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Parties Involved:
Colorado Department of Institutions
Appellee
Roy Romer
Appellee
Jeffrey A. Sandler
Appellee
State Of Colorado
Appellee
Frank A. Taylor
Appellee
Raymond Del Turco
Appellee
United States of America
Appellant

Document Text:

FILED 

United Srates O:>urt of Ar~als Tenth Circuit: 

PUBLISH JUN 2 5 1§g1 

UNITED STATES COURT OF APPEAL~OBERT L. HOECKER 

Clerk 

FOR THE TENTH CIRCUIT 

UNITED STATES OF AMERICA, 

Plaintiff-Appellant, 

v. 

STATE OF COLORADO; ROY ROMER, 

Governor of the State of 

Colorado; COLORADO DEPARTMENT 

OF INSTITUTIONS; FRANK A. 

TAYLOR, M.D., Executive 

Director, Colorado Department 

of Institutions; JEFFREY A. 

SANDLER, Director, Colorado 

Department of Institutions, 

Division for Developmental 

Disabilities; RAYMOND DEL 

TURCO, Superintendent Wheat 

Ridge Regional Center, 

Defendants-Appellees. 

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No. 90-1307 

Appeal from the United States District Court 

For the District of Colorado 

D.C. No. 86-F-1470 

Submitted on the briefs: 

Michael J. Norton, United States 

Assistant Attorney General; Dennis 

Eisenstein, Department of Justice, on 

Appellant. 

Attorney; ' John 

J. Dimsey and 

the briefs for 

R. Dunne, 

Miriam R. 

PlaintiffGale A. Norton, Attorney General; Raymond T. Slaughter,'Chief 

Deputy Attorney General; Timothy M. Tymkovich, Solicitor General; 

Appellate Case: 90-1307 Document: 01019297108 Date Filed: 06/25/1991 Page: 1 
Maurice G. Knaizer, Deputy Attorney General; Larry A. Williams, 

First Assistant Attorney General; and Carolyn Lievers, Assistant 

Attorney General, on the briefs for Defendants-Appellees. 

Before LOGAN, MOORE, and BALDOCK, Circuit Judges. 

MOORE, Circuit Judge. 

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Appellate Case: 90-1307 Document: 01019297108 Date Filed: 06/25/1991 Page: 2 
The United States appeals from the district court's denial of 

its motion to modify a consent decree entered into by the United 

States and the State of Colorado. The government argues that the 

district court improperly modified the agreement reached by the 

parties when entering the decree. We agree and reverse. 

This case originated on July 10, 1986, when the United States 

filed suit against Colorado under the Civil Rights of 

Institutionalized Persons Act, 42 u.s.c. 1997-1997j, alleging the 

conditions at Wheat Ridge Regional Center (Center), an institution 

for the developmentally disabled, violated the constitutional 

rights of the residents. On July 22, 1986, the parties reached a 

settlement of the action which they submitted to the district 

court. The court approved the settlement and entered a consent 

decree to correct conditions at the Center. This decree gave 

Colorado until July 1, 1988, to comply with its terms. 

On January 26, 1990, the government filed a motion for an 

order to show cause why Colorado should not be held in contempt 

for failing to comply with the 1986 decree. Hearings were held on 

the motion, and the parties ultimately entered into a second 

agreement on July 26, 1990. Once again, the agreement was 

submitted for the court's approval. The district court approved 

the agreement on August 13, 1990, dismissed the government's 

contempt action, and entered several other orders implementing the 

agreement. 

The government then moved the court to modify the decree, 

claiming one of the implementing orders substantially changed an 

essential term of the settlement agreement. Specifically, it 

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Appellate Case: 90-1307 Document: 01019297108 Date Filed: 06/25/1991 Page: 3 
argued that the implementing order shifted a burden of proof to 

the government when the parties had already agreed the state 

should bear that burden. The district court denied the 

government's motion for modification, stating that its August 13, 

1990 order "effectuates terms contained in the stipulation by the 

parties." The government now appeals from this denial. 

The parties stipulated to the following provision concerning 

the dismissal of the decree: 

5. (A) The parties contemplate that Defendants shall 

have fully and faithfully implemented all provisions of 

this Stipulation and of the Consent Decree by July 1, 

1991. 

(B) The Court shall retain jurisdiction of this 

action for all purposes under this Stipulation and 

Consent Decree until Defendants have fully and 

faithfully implemented all prov1s1ons of this 

Stipulation and the Consent Decree . . . . 

(D) Dismissal shall be granted unless, within 

sixty (60) days after the receipt of Defendant's motion 

[to dissolve the decree upon certifying full 

implementation], the United States objects to such 

motion. If an objection is made with particularity, the 

Court shall hold a hearing on the motion and the burden 

shall be on Defendants to demonstrate that they have 

fully and faithfully implemented all provisions of this 

Stipulation and the Consent Decree, and any approved 

plans or parts thereof. 

R. at 94. The district court's implementary order of August 13, 

1990, added, among other things, the following provision: "The 

Court's jurisdiction in this matter shall conclude on July 1, 1991 

unless good cause is shown that the necessity exists for a modest 

extension thereof." 

