Alexander v. BrittAlexander v. Britt
Affirmed by published opinion. Judge Motz wrote the opinion, in which Judge Niemeyer and Senior Judge Young joined.
COUNSEL
ARGUED: William Woodward Webb, BROUGHTON, WILKINS, WEBB & SUGGS, P.A., Raleigh, North Carolina; Robert Joel Blum,
OPINION
DIANA GRIBBON MOTZ, Circuit Judge:
The district court refused to terminate a consent order, which the parties entered into in 1992, which became fully effective in 1994, and which provided that the court would retain jurisdiction over its subject matter until 1998. We affirm.
I.
This case is a class action by applicants for Aid to Families with Dependent Children (AFDC) and Medical Assistance (Medicaid) against state officials responsible for the administration of these programs in North Carolina and their agents, the administrators of the one hundred North Carolina county departments of social services. Since the inception of this case in 1974, the applicants have alleged, and the district court has repeatedly found, that the administrators have failed to comply with federal regulations concerning the processing of aid applications.
The administrators have been subject to numerous court orders and settlement agreements, all designed to encourage them to comply with federal law. The present conflict relates solely to a 1992 consent order, the terms of which the parties negotiated for many months. The stated purpose of the consent order was to bring all local social service departments “into compliance with the requirement in federal law to timely process AFDC and Medicaid applications without improper discouragement, denial or withdrawal of those applications.” Pursuant to that purpose, the administrators agreed, inter alia, to meet the deadlines federal regulations mandate for processing
In August, 1994, the administrators filed a motion to modify the consent order pursuant to
In March, 1995, without replying to the applicants’ opposition or obtaining a ruling on the modification motion, the administrators filed a second
The district court denied the administrators’ motion to terminate. The court noted the parties’ specific agreement in the 1992 consent order that the court would retain jurisdiction over the parties and “the subject matter of this action for a period of six years.” Citing Rufo, the court found that the administrators were not entitled to relief from the order because they had failed to establish the existence of a “significant change in factual conditions or in the law” or to demonstrate that their proposed alternative plan was “suitably tailored” to any changed circumstance.
On appeal, the administrators argue that the district court erred in applying what they characterize as the “more stringent” Rufo standard, rather than the Dowell standard; they maintain that had the court properly applied the Dowell standard, they would have been entitled to termination of the consent order. These arguments exhibit both a fundamental misunderstanding of Dowell and Rufo and an effort to disregard the undisputed facts of the case at hand.
II.
The standards employed in Dowell and Rufo are but variations on a single theme. Both are grounded in the established general equity powers of the federal courts. Those powers, now formalized in
The administrators seek to place Dowell and Rufo in separate compartments, with Dowell setting forth the standard to be applied when considering any and every motion to terminate a decree, and Rufo setting forth a “more stringent” standard for any and every motion to modify. However, a holding that motions to modify always require satisfaction of a more stringent standard than motions to terminate would be illogical. To adopt the administrators’ argument would mean that the Supreme Court has mandated that the standard a party must meet to obtain the less serious remedy -- modification of a permanent injunction -- in every case is more rigorous than that needed to obtain the more drastic remedy -- termination of such an injunction.2 In fact, examination of Dowell and Rufo makes clear that while the Rufo standard differs from the Dowell standard, it is hardly “more stringent.” Analysis of these cases demonstrates that the Court articulated different standards not, as the administrators suggest, in response to the differences in the remedies requested (termination versus modification) but in recognition of the differences in the character and purposes of the injunctions at issue in the two cases. The administrators’ myopic focus on the remedy requested ignores the genesis of Dowell and Rufo and the flexibility that they teach.
