United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                     ___________

                                     No. 00-3199
                                     ___________

Terry L. Jones; Patricia K. Jones;       *
Jones Publishing, Inc.; Jones Oil        *
Company, Inc.; Jones Petroleum           *
Company, a partnership; J. O.            *
Holding, formerly known as Jones         *
Oil Company, Inc.,                       *
                                         *
            Appellants,                  *
                                         *   Appeal from the United States
      v.                                 *   District Court for the District
                                         *   of Nebraska.
United States of America; Stephen L.     *
Tinsley; Sandy Job-Rivera; Christie      *
Stubbert; Charles Vonderschmitt; John    *
Doe, Unknown Internal Revenue            *
Service Department of the Treasury       *
and Department of Justice Employees;     *
Jane Roe, Unknown Internal Revenue       *
Service Department of the Treasury       *
and Department of Justice Employees;     *
Richard Roe, Unknown Internal            *
Revenue Service Department of the        *
Treasury and Department of Justice       *
Employees,                               *

            Appellees.
                                     ___________

                            Submitted: June 13, 2001

                                 Filed: July 5, 2001
                                      ___________

Before MURPHY, HEANEY AND BEAM, Circuit Judges.
                         ___________

BEAM, Circuit Judge.

       This matter now reaches this court for a third time. The appellants (collectively
the "Joneses") appeal the district court's1 denial of their Rule 60(b) motion for relief
from judgment. We affirm.

       The facts underlying this case are amply set forth in our two earlier opinions,
Jones v. United States, 

(8th Cir. 1996) ("Jones I") and Jones v. United
States, 

(8th Cir. 2000) ("Jones II"). In brief, the Joneses filed suit after
an IRS agent improperly revealed confidential tax return information to an informant
and in doing so caused the financial demise of the Jones Oil Company. In Jones I, we
held that the burden of proving "good faith" under 26 U.S.C. § 7431(b), falls on the

. In Jones II, we reduced the Joneses' damages award
to remove an improper element of pre-judgment interest and sustained the district
court's denial of punitive damages and attorneys' 

. This appeal
raises only a narrow question regarding the scope of our holding in Jones II.

        At trial, the Joneses' expert witness calculated damages by capitalizing Jones
Oil's income stream at the time of the company's demise. He then projected that value
forward to the date of trial as if it had been invested at the "Baa bond rate." 

He similarly projected forward Jones Oil's real estate and personal property losses. 

post-trial reply brief, the government asserted these projections constituted pre-
judgment interest, which may not lie against the government absent an express waiver


      1
       The Honorable Richard G. Kopf, Chief Judge, United States District Court for
the District of Nebraska.

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of sovereign immunity from such an award. After the district court rejected this
argument, the government appealed. In Jones II, we agreed with the government:

      Perhaps if [the Joneses' expert] had stated as his opinion that the value of
      the business and the property would have increased a certain amount in
      the relevant interim, that increment would have been recoverable. . . . In
      any event, that is not our case. In our case, the district court awarded
      amounts that compensated the Joneses for the loss of investment capital
      between the time of the loss and the date of trial. This is nothing more
      than damages for the delay in receiving money and, we think, cannot be
      properly characterized as anything but interest. The character or nature
      of interest does not change simply because it is called by another 

(citations omitted). We held that "[t]he judgment must therefore be
reduced by $2,560,081." 

the district court entered an amended
judgment reflecting our order.

       The Joneses then filed a motion for relief from judgment pursuant to Federal
Rule of Civil Procedure 60(b). Had the government raised the argument sooner, they
argued, they could have introduced additional economic evidence and demonstrated
their damages in a manner less resembling pre-judgment interest. The government's
timing, they continued, constituted unfair surprise and entitles them to a new trial. See
Fed. R. Civ. P. 60(b)(1). Rather than meet the merits of the Joneses' motion, the
district court denied it on the grounds that our holding in Jones II had settled the
question, and that it was therefore bound by our mandate and without authority to
entertain the motion. The Joneses appeal this ruling.

       Ordinarily, we review a district court's denial of a Rule 60(b) motion for abuse
of discretion. Ivy v. Kimbrough, 

, 552 (8th Cir. 1997). This case,
however, presents an unusual situation because rather than deny the motion on its



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merits, the district court did so on the grounds that our mandate constrained its
authority. We review such questions of law de novo.

       The parties do not dispute the governing principles. All issues decided by an
appellate court become the law of the case. U.S. v. Behler, 

, 635 (8th Cir.
1996). This rule extends not only to actual holdings but also to all issues implicitly
settled in prior rulings. Roth v. Sawyer-Cleator Lumber Co., 

, 602 (8th Cir.
1995). On remand, a district court is bound by all such determinations. United States
Fidelity & Guarantee Co. v. Concrete Holding Co., 

, 342 (8th Cir. 1999).

