McGOWAN, Circuit Judge:
Congress has been continuously concerned from its inception with the problem of maintaining an adequately manned military establishment for the protection of our national interests. Although one controversial response to that problem has been the operation of a system of compulsory military service, Congress has also — especially in recent years — attempted to provide a sufficient monetary incentive to attract men and women to careers in the military. One approach that has frequently been chosen by Congress is the award of a monetary bonus — recently labeled a "Regular Reenlistment Bonus" — to enlisted personnel who reenlist or extend the period of their obligated service.
The seven named plaintiffs who filed this class suit in the District Court are enlisted personnel in the United States Navy who claim that they are entitled by contract or under the doctrine of promissory estoppel to receive VRBs equal to four times the amount of their respective RRBs. We conclude that the District Court properly asserted jurisdiction pursuant to 28 U.S.C. § 1346(a)(2),
I. FACTUAL BACKGROUND
On June 23, 1969 plaintiff Larionoff enlisted in the United States Navy for four years. Shortly thereafter, he underwent a series of tests and interviews to determine his appropriate duty assignment. During the course of those interviews with Navy personnel, Larionoff decided to participate in the Advanced Electronic Field (AEF) training program, successful completion of which would place him in the Communications Technician-Maintenance (CTM) service rating. At the time he decided to enter the AEF program, Larionoff was aware that the CTM rating was classified as a "critical military skill" qualifying for a Variable Reenlistment Bonus equal to four times the amount of an enlisted member's Regular Reenlistment Bonus.
Under applicable Navy regulations, the AEF program involved a six year service obligation, and plaintiff Larionoff consequently executed the following "Agreement to Extend Enlistment":
App. at 134 (emphasis added). On that same day, plaintiff Larionoff executed a document requesting assignment to the AEF program and acknowledging his six year obligation:
App. at 135.
On March 9, 1970 Larionoff successfully completed the AEF training program and was advanced to the CTM rating and the E-4 pay grade. He executed a document on that date attesting to his advancement to the E-4 pay grade.
Up to this point in time, neither the Navy nor plaintiff Larionoff had reason to complain about the events that had transpired. The complicating factor, however, was that Larionoff still expected to receive a Variable Reenlistment Bonus once he entered into his period of extended service on June 23, 1973. The Navy cast some doubt on that expectation when it announced on March 24, 1972 that effective July 1, 1972 the CTM rating would no longer be designated as a "critical military skill" eligible for the VRB award. After realizing that the Navy considered him ineligible for a Variable Reenlistment Bonus, Larionoff had his elected representatives in Congress communicate with the Bureau of Naval Personnel concerning his eligibility for the VRB.
The other six named plaintiffs
II. ENTITLEMENT TO THE VARIABLE REENLISTMENT BONUS
Plaintiffs offer two theories to support their contention that they are entitled to receive VRBs. They first argue that they executed their extension agreements "in consideration of the pay, allowances, and benefits" which were to accrue during the period of extended service, see 175 U.S.App.D.C. pages ___-___, 533 F.2d page 1170 supra, and that the term "pay" includes awards of VRB. As an alternative ground, plaintiffs maintain that they are entitled to receive VRBs on a theory of promissory estoppel in that they relied to their detriment on oral representations concerning VRB eligibility made by naval personnel attempting to get them to execute extension agreements. We find it unnecessary to reach the issue of promissory estoppel since we find that under applicable military regulations plaintiffs are entitled to VRBs as part of the "consideration" for which they executed extension agreements.
A. Statutory Provisions
As early as 1795, Congress provided by statute for the payment of a "reenlistment
The Department of Defense eventually recognized that the statutory formula was inefficient since it failed to vary the monetary incentive for reenlistment according to the needs of the armed services for personnel with particular skills. In other words, if a branch of the armed services was adequately manned except for a critical shortage of communications technicians, that
The Defense Department urged both the House and Senate Armed Services Committees to act favorably on this Variable Reenlistment Bonus incentive provision:
H.R.Rep.No.549, 89th Cong., 1st Sess. 47-48 (1965) (emphasis added). See S.Rep.No.544, 89th Cong., 1st Sess. 18 (1965), U.S.Code Cong. & Admin.News 1965, p. 2745; Hearings on H.R. 5725 and H.R. 8714 Before the House Comm. on Armed Services, 89th Cong., 1st Sess., ser. 13, at 2545, (1965) (Statement of then Secretary McNamara). Both committees approved the following Variable Reenlistment Bonus award provision:
In the course of the floor debate over what was to become the Uniformed Services Pay Act of 1965, it became quite clear the Department of Defense had convinced the Congress that the VRB provision was cost-justified since it would save the Government the cost of training a replacement
With these objectives in mind, Congress enacted the VRB provision as recommended by the House and Senate committees, delegating to the Secretary of Defense the authority to issue regulations for the administration of the VRB program. Act of August 21, 1965, Pub.L.No.89-132, § 3, 79 Stat. 547, as amended, Act of Oct. 22, 1968, Pub.L.No.90-623, §§ 3(1), 5, 82 Stat. 1314-15, as amended, 37 U.S.C. § 308 (Supp. IV, 1974).
