Barcia v. Sitkin

• Court: U.S. Court of Appeals — Second Circuit
• Writing for the Court: José A. Cabranes
• Citation: Barcia v. Sitkin, 367 F.3d 87 (2nd Cir. 2004)
• Decision Date: 10 May 2004
• Docket Number: No. 03-7715.,03-7715.
• Parties: Nidia BARCIA, individually and on behalf of all others similarly situated, Municipal Labor Committee, on behalf of the employees it represents, Kettely Laraque, Michael Wernham, Charles Rosa, Soso Liang Lo, Joan Miller, John Paulsen, Esperanza Polanco, Joyce Glotzer, individually and on behalf of all others similarly situated, Plaintiffs-Appellees, v. Louis SITKIN, as Chairman of the New York State Unemployment Insurance Appeal Board, James R. Rhone, Esq., Arthur A. Strauss, Harry Zankel, G. Douglas Pugh, as members of the New York State Unemployment Insurance Appeal Board, Philip Ross, as Industrial Commissioner of the State of New York, New York State Department of Labor, New York State Unemployment Insurance Appeal Board, Defendants-Appellants.

367 F.3d 87

Nidia BARCIA, individually and on behalf of all others similarly situated, Municipal Labor Committee, on behalf of the employees it represents, Kettely Laraque, Michael Wernham, Charles Rosa, Soso Liang Lo, Joan Miller, John Paulsen, Esperanza Polanco, Joyce Glotzer, individually and on behalf of all others similarly situated, Plaintiffs-Appellees, v. Louis SITKIN, as Chairman of the New York State Unemployment Insurance Appeal Board, James R. Rhone, Esq., Arthur A. Strauss, Harry Zankel, G. Douglas Pugh, as members of the New York State Unemployment Insurance Appeal Board, Philip Ross, as Industrial Commissioner of the State of New York, New York State Department of Labor, New York State Unemployment Insurance Appeal Board, Defendants-Appellants.

No. 03-7715.

United States Court of Appeals, Second Circuit.

Argued: January 13, 2004.

Decided: May 10, 2004.

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Deon J. Nossel, Senior Assistant Solicitor General (Michael S. Belohlavek, Deputy Solicitor General, of counsel, Eliot Spitzer, Attorney General of the State of New York, on the brief), Office of the Attorney General of the State of New York, New York, NY, for Defendants-Appellants.

David Raff (Robert L. Becker, of counsel), Raff & Becker, LLP, New York, NY, for Plaintiffs-Appellees.

Before: CABRANES and RAGGI, Circuit Judges, and MUKASEY, District Judge.^*

JOSÉ A. CABRANES, Circuit Judge.

The principal questions we consider are whether, in the circumstances presented, the United States District Court for the Southern District of New York (Robert L. Carter, Judge) erred in (1) denying an application to modify a consent decree entered into in 1983, and (2) granting three requests for enforcement of the decree and for further relief. The consent decree was the result of consolidated class actions challenging the practices and procedures of the Unemployment Insurance Appeal Board, a body established by the State of New York to determine eligibility for unemployment benefits. By resolving their dispute through entry of a consent decree, the parties employed a "hybrid" form of judgment that has elements of both a contract and a judicial decree, Firefighters v. Cleveland, 478 U.S. 501, 519, 106 S.Ct. 3063, 92 L.Ed.2d 405 (1986), for a consent decree (or consent judgment) is "an agreement of the parties entered upon the record with the sanction and approval of the court," Schurr v. Austin Galleries of Illinois, Inc., 719 F.2d 571, 574 (2d Cir.1983); see also Rufo v. Inmates of the Suffolk County Jail, 502 U.S. 367, 378, 112 S.Ct. 748, 116 L.Ed.2d 867 (1992). A consent decree "normally embodies a compromise; in exchange for the saving of cost and elimination of risk, the parties each give up something they might have won had they proceeded with the litigation." United States v. Armour & Co., 402 U.S. 673, 681, 91 S.Ct. 1752, 29 L.Ed.2d 256 (1971). Through the decree in the instant case, the plaintiff class — claimants of unemployment insurance benefits who are, will be, or have been subjected to adverse determinations by the Unemployment Insurance Appeal Board (collectively, "plaintiffs") — obtained injunctive relief from the Unemployment Insurance Appeal Board ("the Board").¹

The Board appeals from an order of the District Court entered June 16, 2003, which denied the Board's motion for modification of the consent judgment to terminate its monitoring provisions, granted in part and denied in part plaintiffs' motion for enforcement and other relief, and denied plaintiffs' motion for modification to develop a revised and arguably expanded compliance plan. The Board contends that the District Court erred in (1) denying its motion for modification, and (2) granting in part plaintiffs' motion for enforcement and other relief.

In considering whether the District Court erred with regard to the parties' requests for modification and enforcement — requests properly before the Court because of its ongoing jurisdiction over the consent decree — it is not our role to evaluate the merits of the consent decree. Instead, our role is to determine whether the District Court properly construed and applied the consent decree for purposes of its implementation and enforcement.

