United States v. 2011-11-21 | 09-15808 | Alfred Albano V. Shea Homes Limited Partnership |…

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
 ALFRED ALBANO, an unmarried
man; MONICA LEWIS, an unmarried
woman; SAMANTHA BAKER, an
individual; ARIEL BARR, an
unmarried man; PHILLIP BARR, a
single man; KEITH BODIE, husband;
STACY BODIE, wife; JON L. BRUCE,
an individual; CRAIG BURKE,
husband; LINDA BURKE, wife;
DAWN R. CAIN, an individual;
CHRISTINA CARLSON, an individual;
CHARLES CHEN, husband; LISA
CHEN, wife; CHRISTOPHER
CORDASCO, an individual; PAUL 
CRANDELL, husband; JENNIFER
CRANDELL, wife; KENT ELLSWORTH,
husband; LAUREE ELLSWORTH, wife;
RONALD FILIPSKI, husband; LAURA
FILIPSKI, wife; ANGELICA HARVEY,
an individual; DIRK HOWARD,
husband; NANCY HOWARD, wife;
GEORGE HULECKI, husband; JEANNE
HULECKI, wife; CANDACE HURTT,
wife; JAMES CRAIG, husband;
ROBERT KEGERREIS, Trustee of the
Kegerreis Family Trust u/a/d June
15, 2005; 
20309

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 CYNTHIA KEGERREIS, Trustee of the
Kegerreis Family trust u/a/d June
15, 2005; JOHN R. LETTEER,
husband; JUDITH LETTEER, wife;
KELLY J. MALLORY, an individual;
CHARLES MCGOLDRICK, husband;
MAUREEN MCGOLDRICK, wife;
ROBERT L. MITCHELL, a single
man; BEATRICE M. LINNE, an
unmarried woman; RICHARD
NAVARRO, an individual; SCOTT A.
OLMSTEAD, husband; AMBER S.
OLMSTEAD, wife; DONALD W.
ROBERTS, husband; JULIA A.
ROBERTS, wife; LINDA S. RODELA,
an individual; JACK E. ROSE, JR.,
husband; SHAWNA R. ROSE, wife;
MARK B. SAMFORD, husband; 
REBECCA L. SAMFORD, wife; JANE
D. SCHMALTZ, an individual;
RICHARD SCOTT, husband; SHARON
SCOTT, wife; DENNIS SIMPSON, an
individual; BLAKE SLAUGHTER,
husband; CHANTELL SLAUGHTER,
wife; BRUCE TARMAN, husband;
JANELLE TARMAN, wife; MICHAEL L.
TOMAINO, II, an individual; ERIC T.
VALIMAKI, husband; CRISTI D.
VALIMAKI, wife; DAVID A.
WENMAN, husband as Trustee of
the Wenman Family Trust dated
July 9, 1999; JACQUELINE DIANE
WENMAN, wife, as Trustee of the
Wenman Family Trust dated July
9, 1999; 
20310 ALBANO v. SHEA HOMES

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 SETH WHEELER, husband, on his
own behalf and on behalf of all
others similarly situated;
JACQUELINE WHEELER, wife, on her No. 09-15808
own behalf and on behalf of all
D.C. Nos. others similarly situated; PHILLIS J.
2:07-cv-02359- SIMPSON, an individual,
SMM  Plaintiffs-Appellants,
2:08-cv-00505-v. SMM
SHEA HOMES LIMITED PARTNERSHIP, OPINIONan Arizona limited partnership;
J.F. SHEA CO., INC., a Nevada
corporation, DBA Shea Homes,
Defendants-Appellees. 
Appeal from the United States District Court
for the District of Arizona
Stephen M. McNamee, District Judge, Presiding
Argued and Submitted
June 16, 2010—San Francisco, California
Filed November 21, 2011
20311 ALBANO v. SHEA HOMES

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Before: Kenneth F. Ripple,* Raymond C. Fisher and
Sandra S. Ikuta,** Circuit Judges.
Opinion by Judge Ripple
*The Honorable Kenneth F. Ripple, Senior United States Circuit Judge
for the Seventh Circuit, sitting by designation.
**Due to the death of the Honorable Pamela A. Rymer, the Honorable
Sandra S. Ikuta, United States Circuit Judge for the Ninth Circuit, was
drawn to replace her. Judge Ikuta has read the briefs, reviewed the record,
and listened to the audio recording of oral argument held on June 16,
2010.
20312 ALBANO v. SHEA HOMES

