United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 18, 2011 Decided December 2, 2011
No. 10-7149
NIKITA SHONTA PETTIES,
BY HER PARENT AND NEXT FRIEND, JUDY MARTIN, ET AL.,
APPELLEES
v.
DISTRICT OF COLUMBIA, A MUNICIPAL CORPORATION, ET AL.,
APPELLANTS
Appeal from the United States District Court
for the District of Columbia
(No. 1:95-cv-00148)
Carl J. Schifferle, Assistant Attorney General, Office of the
Attorney General for the District of Columbia, argued the cause
for appellants. With him on the briefs were Irvin B. Nathan,
Attorney General, Todd S. Kim, Solicitor General, and Donna
M. Murasky, Deputy Solicitor General. Robert C. Utiger,
Attorney, entered an appearance.
Steven Ney argued the cause for appellees. With him on the
brief were Jennifer Lav and Bradford P. Johnson.
Before: ROGERS, GARLAND and GRIFFITH, Circuit Judges.
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Opinion for the Court by Circuit Judge ROGERS.
ROGERS, Circuit Judge: The District of Columbia appeals
the denial of its motion to vacate a preliminary injunction (and
related orders) pursuant to Rule 60(b)(5) of the Federal Rules of
Civil Procedure. The injunction was issued in 1995 in response
to a class action complaint alleging that the District of Columbia
was violating the Individuals with Disabilities Education Act
(“IDEA”), 20 U.S.C. §§ 1400 et seq., by failing to timely pay
private providers of special education services and thereby
jeopardizing students’ special education placements. In moving
to vacate the injunction after fourteen years, the District of
Columbia argued that because it had “cured the systemic
violations of law upon which the preliminary injunction and
other payment orders were predicated” and was “in compliance
with the [latest] payment order,” there were “substantially
changed circumstances concerning the administration and
processing of provider payments” that made unnecessary and
inequitable continued judicial supervision. Defs.’ Mem. of P. &
A. in Supp. of their Mot. to Vacate Prelim. Inj. and Payment
Orders at 1, 10.
The district court denied the motion on two grounds: (1)
dissolving the injunction and subsequent payment orders “would
be disruptive to the status quo” and “counter-productive to the
goal” of settling the case “in short order,” and (2) the District of
Columbia had “overstated both the relevance and the
significance” of the Supreme Court’s recent decision in Horne
v. Flores, 129 S. Ct. 2597 (2009). Mem. Op. and Order Sept.
30, 2010 at 2 (“Mem. Op.”). Because the district court failed to
address the changed circumstances, as Horne v. Flores
instructs, we reverse and remand the case for the district court
to determine whether, in view of changed circumstances, the
District of Columbia’s Rule 60(b)(5) motion should be granted.
3
I.
Congress enacted the IDEA “to ensure that all children with
disabilities have available to them a free appropriate public
education that emphasizes special education and related services
designed to meet their unique needs and prepare them for further
education, employment, and independent living.” 20 U.S.C.
§ 1400(d)(1)(A). On January 20, 1995, special education
students and their parents filed a class action complaint alleging
that the District of Columbia was depriving them of their civil
rights under 42 U.S.C. § 1983 by refusing to provide them with
a free, appropriate education as required by the IDEA. The
defendants included the Superintendent of the District of
Columbia Public Schools and the Director of the Special
Education Branch in the Office of the Superintendent of the
District of Columbia Public Schools. The plaintiffs alleged that
the District of Columbia was jeopardizing students’ special
education placements by failing to pay private providers of
special education services fully and on time. As a result, parents
of special education students were being forced to choose
between standing by as special education services were
discontinued or paying for these services. The complaint noted,
by way of example, that just days before the complaint was
filed, the Chelsea School had written a letter to parents stating
that because of the District of Columbia’s failure to make full
tuition payments for 42 of its 126 students, these students would
be disenrolled unless their parents paid the tuition. The school
explained that the District of Columbia had “[not] offered any
assurances that the problem will be satisfactorily resolved, or,
indeed, any assurance that Chelsea will be paid at all.” Compl.
¶ 23 at 13 (quoting letter of January 17, 1995 from Timothy E.
Hall, Chair of the Board of Governors of the Chelsea School).