B. Military Regulations
In interpreting the regulations issued by both the Department of Defense and the Department of the Navy with respect to the VRB program, it is important to emphasize the narrow question at issue. The Government takes the position that under applicable military regulations eligibility for a Variable Reenlistment Bonus attaches at the date of actual entry into the reenlistment or extension period. Brief at 21. The Government does not argue that appellants would not have been entitled to a VRB if the CTM service rating had been designated as a critical military specialty when they entered their periods of extended service.
At first glance, the applicable military regulations would seem to support the Government's position. The Department of Defense Directive prescribing policies for award of the VRB deals specifically with the question of reduction and termination of VRB awards:
DOD Directive 1304.14, ¶ IV.F. (Sept. 3, 1970). Of course, that Directive is at best ambiguous, in that it is not clear whether a VRB is "awarded" when an enlisted member signs an agreement to extend enlistment or when he or she actually begins to serve the period of extension. Section IV.D.2. of the Directive, however, tells us that "[s]pecific provisions for individual eligibility of enlisted members for receipt of awards" are contained in a separate Department of Defense Instruction.
That separate regulation also addresses the question of reduction and termination of awards:
Department of Defense Instruction 1304.15, ¶ VI.A. (Sept. 3, 1970) (emphasis added). Were it not for the "except" clause, this regulation would also apparently support the Government's interpretation of the VRB program.
The relevant portion of paragraph V.B.1. provides that "[a]n enlisted member is eligible to receive a Variable Reenlistment Bonus if he . . .
(Emphasis added.) And the regulations issued by the Department of the Navy indicate that an extension of enlistment qualifies as a form of "modification of an existing service obligation":
BUPER INST 1133.18E, ¶ 7.h. (Mar. 23, 1972) (emphasis added).
Paragraph V.B.1.f. of the Defense Instruction and paragraph 7.h. of the Navy Instruction were apparently designed to prevent enlisted members from receiving the higher award level of a VRB scheduled for reduction merely by modifying their service obligations after learning of the planned reduction but prior to its effective date. Thus, if the Navy announced on March 24, 1972 that a VRB with a multiple of four was to be reduced to a multiple of two for the CTM rating effective July 1, 1972, an enlisted member extending his or her service obligation after March 24,
The application of these regulations to appellants leads us to conclude that they are entitled to the VRB award level in effect on the date they signed their respective agreements to extend enlistment.
To hold otherwise would undermine the explicit language of paragraphs V.B.1.f. and 7.h. of the appropriate regulations, in that neither those who extended their enlistments on or after March 24, 1972 nor those who extended their enlistments before March 24, 1972 could attain eligibility for the higher award if they were to begin their extended service on a date after July 1, 1972. The paragraphs referred to above obviously contemplate a situation in which enlisted personnel attain eligibility prior to the point at which they enter into periods of extended service.
Moreover, the Government's interpretation would lead to results clearly at odds with the explicit congressional objectives. For example, under the Government's approach an enlisted member who signed an extension agreement when the VRB award level was at a multiple of two but entered into extended service when the multiple was set at four would receive the higher award level. Despite the fact that a bonus with a multiple of two was a sufficient reenlistment incentive for that enlisted member, the Government would apparently award him a windfall in the form of a bonus with a multiple of four.
The Government's interpretation would also frustrate congressional objectives by complicating the decision whether to reenlist. The legislative history indicates that Congress intended to offer enlisted personnel a specific sum
The Government authored these extensions contracts, and it could easily have inserted a provision limiting an enlisted member's VRB eligibility to the award level in effect on the date of actual entry into the period of extended service. Undoubtedly, if such a provision had been included, the Navy would have witnessed fewer extensions of enlistment.
