Carmen THOMPSON; Rhonda Harris; Joann Boyd; Doris Tinsley; Lorraine Johnson; Isaac J. Neal, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees, v. U.S. DEPARTMENT OF HOUSING & URBAN DEVELOPMENT; Alphonso Jackson, in his official capacity as United States Acting Secretary of Housing and Urban Development, Defendants-Appellants, and Housing Authority Of Baltimore City; Daniel P. Henson, III, in his official capacity as Executive Director of the Housing Authority of Baltimore City and the Commissioner of the Baltimore City Department of Housing and Community Development; Mayor And City Council Of Baltimore City, Defendants. Jonestown Planning Council, Incorporated, Movant.
No. 04-1535
United States Court of Appeals, Fourth Circuit
April 15, 2005
348 F.3d 821
Argued: Dec. 2, 2004.
Before WILKINS, Chief Judge, and MICHAEL and TRAXLER, Circuit Judges.
Affirmed by published opinion. Judge TRAXLER wrote the opinion, in which Chief Judge WILKINS and Judge MICHAEL concurred.
TRAXLER, Circuit Judge:
In 1995, African-American public housing residents (the “Plaintiffs“) filed a class action against the United States Department of Housing and Urban Development and its then-Secretary Henry Cisneros (referred to together as “HUD“), along with the Housing Authority of Baltimore City and various Baltimore officials (together, the “Local Defendants“), seeking to eliminate racial segregation and discrimination in Baltimore‘s public housing system. In 1996, the parties entered into a Partial Consent Decree (the “Consent Decree“) resolving some of the issues raised in the complaint. The Consent Decree stated that the district court would exercise jurisdiction for only a limited period of time.
With the end of the court‘s jurisdiction over HUD looming, the Plaintiffs filed a motion requesting that the district court modify the Consent Decree to extend the period during which it would exercise jurisdiction over HUD. The district court granted the motion, and HUD appeals. For the reasons set forth below, we affirm.
I.
Baltimore‘s public housing system began in the 1930s as an officially segregated program. The city abandoned its official segregation policies shortly after the Supreme Court‘s decision in Brown v. Board of Education, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954). In their class action complaint, the Plaintiffs alleged, inter alia, that while the formal policy of segregation was no longer in place, the Local Defendants were perpetuating the former de jure segregation through their racially based assignments of public housing applicants and through their decisions regarding the placement of new housing projects.
The parties ultimately agreed to settle some of the claims asserted in the class action, an agreement that was formalized in the Consent Decree. The Consent Decree imposes numerous obligations on the Local Defendants and HUD. Many of HUD‘S obligations under the Decree are related to the obligations imposed on the Local Defendants, in that most (if not all) of the steps that the Local Defendants are required to take under the Consent Decree require HUD‘S cooperation and approval. The Consent Decree provides that the district court will have jurisdiction over the Local Defendants until their obligations under the decree have been satisfied, and that the court will have jurisdiction over HUD for seven years after the approval of the Decree. The Consent Decree was approved on June 25, 1996; under the terms of the Consent Decree, the district court‘s jurisdiction over HUD was to expire on June 25, 2003. HUD acknowledges, however, that it has obligations under the Consent Decree that extend well beyond June 25, 2003.
Although the Consent Decree has been in effect since 1996, the Local Defendants have fallen jaw-droppingly short of fulfilling their obligations. The Local Defen
Faced with the utter failure of the Local Defendants to comply with the terms of the Consent Decree and the impending termination of the district court‘s jurisdiction over HUD, the Plaintiffs in May 2003 filed a motion asking the district court to modify the Consent Decree to extend the term of its jurisdiction over HUD. The Plaintiffs argued that the failure of the Local Defendants to comply with the Decree was a significant change of circumstance warranting a modification of the Decree. The Plaintiffs contended that since HUD must approve the plans and actions required of the Local Defendants under the Consent Decree, the district court should retain jurisdiction over HUD. Under the original terms of the Consent Decree, the district court‘s jurisdiction over HUD terminated six months after the date that the Local Defendants were to have provided the 911 hard units of public housing. The Plaintiffs therefore requested that the district court extend its jurisdiction over HUD for an additional three years, which would give the court jurisdiction for six months after the date by which the Local Defendants projected they would be able to provide the required 911 housing units.
