Shalala

We consider whether a party that has paid its adversary’s attorney’s fees can petition under Fed.R.Civ.P. 60(b)(5) for relief from the fee judgment, if the underlying merits judgment is reversed.

I

California Medical Association and the other plaintiffs (collectively the “Associations”) provide medical services to Medicare beneficiaries. The Associations sued for higher reimbursements under 42 U.S.C. § 1983 and the Medicare statute, 42 U.S.C. § 1396 et seq. The district court ruled for the Associations and subsequently granted their 42 U.S.C. § 1988 motion for attorney’s fees from the Director of the California Department of Health Services, Kimberly Belshe. Belshe promptly paid the fee award. She appealed the district court’s merits decision, but not the fees.

We reversed based on an intervening clarification of the Medicare statute. See Beverly Community Hosp. Ass’n v. Belshe, 132 F.3d 1259, 1267 (9th Cir.1997). Belshe asked the Associations for return of the fees, but was rebuffed. She then moved under Fed.R.Civ.P. 60(b)(5) for relief from the fee award and restitution of the fees. Belshe reasoned that the award was no longer valid because it was based on a judgment that had…