Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-99-07058/USCOURTS-caDC-99-07058-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 14, 2000 Decided March 31, 2000

No. 99-7058

Joy Evans, et al.,

Appellees

v.

Anthony A. Williams, et al.,

Appellants

United States of America,

Appellee

Appeal from the United States District Court

for the District of Columbia

(No. 76cv00293)

Lutz Alexander Prager, Assistant Deputy Corporation

Counsel, argued the cause for appellants. With him on the

briefs were Robert R. Rigsby, Interim Corporation Counsel,

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Charles L. Reischel, Deputy Corporation Counsel, and Melvin

W. Bolden, Jr., Trial Counsel.

John L. Jacobus argued the cause for appellees Joy Evans,

et al. With him on the brief were Kelly Bagby and Joseph B.

Tulman. Patricia B. Millerioux entered an appearance.

Linda F. Thome, Attorney, U.S. Department of Justice,

argued the cause for appellee United States of America.

With her on the brief was Bill Lann Lee, Acting Assistant

Attorney General.

Before: Silberman, Williams, and Ginsburg, Circuit

Judges.

Opinion for the Court filed by Circuit Judge Silberman.

Silberman, Circuit Judge: The District of Columbia appeals from an order of the district court imposing contempt

fines of $5,096,340 on it for its failure to comply with a

consent decree. We agree with appellant that the fine was a

criminal sanction that could not be imposed without a criminal

trial; we also agree that the district court abused its discretion in refusing to modify the consent decree. We therefore

reverse.

I.

This case started back in 1976, when residents of Forest

Haven, the District of Columbia's institution for the mentally

retarded, brought a class action alleging a panoply of constitutional violations resulting from poor conditions at the facility. Named as defendants were the Mayor and four other

District officials (collectively, the "District"), all sued in their

official capacities. The United States soon intervened on the

side of the plaintiffs.

In 1978, the parties agreed to a consent judgment that

called for closing Forest Haven and placing its residents in

"community living arrangements." Over the next few years

the district court entered additional consent decrees. In 1983

it approved the order that underlies this dispute. That

decree governs almost every aspect of the District's treatUSCA Case #99-7058 Document #507429 Filed: 03/31/2000 Page 2 of 14
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ment of the mentally retarded. In particular, it requires the

District to place specified numbers of Forest Haven residents

in community institutions and to "insure that all vendors are

paid for their goods and services no later than thirty days

following their submission of acceptable vouchers."

By the mid-1990s, the District was confronted with financial problems of "horrendous proportions" and faced "its

worst crisis in over a century." H.R. Rep. No. 96, 104th

Cong., 1st Sess. 4 (1995). It was running an annual deficit of

over $600 million, and a congressional committee found that

"[t]he District of Columbia is insolvent: The City does not

have enough cash to pay all of its bills." Id. at 5. The

District began missing some of the payment deadlines set out

in the consent decree. In April 1995, on the motion of the

plaintiffs, the district court issued an order to show cause why

the defendants should not be held in contempt. It ultimately

so held but did not impose sanctions. Instead, it appointed a

special master to develop a remedial plan through which the

defendants could purge themselves of contempt, and it ordered that the plan include "specific monetary penalties for

noncompliance."

The special master completed her report in January 1996

and issued a supplemental report recommending prospective

sanctions a few months later. The defendants objected,

arguing that the prospective fines proposed were "unduly

harsh and punitive" and that delays in making payments were

"not due to any unwillingness to pay but due to a cash short

fall." But the district court adopted the master's proposed

remedial plan with only slight modifications. The plan provided that whenever the defendants failed to pay an invoice

within thirty days of submission a fine equal to twice the

amount of the invoice would be imposed. Services provided

by some of the facilities caring for the mentally retarded

qualify for Medicaid reimbursement. Because the District

made all Medicaid payments for each month at one time, and

because the payments due to the care providers averaged

approximately $2.8 million per month, a fine equal to twice

the amount of any Medicaid arrearage would have been very

large. The court therefore applied the doubling fines only to

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non-Medicaid payments. Late Medicaid payments, regardless of amount, were to result in a fine of $5,000 per day.

The District continued to miss payment deadlines, and in

April 1997 the plaintiffs moved for the imposition of sanctions.

While the sanctions motion was pending, the District sought

to modify the consent decree so that it would require that

vendors be paid within 45 days, rather than 30 days. Its

motion to that effect included affidavits from the District's

financial officials explaining that cash flow problems required

a 45-day payment cycle. The court referred both motions to

the special master.

