Lampf and as to which the time for appeal or motion for relief from judgment had expired before Congress enacted § 27A. If § 27A were a simple legislative reversal of previously-decided cases, it could not stand; it has long been established that "no decision of any court of the United States can, under any circumstances, in our opinion, agreeable to the Constitution, be liable to a reversion, or even suspension, by the Legislature itself, in whom no judicial power of any kind appears to be vested." Hayburn's Case, 2 U.S. (2 Dall.) 409, 413, 1 L. Ed. 436, n. 3 (1792) (decision of Circuit Court for District of North Carolina, reported with decisions of other Circuits in case not decided by Supreme Court because question was resolved by new legislation while case was pending before Court).
However, the statute does not simply reverse decided cases. Section 27A, as discussed above, imposes a new statute of limitations for cases filed on or before June 19, 1991 of whatever the applicable period was in the jurisdiction in which those cases were filed, rather than the period established by Lampf. The relevant question therefore is whether decisions entered pursuant to Lampf and before enactment of the statute preclude the application of § 27A to those cases.
Neither case law nor separation of powers principles mandates such a preclusive effect. The sole case on point comes from the Court of Appeals of New York, and is persuasive if not binding authority. Hymowitz v. Eli Lilly and Co., 541 N.Y.S.2d 941, 73 N.Y.2d 487, 539 N.E.2d 1069 (N.Y. 1989), cert. denied, 493 U.S. 944, 110 S. Ct. 350, 107 L. Ed. 2d 338 rejected a federal due process challenge
to a New York statute changing the limitations period for toxic exposure tort cases from a period beginning with the date of plaintiff's exposure to the toxic substance to a period beginning with plaintiff's date of discovery of injuries resulting from such injuries. The new statute provided a one-year "window" period during which claims time-barred as of the date of passage or previously dismissed solely on timeliness grounds could be re-filed. L. 1986, § 4, cl. 683, eff. Jul. 30, 1986. The New York Court of Appeals held that "the Legislature may constitutionally revive a personal cause of action where the circumstances are exceptional and are such as to satisfy the court that serious injustice would result to plaintiffs not guilty of any fault if the intention of the Legislature were not effectuated." 73 N.Y.2d at 514, 541 N.Y.S.2d at 951. Under that standard, the Court upheld the statute.
No consensus has emerged from the numerous federal courts now confronted with the question of § 27A's constitutionality. A small number of earlier cases address similar, but not identical, questions, and offer limited guidance.
The Supreme Court has affirmed Congress' power to waive the government's res judicata defense and authorize relitigation of an Indian tribe's claim that had previously been rejected by the Court of Claims. See United States v. Sioux Nation of Indians, 448 U.S. 371, 65 L. Ed. 2d 844, 100 S. Ct. 2716 (1980). However, the Court's decision hinged on its conclusion that the statute merely operated as a waiver of an available defense by an interested party in the litigation. 448 U.S. at 397. This theory limits the case's applicability to the present dispute, but nevertheless Sioux Nation establishes that in some instances Congress can authorize relitigation of decided claims.
As to legislation authorizing the reopening of litigation among private parties, Johnson, and the New York Court of Appeals in Hymowitz, relies on Chase Securities Corp. v. Donaldson, 325 U.S. 304, 89 L. Ed. 1628, 65 S. Ct. 1137 (1944), in which the Supreme Court rejected a due process challenge to application of newly-adopted legislation liberalizing the statute of limitations in a case which the Minnesota Supreme Court had concluded was time-barred as to most claims. However, the claims held to have been time-barred had not been dismissed at the time of the new statute's adoption, and accordingly the Court had no cause to comment on separation of powers implications of reopening previously adjudicated cases.
The cases which most support Andersen's position address the so-called "vested rights" doctrine, see Georgia Ass'n of Retarded Citizens v. McDaniel, 855 F.2d 805, 810 (11th Cir. 1988), cert. denied, 490 U.S. 1090, 104 L. Ed. 2d 988, 109 S. Ct. 2431 (1989), which establishes that "It is not within the power of the legislature to take away rights which have been once vested by judgment." Id. (quoting McCullough v. Virginia, 172 U.S. 102, 123, 43 L. Ed. 382, 19 S. Ct. 134 (1898)). This doctrine rests on twin constitutional bases, one that a final judgment affords the parties rights that may be equated to a form of property enjoying due process protection, and the second that separation of powers principles preclude legislative reopening of adjudicated cases. Id.
The vested rights doctrine, however, is limited where changed circumstances alter the preclusive effect of a prior judgment. See Georgia Ass'n of Retarded Citizens, 855 F.2d at 811. As one commentator has put it, "Sometimes a statutory change or constitutional amendment creates a new cause of action or a new procedure for enforcing a right, or authorizes an additional means of executing a judgment, and to that extent diminishes the conclusive effect of a prior judgment or decree. Whether or not a particular statute makes the conclusive effect of prior judgments inapplicable to later suits depends on legislative intent." 1B Moore's Federal Practice P0.415 at 511 (1984) (quoted in Georgia Ass'n of Retarded Citizens, 855 F.2d at 811).