C. The 1974 Repeal of the Variable Reenlistment Bonus Program
Effective June 1, 1974, Congress repealed the statutory provisions providing for the Regular Reenlistment Bonus and the Variable Reenlistment Bonus and substituted a provision authorizing a new "Selective Reenlistment Bonus" (SRB). Armed Forces Enlisted Personnel Bonus Revision Act of 1974, Pub.L.No.93-277, § 2(1), 37 U.S.C. § 308 (Supp. IV, 1974).
Since contractual rights against the government are property interests protected by the Fifth Amendment, Congressional power to abrogate existing government contracts is narrowly circumscribed. Perry v. United States, 294 U.S. 330, 55 S.Ct. 432, 79 L.Ed. 912 (1935); Lynch v. United States, 292 U.S. 571, 54 S.Ct. 840, 78 L.Ed. 1434 (1934); see Federal Housing Administration v. Darlington, Inc., 358 U.S. 84, 97-98, 79 S.Ct. 141, 3 L.Ed.2d 132 (1958) (Harlan, J., dissenting). And although Congress may constitutionally impair existing contract rights in the exercise of a paramount governmental power such as the "War Powers," U.S.Const. art. I, § 8, cl. 11, 12, 14, Congress is "without power to reduce
Although the stated purpose of the 1974 amendments was to "provide authority to grant enlistment and reenlistment bonuses to enlisted personnel on a selective basis to fill critical and shortage skill requirements in the armed services, in an all-volunteer environment," H.R.Rep.No.93-857, 93d Cong., 2d Sess. 3 (1974), U.S.Code Cong. & Admin.News 1974, pp. 2984, 2985, our review of the legislative history leads us to conclude that the Congress was primarily concerned with reducing government expenditures by more narrowly tailoring the reenlistment bonus scheme to actual military requirements. See S.Rep.No.93-659, 93d Cong., 2d Sess. (1973); H.R.Rep.No.93-857, 93d Cong., 2d Sess. (1974); H.R.Conf.Rep.No.93-985, 93d Cong., 2d Sess. (1974); U.S.Code Cong. & Admin.News 1974, pp. 2984, 2985. The Department of Defense specifically recommended the 1974 amendments to Congress as "an opportunity to save money while simultaneously improving our management of reenlistment incentives." S.Rep.No.93-659, 93d Cong., 2d Sess. 8 (1973); H.R.Rep.No.93-857, 93d Cong., 2d Sess. 9 (1974).
Since there is absolutely no basis in the legislative history to justify a conclusion that Congress was exercising some paramount power enabling it to abrogate existing contract rights, plaintiff Johnson's contractual entitlement to a VRB stands unimpaired after the 1974 amendments.
D. The Issue of Rescission of the Extension Agreements
The amended complaint, asserting jurisdiction under the Tucker Act, 28 U.S.C. § 1346(a)(2), asked that the Government "be ordered to pay to each of the plaintiffs the bonus provided by his contract and/or the contracts of the plaintiffs be deemed rescinded and declared of no further force and effect." App. at 211 (emphasis added). Plaintiffs now maintain that the District Court erred when it refused to declare the contracts rescinded.
We have serious doubts as to whether the plaintiff's request for judicial rescission of their extension contracts falls within this narrow exception since it is hard to conceive of how granting that request would be "in aid of [a money] judgment." Blanc v. United States, 244 F.2d 708, 709 (2d Cir. 1957). Compare C. N. Monroe Manufacturing Co. v. United States, 143 F.Supp. 449 (E.D.Mich.1956); Kemp v. United States, 38 F.Supp. 568 (D.Md.1941). See also Universal Transistor Products Corp. v. United States, 214 F.Supp. 486 (E.D.N.Y.1963). We find it unnecessary to resolve these doubts one way or the other, however, since on the basis of the record before us we would find it impossible to sustain a judicial decree of rescission. The payment of VRBs to the plaintiffs is an adequate legal remedy, and we have been offered no evidence indicating that there are exceptional circumstances in this case that justify the grant of equitable relief.
We therefore conclude that the District Court properly limited the relief in this case to the award of VRBs.
III. CLASS ACTION ISSUES
On September 28, 1973, in the same order granting plaintiffs' motion for summary judgment, the District Court certified this suit as a class action under Rule 23(b)(1)(B) of the Federal Rules of Civil Procedure.
A. The Requirements of Rule 23(c)(1)
Rule 23(c)(1) provides:
The Government argues that the District Court's class action certification must be reversed as inconsistent with Rule 23(c)(1) in that the District Court "did not make a class action determination until the entry of final judgment, some six months after the action commenced." Brief at 25-26.
