Opinion ID: 2997423
Heading Depth: 2
Heading Rank: 3

Heading: Modification of the Decree

Text: The City’s argument, however, encompasses more than simply an attack on the district court’s subject matter jurisdiction over the plaintiffs at the time the 1983 decree was entered. The City primarily argues that it is not “attacking the 1983 decree but rather the plaintiffs’ ability to invoke federal jurisdiction,” Appellee’s Br. at 36-37, specifically, the Nos. 03-1412 & 03-1436 25 plaintiffs’ lack of standing to bring this enforcement action. In support of this argument, the City draws upon cases discussing the nature of, or proposed modifications to, consent decrees. We review these cases below. One of the cases on which the City relies most heavily is Local Number 93, International Association of Firefighters, AFLCIO v. City of Cleveland, 478 U.S. 501 (1986). In that case, the union representing Cleveland firefighters objected to a consent decree that obligated the City of Cleveland to adopt race-conscious measures to correct past discrimination. The Supreme Court concluded that the “voluntary adoption in a consent decree of race-conscious relief that may benefit nonvictims” did not violate the Civil Rights Act of 1964. Id. at 525. Similarly, the Court rejected the notion that there was some “independent judicial canon or ‘common law’ of consent decrees” that prevented courts from entering a consent decree that a court itself could not order had the matter gone to trial. Id. The Court explained that a federal court is more than “a recorder of contracts” from whom parties can purchase injunctions; it is “an organ of government constituted to make judicial decisions. . . .” 1B J. Moore, J. Lucas, & T. Currier, Moore’s Federal Practice ¶ 0.409[5], p. 331 (1984). . . . Accordingly, a consent decree must spring from and serve to resolve a dispute within the court’s subject-matter jurisdiction. Furthermore, consistent with this requirement, the consent decree must “com[e] within the general scope of the case made by the pleadings,” Pacific R. Co. v. Ketchum, 11 Otto 289, 297, 101 U.S. 289, 297, 25 L.Ed. 932 (1880), and must further the objectives of the law upon which the complaint was based. However, in addition to the law which forms the basis of the claim, the parties’ consent animates the legal force of a consent decree. . . . Therefore, a federal court is not necessarily 26 Nos. 03-1412 & 03-1436 barred from entering a consent decree merely because the decree provides broader relief than the court could have awarded after a trial. Id. at 525 (citations omitted). In support of its argument that the plaintiffs lacked standing, the City also draws upon cases involving the modification of consent decrees. We begin our discussion by focusing on an opinion that concerned the continuation of the decree at issue in Swift I. After unsuccessfully attempting to vacate the consent decree to which the defendant meat-packers voluntarily had entered, a few of the defendants moved to modify the decree. See United States v. Swift & Co., 286 U.S. 106, 112 (1932) (“Swift II”). The Supreme Court, although it had been firm in its discussion of the ability to relitigate jurisdiction, readily acknowledged the power of the courts to modify a decree: “We are not doubtful of the power of a court of equity to modify an injunction in adaptation to changed conditions, though it was entered by consent.” Id. at 114. Indeed, “[p]ower to modify the decree was reserved by its very terms, and so from the beginning went hand in hand with its restraints. If the reservation had been omitted, power there still would be by force of principles inherent in the jurisdiction of the chancery.” Id. The critical consideration for the Court was whether need for a change existed: A continuing decree of injunction directed to events to come is subject always to adaptation as events may shape the need. The distinction is between restraints that give protection to rights fully accrued upon facts so nearly permanent as to be substantially impervious to change, and those that involve the supervision of changing conduct or conditions and are thus provisional and tentative. The result is all one whether the decree has been entered after litigation or by consent. In either event, a court does not abdicate its power to Nos. 03-1412 & 03-1436 27 revoke or modify its mandate, if satisfied that what it has been doing has been turned through changing circumstances into an instrument of wrong. We reject the argument for the interveners that a decree entered upon consent is to be treated as a contract and not as a judicial act. . . . The consent is to be read as directed toward events as they then were. It was not an abandonment of the right to exact revision in the future, if revision should become necessary in adaptation to