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vacating a consent decree because factual changes made prospective enforcement inequitable, concluding that "continued judicial oversight is improper" because "there is no ongoing violation of federal law."
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74 Civ. 4868(LAP)
03-28-2012
EMMA CALDERON, DOLOROS CALDERON, VICTOR CALDERON, OLLIE BLOUNT, individually, and on behalf of their minor children, and on behalf of all other persons similarly situated, Plaintiff, v. MATTHEW WAMBUA, as Commissioner of the New York City Department of Housing Preservation and Development Defendants.
MEMORANDUM AND ORDER
:
Plaintiffs brought this action in 1974 for improper termination of certain temporary housing services. Defendant Matthew Wambua, Commissioner of the New York City Department of Housing Preservation and Development ("HPD") seeks to vacate paragraphs two through five of the 1975 stipulation settling this case pursuant to Rule 60(b)(5). For the reasons set forth herein, Defendant's motion is GRANTED.
I. BACKGROUND
A. Facts
This case dates back to 1974. Plaintiffs were New York City residents whose homes had been destroyed by fire who as a result, required the services of the New York City Department of Relocation and Management Services, an agency of the Housing and Development Administration ("HDA"). Those services included relocation services, including temporary placement in a residential hotel. Plaintiffs brought suit against Defendants when the HDA sought to terminate those services without providing meaningful due process. (Compl. ¶¶ 20-53.) Plaintiffs sought damages and injunctive relief on behalf of themselves and a putative class of similarly situated individuals. (Id. ¶ 5, § VII.)
At the time of the initial filing, Plaintiffs sued several individuals employed by the HDA, both in their individual and official capacities. (Krishnan Decl. Ex. A ¶¶ 13-19.) Pursuant to Fed. R. Civ. P. 25(d), Matthew Wambua, Commissioner of HPD, is substituted as a defendant for Roger Starr, who was head of the HDA in 1975. The Court notes that the remaining defendants were various officials of the HDA whose positions no longer exist at HPD and that as a result those defendants have not been substituted. (Louie Decl. ¶ 5.)
On October 27, 2011, the Court so ordered a stipulation [dkt. no. 38] that provides: Mary Ellen Little is a client of The Legal Aid Society and currently receives relocation services from Defendants, and Ms. Little intervenes in this action pursuant to Fed. R. Civ. P. 71, solely for the purpose of responding to Defendant's motion pursuant to Fed. R. Civ. P. 60(b).
In November of 1975, Judge Constance Baker Motley issued a temporary restraining order and an opinion finding that (1) Plaintiffs had not received timely notice of scheduled termination hearings; (2) the factual basis supporting termination was not disclosed to Plaintiffs either before or during the hearings; (3) Defendants had misapplied any applicable standard governing termination for "failure to cooperate"; and (4) there was evidence that the hearing officers were not impartial. (Krishnan Decl. Ex. D, Findings of Fact and Conclusions of Law (Nov. 25, 1974).)
B. The Order
On August 5, 1975, the parties signed a settlement agreement which Judge Motley so ordered. The Order set forth the following provisions:
¶ 1. That Defendants would promulgate new regulations, as agreed to by the parties and set forth in Appendix A to the Order, governing relocation services provided to persons displaced by orders to vacate;(Krishnan Decl. Ex. F ("1975 Stipulation").)
¶ 2. That if Defendants later proposed to amend the regulations, they would afford Plaintiffs' counsel 30 days' notice;
¶ 3. That if Plaintiffs' counsel objected to any proposed amendments to the regulations, the parties would negotiate in good faith;
¶ 4. That if any such negotiations failed, Plaintiffs would be permitted, on three days' notice to Defendants, to move the Court to re-open the case and consider whether the proposed amendments were consistent with Judge Motley's Opinion; and
¶ 5. That if Plaintiffs moved to re-open the case within five days of the failure of any negotiations, the proposed amendment would not go into effect until the Court decided the motion or directed otherwise.
C. Developments Following the 1975 Stipulation
The City adopted and implemented the City Administrative Procedure Act ("CAPA") in 1988. (Krishnan Decl. Ex. G ¶ 13.) It has been included as Chapter 45 of the Charter since 1989. (Krishnan Decl. ¶ 13.) Accordingly, all New York City agency rules must be adopted in accordance with CAPA, not just those relating to relocation services. (See Krishnan Decl. Ex. K "Report of the New York City Charter Revision Commission".) CAPA requires city agencies to provide notice to the public of proposed rule-making and the opportunity to comment.
