Alexander v. Britt

• Decision Date: 16 July 1996
• Docket Number: No. 95-2412,95-2412
• Citation: 89 F.3d 194
• Parties: Medicare & Medicaid Guide P 44,491 Clara ALEXANDER, Plaintiff-Appellee, v. Robin BRITT, Defendant-Appellant, and David T. Flaherty, Defendant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 194

89 F.3d 194

Medicare & Medicaid Guide P 44,491

Clara ALEXANDER, Plaintiff-Appellee, v. Robin BRITT, Defendant-Appellant, and David T. Flaherty, Defendant.

No. 95-2412.

United States Court of Appeals, Fourth Circuit.

Argued March 7, 1996.

Decided July 16, 1996.

ARGUED: William Woodward Webb, Broughton, Wilkins, Webb & Suggs, P.A., Raleigh, North Carolina; Robert Joel Blum, Office of the Attorney General of North Carolina, Raleigh, North Carolina, for Appellant. Douglas Stuart Sea, Legal Services of Southern Piedmont, Charlotte, North Carolina, for Appellee. ON BRIEF: Barbara J. Degen, Catawba Valley Legal Services, Inc., Morganton, North Carolina, for Appellee.

Before NIEMEYER and MOTZ, Circuit Judges, and YOUNG, Senior United States District Judge for the District of Maryland, sitting by designation.

Affirmed by published opinion. Judge MOTZ wrote the opinion, in which Judge NIEMEYER and Senior Judge YOUNG joined.

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 applications, see 42 C.F.R. § 435.911; 45 C.F.R. § 206.10, and to monitor local departments' compliance. To calculate compliance, the parties agreed to substitute "hard" numbers where federal regulations were less quantifiable. ¹ The requirements of the consent order were phased in beginning August, 1992 and took full effect on January 1, 1994. The consent order also included a "sunset provision," in which the parties agreed that the district court would retain jurisdiction "for a period of six years from entry of this order," i.e., from August 1, 1992 until August 1, 1998.

In August, 1994, the administrators filed a motion to modify the consent order pursuant to Rule 60(b) of the Federal Rules of Civil Procedure. The administrators asserted that "unforeseen factual conditions resulting in unanticipated consequences have made implementation and compliance with the ... consent order substantially more onerous and unworkable...." The administrators maintained that the standard the Supreme Court employed in Rufo v. Inmates of Suffolk County Jail, 502 U.S. 367, 112 S.Ct. 748, 116 L.Ed.2d 867 (1992), applied to their motion and entitled them to a modification of the consent order. In the administrators' view, the Rufo standard was the "proper standard for modification or termination of consent decrees under Rule 60(b)." (emphasis added). The applicants opposed the motion, maintaining that the administrators could not meet the Rufo standard.

In March, 1995, without replying to the applicants' opposition or obtaining a ruling on the modification motion, the administrators filed a second Rule 60(b) motion, this time requesting that the district court terminate the consent order. Seven months after asserting that compliance with the consent order was impossible because its terms were "onerous" and "unworkable," the administrators now claimed that they had "complied in good faith" with the consent order. Rather than the Rufo standard they had previously urged on the court, the administrators asserted that the proper standard for evaluating their termination motion was set forth in Board of Education of Oklahoma City Public Schools v. Dowell, 498 U.S. 237, 111 S.Ct. 630, 112 L.Ed.2d 715 (1991). Under the Dowell standard, the administrators maintained that their good faith compliance with the consent order warranted its termination. They further informed the court that they had devised a plan to "ensure timely and efficient service to AFDC and Medicaid applicants," and represented that they would implement the plan if the court terminated the consent order.

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 Rule 60(b), which provided the basis for the motions made in Dowell, Rufo, and the case at hand, permit courts to grant parties relief from final judgments that have prospective effect. Rule 60(b) states, in pertinent part, that on "such terms as are just" a court may "relieve a party" from a judgment or order "where it is no longer equitable" that the judgment have "prospective application." Fed.R.Civ.P. 60(b)(5), (6). Accordingly, when confronted with any motion invoking this rule, a district court's task is to determine whether it remains equitable for the judgment at issue to apply prospectively and, if not, to relieve the parties of some or all of the burdens of that judgment on "such terms as are just."

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, 52 S.Ct. 460, 76 L.Ed. 999 (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 change what was decreed after years of litigation with the consent of all concerned." Id. at 119, 52 S.Ct. at 464. Some courts, including this one, recognized that Swift permitted a more flexible approach when a party sought relief from decrees "directed to events to come" rather than at "fully accrued" rights. See Nelson v. Collins, 659 F.2d 420, 424 (4th Cir.1981) (en banc) (quoting Swift, 286 U.S. at 114, 52 S.Ct. at 462). However, for the most part, federal courts applied the Swift "grievous wrong" standard rigidly, leading them almost invariably to deny motions to terminate or modify permanent injunctions.

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, 111 S.Ct. at 637. ³ The Court reasoned that because school desegregation decrees were intended as "temporary measure[s] to remedy past discrimination" and were...