For the reasons that follow, we reverse the District Court's partial grant of plaintiffs' motion for enforcement and other relief, and we affirm in all other respects.

I. BACKGROUND

A. The Consent Judgment

We begin by setting forth the procedures and practices of the Board as relevant to this case:

Under New York law, an individual claiming entitlement to unemployment insurance benefits files a claim with the local employment office of the New York State Department of Labor serving the area in which he or she was last employed or resides. N.Y. Labor L. § 596(1). "The validity of the claim and the amount of benefits payable to the claimant" are determined in accordance with regulations and procedures established by New York's Commissioner of Labor, who issues the initial determination of the claim. Id. § 597(1). A person dissatisfied with the Commissioner's determination may request a hearing before an Administrative Law Judge ("ALJ"),² who acts under the supervision of the Board. Id. § 620(1). The ALJ is required to give prompt written notice of his or her decision ("initial decision"). Id. § 620(3). The decision is deemed a decision of the Board, unless a party appeals from the ALJ's decision to the Board. Id. The Board may decide any case appealed to it on the basis of the existing record, or it may elect to hold an additional hearing. Id. § 621(3). The Board "may affirm or reverse, wholly or in part, or may modify the decision appealed from and shall render its decision promptly and shall thereupon send written notice thereof together with the reasons therefor" to the affected parties. Id. From the Board's decision, which is final on all questions of fact, a person may seek judicial review of questions of law by appealing to state court — specifically, to the Appellate Division of the New York State Supreme Court, Third Department. Id. §§ 623(1), 624.

In 1979 and 1980, plaintiffs commenced four class actions,³ later consolidated, challenging the practices and procedures of the Board and seeking injunctive relief and damages. They asserted, among other things, that the Board, in deciding appeals before it and in its supervision over ALJs, deprived plaintiffs of benefits without fair and impartial hearings, in violation of the Social Security Act, 42 U.S.C. § 503(a), and the due process clause of the Fourteenth Amendment, remediable by 42 U.S.C. § 1983.⁴ Deprivations asserted by plaintiffs include the ALJs' failures to: provide specific notice of the basis for denying or contesting benefits; permit cross-examination; allow confrontation of witnesses and documents; act as an impartial adjudicator; permit the introduction of documents; permit a closing statement; and decide the case based upon substantial evidence.

On March 1, 1983, after discovery but prior to any dispositive ruling by the District Court, the parties submitted to the Court a proposed consent judgment and decree ("the Consent Judgment"), which settled all of plaintiffs' claims without any admission of liability by the Board. The Consent Judgment — "detailed, specific, and born of vigorous and explicit negotiations," Barcia v. Sitkin, 1996 WL 251848, at *4 (S.D.N.Y. May 10, 1996) (denying plaintiffs' 1996 motion to modify) — provided injunctive relief to plaintiffs by instituting a "long list of procedural safeguards to claimants" to ensure proceedings that conform to due process, Barcia v. Sitkin, 1983 WL 44294, at *1 (S.D.N.Y. Aug.1, 1983). As pertinent here, the Consent Judgment, in a section entitled "Review," imposed obligations on the Board in its review of ALJ decisions appealed to it.⁵ For cases covered by the Consent Judgment, the Board⁶ was required to use one of two checklists, set forth in appendices to the Consent Judgment, to determine whether any procedural irregularities had occurred in the case's proceedings before the ALJ. See Consent Judgment ¶¶ 39-43. The checklist attached to the Consent Judgment as Appendix E ("E Checklist") was for review of all current or prospective cases on appeal ("current cases"), i.e., those cases decided by the Board subsequent to July 11, 1983, the effective date of the Consent Judgment; the checklist attached as Appendix F ("F Checklist") was to be used to review retroactively those cases decided prior to the effective date of the Consent Judgment but reopened under its terms ("past cases"), i.e., all cases in which claimants were denied unemployment insurance benefits by the Board between March 1, 1978 and July 11, 1983. Id. ¶¶ 39, 43. The E Checklist contained a list of 32 numbered procedural errors, and the F Checklist contained a shorter but similar list — the difference reflecting Board procedures that had been changed or added by the Consent Judgment and that were applicable only to so-called current cases. Id. For past cases, the Board was required to send a notice of reopening⁷ to the claimant, who, in order for the case to receive further consideration by the Board, was directed to return a response form requesting reconsideration. For past cases in which the Board received an affirmative response from the claimant, and in all current cases, the Board reviewed the records of the ALJ proceedings. If the Board, in reviewing those records, found any of the errors listed on the applicable checklist, and further found that the error affected the rights of the individual, the Consent Judgment required the Board to "take such action which it deems necessary and where no action was deemed necessary, the Board shall state on the checklist and it shall specify the reason or reasons for such decision." Id. ¶ 68. Possible remedial actions included a new hearing and the opportunity to submit additional evidence.

The...