CAPA sets forth detailed requirements by which a New York City agency may "adopt rules necessary to carry out the powers and duties delegated to it by or pursuant to federal, state, or local law." (Krishnan Decl. Ex. L § 1043.) An agency must publish its regulatory agenda on a yearly basis so that the public has advance notice of the rules, including amendments to the rule. The agenda includes: (1) a summary of each proposed rule; (2) the reason action is being considered; (3) a description of the types of individuals and entities likely to be subject to the rule; (4) an identification of all relevant federal, state, and local laws and rules; and (5) an approximate schedule for adopting the proposed rule, the name and telephone number of an agency official knowledgeable about each subject area involved. (Id. § 1042.) Action is not precluded on an item if it is not included on a regulatory agenda, but the agency must include the reason for its exclusion from the agenda in the notice of proposed rulemaking. (Id. §1042(c).)
The public has the opportunity to comment on a proposed rule by written submission or at a public hearing if one is scheduled. (Id. § 1043(e).) Agencies must provide the public with all of the written comments and a summary of oral comments. (Id. § 1043(b).) A final rule may only be adopted after the agency considers the comments provided by the public. (Id. § 1043(e).) CAPA additionally requires agency outreach to the community that will be affected by the regulation. (Id. § 1043(e).)
On April 27, 2010, Mayor Bloomberg signed Executive Order No. 133 which enhanced the CAPA provisions for public participation by establishing an information portal that requires all agencies to post proposed rules on the website. (Krishnan Decl. Ex. N.) On October 6, 2010, Mayor Bloomberg signed Local Law 46 amending § 1043 of the Charter. (Krishnan Decl. Ex. L ¶ 17.) City Charter § 1043 requires City agencies to provide opportunities for the public to comment on proposed rules and to enact final rules only "[a]fter consideration of the relevant comments presented." (Krishnan Decl. Ex. M.)
D. The Motion Before the Court
Defendants seek to vacate paragraphs two through five of the 1975 Stipulation pursuant to Rule 60(b)(5). Defendants argue that "the landscape significantly changed" since the parties entered into the 1975 Stipulation. (Def. Memo. at 3.)
Defendants assert that CAPA accomplishes the goals of 1975 Stipulation. Id. In light of CAPA, which Defendants characterize as a significant change in circumstances, Defendants state that continued compliance with the 1975 Stipulation paragraphs two through five is onerous and contrary to the public interest. (Def. Memo. at 3.)
Additionally, Defendants argue the relief sought should be granted on the grounds that continued federal judicial supervision is improper and plaintiffs do not have standing. The Court will address each of Defendants' arguments in turn.
II. Analysis
A. Rule 60(b)(5)
"[C]onsent decrees 'have attributes both of contracts and of judicial decrees,' a dual character that has resulted in different treatment for different purposes." Local No. 93 v. City of Cleveland, 478 U.S. 501, 519 (1986) (quoting United States v. ITT Continental Baking Co., 420 U.S. 223, 226 n. 10(1975)).
A consent decree "is to be construed . . . basically as a contract." ITT Continental, 420 U.S. at 238. "[I]t is the agreement of the parties, rather than the force of law upon which the complaint was originally based, that creates the obligations embodied in a consent decree. Local No. 93, 478 U.S. at 522, 106 S. Ct. at 3075.
According to Rule 60(b)(5), "upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons: "the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable." Fed. R. Civ. P. 60(b)(5). In applying Rule 60(b)(5), district courts are to apply a "flexible standard." Rufo v. Inmates of Suffolk County Jail, 502 U.S. 367, 381 (1992). "The party seeking relief bears the burden of establishing that changed circumstances warrant relief." Horne v. Flores, 129 S. Ct. 2579, 2593 (2009) (citing Rufo at 383.) "[B]ut once a party carries this burden, a court abuses its discretion when it refuses to modify an injunction or consent decree in light of such changes." Id. (internal citations omitted).
