Fifth Circuit Says Alleged Compliance With Federal Law is Insufficient to Dissolve Consent Decree

Per Frazar v. Ladd, --- F.3d ---, 2006 WL 2023106 (5th Cir. July 20, 2006):

[D]efendants moved pursuant to Rule 60(b)(5) to terminate the entire consent decree or, in the alternative, to dissolve the consent decree as to all urban areas of Texas. Defendants argued that they were in compliance with federal Medicaid law, therefore rendering the consent decree unnecessary, and its enforcement inequitable. Defendants argued that the ends of the consent decree had been met (i.e., compliance with the federal law), and it was no longer equitable that the judgment should have prospective application...

Plaintiffs argued that defendants were not entitled to Rule 60(b)(5) relief because: (1) compliance with federal law alone was insufficient to warrant dissolution of the consent decree; (2) defendants were not in compliance with federal law; (3) defendants had never attempted to comply, in good faith, with certain provisions of the consent decree; and (4) the objects of the consent decree had not been attained.

Defendants contend that the district court applied the incorrect legal standard for consent decree modification in institutional reform cases and argue that the district court failed to follow the Supreme Court's admonishments in Frew II [Frew ex rel. Frew v. Hawkins, 540 U.S. 431 (2004) (holding that Eleventh Amendment did not bar enforcement of consent decree)] regarding federalism, separation of powers, democratic accountability, and deference to those state officials responsible for administering public institutions and programs. The contention is that instead of following Frew II, the district court placed too much importance on the Rufo v. Inmates of the Suffolk County Jail, 502 U.S. 367 (1992) test for consent decree modification.

....

Defendants are seemingly attempting to re-litigate the claims underlying the Consent Decree. If the basis for a meritorious Rule 60(b) motion is that the claims underlying the consent decree are not meritorious, then parties to consent decrees would be permitted to file periodic Rule 60(b) motions asserting compliance with federal law and, in effect, continually re-litigate the underlying claims until a court determines the defendants are in compliance with federal law and the decree is dissolved. The party filing the Rule 60(b) motion would potentially be able to eliminate consent decree obligations, even if there is no attempted compliance with its legally enforceable terms, no showing that conformity to federal law makes compliance with the consent decree substantially more onerous or unworkable, and no showing that the requested relief is sufficiently tailored to the changed factual circumstances. See Rufo, 502 U.S. at 384-91; Cooper v. Noble, 33 F.3d 540, 545 (5th Cir.1994). It follows that the parties opposing dissolution would not enjoy the benefits for which they bargained or the judicially enforceable obligations upon which they relied in entering into the consent decree; and the parties seeking dissolution would paradoxically be entitled to equitable relief despite their inequitable behavior. A Rule 60(b) motion is not a vehicle by which Defendants may disregard the voluntary obligations contained in the Consent Decree, allow time to pass, and then litigate the underlying claims in hopes of never actually complying with [ ] its terms. If the Court wished the law to be that consent decrees must be dissolved if defendants comply with federal law, it would have expressly stated so. It did not. A rule of law based on a single factor (compliance with federal law) is the opposite of the Court's requirement of equitable flexibility. We hold that the district court properly determined that the applicable legal standard in this case came from Rufo and Cooper.