Delay v. Gordon ( 2007 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
WILLIAM H. DELAY, 
Plaintiff-Appellant,
v.
No. 05-36108
MEL GORDON, Chairman; PACIFIC
NORTHWEST RIVER BASINS
COMMISSION, an interstate
 D.C. No.
CV-80-00549-ALH
commission, OPINION
Defendants-Appellees,
UNITED STATES OF AMERICA,
Real Party in Interest.

Appeal from the United States District Court
for the District of Oregon
Ancer L. Haggerty, District Judge, Presiding
Argued and Submitted
September 15, 2006—Portland, Oregon
Filed January 11, 2007
Before: Barry G. Silverman and Ronald M. Gould,
Circuit Judges, and John S. Rhoades,* District Judge.
Opinion by Judge Gould
*The Honorable John S. Rhoades, Sr., Senior United States District
Judge for the Southern District of California, sitting by designation.
305
DELAY v. GORDON 307
COUNSEL
J. William Bennett, Cannon Beach, Oregon, for plaintiff-
appellant William H. Delay and Delay Beneficiaries.
308 DELAY v. GORDON
Isaac J. Lidsky, Attorney, Appellate Staff, Office of the Attor-
ney General, Washington, D.C., for defendants-appellees Mel
Gordon, Chairman, and Pacific Northwest River Basins Com-
mission, and for the United States.
OPINION
GOULD, Circuit Judge:
The beneficiaries of Plaintiff-Appellant William Delay’s
estate1 appeal an order from the district court denying modifi-
cation under Federal Rule of Civil Procedure 60(b)(6) of a
January 8, 1985 judgment on a breach of employment con-
tract claim against the now-abolished Pacific Northwest River
Basins Commission (“the Commission”). Appellants asserted
that, under a change in the decisional law, the United States
was liable for effecting an unconstitutional taking of Delay’s
cause of action when it abolished and de-funded the Commis-
sion in 1981, so that the judgment against the Commission
should be modified to be a judgment against the United States
for which the United States Judgment Fund was liable. As
stated by the district court, “Pursuant to Rule 60(b)(6), plain-
tiff seeks an order modifying the District Court Judgment to
make the United States liable on the Judgment at issue.” The
district court denied the Motion to Modify Judgment Pursuant
to Rule 60(b)(6), the Delay beneficiaries have appealed, we
have jurisdiction under 28 U.S.C. § 1291, and we affirm.
I
The Commission was established by Executive Order in
1967 by President Lyndon Johnson and charged with main-
taining a joint plan for federal, state, interstate, local, and non-
1
William Delay died in 1998. His wife, Marlene Delay, died in 2003.
The Delay children are beneficiaries of William Delay’s estate (“Delay
beneficiaries” or “Appellants”).
DELAY v. GORDON 309
governmental development of water resources in the Colum-
bia River basin.2 The Commission received at least fifty per-
cent of its funding from the federal government in addition to
contributions by the participant states. According to his
employment contract with the Commission, Delay was hired
on March 11, 1969 as a hydrologist “for such a period of time
as [his] services were necessary and satisfactory.” On April
21, 1978, Mel Gordon, as newly appointed Chairman of the
Commission, notified Delay that his assignments had been
completed, and that his position would be terminated on June
8, 1978.
After the termination, on June 5, 1980, Delay brought a
claim for breach of employment contract and violations of 42
U.S.C. § 1983 in the United States District Court for the Dis-
trict of Oregon under 28 U.S.C. § 1332.3 The United States
Attorney for the District of Oregon, which represented Com-
missioner Gordon, asserted that Delay’s employment contract
was with the United States and argued that the district court
lacked jurisdiction under 28 U.S.C. § 1346(a)(2) (“the Tucker
Act”),4 requiring transfer to the United States Claims Court.
