Rodriguez v. VIA Metropolitan Transit System

• Decision Date: 10 October 1986
• Docket Number: No. 85-2672,85-2672
• Citation: 802 F.2d 126
• Parties: Rachel RODRIGUEZ, et al., Plaintiffs-Appellees, v. VIA METROPOLITAN TRANSIT SYSTEM, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 126

802 F.2d 126

Rachel RODRIGUEZ, et al., Plaintiffs-Appellees, v. VIA METROPOLITAN TRANSIT SYSTEM, et al., Defendants-Appellants.

No. 85-2672.

United States Court of Appeals, Fifth Circuit.

Oct. 10, 1986.

Judith R. Blakeway, Matthews & Branscomb, John R. Pinckney, III, Mark S. Helmke, San Antonio, Tex., for defendants-appellants.

Bill McKee, Brendan E. Gill, Bexar County Legal Aid Ass'n, San Antonio, Tex., for plaintiffs-appellees.

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

Before WISDOM, DAVIS, and JONES, Circuit Judges.

EDITH HOLLAN JONES, Circuit Judge:

VIA, San Antonio's metropolitan transit authority, and two of its officers challenge the district court's order specifically enforcing a 1978 agreement VIA had entered into to settle an action on behalf of handicapped residents seeking transportation services adapted to their needs. We AFFIRM the district court's finding that the agreement is enforceable but REMAND the case for further consideration of the manner in which the agreement is to be implemented.

Rachel Rodriguez, a plaintiff in the earlier suit and a signatory to the 1978 settlement agreement, filed the instant lawsuit in state court in 1983. VIA removed the case to the federal district court, where it was amended to add several new plaintiffs and class action allegations. The amended action alleges violations of section 504 of the Rehabilitation Act, 29 U.S.C. Sec. 794, Section 121.003 of the Texas Human Resources Code, the federal and state constitutions and breach of the 1978 settlement agreement. ¹ The district court certified the class with named plaintiffs as its representatives and decided the class action on contractual grounds, without reaching the federal or state constitutional or statutory questions. After a three-day bench trial, the district court found that the defendants had violated the settlement agreement and ordered specific enforcement of the three provisions that are the subject of this appeal.

In its pleadings and at trial, VIA's position was that it had complied with the terms of the agreement and had acted within the framework of the relevant statutory and regulatory directives. Adopting an additional strategy on appeal, VIA launches a broad scale attack on the validity of the agreement itself, and the district court's construction of the agreement. VIA contends that (1) the agreement was not a contract but merely a non-binding statement of policy, and (2) even if the agreement is construed to be a contract, it cannot or should not be enforced. ² Ordinarily an appellate court will not consider issues not raised in the trial court, unless, inter alia, the issues can be resolved as a matter of law, and a refusal to consider it would result in a miscarriage of justice. See Callejo v. Bancomer, S.A., 764 F.2d 1101, 1117 n. 20 (5th Cir.1985). Our review of the validity and enforceability of the agreement is appropriate under this exception to the general rule.

1. Formation of the Agreement.

The 1978 agreement was filed with the court in which the class action was pending, but was not incorporated into a formal consent decree. Nonetheless, settlement agreements, when fairly arrived at and properly entered into, are generally viewed as binding, final and as conclusive of the rights of the parties as is a judgment entered by the court. Thomas v. Louisiana, 534 F.2d 613, (5th Cir.1976); Cia. Anon. Venezolana de Navegacion v. Harris, 374 F.2d 33 (5th Cir.1967). Preliminarily, we note that VIA acknowledges that the settlement agreement fully and completely resolved the matters that gave rise to the earlier class action. The agreement recites that it was being adopted in order to comply with applicable statutory and regulatory requirements relating to transportation services for the elderly and handicapped. See Urban Mass Transportation Act of 1964 ("UMTA"); Section 504 of the Rehabilitation Act of 1973 29 U.S.C. Sec. 794 (1976). The federal regulations in effect then and at the time of the instant action required transit authority recipients under UMTA to make "special efforts" in planning services and facilities that can be effectively used by the elderly and handicapped. See 49 U.S.C. Sec. 1612(a); 49 C.F.R. Sec. 609.15 (1976); 49 C.F.R. Sec. 609.204 (1975); 41 Fed.Reg. 18,324 (1976); 23 C.F.R. Sec. 450.120(a)(5) (1976); 46 Fed.Reg. 37,488 (1981), codified at 49 C.F.R. Sec. 27.77 (1985). ³ For discussion of the regulatory history of Sec. 504 and related acts and regulations, see Dopico v. Goldschmidt, 687 F.2d 644, 646-648 (2d Cir.1982) and Lloyd v. Illinois Regional Transportation Authority, 548 F.Supp. 575 (N.D.Ill.1982).

