Reed v. Cleveland Bd. of Ed.

Citation607 F.2d 737
Decision Date23 August 1979
Docket Number78-3522,Nos. 78-3520,s. 78-3520
PartiesRobert Anthony REED, III, et al., Plaintiffs-Appellees, v. CLEVELAND BOARD OF EDUCATION, its Individual Members, and Former SuperintendentPaul W. Briggs, Ohio State Board of Education, and Franklin B. Walter,Superintendent of Public Instruction, Defendants-Appellants.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

George I. Meisel, Squire, Sanders & Dempsey, James P. Murphy, John H. Bustamante, Bustamante, Donohoe, Palmisano & Co., L. P. A., Mark O'Neill, Weston, Hurd, Fallon, Paisley & Howley, James L. McCrystal, Jr., Cleveland, Ohio, for defendants-appellants.

James L. Hardiman, Teresa Demchak, Cleveland, Ohio, Thomas I. Atkins, Boston, Mass., Nathaniel R. Jones, NAACP, New York City, Jeremiah Glassman, John C. Hoyle, Civ. Rights Div., Dept. of Justice, Washington, D. C., for plaintiffs-appellees.

Before EDWARDS, Chief Judge, and LIVELY and ENGEL, Circuit Judges.

LIVELY, Circuit Judge.

This appeal is from an order of the district court making an interim allowance of fees to the special master and several experts appointed by the court in a school desegregation case. We affirm the order in part, vacate and modify it in part and remand for further proceedings.


A class action was filed in the United States District Court for the Northern District of Ohio on December 12, 1973, seeking a permanent injunction enjoining the continuation of policies and practices which have "the purpose and effect of perpetuating racial and economic segregation in the public schools" of Cleveland, Ohio. The defendants were the Cleveland City Board of Education, its members and superintendent, the Ohio State Board of Education and the Governor and Attorney General of Ohio. The Governor and Attorney General were subsequently dismissed. Among the demands for specific relief contained in the complaint was a prayer for entry of an injunction:

(a) Requiring defendants, their agents and other persons acting in concert with them to develop and implement a "system wide" plan of desegregation which will provide for the elimination of the pattern of racial segregation in the Cleveland public school system at the beginning of the 1974-1975 school year.

Following extensive pretrial activities the court conducted a bench trial on the issue of liability from November 24, 1975 to February 5, 1976, when the case was taken under submission. On August 31, 1976 the district court filed a memorandum opinion and order finding both the Cleveland and State defendants in violation of the Constitution in the operation of the Cleveland public school system. See Reed v. Rhodes, 422 F.Supp. 708 (N.D.Ohio 1976). Near the end of its opinion the district court announced its intention to appoint a special master:

At this time, it is the intention of the court to appoint a special master to assist it in the prudent exercise of its equitable jurisdiction to remedy the constitutional violations found herein. It is also anticipated that the special master will be assisted by a panel so that input may be received from legitimately affected interest groups.

Id. at 797.

On September 14, 1976 the district court appointed Daniel R. McCarthy special master. Mr. McCarthy is a Cleveland attorney who primarily practices taxation law. He had not been involved in the Cleveland school case and had no previous experience in such litigation. At a hearing on November 24, 1976 the presiding judge stated that appointment of the panel referred to in his opinion seemed premature, but that he intended to appoint at least two experts to assist the special master, "one who will work with the State Board of Education in the preparation of its plan, and one who will work with the Cleveland Board of Education in the preparation of its plan." The following order was then entered by the district court, on December 3, 1976:

To aid the Special Master in his appraisal of the desegregation plans to be submitted by the defendants, the Court hereby appoints Professor Edward A. Mearns, Jr. and Dr. Gordon Foster as Experts. Professor Mearns will assist with the evaluation of the plan to be submitted by the Cleveland Board of Education while Dr. Foster will assist in evaluating the plan to be submitted by the State Board of Education.

