Opinion
Nos. C-84-1100 MHP, C-84-7089 MHP.
August 25, 1988. Supplemental Order Awarding Attorneys' Fees August 31, 1988.
Eva Jefferson Paterson, San Francisco Lawyers' Committee for Urban Affairs, Shauna I. Marshall, Equal Rights Advocates, William C. McNeill, III, Employment Law Center, Denise M. Hulett, Mexican-American Legal Defense Educational Fund, San Francisco, Cal., Dennis W. Hayashi, Asian Law Caucus, Oakland, Cal., Mary C. Dunlap, Law Offices of Mary C. Dunlap, San Francisco, Cal., Russell Galloway, Berkeley, Cal., for plaintiffs in intervention.
Robert T. Moore, Richard S. Ugelow, U.S. Dept. of Justice, Civil Rights Div., Employment Litigation Section, Washington, D.C., Joann Swanson, Dept. of Justice, San Francisco, Cal., for Dept. of Justice.
Duane W. Reno, Cindy O'Hara-Varela, Davis, Reno Courtney, San Francisco, Cal., for Firefighters Union, Local No. 798.
Louise K. Renne, City Atty., George Riley, Judy Lynch, Deputy City Attys., San Francisco, Cal., for the City County of San Francisco.
Barbara Y. Phillips, Rosen Phillips, San Francisco, Cal., Special Monitor.
ORDER GRANTING INJUNCTION
This employment discrimination action was originally brought by the United States against the City and County of San Francisco ("the City") citing unlawful discrimination on the basis of race by the San Francisco Fire Department ("SFFD"). Various individuals and organizations later intervened as plaintiffs adding claims for unlawful discrimination on the basis of gender, and San Francisco Firefighters Local 798 ("the Union") intervened as a defendant. A consent decree was entered in settlement of this action on May 20, 1988. An order approving the terms of the consent decree was filed June 10, 1988. See United States v. City and County of San Francisco, 696 F. Supp. 1287, 1319 (N.D. Cal. 1988) [hereinafter " Davis III"].
Plaintiff-intervenors are: Fontaine Davis, Eric H. Washington, Jerilyn North, Robert L. Demmons, Jimmie Braden, Audry Lee, Early Davis, Brandi Swanson, Susan Moorehead, Anne Young, Mary M. Carder, Theresa Rodigou, Kathleen J. Bradshaw, Patricia Murray, Chinese for Affirmative Action (CAA) and the Mexican American Legal Defense Fund (MALDEF).
The ink was hardly dry on the consent decree when the City entered the throes of a budget crisis and sought to make cuts in the SFFD budget in order to ameliorate the financial shortfall. The case came on for hearing before the court on an order to show cause why the defendant should not be held in contempt for violating the orders of this court and on the City's belated request for an emergency hearing on the budget. The court received evidence and heard argument over the course of a four day hearing. Having considered the memoranda and submissions of the parties as well as the evidence taken and arguments offered during the hearing, for the following reasons, the court orders that the City is permanently enjoined from reducing the number of authorized positions in the SFFD, and from demoting SFFD personnel other than for legitimate disciplinary reasons. Further, although the court does not find that the City is yet in contempt of court, the City shall bear the costs and attorneys' fees related to the hearing on contempt.
BACKGROUND
The detailed factual background of this case was outlined in Davis III and will not be repeated here. In any event, it is the events subsequent to the filing of the consent decree that are pertinent to the current motions.
The court ordered the filing of the consent decree on May 20, 1988. That same day the parties came before the court on an order to show cause re contempt arising from the City's failure to provide adequate information to the court or to the parties regarding test development. Before the end of that hearing the plaintiff-intervenors informed the court that the City was planning demotions in the SFFD as a way to resolve a budgetary shortfall. After some discussion, the court enjoined the City from taking any adverse employment action until the City had prepared and the court had had an opportunity to review a report on the effects any budgetary changes might have on the consent decree. That bench order was later memorialized and filed June 22, 1988.
In response to the court's demand for a report spelling out the ramifications of proposed budget cuts for the provisions of the consent decree, on May 26, 1988 the City filed a document of less than two pages. That document, based on the prediction that a local proposition on the June 7 ballot would allow the city to raise revenues in excess of the Gann limit, baldly asserted that the trimming of the SFFD budget would have little effect on the City's ability to comply with its obligations under the consent decree. On June 7 the voters rejected the proposition that would have overridden the Gann limit. The City failed to submit a subsequent report until after the plaintiff-intervenors moved the court to find the City in contempt.
