U.S. v. Board of Educ. of City of Chicago, s. 86-1159

• Decision Date: 18 August 1986
• Docket Number: Nos. 86-1159,86-1160,s. 86-1159
• Parties: 34 Ed. Law Rep. 689 UNITED STATES of America, Plaintiff-Appellant, Cross-Appellee, v. BOARD OF EDUCATION OF the CITY OF CHICAGO, Defendant-Appellee, Cross-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 281

799 F.2d 281

34 Ed. Law Rep. 689

UNITED STATES of America, Plaintiff-Appellant, Cross-Appellee, v. BOARD OF EDUCATION OF the CITY OF CHICAGO,

Defendant-Appellee, Cross-Appellant.

Nos. 86-1159, 86-1160.

United States Court of Appeals,

Seventh Circuit.

Argued June 3, 1986.

Decided Aug. 18, 1986.

Neil H. Koslowe, Dept. of Justice, Washington, D.C., for plaintiff-appellant, cross-appellee.

Robert M. Weissbourd, Pressman & Hartunian, Chicago, Ill., for defendant-appellee, cross-appellant.

Before CUMMINGS, Chief Judge, and WOOD and FLAUM, Circuit Judges.

FLAUM, Circuit Judge.

For the third time in the nearly six years since its inception, the consent decree entered into by the Chicago Board of Education and the United States in order to settle a federal desegregation suit comes before this court fraught with problems of interpretation and implementation. The history of this decree is notable not for its success in raising an allegedly segregated school system to a constitutionally acceptable level, but for what it has illuminated about the character and limitations of the executive, municipal, and judicial institutions involved. The present state of the record is the product of the parties' recalcitrance in fulfilling their obligations in a spirit of cooperation similar to the one in which they entered into the settlement, ¹ and the seemingly insurmountable difficulties faced by the court system in trying to fill in the interstices of a multi-million dollar desegregation plan. In the latest phase of this litigation, the district court interpreted this court's 1984 opinion and the decree's funding provisions as requiring that the Board be treated as a priority, see infra note 10, with respect to all federal funds for which a program contained in the Board's plan meets the federal statutory criteria. Pursuant to this interpretation, the district court determined the exact amounts of the funds in various programs that the Board is entitled to under the consent decree.

While a colorable construction of the decree, this result does not comport with the approach we adopted in our previous opinions. The aim of those opinions was to avoid complete judicial usurpation of the parties' consensual relationship. Only as a last resort, after the parties refuse or are unable to settle their differences, should the court take steps to determine, on its own accord, the proper resolution of this dispute. This litigation has now reached a point where we must abandon any perception that the case is proceeding along on a proper course. In order to correct the situation, we will now provide more exacting guidelines to advance further judicial action. Accordingly, the order of the district court is vacated and the case is remanded for further proceedings consistent with this opinion.

I.

The origins of this dispute are well-documented in previous district court and appellate opinions and need not be elaborated here. See United States v. Board of Education of the City of Chicago, 744 F.2d 1300 (7th Cir.1984) (vacating the district court's order appearing at 567 F.Supp. 272 (N.D.Ill.1983)); United States v. Board of Education of the City of Chicago, 717 F.2d 378 (7th Cir.1983) (vacating the district court's order appearing at 554 F.Supp. 912 (N.D.Ill.1983)); United States v. Board of Education of the City of Chicago, 621 F.Supp. 1296 (N.D.Ill.1985) (the district court order being reviewed in the present appeal). In its simplest form, this case revolves around the nature of the United States' obligation to provide funds under p 15.1 of a consent decree entered into on September 24, 1980. This provision does not propose a detailed plan of financing, but merely provides that:

Each party is obligated to make every good faith effort to find and provide every available form of financial resources adequate for the implementation of the desegregation plan.