Prior to Dowell and Rufo, federal courts generally looked to United States v. Swift & Co., 286 U.S. 106 (1932), for the standard to apply when reviewing motions to terminate or modify permanent injunctions. Swift involved an antitrust consent decree, in which meatpacking companies agreed to an injunction against certain monopolistic practices. Ten years later, the companies sought a modification of the decree, which the district court granted in part. The Supreme Court reversed, explaining: “Nothing less than a clear showing of grievous wrong evoked by new and unforeseen conditions should lead us to
In its 1991 Dowell decision, the Supreme Court held that the Swift “grievous wrong” standard was not “the proper standard to apply to injunctions entered in school desegregation cases.” Dowell, 498 U.S. at 248.3 The Court reasoned that because school desegregation decrees were intended as “temporary measure[s] to remedy past discrimination” and were “not intended to operate in perpetuity,” a more flexible approach was warranted. Id. at 247. The Court distinguished Swift as a case involving a “continuing danger” that the party asking for the modification would revert to its prior illegal conduct. Id. (citing United States v. United Shoe Mach. Corp., 391 U.S. 244, 248 (1968)). Because the court-imposed decree in Dowell was aimed primarily at remedying past unconstitutional conduct, and no evidence indicated that the local authority would revert to its former illegal behavior, the Court held that to obtain relief the local authority need not demonstrate the existence of a “grievous wrong” caused by “new and unforeseen conditions.” Dowell, 498 U.S. at 247. In the context of deciding whether to “modify or dissolve a desegregation decree,” the Supreme Court directed that
Although in Dowell and Rufo the Court set forth different standards, its approach was the same. In both cases, the Court eschewed Swift‘s rigid “grievous wrong” standard in favor of a more flexible approach appropriate to the situation. In both, the Court analyzed a number of factors to determine whether the movants were entitled to
Dowell involved a somewhat unusual situation: the district court had imposed an injunction not to ensure current compliance with federal law but primarily to remedy the effects of past wrong-doing (state-sponsored segregation). It was in this context that the Court held that
Nothing in Dowell or Rufo indicates that the Supreme Court intended the Rufo standard to apply to all modification motions and the Dowell standard to all termination motions. But see United States v. City of Miami, 2 F.3d 1497, 1503-05, 1508-09 (11th Cir. 1993) (directing district court to apply Rufo standard to modification motion and Dowell standard to termination motion); Heath v. DeCourcy, 992 F.2d 630, 633-35 (6th Cir. 1993) (same). Indeed, Dowell itself makes clear that a party can invoke the standard it sets forth to terminate or modify a decree. See Dowell, 498 U.S. at 248 (rejecting lower court‘s position that compliance alone “cannot become the basis for modifying or dissolving an injunction“) (emphasis added); see also id. at 249 (“in deciding whether to modify or dissolve a desegregation decree, . . . compliance with previous court orders is obviously relevant“) (emphasis added). Similarly, if a party can demonstrate a significant, unforeseen change in the facts or law, it may invoke Rufo to move for modification and even, if the unforeseen change in circumstances is particularly dramatic, termination. See, e.g., Sweeton v. Brown, 27 F.3d 1162, 1166 (6th Cir. 1994) (en banc), cert. denied, 115 S. Ct. 1118 (1995); Evans v. City of Chicago, 10 F.3d 474, 483 (7th Cir. 1993) (en banc) (Ripple, J., concurring), cert. denied, 114 S. Ct. 1831 (1994).
Thus, it is clear that Dowell and Rufo are entirely consistent; they do, indeed, sound the “same theme.” Rufo, 502 U.S. at 380.
III.
What is unclear is whether the Dowell standard can be invoked when a party seeks to terminate or modify a consent decree, like that at issue here, which contains a specific sunset provision and was
A critical factor in the 1992 consent order, duly emphasized by the district court, is the administrators’ agreement to abide by the terms of the order for six years. Unlike the injunction in Dowell, the order in this case was not court-imposed but resulted from extended negotiations between the parties. Of course, such an order is “enforceable as a judicial decree” and is therefore subject to
Thus, defendants have somewhat different obligations under consent decrees than they do under court-imposed injunctions. In the latter, defendants can only be required to address ongoing illegal activity or the past effects of illegal activity -- i.e., violations of substantive federal law. But, in a consent decree, defendants may agree, within limits, to do more than a judicially imposed injunction could have required. See Plyler v. Evatt, 924 F.2d 1321, 1327 (4th Cir. 1991). The consent decree must, of course, still relate to an alleged violation of federal law, see Rufo, 502 U.S. at 389, but if it does, the parties should be held to their bargain. See id. at 391-92 (A “court should not `turn aside to inquire whether some of [the provisions of the decree] upon separate as distinguished from joint action could have been opposed with success if the defendants had offered opposition.‘“) (quoting Swift, 286 U.S. at 116-17). It would seem that the six-year term makes it impossible for the administrators to have complied with the 1992 consent order, or for the order to have fulfilled its purpose, in less than six years.