The Gann Amendment, Cal. Const., Art. XIIIB, with certain exceptions, imposes a limit on the expenditures of tax revenues by the state and local governments.
In the interim, the Union had appealed both the entry of the consent decree and the opinion in Davis III to the Ninth Circuit and had moved for a stay pending appeal. On June 13, a panel of the court of appeals temporarily granted a stay pending appeal.
By letter dated June 15, 1988, attached to this order at Appendix A, the City reported to the court that the failure of the ballot proposition would not affect its ability to comply with its obligations under the consent decree because the Gann Amendment allowed the City "to exclude from the Gann limit those additional expenditures for services which have been mandated by the court." In an appended memorandum to the Mayor dated June 14, 1988 the City Attorney explained more specifically that by its terms the Gann Amendment excluded "[a]ppropriations required for purposes of complying with mandates of the courts or the federal government which, without discretion, require an expenditure for additional services or which unavoidably make the providing of existing services more costly." In that memorandum, the City Attorney identified for the Mayor the City's obligation to hire 500 new firefighters as one of the requirements of the consent decree which could be exempted under Gann.
On June 24, the monitor filed with the court a report on the budget. The monitor reported that the City planned to deactivate one division, one battalion district, one rescue squad and up to four truck companies on July 1, 1988. This plan included the elimination of 186 authorized positions in the SFFD. Also on June 24, on plaintiff-intervenors' motion, the court issued an order to show cause why the City should not be held in contempt and reiterated its prior order enjoining the City from taking any action which might adversely impact on its ability to fulfill its obligations under the consent decree.
On June 30 a majority of the Ninth Circuit panel lifted the temporary stay and denied the Union's motion for a stay pending appeal.
Hours after the Ninth Circuit lifted the stay, the City swore 81 new lieutenants into the SFFD pursuant to the terms of the consent decree. On the next day, July 1, the City appeared before the court on the order to show cause and announced almost in one breath the promotion of the 81 lieutenants and its plan promptly to demote 28 of those new lieutenants as part of the proposed budget for fiscal year 1988-89 partially outlined in the monitor's June 24 report.
In response to the court's specific questions about the ramifications for the terms of the consent decree of the City's proposed 1988-89 budget ("the proposed budget") for the SFFD and the other parties' charges of misrepresentation, the City responded only that it intended to comply with the terms of the decree and that the parties and the court were obliged to trust in the City's good intentions. The court demanded that the City submit the declarations of those officials responsible for developing the SFFD budget on the subject of the ramifications of the proposed budget for the consent decree, and continued the hearing to the following week. Deputy Mayor for Finance Sam Yockey, Assistant V for budget analysis Kathryn Harrison and Fire Chief Frederick Postel submitted declarations and testified at the hearing.
The SFFD is organized by divisions, which break down into battalion, engine and truck companies. See Administration chart appended to Monitor's Report Re Budget [hereinafter "Monitor's Budget I"]. For fiscal year 1988-89, beginning July 1, 1988 the City proposed to reorganize the SFFD by consolidating its three divisions into two, reducing its ten battalions to nine, eliminating four truck companies and one rescue squad. See Defendant's Report on Fire Department Budget Cuts and Administrative Reorganization [hereinafter "City's Budget II"] at 4-5.
This reorganization of the SFFD would have a double-barrelled effect on the number of authorized positions in the SFFD. First, by direct elimination of the companies and by the process of "bumping," between 42 and 62 promotional opportunities would be lost. Second, the proposed budget would directly eliminate 136 entry-level hiring opportunities.
Bumping is what happens when a uniformed officer above the rank of firefighter H2 is demoted and there are, as in this case, no open slots in the ranks below. For example, when a battalion chief is demoted to captain, a captain must be demoted to lieutenant and a lieutenant will be demoted to firefighter. So when a high ranking officer is bumped, his position, and one in every rank below is eliminated unless additional positions are created in the rank or ranks below, something which will not occur under this plan.