The prayer for relief sought: (1) temporary and permanent
injunctive relief requiring the defendants to pay immediately and
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fully all debts to private providers of special education, and to
give satisfactory written assurances of future timely payments;
(2) regular reports from defendants on their compliance with any
court order until such time as the district court determines the
rights of the plaintiff class are no longer being violated or in
immediate jeopardy of further violation and continued court
monitoring is unnecessary; (3) payment by defendants of
plaintiffs’ reasonable attorneys’ fees and costs; and (4) such
other relief as is just and proper.
On March 17, 1995, the district court issued a preliminary
injunction. The district court found that the District of
Columbia had “not paid the costs of private special education
placements or related services either fully or on a current or
timely basis for at least the 1994-1995 school year,” and that the
District of Columbia’s “ongoing refusal to meet [its] financial
obligations . . . ha[d] placed plaintiffs’ education in constant
jeopardy.” Prelim. Inj. ¶¶ 3, 6. It ordered the District of
Columbia to pay all outstanding debts to private providers of
special education services within two weeks. In a series of
subsequent payment orders, issued as late as 2009, the district
court set detailed payment deadlines. On July 8, 1997, the
district court appointed a Special Master to assist with
implementation of a transportation services plan and later
extended the Special Master’s duties to include resolving
payment disputes between the District of Columbia and private
providers. In a status report filed on May 4, 2005, the Special
Master advised that “sufficient progress has been made to merit
discussion of exit criteria for the portion of the case related to
payments.” Status Rpt. of Spec. Master, May 4, 2005 at 5.
Referencing a meeting with the parties on April 20, 2005, the
Special Master listed “four indicators” considered “necessary
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to ensure . . . a reliable, fair and efficient payment process
without judicial supervision.” Id.1
On March 20, 2009, the District of Columbia filed a motion
to vacate the preliminary injunction and related payment orders
pursuant to Rule 60(b)(5). The “basic grounds” were “the
changed circumstances since the preliminary injunction and
subsequent payment orders were issued, the record of
compliance with [its] obligations to pay private providers, and
the new system for payment of private providers in the
Education Reform Amendment Act of 2007,” D.C. Law 17-9.
Defs.’ Mot. to Vacate Prelim. Inj. and Payment Orders at 1.
“Under all the facts and circumstances,” as set forth in the
motion and attached exhibits, the District of Columbia argued
that “it is inequitable and unnecessary to continue in effect the
preliminary injunction and subsequent payment orders.” Id.
D.C. Law 17-9 had shifted responsibility for the vast majority of
provider payments from the District of Columbia Public Schools
(“DCPS”) to the Office of the State Superintendent of Education
(“OSSE”), which, in turn, had established a new automated
system for tracking invoices. See generally id. at Ex. K. During
the first two months that the OSSE’s system was in place, all
1
The “four indicators” were: (1) current Individual Education
Programs (“IEPs”) for every eligible special education student, with
placements determined annually; (2) written payment procedures
adopted as D.C. Board of Education polices or Superintendent
directives; (3) a special education advisory panel to examine policies
and regulations affecting special education students; and (4) accurate
projections by the District of Columbia of special education costs
based on rates commensurate with those in surrounding jurisdictions.
Status Rpt. of Spec. Master, May 4, 2005 at 5–6. The Special Master
also mentioned “other endeavors” in the parties’ interests: a pro bono
or low-cost dispute resolution service capable of resolving payment
disputes with providers, and formation of an association to represent
the common interests of the private providers. Id. at 6.
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invoices were paid on time and the OSSE generated no payment
disputes. See Defs.’ Mem. of P. & A. in Supp. of Mot. to Vacate
Prelim. Inj. and Payment Orders at 18, 21. In addition, the
DCPS was paying 99% of provider invoices on time and only
three disputes initiated by it had come before the district court
in the previous year. See id. at 18–19. Consequently, “[n]o
private schools or providers have threatened to displace DCPS
students, or not take any more, or discontinue providing services
to them, for many years.” Id. at 12. Concluding that there can
be “no serious doubt” that the “goal” of this litigation, “to
correct systemic violations of the law . . . found in 1995,” has
been “achieved,” the District of Columbia argued that “the
changed circumstances, the evidence of [its] good faith . . . and
the heavy costs that this litigation continues to impose upon the
taxpayers of the District of Columbia, require the vacation of the
preliminary injunction and all subsequent payment orders.” Id.
at 34–35.