The remand instructions of the second appellate opinion established that defining the parameters of p 15.1 was the central issue in the case. 744 F.2d at 1304-07. In our first opinion, we held that p 15.1 imposed a "substantial obligation" on the United States Department of Education. The government's position that its duties were limited to assisting the Board in the grant application process was rejected. 717 F.2d at 382-83. The obligations inherent in the funding provision were left unarticulated in the hope that the parties, prodded by the court, would provide the meaning of the decree they drafted. "[T]he process of dispute resolution ... failed remarkably in this case" ² and the dispute came before this court again for review of a district court order which, among other things, interpreted p 15.1 as imposing on the government an obligation to provide all the funds required by the desegregation plan that the Board was unable to obtain from other sources. Having declined in the 1983 appeal to adopt the government's exceedingly narrow construction of p 15.1, this court in 1984 rejected the opposite extreme as embodied in the district court's order. In reaching this conclusion, we found that there was nothing in the language of p 15.1, or the extrinsic evidence regarding its adoption, that required the Department of Education to provide the Board with all its needs regardless of the availability of funds for which the plan qualified or to seek legislation providing funds for the Board. 744 F.2d at 1306. Our opinion went a step further, based upon representations of the government's counsel at oral argument, and instructed the district court that if the Board was receiving on a priority basis the maximum level of funding available from existing desegregation programs under established program criteria, the government then would be in compliance with p 15.1. 744 F.2d at 1305-06.

Following the second remand, the basic relationship, or lack thereof, between the parties remained the same while their exact positions shifted slightly. The government took the position that the second appellate opinion constituted an adoption of its November 10, 1983 plan as described by the Assistant Attorney General during oral argument. ³ Under the government's plan, as it emerged from oral argument during the 1984 appeal, the Board would be given "top of the list" priority with respect to funding programs specifically designated for desegregation purposes--namely, the grants available pursuant to Title IV of the Civil Rights Act of 1964 and monies not otherwise obligated in the Secretary of Education's "Discretionary Fund." In fiscal year 1984, the government therefore attempted to fund the Board pursuant to this interpretation of p 15.1.

The nature and level of funding provided by the government to the Board were the subject of the district court's latest opinion. The district court rejected the position that the second appellate opinion had adopted the November 10, 1983 plan and thus had resolved the dispute over the meaning of p 15.1. The district court took the position that the two appellate opinions had established broad limits concerning the scope of p 15.1, but that the definitive meaning of the provision still awaited judicial resolution. The instructions on remand did not define the terms "priority" or "available desegregation funds" and thus left unresolved, according to the district court, substantial interpretive issues.

In defining the meaning of p 15.1 and the remand instructions, the district court adopted a tripartite analysis. The issues in the case were divided into:

(1) scope --this concerns questions of which funds within the Department of Education budget are "available" for desegregation purposes and thus subject to the priority under p 15.1;

(2) pipeline --this concerns at what stage along the appropriation process, from Congress to eventual disbursement to earmarked grantees, must the Secretary consider the Board's p 15.1 priority;

(3) share --this is the derivative issue of what amount of funds the Board is entitled to given the determinations made by the court on the scope and pipeline issues.

With respect to the scope issue, the district court adopted an expansive interpretation, rejecting the government's position that the "existing school desegregation programs" language in the second appellate opinion limited the availability to Title IV and the Discretionary Fund. The court ruled that "[t]he p 15.1 priority extends to any statutory program which could materially further the Board's desegregation plan, so long as a project in that Plan may qualify for funding under relevant statutory criteria." 621 F.Supp. at 1310. This conclusion was based on the language of p 15.1, the history of the decree's negotiations, and the nature of the desegregation plan contemplated by the decree. The court noted that p 15.1 contains no restrictions as to what funds are within its scope; thus a review of the extrinsic evidence was necessary to determine the intent of the parties.

With respect to the intent of the government, the district court relied on statements made by the government during the course of negotiations to the effect that funding for the decree was contemplated from diverse programs within the Department of Education as well as other federal agencies. In the view of the district court, these manifestations of intent were not surprising given the unique nature of the desegregation plan. Unlike past programs, the one contemplated by the decree focused on encouraging voluntary desegregation through new educational programs and a "compensatory" educational program for those schools that, due to the demographics of Chicago, must remain segregated. The district court reasoned that it could not have been the intent of the parties to approve sweeping educational reform encompassing a vast number of potential programs while at the same time limiting federal cooperation in this expensive program to those funds specifically appropriated with traditional desegregation...