The reduction in authorized positions would not result in any layoffs because due to its now legendary inability to devise entry-level and promotional tests that are valid under Title VII, the City for many years has been prevented from hiring or promoting firefighters. As a result, the actual strength of the SFFD has diminished over the years. Therefore, the City's proposal to eliminate authorized positions would have the effect of shrinking the authorized strength of the SFFD to meet its present staffing. According to Chief Postel, absent retirements, the proposed budget would leave only three positions available to be filled in the rank of H2 firefighter.
The proposed budget made other straight funding cuts. Despite the City's protestations that the requirements of the consent decree would be fulfilled, the testimony and other evidence demonstrated unequivocally that these cuts would adversely affect the SFFD's ability to provide incoming recruits and incumbent officers with human relations and officer training, to provide counseling services to a force which has been experiencing a marked increase in both incidents of racial harassment and stress-related disability, to actively recruit in minority communities and among women, to retrofit firehouse facilities in order to accommodate women, and to investigate and eliminate racial and sexual harassment within the SFFD.
DISCUSSION
In reviewing the arguments of the parties, the court is not unsympathetic to the City's fiscal woes. However, it is dismaying that the City was prepared to effect such drastic changes in the SFFD without either reporting to the court or to the parties or first applying to the court for modification of its obligations under the consent decree. For the first time in twenty years the City had developed a workable solution to the problems of employment discrimination in the SFFD; it did little to protect that solution. The conclusion is inescapable that the City cannot hope to fulfill its obligations under the decree if it cuts the SFFD's budget in the manner proposed. Under the circumstances, it was the City's obligation to move the court to relieve it of its duties under the consent decree. Instead, the City ignored its responsibility and forced the plaintiff-intervenors to come to court to prevent the City from implementing cuts which would cripple the consent decree from the outset. Even at the hearing, the City attempted to let its case rest on representations of good faith rather than hard evidence as to its ability to meet its obligations.
It is also disheartening that the City made so little effort to muster support for fully funding the consent decree and so readily conceded to cuts in the SFFD budget. The City's protestations about the workings of the Gann amendment were highly unconvincing. The Gann amendment contains an express exclusion for court orders such as the consent decree. The fact of the matter is that the City did not even attempt to exclude the known costs of the consent decree from the City's Gann calculation, although the costs of other consent decrees and federal court orders were indeed excluded and fully funded. At bottom, it is not at all clear that the City is unable to appropriate the moneys to fund the decree fully as contemplated by the parties.
Section 9(b) of the Gann amendment permits local governments to exclude the costs of court-ordered programs from the Gann calculation. The City's argument is that once those programs are eliminated from the calculation, it may then raise and spend revenue up to the limit without considering or providing for the costs of such programs. The City refused to concede that the exclusion in fact permits it to raise the revenues necessary to fund the programs excluded under Gann. The court finds this a strained analysis of section 9(b). The exclusion relates directly to the court-ordered programs and clearly contemplates that such programs be funded.
The City officials in charge of formulating the SFFD budget testified at the hearing that they had not been given a copy of the consent decree, that they had not had an opportunity independently to evaluate whether the budget would allow the SFFD to comply with the terms of the decree, and that when the experts were unsure of whether the budget would support compliance, the City Attorney had given them a bald legal opinion that the terms of the consent decree were met. In fact, every time the court questioned Ms. Harrison or Chief Postel about numbers that would not add up, the standard answer was to the effect that each had been assured by the City Attorney that the terms of the decree would be met. The court was shocked to learn not only that the decree had not been provided to the officials in charge of the budget, but that provisions fundamental to the decree, such as the minimum of 500 hires over the course of the decree, were presented to them by the City Attorney as something less than firm requirements.
The City's failure to request relief before planning this proposed budget is completely at odds with its obligations. It also skewed the posture of the parties on the motion. If the City had moved the court for a modification of the consent decree, it would have been its burden to demonstrate an inability beyond its control to comply with the terms of the decree. For the reasons stated below, the City failed to meet this burden.
