Frazar v. Ladd

• Decision Date: 20 July 2006
• Docket Number: No. 05-41798.,05-41798.
• Citation: 457 F.3d 432
• Parties: Jeneva FRAZAR, et al., Plaintiffs, Linda Frew, as next friend of her minor child, Carla Frew; Carla Frew; Charlotte Garvin, as next friend of her minor children, Johnny Martinez, Brooklyn Garvin and BreAnna Garvin; Shannon Garcia, as next friend of her minor children, Andrew Garcia, Marisha Garcia, Stephen Sanchez and Allison Sanchez; Maria Ayala, as next friend of her minor children, Christopher Arizola, Leonard Jimenez and Joseph Veliz; Mary Fisher, as next friend of her minor child, Tyrone T. Edwards; Mary Jane Garza, as next friend of her minor children, Hilary Garza and Sarah Renea Garza, Plaintiffs-Appellees, v. Richard LADD, et al., Defendants, David Ballard, Texas State Medicaid Director; Albert Hawkins, State Commissioner of Health and Human Services; Dr. Eduardo Sanchez, Commissioner of Health; Bridgett Cook, employee of Texas Department of Health in official capacity, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

457 F.3d 432

Jeneva FRAZAR, et al., Plaintiffs,

Linda Frew, as next friend of her minor child, Carla Frew; Carla Frew; Charlotte Garvin, as next friend of her minor children, Johnny Martinez, Brooklyn Garvin and BreAnna Garvin; Shannon Garcia, as next friend of her minor children, Andrew Garcia, Marisha Garcia, Stephen Sanchez and Allison Sanchez; Maria Ayala, as next friend of her minor children, Christopher Arizola, Leonard Jimenez and Joseph Veliz; Mary Fisher, as next friend of her minor child, Tyrone T.

Edwards; Mary Jane Garza, as next friend of her minor children, Hilary Garza and Sarah Renea Garza, Plaintiffs-Appellees, v. Richard LADD, et al., Defendants, David Ballard, Texas State Medicaid Director; Albert Hawkins, State Commissioner of Health and Human Services; Dr. Eduardo Sanchez, Commissioner of Health; Bridgett Cook, employee of Texas Department of Health in official capacity, Defendants-Appellants.

No. 05-41798.

United States Court of Appeals, Fifth Circuit.

July 20, 2006.

Susan F. Zinn, San Antonio, TX, Jane K. Swanson, The Woodlands, TX, for Plaintiffs-Appellees.

Philip Andrew Lionberger, Deputy Sol. Gen., Matthew F. Stowe, Linda A. Halpern, Austin, TX, for Defendants-Appellants.

Appeal from the United States District Court for the Eastern District of Texas.

Before REAVLEY, SMITH and DENNIS, Circuit Judges.

REAVLEY, Circuit Judge:

This is the latest chapter in the suit to improve Texas administration of the Medicaid program to afford health care to the certified class of indigent children.¹ The state officials filed this motion to terminate or modify the consent decree entered in 1996. The district court denied the motion and we affirm.

I.

Following remand from this court, defendants moved pursuant to Federal Rule of Civil Procedure 60(b)(5) to terminate the entire consent decree or, in the alternative, to dissolve the consent decree as to all urban areas of Texas.² Defendants argued that they were in compliance with federal Medicaid law, therefore rendering the consent decree unnecessary, and its enforcement inequitable. Defendants argued that the ends of the consent decree had been met (i.e., compliance with the federal law), and it was no longer equitable that the judgment should have prospective application. In the alternative, defendants argued that they established compliance with federal law in all urban areas of Texas and, thus, the objects of the consent decree had been attained, and it should have no prospective application, with respect to urban areas.

Plaintiffs argued that defendants were not entitled to Rule 60(b)(5) relief because: (1) compliance with federal law alone was insufficient to warrant dissolution of the consent decree; (2) defendants were not in compliance with federal law; (3) defendants had never attempted to comply, in good faith, with certain provisions of the consent decree; and (4) the objects of the consent decree had not been attained.

Following an eight-day evidentiary hearing on the Rule 60(b)(5) motion, and consideration of post-hearing briefs, the district court issued a decision denying defendants' Rule 60(b)(5) motion in its entirety. The district court applied the legal standard articulated by the Supreme Court in Rufo v. Inmates of the Suffolk County Jail, 502 U.S. 367, 112 S.Ct. 748, 116 L.Ed.2d 867 (1992) and by this court in Cooper v. Noble, 33 F.3d 540 (5th Cir. 1994). The dispositive holding of the district court was to reject defendants' overriding contention that the recent opinion of the Supreme Court in Frew II requires termination of judicial oversight when the state complies with federal law, whatever the terms of the consent decree may be.

II.

