Ibarra v. Texas Employment Com'n

• Decision Date: 25 August 1986
• Docket Number: Civ. A. No. L-83-44-CA.
• Parties: Fidel B. IBARRA, Jr., et al. v. TEXAS EMPLOYMENT COMMISSION, et al.
• Court: U.S. District Court — Eastern District of Texas

645 F. Supp. 1060

Fidel B. IBARRA, Jr., et al. v. TEXAS EMPLOYMENT COMMISSION, et al.

Civ. A. No. L-83-44-CA.

United States District Court, E.D. Texas, Lufkin Division.

August 25, 1986.

COPYRIGHT MATERIAL OMITTED

Richard S. Fischer, Nacogdoches, Tex., Kristine Poplawski, Farmworker Justice Fund, Inc., Washington, D.C., for plaintiffs.

Steve Zanowic, Federation for American Immigration Reform, Washington, D.C., for amicus curiae.

Suzanne Formby, Asst. Atty. Gen., Austin, Tex., for defendants.

Ruth Yeager, Asst. U.S. Atty., Tyler, Tex., Robert G. Damus, Leslie K. Dellon, Dept. of Justice, Civ. Div., Thomas W. Hussey, Ellen Sue Shapiro, Dept. of Justice, Office of Immigration Litigation, Civ. Div., Washington, D.C., for the U.S.

MEMORANDUM OPINION AND ORDER

JUSTICE, Chief Judge.

The defendants, the Texas Employment Commission, its chairperson, and its two commissioners ("TEC"), seek to set aside the final consent decree that was preliminarily approved in this civil rights class action on April 17, 1986, or, alternatively, seek a ruling on the legality of the consent decree. Also pending for consideration is the question of final acceptance of the settlement agreement, which has been recommended for approval by the magistrate who presided over the fairness hearing.

I.

Fidel B. Ibarra, Jr., and Mario Esparza, lawful permanent residents of the United States, sued the TEC in 1983 for its refusal to award them unemployment benefits. They challenged the state requirement that all applicants for unemployment compensation must produce documents showing that the Immigration and Naturalization Service ("INS") has authorized them to work. The state required alien claimants to submit proof of written evidence that the INS had authorized them to work during the period they earned wage credits and during the weeks they requested unemployment compensation benefits. Final Pre-Trial Order 18. After a hearing on the maintainability of this action as a class action, a class was approved consisting of "all past, present, and future individuals who have been denied unemployment benefits in Texas because of their inability to produce INS work authorization." Ibarra v. Texas Employment Commission, 598 F.Supp. 104, 110 (E.D.Tex.1984). A partial consent decree was entered in November 1985, that resolved all issues except the proper interpretation of a statutory section that provides for payment of unemployment compensation to aliens "permanently residing in the United States under color of law."¹ Subsumed under that issue is whether the TEC's requirement of employment authorization denies benefits to aliens who are permanent residents under color of law.

On the eve of a hearing scheduled on the plaintiffs' motion for a preliminary injunction, the state moved to join the United States Department of Labor ("DOL") and the INS as defendants. The federal agencies were added as defendants, and they moved for their dismissal from the litigation. The state then sought leave to file cross-claims against the federal defendants. All of the parties filed memoranda and participated at a hearing on whether the federal agencies should remain as parties. A fifteen-page memorandum opinion and order dismissed the federal agencies, finding that the DOL and INS were not parties who should be joined under Fed.R. Civ.P. 19 as persons needed for just adjudication. Order of January 10, 1986, at 2. In addition, the order denied the state's request to file supplemental pleadings against the two agencies on the grounds that the state had delayed nearly three years before filing its third-party complaint, the granting of the motion would harm the plaintiffs or the Department of Labor, and the state could adequately protect its interests without the third-party complaint. Id. at 14. The two federal agencies were designated as amici curiae and asked to submit a brief.

The case was called for trial on February 18, 1986, and opening statements were heard. At that time, the TEC announced that it would no longer require INS work authorization during the period the claimant earned wage credits.² Its change of position was attributed to the federal government's brief that stated that work authorization was an additional state requirement not mandated by federal law or the DOL. See Memorandum of Amicus Curiae United States Department of Labor and United States Immigration and Naturalization Service 6-7 (hereinafter cited as Federal Amici Memorandum). In connection with its requirement that an alien applicant produce work authorization to prove his availability for work while he received benefits, the state requested sixty days in which to formulate a policy.³ The state additionally requested the joinder of the Department of Labor so that the plaintiffs, if they prevailed, could seek attorney's fees directly from the federal agency. The court encouraged the parties to discuss a settlement and, if agreement appeared possible, to submit the position of the TEC in writing.

