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No. 90-1339
ROBERTO NAVARRO-AYALA, ET AL.,
Plaintiffs, Appellees,
v.
RAFAEL HERNANDEZ-COLON, ET AL.,
Defendants, Appellants.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Hector M. Laffitte, U.S. District Judge]
____________________
Before
Campbell, Torruella and Cyr,
Circuit Judges.
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Jorge E. Perez-Diaz, Solicitor General, Department of Justice, with
whom Norma Cotti-Cruz, Deputy Solicitor General, was on brief for
appellants.
Armando Cardona-Acaba, Puerto Rico Legal Services, for appellees.
____________________
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CAMPBELL, Circuit Judge. The two issues raised by
this appeal are: (1) whether the action below is a class
action, even though the district court never certified a class
as required by Fed. R. Civ. P. 23(c)(1), and gave no notice to
class members; and (2) whether the stipulation executed by the
parties and approved and entered in the court record by the
district court in 1977 conferred authority on the district
court to regulate the care given certain patients at a separate
psychiatric facility located some distance from the institution
named in the original action. We hold that this suit is a
class action and that the provisions of the stipulation do not
apply at the other institution.
SUMMARY OF FACTS AND ISSUES
In 1974 Roberto Navarro Ayala ("Navarro"), a mentally
retarded patient at the Psychiatric Hospital of the
Commonwealth of Puerto Rico, a public mental health institution
located in R¡o Piedras, San Juan ("Hospital" or "R¡o Piedras"),
filed a complaint under 42 U.S.C. 1983 in the District Court
for the District of Puerto Rico, on behalf of himself and all
others at the Hospital, asserting that the inhumane conditions
there violated plaintiffs' constitutional rights. Included as
defendants were the Governor and other Commonwealth officials
having control over the Hospital.
In 1977, before trial, the parties executed, and the
district court approved, a stipulation effectively ending the
suit. The stipulation provided for numerous specified
improvements in respect to what was termed the "institution and
its residents." The word "institution" was defined in the
stipulation as being "The Commonwealth of Puerto Rico
Psychiatric Hospital as presently constituted or in
Decentralized form."
In the ensuing fourteen years, defendants have taken
many steps under the supervision of the district court to
comply with the terms of the stipulation. Recently, however,
disputes have arisen as to the court's right to force the
defendants to apply the stipulated measures at a different
facility known as the Guerrero Therapeutic Community
("Guerrero") to which certain of the Hospital's former patients
were sent as part of the process of relieving overcrowding at
the Hospital. Defendants contend (1) that the district court's
jurisdiction is limited to ordering relief to Navarro
personally, the only named plaintiff, because a class of
patients was never certified, and notice was never given to the
class; and (2) that the stipulation currently governs only the
care and treatment of patients at the Psychiatric Hospital in
R¡o Piedras, within the municipality of San Juan, and does not
regulate the care and treatment of patients at Guerrero.
In a March 6, 1990 "Opinion and Order," the district
court held that this suit was a class action. The court also
reaffirmed its position that it had "jurisdiction" not only
over R¡o Piedras but also over Guerrero in respect to the
treatment and living conditions of former R¡o Piedras patients
there. Defendants appealed from these rulings.
BACKGROUND
A. The Institution
During the early part of the 1970s, as now, the
Psychiatric Hospital in R¡o Piedras, San Juan, was one of the
hospitals offering mental health services as part of the
Commonwealth of Puerto Rico's Department of Health Mental
Health Program. In the words of the 1977 stipulation, the
Hospital offered hospitalization 24 hours a day, emergency
psychiatric services and admissions, and outpatient psychiatric
services. According to the stipulation, referrals came "from
the Northeastern Region of Mental Health Centers of Arecibo,
Manat¡, Bayam¢n, Caguas, Carolina, Fajardo, Humacao, San
Patricio and Cayey." (We take judicial notice that the
Guerrero Therapeutic Community in dispute is located outside
and to the west of the above-named communities; its locus, the
city of Aguadilla, is in the northwest corner of Puerto Rico,
roughly 70 miles from San Juan.)
In the early 1970s the Hospital was badly overcrowded
and urgently in need of improvement. According to allegations
of plaintiffs' complaint, it lacked essential physical
facilities, such as lockers where patients could safely keep
their personal belongings, clocks in all wards, visible
calendars, lamps, night tables, lounging areas with comfortable
chairs, pictures, magazines, books and other items of normal
daily living. Beds in the wards did not have pillows, the
laundry service was faulty, and the bathrooms and hallways were
not deodorized. Patients would be placed naked in isolation
rooms which lacked toilet facilities. Not only were the
facilities faulty, but so, too, was the treatment. Therapeutic
treatment was insufficient, as the Hospital was understaffed.
Many patients allegedly did not have comprehensive habilitation
plans addressed to their individual needs; and, in some wards,
patients were grouped according to their geographical origin,
regardless of their mental condition and needs.
B. The Plaintiff
Roberto Navarro Ayala ("Navarro") was referred to a
social worker at the Psychiatric Hospital in R¡o Piedras in
1970, when he was 19 years old because of "abnormal behavior."
After attempts to treat Navarro's mental illness using only
out-patient services had failed, his mother had him committed
to the Hospital in April of 1974.
C. Evolution of this Appeal
On November 25, 1974, Navarro, represented by his
mother, Maria Ayala, filed a complaint in the District Court
for the District of Puerto Rico "on behalf of all allegedly
mentally incapacitated persons now residents at the Psychiatric
Hospital . . . or that are receiving mental treatment in said
Hospital." The complaint contained detailed allegations
criticizing conditions at the Hospital and the treatment
received by patients therein; included were the allegations
outlined above. The complaint alleged that these conditions at
the Psychiatric Hospital violated provisions of the Bill of
Rights of the United States Constitution, depriving Navarro of
his right to privacy, his right not to be subjected to cruel
and unusual punishment, his right not to be subjected to
involuntary servitude, his right to equal protection under the
law, and his right to treatment. The complaint alleged that
the Psychiatric Hospital "is not a therapeutic institution. It
resembles a prison . . . ." It further alleged that the
Psychiatric Hospital's environment "is inhumane and
psychologically destructive" due to overcrowding and lack of
minimal physical and health facilities. Other inadequacies of
the Psychiatric Hospital were delineated. While describing at
length the wretched conditions at the Psychiatric Hospital, the
complaint did not allege similar inadequacies at any other of
the Commonwealth's mental health facilities. The prayers in
the complaint sought declaratory and injunctive relief solely
at the Hospital: they requested a declaration that the
Psychiatric Hospital did not meet constitutionally minimum
standards; a judicial determination of what proper standards
the Constitution required for residents of the Psychiatric
Hospital; and an injunction against the unconstitutional
conditions there. The court was asked to enjoin further
admissions to the Hospital until it had determined that the
Hospital met such standards as the court specified.
The complaint named as defendants: Rafael Hern ndez
Col¢n, as Governor of the Commonwealth of Puerto Rico; Jos‚
Alvarez de Choudens, then Secretary of Health of the
Commonwealth; Jos‚ A. Nu¤ez-L¢pez, then Assistant Secretary of
Health; Erick Santos, then Director of the Commonwealth's
Psychiatric Hospital; Concepci¢n P‚rez, then Administrator of
the Hospital Center of Puerto Rico, and their "agents,
employees and/or successors in office."