In Rufo, the Supreme Court set out a two-part test for analyzing a Rule 60(b)(5) motion to modify or vacate a consent decree. 502 U.S. 367. The first prong states that "a party seeking modification of a consent decree bears the burden of establishing that a significant change in circumstances warrants revision of the decree," which it may do "by showing either a significant change in factual conditions or in law." Id. at 383-84. A significant change such as "(1) changed factual conditions make compliance with the decree substantially more onerous;" (2) "a decree proves to be unworkable because of unforeseen obstacles"; or (3) "enforcement of the decree without modification would be detrimental to the public interest." Id. at 384.
If the moving party satisfies the first Rufo prong, the second prong directs the Court to "consider whether the proposed modification is suitably tailored to the changed circumstance." Id. at 383. "[T]he focus should be on whether the proposed modification is tailored to resolve the problems created by the change in circumstances. A court should do no more, for a consent decree is a final judgment that may be reopened only to the extent that equity requires." Id. at 391. Additionally, the Court stated that there are three things that must be clear about the modification. Id. First, "a modification must not create or perpetuate a constitutional violation." Id. Second, "a proposed modification should not strive to rewrite a consent decree so that it conforms to the constitutional floor." Id. Third, "within these constraints, the public interest and '[c]onsiderations based on the allocation of powers within our federal system; require that the district court defer to local government administrators. . . ." Id. at 392 (quoting Board of Ed. of Oklahoma City Pub. Sch. v. Dowell, 498 U.S. 237, 248 (1991)).
i. Rufo Prong One
Under prong one, the Defendants bear the burden of establishing that a significant change warrants revision of the 1975 Stipulation. The Defendants argue that the adoption of CAPA constitutes a significant factual change that warrants relief from the 1975 Stipulation. (Def. Memo. at 13.)
Defendants characterize the enactment of CAPA, and the enhancements to CAPA thereafter, as a "changed factual condition" rather than a change in law. Plaintiffs' disagree with this characterization, but their disagreement is dispelled in light of the Supreme Court's decision in Horne v. Flores, 129 S. Ct. 2579, There, the Supreme Court held that certain legislative changes were significant factual changes that the district court should have considered. Id. at 2601. In Horne v. Flores, the Supreme Court reversed the decisions of the lower courts denying defendants' motion to vacate orders and injunctions that related to Arizona's compliance with a requirement of the Equal Education Opportunities Act of 1974 ("EEOA"). The court ordered the State to "appropriately and constitutionally fund the state's [English Language-Learner] programs." Id. at 2590. Thereafter, Arizona adopted Proposition 203 which set forth requirements of a "structured English immersion" ("SEI") approach to English lessons. Upon review of the lower courts' denials, the Supreme Court held that the legislative changes, specifically Proposition 203, which related to the precise issues addressed by the injunction, were "important factual . . . change[s]." Id. at 2601. Here, as in Horne v. Flores, the adoption of legislation that addresses precisely those concerns that the order was crafted to remedy constitutes a factual change.
For purposes of thoroughness, the Court notes that if Defendants had argued in the alternative that CAPA and Executive Order 133 constitute a change in law rather than a change in fact, the Court would find Rufo prong one not satisfied because CAPA and Executive Order 133 are neither impermissible under federal law nor make legal what the 1975 Stipulation sought to prevent.
Defendants assert that this factual change is significant because it both makes compliance with the 1975 Stipulation substantially more onerous and that enforcement of the decree without modification would be detrimental to the public interest. (Def. Memo. at 14-16.) Plaintiffs characterize Defendants' argument as speculative. (Pl. Memo. at 11.) In Patterson Newspaper & Mail Deliverer's Union of N.Y. & Vicinity, this Court reiterated the well-settled proposition that "a decree may not be modified on the basis of speculation or unsupported factual allegations." Nos. 73 Civ. 3058, 73 Civ. 4278, 1986 WL 520, at *3 (S.D.N.Y. Oct. 22, 1986).
