Ramirez v. Rivera-Dueno, RIVERA-DUENO

• Decision Date: 07 October 1988
• Docket Number: RIVERA-DUENO,No. 88-1423,88-1423
• Citation: 861 F.2d 328
• Parties: Victor RAMIREZ, etc., et al., Plaintiffs, Appellees, v. Jaime, etc., et al., Defendants, Appellants. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 328

861 F.2d 328

Victor RAMIREZ, etc., et al., Plaintiffs, Appellees, v. Jaime RIVERA-DUENO, etc., et al., Defendants, Appellants.

No. 88-1423.

United States Court of Appeals First Circuit.

Heard Oct. 7, 1988.

Decided Nov. 17, 1988.

Rehearing and Rehearing En Banc Denied Jan. 13, 1989.

Pedro A. Del Valle-Ferrer, Director, Federal Litigation Div., Dept. of Justice, with whom Rafael Ortiz Carrion, Sol. Gen., and Norma Cotti Cruz, Deputy Sol. Gen., Dept. of Justice, San Juan, P.R., were on brief, for defendants, appellants.

Ana Matanzo Vicens, for plaintiffs, appellees.

Before CAMPBELL, Chief Judge, BOWNES and BREYER, Circuit Judges.

LEVIN H. CAMPBELL, Chief Judge.

For more than a decade, plaintiffs, representing mentally retarded persons, have engaged in protracted litigation and negotiation with Puerto Rico's Secretaries of Health and of Social Services over the quality of services for mentally retarded persons in Puerto Rico. At the hub of the present appeal is a court-approved agreement entered into by the two sides in 1984 in lieu of a trial that was then scheduled. The two sides take sharply contrasting views of this agreement. While the plaintiffs view it as a definitive and binding settlement of the case, the defendants view it as merely an arrangement--one that has proved futile--to work towards a negotiated settlement. Adopting plaintiffs' view of the matter, the district court has denied defendants' present motion for a trial. We believe that the defendants' view of the 1984 agreement is more accurate, and rule that they have a right to a trial.

I. BACKGROUND

The complaint was filed in 1977 on behalf of mentally retarded persons in Puerto Rico. Although the complaint was put forth as a class action, a class was never certified. ¹ The complaint, as amended most recently in 1981, alleges that the Commonwealth of Puerto Rico has failed to provide necessary residential and treatment services for mentally retarded adults, and that this failure has amounted to a deprivation of plaintiffs' civil rights. Plaintiffs seek declaratory and injunctive relief under 42 U.S.C. Sec. 1983 (1982) and various United States constitutional provisions and statutes, as well as under the Constitution of Puerto Rico.

Between 1977 and 1983, the case proceeded before four different federal district judges, with a changing cast of attorneys. It was set for trial on September 20, 1983. Several weeks before that date, the court granted defendants a continuance in order to try to reach a preliminary agreement with plaintiffs. On December 20, 1983, in the face of delays, the district court granted the parties a final extension until January 31, 1984, "to file the preliminary agreement or be prepared to show cause why sanctions should not be imposed." On January 31, 1984, the parties filed a joint motion reporting the following agreement ("the 1984 agreement"):

1. The parties agree that plaintiffs will paralize [sic] the prosecution of this suit for the period of a year and a half from the date of filing of this Motion if the terms and conditions of the Executive Order, included as Exhibit A of this motion, are met.

2. The parties will file a joint status report every six months.... Said report shall include the status of compliance with the terms and conditions of the Executive Order....

The district court approved the agreement on February 2, 1984.

In the executive order referred to in the agreement, the Governor of Puerto Rico ordered that all existing services for the mentally retarded be consolidated within the Department of Health. After this consolidation the Department of Health was to "formulate a comprehensive health services system for said population incorporating the existing services and those newly created which are necessary...." The plan for the services was to be prepared within a year and a half, and then "must be available for the consideration and approval of the Governor."

In the two years that followed the agreement, defendants submitted to plaintiffs several versions of a plan for services for the mentally retarded, but plaintiffs rejected these plans as inadequate. In March 1986, plaintiffs requested the court's permission to resume the prosecution of the case "since the terms of the Stipulation between the parties have not been complied with." The district court apparently never ruled on this motion. Instead, further negotiations commenced between the parties. In a joint status report, submitted to the court on March 5, 1987, the parties concluded that a comprehensive plan was "still necessary," and they outlined a new timetable for the development of a plan.