The district court granted the Plaintiffs’ motion to modify the Decree. The court held that the Local Defendants’ “level of compliance fell so far short of complete as to be beyond any reasonable degree of expectations or acceptability.” J.A. 509. The district court concluded that the magnitude of the Local Defendants’ non-compliance amounted to a change of circumstance sufficient to warrant modification of the Consent Decree, notwithstanding the fact that HUD was not responsible for the delays of the Local Defendants. The district court, however, declined to extend its jurisdiction over HUD by the three years requested by the Plaintiffs. Instead, the district court extended its jurisdiction “until such time as HUD shows that its obligations have been fulfilled approximately to the same extent as the parties and the Court originally and reasonably contemplated would have been fulfilled by June 25, 2003.” J.A. 516-17. This appeal followed.
II.
It has long been recognized that courts are vested with the inherent power to modify injunctions they have issued. That same authority also exists with regard to a court‘s consent decrees, which regulate future conduct and thus operate as injunctions:
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.... Power 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. 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 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.
United States v. Swift & Co., 286 U.S. 106, 114-15, 52 S.Ct. 460, 76 L.Ed. 999 (1932) (citations omitted); see Benjamin v. Jacobson, 172 F.3d 144, 161 (2d Cir.1999) (en banc) (“The proposition that a court has the authority to alter the prospective effect of an injunction in light of changes in the law or the circumstances is, of course, well established.“); Sweeton v. Brown, 27 F.3d 1162, 1166 (6th Cir.1994) (“Anglo-American courts have always had the inherent equitable power to modify consent decrees imposing ongoing injunctive relief.“).
The court‘s inherent authority to modify a consent decree or other injunction is now encompassed in
In Rufo v. Inmates of Suffolk County, 502 U.S. 367, 112 S.Ct. 748, 116 L.Ed.2d 867 (1992), the Supreme Court considered the application of
The upsurge in institutional reform litigation since Brown v. Board of Education ... 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....
The experience of the District Courts and Courts of Appeals in implementing and modifying such decrees has demonstrated that a flexible approach is often essential to achieving the goals of reform litigation. The Courts of Appeals have also observed 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 380-81 (citations and internal quotation marks omitted). The Court emphasized, however, that while “a district court should exercise flexibility in considering requests for modification of an institutional reform consent decree, it does not follow that a modification will be warranted in all circumstances.” Id. at 383.
[A] party seeking modification of a consent decree bears the burden of establishing that a significant change in circumstances warrants revision of the decree. If the moving party meets this standard, the court should consider whether the proposed modification is suitably tailored to the changed circumstance.
Id. A “significant change either in factual conditions or in law” can support a requested modification. Id. at 384. A significant change in the factual conditions can support a modification if the changed conditions “make compliance with the decree substantially more onerous,” if the decree “proves to be unworkable because of unforeseen obstacles,” or if “enforcement of the decree without the modification would be detrimental to the public interest.” Id.; see Thompson v. HUD, 220 F.3d 241, 247 (4th Cir.2000) (“Thompson I“). “Ordinarily, however, modification should not be granted where a party relies upon events that actually were anticipated at the time it entered into a decree.” Rufo, 502 U.S. at 385.
III.
As noted above, the district court concluded that the Local Defendants’ nearly complete failure to comply with their obligations was a sufficient change of circumstance to warrant modification of the Consent Decree. On appeal, HUD challenges the district court‘s decision on several grounds. HUD contends that the parties anticipated that, at the time the court‘s jurisdiction over HUD was to expire, the Local Defendants might not have fulfilled their obligations under the Decree. HUD thus contends that because the Local Defendants’ lack of compliance was anticipated, it cannot be a basis for modifying the Consent Decree. HUD also contends that because it was not responsible for the Local Defendants’ failings, it was error for the district court to use those failings as a reason to modify HUD‘s obligations under the Decree. Finally, HUD contends that the modification was not suitably tailored to the problems identified by the district court.
