Opinion ID: 465424
Heading Depth: 2
Heading Rank: 1

Heading: The Decision to Modify the Consent Decree

Text: 10 We review modifications of consent decrees for abuse of discretion. United States v. Oregon, 769 F.2d 1410, 1416 (9th Cir.1985); Washington v. Penwell, 700 F.2d 570, 575 (9th Cir.1983). Relying on United States v. Swift & Co., 286 U.S. 106, 52 S.Ct. 460, 76 L.Ed. 999 (1932), and its progeny, Caltrans claims that a consent decree cannot be modified absent a showing of exceptional circumstances. The Supreme Court said in Swift that 11 [n]othing less than a clear showing of grievous wrong ... should lead us to change what was decreed after years of litigation with the consent of all concerned. 12 286 U.S. at 119, 52 S.Ct. at 464. However, later decisions have made clear that this admonition must be read in the context of the factual background in Swift. See United States v. United Shoe Machinery Corp., 391 U.S. 244, 248, 88 S.Ct. 1496, 1499, 20 L.Ed.2d 562 (1968); New York State Association for Retarded Children v. Carey, 706 F.2d 956, 969 (2d Cir.), cert. denied, 464 U.S. 915, 104 S.Ct. 277, 78 L.Ed.2d 257 (1983). In Swift, defendant meat-packers requested modifications which would allow them to engage in practices enjoined by the consent decree they had signed a decade earlier. See 286 U.S. at 112-13, 52 S.Ct. at 461. The Court acknowledged the power to modify the decree as events may shape the needs, id. at 114, 52 S.Ct. at 462, but found that the situation had not changed sufficiently in the decade since the agreement was signed to alter the potential for antitrust violations that had led to the underlying litigation. Id. at 116-19, 52 S.Ct. at 463-64. 13 Swift involved a proposal by defendants to make changes in the decree for their own benefit, that would have altered significantly their obligations. See United Shoe Machinery, 391 U.S. at 248, 88 S.Ct. at 1499. Courts have not applied the strict Swift standard to modifications that alter the parties' obligations when experience with a consent decree reveals problems with its administration. The Second Circuit has said that a court can alter a consent judgment where a better appreciation of the facts in light of experience indicates that the decree is not properly adapted to accomplishing its purposes. King-Seeley Thermos Co. v. Aladdin Industries, 418 F.2d 31, 35 (2d Cir.1969). Such flexibility is essential to the administration of comprehensive decrees arising out of complex litigation. Courts have allowed modifications that retain the essential features and further the primary goals of such decrees while taking into account what is realistically achievable by the parties. See Carey, 706 F.2d at 969-71; Philadelphia Welfare Rights Organization v. Shapp, 602 F.2d 1114, 1120-21 (3d Cir.1979), cert. denied, 444 U.S. 1026, 100 S.Ct. 689, 62 L.Ed.2d 660 (1980). Thus, as the Seventh Circuit recently noted, a component of the modern standard for modification of a consent decree is that it may be altered if experience with [its] administration ... shows the need for modification. Donovan v. Robbins, 752 F.2d 1170, 1182 (7th Cir.1985). This modern standard obviously leaves the administering court a great deal of discretion even to alter the substantive rights of the parties. 14 The modification at issue here fleshed out a decree that was silent on a procedural point. When a decree is silent on a substantive issue, courts are reluctant to impose additional burdens, because the parties could have bargained for and included an absent provision if they had so desired. See United States v. Armour & Co., 402 U.S. 673, 680-83, 91 S.Ct. 1752, 1756-58, 29 L.Ed.2d 256 (1971); Fox v. United States Department of Housing & Urban Development, 680 F.2d 315, 323 (3d Cir.1982). Where a procedural provision is missing, however, the considerations are entirely different. 15 When a dispute developed over the right to replace CFAAC members, some resolution of the issue was necessary for CFAAC's continued functioning. The court, finding that the decree did not resolve the issue, modified the decree to spell out the missing procedures. In an analogous case, United States v. United Foam Corp., 565 F.2d 563 (9th Cir.1977), we approved a modification to a consent decree that had given the defendant two years to divest a plant. When the defendant did not comply, the court amended the decree to create trusts to sell the plant. 