Clearly, a District Court cannot simultaneously certify an action under Rule 23(b)(3) and enter a final judgment in the action since Rule 23(c)(2)
In that regard, we find persuasive a recent analysis of the issue by Justice (then Judge) Stevens:
Jimenez v. Weinberger, 523 F.2d 689 at 697 (7th Cir. 1975) (emphasis in original).
Applying that analysis to the facts of this case, we do not think that the District Court committed reversible error in simultaneously certifying the case as a class action and entering summary judgment for the plaintiffs. In the first place, although the Government is correct in stating that the class action was not certified until "some six months after the action commenced," the final certification cannot be considered unreasonably delayed. Plaintiffs filed this suit on March 30, 1973 "on behalf of themselves and on behalf of all others similarly situated," and they filed a motion to confirm the class on April 23, 1973. The Government, after requesting two extensions of time, eventually filed its memorandum in opposition to the motion to confirm the class on June 27, 1973. After the named plaintiffs filed responsive papers in early August, the District Court heard oral argument on plaintiffs' various motions and directed the parties to complete the filing of additional papers by August 24, 1973. Although the District Court could have been more prompt in certifying the action, we do not consider the September 28, 1973 order untimely.
Moreover, absent some showing of actual prejudice either to the Government or to the absent class members, we cannot conclude that the simultaneous entry of the judgment and the class action certification was reversible error. The only prejudicial factor which the Government suggests in this case is that simultaneous entry of the
B. Due Process Notice Requirements
This case thrusts us directly into the controversy over the precise prejudgment notice requirements in Rule 23(b)(1) class actions.
The question before the Court in Eisen was whether Rule 23(c)(2), which requires in Rule 23(b)(3) actions "the best notice practicable under the circumstances including individual notice to all members who can be identified through reasonable effort," was satisfied by notice through publication rather than individual notice to the two and one quarter million easily identifiable members of a Rule 23(b)(3) class.
Sosna, decided just last Term, provides some firm indication that the Court intends to pursue a different approach to notice problems in actions certified under sections other than 23(b)(3). Sosna involved a class suit for declaratory and injunctive relief challenging the constitutionality of Iowa's durational residency requirement for divorce petitions. Recognizing that "it [was] contemplated that all members of the class will be bound by the ultimate ruling on the merits," 419 U.S. at 403, 95 S.Ct. at 559, the Court first satisfied itself that the conditions of Rule 23(a) had been met. Id. As to the issue of notice in a Rule 23(b)(2) action, the Court stated in a footnote that "the problems associated with a Rule 23(b)(3) class action, which were considered by this Court last Term [in Eisen], are not present in this case." Id. at 397, n.4, 95 S.Ct. at 556.
Recognizing that the Court seems to have relied primarily on the language of the Rule rather than on constitutional grounds, a number of lower federal courts have concluded that Eisen and Sosna strongly imply that notice is not required in actions brought under subdivisions other than 23(b)(3). United States v. Allegheny-Ludlum Industries, Inc., 517 F.2d 826, 878-79 (5th Cir. 1975) (Rules 23(b)(1) and 23(b)(2)); Wetzel v. Liberty Mutual Insurance Co., 508 F.2d 239, 255-57 (3d Cir.) (Rule 23(b)(2)), cert. denied, 421 U.S. 1011, 95 S.Ct. 2415, 44 L.Ed.2d 679 (1975); Mattern v. Weinberger, 519 F.2d 150, 157-58 (3d Cir. 1975) (Rule 23(b)(2)) (citing Wetzel, supra); Molina v. Weinberger, No. 74-1611 (9th Cir. Oct. 1, 1975), slip opinion at 11-14 (Rule 23(b)(2)); e. g., American Finance System, Inc. v. Harlow, 65 F.R.D. 94, 110-11 (D.Md.1974) (Rule 23(b)(2)). Indeed, the Second Circuit has now concluded that prejudgment notice is not required in 23(b)(2) actions, Frost v. Weinberger, 515 F.2d 57, 65 (2d Cir. 1975) (Friendly, J.), see Ives v. W. T. Grant Company, 522 F.2d 749, 764 (2d Cir. 1975), and the Seventh Circuit has indicated that its Schrader opinion will have to be reexamined in light of Eisen, Bijeol v. Benson, 513 F.2d 965, 968 n.3 (7th Cir. 1975).