1975 - June 1977: The Stipulation
The defendants answered the complaint on March 21,
1975, denying most of its allegations, including that the suit
was properly a class action. The defendants also denied that
the district court had jurisdiction. However, before the case
could be set for pretrial in May 1977, all parties engaged in
negotiations resulting in agreement on the terms of a
comprehensive stipulation in settlement of the lawsuit. On
April 20, 1977, they submitted the stipulated agreement for the
court's approval. The remedying of the existing conditions at
the Psychiatric Hospital was the central theme of the
stipulation; it included 86 standards that the parties
stipulated would be observed at the Hospital. Short term plans
included removal of the mentally retarded and other long term
patients who did not require this type of hospital care to the
Cayey and Bayam¢n Psychosocial and Rehabilitation Centers, and
included the placement of additional patients in the foster
home care program. The agreement contained no express
provisions that the 86 standards, or any of them, would be
effectuated at the Cayey and Bayam¢n facilities, nor did it
mention at all the Guerrero Therapeutic Community in Aguadilla.
The court approved the stipulation and on June 3, 1977 entered
judgment "in accordance with all the agreements made by the
parties."
Appointment of the Special Master
Between July 1977 and 1984, there was little activity
in the case. On January 31, 1985, the district court held a
status conference, and, on February 1, 1985, entered an order
granting plaintiff's request that a master be appointed. On
February 8, 1985, the court appointed Dr. David Helfeld, former
Dean of the University of Puerto Rico Law School, as Special
Master ("Master"). The court charged the Master to see to the
carrying out of the stipulation within the shortest feasible
time period. The Master periodically informed the district
court of his monitoring activities, and made recommendations on
ways to achieve compliance. The Master asserted in several of
his recommendations that bringing R¡o Piedras into compliance
with the consent decree would require improvements to other
facilities as well as to R¡o Piedras. As of November 1990, a
total of thirteen reports had been filed with the district
court.
On April 10, 1985, a hearing was held before the
Master on plaintiff Navarro's condition. The director of the
Hospital thereafter took measures to provide Navarro with the
care required by the consent decree. An individual treatment
plan was prepared for him.
1986 - 1990
By April 11, 1986, the Hospital was still
overcrowded. The Hospital's total census was 421, not counting
64 patients out on passes. Only 312 beds were available and,
according to the Hospital's medical director, 296 was the ideal
number of patients until adequate staffing could be provided.
A number of alternatives to solve this problem were discussed
by the defendants and the Master. During this period the
Commonwealth made available additional funds totaling $8
million for all mental health programs.
After tendering his preliminary fourth report, the
Master asked the defendants for a compliance proposal that
would bring the case to a close. After several drafts of a
compliance plan had been proposed and rejected, on June 29,
1987, the Secretary of Health submitted a third plan ("Plan
3"). Plan 3 proposed converting the Hospital into a 250-bed
hospital treating only acute and subacute patients, and
transferring less severe patients to outside private facilities
paid for by the Department. Pressure on the emergency ward was
to be relieved through the use of three ambulatory facilities.
Facilities in San Patricio and Caguas, both located in the San
Juan metropolitan area, would receive emergencies patients from
the western and southern parts of the metropolitan area,
respectively. The Guerrero Therapeutic Community, located on
the western side of Puerto Rico in Aguadilla, 70 miles from San
Juan, would take in emergency patients from the Arecibo area.
Other Commonwealth mental health facilities were also to take
responsibility for patients previously directed to the
Hospital. Overcrowding would thus be eliminated, with care in
other Commonwealth or private facilities provided both for many
emergency and intensive care patients as well as for those
patients needing residential facilities or family-care
alternatives.
After reviewing this proposal, the Master submitted
the final version of his fourth report. The report recommended
to the court that Plan 3 "be incorporated into the Court's
Order." This report also suggested that the court take a
number of actions with respect to "pre- and post-Hospital
programs whose support is essential to the Hospital's
compliance with the Court's consent order." These actions
included requiring the Secretary to report on the budget of
such institutions and charging "[t]he mental health system
. . . with responsibility for all patients who are neither
acute or subacute." With respect to the Guerrero facility, the
Master stated that "[s]ince its initial planning stage the
Hospital has had a direct relationship with [Guerrero]," and
therefore recommended that the court direct the defendants to
set aside 144 beds in Module 7 of Guerrero for patients
transferred from the Hospital.
On August 5, 1987, the defendants filed exceptions
and commentaries to the Master's fourth report. While noting
that "[t]he class in the present action is composed of the
patients of the Psychiatric Hospital and the institutions
wherever they may be referred to in a descentralization [sic]
program," the defendants asked that the court "maintain the
scope of the class in the above captioned case and the
stipulations agreed on by admitting from Plan 3 those portions
that apply to the Psychiatric Hospital." The defendants now
claim that, through this filing, they objected to the
application of the stipulation beyond R¡o Piedras.
On August 10, 1987, in response to the Master's
fourth report and the defendants' exceptions thereto, the court
issued an order. As suggested by the Master, the order
"incorporated" Plan 3, instructed the Secretary to report on
the budgets for "the Hospital and the pre- and post-Hospital
programs whose support is essential to the Hospital's
compliance," and stated that the Commonwealth's mental health
system would be "charged" with care and treatment of patients
who were "neither acute or subacute." With respect to the
issue of "jurisdiction," the court treated the defendants'
exceptions and commentaries as an objection to its
"jurisdiction" over the "network of pre- and post-hospital
services." In response to this objection, the court stated
that it had no intention of concerning itself with matters not
directly related to the Hospital's compliance with the
stipulation. The court added, however, that "this translates
principally into a concern that pre- and post-Hospital
facilities be adequately funded. There is also the related
concern that patients transferred from the Hospital to
transitional and psychiatric rehabilitation services receive
care and treatment consistent with the 86 stipulations." The
defendants did not appeal from this order.
The transfer of 144 patients to Module 7 of Guerrero
took place as ordered. This transfer appears to have been part
of a large scale exodus of patients from R¡o Piedras.
According to the Master's tenth report, during the eight months
following the court's August 10, 1987 order, 904 patients left
the Hospital. Of these, 343 were "transferred to the
transitional services suited to their individual needs," and
the balance apparently left the Puerto Rico mental health
system.
At the same time these transfers were occurring, the
Master, with the consent of the defendants, conducted several
visits to various facilities, including Guerrero, (the
"tripartite visits") to assess the defendants' progress. The
Master indicated that by April 27, 1988 overcrowding at the R¡o
Piedras Emergency Ward had been eliminated and the PIC
(Emergency) unit inaugurated. On May 23, 1988, the Master
submitted his sixth report to the court. The Master stated
that the acute system of care was functioning in substantial
compliance with the stipulation, and that the process of
deinstitutionalization had continued at a good pace and was in
its final phase. Notwithstanding these improvements,
plaintiffs argued in 1988 that the tripartite visits had
revealed that the transitional services offered at several
facilities other than R¡o Piedras, including Guerrero, were in
need of a strengthened program of occupational therapy. The
Master, however, questioned his own authority to address that
contention, stating:
[t]hat the program of Transitional
Services can be strengthened also is
undoubtedly true, but in my opinion
questions of that sort are not covered by
the Consent Decree's . . . stipulations
and, therefore, it would be inappropriate
for this report to make findings exceeding
the limited standard of comparing the
Hospital and post hospital conditions of
the 343 transferred patients.
On June 28, 1988, the defendants submitted a motion
claiming that the case should be closed because the government
had substantially complied with the 1977 stipulation. The
court denied this motion on December 8, 1988, ruling that the
Hospital was not in "full compliance."
On May 12, 1989, the Master submitted his eighth
preliminary report covering the period of October 1988 to April
18, 1989. The report noted the problems faced by the Hospital
in its effort to achieve full compliance. The Department of
Health had not made available a sufficient number of
transitional or post-hospitalization residential facilities.
According to the report, the failure to provide sufficient
units of transitional services was one of the principal causes
for the Hospital's failure to achieve full compliance.
A number of meetings were then held between the
parties and the Master to determine the substantive criteria
and procedure to be followed in assessing whether full
compliance had been achieved. Since no consensus was reached,
each party submitted its own proposal to the Master. The
Master, in his eighth preliminary report recommended to the
court that an "interdisciplinary team," consisting of a
psychiatrist, a social worker, a nurse, and an occupational
therapist, be assembled to evaluate the substantive and
procedural criteria for determining compliance. On April 15,
1989, the court issued an order appointing the members of the
interdisciplinary team and providing for their compensation.