events to be. Id. at 114-15 (citations omitted). Despite this reference to flexibility, however, the Court concluded that “[n]othing less than a clear showing of grievous wrong evoked by new and unforeseen conditions should lead us to change what was decreed after years of litigation with the consent of all concerned.” Id. at 119. Later cases, however, have warned that this rather intransigent language must be read in the broader factual context presented by the Swift II case: “Our decisions since Swift [II] reinforce the conclusion that the ‘grievous wrong’ language of Swift [II] was not intended to take on a talismanic quality, warding off virtually all efforts to modify consent decrees.” Rufo v. Inmates of the Suffolk County Jail, 502 U.S. 367, 380 (1992). Swift II, the Court explained, “pointedly distinguished the facts of that case from one in which genuine changes required modification of a consent decree.” Id. at 379. Indeed, in Rufo the Court noted that the standard for modification of consent decrees, now set forth 3 in Federal Rule of Civil Procedure 60(b), is a “flexible” one. 3 Rule 60(b) provides, in relevant part: On motion and upon such terms as are just, the court may (continued...) 28 Nos. 03-1412 & 03-1436 It further explained why such flexibility was necessary: The upsurge in institutional reform litigation since Brown v. Board of Education, 347 U.S. 483 (1955), has made the ability of a district court to modify a decree in response to changed circumstances all the more important. Because such decrees often remain in place for extended periods of time, the likelihood of significant changes occurring during the life of the decree is increased. Id. at 380. Furthermore, the Court noted that “the public interest is a particularly significant reason for applying a flexible modification standard in institutional reform litigation because such decrees ‘reach beyond the parties involved directly in the suit and impact on the public’s right to the sound and efficient operation of its institutions.’ ” Id. at 381 (quoting Heath v. DeCourcy, 888 F.2d 1105, 1109 (6th Cir. 1989)). Thus, a party seeking modification of a consent decree does not have to prove a “grievous” wrong of the kind required in Swift; the party only “bears the burden of establishing that a significant change in circumstances warrants revision of the decree.” Id. at 383. This initial burden may be met “by showing either a significant change either in factual conditions or in law.” Id. at 384. “While a decision that clarifies the law will not, in and of itself, provide a basis for modifying a decree, it could 3 (...continued) relieve a party or a party’s legal representative from a final judgment, order, or proceeding for the following reasons: . . . (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application . . . . Nos. 03-1412 & 03-1436 29 constitute a change in circumstances that would support modification if the parties had based their agreement on a misunderstanding of the governing law.” Id. at 390. If the moving party meets this standard, a district court should consider whether the proposed modification is “suitably tailored to the changed circumstance.” Id. at 383. A proposed modification, the Court stated, “must not create or perpetuate a constitutional violation.” Id. at 391. However, neither should a court “strive to rewrite a consent decree so that it conforms to the constitutional floor”; instead, “the focus should be on whether the proposed modification is tailored to resolve the problems created by the change in circumstances.” Id. Within these constraints, due deference must be given to the local bodies that implement the decree as well as administer the laws for the common good: [T]he public interest and “[c]onsiderations based on the allocation of powers within our federal system,” [Board of Education of Oklahoma City Public Schools v. Dowell, 498 U.S. 237, 248 (1991)], require that the district court defer to local government administrators, who have the “primary responsibility for elucidating, assessing, and solving” the problems of institutional reform, to resolve the intricacies of implementing a decree modification. Brown v. Board of Education, 349 U.S. 294, 299 (1955). Although state and local officers in charge of institutional litigation may agree to do more than that which is minimally required by the Constitution to settle a case and avoid further litigation, a court should surely keep the public interest in mind in ruling on a request to modify based on a change in conditions making it substantially more onerous to abide by the decree. To refuse modification of a decree is to bind all future officers of the State, regardless of their view of the necessity of relief from one or more provisions of a decree that 30 Nos. 03-1412 & 03-1436 might not have been