In pursuance of this objective, Professor Mearns and Dr. Foster shall observe the progress of the respective school boards towards the formulation of their desegregation plans. They shall engage in such factual investigations as they deem appropriate and shall be given complete cooperation by the State and Cleveland School Boards in their efforts to execute their offices.

The court does not intend by the appointment of these Experts to limit the responsibility of the respective school boards in the preparation of their desegregation Professor Mearns is appointed Nunc pro tunc as of December 1, 1976.

plans. The full responsibility for the preparation and timely submission of the desegregation plans lies with the respective school boards and not the Experts. The Experts are neither required nor expected to undertake an active role in the formulation of the plans to be submitted by the school board.

On December 7, 1976 the district court entered an order containing "guidelines and instructions" for the formulation of desegregation plans. Included were the following instructions concerning the special master:

The Special Master shall evaluate the constitutional sufficiency as well as the practicability of the desegregation plans. The Special Master shall prepare and submit to the Court recommendations concerning the desegregation plans submitted by the defendants, together with any revisions or alternative plans which he deems necessary to complete the desegregation of the Cleveland Public Schools.

The Special Master may conduct such hearing and investigations as he deems necessary to the performance of his duties. The Special Master and his Experts shall have complete and unrestricted access to the records of the respective school boards including but not limited to statistical data, student records, contracts and minutes of all board meetings past and present which relate to desegregation. They shall have free access to all employees and staff of the Cleveland and State School Boards. The Special Master and his Experts shall be given notice of and free access to all meetings at which desegregation plans are to be discussed. The notice shall be the same as that given to members of the respective boards and their staffs and shall contain the anticipated agenda of the meetings.

Notice shall also be given to the Special Master of all public hearings to be held by the respective school boards such as those scheduled by the Cleveland Board of Education for Wednesday, December 8, 1976 at the 28 junior high schools in the system.

Additionally, the Special Master may, as the need arises, contact and confer with the attorneys for the respective parties.

The district court entered an order on February 15, 1977 directing Dr. Foster to assist in evaluating the plan to be submitted by the Cleveland Board as well as that of the State Board. Referring to its order of December 3, 1976 the district court repeated its statement that appointment of experts did not relieve the Cleveland Board of its responsibility to formulate a plan of desegregation. The order concluded, "The Experts are not required to undertake an active role in the formulation of the plan to be submitted by the Cleveland School Board."

The special master determined from testimony of Cleveland school officials that the Cleveland Board was hampered in its "policy and decision making role in the desegregation process" by its members' lack of familiarity with the financial details of the operation of the system. He further found that there were persons occupying high administrative positions requiring a background in finance or business whose only experience was in education. The testimony which he heard "time and again demonstrated weaknesses in the administrative and management functions . . . ." (Special master's interim report to the court, App. 58).

These criticisms appear to have been supported by a report from the State Auditor's office. A state audit was conducted at the request of the Cleveland Board in seeking approval of a plan to close all the schools in the Cleveland system on or about October 17, 1977 for lack of funds. The district court had previously enjoined the Cleveland Board from closing any schools without court approval. The report of audit cited numerous deficiencies in the records and procedures of the Cleveland Board and several instances of illegal borrowing by the general fund from restricted funds.

The special master recommended that the motion of the Cleveland Board for permission to close all schools be denied. He also recommended that Ernst & Ernst, certified public accountants, "be retained to make a comprehensive survey of the financial operations of the Cleveland City School District and the management capabilities so as to assure that desegregation can be properly and expeditiously implemented." The special master filed with the court a letter from Ernst & Ernst proposing to carry out three specific functions as financial consultant to the Cleveland Board: (1) development of a five year forecast, including a student enrollment projection; (2) development of a "financial model" based on the five year forecast; and (3) the conduct of an operational appraisal of management systems, seeking to identify areas of greatest potential for cost reduction or revenue improvement.

The district court accepted the recommendation of the special master. It denied the motion of the City defendants to close the schools and ordered the appointment of Ernst & Ernst "to conduct a comprehensive survey of the financial operations of the Cleveland City School District and its management...

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