On December 4, 1981, the Magistrate Judge agreed with the
government’s position and transferred the case under 28
U.S.C. § 1491(a)(1).5 Before Delay’s case was transferred,
2
The Commission was comprised of a chairman and representatives
from eight federal departments and two federal agencies, all appointed by
the President; appointees from five participating Pacific Northwest states;
one observer from Canada; and representatives from interested Native
American tribes.
3
The breach of contract claim alleged that Delay was not terminated in
compliance with the Personnel Manual. The district court dismissed the
section 1983 claims on summary judgment.
4
“The district court shall not have jurisdiction of any civil action or
claim against the United States founded upon an express or implied con-
tract with the United States. . . .” 28 U.S.C. § 1346(a)(2).
5
“The United States Court of Federal Claims shall have jurisdiction to
render judgment on any claim against the United States founded . . . upon
an express or implied contract with the United States. . . .” 28 U.S.C.
310 DELAY v. GORDON
however, President Ronald Reagan abolished the Commission
by Executive Order, effective September 8, 1981.
Before the Claims Court, the United States reversed its
position and argued that the claims court lacked jurisdiction
because the Commission was not a federal entity and thus
Delay had no contract with the United States. On September
28, 1983, the Claims Court held that in light of the statutory
framework establishing the Commission, and “the legislative
history illuminating that framework, it is crystal clear that the
plaintiff’s employment contract was not a ‘contract with the
United States,’ within the meaning of section 1491.” See
Delay v. United States, No. 32-82C, slip op. at 7 (Cl. Ct. Sept.
28, 1983) (citing legislative history that “Commissions [were]
. . . not ‘to be Federal bodies’ or ‘Federal agencies’ ”). On
April 9, 1984, the United States Court of Appeals for the Fed-
eral Circuit affirmed the lower court and remanded with
instructions to transfer the case back to the United States Dis-
trict Court for the District of Oregon for further proceedings
on the breach of contract claim.6 See Delay v. United States,
Appeal No. 84-606 (Fed. Cl. Apr. 9, 1984).
§ 1491(a)(1). At the time of transfer, the functions now handled by the
Court of Federal Claims and the United States Court of Appeals for the
Federal Circuit were in a single court, the United States Claims Court.
Shortly after the transfer of Delay’s case, pursuant to the Federal Courts
Improvement Act of 1982, the United States Claims Court was replaced
by and split into its descendant courts, with a trial division becoming the
United States Claims Court, and an appellate division becoming the
United States Court of Appeals for the Federal Circuit. The United States
Claims Court in 1992 was later renamed the United States Court of Fed-
eral Claims.
6
While the United States Attorney for the District of Oregon represented
the Commission before the district court, an Assistant Attorney General
and a Department of Interior lawyer argued before the Claims Court. The
government’s position then, as now, was that it mistakenly had argued
before the district court that the case should be transferred.
DELAY v. GORDON 311
On January 8, 1985, after a jury trial, the district court
entered a judgment on Delay’s breach of contract claim
against the Commission in the amount of $140,430 plus post-
judgment interests and costs. With the Commission formally
abolished by this time, however, the only remaining funds
associated with the Commission were $28,855.53 held in a
suspense account at the Office of Management and Budget
(“OMB”). Because the OMB would not release the funds
absent an express waiver of claims on the remainder of the
judgment, Delay refused to settle. In the intervening two dec-
ades, Delay pursued in vain various avenues to obtain pay-
ment on the judgment.7
In November 2004, the Delay beneficiaries filed a Motion
to Modify Judgment Pursuant to Rule 60(b)(6) in the United
States District Court for the District of Oregon to make the
United States liable as the real party-in-interest. Thus the
plaintiffs’ motion urged that the judgment be modified to be
a judgment against the United States, for which the United
States was liable for the satisfaction thereof. The Delay bene-
ficiaries asserted that given the combined authority in Lebron
v. National Railroad Passenger Corp., 513 U.S. 374 (1995),
and Brentwood Academy v. Tennessee Secondary School Ath-
letic Ass’n, 531 U.S. 288 (2001),8 the Commission could be
7
First in 1990, Delay unsuccessfully attempted to obtain payment from
the General Accounting Office, a request rejected under the Claims
Court’s holding that Delay’s contract was not with the United States.