The master concluded that the motion for sanctions was

unnecessary because the remedial plans made fines automatic. She thought the fines were civil coercive sanctions, so the

defendants were not entitled to the protections of criminal

procedures. Although she did not formally find that circumstances had changed so as to warrant modifying the order as

the defendants requested, she did recommend three changes

to the schedule of sanctions which essentially, at least prospectively, gave the District the relief it sought. First, fines

for missed payments would be forgiven unless the nonpayment continued until the 45th day. Second, fines for

delays in non-Medicaid payments would be reduced to $1,000

per day, regardless of the amount of the payment, and third,

fines for delays in Medicaid payments would be increased

from $5,000 per day to $10,000 per day.

The District objected to the special master's report and

demanded a jury trial. In Evans v. Williams, 35 F. Supp. 2d

88 (D.D.C. 1999), the district court adopted the special master's factual findings. Although it disagreed with the master's conclusion that the fines were automatic (noting that

automatic fines would amount to summary punishment for an

indirect contempt, a violation of due process), it granted the

plaintiffs' motion to impose fines. The district judge agreed

with the special master that the fines were civil rather than

criminal. Therefore provision of criminal procedures was

unwarranted, and the court rejected the District's objection

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tions unjust. It also adopted the special master's conclusions

with respect to modification of the order and the remedial

plan. But it modified the remedial plan only prospectively

from the date of its decision, which was almost two years

after the defendants had sought the modification.

The court ordered the District to pay $5,096,340 in fines,

and the District appealed.

II.

This case turns entirely on the proper characterization of

the contempt fine. Was it civil or criminal? If the fine was

criminal then it may be imposed only if the District's noncompliance--which the District claims was practically unavoidable--is proven beyond a reasonable doubt to be willful.

See United States v. Rapone, 131 F.3d 188, 195 (D.C. Cir.

1997). If it was civil the District would have had to show that

compliance was impossible to avoid the sanction. Perhaps of

even greater significance, if the judge's order is criminal in

character (and the fine is serious), then the District is entitled

to a jury trial. See Bloom v. Illinois, 391 U.S. 194, 198

(1968).

Traditionally, whether a contempt is civil or criminal has

depended on the "character and purpose" of the sanction. A

sanction is considered civil if it is "remedial, and for the

benefit of the complainant. But if it is for criminal contempt

the sentence is punitive, to vindicate the authority of the

court." Gompers v. Buck's Stove & Range Co., 221 U.S. 418,

441 (1911). There also has been a traditional distinction

between mandatory and prohibitory orders. The "paradigmatic coercive, civil contempt sanction ... involves confining

a contemnor indefinitely until he complies with an affirmative

command." International Union, United Mine Workers of

America v. Bagwell, 512 U.S. 821, 828 (1994). On the other

hand, a fixed term of imprisonment imposed retroactively to

punish an act of disobedience is criminal. This distinction has

been extended to fines, so that "a per diem fine imposed for

each day a contemnor fails to comply with an affirmative

court order" is civil, but an unconditional fine imposed "after

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a finding of contempt is criminal if the contemnor has no

subsequent opportunity to reduce or avoid the fine through

compliance." Id. at 829.

The District argues that the fines were indisputably not

compensatory (a classic aspect of a civil fine), for they were

paid to the court and not at all calibrated to the damage

caused by the District's conduct. Moreover, the fines, according to the District, were fixed and determinate; there

was no opportunity to escape their consequences by altering

behavior, i.e., to purge them once they were imposed. In

other words, the fines were designed primarily to punish past

acts rather than coerce future conduct and therefore should

be thought punitive.1

Appellees argue instead that the fines should be seen as

coercive and therefore civil in character because the schedule

of prospective fines was announced in advance. The District

therefore had the capacity to avoid the fines, so to speak to

purge itself of contempt, by altering its conduct prior to the

time the fines accrued. The United States makes a similar

argument: the fines "were imposed for each day or month in

which the defendants failed to comply with the 30-day payment requirement, and ended once the defendants complied

with the requirement." In effect, the government would

treat the defendants' contempt as one ongoing systemic problem of noncompliance with the consent decree. Each missed

bill payment deadline would be another instance of the ongoing contempt. On this view the fines for missed bill payments were coercive sanctions that were imposed only so long

as the defendants remained in contempt and that stopped

being imposed once the defendants began to comply.