The plaintiffs opposed the motion on the principal grounds
that the District of Columbia had yet to demonstrate “sustained
compliance” or to implement structural reforms identified by the
Special Master to sustain compliance. See Pls.’ Mem. in Opp’n
to Defs.’ Mot. to Vacate Prelim. Inj. and Paym’t Orders at 2.
Pointing to DCPS’s performance in the first four months of 2009
in which it disputed 215 invoices and made 335 late payments,
plaintiffs argued that the District of Columbia needed to
establish a quick, effective, low-cost dispute resolution
mechanism to replace the Special Master, a transparent and
equitable system for setting rates for special education services,
and a mechanism for monitoring the budget process to ensure
sufficient funding for special education. See supra note 1. In
response, the District of Columbia stated that the OSSE, which
handles roughly 90% of payments to providers (as measured by
dollar amount), was “in the process of developing an alternative
dispute resolution mechanism” with the Office of
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Administrative Hearings (“OAH”). Reply Mem. of Defs. in
Supp. of Mot. to Vacate at 2.
While the Rule 60(b)(5) motion was pending, the parties
attended a conference before a Magistrate Judge on April 10,
2009 and met with the Special Master in the spring and summer
of 2010 in unsuccessful attempts at settlement. On April 20,
2010, the District of Columbia moved for a decision on its Rule
60(b)(5) motion. In that motion and a supplemental filing, it
called the district court’s attention to Horne v. Flores, decided
June 25, 2009, which it argued “stands for the principle that
where durable legal compliance is achieved by means other than
compliance with the requirements of a court order, ‘continued
enforcement of the order is not only unnecessary, but
improper.’” Supplement to Mot. of Defs. for Ruling in Resp. to
Ct. Order of Apr. 20, 2010 at 11 (quoting Horne v. Flores, 129
S. Ct. at 2595). Because the District of Columbia “has long
been in compliance with the [district] [c]ourt’s orders and the
law in the area of vendor payment,” the District of Columbia
suggested “[its] motion to vacate [did] not require the [district]
[c]ourt to define the precise scope of Horne [v. Flores].” Id. at
2. Included with its motion was a compilation of the District of
Columbia’s monthly reports on the timeliness of provider
payments and pending payment disputes. See Defs.’ Mot. for a
Ruling on their Mot. to Vacate the Prelim. Inj. and Paym’t
Orders at Exhibit U. Prior to the district court’s ruling, monthly
reports were filed through September 15, 2010.
On September 30, 2010, the district court denied the Rule
60(b)(5) motion. In a brief memorandum and order, the district
court stated that (1) dissolving the preliminary injunction and
subsequent payment orders “would be disruptive to the status
quo and counter-productive to the goal of finally resolving this
case in short order,” and (2) the District of Columbia had
8
“overstated both the relevance and the significance of . . . Horne
v. Flores.” Mem. Op. at 2.
II.
On appeal, the District of Columbia contends, in light of
Horne v. Flores, that the district court abused its discretion in
failing to vacate the sixteen-year-old preliminary injunction and
the related payment orders. Interpreting Horne v. Flores to
mandate dissolution of institutional reform litigation orders
when the defendant has achieved compliance with federal law,
the District of Columbia seeks reversal and vacation of the
preliminary injunction and related payment orders because it has
achieved “sustained compliance” with the IDEA’s requirements.
Appellants’ Br. 26. Alternatively, it seeks a remand for further
proceedings.
Rule 60(b)(5) provides that a district court may vacate an
order or judgment if “applying it prospectively is no longer
equitable.” In the context of institutional reform litigation, the
Supreme Court has instructed that district courts must employ “a
flexible modification standard” because such decrees “often
remain in place for extended periods of time” such that “the
likelihood of significant changes occurring during the life of the
decree is increased.” Rufo v. Inmates of Suffolk County Jail, 502
U.S. 367, 380–81 (1992). The Court reasoned that a flexible
standard is in the public interest “because such decrees ‘reach
beyond the parties involved directly in the suit and impact on the
public’s right to the sound and efficient operation of its
institutions.’” Id. at 381 (quoting Heath v. De Courcy, 888 F.2d
1105, 1109 (6th Cir. 1989)). In Horne v. Flores, the Court
elaborated on the nature of the Rule 60(b)(5) inquiry while
reaffirming that district courts must engage in a “broad and
flexible” inquiry that focuses “only [on] whether ‘a significant
change either in factual conditions or in law’ renders continued
9
enforcement . . . ‘detrimental to the public interest.’” 129 S. Ct.
at 2596–98 (quoting Rufo, 502 U.S. at 384).