Next, when Delay sought a writ of garnishment against the OMB in 1991,
the United States District Court for the District of Columbia ruled that
there was no waiver of sovereign immunity that would permit garnish-
ment. Finally, Delay’s family convinced a California Congressman to
sponsor a private relief bill on February 27, 2001, but the bill failed to
make it out of committee.
8
In Lebron v. National Railroad Passenger Corp., the Supreme Court
held that Amtrak could be deemed a federal entity for purposes of the First
Amendment regardless of its statutory designation as a “private” corpora-
tion. 513 U.S. 374, 383-84, 400 (1995). In Brentwood Academy v. Tennes-
see Secondary School Athletic Ass’n, the Supreme Court held that a
nominally private interscholastic athletic association comprised primarily
of public schools was a state actor for purposes of claims under 42 U.S.C.
§ 1983 due to a substantial entwinement with state regulatory functions.
531 U.S. 288, 302-03 (2001).
312 DELAY v. GORDON
characterized for the first time as a federal entity. Under a
new theory, plaintiffs argued that Delay was prevented from
collecting on the judgment because the government had taken
inconsistent positions regarding Tucker Act jurisdiction,
which caused significant delay as the case was unnecessarily
transferred to the Claims Court and then back to the district
court in Oregon. In plaintiffs’ view, the effect of the delay
denied Delay the opportunity to obtain a judgment before the
Commission had been wound up and de-funded. Plaintiffs
alleged that the United States thereby effected an unconstitu-
tional taking of Delay’s property (i.e. his claim against the
Commission), when, in September 1981, the United States
abolished the Commission while Delay’s breach of contract
claim against the Commission was pending.
In assessing plaintiffs’ Motion to Modify Judgment, the
district court expressed sympathy with the idea that the gov-
ernment’s inconsistent positions caused inordinate delay in
the resolution of Delay’s case (noting that “defendants caused
excessive delays,” that plaintiff’s suit was filed in 1980 in the
district court but not brought to trial until 1984, and that
“[a]bsent defendants’ delays, plaintiff’s judgment likely could
have been entered before the Commission was terminated on
September 8, 1981”). The district court also commented that
the effect of Lebron-Brentwood Academy could recast the
Commission as “the United States for constitutional pur-
poses.” The district court also viewed favorably plaintiffs’
reliance on United States v. Washington, 394 F.3d 1152 (9th
Cir. 2005) (the Samish case),9 to support the argument that the
9
In the Samish case, we considered under Rule 60(b)(6) a judgment that
denied the Samish intervention in the adjudication of fishing rights under
various treaties on the ground that they had not maintained an organized
tribal structure. See United States v. Washington, 394 F.3d 1152, 1161 (9th
Cir. 2005) (holding that the Samish’s lack of recognition as a tribe was a
circumstance beyond its control, and that the lengthy process to secure
tribal recognition by the Bureau of Indian Affairs amounted to extraordi-
nary circumstances that warranted setting aside the judgment that denied
them fishing rights based on their perceived non-tribe status).
DELAY v. GORDON 313
excessive delay amounted to extraordinary circumstances
under Rule 60(b)(6) in impeding Delay’s prosecution of his
case to judgment.10 The district court concluded that the
Lebron and Brentwood Academy holdings could not be
expanded to encompass contractual claims against the United
States under these circumstances in light of the 1983 decision
by the Court of Claims that no contract claim existed against
the United States. Moreover, the district court denied relief on
the request for amendment of judgment to reflect a takings
claim because it was “unconvinced that the circumstances
presented can be fairly reinterpreted to describe ‘a constitu-
tional taking’ in any reasonable sense of the meaning of that
term.” This timely appeal followed.