Recently the Supreme Court in Bagwell had occasion to

struggle with the elusive distinction between civil and criminal contempt fines. In Bagwell a state court had imposed

__________

1 The District does not challenge the per diem fines associated

with late Medicaid payments (even to the extent of raising an

impossibility defense). We therefore discuss only the doubling fines

associated with non-Medicaid payments.

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fines of $52 million against the United Mine Workers for

repeated violations of an injunction prohibiting the union and

its members from engaging in illegal picketing practices,

including throwing rocks at employees and obstructing access

to company facilities. The court had set forth a prospective

schedule of fines, which it too had characterized as "civil and

coercive," saying that payment "would only be required if it

were shown the defendants disobeyed the Court's orders." Id.

at 824. The Supreme Court nevertheless held that the

sanctions were criminal and that the union was entitled (due

process) to the protections of criminal procedures.

The Supreme Court began its analysis by noting that the

fines were not compensatory because they were paid to the

court and not the company that was injured by the union's

conduct. Then, it recognized the futility of distinguishing

between coercing affirmative acts and punishing prohibited

conduct (pointing out, for example, that "an injunction ordering the union: 'Do not strike,' would appear to be prohibitory

and criminal, while an injunction ordering the union: 'Continue working,' would be mandatory and civil"). Id. at 835. Nor

did it attach significance to the fact that the trial court had

prospectively announced a schedule of sanctions, reasoning

that "the union's ability to avoid the contempt fines was

indistinguishable from the ability of any ordinary citizen to

avoid a criminal sanction by conforming his behavior to the

law." Id. at 837. It thought that the fines were most closely

analogous to fixed, determinate criminal fines that the union

had no chance to purge once imposed.

Appellees' and intervenor's effort to lump together each

District action or inaction in a continuous course of noncompliance is inconsistent with the Supreme Court's Bagwell

analysis. If their approach governed, the United Mine Workers' contempt would have been treated not as a series of

discrete acts but as an ongoing pattern of noncompliance with

the order to refrain from violence. Each fine would have

been thought imposed not for a particular violent act but as

additional coercion (like a per diem fine) for a continuation of

the ongoing contempt. Accordingly, drawing upon Bagwell, it

is improper to regard the District as capable of purging itself

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of contempt by paying a bill before the thirtieth day--it

simply was not in contempt until it failed to pay on the

thirtieth day. Each missed payment was a separate violation

of the consent decree and a separate act of contempt. And

for each act of contempt, the District was subjected to a onetime determinate fine; once it was imposed, there was no

opportunity to eliminate it through future compliance. To be

sure, the District could have avoided liability had it paid each

bill before the thirtieth day. But as the Bagwell Court

pointed out, this is no different from any citizen's ability to

avoid punishment by conforming his conduct to the law.

Appellees also argue that the fines are not large enough to

be scrutinized under Bagwell.2 They do not suggest that a

fine of over $5 million is not "serious"--obviously it is.

Instead, they contend that the many smaller fines that make

up the $5 million should be evaluated separately. This overlooks the large size even of some of the component fines (for

example, a $104,600 bill paid on the 31st day produced a

$209,200 fine). More fundamentally, it is at odds with the

approach taken by Bagwell, which considered the amount of

the total fine. See id. at 837 ("The fines assessed were

serious, totaling over $52 million.") (emphasis added); see

also NOW v. Operation Rescue, 37 F.3d 646, 660 (D.C. Cir.

1994) (Aggregate fine of $193,623 was "large enough to invite

our scrutiny under the principles enunciated in Bagwell.").

In any event, it was the nature of the injunction itself,

rather than the form or amount of the fines, that appears to

have been the key to the Court's determination that the

contempt was criminal in character in Bagwell. The Court

described the injunction as establishing a "detailed code of

conduct," Bagwell, 512 U.S. at 836, and it was that "consideration" that convinced the court that the fines were criminal.

The union's sanctionable conduct did not occur in the

court's presence or otherwise implicate the court's ability

to maintain order and adjudicate the proceedings before

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2 Neither the appellees nor the intervenors argue that, even if

the fine is criminal, it is nevertheless "petty" and could be imposed

without a jury trial. Cf. Taylor v. Hayes, 418 U.S. 488 (1974).