In the present circumstances, several factors demonstrate the compatibility of § 27A(b) with both due process and separation of powers requirements, and establish the non-applicability of the vested rights doctrine, or the compatibility of this case with the "changed circumstances" exception to that doctrine.
First, the seeming finality of the judgment is rendered less certain by the short time that passed between its execution and passage of § 27A, particularly in light of the provision of Rule 60(b), Fed. R. Civ. P., that "the court may relieve a party . . . from a final judgment [for] . . . (6) any other reason justifying relief from the operation of the judgment" where a motion is made "within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the judgment. . . ." Even if the theoretical possibility of a Rule 60(b) motion cannot in all cases preclude the vesting of due process rights in a decision, see Tonya K. v. Board of Education, 847 F.2d 1243, 1248 (7th Cir. 1988) (dicta), here the motion was plainly brought within the "reasonable time" contemplated by the Rule, particularly in light of the provision that relief could be granted up to a year after the initial dismissal for nonapplicable specified reasons. This tenuousness of Anderson's claim to finality of judgment calls into question whether the prior adjudication in Andersen's favor created the type of vested rights protected by due process under the vested rights doctrine, as well as whether legislation disturbing the judgment threatens the necessary independence of the judiciary.
Second, the artificiality and technicality of the sole reason for dismissal of the initial case, which had nothing to do with its merits -- that is, the new limitations period established by Lampf -- militates in favor of allowing relief. While a dismissal on statute of limitations grounds technically is a final adjudication on the merits, the Supreme Court has noted that the timeliness defense is not a "'fundamental' right . . . of the individual," and that "the history of pleas of pleas of limitation shows them to be good only by legislative grace and to be subject to a relatively large degree of legislative control." Chase Securities Corp. v. Donaldson, 325 U.S. 304, 314, 89 L. Ed. 1628, 65 S. Ct. 1137 (1945). Legislation to alter such a technical defense, and its application even to dismissed cases, goes far less to the heart of the judicial function than would a legislative attempt to reverse adjudications which had addressed the true merits of the disputes in question. Moreover, in view of the history of changing limitations periods in this case, Andersen in no way could have acted in reliance on the new legal defense afforded it by Lampf, which diminishes the force of its due process objection; in fact § 27A merely counteracts a windfall that Lampf provided Andersen. Andersen was in the midst of defending this suit on the merits when Lampf unexpectedly, and well into the course of the dispute, shortened the applicable limitations period.
Third, an opposite result would be too arbitrary and burdensome to plaintiffs whose cases had been dismissed before Congress adopted § 27A. It would produce the result that plaintiffs whose cases were not dismissed under Lampf before Congress acted, whether due to defendants' slowness in moving for such relief, or individual courts' inability to address motions to dismiss promptly, or those courts' determination to delay decision pending Congressional action or further developments from the Supreme Court or their respective Circuits, would have their claims protected by § 27A, while those plaintiffs whose indistinguishable claims had been dismissed promptly were forever barred.
Moreover, to the extent that, as Moore states, legislative intent determines the applicability of the "changed circumstances" exception to vested rights doctrine, the express terms of § 27A(b) establish Congress' intent to void the preclusive effect of prior adjudications under Lampf. Congress' explicit intent strongly supports the conclusion that the new limitations period established by § 27A is a changed circumstance vitiating any vested rights Andersen may have in the earlier adjudication under then-prevailing law.
Finally, Congress did not single out and reverse decided cases contrary to its predilections. Rather, it provided relief for a broadly defined class of claimants from what it deemed to be an unfair rule, and it did so without regard to whether or not those claimants' cases had yet been adjudicated pursuant to the new rule of Lampf. Such evenhanded treatment is less threatening to the judiciary's independence than would be Congressional action to reverse particular adjudications.
For these reasons, reinstatement of Johnson's § 10(b) claim is consistent with separation of powers and due process requirements, and is hereby ordered.
There remains the question whether to reinstate Johnson's related state law claims, which were dismissed when the dismissal of its § 10(b) claim destroyed the basis for pendent jurisdiction over the state law claims. The factors identified in United Mine Workers v. Gibbs, 383 U.S. 715, 726, 16 L. Ed. 2d 218, 86 S. Ct. 1130 (1966), all support reinstatement: the § 10(b) claim has been restored and affords federal subject matter jurisdiction, the state and federal claims derive from a common nucleus of operative fact, and considerations of judicial economy and fairness to the parties all weigh heavily in favor of reinstatement so that the dispute can be resolved in one forum. Accordingly, the state law claims contained in Johnson's complaint are reinstated and the dismissal of those claims is vacated.
Since § 27A is consistent with constitutional separation of powers principles, and accordingly Johnson's § 10(b) claim is reinstated pursuant to that statute. The earlier dismissal of Johnson's pendent state claims is vacated and the claims reinstated.
It is so ordered.
Morris E. Lasker
DATED: New York, New York
April 25, 1992