II
We review the district court’s denial of a Rule 60(b)(6)
motion for an abuse of discretion. See Washington, 394 F.3d
at 1157. The judgment below must be affirmed unless (1) we
have “a definite and firm conviction that the district court
committed a clear error of judgment in the conclusion it
reached upon weighing the relevant factors,” (2) the district
court applied the wrong law, or (3) the district court rested its
decision on clearly erroneous findings of fact.” SEC v.
Coldicutt, 258 F.3d 939, 941 (9th Cir. 2001) (internal cita-
tions omitted).
III
The Delay beneficiaries argue that the district court abused
its discretion when it did not modify the judgment to become
a judgment against the United States, in light of Lebron-
10
The district court found that the Delay beneficiaries had met the Rule
60(b)(6) requirement that the motion be filed within a reasonable time “in
that it was based on case law that emerged in 1996, 2001, and 2005,” and
because Delay had consistently pursued other remedies during the relevant
period.
314 DELAY v. GORDON
Brentwood Academy, where the district court recognized that
the delay in litigation caused by the government was an
extraordinary circumstance that impeded Delay from obtain-
ing and collecting on a judgment before the Commission was
abolished and de-funded.
[1] Rule 60 of the Federal Rules of Civil Procedure pro-
vides a means of altering a judgment in limited circumstances.
Rule 60(b) provides:
(b) Mistakes; Inadvertence; Excusable Neglect;
Newly Discovered Evidence; Fraud, etc. On
motion and upon such terms as are just, the court
may relieve a party or a party’s legal representative
from a final judgment, order, or proceeding for the
following reasons: (1) mistake, inadvertence, sur-
prise, or excusable neglect; (2) newly discovered
evidence which by due diligence could not have
been discovered in time to move for a new trial
under Rule 59(b); (3) fraud (whether heretofore
denominated intrinsic or extrinsic), misrepresenta-
tion, or other misconduct of an adverse party; (4) the
judgment is void; (5) the judgment has been satis-
fied, released, or discharged, or a prior judgment
upon which it is based has been reversed or other-
wise vacated, or it is no longer equitable that the
judgment should have prospective application; or (6)
any other reason justifying relief from the operation
of the judgment. The motion shall be made within a
reasonable time, and for reasons (1), (2), and (3) not
more than one year after the judgment, order, or pro-
ceeding was entered or taken . . . .
Fed. R. Civ. P. 60(b).
A leading treatise, discussing the purposes of Rule 60,
explains that “Rule 60 regulates the procedures by which a
party may obtain relief from a final judgment. . . . The rule
DELAY v. GORDON 315
attempts to strike a proper balance between the conflicting
principles that litigation must be brought to an end and that
justice should be done.” 11 Charles Alan Wright, Arthur R.
Miller & Mary Kay Kane, Federal Practice and Procedure
§ 2851 (2d ed. 1995).
[2] The Rule 60(b)(6) “catch-all” provision, on which
appellants rely, applies only when the reason for granting
relief is not covered by any of the other reasons set forth in
Rule 60. Cmty. Dental Servs. v. Tani, 282 F.3d 1164, 1168 n.8
(9th Cir. 2002). “Rule 60(b)(6) has been used sparingly as an
equitable remedy to prevent manifest injustice” and “is to be
utilized only where extraordinary circumstances prevented a
party from taking timely action to prevent or correct an erro-
neous judgment.” United States v. Alpine Land & Reservoir
Co., 984 F.2d 1047, 1049 (9th Cir. 1993). A party seeking to
re-open a case under Rule 60(b)(6) “must demonstrate both
injury and circumstances beyond his control that prevented
him from proceeding with the prosecution or defense of the
action in a proper fashion.” Cmty Dental, 282 F.3d at 1168.
