Opinion ID: 4562365
Heading Depth: 3
Heading Rank: 2

Heading: Amended Agreement (“Consent Decree”)

Text: On November 18, 2015, the parties to the original Agreement entered into a First Amendment to the Settlement Agreement (the Amendment) to address concerns related to singling out Sunrise for special monitoring. The Amendment alters the original Agreement in two important respects. First, the monitoring provisions were deleted entirely and replaced with language that does not mention Sunrise specifically, instead referencing “any Agency.” (R. 552- -4- No. 18-5680, Pedreira, et al. v. Sunrise Children’s Servs., Inc., et al. 2, PageID 6277) One of the recitals for the Amendment states that “the Parties desire to amend the Settlement Agreement to eliminate any ‘singl[ing] out’ of or potential reputational harm to Sunrise by uniformly applying the same monitoring triggers and rules to all Agencies, as set forth in this Amendment.” (Id. at PageID 6276 (alteration in original)) Second, the Amendment adds clarifications, “in light of objections raised by Sunrise during briefing concerning the Settlement Agreement.” (Id.) The Amendment provides that no regulatory changes are needed to comply with or enforce the Agreement: “Notwithstanding any references in the Settlement Agreement to possible enactment of new or modified administrative regulations, the Parties agree that the Commonwealth Defendants do not need to enact or modify any administrative regulations to comply with the Settlement Agreement.” (Id. at PageID 6278) Unlike the treatment of the monitoring provisions and the Settlement Agreement’s reference to Sunrise, the parties to the Amendment did not remove or change language concerning enacting or modifying regulations. Otherwise, the Amendment provides that “all the terms of the Settlement Agreement shall remain in full force and effect, and the Parties shall continue to comply with the Settlement Agreement, as amended herein, including during the pendency of any further proceedings in, or relating to dismissal of, the Lawsuit.” (Id.) Plaintiffs and Kentucky again agreed to file a joint motion in the district court requesting approval of the Settlement Agreement as amended, dismissal of the suit with prejudice, incorporation of the Agreement into the Court’s order of dismissal, and retention by the court of jurisdiction to enforce the order. (Id.) C. Change in Administration and Opposition to Amended Agreement On December 8, 2015, Kentucky Governor Matt Bevin assumed office. On April 11, 2016, the Governor’s Office notified Plaintiffs’ counsel that it had undertaken a “fresh appraisal” of this case and concluded that it would not consent to the Amended Agreement. The Governor’s Office -5- No. 18-5680, Pedreira, et al. v. Sunrise Children’s Servs., Inc., et al. took the position that the Amended Agreement was not fair, reasonable, or consistent with the public interest and that it did not wish to pursue the Agreement on remand. Plaintiffs separately and individually moved the district court to enter the Amended Agreement and to dismiss the suit on June 27, 2016. Kentucky and Sunrise opposed the motion; Kentucky specifically asserted “a change in administration and, in every respect, philosophy, following Governor Matthew G. Bevin’s election in November 2015.” Defendants argued that the Amended Agreement was unenforceable for lack of consent and that the district court lacked authority to enter and enforce it. The district court issued an order rejecting Defendants’ arguments and determining that, regardless of the change of administration, the Amended Agreement remained a viable proposed consent decree and that it would schedule the matter for a fairness hearing. Sunrise filed a motion for reconsideration of the district court’s order, challenging the Amended Agreement’s lawfulness and contending that the decree could not be lawfully implemented without modifying or expanding Kentucky regulations. The court granted that motion, concluding that the Amended Agreement violates Kentucky law because it requires enactment of new or modified administrative regulations to be implemented. See Pedreira v. Sunrise Children’s Servs., Inc., No. 3:00-CV-210, 2018 WL 2435424, at  (W.D. Ky. May 30, 2018). The court refused to enforce the Amended Agreement. Id. Plaintiffs filed an interlocutory appeal of the district court’s refusal to enter the Amended Agreement, and Defendants moved to dismiss the appeal, arguing that we lacked jurisdiction to hear it. On October 24, 2018, we denied Defendants’ motion to dismiss. The appeal is now before us on the merits.1 1 Since the filing of this appeal, there has been another change of administration. In 2019, Andrew Graham Beshear—son of former Kentucky Governor Steven Beshear who served just before Governor Bevin—was -6- No. 18-5680, Pedreira, et al. v. Sunrise Children’s Servs., Inc., et al.