Appeal from the United States District Court for the District of New Jersey (D.C. Civil No. 1791-71).
Gibbons and Garth, Circuit Judges, and Weiner,*fn* District Judge. Gibbons, Circuit Judge, dissenting.
This is an appeal from a denial of a motion made by the Bergenfield Board of Education (Board) pursuant to Fed.R.Civ.P. 60(b).*fn1
After the Supreme Court determined that states need not comply with federal wage and hour legislation,*fn2 the Board moved the district court to vacate its judgment which compelled payments of past overtime wages to employees and restrained, inter alia, future underpayment. The Board's motion was made some eight months after this court had affirmed the district court's judgment.
The district court vacated so much of its judgment as related to the prospective operation of its decree but refused to vacate its award of past wages. We affirm.
The Secretary of Labor (Secretary) instituted this action in 1971*fn3 to enjoin the Board and other defendants*fn4 from violating certain provisions of the Fair Labor Standards Act of 1938 (Act)*fn5 which provide for minimum wages and maximum hours for employees.*fn6 On May 7, 1975, judgment for the Secretary was entered, ordering (1) future overtime payments and compliance by the Board with the Act's record-keeping provisions and (2) the payment of $5,570.43 in withheld past wages. Identifying by a separate schedule annexed to the judgment the particular employees and the amount of wages each of them was due, the court directed that a certified check totalling $5,570.43 for past wages be "made payable to the 'Wage and Hour Division -- Labor' and sent to the United States Department of Labor."*fn7 In February, 1976, this Court, rejecting the Board's plea to withhold decision pending the Supreme Court's determination of National League of Cities v. Usery, 426 U.S. 833, 49 L. Ed. 2d 245, 96 S. Ct. 2465 (1976) (see Brief for the Board at 7-8), summarily affirmed the May 7, 1975 Judgment (May 7th Judgment) of the district court. 530 F.2d 964 (3d Cir. 1976). The Board did not seek to appeal our Court's judgment to the United States Supreme Court, despite the Board's knowledge that National League was pending before that Court. Rather, in May, 1976, the Board, in satisfaction of the money judgment, delivered a check totalling $5,570.43 to the Secretary to cover the past wages withheld.*fn8
On June 24, 1976, the Supreme Court decided National League of Cities v. Usery, supra. Overruling Maryland v. Wirtz, 392 U.S. 183, 20 L. Ed. 2d 1020, 88 S. Ct. 2017 (1968), the National League Court held that in most instances the Act could not constitutionally be applied to states and localities. The Court reasoned that:
insofar as [the minimum wage and maximum hour provisions of the Act] operate to directly displace the States' freedom to structure integral operations in areas of traditional governmental functions, they are not within the authority granted Congress.
In the wake of National League, state and local authorities inevitably challenged prior rulings which had applied the Act to them.*fn10 The Board as we have noted, having failed to seek review in the United States Supreme Court, then filed in the district court a motion pursuant to Fed.R.Civ.P. 60(b) to vacate the May 7th Judgment. That motion was filed on October 22, 1976, four months after National League was decided and eight months after this court had affirmed the district court's May 7, 1975 Judgment.
In response to the 60(b) motion, the district court, citing United States v. Swift & Co., 286 U.S. 106, 119, 76 L. Ed. 999, 52 S. Ct. 460 (1932), ruled that "equitable grounds have been established for modifying the injunction imposed upon defendants."*fn11 However, in considering whether to grant the Board's motion as to the money judgment totalling $5,570.43 that had been ordered, the district court ruled that it would not vacate that portion of the judgment. In so ruling, the district court relied upon and quoted Elgin National Watch Co. v. Barrett, 213 F.2d 776, 779 (5th Cir. 1954):
even if [the statute upon which the action was based] was, or is, unconstitutional the judgment based upon it is not void. Until such a judgment is reversed or regularly set aside, it is valid and binding upon the parties thereto and their privies. It is the law of the case. . . . Such a judgment, even though subsequent decisions prove it erroneous, is not void and, since it is not, is not subject to vacation under Rule 60(b)(4), Federal Rules of Civil Procedure, 28 U.S.C.A.*fn12
On January 24, 1977, the district court's order reflecting these determinations was filed. It is from so much of that order that requires the Secretary to "distribute to defendant's employees in the manner set forth in said [May 7th] Judgment the sum of $5,570.43 paid to [the ...