      Whether the district court had authority to entertain the merits of the Joneses'
Rule 60(b) motion, then, turns on whether we explicitly or implicitly resolved in Jones
II the question whether the government's delayed assertion of sovereign immunity
constituted surprise. Our opinion in Jones II does not explicitly settle the question, as
nowhere therein did we address surprise. Moreover, that issue simply could not have
been before this court in Jones II. The district court specifically rejected the sovereign
immunity argument the government raised in its post-trial briefing. Jones v. United
States, 

, 1145 n.23 (D. Neb. 1998). Having prevailed below prior
to the Jones II appeal, the Joneses' had no cause to raise a Rule 60(b) motion seeking
relief from a judgment due to surprise.

       The government sets the question to a different spin, focusing on the text of
Jones II where we ordered "[t]he judgment must therefore be reduced by 

. Given this strict mandate, the government argues, the district court
lacked authority to do anything but enter a judgment amended as ordered. In so far as
the amended judgment is concerned, the government is correct. Yet, an appellate court
order resolving one issue, here that the award as originally ordered improperly included
pre-judgment interest, does not strip the district court of other post-judgment authority,
such as that granted by Rule 60(b). Certainly, the district court could not use its Rule
60(b) authority to ignore or reverse this court's mandate, but that mandate does not

                                           -4-
prevent it from entertaining the merits of such a motion. We therefore conclude that
the district court had authority to visit the merits of the Joneses' motion.

       This does not dispose of the matter, however, for "[w]e may affirm the district
court on any basis supported by the record." Gonzales-Perez v. Harper, 

,
638 n.6 (8th Cir. 2001). Rule 60(b) relief may be afforded in only the most exceptional
of circumstances. General Electric Co. v. Lehnen, 

, 67 (8th Cir. 1992). As
the record in this case does not suggest any such circumstances, we conclude that the
Joneses are not entitled to Rule 60(b) relief.

       In Jones II, we agreed with the government that the damage award in favor of
the Joneses contained an element of pre-judgment interest, which cannot lie against the
government absent an express waiver of the government's sovereign immunity

. This rule has long been well established. See Library
of Congress v. Shaw, 

, 314 (1986) (tracing history of rule requiring
separate waiver of immunity for interest award). Moreover, it is axiomatic that because
sovereign immunity implicates our subject matter jurisdiction, the issue may not be
waived, and the government may raise it at any stage. Arneson v. Callahan, 

, 1245 n.3 (8th Cir. 1997); Preferred Risk Mutual Ins. Co. v. United States, 

, 793 (8th Cir. 1996) (citing cases). Indeed, in cases implicating subject
matter jurisdiction, federal courts are obliged to raise the issue sue sponte even where
the parties themselves have failed to do so. See, e.g., Gorman v. Easley, Nos.00-1029
& 00-1030, 

, at *2 (8th Cir. June 13, 2001).

        Had we raised the issue sue sponte, our ruling would not have been susceptible
to relief pursuant to a Rule 60(b) motion alleging unfair surprise.2 We do not think the
issue warrants contrary disposition simply because the government raised the issue


      2
       Indeed, in Jones II, we seem to have raised a related issue on our own motion,
pointing out that the Joneses were entitled to post-judgment 

.

                                          -5-
itself. The Joneses' argument that all parties and the district court seemed to agree to
a large extent on the proper damages formulation does not affect this conclusion. To
permit a finding of surprise because the government belatedly raised an issue which our
precedent clearly establishes may be raised at any point would work to the detriment
of federal courts' ability to properly review their own jurisdiction.

        Moreover, to grant the Joneses the relief they request would simply be to award
them a second bite at the apple. The Joneses proffered a theory of damages which
projected capitalized income forward over time as a given return on investment. Now
they argue that with proper warning as to the sovereign immunity problem, they could
have argued that their actual loss at the time of Jones Oil's demise, calculated in a
different way, was equal to the company's projected earnings stream. As an initial
matter, we do not see how that argument would circumvent our holding in Jones II.
That aside, however, as with all litigants, the Joneses had their day in court to present
their case as they saw fit. We have previously held that an attorney's ignorance or
carelessness is not cognizable under Rule 60(b). Cline v. Hoogland, 

, 778
(8th Cir. 1975). We think the same rule applies to litigation strategy and evidentiary
choices. That the Joneses' chosen approach to damages might be characterized as
including prejudgment interest is hardly so novel as to constitute surprise warranting
relief under the strictures of Rule 60(b).

       Thus in sum, while we agree with the Joneses that the district court should have
entertained the merits of the motion, in doing so the district could have but concluded
that the Joneses' motion should be denied. Accordingly, we affirm.




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A true copy.

      Attest:

         CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




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