Other circuits have recognized that the Dowell standard does not appear suitable for decrees aimed at ensuring ongoing compliance with the law. Thus, the Dowell standard has been applied primarily in cases, like Dowell itself, involving decrees that may generally enjoin ongoing illegal activity, but are directed principally at remedying the effects of past illegal activity. See, e.g., Youngblood v. Dalzell, 925 F.2d 954, 955-56 (6th Cir. 1991). No court has employed Dowell to terminate or modify a decree aimed exclusively, or even principally, at ongoing illegal activity. In those instances it is to Rufo, rather than Dowell, that our sister circuits have turned not only to determine whether such decrees should be modified but also whether they should be terminated. See, e.g., United States v. Eastman Kodak Co., 63 F.3d 95, 102 (2d Cir. 1995) (relying on Rufo and United Shoe); Sweeton, 27 F.3d at 1162, 1163-64; Protectoseal Co. v. Barancik, 23 F.3d 1184, 1187 (7th Cir. 1994); Evans, 10 F.3d at 474, 476.
Accordingly, the Dowell standard may well be inapplicable to consent decrees, like the 1992 consent order, in which the parties agree to cease ongoing illegal activity under specified terms and conditions. We note that the First Circuit has voiced similar uncertainty as to the applicability of Dowell in this context. See Inmates of Suffolk County Jail v. Rufo, 12 F.3d 286, 292-93 (1st Cir. 1993) (after remand from the Supreme Court). The uncertainty would appear to be exacerbated here where the consent decree specifically provides for court supervision for a defined, and relatively short, period of time. We need not definitively resolve the question in this case because in any event,
IV.
As discussed above, to meet the Dowell standard, the administrators must demonstrate: (1) that for a reasonable period of time (2) they have complied in good faith with the consent decree (3) to the point that the “vestiges” of past unlawful behavior have been eliminated “to the extent practicable,” and thus the purpose of the decree has been satisfied. See Dowell, 498 U.S. at 249-50.
The administrators studiously ignore the first of these factors. The reason seems clear: the record unequivocally demonstrates that the administrators have not complied with the consent decree for a reasonable period of time. The 1992 consent decree was issued less than four years ago and has only been fully effective since January, 1994. Thus, in March, 1995, when the administrators moved to terminate the order, it had been in full effect for little more than a year. No court has held that compliance for such a short period constitutes compliance for a “reasonable period” of time.
Only compliance for substantially longer periods has been regarded as significant evidence of good faith compliance. See Dowell, 498 U.S. at 249 (the “passage of time [twelve years] enables the District Court to observe the good faith of the school board in complying with the decree“); see also Patterson v. Newspaper & Mail Deliverers’ Union, 13 F.3d 33, 34-35 (2d Cir. 1993) (motion to terminate, denied eleven years after a decree‘s entry, was properly granted after eighteen years), cert. denied, 115 S. Ct. 58 (1994); City of Miami, 2 F.3d at 1508 (after consent decree had been in effect for fifteen years, district court should examine whether termination warranted); Consumer Advisory Bd. v. Glover, 989 F.2d 65, 68 (1st Cir. 1993) (after fifteen years, district court held to have “considerable discretion” to conclude the decree should be dissolved). Cf. Youngblood, 925 F.2d at 955 (although seventeen years had passed, district court should reconsider its decision to terminate the decree).