We review the district court‘s decision to modify the Consent Decree for abuse of discretion, see Thompson I, 220 F.3d at 246, and “we accept the factual findings on which the district court‘s decision is based unless they are clearly erroneous,” Small v. Hunt, 98 F.3d 789, 796 (4th Cir.1996). Such a deferential standard of review is warranted in view of the nature and purpose institutional-reform consent decrees:
The rule of broad discretion in public interest cases is designed to give the district court flexibility in deciding exactly how the numerous conditions of a complex consent decree are to be implemented in practice. In overseeing broad institutional reform litigation, the district court becomes in many ways more like a manager or policy planner than a judge. Over time, the district court gains an intimate understanding of the workings of an institution and learns what specific changes are needed within that institution in order to achieve the goals of the consent decree.
Navarro-Ayala v. Hernandez-Colon, 951 F.2d 1325, 1338 (1st Cir.1991); see also Ruiz v. Lynaugh, 811 F.2d 856, 861 (5th Cir.1987) (“We note that a district court‘s decision to modify a consent decree in an ongoing institutional reform case is committed to that court‘s discretion because it is intimately involved in the often complex process of institutional reformation. It has the personal knowledge, experience, and insight necessary to evaluate the par
A.
HUD contends that the district court‘s decision to modify the Consent Decree was in error because the circumstance upon which the court based the modification—the lack of compliance by the Local Defendants—was anticipated by the parties at they time they entered into the Decree. HUD points out that the Consent Decree calls for the district court to exercise jurisdiction over the Local Defendants until they fulfilled their obligations under the Decree, but for the court to exercise jurisdiction over HUD until June 2003—seven years after the Decree was approved. HUD thus argues that the parties fully anticipated that HUD might be out of the picture before the Local Defendants fulfilled their obligations under the Decree, and that the district court therefore erred by modifying the Decree based on an anticipated event. See Thompson I, 220 F.3d at 248-49 (reversing modification of Consent Decree because modification was based on circumstances that were anticipated at the time the Decree was entered into).
We agree that the parties when executing the Consent Decree must have anticipated the likelihood that HUD would be released from the district court‘s jurisdiction before the Local Defendants had completed their obligations under the Decree. The structure of the Decree itself leaves no room for doubt on that score. But the district court did not modify the Consent Decree because the Local Defendants had not quite completed all of their obligations; the court modified the Decree because the Local Defendants had done almost nothing that they were required to do under the Decree.2
HUD argues, however, that the magnitude of the Local Defendants’ failure is irrelevant. Since the parties anticipated the possibility that HUD would be released from the court‘s jurisdiction at a time when the Local Defendants were still performing under the Decree, HUD contends that the modification was impermissible under Rufo and Thompson I, even if the Local Defendants were farther behind than anticipated. We disagree.
Preliminarily, we note that the issue is whether the parties actually anticipated the events giving rise to the modification request; that the events were theoretically foreseeable does not foreclose a modification. See Rufo, 502 U.S. at 385 (rejecting the argument that “modification should be allowed only when a change in facts is both ‘unforeseen and unforeseeable,‘” noting that “[l]itigants are not required to anticipate every exigency that could conceivably arise during the life of a consent decree“). In this case, there is nothing in the Consent Decree or the record to suggest that Plaintiffs anticipated the exceptional magnitude of the Local Defendants’ non-compliance. J.A. 508 (“Certainly, the absence of complete compliance with a consent decree is not necessarily extraordinary or unforeseeable. However, failed compliance of the magnitude confronted in the instant case is nothing short of exceptional.” (citation omitted)). If the parties had actually anticipated that the Local Defendants would be so far behind on their obligations at this stage in the proceedings, the Consent Decree would never have been executed. The Plaintiffs would not
B.
HUD contends, however, that even if the degree of the Local Defendants’ failure to comply was not anticipated, the only failings specifically identified by the district court were those of the Local Defendants. HUD argues that since it was not at fault for the Local Defendants’ delay in compliance, the delay should not have been the basis for a modification of HUD‘s obligations under the Decree. We disagree.