On June 12, 1989, plaintiffs submitted to the Master
a "Motion Seeking Remedies," alleging that former Hospital
patients transferred to Guerrero were not receiving adequate
treatment. The motion alleged that there was overcrowding at
Guerrero, that the facilities were unsanitary and more akin to
a concentration camp than a therapeutic community. The
Master's interdisciplinary team was instructed to visit
Guerrero on June 19, 1989 and thereafter report to the court on
its findings and recommendations regarding treatment at
Guerrero. The interdisciplinary team subsequently reported
that former R¡o Piedras patients at Guerrero lacked complete
individualized treatment plans and were not receiving the
benefits of an adequate psychiatric rehabilitation program.
Several meetings were held between the Master and Commonwealth
officials to discuss this report. The Commonwealth officials
alleged that they faced problems in the recruitment and
retaining of personnel due to the scarcity of professionals in
the vicinity of Guerrero and the low government salaries.
The defendants then, in a September 6, 1989 letter,
objected to the Court's "jurisdiction" over Guerrero. This
objection was formally raised before the court in an October
20, 1989 motion. On December 28, 1989, the district court
issued an opinion and order, addressing two questions. First
was "whether the court has jurisdiction over patients of the
R¡o Piedras Psychiatric Hospital who have been transferred to
the Therapeutic Community at Guerrero." Second was whether
those patients had "received, or [were then receiving] adequate
psychiatric rehabilitation services."
With respect to the first question, the court
concluded that:
The Court's August 10, 1987 Order
clarified that it had jurisdiction over
R¡o Piedras Psychiatric Hospital patients
transferred to Guerrero. In response to
defendant's November 20, 1989 motion, the
Court now reaffirms its jurisdiction over
the latter patients.
This "jurisdiction" empowered the court to "secure compliance
with the 86 stipulations in the Consent Decree, with the terms
of the August 10, 1987 order, and all other pertinent orders
issued by the Court." Although the court stated that this
conclusion was consistent with the language of the stipulation,
it did not engage in any detailed analysis of that language.
Instead, it based its conclusion largely on Guerrero's role in
relieving overcrowding at R¡o Piedras, the parties' actions
subsequent to the drafting of the stipulation and its previous
order of August 10, 1987. Thus the court stated that its
conclusion was grounded on the Master's view that the Hospital
"could only comply with the stipulations if it were conceived
as an integral part of a system of mental health care which,
besides the Hospital, necessarily included a network of pre-
and post-hospital services." The court further stated that
Plan 3, and the letter commitments of the Secretary concerning
Guerrero, were proposed by the Secretary, at his initiative,
accepted by the plaintiffs, adopted by the court and
incorporated in the August 10, 1987 order. The court therefore
held that, because of its August 10 order "incorporating" Plan
3, Plan 3 was
as much a binding legal obligation as the
stipulated agreement once it was
incorporated in the Consent Decree. The
Court's August 10, 1987 Order does not
modify the stipulated agreements, as
defendants claim, but rather represents an
instrument proposed by the Secretary and
accepted by the court. It also serves to
clarify the scope of the court's
jurisdiction, which in the case of
Guerrero is explicitly included.
In addition, the court found that the defendants had manifested
their consent to its "jurisdiction" by failing to object to
several early reports of the Master concerning the reach of the
stipulations, the tripartite visits, or the visits of the
interdisciplinary team.
Having found that it had "jurisdiction " over former
R¡o Piedras patients transferred to Guerrero, the court went on
to address the plaintiffs' contention that those patients were
not receiving adequate rehabilitation services. The court
determined that those patients "were not receiving adequate
psychiatric rehabilitation services on June 19, 1987 and for an
indeterminate period of time prior to that date." However, the
court was unable to determine whether those services had been
adequate since September 6, 1989. Therefore, the court ordered
the Master to develop "criteria for evaluating Guerrero's
rehabilitation services . . . based on the stipulations, the
court's August 10, 1987 Order, and, as well, the concept of a
therapeutic community as enunciated by the Mental Health
Secretariat." The court postponed its decision to fine the
defendants, as requested by the Master, to a later date.
On January 16, 1990, the defendants moved the court
under Fed. R. Civ. P. 59(e) to alter or amend the December 28,
1989 opinion and order. The defendants argued in their motion
that the district court's "jurisdiction" could not extend
beyond the scope of the stipulated agreement, that the
stipulation was limited to conditions of confinement and
treatment at the R¡o Piedras Psychiatric Hospital and, thus,
that the court lacked "jurisdiction" over the network of pre-
and post-hospitalization services. The defendants also argued,
for the first time since their answer to the complaint in 1975,
that a class of plaintiffs had never been certified as required
by Fed. R. Civ. P. 23(c)(1). Plaintiffs opposed the
defendants' motion under Rule 59(e) and moved for sanctions
under Fed. R. Civ. P. 11, stating that the defendants' motion
under Rule 59(e) was frivolous.
On March 6, 1990, the district court issued another
opinion and order reaffirming its "jurisdiction" over the
network of pre- and post-hospitalization services and over
former Hospital patients transferred to Guerrero for largely
the same reasons as those set forth in its December 28 opinion
and order. The court stated that "the stipulated agreement was
never understood as limited to conditions and services
exclusively within the Hospital," and that, even if the
stipulation's application to Guerrero "is characterized as a
modification, it was the [defendants'] doing in the first
instance." The district court also rejected the defendants'
assertion that it did not have "jurisdiction" over these
facilities based on principles of federalism. It found the
defendants' arguments "largely irrelevant."
In the March 6, 1990 opinion and order, the court
also ruled that this action had been maintained as a class
action since class certification was satisfied when the court
approved the stipulated agreement in April of 1977. As to
notice to the class members, the district court found that the
provision under Rule 23 requiring notice existed essentially to
permit individuals to request exclusion from the class, or to
enter an appearance through their own counsel. Even if all the
patients had been notified directly or through their respective
guardians, the district court found it inconceivable that any
of them would have asked to be excluded from the benefits
mandated by the agreement. The record reflects, the court
said, that in thirteen years no patient nor his respective
guardian had come forth to complain that his rights under the
stipulated agreement had in any way not been represented
adequately by counsel for plaintiffs in the class action, nor
had any member of the class sought to be represented by his or
her own counsel. Finally, the court agreed with plaintiffs'
view that the defendants' arguments were frivolous and,
pursuant to Fed. R. Civ. P. 11 and 28 U.S.C. 1927, assessed
sanctions totaling $1,500 in attorney's fees against counsel
for the defendants.
It is from the March 6, 1990 order that the
defendants appeal.
I. CLASS ACTION
Defendants contend that the suit Navarro instituted
below never became a class action because a class was never
certified as required by Fed. R. Civ. P. 23(c)(1).
Defendants point out that the purported members of the class
and their guardians were never notified of the proceedings in
the case, either by counsel for plaintiff or by the court-
appointed Master. Finally, defendants argue that "even though
the parties entered into a stipulated agreement which the court
approved, neither the stipulated agreement nor the court's
judgment approving it describe the members of the class."
Under defendants' view, only Navarro, the individual plaintiff,
was a party to the stipulated agreement, limiting defendants'
duties to providing to Navarro alone whatever services he was
entitled to receive.
The district court rejected this narrow
characterization of the action. In its March 6, 1990 opinion
and order, it held that the class action nature of this suit
was implicitly certified by the court when, in 1977, it entered
a judgment in accordance with the terms of the consent decree.
While conceding that the court did not at the time or
thereafter notify the members of the class, the district judge
stated that it "would not only be inequitable, it would be
absurd" to declare, thirteen years after the stipulated
agreement, that a class action had not been established.