The parties announced a week later that the case had settled. They submitted a proposed final consent decree that defined "permanently residing in the United States under color of law" to mean "aliens of whose presence in the United States the Immigration and Naturalization Service (INS) is aware and with regard to whom there has been an affirmative case-specific or class-specific determination that allows the alien to remain in the United States for an indefinite period of time." Final Consent Decree 4-5 (February 22, 1986). They also moved for preliminary approval of the settlement and for approval of the notice of the settlement to class members. Because the consent decree was unclear on several points, counsel for both parties were asked to clarify several questions regarding the notice of the proposed settlement to class members, the enforcement of the decree, and the length of time in which this court would retain jurisdiction. Their responses were incorporated into a second proposed final consent decree, which was submitted on April 16, 1986, and preliminarily approved on the following day.

A month later the TEC moved to stay the proposed settlement hearing to enable the defendants to negotiate with federal officials concerning provisions of the consent decree that the DOL stated were inconsistent with federal law. Motion to Stay Proposed Settlement Hearing 2. The stay was denied because the state had already had sufficient time to consult with federal officials and because consent decrees cannot be rescinded by either party at will. Order of June 3, 1986.

A magistrate presided over the June 20, 1986, hearing on the fairness, reasonableness, and adequacy of the settlement. At the hearing, the state attempted to repudiate the agreement, but the magistrate found that he lacked the authority to receive evidence on the state's motion to set aside the consent decree. No class member or person representing a class member appeared to oppose the proposed settlement or filed a written objection or comment. The magistrate concluded that the parties had substantially complied with the order requiring notice of the settlement hearing and that "insofar as class members are concerned, the class action settlement should be approved." Report and Recommendation of the United States Magistrate 3-4 (hereinafter cited as Magistrate's Report). No objections to the magistrate's report were filed during the ten days after the parties received the report.

Following the hearing, the parties were given a month in which to submit further information concerning the proposed consent decree. Both plaintiffs and defendants took advantage of the opportunity, with the state submitting an affidavit from the person whose testimony it had sought to present at the June 20 hearing. In its filing, the state additionally objected to the magistrate's finding that he could not receive evidence on the motion to set aside the consent decree. The plaintiffs, on the other hand, urged the denial of the defendants' attempt to repudiate.

II.

Four months after entering into the settlement agreement and two months after submitting the revised final consent decree, the TEC filed its motion to set aside the final consent decree and reurge the joinder of the federal agencies as third-party defendants. The defendants contend that the TEC is merely a "pass-through" agency that must conform to federal law to receive federal funding and to enable Texas employers to receive tax benefits. Referring to a recent DOL letter that suggests the proposed consent decree violates federal law, the defendants urge that the Justice Department "is the appropriate agency to interpret federal law." Motion to Set Aside Final Consent Decree and to Reurge Joinder of Federal Agencies and Memorandum in Support Thereof 3-4.

A. Need for an Evidentiary Hearing

In the supplement to their motion, the defendants request a hearing to argue the merits of their motion to set aside or, alternatively, a full evidentiary hearing on the motion. The TEC cites no authority for a hearing, other than its belief that the views of the parties deserve a full airing. Supplement to Defendants' Motion to Set Aside Consent Decree and Objection to Magistrate's Report from Hearing on June 20, 1986, at 2. When material facts concerning the existence of a settlement agreement are disputed, a district court should hold a plenary hearing to determine the enforceability of the settlement, rather than summarily enforcing it. Pearson v. Ecological Science Corp., 522 F.2d 171, 176 n. 5 (5th Cir.1975), cert. denied sub nom. Skydell v. Ecological Science Corp., 425 U.S. 912, 96 S.Ct. 1508, 47 L.Ed.2d 762 (1976); accord Lee v. Hunt, 631 F.2d 1171, 1177 (5th Cir.1980), cert. denied, 454 U.S. 834, 102 S.Ct. 983, 71 L.Ed.2d 118 (1981). Summary enforcement of either a consent decree or a settlement agreement is ill-suited to complex factual issues related to the formation or the consummation...