Even after this renewed effort, the parties proved unable to move toward a mutually acceptable solution. On August 17, 1987--more than ten years after the inception of the suit--the district court appointed a special master, citing "the need to constantly and effectively monitor the activities of the defendants in their compliance with their obligations under the Court's Order dated December 20, 1983." (The December 20, 1983 order was the one that directed the parties, upon penalty of sanctions, to file their preliminary agreement with the court.) Defendants' motion to vacate the order appointing the special master was denied. On September 21, 1987, defendants proposed a new two-year plan, accompanied by a proposed new executive order of the Governor. The district court referred this proposal to the special master. According to defendants, two days prior to the scheduled hearing before the special master, plaintiffs' attorney informed defendants that this new plan, like the previous ones, was unacceptable to plaintiffs.

On December 15, 1987, defendants filed the motion that is the focus of the present appeal. Claiming that the parties had reached an impasse, defendants stated that they were withdrawing from any further negotiations and requested that the long-delayed trial be rescheduled. Shortly afterward, on December 30, defendants submitted an answer to plaintiffs' six-year-old amended complaint.

On February 26, 1988, the district court issued an opinion and order responding to defendants' request for a trial. After reviewing the history of the case, the district court concluded that the January 31, 1984 agreement was in fact a settlement agreement--transformed by court approval on February 2, 1984, into a consent decree--in which both parties had permanently surrendered their right to a trial. Accordingly, the court denied defendants' request for a trial, as well as their motion submitting an answer to the amended complaint. The court ruled that it had "jurisdiction to enforce the settlement agreement of January 31, 1984, as amended by the Joint Agreement [the joint status report] of March 5, 1987." To this end, the court instructed the special master to "meet with the parties to determine whether consensus can be reached on a Plan as mandated by the settlement agreement and, if consensus should prove to be unavailing, to report to the Court on who is responsible for the failure of compliance, with his recommendations on how the Court should proceed."

II. WAS THE 1984 AGREEMENT A SETTLEMENT AGREEMENT?

The pivotal issue in this appeal is whether the January 1984, agreement was, in fact, a "settlement agreement" that obviated the need for plaintiffs to prove at trial that defendants had violated their constitutional or other federally protected rights and, for that reason, owed the plaintiffs redress. If it was such a settlement agreement--transformed by court approval into a consent decree--then the district court would have been within its power to deny defendants a trial and instead to press for compliance with the agreement. If, on the other hand, the 1984 agreement was merely an arrangement to work toward a mutually acceptable agreement--as defendants insist--then the district court exceeded its authority when it refused to grant defendants a trial, since defendants cannot be required to adhere to the court's remedies without first having been found to have violated the law. Thus, we now consider the nature of the 1984 agreement. We postpone until afterward discussion of whether the district court's order is appealable or otherwise reviewable by this court.

In the district court's view of the critical events, "[t]hrough the process of negotiation the parties reached a settlement agreement on January 31, 1984, consisting of the terms of Executive Order 4234, signed by the Governor on February 1, 1984, and approved by the Court the following day." As the district court saw it, the agreement was one in which the parties gave up their respective claims and defenses, and subjected themselves to the district court's supervisory authority. The district court likened the 1984 agreement, together with the March 1987 joint status report, to an "affirmative action" consent decree:

Typically, a settlement agreement avoids admissions of responsibility and culpability with reference to the claims set forth in the complaint. Rather the parties agree to focus on affirmative action, foregoing their respective claims and defenses. That is what took place in this case. The complaint contained a number of alleged violations of constitutional and statutory rights. Defendants were entitled to put their defenses to the test of a trial, as were plaintiffs with respect to their claims. Both parties chose an alternative course: not to litigate through trial, but rather to reach settlement on the basis of a joint agreement under the aegis of the Court. The Joint Agreements, both on January 31, 1984 and on March 5, 1987, in effect substituted for the claims and defenses of the parties' complaint and answer a course of affirmative action which both parties implicitly recognized was remedial in nature. The Court's stamp of approval made it the ultimate guardian of the settlement agreement's enforcement. See Local No. 93 v. City of Cleveland, 478...