Here, it is not mere speculation that there would be a delay in the rulemaking process if Defendants were to comply with both procedures. Compliance with the 1975 Stipulation requires that Defendants notify Plaintiffs' counsel of any proposed amendments to the rule. (Krishnan Decl. Ex. F ¶ 2.) If any changes are made as a result of negotiations with Plaintiffs, in order to comply with CAPA those changes must then be published in the City Record, Defendants must wait for comments from the public, and Defendants must then consider those comments in amending the rule in question. It is clear that compliance with both the 1975 Stipulation and CAPA would be redundant, would prolong the process of amending rules and regulations and could potentially result in litigation if Plaintiffs so choose to re-open the case after failure of any negotiations, which, in turn, could lead to indeterminable delay. It is evident that the public would suffer as a result of the redundant processes and inevitable delay caused by compliance with both sets of procedures.
Plaintiffs argue that Defendants have failed to comply with the 1975 Stipulation over the past 35 years and cite this as a reason to discredit Defendants' assertion that "continued compliance . . . results in indefinite delay." (Pl. Reply at 4-5, emphasis added.) The only example Plaintiffs cite of non-compliance occurred in 1981 in Goodwin v. Gleidman, 463 N.Y.S.2d 693 (N.Y. Sup. Ct. 1983). Plaintiffs also cite an example of when Defendants did comply with the 1975 Stipulation fifteen years ago. (Pl. Reply at 4, see Declaration of Judith Goldiner (Oct. 17, 2011) ("Goldiner Decl.") ¶ 2.) These examples merely serve to demonstrate the lack of problems with relocation rulemaking over the past 35 years. --------
Accordingly, the Court finds that Defendants have satisfied their burden with respect to Rufo prong one.
i. Rufo Prong Two
Because the enactment of CAPA constitutes a significant factual change that warrants revision of the decree, Rufo prong two directs that the Court consider the proposed relief and determine whether the proposed modification is "suitably tailored." Defendants seek to vacate paragraphs 2 through 5 of the 1975 Stipulation and argue this relief is appropriate in light of the fact that the primary purpose of the 1975 Stipulation is satisfied by the CAPA provisions.
First, "a modification must not create or perpetuate a constitutional violation. Rufo at 391. Second, "a proposed modification should not strive to rewrite a consent decree so that it conforms to the constitutional floor." Id. "[T]he focus should be on whether the proposed modification is tailored to resolve the problems created by the change in circumstances. A court should do not more, for a consent decree is a final judgment that may be reopened only to the extent that equity requires." Id. Third, principles of federalism "require that the district court defer to local government administrators, who have the 'primary responsibility for elucidating, assessing, and solving' the problems of institutional reform, to resolve the intricacies of implementing a decree modification." Id. at 392 (quoting Brown v. Board of Educ., 349 U.S. 294, 299 (1955)). For the reasons set out below, the Court finds that the proposed modification of the 1975 Stipulation is suitably tailored.
First, following the procedures set forth in CAPA - a lawfully enacted Act of the City of New York - does not create or perpetuate a constitutional violation.
Second, the proposed modification does not conform to the constitutional floor. Plaintiffs themselves note that "[t]he Order exists because, at the time of the original lawsuit, no meaningful safeguards existed for the due process rights of New Yorkers living in temporary emergency housing." (Pl. Memo. at 6.) CAPA certainly provides meaningful safeguards for the due process rights of Plaintiffs and others similarly situated. Indeed, CAPA accomplishes as to all rulemaking what the parties sought to accomplish as to rulemaking for relocation services through the prospective relief in the 1975 Stipulation: it allows plaintiffs the opportunity to participate in any amendments to the Rules and Regulations.
As Plaintiffs point out correctly, there are some distinctions between the rights accorded under the 1975 Stipulation and those under CAPA. Specifically, CAPA does not provide for good-faith negotiations and judicial review in the event of impasse during said negotiations. While that is true, CAPA does require that Defendants provide the public with notice of a proposed rule or amendment to a rule and to consider all comments it receives and Defendant must consider the public's feedback. (Krishnan Decl. Ex. L § 1043(e), emphasis added.) Once the rule is finalized, Defendants must then publish the rule along with the written comments and summaries of comments provided at oral hearings. (Id.) Then, after that process is completed, members of the public can challenge the rule in a judicial forum. Although CAPA provides for slightly different procedures, the substantive safeguards that the 1975 Stipulation put in place are maintained.
With respect to the third Rufo factor, the views of the City, which the Court must accord significant weight, unequivocally support the application of CAPA and vacatur of paragraphs two through five of the 1975 Stipulation. Id.