We have jurisdiction³ and review the denial of a Rule 60(b) motion for an abuse of discretion.⁴ A district court's ruling on a Rule 60(b) motion is entitled to deference.⁵ We review de novo, however, any questions of law underlying the district court's decision.⁶

A.

Defendants contend that the district court applied the incorrect legal standard for consent decree modification in institutional reform cases and argue that the district court failed to follow the Supreme Court's admonishments in Frew II regarding federalism, separation of powers, democratic accountability, and deference to those state officials responsible for administering public institutions and programs. The contention is that instead of following Frew II, the district court placed too much importance on the Rufo test for consent decree modification.

In Rufo, the Court noted that the standard for modification of consent decrees, now set forth in Federal Rule of Civil Procedure 60(b),⁷ is a "flexible" one⁸ and a party seeking modification of a consent decree "bears the burden of establishing that a significant change in circumstances warrants revision of the decree."⁹ That burden may be met "by showing either a significant change either in factual conditions or in law."¹⁰ Once a moving party meets this standard, a district court must consider "whether the proposed modification is suitably tailored to the changed circumstance."¹¹

We have had one occasion to apply the standard set forth in Rufo. In Cooper, we upheld a magistrate judge's denial of the defendants' Rule 60(b) motion in a pre-Prison Litigation Reform Act case applying the Rufo Rule 60(b) standard.¹² We explained:

When significant changes in factual conditions make a consent judgment unworkable, make compliance substantially more onerous, or make enforcement detrimental to the public interest, a court has the discretion to modify the judgment. However, the Supreme Court [in Rufo] never suggested that changed factual circumstances in and of themselves were sufficient grounds for relief from a judgment. In fact, the Court insisted that the petitioning party must "ma[k]e a reasonable effort to comply with the decree." Thus, even if we take as true all the alleged changes in factual conditions, the county officials are far from meeting their burden under Rufo. The county officials must also: (1) show that those changes affect compliance with, or the workability or enforcement of, the final judgment, and (2) show that those changes occurred despite the county officials' reasonable efforts to comply with the judgment.¹³

The most recent pronouncement from the Supreme Court on the modification of decrees occurred in this case. In Frew II, while in addition to holding that the Eleventh Amendment does not act as a bar to an enforcement action to a consent decree the initial entry of which was consistent with Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), the Court dedicated Section III of its opinion to state officials warning that enforcement of consent decrees can undermine the sovereign interest and accountability of state governments.¹⁴

The Court acknowledged that:

[i]f not limited to reasonable and necessary implementations of federal law, remedies outlined in consent decrees involving state officeholders may improperly deprive future officials of their designated legislative and executive powers. They may also lead to federal court oversight of state programs for long periods of time even absent an ongoing violation of federal law.¹⁵

In such circumstances, the Court stated, the States are not without remedy:

When a suit under Ex parte Young requires a detailed order to ensure compliance with a decree for prospective relief, and the decree in effect mandates the State, through its named officials, to administer a significant federal program, principles of federalism require that state officials with front-line responsibility for administering the program be given latitude and substantial discretion.

The federal court must exercise its equitable powers to ensure that when the objects of the decree have been attained, responsibility for discharging the State's obligations is returned promptly to the State and its officials. As public servants, the officials of the State must be presumed to have a high degree of competence in deciding how best to discharge their governmental responsibilities. A State, in the ordinary course, depends upon successor officials, both appointed and elected, to bring new insights and solutions to problems of allocating revenues and resources. The basic obligations of federal law may remain the same, but the precise manner of their discharge may not. If the State establishes reason to modify the decree, the court should make the necessary changes; where it has not done so, however, the decree should be enforced according to its terms.¹⁶

The Court cited two cases as examples of the application of Rule 60(b) to consent decrees in the context of institutional reform litigation: Rufo, 502 U.S. 367, 112 S.Ct. 748, 116 L.Ed.2d 867 and Philadelphia Welfare Rights Organization. v. Shapp, 602 F.2d 1114 (3d Cir.1979).¹⁷

Defendants contend that in light of the principles expressed in Frew II, the Supreme Court altered the standard that courts employ to modify a consent decree arising from institutional reform litigation, and that Frew II marks a shift away from Rufo's changed-circumstances approach. They contend that Frew II adopted a more flexible approach, one which places considerable weight upon democratic accountability and federalism concerns. According to defendants, this alleged new standard annunciated by the Court in Frew II requires the district court to promptly return the State's program to state officials when the objects of the decree have been attained, and to do so here because the object of the consent decree is compliance with the Medicaid Early Screening, Diagnosis and Training Program (EPSDT) and they are in compliance with the EPSDT. In essence, defendants argue that Frew II requires the district court to promptly return the State's program to state officials if there are no ongoing violations of federal law.

We reject defendants' argument that Frew II ushers in a new standard for consent decree...