We first note that this argument seems to proceed on an assumption that a consent decree may be modified only upon a showing of fault. Quite the opposite is true. Consent decrees are frequently modified when the change of circumstance was not brought about by the fault of a party to the agreement. For example, we have held that modifications should be made to consent decrees entered in prison-condition litigation where there was an unanticipated increase in the prison population. See Small, 98 F.3d at 796-97; Plyler v. Evatt, 846 F.2d 208, 215–16 (4th Cir.1988). While the cases involved requests by the defendants to modify the
A court‘s ability to modify a consent decree or other injunction springs from the court‘s inherent equitable power over its own judgments. See United States v. City of Miami, 2 F.3d 1497, 1509 (11th Cir.1993) (“[A] district court‘s decision on a request to terminate or modify a consent decree is an exercise of that court‘s equitable power....“); SEC v. Worthen, 98 F.3d 480, 482 (9th Cir.1996) (“With respect to permanent injunctions, we have held that Rule 60(b)(5) represents a codification of preexisting law, recognizing the inherent power of a court sitting in equity to modify its decrees prospectively to achieve equity.” (internal quotation marks omitted));
The essence of a court‘s equity power lies in its inherent capacity to adjust remedies in a feasible and practical way to eliminate the conditions or redress the injuries caused by unlawful action. Equitable remedies must be flexible if these underlying principles are to be enforced with fairness and precision.
Freeman v. Pitts, 503 U.S. 467, 487, 112 S.Ct. 1430, 118 L.Ed.2d 108 (1992); accord Brown v. Board of Educ., 349 U.S. 294, 300, 75 S.Ct. 753, 99 L.Ed. 1083 (1955) (“[E]quity has been characterized by a practical flexibility in shaping its remedies and by a facility for adjusting and reconciling public and private needs.“).
HUD‘s view is that the modification of its responsibilities under the Consent Decree is inappropriate because it has done nothing wrong and bears no responsibility for the lack of compliance upon which the district court based its decision to modify the decree. We believe that such a position would improperly tie the district court‘s hands and severely limit the ability to fashion the necessary relief. Institutional reform litigation frequently involves multiple parties with interrelated obligations, such that a breach of duty by one party can require an adjustment to the duties of another party. The district court must be free to exercise its equitable powers as necessary to remedy the problem. See Rufo, 502 U.S. at 382 (noting that “rigidity [in applying Rule 60(b)(5)] is neither required ... nor appropriate in the context of institutional reform litigation“); Waste Mgmt. of Ohio, Inc. v. City of Dayton, 132 F.3d 1142, 1145 (6th Cir.1997) (“Equitable considerations are clearly factors a district court can address when they are related to a court‘s power and duty to modify, interpret, and oversee a consent decree.“); Berger v. Heckler, 771 F.2d 1556, 1568 (2d Cir.1985) (“[B]readth and flexibility are inherent in equitable remedies.” (internal quotation marks omitted)). This power must include the right, in appropriate cases, to modify the obligations of a party who was without fault in creating the change of circumstance that gave rise to the need for modification. See New York State Ass‘n for Retarded Children, Inc. v. Carey, 706 F.2d 956, 969 (2d Cir.1983) (“It is well recognized that in institutional reform litigation such as this judicially-imposed remedies must be open to adaptation when unforeseen obstacles present themselves, to improvement when a better understanding of the problem emerges, and to accommoda
Accordingly, we conclude that the district court did not abuse its discretion when concluding that the Local Defendants’ lack of compliance with their obligations under the Consent Decree was an unanticipated and substantial change of circumstance. We likewise conclude that the absence of fault on the part of HUD does not preclude a modification of HUD‘s duties under the Consent Decree. The question thus becomes whether the modification imposed by the district court was proper.
C.
“Once a court has determined that changed circumstances warrant a modification in a consent decree, the focus should be on whether the proposed modification is tailored to resolve the problems created by the change in circumstances.” Rufo, 502 U.S. at 391. “A court should do no more, for a consent decree is a final judgment that may be reopened only to the extent that equity requires.” Id.