Our own resolution of the due process claim in a Rule 23(b)(1) action must also
Unlike the situation with respect to members of a Rule 23(b)(3) class, the members of a Rule 23(b)(1) class are likely to be more unified in the sense that there will probably be little interest on the part of individual members in controlling and directing their own separate litigation on the question at issue in the class suit. Indeed, in a Rule 23(b)(1)(B) class action, adjudications with respect to individual members would as a practical matter dispose of the interests of the absent members or substantially impair or impede their ability to protect their interests. At best, then, notice provides absent members with an opportunity to monitor the representation of their rights. In such cases, we think that due process is satisfied if the procedure adopted "fairly insures the protection of the interests of absent parties who are to be bound by it." Hansberry v. Lee, 311 U.S. 32, 42, 61 S.Ct. 115, 118, 85 L.Ed. 22, 27 (1940). We agree with the Ninth Circuit's recent observation that "[o]nly when the purposes in providing class members an opportunity to signify whether representation by named plaintiffs is fair and adequate or to intervene to present additional claims or to otherwise come into the action to, for example, submit views as amici curiae, are in need of being served, does due process require the direction of some sort of notice to absent members" of a Rule 23(b)(1) class. Molina v. Weinberger, supra, slip opinion at 13 (Rule 23(b)(2)). In such cases, notice can be provided pursuant to Rule 23(d)(2).
C. Disclosure Under Rule 23(d)
Plaintiffs argue that the District Court erred in refusing to grant their request for an order directing the Government to disclose the names and addresses of the members of the plaintiff class. Having considered the context in which this request was made, we cannot conclude that the District Court abused its discretion in refusing to issue a Rule 23(d) order.
On May 8, 1973 the attorneys for the named plaintiffs wrote to the United States Attorney's Office stating that "it would be helpful for the Court and plaintiffs if the U.S. Navy were to prepare a list of the names and locations of the plaintiffs [sic] class so that we would be in a position upon Court ruling to notify those members of the class." The United States Attorney did not respond favorably to the request. Plaintiffs apparently first mentioned the disclosure issue to the District Court in their opposition to the Government's initial motion for an extension of time in which to respond to the motion to confirm the class. In their written opposition, plaintiffs mentioned their correspondence with the Government, but failed to request a Rule 23(d) order.
As noted earlier, the Government filed a second motion for an extension of time in which to respond to plaintiffs' motion to confirm the class, and it was in their written opposition to that motion that plaintiffs formally requested an order requiring the Government to disclose the names and addresses of the class members. No reasons were offered to support that request; plaintiffs simply asked for a disclosure order "in addition" to a requested order fining the Government $500 per day per plaintiff for its continued delay in filing responsive papers.
The judgment entered by the District Court complied in all respects with Rule 23(c) in that it described the members of the plaintiff class. Absent some articulation of the reasons why plaintiffs thought a disclosure order would be necessary to protect the interests of absent class members, the District Court certainly cannot be said to have abused its discretion in denying the requested order.
IV. ATTORNEYS' FEES
Plaintiffs' counsel asked the District Court to award them attorneys' fees in the amount of $175,000, approximately 25% of their estimate of the total class recovery. The District Court chose not to follow a percentage of recovery approach and instead relied on the standards for computing attorneys' fees that it had fashioned in Kiser v. Miller, 364 F.Supp. 1311 (D.D.C.1973). Application of the District Court's Kiser approach to this case produced an award of $14,729. Shortly after appellate briefs in this case were filed, this court approved the approach which the District Court had taken in Kiser. Kiser v. Huge, 170 U.S.App.D.C. 407, at 423-426, 517 F.2d 1237, at 1253-1256 (D.C.Cir. 1974); 517 F.2d at 1289-93.
The District Court properly withheld calculation of that portion of the attorneys' fees award dealing with the efforts of counsel directed at this appeal, see Kiser, supra, at 425-426, 517 F.2d at 1255-1256; 517 F.2d at 1292, and we therefore remand the case to the District Court for a determination with respect to that question.
It is so ordered.
ON PETITION FOR REHEARING
Upon consideration of defendants appellants-cross appellees' petition for rehearing, it is
ORDERED by the Court that the aforesaid petition for rehearing is denied.
Statement of Circuit Judge McGowan, joined in by Senior Circuit Judge Rives and Circuit Judge Wright, as to why they voted to deny rehearing.
The Government has filed a petition for rehearing and a suggestion for rehearing en banc on the grounds that: (1) the panel opinion "conflict[s] with prior decisions of this Court and with decisions of the Supreme Court holding that public benefits such as the variable reenlistment bonus can never be the subject of `contract rights' and in the discretion of Congress may be reduced or terminated at any time before they are received"; and (2) the panel opinion "has unduly restricted the paramount powers of Congress, has disregarded a clear declaration of congressional purpose, and has significantly restricted the scope of an important constitutional grant of power" in ruling that Congress was not free to abrogate existing contract rights to the VRB. Because we are of the view that neither statement accurately reflects the scope of the panel decision, we deny the petition for rehearing.