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COUNSEL
Robert H. Willis, Burdman & Shore, Phoenix, Arizona, for
the plaintiffs-appellants.
Gary L. Birbaum and Barry R. Sanders, Mariscal Weeks
McIntyre & Friedlander, Phoenix, Arizona, for defendants-
appellees.
OPINION
RIPPLE, Senior Circuit Judge:
On June 30, 2011, the Supreme Court of Arizona answered
questions that we had certified to that court. Specifically, it
determined that the rule of American Pipe & Construction Co.
v. Utah, 414 U.S. 538 (1974), does not toll the statute of
repose for construction-defect claims set forth in Arizona
Revised Statutes section 12-552. Albano v. Shea Homes Ltd.
P’ship, 254 P.3d 360, 366 (Ariz. 2011). It also determined
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that Arizona’s savings statute, Ariz. Rev. Stat. § 12-504(A),
does not operate to save the appellants’ claims. Albano, 254
P.3d at 367.
Following our receipt of these answers, we allowed the par-
ties to file submissions to address whether there were any
issues left to be resolved by this court. The appellees
informed us that the Supreme Court of Arizona’s clear
responses to the certified questions were determinative of the
matters before the court: Appellants’ claims were time-barred.
The appellants agree that the Supreme Court of Arizona’s
answers definitively resolve their claims. Nevertheless, rely-
ing on Chevron Oil Co. v. Huson, 404 U.S. 97 (1971), they
ask that the rules articulated by the Supreme Court of Arizona
be applied only in a prospective manner, thus exempting the
appellants from the effects of those rules. We refuse to do so
for several reasons.
[1] First, the appellants never have argued that, in the
event that the court concluded that American Pipe tolling did
not save their claims, that determination should be nonretro-
active. Having failed to raise this alternative claim in a timely
manner, it is waived.
[2] Second, Chevron Oil is inapplicable here.1 As subse-
quent case law has made clear, Chevron Oil and its progeny
articulate a methodology for determining when a federal court
should apply a rule of federal law retroactively. See, e.g.,
Harper v. Va. Dep’t of Taxation, 509 U.S. 86, 97 (1993)
(“When this Court applies a rule of federal law to the parties
before it, that rule is the controlling interpretation of federal
1As the appellants note, this court recently has reaffirmed the vitality of
Chevron Oil Co. v. Huson, 404 U.S. 97 (1971), in this circuit. See Nunez-
Reyes v. Holder, 646 F.3d 684, 690 (9th Cir. 2011) (en banc) (stating that
“the three-factor Chevron Oil test remains good law, at least in cases, such
as this one, where we announce a new rule of law not affecting our juris-
diction”).
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law and must be given full retroactive effect . . . .”).2 When
we consider a matter of state law, however, “[w]e are
required, in exercising our appellate jurisdiction over this
diversity case, to apply the law as presently defined by the
highest court of [the State], despite the fact that the law was
altered after the judgment below was entered.” Nelson v.
Brunswick Corp., 503 F.2d 376, 381 (9th Cir. 1974) (citing
Vandenbark v. Owens-Illinois Glass Co., 311 U.S. 538 (1941)).3
2See also Lamb ex rel. Donaldson v. Volkswagenwerk Aktiengesell-
schaft, 631 F. Supp. 1144, 1151 (S.D. Fla. 1986) (“[T]he Supreme Court’s
pronouncement in Chevron Oil would not determine the result of this law-
suit even if Plaintiff had met its three-pronged standard. . . . Chevron Oil
concerned the retroactive application of a federal decision involving fed-
eral law. The task of this Court in this diversity action is to reconcile this
case with the current state of Florida law.”).
3We noted in Nelson, 503 F.2d at 381, that,
At the time the Vandenbark rule was adopted, it was undoubtedly
thought to be a necessary extension of the Court’s interpretation
of the Rules of Decision Act in Erie R. Co. v. Tompkins, 304 U.S.
64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). The rule has been criti-
cized, we think perhaps justly, because it can lead to a difference
in the result obtained in a federal and state court. In a state which
engages in prospective overruling, the federal appellate court’s
application of the new rule will lead to a different result than
would have resulted in a case pending in the state appellate courts
if the new rule were not applied retroactively. The Vandenbark
decision does not on its face seem to contemplate an independent
determination of whether the state will apply a change in its rules
of decision retroactively in ascertaining the law of a state; we
apply Vandenbark as a “hard-and-fast” rule here. However, we
do not think any difference would result from a more flexible
approach, as our analysis of the Washington decisions indicates
that Washington would probably apply this decision retroac-
tively.
Id. at 381-82 n.12 (citation omitted).
Since our decision in Nelson, several courts of appeals have commented
that the rule in Vandenbark “may run afoul of Erie when the intervening
change in state law would not have been applied retroactively by the state
courts themselves.” Moorhead v. Mitsubishi Aircraft Int’l, Inc., 828 F.2d
278, 289 (5th Cir. 1987); see also, e.g., Litton Sys., Inc. v. Am. Tel. & Tel.
20315 ALBANO v. SHEA HOMES

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[3] Even if we were free to deviate from the Vandenbark
rule, however, the same result would obtain. “Normally,
[Supreme Court of Arizona] decisions in civil cases operate
retroactively as well as prospectively.” Lowing v. Allstate Ins.
Co., 859 P.2d 724, 731 (Ariz. 1993). Although that court has
“a great deal of discretion to decide the most equitable time
to make new rules applicable,” id. (internal quotation marks
omitted), it gave no indication that its answers to the certified
questions should be given only prospective application. On
the contrary, we take judicial notice of the fact that the appel-
lants, by way of a motion for reconsideration, specifically
requested that the Supreme Court of Arizona “modify its
Opinion to have a prospective effect only with regard to class
action complaints filed after its date of decision” and that the
Supreme Court of Arizona denied the appellants’ motion for
reconsideration.
[4] Both of the parties agree that the Supreme Court of
Arizona’s answers to our certified questions put an end to the
litigation before this court. Consequently, we now hold that,
for the reasons articulated by the Supreme Court of Arizona,
the appellants’ claims are time-barred. The judgment of the
district court dismissing the appellants’ complaints is, there-
fore, affirmed.
AFFIRMED.
Co., 746 F.2d 168, 172 n.6 (2d Cir. 1984) (reciting result in Vandenbark
and noting that “[t]his result was reached to carry out the teaching of Erie
. . . though Erie probably required application only of state appellate deci-
sions that the state court itself said were applicable to judgments previ-
ously entered but pending on direct review”).
20316 ALBANO v. SHEA HOMES

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