Opinion ID: 160839
Heading Depth: 2
Heading Rank: 3

Heading: The District Court's Exercise of its Equitable Modification Power

Text: 24 In Rufo, the Supreme Court formulated a two-step process to determine whether a consent decree in an institutional reform litigation case should be modified and the extent of any such modification. See 502 U.S. at 383. Under the Rufo approach, a party seeking modification of a consent decree bears the burden of establishing that a significant change in circumstances warrants revision of the decree. Id. When attempting to show the requisite change in circumstances, however, the party seeking modification ordinarily cannot rely upon events that actually were anticipated at the time it entered into a decree. Id. at 385. If the moving party can meet its initial burden, the court may modify the decree if the modification is suitably tailored to the changed circumstance. Id. at 383. 25 Appellees argue that Utah's significant non-compliance with the terms of the Agreement at the end of the four-year period constitutes a changed circumstance that supports equitable modification. Utah appears to concede that its non-compliance is a significant change in circumstances, but argues Appellees have failed to meet their initial burden under Rufo because the non-compliance was both foreseeable and actually foreseen by Appellees when they entered into the Agreement. See id. at 385 (holding that movant is ordinarily not entitled to modification of consent decree if the changed circumstances were actually foreseen at the time of the agreement). 26 Utah's argument that non-compliance with the terms of a consent decree is always foreseeable and thus can never constitute a changed circumstance is clearly foreclosed by Supreme Court precedent. The proper focus is on whether Utah's non-compliance was actually foreseen by Appellees, not whether the non-compliance was foreseeable. See id. at 384, 386 n.10 (rejecting a standard that would require the movant to show that the changed circumstance was not foreseeable). 27 Utah also maintains that Appellees were well aware when they entered into the Agreement that compliance would not be completed within four years and thus the changed circumstances were actually foreseen by Appellees. Utah contends that Appellees failed to meet their burden of demonstrating a significant change of fact because they failed to show that they did not actually foresee the non-compliance. While it is true that Appellees, as the moving party, bear the burden of demonstrating that they did not actually foresee Utah's significant non-compliance, the district court's conclusion that Appellees satisfied that burden is amply supported by the evidence presented to the court. 28 The district court found that Utah was 20 percent in compliance and 80 percent in noncompliance with the provisions of the Agreement. The court's finding of Utah's substantial non-compliance is supported by four reports prepared by the Monitoring Panel. Utah conceded at oral argument that it has never contested the non-compliance figures contained in the Monitoring Panel reports. Thus, the district court's finding of substantial non-compliance is not clearly erroneous. Based on the findings of substantial non-compliance, the district court concluded that [n]either the parties nor the court could have predicted back in 1994 that very substantial increases in funding would lead to higher levels of noncompliance with the [Agreement]. Such unforseen circumstances provide an objective basis for equitable intervention by this court to rescue, if necessary, the purposes of the agreement. 29 Utah's arguments notwithstanding, it would defy logic for Appellees to agree to include the four-year Termination Provision in the Agreement if they actually foresaw that Utah would not be in substantial compliance with the terms of the Agreement at the end of the four-year period. Based on the evidence before the district court, the court could reasonably conclude that Utah's significant non-compliance was not actually foreseen by Appellees. Accordingly, the district court's conclusion that the Agreement should be modified to extend the term of the Agreement was not an abuse of discretion. 4