Before discussing the three primary contentions pressed upon us by the Government, we note that the petition for rehearing focuses only on named plaintiff Johnson and other members of the class who began serving their periods of extended service after the effective date of the 1974 statute repealing the Variable Reenlistment Bonus system.
The Government first argues that named plaintiff Johnson had no contract right to a VRB award since "the very nature of the statute . . . which authorized the VRB was such as to prevent the VRB from ever becoming the subject of a `contractual entitlement'".
But we do not read Dickerson to mean that one can never claim a contract right to a benefit which in some contexts has been accurately labeled a gratuity. That just the opposite is true is illustrated by the Supreme Court cases cited by the Government dealing with changes in the salaries of Government officials. For example, in Fisk v. Jefferson Police Jury the Supreme Court noted:
116 U.S. 131, 133-34, 29 L.Ed. 587, 588 (1885).
The salary cases indicate that once someone agrees to perform certain services in exchange for a given sum of money, and the Government has received that performance — or, as in this case, insists on receiving it
The Government raises a second but equally unpersuasive argument as to why named plaintiff Johnson did not have a contract right to a VRB award, namely, that enlisted documents must be construed to incorporate not only the statutes in force at the time the agreement is signed but future changes in those statutes as well. Petition at 8. The Government's point on this issue is certainly accurate as to regular pay for enlistees, and cases such as Johnson v. Powell, 414 F.2d 1060 (5th Cir. 1969), indicate that the Government's point has broad applicability. But this does not mean that Congress is without authority to decide to promise a specific sum, rather than an uncertain sum, to achieve a given result, and this is precisely how the panel interpreted the extension agreement. Our review of the legislative history — which is clear — and the regulations — which at times are ambiguous — led us to conclude that Congress intended — and the regulations provided — a promise to pay a specific sum (in the form of a VRB) not dependent on future change.
As we read the petition, the Government does not argue that Congress is without power to establish a VRB scheme not dependent on future change. Instead, it argues that the contract for a VRB is like the normal contract for military pay — that is, a contract which anticipates future changes.
We stress that this is the only point on which we are in conflict with the Fourth Circuit. In Carini v. United States, 528 F.2d 738 (1975), that court took the position that the contract at issue anticipated possible statutory change, a result reached without analysis of the legislative history or applicable regulations. Moreover, as we indicated at footnote 35 in the panel opinion, all four district courts ruling on the issue disagree with the approach taken by the Fourth Circuit.
The final argument raised by the Government is that even if named plaintiff Johnson had a contractual right to a VRB award, Congress was exercising a paramount power in repealing the statute and thus under Lynch v. United States, 292 U.S. 571, 54 S.Ct. 840, 78 L.Ed. 1434 (1934), was constitutionally free to abrogate existing contract rights.
We have no disagreement with the Government's assessment of these purposes, but the determinative factor is that they have nothing to do with enlisted personnel who had already agreed to extend their enlistments before Congress repealed the prior statute. The purposes identified by the Government speak in prospective terms and are completely unrelated to men who had already agreed to serve the additional two years; as a result, they cannot be used to justify a change in the terms of already binding extension agreements.
App. at 130.
As to the other six named plaintiffs, it was stipulated by the parties that they could receive their Regular Reenlistment Bonuses without prejudice to their claims for VRBs. App. at 248.
In 1922, Congress enacted a single and more systematic piece of legislation authorizing reenlistment bonuses to enlisted members of the army, navy, and marine corps. Act of June 10, 1922, ch. 212, §§ 9-10, 42 Stat. 629-30, as amended, Act of June 16, 1942, ch. 413, §§ 10, 19, 56 Stat. 364, 369, as amended, Act of Sept. 7, 1944, ch. 407, § 8, 58 Stat. 730, as amended, Act of June 28, 1947, ch. 162, § 4, 61 Stat. 192. See also Act of Aug. 18, 1941, ch. 364, § 2, 55 Stat. 629, as amended, Act of June 16, 1942, ch. 413, § 10, 56 Stat. 364, as amended, Act of Oct. 12, 1949, ch. 681, § 531(b)(29), 63 Stat. 838. This coordinated approach to reenlistment bonuses was again overhauled in 1949. Career Compensation Act of 1949, ch. 681, § 207, 63 Stat. 811, as amended, Act of July 16, 1954, Pub.L.No.506, 68 Stat. 488, as amended, Act of July 25, 1961, Pub.L.No.87-103, 75 Stat. 219. These provisions were enacted into positive law in 1962 and codified as 37 U.S.C. § 308, see Act of Sept. 7, 1962, Pub.L.No.87-649, 76 Stat. 467, and were restated without substantive change in 1968, see Act of Oct. 22, 1968, Pub.L.No.90-623, §§ 3(1), 6, 82 Stat. 1314-15.