entered had the matter been litigated to its conclusion. . . . Financial constraints may not be used to justify the creation or perpetuation of constitutional violations, but they are a legitimate concern of government defendants in institutional reform litigation and therefore are appropriately considered in tailoring a consent decree modification. Id. at 392-93 (citations, parallel citations and footnote omitted). The Court then summarized its holding: [T]he Swift “grievous wrong” standard does not apply to requests to modify consent decrees stemming from institutional reform litigation. Under the flexible standard we adopt today, a party seeking modification of a consent decree must establish that a significant change in facts or law warrants revision of the decree and that the proposed modification is suitably tailored to the changed circumstance. . . . 4 Id. at 393. 4 The plaintiffs suggest that the Supreme Court’s decision in Kokkonen v. Guardian Life Insurance Company of America, 511 U.S. 375 (1994), somehow increases a party’s burden in seeking modification of a consent decree pursuant to Rule 60(b). We disagree. Kokkonen concerned an attempt to enforce a settlement agreement between two private parties. The terms of the agreement were not entered as part of a consent decree: [T]he only order here was that the suit be dismissed, a disposition that is in no way flouted or imperiled by the alleged breach of the settlement agreement. The situation would be quite different if the parties’ obligation to comply with the terms of the settlement agreement had been made part of the (continued...) Nos. 03-1412 & 03-1436 31 We have had occasion to apply the standards set forth in Rufo to cases that have come before this court. In Evans v. City of Chicago, 10 F.3d 474 (7th Cir. 1993) (en banc), we considered a consent decree that required the City of Chicago to pay its tort judgments in a particular sequence. The City moved to vacate that decree pursuant to Rule 60(b). A plurality of the en banc court believed that the outcome of the case was dictated by the public nature of the litigation. The plurality explained that, when courts are asked to modify a consent decree involving a governmental entity, they are bound by principles of federalism (and by the fundamental differences between judicial and political branches of government) to preserve the maximum leeway for democratic governance. Over the last decade a series of decisions in this circuit has emphasized the district court’s responsibility to identify the rule of federal law supporting a consent decree binding the political arms of government, and the corresponding obligation to permit new public officials to set their own policy within the limits established by federal law. 4 (...continued) order of dismissal—either by separate provision (such as a provision “retaining jurisdiction” over the settlement agreement) or by incorporating the terms of the settlement agreement in the order. In that event a breach of the agreement would be a violation of the order, and ancillary jurisdiction to enforce the agreement would therefore exist. That, however, was not the case here. The judge’s mere awareness and approval of the terms of the settlement agreement do not suffice to make them part of his order. Id. at 380-81. Unlike the situation in Kokkenen, the 1983 Consent Decree was entered as the judgment of the court and also specifically provided for continuing enforcement jurisdiction for the district court. 32 Nos. 03-1412 & 03-1436 Id. at 479. The plurality then concluded that [a]ll of these cases illustrate the principle we recognize today: entry and continued enforcement of a consent decree regulating the operation of a governmental body depend on the existence of a substantial claim under federal law. Unless there is such a claim, the consent decree is no more than a contract, whose enforcement cannot be supported by the diversity jurisdiction and that has in court no more force than it would have outside the court. 5 Id. at 480. Not long after Evans, we decided two other cases pertinent to the present discussion—Komyatti v. Bayh, 96 F.3d 955 (7th Cir. 1996), and David B. v. McDonald, 116 F.3d 1146 (7th Cir. 1997). In Komyatti, Indiana prisoners filed a class action against state prison officials in which they alleged that certain conditions of their confinement violated the Constitution. The parties negotiated a settlement, “which, by incorporating an Indiana statutory provision, accord[ed] prisoners . . . certain procedural protections, including the availability of a ‘lay advocate,’ during the disciplinary pro- 5 One member of the court, concurring in the judgment, stated that, [f]or the present, it is sufficient to conclude that this court’s decision in Evans v. City of Chicago, 873 F.2d 1007 (7th Cir. 1989) (Evans