The manner in which San Antonio's transit authority chose to meet Sec. 504's "special efforts" requirement was reached after extensive negotiations with the original plaintiffs and the parties' compromise was embodied in the 13 provisions of the agreement. In the years following the settlement, VIA developed a paratransit system modelled directly on those provisions. For example, VIA inaugurated a paratransit service, VIA Trans; acquired a fleet of vans and contracted with a taxicab company to supplement its paratransit fleet; established schedules and routes; created an advisory committee; and established guidelines for VIA's personnel in their dealings with the handicapped. In short, VIA set about implementing the very procedures and measures contemplated when it signed the agreement. The establishment of a separate paratransit system spared VIA from the considerably more expensive alternative of retrofitting its mainline buses to make them wheelchair accessible. In exchange, the class plaintiffs gave up a claim for mainline accessibility, plausible under the federal law and cases then controlling, for assurances of a smaller fleet providing curb-to-curb accessibility. Absent fraud, deception, coercion or overreaching, a valid settlement agreement may not be repudiated. Strange v. Gulf & Southern American Steamship Co., 495 F.2d 1235 (5th Cir.1974). VIA makes no such allegation. We conclude, based upon the terms of the agreement and VIA's subsequent conduct, reinforced by VIA's consistent testimony at trial that it believed it was in compliance with the agreement, that in settling the earlier action VIA was entering into a contractual obligation and not just adopting a nonbinding statement of policy.

2. Violation of the Agreement.

We turn now to the three provisions in issue and the order of the court specifically enforcing them. The provisions require VIA to

1. diligently prosecute applications to the Department of Transportation for capital grants for the acquisition and maintenance of a fleet of 25 lift equipped vans for paratransit service;

2. provide paratransit service upon no more than two hours notification, except during peak demand periods; and

3. as soon as the vans became available, undertake a six month experiment running two or three of the vans on a route between shopping malls.

The district court, after reviewing the evidence, concluded that provision (1) required VIA to "maintain and operate" the 25 van fleet between 6:00 A.M. and 11:00 P.M., seven days a week. With regard to provision (2) the court found that VIA had failed to provide service on two hours' notice, and that riders routinely had to call seven days in advance for service. The court, however, found that enforcing the two hour service provision was neither feasible nor practical. The court, therefore, modified the provision to require VIA to provide demand-response service on no more than 24 hours' notice. ⁴ With regard to provision (3) the court found that VIA had not undertaken the experiment and ordered immediate compliance.

With regard to provision (1) above, the following facts were uncontroverted: VIA Trans applied for and obtained capital grants sufficient to purchase 25 vans; 25 vans were purchased and used; in 1983, VIA had sold or solicited to sell several of its vans; in 1984, VIA had a fleet of 20 vans, 14 of which were committed to peak hour service; in 1985, between 6 and 15 vans were in service at one time; hours of operation are 6:00 a.m. to 11:00 p.m., seven days a week; eligibility is determined on a first-come, first-served basis; limited subscription service is available for regularly recurring trips.

With regard to provision (2) above, although the testimony was conflicting, it indicated that, with rare exceptions, riders were required to call seven days in advance to succeed in reserving a ride. With regard to provision (3) above, VIA admitted that it had not instituted the experiment but contended that this violation was excused because the advisory committee, composed of class plaintiffs, had voted against the experiment. The district court rejected the excuse because one member of the advisory committee testified that his negative vote was prompted by VIA's representations that the experiment would cause further depletion of the six to fifteen vans being used for regular service.

Were our inquiry to end here, we would conclude that the court's findings of violation had ample support as the record had been developed by the parties up to and including trial. After judgment was entered, however, VIA moved for a new trial and/or for alteration or amendment of the judgment. Attached to the motion was an affidavit, by Wayne Cook, chief executive officer of VIA and a signatory to the 1978 agreement. Cook's affidavit was replete with data, some of them new, allegedly demonstrating the harmful effects the court's specific enforcement order would work on the transit authority, the city fisc, and the class plaintiffs. The district court denied the motion without an evidentiary hearing. On appeal, VIA reurges these data and based on the data, makes the following argument.

3. Enforcement of the agreement.

VIA contends that if the agreement is a contract, it may not be specifically enforced...