U.S. v. Board of Educ. of City of Chicago

• Decision Date: 09 September 1983
• Docket Number: Nos. 83-2308,83-2402 and 83-2445,s. 83-2308
• Citation: 717 F.2d 378
• Parties: 13 Ed. Law Rep. 637 UNITED STATES of America, Plaintiff-Appellant, v. BOARD OF EDUCATION OF the CITY OF CHICAGO, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 378

717 F.2d 378

13 Ed. Law Rep. 637

UNITED STATES of America, Plaintiff-Appellant, v. BOARD OF EDUCATION OF the CITY OF CHICAGO, Defendant-Appellee.

Nos. 83-2308, 83-2402 and 83-2445.

United States Court of Appeals, Seventh Circuit.

Argued Aug. 25, 1983.

Decided Sept. 9, 1983.

William Bradford Reynolds, U.S. Dept. of Justice, Washington, D.C., for plaintiff-appellant.

Hugh R. McCombs, Jr., Isham, Lincoln & Beale, Chicago, Ill., for defendant-appellee.

Before CUMMINGS, Chief Judge, and WOOD and FLAUM, Circuit Judges.

FLAUM, Circuit Judge.

This is an appeal from a June 30, 1983, order of the district court, as modified by two orders entered on July 26, 1983, which interpreted and enforced a consent decree that was executed by the United States and the Board of Education of Chicago ("Board") in 1980. For the reasons set forth below, we affirm in part and vacate in part.

FACTS

On September 24, 1980, the United States filed a complaint against the Board charging that Chicago's public school system was racially segregated in violation of the fourteenth amendment and titles IV and VI of the Civil Rights Act of 1964. On the same day, the parties filed a previously-negotiated consent decree ("Decree"), in which they agreed that the Board would develop and [e]ach party is obligated to make every good faith effort to find and provide every available form of financial resources adequate for the implementation of the desegregation plan.

implement a system-wide plan to remedy the effects of past segregation of black and Hispanic students in Chicago schools. The Decree also provides, in p 15.1, that

The Board developed and implemented a desegregation plan beginning in 1981. The district court upheld the constitutionality of the plan on January 6, 1983. See United States v. Board of Education of Chicago, 554 F.Supp. 912 (N.D.Ill.1983).

On May 31, 1983, the Board filed a petition for an order directing the United States to comply with p 15.1 of the Decree, and it requested declaratory and injunctive relief. Among other things, the Board asked the district court: (1) to find that the United States had violated p 15.1; (2) to direct the United States to identify funds that could be made available to the Board for the desegregation plan; and (3) to order the United States to provide immediate financial assistance to the Board to the extent that funds were identified as available and needed by the Board to implement the plan.

After five days of hearings, the district court entered an order on June 30, 1983, ruling that while the Board had made every good faith effort to "find and provide every available form of financial resources," ¹ the United States had not. The district court found that the United States had violated p 15.1 by failing to provide available desegregation funding, by taking no affirmative steps to find and provide such funding, and by taking affirmative steps to minimize and eliminate available sources of funding. The court ruled that the Decree obligates the United States to provide, from "available" federal funds, the level of funding that the Board needs to implement adequately its desegregation plan, and that the Board is unable to obtain from other sources. United States v. Board of Education of Chicago, 567 F.Supp. 272 (1983) ("Order of June 30"). The court determined the obligation of the United States for funding the Board's desegregation plan in the 1983-84 school year to be not less than $14.6 million, ² and it directed the United States to undertake an "active and affirmative program of making every good faith effort to find and provide" the $14.6 million and such further levels of funding as the district court may determine. Id. at 275-76.

The court identified three sources of federal funding that are potentially "available" to the Board to satisfy the federal government's commitment: approximately $8.9 million in the Secretary of Education's Discretionary Fund; ³ $24 million in Title IV funds; ⁴ and $28.08 million in the Special In appealing the district court's orders, the United States essentially raises two issues: first, whether the district court correctly interpreted the nature and extent of the United States' obligation under p 15.1 of the Decree; and second, if its interpretation was correct, whether the remedies imposed by the district court constitute an abuse of discretion.