II), changed the prevailing law to such a degree as to make further enforcement of the consent decree by the district court inappropriate under the standards set forth by the Supreme Court in Rufo v. Inmates of the Suffolk County Jail . . . . Evans v. City of Chicago, 10 F.3d 474, 483 (1993) (Ripple, J., concurring). Nos. 03-1412 & 03-1436 33 cess.” Komyatti, 96 F.3d at 956. Two years later, prisoners filed a motion to hold the state in contempt for violating the decree. The district court refused to enforce the provisions of the consent decree because it believed that the decree required the State to comply with state law in violation of the Eleventh Amendment. Id. This court disagreed with the district court that enforcement of the decree created an Eleventh Amendment problem. Nevertheless, the court acknowledged that “[t]here may indeed be instances when significant factual or legal changes make it inequitable for a court to continue to enforce a settlement decree. When such circumstances occur, the parties may . . . seek an alteration in the terms of the consent decree pursuant to Federal Rule of Civil Procedure 60(b)(5).” Id. at 962 (footnote omitted). We identified the specific errors made by the district court and gave it detailed instructions to be followed on remand: The district court erred in several respects. First, it should not have held that the proper course for the state officials was to ignore the provision with impunity. The appropriate course . . . would have been to seek an alteration of the decree from the district court. Secondly, the district court assumed that the court could not retain, and enforce through its contempt power, any provision of the consent decree that could not be characterized as required by the Constitution itself. In this respect, it failed to recognize that a federal consent decree can contain a provision not explicitly required by the Constitution as long as the criteria set forth in Firefighters are met. The mere congruence of the selected terms with a provision of state law does not, standing alone, render the consent decree beyond the authority of the federal court. Rather, the selection of that term must be measured against the criteria of Firefighters. “If 34 Nos. 03-1412 & 03-1436 a federal court can validly enter a consent decree, it can surely enforce that decree.” If intervening legal or factual changes make enforcement inequitable, Rule 60 provides an effective remedy. Id. at 963-64 (quoting Kozlowski v. Coughlin, 871 F.2d 241, 244 (2d Cir. 1989); internal citations and footnote omitted). Finally, in David B., this court again discussed the standard for modifying a consent decree. In that case, the heads of three Illinois agencies had signed a consent decree promising to provide “appropriate” services to the state’s youth that were in need of “specialized services.” David B., 116 F.3d at 1147. Over a decade later, “the legislature of Illinois enacted a statute curtailing” the authority of one of the agencies “to provide services to children over the age of 13 who ha[d] been adjudicated ‘delinquent.’ ” Id. The agency perceived these as inconsistent obligations and petitioned the court “to be relived of any duty to provide services to delinquents over the age of 13.” Id. The district court refused to modify the decree on the ground that there had not been a change in federal law that rendered the decree inequitable. We reversed. We noted initially that it might be possible to reconcile the decree and the statute. However, assuming that the decree required the agency “to take custody of some persons over the age of 13 who have been adjudicated delinquent,” “[t]hen the decree should be modified to eliminate the conflict between its requirements and the new statute.” Id. at 1148-49. We stated that, in Rufo, on which the district court had relied, “[t]he Court did not distinguish between legal and factual circumstances, or between state and federal law; change in any of these things may justify a modification under Fed. R. Civ. P. 60(b)(5).” Id. at 1149. Thus, the change in state law certainly could justify the modification sought. Nos. 03-1412 & 03-1436 35 We then turned to the task of the district court on remand. We noted that our past cases had emphasized that consent decrees must be based on substantial federal claims, and, although the lack of such a claim “does not permit a party to disregard the decree, . . . it does justify modification or vacatur.” Id. at 1150 (citing Komyatti, 96 F.3d at 962-63). The court instructed the district court that [i]t must either construe or modify the decree forthwith to permit Illinois to reallocate tasks among its agencies and to reduce the services offered to persons adjudicated delinquent. Then it must determine whether a sub- stantial federal claim supports the decree as a whole; if not, the entire decree must be lifted and the task of shaping public policy be restored to persons today holding political office—subject only to whatever limitations federal law and the Supremacy Clause now place on the operation of the state’s social-welfare system. Id. Our discussion of modification and enforcement of consent decrees would not be complete without mention of Frew v. Hawkins, 124 S. Ct. 899 (2004), handed down after arguments were heard in the present case. In Frew, the Court considered “whether the Eleventh Amendment bars enforcement of a federal consent decree entered into by state officials.” 