Moreover, even if the parties’ agreement to the six-year sunset provision does not mandate that the consent order remain effective for
Medicaid and AFDC applicants have been forced to litigate for more than twenty years in an effort to make the administrators comply with federal law. The administrators themselves concede that they have had significant difficulty in adhering to federal regulations. They acknowledge that “[c]ertainly [judicial] supervision may have been justified throughout part of the 1970‘s, the 1980‘s and even into the 1990‘s.” Brief of Appellants at 3. Thus, in this case, a party that has
This brings us to a second factor the Supreme Court emphasized in Dowell -- a party‘s good faith compliance with the decree. Although we express no opinion as to whether the administrators have acted in good faith, the evidence is uncontroverted that the administrators have never been able to comply with the consent order. Indeed, the administrators’ own statistics document their failure to achieve compliance. The central purpose and requirement of the consent order was for “all applications [to] be processed timely in compliance with federal law.” To that end, the consent order requires each county department to meet both an “average processing time” and a “percent processed timely” threshold each month. As the administrators’ statistics reveal, since the inception of the order there has never been a month in which all one hundred county departments complied with the thresholds agreed to in the order. On average, since the time the order became fully effective in January, 1994, one-fifth of the local departments have failed to comply with these thresholds. In the two most recent months for which the administrators submitted data, January, 1995 and February, 1995, thirty-six counties and twenty counties, respectively, failed to comply with the thresholds.
The administrators respond that the statistics must be analyzed in context, arguing that “most of the departments out of compliance were in small, less populated counties,” and so it is unfair to focus on them. Brief of Appellants at 4-5. Whatever the merits of this claim, the fact that the administrators need to make it at all reveals, in the administrators’ own words, that they have been continually “out of compliance” with the consent order.
The administrators seem to believe that the Dowell standard permits good intentions to substitute for compliance. Thus, before us they claim, not that they have “complied with the consent order,” but that they have “complied in good faith with the basic purpose of the
The last factor in the Dowell standard is whether the administrators have removed the vestiges of past wrong-doing to the extent that the purpose of the consent order has been fulfilled. For the same reasons that it is unclear whether the Dowell standard applies at all to the 1992 consent order, the administrators cannot make this showing. The primary purpose of the order in this case was not to redress past wrong-doing but to ensure current and future compliance with federal regulations for the period between 1992-1998. Due to the inherent difficulty in proving that the purpose of a decree ensuring ongoing compliance for six years has been fulfilled prior to the end of the six year period, especially when the administrators cannot establish that they have ever fully complied with the consent order, the administrators cannot satisfy this element either.
V.
In view of the fact that the administrators can establish none of the Dowell factors, the Dowell standard, even if applicable here, is of no use to them. Because the administrators could not meet the Dowell standard, the district court correctly analyzed their termination motion under the Rufo standard. Indeed, under the circumstances of this case,
It will be remembered that only seven months prior to moving to terminate the decree, the administrators had filed a motion to modify, which remained pending when the court resolved the termination motion. In the modification motion, the administrators acknowledged that Rufo set forth the standard for modification or termination of consent decrees.” Moreover, attached to the termination motion was a new plan, devised by the administrators, for processing aid applications. Although the administrators did not expressly urge the court to modify the consent order by substituting in its place the voluntary plan, they certainly did assert that the voluntary plan would effectively substitute for the consent order.
The administrators thus have been less than clear both as to whether they were invoking Dowell or Rufo and whether they were pursuing elimination of all court-approved plans or substitution of a new plan. In view of this and the total lack of any support in the record that the Dowell standard (even if applicable) had been met, the district court‘s examination of the administrators’ motion under the Rufo standard can hardly be considered error. Rather, this appears to be precisely the sort of flexibility appropriate to an equitable analysis of a
Applying Rufo, the district court found that the administrators had failed to establish a significant change in the law or facts that warranted relief from the 1992 consent order. The administrators have not challenged the court‘s finding under Rufo and, therefore, that issue is not before us. Nevertheless, we reiterate the district court‘s observation that should Congress pass legislation relating to the programs at issue in this case, the administrators are free, of course, to re-file motions for relief under
For all of these reasons, the district court‘s order denying the motion to terminate is
AFFIRMED.