The district court concluded that enforcement of the Consent Decree would be substantially more difficult if it did not extend the period of jurisdiction over HUD. The court thus concluded that extending the period of its jurisdiction over
In our view, the modification implemented by the district court nicely meets Rufo‘s requirement that any modification be “suitably tailored to the changed circumstance.” Rufo, 502 U.S. at 391. Although the Local Defendants bear most of the substantive obligations under the Consent Decree, the Decree also imposes various obligations on HUD, many of which are related to the obligations of the Local Defendants.4 Given that the Local Defendants are so far behind in fulfilling their obligations under the Consent Decree and that many of the obligations of the parties are interrelated, the district court properly recognized the utility of retaining jurisdiction over HUD, so as to ensure that the Decree can be efficiently enforced. And by extending the period of jurisdiction only until the Local
HUD, however, argues that the relief fashioned by the district court was not suitably tailored to remedy the problem at hand. According to HUD, the Consent Decree‘s retention-of-jurisdiction provision was “the heart” of its bargain, Brief of Appellants at 18, and the district court‘s rewriting of that clause can hardly be considered a suitably tailored remedy.5
HUD, however, argues that the relief fashioned by the district court was not suitably tailored to remedy the problem at hand. According to HUD, the Consent Decree‘s retention-of-jurisdiction provision was “the heart” of its bargain, Brief of Appellants at 18, and the district court‘s rewriting of that clause can hardly be considered a suitably tailored remedy.6
Finally, HUD suggests that the district court‘s modification went beyond what was necessary to address the changed circumstances, because the modification imposes substantial new obligations on HUD and has provided an opening for the Plaintiffs to seek to hold HUD in contempt for violating the terms of the Consent Decree. Again we disagree.
As HUD concedes, it has obligations under the Consent Decree that extend well beyond the date that the court‘s jurisdiction over HUD originally was to expire. Therefore, even if the district court had declined to modify the retention-of-jurisdiction clause, the court‘s inherent authority over its own judgment would have provided it with the continuing authority to enforce the Consent Decree against HUD. See Frew v. Hawkins, 540 U.S. 431, 440, 124 S.Ct. 899, 157 L.Ed.2d 855 (2004) (“Federal courts are not reduced to approving consent decrees and hoping for compliance. Once entered, a consent decree may be enforced.“); System Fed‘n No. 91 v. Wright, 364 U.S. 642, 647, 81 S.Ct. 368, 5 L.Ed.2d 349 (1961) (explaining that injunctions “often require[] continuing supervision by the issuing court and always a continuing willingness to apply its powers and processes on behalf of the party who obtained that equitable relief“); Brewster v. Dukakis, 3 F.3d 488, 491 (1st Cir.1993) (“[S]o long as the injunction endures, the district court‘s enforcement authority can always be ‘reawakened.’ “); In re Pearson, 990 F.2d 653, 657 (1st Cir.1993) (“[W]hen an injunction entered pursuant to a consent decree has ongoing effects, the issuing court retains authority to enforce it.“); Hook v. Arizona Dep‘t of Corr., 972 F.2d 1012, 1014 (9th Cir.1992) (concluding that district court had jurisdiction over motion to seeking to hold defendants in contempt for violating consent decree in case that had been closed for 16 years: “A district court retains jurisdiction to enforce its judgments, including consent decrees. Because the inmates allege a violation of the consent decree, the district court had jurisdiction.” (citation omitted)); United States v. Fisher, 864 F.2d 434, 436 (7th Cir.1988) (“[W]hen a court issues an injunction, it automatically retains jurisdiction to enforce it.“); Waffenschmidt v. MacKay, 763 F.2d 711, 716 (5th Cir.1985) (“Courts possess the inherent authority to enforce their own injunctive decrees.... Courts do not sit for the idle ceremony of making orders and pronouncing judgments, the enforcement of which may be flouted, obstructed, and violated with impunity, with no power in the tribunal to punish the offender.” (internal citations omitted)). Thus, the modification of the Consent Decree exposes HUD to no greater risk of contempt
IV.
To summarize, we conclude that the district court properly found that the Local Defendants’ near total failure to comply with the terms of the Consent Decree was an unanticipated change of circumstance that warranted modifying the Consent Decree. Because many of the obligations of HUD and the Local Defendants under the Decree are interrelated, the district court did not abuse its discretion by concluding that the Decree should be modified to extend the period of the court‘s retention of jurisdiction over HUD. The district court‘s modification of the Decree was suitably tailored to the problems created by the change of circumstance, as required by Rufo. Accordingly, the district court‘s order modifying the Consent Decree is hereby affirmed.
AFFIRMED
UNITED STATES of America, Plaintiff-Appellee, v. Gay Sanford WASHINGTON, Defendant-Appellant.
No. 03-4867
United States Court of Appeals, Fourth Circuit
April 15, 2005
Argued: Oct. 26, 2004.