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it. Nor did the union's contumacy involve simple, affirmative acts, such as the paradigmatic civil contempts

examined in Gompers. Instead, the Virginia trial court

levied contempt fines for widespread, ongoing, out-ofcourt violations of a complex injunction. In so doing, the

court effectively policed petitioners' compliance with an

entire code of conduct that the court itself had imposed.

The union's contumacy lasted many months and spanned

a substantial portion of the State.

Id. at 837-38.

In response to the District's claim that the order before us

is just the same kind of complex injunction that was before

the Court in Bagwell, appellees (and the intervenors) argue

that we should see the consent decree as only addressing

various simple discrete acts; in other words, they would

disaggregate the decree. But, if anything, the decree here is

more far-reaching than the Bagwell injunction which, after

all, did not seek to control the union's business. It only

prohibited violence at a strike at one company. Here, by

contrast, the decree governs the administration of an entire

governmental program in the District of Columbia. It prescribes a complete code of conduct--originally covering everything from bill payments to staffing to air conditioning--

that the district court has enforced for years. Even the

payment requirement has complex elements because the District paid over one hundred non-Medicaid providers each

month.

Appellees complain that if sanctions such as these were

deemed criminal and not civil, it would be difficult for the

court to manage litigation seeking institutional reform. That

may well be so. Giving alleged wrongdoers the benefit of a

hearing before a neutral factfinder--particularly a jury--is

always in some sense an impediment to judicial power. And

it is not surprising that district courts around the country,

reluctant to surrender part of their power to coerce obedience

to their decrees, have resisted the logic of Bagwell.3 But as

__________

3 See, e.g., Crowe v. Smith, 151 F.3d 217, 221 (5th Cir. 1998)

(reversing order "imposing serious criminal sanctions ... via a

manifestly civil process"); Mackler Prods., Inc. v. Cohen, 146 F.3d

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the Supreme Court noted, there are countervailing considerations. When a district judge assumes the responsibility to

regulate the activities of a large institution and then seeks to

identify and punish violators of his or her injunction, he or

she comes perilously close to fusing the powers which our

Constitution separates. See Bagwell, 512 U.S. at 831 ("Unlike most areas of law, ... civil contempt proceedings leave

the offended judge solely responsible for identifying, prosecuting, adjudicating, and sanctioning the contumacious conduct."). The Court was not unaware that its decision would

lay "burdens on courts' ability to sanction widespread, indirect contempts of complex injunctions," id. at 838--nor are

we. Because the defendants were not given the benefit of

criminal procedures, the order imposing the fine must be

reversed.4

III.

There remains the propriety of the district court's refusal

to modify the consent decree. The practical consequence of

this issue has been somewhat attenuated by the special

master's decision to modify the fine structure, but the question remains relevant because the fines were modified only

prospectively. The District still faces the possibility of being

fined for late payments made between April 1997 (when it

made the motion to modify) and February 1999 (when the

fine schedule was modified).

Federal Rule of Civil Procedure 60(b)(5) permits a court to

modify a judgment or order when "it is no longer equitable

that the judgment should have prospective application." Ap-

__________

126 (2d Cir. 1998) (reversing a $10,000 punitive fine imposed without

criminal procedures); Law v. NCAA, 134 F.3d 1025 (10th Cir. 1998)

(reversing retroactively imposed per diem fines); In re E.I. DuPont

de Nemours & Co.-Benlate Litigation, 99 F.3d 363 (11th Cir. 1996)

(reversing an over $13,000,000 punitive fine imposed without criminal procedures).

4 Because we have determined that the District must be given a

criminal trial, we do not address the argument that the district

court abused its discretion in refusing to consider the defense of

impossibility.

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pellant argues that under Rufo v. Inmates of the Suffolk

County Jail, 502 U.S. 367 (1992), the district court should

have granted its motion to modify. Rufo held that the party

seeking a modification need not make a "clear showing of

grievous wrong evoked by new and unforeseen conditions"--a

standard that had been applied since United States v. Swift &

Co., 286 U.S. 106, 119 (1932). It pointed out that flexibility is

especially important in institutional reform litigation: "Because [consent] decrees often remain in place for extended

periods of time, the likelihood of significant changes occurring

during the life of the decree is increased." Rufo, 502 U.S. at

380. In particular, "[m]odification of a consent decree may be

warranted when changed factual conditions make compliance

with the decree substantially more onerous." Id. at 384.

While a modification should not be granted because of "events

that actually were anticipated" by the parties, the party

seeking a modification need not show that the changed circumstances were unforeseeable. Id.

