Opinion ID: 4562365
Heading Depth: 3
Heading Rank: 1

Heading: Initial “Settlement Agreement”

Text: Seven years after this suit was filed, Plaintiffs and Kentucky entered a Settlement Agreement to resolve the case, without Sunrise’s approval. The Agreement denied that Kentucky (or Sunrise) violated the Establishment Clause or other rights of the children under Sunrise’s care, but it required Kentucky to modify the terms of its standard two-year contracts—Private Child Care Agreements (PCC Agreements)—with Sunrise and other child-care providers and agencies. The terms of the Agreement seek to prevent publicly-funded, private child-care providers from engaging in any form of religious indoctrination, proselytization, or coercion of children in Kentucky’s public child-care system. The terms require providers to inform a child and the child’s parent of a child-caring facility’s religious affiliation, to provide children with opportunities to attend a church of their choice, and to provide non-religious alternatives. Providers must also agree not to discriminate against children on the basis of religion and, once the children leave their -2- No. 18-5680, Pedreira, et al. v. Sunrise Children’s Servs., Inc., et al. care, must give them an exit survey that asks about their experiences and whether the provider attempted to convert the child to a new religion. The Agreement includes monitoring provisions requiring Kentucky to provide information to organizations such as the American Civil Liberties Union (ACLU) and Americans United for Separation of Church and State (Americans United) concerning the religious beliefs of the children in Sunrise’s care, those children’s exit surveys, any reports by the State’s caseworkers for those children, and records of any religious activities at Sunrise’s group homes. The Agreement also requires Kentucky to provide the ACLU and Americans United similar information about providers other than Sunrise in the event Kentucky receives and investigates a complaint about the provider. Finally, the Agreement contemplates the possibility of Kentucky enacting new regulations to implement some of its provisions. Specifically, if new or modified administrative regulations “must be enacted to comply with the terms” of the Agreement, Kentucky must “initiate the process of modifying any [such] administrative regulations.” Kentucky does not have to guarantee that it will enact or modify any regulation, and a failure to do so would not constitute a violation of the Agreement. In exchange, Plaintiffs promise to dismiss their lawsuit with prejudice and waive any claims based on conduct occurring before the settlement. The Settlement Agreement provides that the Kentucky district court that enters the agreement has exclusive jurisdiction to enforce it. Plaintiffs, Kentucky, and the ACLU and Americans United have the same rights to enforce the Agreement; Sunrise does not. The terms also indicate that the Agreement is not a “consent decree” and purports to divest the district court of its power to hold Kentucky in contempt if the state violates the Agreement. -3- No. 18-5680, Pedreira, et al. v. Sunrise Children’s Servs., Inc., et al. Plaintiffs and Kentucky agreed on the settlement terms and filed a motion asking the district court to dismiss the suit and retain jurisdiction to enforce the Settlement Agreement. Sunrise objected and filed a motion to dismiss for lack of jurisdiction. The court denied Sunrise’s motion, granted Plaintiffs’ motion to dismiss, entered an order incorporating the Agreement, and retained jurisdiction to enforce the order. Sunrise appealed. On October 6, 2015, we determined that Sunrise had standing to object to and appeal the Settlement Agreement. Pedreira v. Sunrise Children’s Servs. Inc. (Pedreira II), 802 F.3d 865, 869 (6th Cir. 2015). We reaffirmed Plaintiffs’ standing to bring the suit and held that the district court did not abuse its discretion by labelling its dismissal of the case as a dismissal with prejudice. Id. at 870–71. Examining the Agreement, we determined that it had the key attributes of a consent decree: “the [district] court expressly retained jurisdiction to enforce compliance with the settlement’s terms; and by incorporating the settlement into the court’s own dismissal order, the court gave its imprimatur to the settlement’s terms.” Id. at 871. We remanded the case for consideration of the Agreement as a consent decree and directed the district court to address whether it was fair, reasonable, and consistent with the public interest. Id. at 872. Specifically, the district court was to determine whether the consent decree was fair to Sunrise and to allow anyone affected by the decree an opportunity to present evidence and have its objections heard. Id.