[3] As another leading treatise explains, “Rule 60(b) is
available only to set aside a prior judgment or order; courts
may not use Rule 60(b) to grant affirmative relief in addition
to the relief contained in the prior order or judgment.”11 12
Moore’s Federal Practice § 60.25 (Matthew Bender 3d
2004). An Eleventh Circuit case, United States v. $119,980,
680 F.2d 106 (11th Cir. 1982), illustrates this limitation on the
11
We have recognized an exception to this rule where “[r]epudiation of
a settlement agreement that terminated litigation pending before a court
constitutes an extraordinary circumstance” that may justify vacating the
court’s prior dismissal order under Rule 60(b) in order to return the parties
to the status quo ante, rather than leaving the frustrated party to sue for
breach of the settlement agreement. See Keeling v. Sheet Metal Workers
Intl. Ass’n, Local Union 162, 937 F.2d 408, 410 (9th Cir. 1991) (adopting
minority position as set forth in United States v. Baus, 834 F.2d 1114,
1124 (1st Cir. 1987), that Rule 60(b) permits in some cases re-opening set-
tled litigation to enforce settlement agreements).
316 DELAY v. GORDON
district court’s powers of equity. In United States v. $119,980,
the district court had approved a settlement in which the
United States Customs Services and the claimants would split
a res of $119,980. 680 F.2d at 107. After the final order was
entered, the district court learned that the Internal Revenue
Service (“IRS”) had issued notices of levy against the defen-
dant currency. Id. In response to the motion of the IRS, the
district court modified the order under Rule 60(b)(6), direct-
ing that half of the money be given to the IRS rather than to
claimants. Id. The Eleventh Circuit held that the district court
did not have authority under Rule 60(b) to require that the
money be given to the IRS. Id. at 108 (ruling that district
court only had the authority to “set aside its order approving
and implementing the settlement”). See also United States v.
One Toshiba Color Television, 213 F.3d 147, 158 (3d Cir.
2000) (Rule 60(b) did not provide monetary remedy for void
forfeiture); Adduono v. World Hockey Ass’n, 824 F.2d 617,
620 (8th Cir. 1987) (reversing district court that re-opened
judgment under Rule 60(b)(6) in order to sanction attorney
and award fees under Federal Rule of Civil Procedure 11);
United States v. One Douglas A-26B Aircraft, 662 F.2d 1372,
1377-78 (11th Cir. 1981) (holding in forfeiture case that dis-
trict court had no power under Rule 60(b) to re-open judg-
ment giving airplane to claimant in order to provide additional
damages for deterioration of the plane).
[4] We may assume that Delay suffered an injury when the
de-funding of the Commission prevented him from collecting
on the judgment. We may also assume that the district court
properly determined that the Delay beneficiaries filed the
Rule 60(b)(6) motion within a reasonable time because they
pursued other avenues of relief until 2002 prior to seeking
relief under their Lebron-Brentwood Academy theory. We
may further assume arguendo that the inordinate delay caused
by the government’s inconsistent positions amounted to
extraordinary circumstances. Nonetheless, at the threshold we
must confront the issue of whether Rule 60(b)(6) permits a lit-
igant, who relies on an asserted change of law, to gain an
DELAY v. GORDON 317
amended judgment on a new legal claim against a separate
party that was not responsible for, or a party to, the initial
judgment.
[5] Appellants’ theory under Rule 60(b)(6) demands the re-
characterization of the Commission as a federal entity to
assert an entirely new takings claim against a new party, the
United States. Thus appellants did not merely seek to re-open
the judgment on the contract claim, in order to amend a com-
plaint and advance a new takings claim against the United
States. Rather, appellants’ motion asked the district court to
substitute the United States for the Commission as the party
responsible for the extant judgment. The prior judgment was
based on a contract claim against the Commission that was lit-
igated. The requested amended judgment would be based,
according to appellants’ theory, on a constitutional taking by
the United States of Delay’s contract claim when the Com-
mission was abolished and then de-funded, which takings
claim has never been litigated. Appellants seek to revisit the
circumstances that enabled the United States to be dismissed
from the action under the controlling law of the time, re-insert
the United States as the real party-in-interest under a retro-
spective application of Lebron-Brentwood Academy, and gain
a judgment against the United States on a new takings claim
to effect that Delay had a property interest in his cause of
action against the United States that was destroyed upon ter-
mination of the Commission.