To decide whether the District's financial problems were a

changed circumstance, we first must answer the antecedent

question: changed relative to when? The District looks to

the 1983 consent decree, the appellees and the United States

to the 1996 remedial plan. But the 1996 remedial plan was

designed simply to implement the consent decree and to

address the district's failure to make payments in accordance

with it. The substantive obligations imposed on the district

all stem from the 1983 decree. Our focus might be different

if the remedial plan had been based on a comprehensive

reexamination of the obligations in the 1983 decree. In that

case, it might be thought that the District was obliged to

make its claim of financial hardship then. But the aims of the

remedial plan were more modest: the judge explained that its

purpose was simply "to bring the District into compliance

with its outstanding obligations." It is true that the judge

also invited the parties to seek appropriate modifications of

the consent decree in light of changed circumstances. But

even though the District did not in so many words request

relief from the 30-day payment requirement, it did object

(repeatedly) to being sanctioned for late payments, explaining

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that it expected to be unable to pay on time. In any event,

the parties do not appear to have regarded the remedial plan

as a complete solution to all of the problems that had arisen

under the consent decree. They thought that the District's

financial difficulties still might require a future solution. The

special master noted that the possibility of further modifications had been discussed, and the judge observed that the

District was in a time of "transition" and its ability to make

timely payments might be contingent on the actions of Congress. We therefore think we must look at whether circumstances have changed since 1983 rather than at whether they

have altered only in the last few years.

The District makes the obvious point that no one in 1983

anticipated the District's insolvency or its crushing debt

burden. And as Rufo explained, "[f]inancial constraints may

not be used to justify the creation or perpetuation of constitutional violations, but they are a legitimate concern of government defendants in institutional reform litigation and

therefore are appropriately considered in tailoring a consent

decree modification." Id. at 392-93. Appellees respond that

although this particular financial crisis was not contemplated,

the parties certainly had in mind the District's generic inability or refusal to pay the vendors--that was the very reason

the 30-day requirement was part of the consent decree. But

Rufo's modification standard does not require absolute unforeseeability. It is enough that the parties did not actually

contemplate the changed circumstances. And the crisis of

the 1990s was different in kind rather than degree. Moreover, the 30-day payment requirement likely was intended to

protect the class members against bureaucratic neglect, not

against the District's near-bankruptcy. In truth, the consent

decree was negotiated with the expectation that the District

would be able to pay its bills. Once it could not, circumstances had changed.

The appellees contend that even with the District's financial

problems, a 30-day payment schedule is not unreasonable or

onerous. But the District submitted affidavits to the conUSCA Case #99-7058 Document #507429 Filed: 03/31/2000 Page 12 of 14
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trary, and the district court seems at least implicitly to have

resolved this question in its favor, for the effect of its ruling is

to give the District the benefit of a 45-day payment schedule,

albeit only after February 1999. The judge offered no reason

why the District's relief from fines should not extend to the

point at which it made the motion--nor can we think of one.

We do not of course suggest that a party may be relieved

from the obligation to comply with an injunction simply by

making a motion for a modification. But here the District

claimed that it could not comply, despite making a good faith

effort to do so. If true, this should have relieved it from

liability. See Tinsley v. Mitchell, 804 F.2d 1254, 1256 (D.C.

Cir. 1986) ("If a party lacks the financial ability to comply

with an order, the court cannot hold him in contempt for

failing to obey."). And the district court did not find that the

District's claim was wrong. Instead, it adopted the master's

report which simply pointed out that the District's financial

situation was no worse than at the time the remedial plan was

adopted in 1996--a fact that as we have explained is not

relevant.

Nor is the United States correct when it invokes the

collateral bar rule of Walker v. City of Birmingham, 388 U.S.

307 (1967). Walker provides that the invalidity of an injunction is not a defense to contempt, so that a party faced with

an invalid injunction must have the injunction modified or

vacated; he cannot simply ignore it. The theory behind that

rule is rather obvious, but it does not extend to cases where a

party is faced with an injunction with which it is unable to

comply. Walker cannot justify subjecting the District to

liability for the period in which the district court was considering the modification motion.

We conclude that it was an abuse of discretion for the

district court not to grant the District's motion retroactive to

the time at which it was made.

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* * * *

The order of the district court is reversed, and the case is

remanded for further proceedings consistent with this opinion.

So ordered.

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