In 1974, Congress amended the relevant statutory provisions to limit eligibility for the reenlistment bonus to those servicemen who possess skills designated as "critical" by the Secretary of Defense. Armed Forces Enlisted Personnel Bonus Revision Act of 1974, § 2(1), 37 U.S.C. § 308 (Supp.IV, 1974). The 1974 amendments also contained a grandfather clause preserving the options of those servicemen eligible for a reenlistment bonus on the date before the effective date of the 1974 amendments. Armed Forces Enlisted Personnel Bonus Revision Act of 1974, Pub.L.No.93-277, § 3, 88 Stat. 121.
It is also important to note that Congress has often established a limitation on the total amount that could be paid to an enlisted member in the form of regular reenlistment bonuses. See, e. g., Career Compensation Act of 1949, ch. 681, § 207(a), 63 Stat. 811. The Variable Reenlistment Bonus does not count toward this statutory maximum. Act of August 21, 1965, Pub.L.No.89-132, § 3, 79 Stat. 547, as amended, 37 U.S.C. § 308 (Supp.IV, 1974).
H.R.Doc.No.170, 89th Cong., 1st Sess. 12 (1965).
The career manning level is the ratio of the number of career personnel in a military specialty to the career requirements in that specialty. Id. at ¶ III.K. And career personnel is defined to include "first term personnel who are serving in an enlistment, as extended, or an extension of enlistment that will total six or more years of active service." Id. at ¶ III.I. (emphasis added). Consequently, appellants, by extending their enlistments at a time when the VRB award level was set at a multiple of four, may have contributed to the very satisfaction of Navy personnel requirements that led to termination of the VRB for the CTM rating. Indeed, in explaining to plaintiff Larionoff's elected representatives why he was ineligible for the VRB award, the Chief of Naval Personnel wrote: "Although the communications technician (maintenance) rating was formerly VRB eligible, the most recent review of the manning levels dictated that it be removed from the eligibility list." App. at 149 (emphasis added).
We are aware that the Fourth Circuit has reversed the District Court decision in Carini on the ground that the 1965 statute was not "a part of the reenlistment agreement," 528 F.2d at 741, and that the "contract . . . anticipated possible statutory change," 528 F.2d at 741. Carini v. United States, No. 75-1399 (Dec. 19, 1975). We obviously disagree. The Government argued that the case before us turns primarily on the construction of the applicable military regulations. Brief at 15. And as our textual discussion indicates, we construe those regulations to mean that VRB eligibility attaches when an extension agreement is signed. Thus, under our view of the case, the contract clause did not anticipate possible statutory changes and an explicit clause would have been necessary to achieve that effect given existing regulations. See pages 175 U.S.App.D.C., ___-___, 533 F.2d pages 1178-1179 supra.
The Fourth Circuit opinion in Carini also places some emphasis on the Congressional intent evidenced in a section of the Conference Report accompanying the 1974 statute ironically labeled "Clarification of interpretation of bill language". H.R.Rep.93-985, 93d Cong., 2d Sess. 4 (1974), U.S.Code Cong. & Admin.News 1974, p. 3000. Even if we were to agree that the language in the report indicates that Congress intended to allow the members of this class to become eligible for the new Selective Reenlistment Bonus "if, during the initial enlistment period, the old reenlistment extension agreements are cancelled and new ones executed calling for a longer period of extended service," 528 F.2d at 740, we would still be unable to find any reason to justify congressional abrogation of existing contract obligations to members of the class.
It has been held that if the only practical effect which the putative class action would have on the interests of other members of the class is a stare decisis effect on actions filed in the same jurisdiction and perhaps a persuasive effect on actions filed in other jurisdictions, the suit would not qualify as a class action pursuant to Rule 23(b)(1)(B). E. g., Lamar v. H & B Novelty & Loan Co., 489 F.2d 461, 467 (9th Cir. 1973); Richardson v. Hamilton Int'l. Corp., 62 F.R.D. 413 (E.D.Pa.1974). As the Ninth Circuit recently observed, allowing the stare decisis consequences of an individual action to supply the practical disposition or substantial impairment of the rights of the class "would make the invocation of Rule 23(b)(1)(B) unchallengeable" in cases meeting the class action prerequisites of Rule 23(a). LaMar v. H & B Novelty & Loan Co., supra, 489 F.2d at 467.