The question of class certification here is not
simple. See generally Pasadena City Board of Education v.
Spangler, 427 U.S. 424, 430 (1976) (absent certification, where
named plaintiffs lost their interest in the lawsuit, case would
have become moot, infra). In important public interest
litigation like this, we do not know how the parties and the
original judge could have overlooked a key step like class
certification. Nonetheless, we are persuaded that because this
case was instituted by a complaint seeking class relief,
implicitly granted class relief, and was conducted for years as
a de facto class action, it should and may be recognized as
such. We shall address defendants' contrary arguments.
A. Class Certification under Fed. R. Civ. P. 23(c)(1)
It was an egregious omission for the district court
not to have determined explicitly, as soon as practicable after
this action commenced, whether it could be maintained as a
class action and, if so, the proper description of the class.
See Fed. R. Civ. P. 23(c)(1). Certifying the class "as soon
as practicable" under Rule 23(c)(1) is not a minor formality,
but is necessary to give the action a clear definition. See
Fed. R. Civ. P. 23(c)(1), advisory committee's notes to 1966
amendments. By focusing on the class issue early on, the
district court identifies the plaintiffs, demarcates the
boundaries of the legal dispute and makes provision to protect
absent class members. In so doing, of course, the district
court may take advantage, to the extent appropriate, of the
parties' own agreements and stipulations describing the nature
of the suit and the existence of a class. See Willie M. v.
Hunt, 657 F.2d 55 (4th Cir. 1981).
While express class certification is a fundamental
requirement, uncertified actions have on occasion been
recognized as class actions. When the parties stipulate that
the action is a class action and clearly define the members of
the class, and the court enters judgment pursuant to the
stipulated terms, this may sufficiently imply certification for
purposes of Fed. R. Civ. P. 23(c)(1). See Oburn v. Shapp, 393
F. Supp. 561 (E.D. Pa.) (holding that where the action was
filed as a class action and a consent decree was entered into,
entry of the consent decree was sufficient certification of the
action as a class action under Rule 23), aff'd on other
grounds, 521 F.2d 142 (3d Cir. 1975); Bing v. Roadway Express,
Inc., 485 F.2d 441, 447 (5th Cir. 1973) (where the plaintiff
brought an action as a class action and the district court
granted class relief, but neglected to certify the class, the
district court nevertheless "implicitly determined that th[e]
suit would be maintained as a class action").
While the Supreme Court has yet to rule directly on
the issue of implied certification, the Court has suggested, in
dicta, that parties may not be able to rely on implicit class
certification. Pasadena City Board of Education v. Spangler,
427 U.S. 424 (1976). In Spangler, several students of a public
school system sued the school board and several of its
officials, alleging unconstitutional segregation. After trial,
the district court entered a judgment holding that the
defendants' educational policies violated the Fourteenth
Amendment, and, pursuant to the court's order, the defendants
submitted a plan for systemwide relief. Four years later, the
defendants moved to modify the district court's order. This
motion was denied on the merits by the district court, 375 F.
Supp. 1304 (1975), whose decision was affirmed by the Ninth
Circuit, 519 F.2d 430 (1975). Before considering the merits,
however, the Supreme Court noted that, because the original
plaintiffs had graduated and no class had ever been certified
under Rule 23, the case would be moot had the United States not
intervened. The Court thus rejected the plaintiffs' argument
ÄÄ raised, insofar as appears from the published opinions, for
the first time in the Supreme Court ÄÄ that "th[e] litigation
was filed as a class action, that all the parties have until
now treated it as a class action, and that the failure to
obtain the class certification required under Rule 23 is merely
the absence of a meaningless 'verbal recital.'" 427 U.S. at
430. The Court stated that "while counsel may wish to
represent a class of unnamed individuals still attending the
Pasadena public schools . . . there has been no certification
of any such class which is or was represented by a named party
to this litigation. Except for the intervention of the United
States, we think this case would clearly be moot." Id.
(citations omitted).
Any expression by the Supreme Court, whether or not
in dicta, must be taken seriously. Events here, however, come
much closer than in Spangler to actual class certification.
Unlike in Spangler, the parties have executed, and the court
has approved, a written stipulation providing not only for
class-wide relief but describing those who constitute the
class. The named plaintiff, Navarro, sued expressly on behalf
of himself and "all allegedly mentally incapacitated persons
now residents at the Psychiatric Hospital . . . or that are
receiving treatment in said Hospital." The defendants, in
their answer, denied, inter alia, that the suit was properly a
class action. On April 8, 1975, the plaintiffs filed a
memorandum of law containing detailed arguments in support of
treating the case as a class action, but before the district
court could rule on this motion, the parties submitted to the
court on April 20, 1977 a stipulated agreement in resolution of
the case. After reviewing the provisions of the stipulation,
the court entered judgment on June 2, 1977 "in accordance with
all the agreements made by the parties in said stipulation."
One of the agreements so made by the parties was the stipulated
definition of "residents" of the Hospital (for whose benefit
the operative clauses of the consent decree were drafted) as
"[a]ll persons who are now patients and all persons who may in
the future receive treatment or habilitation at such
institution."
Once the plaintiffs and defendants stipulated to
these matters, and the court entered judgment in accordance
with their written stipulation, the class nature of the suit
was, in practical effect, "established." The remedies in the
stipulation clearly went far beyond the individual needs of the
named plaintiff. It was fashioned as an instrument for
Hospital-wide change, affecting all patients at R¡o Piedras,
not just one patient. Consistent with the stipulation, the
sweeping hospital improvements later undertaken by the court,
Master and parties were directed at benefiting the entire
patient class, not simply at helping the named plaintiff. Had
defendants or the court not believed this was a class action,
they would hardly have taken the measures they did for thirteen
years nor would defendants have failed to raise the issue until
now.
The stipulation, moreover, specifically describes the
class members who are to benefit from the stipulated relief.
Supra. No stipulated agreement or definition appeared in
Spangler. Thus, the stipulation served the purpose of Rule 23
ÄÄ "to give clear definition to the action," Fed. R. Civ. P.
23(c)(1) advisory committee's notes to 1966 amendment ÄÄ even
though it did not use the words "class" as such.
A second difference between this case and Spangler is
that, in the proceeding from which this appeal was taken, the
question of whether this was a class action was presented to
the district court, which found that it was. The defendants
had argued the contrary position to the court. The court
concluded that, while the original judge had never expressly
certified a class, a class had been intended and was defined in
the stipulation, and that the court, the parties and the Master
had continuously viewed and treated the case as a class action.
Thus the court of appeals is not being asked to imply
certification for the first time on appeal from whatever it can
discern of the actions of the parties below, as in Spangler.
Rather the matter of class certification comes to us, after
adversarial presentation below, with the benefit of a district
court finding. The situation is close to that where a district
court certifies a class retroactively after judgment, having
inadvertently failed to act earlier on a certification motion.
See Gurule v. Wilson, 635 F.2d 782, 790 (10th Cir. 1980);
Marshall v. Kirkland, 602 F.2d 1282, 1301 (8th Cir. 1979).
Thus, notwithstanding the concerns Spangler raises, we think it
proper to uphold the district court's recent ruling sustaining
the class nature of this suit. We hold that the action may
proceed as a class action.
B. Notice to the Members of the Class
Defendants also complain that neither the patients
nor their guardians were given any notice regarding the
proceedings in this case, either by counsel for the plaintiff
or by the court-appointed Master. Defendants appear to focus
on Rule 23(e), but since Rule 23(d)(2) as well as Rule 23(e)
refers to notice, we review the arguments under both.
Rule 23(d)(2) indicates that notice is not
mandatory, but may be required by the court.
"Subdivision (d)(2) does not require
notice at any stage, but rather calls
attention to its availability and invokes
the court's discretion. In the degree
that there is cohesiveness or unity in the
class and the representation is effective,
the need for notice to the class will tend
toward a minimum . . . ."