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Appellate Case: 90-1307 Document: 01019297108 Date Filed: 06/25/1991 Page: 4 
I. 

A. 

Because the order appealed from is interlocutory, we must 

first consider whether we have jurisdiction. As a general rule, 

our appellate authority extends only to final orders. 28 u.s.c. 

§ 1291. One exception to this rule grants appellate jurisdiction 

over interlocutory decisions of district courts "granting, 

continuing, modifying, refusing or dissolving injunctions, or 

refusing to dissolve or modify injunctions." 28 u.s.c. 

§ 1292(a)(l). In Carson v. American Brands, Inc., 450 U.S. 79 

(1981), the Supreme Court allowed an appeal under§ 1292(a)(l) 

from an order refusing to approve a consent decree. The Carson 

court noted that while the case did not involve an appeal of an 

action labelled an injunction, the denial of the consent decree 

had the same "practical effect." Id. at 84, 85. 

Carson also held that for the interlocutory consent decree to 

be appealable under§ 129l(a)(l), the appellant must show not only 

that the action had the same practical effect as the denial of an 

injunction, but also that the order might have irreparable 

consequences and can only be "effectively challenged" by immediate 

appeal. Id. at 85. Therefore, to sustain our jurisdiction here, 

the government must satisfy Carson's tripartite test: 1) the 

interlocutory order must have the practical effect of denying an 

injunction; 2) the order must have irreparable consequences; and 

3) the order must be one that can be effectively challenged only 

by immediate appeal. See also Sierra Club, Inc. v. Electronic 

Controls Design, Inc., 909 F.2d 1350, 1353 (9th Cir. 1990). 

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Appellate Case: 90-1307 Document: 01019297108 Date Filed: 06/25/1991 Page: 5 
B. 

It is undisputed that the parties negotiated a new settlement 

agreement that was essentially injunctive in nature. Like the 

circumstances in Carson, "prospective relief was at the very core" 

of the parties' agreement. 450 u.s. at 84. The new settlement 

agreement in this case contained many conditions which Colorado 

must fulfill. Thus, this consent decree entered to effectuate the 

settlement must be regarded as the functional equivalent of an 

injunction. The government contends the order approving the 

agreement has the effect of changing the agreed burden of proof. 

Although the order is ambiguous, for the purposes of our 

jurisdictional inquiry, we shall presume that is its effect. 

The state, however, argues the district court did not enter 

injunctive relief merely by changing the burden of proof. 

the state contends, the actual order appealed from 

injunctive attributes. We do not agree. 

Thus, 

has no 

As the Ninth Circuit noted in Sierra Club, 909 F.2d at 1353, 

"[b]ecause the court refused to enter the entire consent judgment, 

its denial had the practical effect of denying an out-of-court 

settlement containing injunctive relief." In the present case, 

while the district court approved the settlement, the modification 

of the agreed upon procedure for its enforcement directly affected 

the injunctive remedy. By placing upon the government the burden 

of proving the state's failure to comply with the terms of the 

agreement, the court refused to effectuate the injunctive remedy 

stipulated by the parties and substituted another in its stead. 

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This court need not, however, resolve at this point the issue 

of whether the modification made by the district court was itself 

injunctive in nature because our§ 1292(a)(1) jurisdiction is not 

dependent upon the particular provision at issue in the appeal. 

Indeed, the precise issue on appeal need not be an injunctive 

order if the decree within which the order is effected is 

essentially injunctive. In Donovan v. Robbins, 752 F.2d 1170, 

1176 (7th Cir. 1984), the court held that even though the 

"stumbling block" to approval of the decree at issue was not an 

injunctive provision, it did affect enforcement of the injunctive 

provisions in the decree, and this is sufficient to satisfy the 

Carson requirement that the action have the practical effect of 

denying an injunction. Therefore, we believe the first 

requirement of Carson is satisfied. 

c. 

Next, the government must show irreparable harm and the 

probable loss of the opportunity to challenge effectively the 

order. Carson held that these two requirements are satisfied if 

the appellants "might lose their opportunity to settle their case 

on the negotiated terms" or if they are denied "their right to 

compromise their dispute on mutually agreeable terms." 450 u.s. 

at 86, 88. The Court in Carson, quoting from United States v. 

Armour & Co., 402 U.S. 673, 681 (1971), in support of the 

importance of maintaining the integrity of the settlement agreed 

upon by the parties, stated: 

Consent decrees are entered into by parties 

after careful negotiation has produced 

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to a case 

agreement on 

Appellate Case: 90-1307 Document: 01019297108 Date Filed: 06/25/1991 Page: 7 
their precise terms. The parties waive their right to 

litigate the issues involved in the case and thus save 

themselves the time, expense, and inevitable risk of 

litigation. Naturally, the agreement reached normally 

embodies a compromise; in exchange for the saving of 

cost and elimination of risk, the parties each give up 

something they might have won had they proceeded with 

the litigation. 

450 u.s. at 86-87. In the present case, the district court's 

order significantly affects future actions between the parties. 

By shifting the burden of proof, the court has irreparably harmed 

the government by placing it into a weaker future negotiating 

position. The negotiating position established by the agreement 

prior to its modification was the product of a negotiation itself. 