                Programs and Populations Account. 5   In addition, the district court ordered the Executive Branch to identify and support any available legislative initiatives that would provide financial assistance to the Board for desegregation expenditures.  To effectuate its order and to insure that the funds would remain available pending final resolution of the case, the court enjoined the United States from spending or obligating certain funds in the Secretary's Discretionary Fund and the Department of Education's Special Programs and Populations Account.  Finally, the United States was ordered to undertake an affirmative program to preserve the continued availability of $250 million in excess Guaranteed Student Loan funds 6 and to support legislative initiatives to set aside this $250 million in an escrow fund, for potential use in fulfilling the United States' obligations under p 15.1 over the next five years
                

INTERPRETATION OF PARAGRAPH 15.1

In interpreting p 15.1, the district court found that p 15.1 imposes an obligation on the United States to do more than merely assist the Board in looking for and applying for federal funds. See Transcript of June 8, 1983, at 15; Transcript of June 27, 1983, at 23. Furthermore, the court determined that "the United States' promise to 'make every good faith effort' to find and provide available funds entails a serious and substantial obligation." Conclusion of Law No. 8. In line with this interpretation of p 15.1, the district court concluded that, under this provision, the United States cannot work actively to make financial resources unavailable. Conclusion of Law No. 4. Finding that the United States had worked to make financial resources unavailable, the district court held that the United States violated its obligations under the Decree. Conclusion of Law No. 10.

In appealing the district court's ruling, the United States argues that the court erred in reading into p 15.1 an elastic promise by the United States to fund for five years all of Chicago's education costs that are denominated by the Board as desegregation expenses, to give Chicago priority over other school districts and educational priorities in dispersing federal education funds, and to shape the legislative program and policy determinations of the Executive Branch to maximize federal assistance to Chicago. Appellant's Brief at 14-15. The United States contends that p 15.1 does not impose an obligation on its part to actually provide funds. According to the United States, p 15.1 merely requires it to make a good faith effort to assist the Board in locating and applying for funds that have been earmarked by Congress for school districts undergoing desegregation. Id. at 17, 19. Thus, the United States argues essentially that money is "available" to the Board, within the meaning of p 15.1, when funds have been appropriated for desegregation The Board responds that the district court properly construed p 15.1 to require substantial efforts by the United States to actually provide financing, and to preclude the Executive Branch from deciding to provide virtually no desegregation funding, notwithstanding the availability of funds. Appellee's Brief at 11. The Board concedes that Congress has the exclusive power to determine availability, see id. at 14, but the Board maintains that, within the meaning of p 15.1, "every available" refers to funds that are or might be made subject to the Department of Education's control, including those funds that the Department might obtain by seeking reappropriation or new legislation from Congress. See id. at 17, 18.

purposes and the Executive Branch has provided its assistance in the application and awarding process.

It is clear that consent decrees are construed according to precepts of contract construction. United States v. ITT Continental Baking Co., 420 U.S. 223, 236-38, 95 S.Ct. 926, 934-35, 43 L.Ed.2d 148 (1975). Thus, the interpretation of consent decree provisions, like the interpretation of contract provisions, is a matter of law and subject to plenary review on appeal. See Vertex Distributing, Inc. v. Falcon Foam Plastics, Inc., 689 F.2d 885, 892 (9th Cir.1982); Fox v. United States Department of Housing and Urban Development, 680 F.2d 315, 319 (3d Cir.1982). The district court's views on interpretation, however, are entitled to deference. Brown v. Neeb, 644 F.2d 551, 558 n. 12 (6th Cir.1981) ("[f]ew persons are in a better position to understand the meaning of a consent decree than the district judge who oversaw and approved it").

In its conclusions of law accompanying the order of June 30, the district court stated that p 15.1 is unambiguous in its terms and that extrinsic evidence is therefore unnecessary to a determination of its meaning. See Conclusion of Law No. 4. Nevertheless, the court examined the parol evidence offered by the United States and concluded that, if it had resorted to this evidence, its conclusions as to the meaning of p 15.1 would be the same. See id.

We begin our review by finding the district court incorrect in its ruling that p 15.1 is unambiguous. A provision is ambiguous if, after applying established rules of construction, it is reasonably susceptible to more than one meaning. Richland Plantation Co. v. Justiss-Mears Oil, 671 F.2d 154, 156 (5th Cir.1982). Aside from the broad language that permeates all of p 15.1, the word "available" is capable of more than one meaning, as evidenced by the arguments put forth by the parties, and as acknowledged by the district court itself. See Conclusion of Law No. 4 (" '[a]...