Even if the court places the burden on plaintiff-intervenors as movants for injunctive relief, that burden has been met. Permanent injunctive relief is justified by findings indicating that "the movant has no adequate remedy at law and will suffer irreparable harm if the court denies equitable relief." Burrus v. Turnbo, 743 F.2d 693, 699 (9th Cir. 1984), vacated as moot, 474 U.S. 1016, 106 S.Ct. 562, 88 L.Ed.2d 548 (1985). Of course, the court also has broad discretion to fashion equitable relief in order to enforce the provisions of the consent decree, over which it retains jurisdiction for the next seven years. See Davis III, 696 F. Supp. at 1321.
Although the City concedes that this court retains jurisdiction to enforce the consent decree, it contends that the court lacks jurisdiction to interfere in the uniquely political process of formulating a budget. The notion that the two are unrelated is disingenuous. The City assumed certain obligations by the terms of the decree, which are founded on the assumption that there are funds to carry out the obligations. To the extent that the City seeks to solve the budget crisis on the back of the SFFD, the court has jurisdiction to ensure that budget determinations do not interfere with the City's obligations under the decree. Indeed, there would be little incentive for litigants to settle actions with local governments if the courts allowed them to escape their obligations by crying fiscal constraint. See Liddell v. Missouri, 731 F.2d 1294, 1320-22 (8th Cir.), cert. denied, 469 U.S. 816, 105 S.Ct. 82, 83 L.Ed.2d 30 (1984). The City accepted the obligations of the consent decree and will be held to carry out its obligations in full.
The court is loath to get into specifics regarding the City's decision to allocate its resources. It is not the court's province to create a budget for the SFFD or for the City. It is the court's function, however, to ensure that the consent decree is carried out and to evaluate whether the proposed budget is likely to render the City incapable of realizing the terms of the decree. In this case, there is clearly no adequate remedy at law; the potential harm posed by the proposed budget is irreparable in that those job opportunities sought to be eliminated, once lost, will irreparably damage the rights to relief negotiated for in the consent decree. In reaching this conclusion, the court's starting point is the City's obligations under the consent decree. Those obligations are both specific and general.
I. The Obligation to Hire 500 Firefighters
Under paragraph 9 of the decree, see Davis III, 696 F. Supp. at 1314, the City is obliged to hire "at least 500 entry level firefighters" over the seven year course of the decree. The problem however, is not merely the City's inability under the proposed budget to meet the 500 figure, but the ramifications of a failure to meet that figure for the rest of the decree. This figure is an essential part of the foundation on which the consent decree stands. By making 500 hires impossible to attain, the proposed budget would undermine the entire scheme of relief.
First, the evidence is uncontroverted that under the proposed budget the City will not have 500 openings in the SFFD in the next seven years. There was a great deal of skirmishing at the hearing over retirement rates and what a reasonable prediction as to the number of openings after retirement will be in the next seven years. While the court finds that the City's estimates as to the predicted rate of retirement were not credible, even the City's best prediction of 374 retirements over the next seven years, see Declaration of Kathryn Harrison Regarding Retirement Rates at 4, would not create vacancies sufficient to meet the number of hires required to support the consent decree. The Union's estimate, which, unlike the City's figures, was supported by specific evidence of the age and years of service of each of the current members of the SFFD in addition to raw averages of historical trends, predicted only 267 retirements, or an average of 38 per year, over the same seven year period. See Declaration of Duane Reno filed July 13, 1988.
The City's figures also failed to take into consideration the fact that the SFFD cannot fill the positions of firefighters who begin their retirement on the basis of lump sum sick pay until that lump sum is fully paid out. See Monitor's Budget III at 5.
Second, the City claims that the proposed budget contemplates a class of at least 24 to begin the fire college in fiscal year 1988-89. There are two problems with this assertion. First, under the proposed budget there are only places for three new hires. This means that in order to hire a class of twenty-four in the 1988-89 fiscal year, absent twenty one retirements, the SFFD would need to obtain a supplemental appropriation. This process involves fourteen steps, can take as long as eight or nine months and may finally be denied by the board of supervisors. See Monitor's Budget III at 2-5. Second, in order to meet the trigger numbers for testing deadlines set out in the decree, the City must have 90 new firefighters trained by March of 1990. If the City only budgets to train 24 this year, it will have to assemble funds to hire and train 66 firefighters next year, which would require an additional 66 retirements plus additional training funds and salaries. The reconfiguration of the department will make it next to impossible to reach the trigger on the specified date.