Fed. R. Civ. P. 23(d), advisory committee's notes to 1966
amendment. Hence, the notice contemplated under Rule 23(d)(2)
is discretionary. Penson v. Terminal Transport Co., 634 F.2d
989, 993 (5th Cir. 1981); United States v. Allegheny-Ludlum
Industries, Inc., 517 F.2d 826, 878 n.86 (5th Cir. 1975), cert.
denied, 425 U.S. 944 (1976). Commentators have stated that
adequate representation alone will comply with the due process
demands of the rule, obviating constitutional need for
notification of class certification. H. Newberg, Newberg on
Class Actions, 8.16 (2d ed. 1985). Thus, Rule 23(d)(2) did
not require the district court to give notice of class
certification to the patients or their guardians.
The language of Rule 23(e), on the other hand,
directs that notice be given to "all members of the class"
before dismissal or compromise of a class action. Here,
although the stipulation effectively compromised the case, the
district court entered judgment under the stipulation without
first giving notice to class members. But while Rule 23(e)
directs the giving of notice, it leaves the form of the notice
to the court's discretion; for this reason, courts have
sometimes overlooked the absence of notice where there was
clearly no prejudice to class members. See, e.g., Larkin
General Hospital, Ltd. v. American Tel. & Tel. Co., 93 F.R.D.
497, 502 (E.D. Pa. 1982) (dismissal of class action without
notice said to be without prejudice to class). More important,
where a cohesive class is certified under Rule 23(b)(2), notice
may suffice if given to a suitable class representative. See
Walsh v. Great Atlantic & Pacific Tea Co., Inc., 726 F.2d 956,
962 (3d Cir. 1983). We think that Puerto Rico Legal Services,
which was counsel for Navarro and the class, may be considered
a suitable representative for notice purposes here, at least
where, as found, there have never been complaints from putative
class members. Counsel monitored and actively participated in
the settlement, which has resulted in significant benefits to
the patient class. Counsel obviously saw itself as
representing the entire patient class at the Hospital, and not
just the named plaintiff.
The lack of notice argument is particularly
inappropriate coming, as it does, not from injured class
members but from officials seeking to use the lack of notice as
a basis for resisting the granting of relief to the plaintiff
class. To uphold defendants for failure of notice to class
members would be to wield the notice requirement as a sword
against those it was meant to help.
We hold, in sum, that this suit is properly a class
action brought in behalf of all persons were now patients when
suit was brought and all persons who may in the future receive
treatment or habilitation at the Psychiatric Hospital in R¡o
Piedras.
II. APPLICATION OF THE STIPULATION TO GUERRERO
The second issue is whether the district court
correctly determined that the terms of the stipulation can be
enforced in respect to former Hospital patients now residing at
the Guerrero Therapeutic Community, a separate institution
located in the city of Aguadilla, approximately 70 miles from
the Hospital. The court ruled that the stipulation entered in
1977 applied to Guerrero in respect to the approximately 144
patients transferred there from R¡o Piedras. The court
therefore concluded that it had "jurisdiction" over Guerrero,
and that the Master should consider how the stipulation
(although written chiefly in terms of the needs of R¡o Piedras)
should be applied to the rehabilitation services offered at
Guerrero.
We hold that neither the terms of the stipulation nor
the subsequent actions of the parties make the stipulation
applicable at Guerrero.
A. Standard of Review
The present case was not resolved by judicial rulings
and findings but by a court-approved stipulation. Whether
the remedial provisions of the stipulation, and the district
court's oversight, extend to Guerrero are, therefore, matters
of interpreting that stipulation. This, in turn, raises the
question whether, on appeal, this court owes special deference
to the district court's interpretation, over and above the
deference we would normally give to a lower court's
construction of a contract. We think not, as the institutional
coverage of the stipulation goes to the very heart of the
parties' original bargain.
We recognize that this court has said that district
courts enforcing public law consent decrees have, in general,
broad discretion in determining such matters as whether the
objectives of the decree have been substantially achieved.
United States v. Commonwealth of Massachusetts, 890 F.2d 507,
509 (1st Cir. 1989). Unlike consent decrees entered into in
commercial litigation, which are to be construed throughout
like a contract, id., the interpretation of broad, programmatic
decrees entered into in public law litigation will often
warrant a more flexible approach. AMF, Inc. v. Jewett, 711
F.2d 1096, 1101 (1st Cir. 1983). Thus, "in examining a decree
issued in public law litigation . . . the appellate court
should recognize that broad 'judicial discretion may well be
crucial' for the district judge to secure complex legal goals."
Massachusetts Association of Older Americans v. Commissioner of
Public Welfare, 803 F.2d 35, 38 (1st Cir. 1986) (citations
omitted).
In Langton v. Johnson, 928 F.2d 1206 (1st Cir. 1991),
we elaborated the rationale behind these two different
standards for interpreting consent decrees:
This double standard derives from the
realities of human experience. Different
types of consent decrees are ordinarily
conceived and hatched in markedly
different ways. In a commercial setting,
a consent decree is treated like a
contract because the court assumes that
private parties understand the economic
realities and business consequences of
their agreements . . . .
In public law litigation, courts
typically play a proactive role ÄÄ a role
which can have nearly endless permutations
. . . . Frequently, the trial court's
adjudicative function blends with its
service as an instrument for change. The
relief requested often involves the
restructuring of a state or city program,
requiring the court to fashion equitable
remedies ÄÄ sometimes unique and often
complicated ÄÄ in order to secure 'complex
legal goals.' . . . We agree with
Professor Chayes that, in the public law
context, the consent decree 'provides for
a complex, ongoing regime of performance
rather than a simple, one-shot, one-way
transfer . . . . It prolongs and deepens,
rather than terminates, the court's
involvement with the dispute.' Chayes,
The Role of the Judge in Public Law
Litigation, 89 Harv. L. Rev. 1281, 1298
(1976) . . . .
928 F.2d at 1221.
The above might at first glance appear to require
deference to the judgment of the district court in this case as
to the scope of coverage of the present stipulation. However,
we see a critical distinction here based on the nature of the
question. The rule of broad discretion in public interest
cases is designed to give the district court flexibility in
deciding exactly how the numerous conditions of a complex
consent decree are to be implemented in practice. In
overseeing broad institutional reform litigation, the district
court becomes in many ways more like a manager or policy
planner than a judge. Over time, the district court gains an
intimate understanding of the workings of an institution and
learns what specific changes are needed within that institution
in order to achieve the goals of the consent decree. In
Commonwealth of Massachusetts, for example, the district court
needed considerable leeway to decide whether the Commonwealth's
remedial plan for providing periodic evaluations of the
patients was sufficiently specific. 890 F.2d at 509. In Older
Americans the district court, in ruling on a contempt motion,
needed discretion to decide whether a state's new policy for
deciding whether to terminate AFDC benefits would suffer from
the same deficiencies as the former termination policy which
had given rise to the litigation. 803 F.2d at 39. And the
Langton district court, also ruling on a contempt motion,
required discretion to decide whether a treatment center had
sufficiently implemented the educational, vocational,
recreational and therapeutic programs required by a consent
decree. 928 F.2d at 1211-17.
However, the issue now presented differs markedly
from the issues that were before the district courts in
Commonwealth of Massachusetts, Older Americans and Langton.
Here the issue is at what public institution or institutions
the Commonwealth of Puerto Rico, in agreement with plaintiffs,
consented to sponsor and finance sweeping remedial measures
under the aegis of the federal court. The rationale for
deferring to the decision of a district court, that its
involvement with the ongoing case makes it best able to decide
issues concerning institutional management and compliance,
should not control an issue, like this one, which involves
determining the scope of the parties' original bargain. If
this were not so, the making of a consent decree would, from
the government's point of view, be a game of Russian roulette,
since there could be no predicting the circumstances which
might lead the judge, a decade or so later, to enlarge the
areas of his own control. Ordinary contract principles,
involving determination of the parties' intent when they
entered into the stipulation, are the appropriate
interpretative guideposts here.