Accordingly, the Court finds that vacatur of paragraphs two through five of the 1975 Stipulation to allow the City to promulgate amendments to rules and regulations in accordance with the procedures set forth in CAPA is a suitably tailored modification.
b. Judicial Supervision
Defendants request that the Court exercise its equitable powers and terminate the provisions of the 1975 Stipulation relating to amendment of the Rules and Regulations. (Def. Memo. at 19.) The Supreme Court has held that federal control of local institutions must be discontinued promptly when it is no longer required to remedy a violation of federal law. Horne v. Flores, 129 S. Ct. at 2595.
Defendants argue that continued judicial oversight is unnecessary and inappropriate. In Horne, the Supreme Court discussed the importance of taking a flexible approach to ensure that "'responsibility for discharging the State's obligations is returned promptly to the State and its officials' when the circumstances warrant." Id. at 2595 (quoting Frew, 540 U.S. 431, 442 (2004). In Frew, the Supreme Court concluded that "[i]f the State establishes reason to modify the decree, the court should make the necessary changes; where it has not done so, however, the decree should be enforced according to its terms." 540 U.S. at 442. Courts must exercise their equitable powers "to ensure that when the objects of the decree have been attained, responsibility for discharging the State's obligations is returned promptly to the State and its officials," Id.
As stated above, the Court finds that it is appropriate to modify the 1975 Stipulation. The violations of federal law that were the subject of Judge Motley's 1975 Stipulation have been remedied, and there is no ongoing violation of federal law. Therefore, continued judicial oversight is improper.
c. Standing
Finally, Defendants ask the Court to find that Plaintiffs' claims are moot and that Plaintiffs have no standing to oppose the motion before the Court. It is true that the four Plaintiffs named originally no longer receive services from HPD and no class was certified. (Krishnan Decl. ¶ 3.)
Under Article III of the Constitution, this Court generally may on only adjudicate "only actual, ongoing cases or controversies." Lewis v. Continental Bank Corp., 494 U.S. 472, 477 (1990). A federal district court has jurisdiction to supervise and enforce its own final judgments, including consent decrees. See Berger v. Heckler, 771 F.2d 1556, 1568 (2d Cir. 1985). Plaintiffs cite Crumpton v. Bridgeport Educators' Association to support the contention that the Court retains jurisdiction over the 1975 Stipulation. 993 F.2d 1023 (2d Cir. 1993). In Crumpton, defendants challenged the court's jurisdiction over a consent decree issued in a class action where teacher hiring practices were amended as a result of racially motivated hiring practices. Id. The wrongfully fired teachers were subsequently re-hired, and as a result defendants argued that principles of mootness deprived the court of jurisdiction. See id. at 1028. The Court of Appeals held that the consent decree continued to govern the subject matter of the dispute because of an "enduring interest in the interpretation of [the decree]" but, even if plaintiffs did not have a continuing interest, the case would "satisfy the capable of repetition, yet evading review exception to the actual case and controversy requirement." Id. at 1027-8 (internal quotations omitted). Similarly here, Plaintiffs have an enduring interest because the 1975 Stipulation governs the City's relocation services.
As mentioned above, a proposed intervenor has standing to enforce a consent decree as an intended beneficiary despite not being an original named Plaintiff. Fed. R. Civ. P. Rule 71. Rule 71 states that "when an order grants relief for a nonparty or may be enforced against a nonparty, the procedure for enforcing the order is the same as for a party." Id. Accordingly, the Court finds that Ms. Little has standing because she currently receives the type of relocation services covered by the 1975 Stipulation. See Berger v. Heckler, 771 F.2d 1556 (2d Cir. 1985) (holding that non-parties who received benefits as a result of the consent decree could invoke Rule 71 to enforce provisions of said consent decree).
For the foregoing reasons, the Court finds that the case is not moot and jurisdiction is proper.
III. Conclusion
III. Conclusion
For the foregoing reasons, Defendants' Motion to Dismiss portions of the 1975 Stipulation [dkt. no. 31] is GRANTED. SO ORDERED. Dated: New York, New York
March 28, 2012
/s/_________
LORETTA A. PRESKA
CHIEF U.S.D.J.