Third, the hiring goals for minorities and women are predicated on 500 hires and it was on the basis of that number of hires that the court approved the hiring goals in the consent decree. The City's argument that 500 hires are not required by the terms of the decree is belied by the fact that in the memorandum to the Mayor of June 14, 1988, the City Attorney stated that the "consent decree requires the City to hire 500 new firefighters. . . ." Appendix A, Memo at 7. If the City fails to hire 500 new firefighters over the course of the decree, achievement of the remedial goals of the decree would require an increase in the levels of hiring of minorities and women. The City does not pretend that such an increase in minority hiring could be justified under current law on the basis of the record before the court.
Lastly, with respect to the issue of 500 hires, the City's protestation that it will be able to make up in later years for what it plans to take away from the SFFD this fiscal year is simply not credible. There is no basis either in the history of the City or in the history of other cities for the hope that down the road, the City's financial picture will become so glowing as to allow it to increase the authorized strength of the SFFD to current levels after reducing it by almost a third.
II. The Obligation to Promote Captains
Paragraph 11 of the consent decree, see Davis III, 696 F. Supp. at 1314, specifically requires the City to give a special captain's examination to six named Black firefighters and to integrate the results of that test with the existing captain's list, immediately promoting to captain those of the six who place in the range of names already promoted from the list. Under the proposed budget, there are no openings for captains. The City's answer to this problem is to pledge that it will promote these men to captain but give them the work of lieutenants.
This attempted resolution is unacceptable. The consent decree contemplates providing these men with the kind and quality of work necessary to qualify them to compete with others of the same rank. Placing those who qualify for the rank of captain in lieutenant's jobs will handicap them in competing for the next promotional rank. While White captains will have been experienced in performing the duties of captain, these Black captains will have been performing not captain's but lieutenant's work. The decree does not contemplate such a result and the court cannot permit the City to put these captains at such a disadvantage or to discriminate against them in the type of assignments made.
The proposal to reduce the number of authorized positions by reconfiguring the SFFD amounts to an anticipatory repudiation by the City of its obligations under the consent decree. The City cannot give away the store and then claim that damage is purely speculative and that there has as yet been no breach for which relief may be afforded.
Because the City cannot live up to its obligations under paragraphs 9 and 11 of the consent decree under the proposed budget, the court permanently enjoins the City from making any reductions in the number of authorized positions in the SFFD. This does not mean that the City is required immediately to fill all authorized positions. It does mean that these positions must remain funded in the quantity and quality required by the spirit and tenor of the consent decree and available for hiring and promotion in the numbers and at the times required by the terms of the consent decree. At the times called for there must be sufficient numbers of positions of true responsibility in the required ranks to effectuate the hiring and promotions contemplated by the decree. In the absence of an injunction, the consent decree would be worthless paper. The court declines to offer the city any relief from the commitment to 500 hires over seven years, or from the goals, triggers or test dates set out in the decree.
III. The Proposed Demotions
The City was not required by the terms of the consent decree to promote a full complement of 81 lieutenants. The consent decree, however, does not contemplate demotions. In the judgment of the court the City was cavalier in promoting 81 with full knowledge that it intended the very next day to demote 28 of those promoted. There is little indication that the City took account of the effects of the demotions. The fact that two of those promoted would be demoted to a rank lower than that they gave up in order to be promoted to the rank of lieutenant is a prime example of the City's callousness and disregard. See Declaration of Eva Paterson filed July 11, 1988. Moreover, to hold out the promise of promotion and then to demote would be in violation of the spirit and tenor of the consent decree. Accordingly, the City is enjoined from making any demotions other than for legitimate disciplinary reasons.
IV. The Obligations to Train and to Provide Necessary Support
As part of the consent decree, the City undertook to provide a range of training in addition to the usual fire suppression training of new recruits. Specifically, there must be special physical training for women. In addition, in conjunction with its obligation to investigate and punish incidents of racial harassment against members of the SFFD, the City must provide human relations training for all its members. The reductions in the portion of the proposed budget relating to training will make this impossible. Chief Postel made clear that there must be at least 6 full time officers in the bureau of training, two of whom have the rank of captain H39 or above.