Especially is this so given that the reach of the
stipulation brings along with it the oversight jurisdiction of
the federal courts. Principles of federalism weigh against a
rule of district court deference which could result in
enlarging federal jurisdiction beyond the parties' original
understanding. One of the contracting parties here was, in
effect, the Commonwealth of Puerto Rico, which now strenuously
objects to the district court's interpretation. Especially
where there has been no trial finding of unconstitutionality at
any institution, the stipulation must limn the proper
boundaries of the federal writ and must be scrupulously
honored. The Supreme Court has emphasized that "although
the 'remedial powers of an equity court must be adequate to the
task, . . . they are not unlimited,' Whitcomb v. Chavis, 403
U.S. 124, 161 (1971). One of the most important considerations
governing the exercise of equitable power is a proper respect
for the integrity and function of local government
institutions." Missouri v. Jenkins, 110 S. Ct. 1651, 1663
(1990). In enforcing a consent decree, a district court must
remain "aware of . . . the need to strike a proper balance
between the integrity of the Consent Decree and the principles
of federalism." Duran v. Elrod, 713 F.2d 292, 297 (7th Cir.),
cert. denied, 465 U.S. 1108 (1983). Here, our concern for
principles of federalism is at its highest because we are
dealing not with the details of implementing a clearly
applicable consent decree, but with the question of whether the
consenting parties, including officials of the Commonwealth of
Puerto Rico, ever understood that the relief set out would
apply at another, unmentioned institution. The issue is not,
as in other cases, whether the defendants have conceded to the
court authority to implement a particular policy in an
institution already surrendered to the general authority of the
court. Rather, the issue concerns a much greater threat to the
Commonwealth's sovereignty, whether it has voluntarily
surrendered to the federal court its authority over the
institution at all.
We conclude that the question of the district court's
power over Guerrero is an issue to be decided under ordinary
contract rules. Appellate review of contract interpretation is
ordinarily plenary, Fashion House, Inc. v. K. Mart Corp., 1892
F.2d 1076, 1083 (1st Cir. 1981). We, therefore, proceed
carefully to scrutinize the stipulations and the actions of the
parties to determine whether the consent decree applies at
Guerrero.
B. What the Stipulation Originally Provided
The stipulation defines the term "institution" as
"[t]he Commonwealth of Puerto Rico Psychiatric Hospital as
presently constituted or in Decentralized form" and then goes
on to specify 86 conditions that must be met at the
"institution." The question is whether this definition of the
term "institution" includes Guerrero.
It is clear that neither in 1977 nor at any later
time was Guerrero the ". . . Hospital as presently
constituted." Can it be viewed as having become the
". . . Hospital . . . in Decentralized form?"
The plaintiffs suggest that when the definition of
"institution" was drafted in 1977, the parties had in mind the
"decentralizing" of R¡o Piedras Hospital by transferring some
of its emergency and other outpatient services to other
facilities, placing some of its existing patients elsewhere,
and diverting others who might become new patients. Plaintiffs
go on to urge that such actions would cause the Hospital in
"decentralized form" to become, besides R¡o Piedras itself, any
and all pre- and post-Hospital facilities within Puerto Rico
serving or receiving patients who would formerly have been
served by the Hospital or might have stayed there. Thus,
Guerrero, which particularly (but by no means exclusively) came
to serve a "post-Hospital" or "transitional" function, thereby
relieving demands on R¡o Piedras, is said to have become,
functionally, a "decentralized form" of R¡o Piedras Psychiatric
Hospital, and hence subject to all the relief imposed by the
stipulation upon that institution.
We have fundamental difficulty with this reasoning.
First, we do not think that a distant mental health facility,
distinct from the Hospital, and with no administrative
connection therewith, would normally be considered the
". . . Hospital . . . in Decentralized form." There is no
evidence of any special relationship between the Hospital and
Guerrero other than an arrangement, tendered initially by
defendants and now enforced by the court, that it would provide
144 places to accommodate Hospital overflow. If the mere
receipt of patients from the Hospital, or otherwise destined
for the Hospital, is sufficient to transform an institution
into "[t]he Commonwealth of Puerto Rico Psychiatric Hospital
. . . in Decentralized form," then every other public facility
receiving one or more such patients becomes theoretically
subject to the 86 reform standards set out in the stipulation,
or, at least, to a visit from the Master to determine how much
of the stipulation it is possible to apply there. Such a
construction would cause the tail to wag the dog. As we
discuss below, most of the stipulation was drafted rather
obviously for application at the Hospital. Any such
construction as we have mentioned would result in placing the
federal court in essentially standardless control of many of
the mental health institutions around Puerto Rico, simply
because of the presence there of one or more former R¡o Piedras
patients.
A further reason to doubt this unnatural reading of
the stipulation is that it far exceeds the relief sought by the
plaintiffs in their complaint. The chief evidence of what
plaintiffs were seeking when they agreed to the stipulation
lies in the complaint, in which plaintiffs outlined the relief
sought in their lawsuit. The complaint speaks of overcrowding,
understaffing, poor living conditions, and inadequate care and
treatment of patients at "the Commonwealth of Puerto Rico
Psychiatric Hospital" (i.e., what we also call the "Hospital"
or "R¡o Piedras"). In its prayers, the complaint seeks
declaratory and injunctive relief at (specifically and
repeatedly) the Psychiatric Hospital alone. Far from
mentioning the treatment of patients outside the Hospital, or
the treatment of removed Hospital patients at other places, it
seeks an injunction against further admission of patients to
the Psychiatric Hospital until conditions there are improved.
There is no reference whatever to decentralized facilities or
decentralization in the complaint. The complaint makes clear
that the sole object of the lawsuit is to improve conditions at
the Psychiatric Hospital. It seems reasonable, therefore, to
assume that this, too, was the object of the stipulation
entered into by way of settlement of that suit. If so, we
think the term ". . . Hospital . . . in Decentralized form"
deserves a less ambitious reading than is now urged. The
parties might simply have meant a reconstituted Hospital
composed of separate administratively linked components. Or
they may have thought that several quasi-independent facilities
would operate bearing the original name of the Psychiatric
Hospital. The fact is, no one knows. Lacking any further
explanation of what was meant, we do not believe that this
curious and totally unclear terminology can now bear the burden
of including facilities around Puerto Rico whose only link with
the Hospital is the receipt or diversion of some of its
patients.
The substantive provisions of the stipulation
likewise offer little support for the proposition that it was
meant to apply beyond the Hospital proper. To the contrary,
the stipulation bears overwhelming evidence that the standards
therein were drafted to apply at the Hospital ÄÄ
understandably, since conditions at the Hospital were the sole
target of plaintiffs' complaint.
First, several of the stipulation's provisions equate
the "institution" ÄÄ the entity to which the stipulation
applies ÄÄ with R¡o Piedras. In section "B- III", describing
habilitation plans, the stipulation states that
The Mental Health Centers which refer
patients to the San Juan Psychiatric
Hospital shall make a preliminary
evaluation of the mental condition of such
patient. Each patient who is referred to
the institution must be preliminarily
evaluated by the Emergency Room Physician
prior to admission to determine whether he
should be admitted.
In this passage the parties appear to have used "San Juan
Psychiatric Hospital" and "institution" interchangeably. If
the term "institution" were not synonymous with R¡o Piedras,
then these two sentences would refer to two different entities,
which, in context, would not make sense.