[6] The United States represented the Commission through-
out this litigation. However, the contract claim underlying the
judgment at issue is distinct from the new takings claim.12 The
12
Because the allegedly extraordinary circumstances arising from
government-caused delay do not relate to the breach of contract claim
underlying the judgment, appellants’ reliance on the Samish case is
unavailing. In the Samish case, we ordered a judgment re-opened that
denied the Samish intervention in the adjudication of fishing rights under
various treaties on the ground that they had not maintained an organized
318 DELAY v. GORDON
fact that Delay, the prevailing party, was unable to collect on
a correct judgment against a de-funded entity is unfortunate.
However, we cannot void the original judgment to substitute
the United States as the responsible party with liability on a
new legal theory. Where courts have been without authority
to re-open judgments under Rule 60(b)(6) to award fees for
attorney misconduct, see Adduono, 824 F.2d at 620, or to per-
mit equitable reallocation of forfeiture proceeds, see United
States v. $ 119,980, 680 F.2d at 108, we conclude a fortiori
that Rule 60(b)(6) cannot be used to assert a new and distinct
legal claim against a defendant that was not party to the origi-
nal judgment.13
tribal structure. See United States v. Washington, 476 F. Supp. 1101 (W.D.
Wash. 1979) (“Washington II”), aff’d 641 F.2d 1368, 1373-74 (9th Cir.
1981). We held that the BIA improperly withheld tribal recognition during
the period of Washington II, which constituted extraordinary circum-
stances meriting relief under Rule 60(b)(6) because the “Samish would
almost certainly have won the right to exercise its treaty fishing rights had
the tribe been federally recognized at the time . . . .” Washington, 394 F.3d
1156, 1159-60. The Samish case is distinguishable from Delay’s situation
because in that case the erroneous judgment was related to the extraordi-
nary circumstances at issue: The judgment in Washington II inequitably
operated to exclude the Samish tribe largely because the BIA failed to
grant timely tribal recognition. Consequently, once the recognition issue
was rectified, the district court could re-open the judgment to allow asser-
tion of the Samish’s valid treaty rights. But the amendment of the judg-
ment in Samish did not alter the theory of the plaintiffs’ case, it merely
added the Samish tribe within the tribes entitled to fishing rights by treaty.
13
Appellants’ theory under Rule 60(b)(6) is also defective because it
relies on a change in decisional law. We have previously held that “a
change in the applicable law after a judgment has become final in all
respects is not a sufficient basis for vacating the judgment.” Tomlin v.
McDaniel, 865 F.2d 209, 210 (9th Cir. 1989) (internal citations omitted)
(denying relief based on change in decisional law under both Rule
60(b)(5) and (6)). In Tomlin, a plaintiff’s section 1983 action was dis-
missed as time-barred under a one-year statute of limitations as deter-
mined by the applicable case law holding that imprisonment did not toll
the statute. 865 F.2d at 209. After the judgment became final, the United
States Supreme Court and the Arizona Court of Appeals each issued deci-
DELAY v. GORDON 319
[7] Rule 60(b)(6) cannot properly be applied here because
appellants ask the district court to nullify the relief granted in
the original correct judgment on a breach of contract claim,
and to give the Delay beneficiaries a new judgment on a tak-
ings theory against a separate defendant that was not bound
by the prior judgment.
[8] We hold that the district court did not abuse its discre-
tion in denying relief.
AFFIRMED.
sions that affected the limitations period for section 1983 actions such that
the Tomlin plaintiff could have timely filed. Id. As to the request for relief
under Rule 60(b)(6), we were unmoved: “[T]he judgment against him
became final before the laws changed. That is the rock on which his argu-
ments founder.” Id. at 210 (original emphasis).