565 F.2d at 565. The defendant's failure to fulfill its obligations made the trust orders necessary extensions of the consent decree, id. at 566, even though the decree had not provided procedures for the situation in which the plant was not sold within the specified time. 16 Application of the necessary extensions analysis of United Foam and the modern standard for allowing modification of consent decrees to the facts of this case make it evident that the district court did not abuse its discretion in this case. We hold that where necessary procedural provisions are absent from a consent decree, the supervising court has wide discretion to amend the decree to include whatever procedures are required for its efficient operation. 2 17 Caltrans argues, however, that despite the silence of the decree, there was no actual gap because the statutory and common law rights of appointing agencies supply the necessary procedures. Interpretation of a consent decree is a matter of law reviewed de novo. Vertex Distributing, Inc. v. Falcon Foam Plastics, Inc., 689 F.2d 885, 892 (9th Cir.1982); Kittitas Reclamation District v. Sunnyside Valley Irrigation District, 626 F.2d 95, 98 (9th Cir.1980), cert. denied, 449 U.S. 1079, 101 S.Ct. 861, 66 L.Ed.2d 802 (1981). 18 Caltrans argues that Federal and California law provide that, in the absence of any provision to the contrary, the party that appoints an official has authority to remove the official. See Harnett v. Ulett, 466 F.2d 113, 117 (8th Cir.1972); Cal.Gov't.Code Sec. 1301 (West 1980); Brown v. Superior Court of Mendocino County, 15 Cal.3d 52, 55, 538 P.2d 1137, 1138, 123 Cal.Rptr. 377, 378 (1975). See also Cal.Corp.Code Sec. 5222(f) (West Supp.1986) (same principle applies to non-profit corporations). Caltrans, however, points to no authority holding that statutory or common law appointment rights apply to an entity that is created and governed by a consent decree. 19 Caltrans also points out that CFAAC's by-laws specifically provide for limited terms for, and removal of, CFAAC members. It suggests that these provisions establish that when the decree was filed all parties assumed that the appointing authorities had removal power. 3 In light of the district court's extensive experience with the case and the decree, we should give special deference to its conclusions about the meaning of the decree. See Vertex Distributing, 689 F.2d at 893. We respect the court's conclusion that the decree is silent as to the mechanisms for replacement. 20 Caltrans also argues that under the terms of the consent decree the district court had no power to modify the decree in the absence of express a request to do so. It claims that the parties requested interpretation, not modification. We disagree. Appellees' motion to interpret the decree contains a request for modification. The proposed order establishes a procedure for replacing committee members that would modify the decree. The district court could reasonably have interpreted the motion as requesting modification and acted on it pursuant to the terms of the decree. In any event, even in the absence of express authorization in the decree or request from the parties, the power to modify in appropriate circumstances is inherent in the equity jurisdiction of the court. Swift, 286 U.S. at 114, 52 S.Ct. at 462.II. The Substance of the Modifications 21 Caltrans claims that even if the district court could modify the decree, the specific modifications it made were improper. It argues that the modifications contravene the purpose of CFAAC and that the court, in dealing with what is essentially a contract, should have attempted to modify in a way that was closer to the expectations of the parties. 22 Caltrans asserts that CFAAC is a representative body and its purpose is to obtain input into the affirmative action process from all segments of the community. Appellees assert that it is a watchdog committee that must be independent from political pressures. CFAAC's review functions as outlined in the consent decree are perfectly consistent with both parties' views of its purpose. The district court's modification is an attempt at a Solomon-like judgment, accommodating both viewpoints. 23 Caltrans is right that consent decrees are treated much like contracts, see Vertex Distributing, 689 F.2d at 892, and that the court in making modifications should consider the original expectations of the parties. We think the court has done that. The judge exercised his discretion to effect a compromise between the positions of the parties. It is inevitable that a compromise will be received more favorably by one side than the other. We do not find an abuse of discretion in the district court's resolution of the dispute in this case. 24 AFFIRMED.