If the government was amenable to the position into which the 

district court thrust it, the government would have agreed to 

accepting the burden of proof as part of the settlement. 

Likewise, if the government was unwilling to assume the burden of 

proof, no settlement would have been achieved without the state's 

acceptance of the burden. We believe it evident from these 

circumstances the government abandoned the contempt proceeding in 

part, at least, upon the agreement that it would not have the 

burden of showing compliance on July 1, 1991. 1 

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compare Equal Employment Opportunity Comm'n v. Pan American World 

Airways, Inc., 796 F.2d 314, 317 (9th Cir. 1986), cert. denied, 

479 U.S. 1030 (1987), where the court held that the district 

court's disapproval of the consent decree "in no way inhibits 

further negotiations between the EEOC and Pan Am to meet the 

concerns raised. As a result, Pan Am is not being denied the 

right to settle the case on any mutually agreeable terms, as were 

the defendants in Carson." In the present case, because the 

district court approved the settlement, but then changed a 

material term of the agreement, the parties are being denied their 

right to settle their case on the terms they have negotiated. 

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The government has satisfied the second and third 

requirements of Carson because it has lost its right to settle the 

case on the terms negotiated by the parties. See Durrett v. 

Housing Auth. of the City of Providence, 896 F.2d 600, 602 (1st 

Cir. 1990). Therefore, we conclude we have jurisdiction to hear 

this appeal under§ 1292(a)(1). 

II. 

The provisions concerning the procedures and timing of the 

dismissal of the decree were unambiguously articulated in the 

Stipulation. The parties negotiated these terms, arriving at a 

mutually acceptable resolution on how and when to dismiss the 

consent decree. There is no question that the district court in 

the present case altered an important provision of the agreement. 

It effectively discarded the balance struck by the parties 

concerning the duration and procedures for dismissing the consent 

decree and substituted its own procedures and time frame. The 

question, then, is whether the district court has the authority to 

make such a change unilaterally and without notice to the parties. 

While the court may either approve or deny the issuance of a 

consent decree, generally it is not entitled to change the terms 

of the agreement stipulated to by the parties. Berger v. Heckler, 

771 F.2d 1556, 1568 (2d Cir. 1985); Artvale, Inc. v. Rugby Fabrics 

Corp., 303 F.2d 283, 284 (2d Cir. 1962). As the court noted in 

Plummer v. Chemical Bank, 668 F.2d 654, 655 n.1 (2d Cir. 1982), 

"[t]he district court judge should not take it upon himself to 

modify the terms of the proposed settlement decree, nor should he 

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Appellate Case: 90-1307 Document: 01019297108 Date Filed: 06/25/1991 Page: 9 
participate in any bargaining for better terms." Citing In re 

General Motors Corp. Engine Interchange Litig., 594 F.2d 1106, 

1125 n.24 (7th Cir.), cert. denied, 444 u.s. 870 (1979). If the 

court discerns a problem with a stipulated agreement, it should 

advise the parties of its concern and allow them an opportunity to 

revise the agreement. United States v. City of Miami, Fla., 664 

F.2d 435, 441 (5th Cir. 1981) (en bane). Ultimately, the district 

court is faced with the option of either approving or denying the 

decree; "the settlement must stand or fall as a whole." Officers 

for Justice v. Civil Serv. Comm'n, 688 F.2d 615, 630 (9th Cir. 

1982), cert. denied, 459 u.s. 1217 (1983). 

The district court, however, is not obliged to approve every 

proposed consent decree placed before it. Because the issuance of 

a consent decree places the power of the court behind the 

compromise struck by the parties, the district court must ensure 

that the agreement is not illegal, a product of collusion, or 

against the public interest. The court also has the duty to 

decide whether the decree is fair, adequate, and reasonable before 

it is approved. City of Miami, 664 F.2d at 440-41. 

There are some circumstances beyond the purview of this case 

under which a district court may itself modify the terms of a 

consent decree. Before the court may modify a consent decree 

under any circumstance, however, it must notify the parties of its 

intent and afford them an opportunity to present relevant evidence 

and argument on the need to modify. United States v. Atlantic 

Ref. Co., 360 u.s. 19, 23 (1959); United States v. Western Elec. 

Co., 894 F.2d 430, 435, 437 n.12 (D.C. Cir. 1990). 

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Moreover, modifications of a consent decree should only be 

made to further the original goals of the agreement. Here, the 

court failed to identify, nor can we find, a defect or deficiency 

that would impede the achievement of the decree's goals. Heath v. 

DeCourcy, 888 F.2d 1105, 1110 (6th Cir. 1989). In addition, the 

district court did not give notice of its intentions or hold a 

hearing on the proposed modification. 

Therefore, we hold that the district court 

authority by modifying the terms of the agreement. 

abused its 

The district 

court should have either approved or denied the consent decree as 

a whole when presented with the terms by the parties. The 

district court's Order of August 13, 1990, is VACATED, and this 

case is REMANDED for the district court to consider whether to 

approve or disapprove of the stipulation as agreed upon by the 

parties. 

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