In Horne v. Flores, students and their parents filed a class
action complaint alleging that the State of Arizona was violating
the Equal Educational Opportunities Act of 1974 (“EEOA”), 20
U.S.C. § 1703(f), by providing inadequate instruction in the
English Language Learner program (“ELL”). The district court
entered a declaratory judgment for the plaintiff class and ordered
the State to establish a funding system that would create a
rational relationship between the amount of available funding
and the actual costs of ELL instruction. See 129 S. Ct. at 2590.
Fourteen years after the complaint was filed, the State moved for
relief pursuant to Rule 60(b)(5) on the ground that changed
circumstances had made continued enforcement of the district
court’s order inequitable. The Supreme Court reversed the
denial of the motion on the ground that the court of appeals and
the district court had “misunderstood . . . the nature of the
inquiry that is required when parties . . . seek relief under Rule
60(b)(5).” Id. at 2588. Noting that Rule 60(b)(5)’s “[u]se of the
disjunctive ‘or’ makes it clear that each of the provision’s three
grounds for relief is independently sufficient and therefore that
relief may be warranted even if [defendants] have not ‘satisfied’
the original order,” id. at 2597, the Court concluded that the
lower courts had erred by failing to determine whether there was
an ongoing violation of the EEOA, see id. at 2597–98. The
Court instructed that if there is no ongoing violation of federal
law and “a durable remedy has been implemented, continued
enforcement of the order is not only unnecessary, but improper.”
Id. at 2595. The Court observed that the lower courts ought to
have “appl[ied] a flexible standard that seeks to return control to
state and local officials as soon as a violation of federal law has
been remedied” and “inquir[ed] broadly into whether changed
conditions” provided evidence of durable compliance with
federal law. Id.
10
The District of Columbia’s brief recites detailed, undisputed
statistical evidence showing that it is timely paying private
providers of special education services. Between October 2009
and September 2010, the one-year period preceding the denial
of the District of Columbia’s Rule 60(b)(5) motion, the OSSE
paid 98.9% of invoices on time and the DCPS paid 94.8% of
invoices on time. See Appellants’ Br. 13–14 (Tables). During
this period the OSSE received 6,012 invoices, of which 46 were
paid late, 35 were disputed in part, and one was disputed in full;
the DCPS received 1,816 invoices, of which 89 were paid late,
170 were disputed in part, and 75 were disputed in full. See id.
13–16 (Tables). The record also shows: The OSSE and the
DCPS have adopted written policies and procedures for making
payments in conformance with the payment orders; the OSSE is
successfully using an automated system for processing invoices
and tracking payment deadlines; and the OSSE entered into a
Memorandum of Understanding with the OAH in January 2009,
providing the latter will adjudicate payment disputes between
providers and the OSSE. And, the District of Columbia has
promulgated a final rule, effective August 1, 2011, on provider
rates. Certificates of Approval for Nonpublic Special Education
Schools and Programs Serving Students with Disabilities
Funded by the District of Columbia and Special Education
Rates, 5 D.C.M.R. §§ 2821, 2833–34, 2844–54; see 58 D.C.
Reg. 5442 (July 2011). As a consequence of its actions, the
District of Columbia states, “no student’s placement or services
have been jeopardized, due to non-payment, for many years.”
Appellants’ Br. 18.
Counsel for the plaintiffs acknowledged during oral
argument that “few if any placements are being jeopardized by
nonpayment” and that this circumstance has “obtained for
several years.” Oral Arg. Tape at 10:56-11:08. The parties thus
agree that the District of Columbia is in compliance with the
IDEA with regard to provider payments; they disagree as to
11
whether the various steps the District of Columbia has
undertaken suffice to demonstrate that court supervision is no
longer necessary. Counsel for the plaintiffs argued that a
durable remedy requires establishment and testing of a
mechanism to resolve payment disputes to replace the Special
Master and the adoption of time limits for initiating payment
disputes. See id. at 14:41-53, 17:05-13. Counsel for plaintiffs
appeared to acknowledge that the other structural reforms and
actions referenced in plaintiffs’ opposition to the District of
Columbia’s Rule 60(b)(5) motion were not relevant, at least at
this stage of the litigation. See, e.g., id. at 16:10-55.