Likewise, Section "B- IV" contains a detailed
description of the R¡o Piedras facility, discussing the number
of wards there and the number of patients, showers and toilets
in each ward. It then goes on to state that "[u]ntil such time
as the physical facilities at the institution can be
habilitated to provide in each ward multi-resident rooms of no
more than 10 patients, and one toilet, lavatory, and shower for
every 10 patients, the following physical improvements shall be
provided . . . ." (emphasis added). By following the
description of deficiencies at R¡o Piedras with a specific
proposal for improving conditions at the "institution," this
paragraph, like that discussed above, equates the term
"institution" with the R¡o Piedras Hospital alone.
Not only does the stipulation equate the
"institution" with R¡o Piedras in two places, several of its
substantive provisions underscore the intention to apply to R¡o
Piedras. For example, as noted above, the stipulation contains
a detailed description of the existing physical facilities at
R¡o Piedras immediately preceding the list of physical
standards to be observed prospectively. This indicates that
the physical standards (and, by implication, the rest of the
standards) were thought of as applying to R¡o Piedras. Even
assuming the standards are general enough to apply to any
facility, the drafter would not likely have preceded these
general standards with a detailed description of R¡o Piedras if
he had intended the standards to apply anywhere but at R¡o
Piedras. Moreover, this physical description of R¡o Piedras
cannot be viewed as some sort of boilerplate language merely
intended to introduce a set of general physical standards. The
stipulation is divided into two overall parts, part "A,"
containing an introductory description of conditions then
existing at R¡o Piedras, and part "B," containing a list of
standards to be observed in the future. Thus, if the physical
description of R¡o Piedras were merely boilerplate, one would
expect it to appear somewhere in part "A," not immediately
preceding the operative physical standards in part "B".
Another part of Section "B- IV" makes specific
reference to two other facilities, Cayey and Bayam¢n, mandating
that 200 patients be moved from R¡o Piedras to those named
facilities. Yet the stipulation does not state that its
standards are to apply to those facilities. If it were the
intent of the parties that Cayey and Bayam¢n be regarded as
part of a decentralized R¡o Piedras, and hence subject to the
stipulation, surely a draftsman would have made this point more
clearly than by the single use of the term "decentralized form"
in the definitional section. Indeed, this would have been the
logical place in the agreement to clarify the requirements
applicable to an institution such as Guerrero. The total lack
of mention of this concept in reference to Cayey and Bayam¢n
seriously undercuts the plaintiffs' current arguments on this
score.
In addition to these particular provisions, the
entire structure of the stipulation indicates that it is aimed
specifically at the R¡o Piedras Hospital. The stipulation is
divided by two headings: "A. FACT SITUATION" and "B.
STANDARDS TO BE OBSERVED AT THE PSYCHIATRIC HOSPITAL AND TIME
SCHEDULE FOR COMPLIANCE" (boldface added). The definition of
"institution" and the entire list of standards are contained
under heading "B," whose title indicates that the definition
and standards are to apply only to the "Psychiatric Hospital,"
i.e., R¡o Piedras. As one of two organizational headings, and
the heading which preceded all of the specific stipulations,
heading "B" was a fairly important piece of language. If the
drafter had been concentrating on producing a document designed
to cover other facilities, he would likely have used a term
such as "Standards to be Observed at all Covered Facilities,"
or something to that effect. That the stipulations begin with
the term "Standards to be Observed at the Psychiatric Hospital
. . . " indicates that the drafter was concerned with the
existing R¡o Piedras facility or, at least, some later
aggregate of facilities constituting a recognizable successor
to the current Hospital.
We conclude, therefore, that the stipulation, as
drafted, did not encompass Guerrero. While Guerrero and many other
institutions have taken overflow from the Hospital, they have not,
in any meaningful sense, become its operational components. They
are not now the "Commonwealth of Puerto Rico Psychiatric Hospital
. . . in Decentralized form." This is not to question the right of
the court to require the Commonwealth to accept Hospital patients
at other facilities, as part of the necessary plan to bring the
Hospital in conformity with the stipulation. A district court has
extensive equitable powers to enforce stipulated goals. But
neither the stipulation nor the court's authority extends to the
conditions at such places in the absence of further agreement or
another lawsuit establishing the existence of unconstitutional
conditions at these separate institutions. State officials
entering into a consent decree are entitled to rely on courts to
apply the decree only to its agreed objects. Consent decrees are
not like the camel's proverbial nose in the tent, which, once
inserted, gives the animal free rein to come and go at will. The
improvement of mental health facilities will not be advanced by
giving state officials reason to avoid entering into such
arrangements in the future for fear they will be expanded beyond
their language.
C. Construction of the Stipulation in Light of the Parties'
Actions
Having decided that the stipulated agreement as drafted
in 1977 did not, by its terms, apply to Guerrero, we next consider
whether it now applies to Guerrero because of the actions taken by
the parties to implement the agreement. An argument that the
actions of the parties make the stipulation applicable to Guerrero
may be constructed in a number of different ways. First, in the
view of the district court, the defendants' actions gave rise to an
equitable estoppel, so that they were estopped to deny that the
stipulations applied to Guerrero. Second, the district court also
held that "norms of judiciary responsibility" dictated the same
result, which might be thought of as an application of the doctrine
of judicial estoppel. See United States v. Levasseur, 846 F.2d
786, 792 (1st Cir. 1988). Third, our dissenting colleague argues
that the defendants' actions may be used as extrinsic evidence to
indicate that the defendants, in drafting the original agreement,
intended that it would apply to facilities such as Guerrero.
All three of these arguments hinge upon the proposition
that the defendants, through their actions, have represented that
the stipulations would apply to Guerrero. Equitable estoppel
contains a representation element, see Phelps v. Federal Emergency
Management Agency, 785 F.2d 13 (1st Cir. 1986). Judicial estoppel
requires inconsistency between a position taken earlier before a
court and a later one (the earlier position here would be the
defendants' purported representation that the agreement applied to
Guerrero). See generally Levasseur, 846 F.2d at 792. The
extrinsic evidence argument supposes that the defendants revealed
their actual intent at the time they entered into the stipulation
through subsequent conduct in carrying it out. We reject all three
approaches because we do not construe the defendants' subsequent
actions as clearly representing that the stipulations applied at
Guerrero.
To be sure, the defendants have taken numerous actions
aimed at using the Guerrero facility, as well as others, to help
alleviate overcrowding conditions at R¡o Piedras. They have done
so at the court's urging, and, as we have said, we believe the
court properly exerted pressure upon defendants to provide
facilities to reduce overcrowding at the Hospital. See Inmates of
Suffolk County Jail v. Eisenstadt, 494 F.2d 1196 (1st Cir. 1974).
The mere transfer of patients to Guerrero and elsewhere, however,
did not constitute a representation by defendants that they agreed
to operate Guerrero in conformity with the 86 conditions set forth
in the stipulation. Nor did defendants' suggestions that the
quality of care provided at these places would be high amount to
any such representation.
Plaintiffs contend that before the adoption of Plan 3,
defendants did not object to, and supposedly by their silence
acquiesced in, certain statements by the Master relating to the
need for improvements at institutions other than R¡o Piedras.
Then, in 1987 the defendants submitted Plan 3, which called for the
transfer of some patients at R¡o Piedras to Guerrero and other
facilities. These and similar actions undoubtedly evidenced a
willingness on the part of the defendants to use Guerrero to help
relieve pressures on R¡o Piedras. But they fell far short of
representing agreement that the terms of the stipulation applied
henceforth at Guerrero.
It is true that after submitting Plan 3, the
defendants, on August 5, 1987, submitted "exceptions and
commentaries" to the Master's fourth report, parts of which may be
read as assuming the stipulations will apply beyond R¡o Piedras.