In deciding not to challenge the merits of the District Court's ruling, the Government apparently concludes that this case meets the practical effect standard of Rule 23(b)(1)(B) precisely because the Government, unlike private litigants, is required to treat all class members alike. See, e. g., Guadamuz v. Ash, 368 F.Supp. 1233, 1235 (D.D.C.1973) (action maintained as a class action under Rule 23(b)(1)(A), 23(b)(1)(B), and 23(b)(2)); Pennsylvania Ass'n for Retarded Children v. Pennsylvania, 343 F.Supp. 279, 291-92 (E.D.Pa.1972) (defendant class action maintained pursuant to Rule 23(b)(1)(B)).
To the extent that there might be doubt that this suit qualifies for class action status under Rule 23(b)(1)(B), we note that the suit would appear to qualify for class action status under Rule 23(b)(1)(A), which covers cases in which the prosecution of separate actions by or against members of the class would create a risk of inconsistent or varying adjudications which would establish incompatible standards of conduct for the party opposing the class. See Maricopa County Mun. Water Con. Dist. v. Looney, 219 F.2d 529 (9th Cir. 1955) (cited in Advisory Committee Note to Rule 23(b)(1)(A), 39 F.R.D. 100 (1966)); Guadamuz v. Ash, supra. See generally 7A C. Wright & A. Miller, supra, § 1773 (1974 Supp.); Note, Community Standards, Class Actions, and Obscenity Under Miller v. California, 88 Harv.L.Rev. 1838, 1868-69 n. 130 (1975). In their motion in the District Court to confirm the class, the named plaintiffs sought certification under Rule 23(b)(1)(A) as well as under Rules 23(b)(1)(B), 23(b)(2), and 23(b)(3).
In any event, the failure of the Government to challenge on appeal the propriety of the class designation eliminates the need for us to resolve that issue. Rizzo v. Goode, 423 U.S. 362, 96 S.Ct. 598, 46 L.Ed.2d 561, 44 U.S.L.W. 4095, 4098 n. 7 (U.S. Jan. 21, 1976).
Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 167, 94 S.Ct. 2140, 2147 (1974).
It is uncertain, however, whether the Supreme Court would conclude that due process requires individual prejudgment notice. As Professor Dam has noted, "[a] close reading of Mr. Justice Powell's opinion [in Eisen] suggests that he did not want to base the notice holding on the Constitution. Yet his plain meaning methodology in interpreting the Rule apparently does not satisfy even him. He returns time and again to due process considerations to give plausibility to his literalist interpretation of the Rule." Class Action Notice: Who Needs it?, 1974 Sup.Ct.Rev. 97, 110. For Professor Dam's discussion of the structure of the opinion in terms of its reliance on the wording of Rule 23 and on due process considerations, see id. at 109-111.
It has been persuasively argued that Mullane and similar cases do not compel the conclusion that individual notice is required in all Rule 23(b)(3) class actions. See, e. g., Note, Managing the Large Class Action: Eisen v. Carlisle & Jacquelin, 87 Harv.L.Rev. 426, 433-441 (1973). But even were the Supreme Court to conclude that due process required individual notice in Rule 23(b)(3) actions, application of the Mullane balancing approach could lead to different results with respect to Rule 23(b)(1) and 23(b)(2) actions given the different interests at stake. Indeed, the subsequent textual discussion of Sosna suggests that very conclusion.
7A C. Wright & A. Miller, supra, § 1786 at 143-44 (footnotes omitted). See Molina v. Weinberger, No. 74-1611 (9th Cir. Oct. 1, 1975), slip opinion at 12-13.
The other "gratuity" cases relied on by the Government resemble Belcher and Flemming, rather than the case of the holder of an annuity. See, e. g., Thompson v. Gleason, 115 U.S.App.D.C. 201, 317 F.2d 90, 96 (1962) (disability benefits); Barnett v. Hines, 70 U.S.App.D.C. 217, 105 F.2d 96, cert. denied, 308 U.S. 573, 60 S.Ct. 88, 84 L.Ed. 480 (1939) (retirement pay).
Id. at 726 (footnote omitted). We would find it difficult to conclude that there was no financial cost in the acquisition of the right to a VRB or that the right to a VRB is not controlled by the merits of the enlisted person's claim — namely, willingness to extend his period of service.