The District of Columbia responds that whether it has
implemented a durable remedy is irrelevant at this stage.
Durability, it suggests, is relevant only where a defendant moves
for relief from a final judgment, not where a defendant seeks
relief from a preliminary injunction and related orders. In
Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290
(D.C. Cir. 2006), this court explained that a preliminary
injunction is not based on a judgment or finding of liability, but
rather on the need to prevent an “injury . . . of such imminence
that there is a clear and present need for equitable relief to
prevent irreparable harm.” Id. at 297 (citation and internal
quotation marks omitted). Because plaintiffs do not dispute
that “few if any” special education placements have been
threatened by nonpayment for “several years,” the District of
Columbia emphasizes that there is “no risk” of imminent harm
to a class member. Oral Arg. Tape at 10:56-11:08; Reply Br.
10. With regard to identifying an alternative dispute resolution
mechanism, the District of Columbia maintains it is sufficient as
a matter of law that an adequate alternative forum exists, namely
in the Superior Court of the District of Columbia. Further, it
notes, the overwhelming majority of provider payments are
handled by the OSSE and any payment disputes with the OSSE
will be adjudicated by the OHA. And, it advises that the DCPS
12
is prepared to enter into a similar agreement with the OHA so
that these disputes also can be adjudicated by the OHA. See
Appellant’s Br. 31-32; Reply Br. 13.2
Although Horne v. Flores did not involve a pre-judgment
preliminary injunction, the Court’s instruction that continued
enforcement of an order entered to remedy a violation of federal
law is unnecessary and improper if there is no ongoing violation
of federal law and “a durable remedy has been implemented,” is
instructive. Horne v. Flores, 129 S. Ct. at 2595. The District of
Columbia acknowledges, in effect, that the determination of
whether preliminary injunctive relief is required because
plaintiffs are at risk of imminent harm is tied to the question of
whether it has remedied the systemic payment problems that
caused the district court to conclude in 1995 it was violating the
IDEA. If the plaintiffs, in fact, face “no risk” of imminent harm,
it is because the District of Columbia has established procedures
for paying providers in a timely manner to ensure compliance
with the IDEA in the future, eliminating the systemic causes that
jeopardized special education placements during the 1994-1995
school year.
The district court’s Rule 60(b)(5) inquiry fell short of what
is required by Horne v. Flores. The question raised by the
District of Columbia’s motion was whether changed
circumstances had rendered continued enforcement of the
2
By letter of November 16, 2011, the District of Columbia
provided as supplementary authority a recently executed
Memorandum of Understanding between the DCPS and the
OHA for adjudication of payment disputes involving DCPS and
private special education providers. See FED. R. APP. P. 28(j).
13
preliminary injunction and related payment orders contrary to
the public interest because special education placements were,
and had been, secure for years. The district court neither
determined whether the District of Columbia was making timely
private provider payments under the IDEA, nor evaluated the
systemic evidence that the District of Columbia is and has been
in compliance with the payment orders. Critically, it never
inquired into whether the risk of imminent harm that it found
warranted injunctive relief in 1995 — namely, that special
education students were in jeopardy of losing special education
services to which they were entitled under the IDEA — had
been ameliorated, if not eliminated, as a result of changed
circumstances.
The district court has overseen this litigation for many
years, and this court would benefit from its assessment of the
likely risk of imminent harm to plaintiffs as a result of untimely
private provider payments were court supervision to be
withdrawn. Although actions taken by the District of Columbia
appear to have remedied the systemic payment problems that
existed in 1995, plaintiffs’ concerns about the appropriate
alternative to dispute resolution by the Special Master and the
time limits for initiation of payment disputes require fact finding
best done in the district court. Accordingly, we remand the case
for the district court to conduct the necessary factual inquiry and
to determine whether, in view of the changed circumstances, the
District of Columbia’s motion to vacate the preliminary
injunction and related payment orders pursuant to Rule 60(b)(5)
should be granted.