The court expresses no opinion on the City's decision to "civilianize" the positions that will be in charge of investigating racial harassment. This decision should be left to the SFFD. The personnel assigned to this job, however, must have the training, experience, authority, supervision and resources to effectively carry out their duties under the consent decree.
The court will not involve itself in specifying what amount of funds or personnel need be provided in order to accomplish these general obligations. The findings of the monitor, which shall be made in consultation with Chief Postel and the SFFD head of training, will be given presumptive effect with respect to the adequacy of resources allotted to all training.
V. Contempt
Although the City was courting contempt, the court does not find that the City went so far as to be in actual contempt either of the consent decree or of the order of May 22, 1988. However, the City did violate its obligation to provide information about its intentions to the court and to the parties. Instead of coming into court to seek a modification, the City acted unilaterally to abrogate the court's order and forced the plaintiff-intervenors to seek relief. Accordingly, the costs and attorneys' fees related to this motion will be assessed against the City. The parties have ten days from July 12, 1988 to submit declarations and demands for fees. The City will then have ten days to respond.
The City is cautioned for the future to read its obligations in the spirit clearly intended by the consent decree. It is the City's responsibility to move for modification of its obligations before instituting changes which may have an adverse effect on the rights protected by the consent decree.
CONCLUSION
For the foregoing reasons, the City is enjoined from reducing the number of authorized positions in the SFFD from the level authorized at the time of the execution of the consent decree and from making any demotions for other than legitimate disciplinary reasons. In addition, the recommendations and conclusions of the monitor made in consultation with Chief Postel and the SFFD head of training will be deemed conclusive with respect to the resources allocated to the bureau of training. Further, although the motion for contempt is denied, the City is ordered to pay costs and attorneys' fees related to this motion in an amount to be determined by supplemental order.
IT IS SO ORDERED.
APPENDIX A
City and County of San Francisco:
Office of City Attorney
Louise H. Renne, City Attorney Dan Siegel Chief of Complex Litigation (415) 554-4229 June 15, 1988
The Honorable Marilyn Hall Patel
United States District Court
450 Golden Gate Avenue
San Francisco, CA 94102
Re: U.S.A. vs. City and County of San Francisco USDC No. C84-7089 MHP/C84-1100 MHP (Consolidated)
Dear Judge Patel:
Last week, we informed you and all parties by letter that the failure of Propositions K and 71 in the general election might affect the City's ability to comply with portions of the consent decree which require the expenditure of public funds. These propositions, had they passed, would have raised the so-called "Gann" limit which sets a ceiling on the amount of money which can be spent by local government.
Since that time, it has come to our attention that in calculating its Gann limit, the City has never applied an exemption set forth in section 9(b) of the Gann Amendment. See Cal. Const., Art XIII, § 9(b). In essence, that section permits local governments to exclude from the Gann limit those additional expenditures for services which have been mandated by a court.
Yesterday, in a memorandum to the Mayor, the City Attorney stated that the exemption under section 9(b) applies to consent decrees such as the one in this case, as well as to other court mandates affecting the City. The City is currently recalculating its Gann limit consistent with this view. We are hopeful that recalculation of the Gann limit will provide the City with sufficient space to meet all of its obligations under this and other mandates.
At the same time, we recognize that whether the City has the necessary funds to meet its obligation is an issue entirely separate from whether the Gann limit prohibits their expenditure. Currently, the Finance Committee of the Board of Supervisors is reviewing the budget and considering a variety of matters affecting the revenues available to meet required expenditures.
At this time, we do not fully know how recalculating the Gann limit will affect our continued ability to meet our responsibilities. Various revenue measures are being considered. We shall keep the Court and the parties informed as the facts become known to us.
A copy of the City Attorney Opinion on the Gann limit is enclosed with this letter.
Very truly yours, LOUISE H. RENNE City Attorney /s/ Dan Siegel
DAN SIEGEL Chief of Complex Litigation
cc: Barbara Phillips (w/encl.)
All Counsel (w/o encl.)
2129G/jan
CITY AND COUNTY OF SAN FRANCISCO MEMORANDUM
TO: HONORABLE ART AGNOS Mayor
FROM: LOUISE H. RENNE City Attorney BURK E. DELVENTHAL Deputy City Attorney
DATE: June 14, 1988
RE: GANN APPROPRIATIONS LIMIT/COURT MANDATES