124 S. Ct. at 901 (emphasis added). Specifically, state officials argued that “a federal court should not enforce a consent decree arising from an Ex parte Young suit unless the court first identifies, at the enforcement stage, a violation of federal law.” Id. at 904. The Court rejected this argument and held that the Eleventh Amendment does not act as a bar to an enforcement action to a consent decree the initial entry of which was consistent with Ex parte Young, 209 U.S. 123 (1908), and Firefighters. The Court also commented on the state officials’ fear “that enforcement of consent decrees 36 Nos. 03-1412 & 03-1436 c[ould] undermine the sovereign interests and accountability of state governments.” Id. at 905. The Court acknowledged that [i]f not limited to reasonable and necessary implementations of federal law, remedies outlined in consent decrees involving state officeholders may improperly deprive future officials of their designated legislative and executive powers. They may also lead to federal court oversight of state programs for long periods of time even absent an ongoing violation of federal law. Id. In such circumstances, the Court stated, the States are not without remedy; it explained: When a suit under Ex parte Young requires a detailed order to ensure compliance with a decree for prospective relief, and the decree in effect mandates the State, through its named officials, to administer a significant federal program, principles of federalism require that state officials with front-line responsibility for administering the program be given latitude and substantial discretion. The federal court must exercise its equitable powers to ensure that when the objects of the decree have been attained, responsibility for discharging the State’s obligations is returned promptly to the State and its officials. As public servants, the officials of the State must be presumed to have a high degree of competence in deciding how best to discharge their governmental responsibilities. A State, in the ordinary course, depends upon successor officials, both appointed and elected, to bring new insights and solutions to problems of allocating revenues and resources. The basic obligations of federal law may remain the same, but the precise manner of their discharge may not. If the State establishes reason to modify the decree, the court should make the Nos. 03-1412 & 03-1436 37 necessary changes; where it has not done so, however, the decree should be enforced according to its terms. Id. at 906 (emphasis added). From these cases, it is clear that there are important differences between a consent decree involving a one-time adjudication among private parties and one that includes an injunction restricting the ability of a State or local government to meet its responsibilities. In the latter case, there is a need to ensure that changes in factual or legal circumstances do not transform a once-just result into one that is unjust, illegal or overly burdensome and do not unnecessarily hinder a State in providing for the welfare of its citizenry. Although changes in the factual or legal predicates on which a consent decree is based are not grounds for ignoring or defying the decree, see Frew, 124 S. Ct. at 906; Komyatti, 96 F.3d at 963 (“[W]e believe that the court expressed the usual course . . . when it wrote that a ‘continuing respect for the valid decrees of a court commands that they be obeyed until changed.’ ” (quoting Kindred v. Duckworth, 9 F.3d 638, 644 (7th Cir. 1993))), Rule 60(b) does provide an avenue for modification of a consent decree. As articulated by the Court in Rufo, Rule 60(b) is a “flexible standard” according to which “a party seeking modification of a consent decree must establish that a significant change in facts or law warrants revision of the decree and that the proposed modification is suitably tailored to the changed circumstance.” 502 U.S. at 6 393. 6 A district court need not wait for the parties explicitly to request such changes; “the court can on its own motion vacate”— or modify—“the decree pursuant to Rule 60(b)(5).” United States v. Bd. of Educ. of Chicago, 799 F.2d 281, 297 (7th Cir. 1986). 38 Nos. 03-1412 & 03-1436