The exceptions and commentaries state that
Said plan [Plan 3] includes a description
of the Mental Health Program of the
Commonwealth of Puerto Rico to illustrate
this Honorable Court and the Master as to
the scope of the program. The Psychiatric
Hospital of R¡o Piedras is only a part of
said program and is the institution under
the stipulations before this Honorable
Court, with whatever facilities may be
used to descentralize [sic] the care of
said hospital's patients. As before
stated the individuals that come in
contact with the primary units of the
mental health program are not patients of
the Psychiatric Hospital and most of the
time do not become so. The class in the
present action is composed of the patients
of the Psychiatric Hospital and the
institutions wherever they may be referred
to in a descentralization [sic] program.
Defendants respectfully reiterate their
request to maintain the scope of the class
in the above captioned case and the
stipulations agreed on by admitting from
Plan #3 those portions that apply to the
Psychiatric Hospital.
We find it difficult to discern any precise meaning
from this language. Even if the reference to "whatever facilities
may be used to descentralize [sic] the care of said hospital's
patients" may be viewed as acknowledging that Guerrero is "under"
the stipulations, that language is contradicted by the apparent
attempt to limit the court's authority to R¡o Piedras by asking it
to "admit [ ] from Plan #3 those portions that apply to the
psychiatric hospital." Moreover, throughout the course of this
litigation, the defendants' "exceptions and commentaries" have been
treated as an objection to the court's "jurisdiction" over
Guerrero. The district court responded to the motion by issuing an
order referring to the defendants "objection" to the scope of its
"jurisdiction" and attempting to clarify that jurisdiction.
Moreover, the district court's December 28, 1989 order states that
its August 10, 1987 order was necessary "because defendants' . . .
motion, taking exceptions to the Master's fourth report, requested
the court to restrict the scope of the stipulations to the physical
premises of the hospital and to the patients residing there." We
therefore decline to treat this motion as a representation by the
defendants that the stipulation would apply to Guerrero.
Nor can the defendants' failure to appeal from the
court's August 10, 1987 opinion and order, issued in response to
the "exceptions and commentaries," be treated as such a
representation. The court stated in that opinion and order that it
intended to see that patients transferred to Guerrero received
treatment consistent with the stipulation. Defendants' failure to
appeal from this order did not, however evidence acquiescence that
the stipulation applied at Guerrero. The August 10 order did not
require the defendants to do anything other than what they had been
doing all along ÄÄ use Guerrero to house patients transferred from
R¡o Piedras. The order required defendants to set aside 144 beds
in Guerrero for former R¡o Piedras patients, submit certain
budgetary information and take several specific actions at R¡o
Piedras. Compliance with these directives said nothing about
defendants' willingness to conform the internal management of
Guerrero with the stipulation. It was not until December 28, 1989
that the court issued an order requiring defendants to take a
particular action with regard to their internal management of
Guerrero in supposed compliance with the terms of the stipulation.
When the court issued this order, defendants promptly objected,
resulting in the present appeal.
Finally, like their previous actions, the defendants'
participation in the "tripartite visits" and the "interdisciplinary
visits" to Guerrero and their submission of a report on the status
of patients transferred to Guerrero cannot be construed as
tantamount to a representation that the stipulation applied to
Guerrero. In the words of the Master, the "tripartite visits" were
undertaken for the limited purpose of "evaluat[ing] if transferred
patients were better off than if they had remained in the
hospital." An agreement to determine whether the patients were
better off in Guerrero does not evidence an agreement that their
treatment was regulated by the 86 stipulations. Indeed, when the
"interdisciplinary group" reported that patients transferred from
R¡o Piedras to Guerrero were receiving inadequate rehabilitative
care, the defendants, in a letter of September 6, 1989, raised
their objections to the decree's application to Guerrero. This
letter began the series of motions and court orders which
culminated in the court's opinion and order of March 6, 1990, now
on appeal.
We do not find, therefore, that defendants ever
acknowledged that the remedial requirements of the stipulation were
applicable at Guerrero. Instead, defendants' actions seem simply
to have reflected the view that they were obligated to improve R¡o
Piedras by reducing overcrowding there, and should do so in a
generally cooperative and progressive manner. The Master noted
in 1987 that the current administration (which took office in 1985)
had considerably increased the Puerto Rican mental health budget
and that, for the first time, a genuine mental health system was
taking shape in Puerto Rico. The district court's order of March
6, 1990 (affirming its December 28, 1989 order) went far beyond any
previous order. For the first time, the district court, instead of
ordering the defendants to move patients from R¡o Piedras to
Guerrero or to determine whether such patients were better off at
Guerrero, has ordered defendants to operate Guerrero's
rehabilitation program under its supervision. The court, moreover,
made clear that it was asserting full jurisdiction over conditions
at Guerrero. To hold that the defendants are now bound to run the
Guerrero facility under court supervision merely because they
earlier made improvements there and accepted patients from R¡o
Piedras would be to punish them for their cooperation.
Thus, while we believe that the district judge and the
court-appointed Master have done an outstanding job performing the
role of policy planners and managers to see that the complex legal
goals inherently part of this litigation come about, a direct
intervention to regulate the operation of the Guerrero facility was
neither included in the terms of the stipulation nor made
appropriate by the subsequent endorsement of the parties. As such
intervention is not authorized, it must terminate.
In so holding, we do not deny that the district court
has broad remedial powers to effectuate the provisions of the
stipulation. See generally Morgan v. McDonough, 548 F.2d 28, 31
(1st Cir. 1977) (district court's "equity power is broad and
flexible and the propriety of an order turns on a balancing of
individual and collective interests in the particular case"). For
example, if former members of the plaintiff class now resident at
Guerrero still lack the individual habilitation plans required by
Section B-III(8)(c) of the stipulation because such plans were
denied them when they were patients at the Hospital, the court even
now could act to correct and remedy that earlier violation of the
stipulation by ordering that the omitted plans be provided. In so
doing, the court could not oversee current care and treatment at
Guerrero, but would be entitled to order the patient to be given
the individual evaluation and diagnosis that he or she should have
been given while still at the Hospital. And, as previously noted,
the court may direct that outside facilities be used temporarily or
permanently to house patients and/or to offer services not provided
by the Hospital if this is the only way to ensure compliance at
the Hospital itself with the stipulation. However, the district
court may not, as a general matter, regulate the rehabilitation
programs offered at Guerrero, or require that institution to comply
generally with the stipulated agreement. An ongoing oversight of
the rehabilitation services or other treatment received by former
R¡o Piedras patients at Guerrero is outside both the terms of the
stipulation and any general remedial power that can be implied
therefrom. To the extent inmates of institutions other than the
Hospital (whether or not formerly patients at R¡o Piedras) believe
that they are now being forced to endure unconstitutional
conditions, they must bring another lawsuit making such allegations
and seeking relief appropriate in their situation.
CONCLUSION
To summarize, we find, first, that this suit is
properly a class action. Second, we hold that the district court
may not impose the terms of the stipulation on, or regulate, the
Guerrero facility.
The opinion and order of March 6, 1990 is affirmed in
part and reversed in part. Orders of the district court
inconsistent with this opinion are vacated, and the case shall
proceed in the district court in a manner consistent with this
opinion.
Concurrence and dissent to follow.
CYR, Circuit Judge (concurring, in part; dissenting, in
part). I concur in Part I of the opinion, but respectfully dissent
from the conclusion reached in Part II. The majority opinion
concludes that the consent decree definition of "institution" is
too vague or ambiguous to permit the interpretation given it by the
district court. The majority seems most concerned that appropriate
respect for the integrity of Commonwealth governmental institutions
and the principles of federalism would be disserved by the district
court's interpretation of its jurisdiction under the consent
decree. Although federalism concerns and the integrity of
Commonwealth governmental institutions merit earnest consideration,
the threat perceived by the majority is exaggerated.
The district court, plainly mindful of the attendant
implications, fairly interpreted the negotiated consent decree,
employing entirely appropriate interpretive standards, and
reasonably concluded that the language of the decree and the long-
term course of performance by the parties evince an intention on
the part of the Commonwealth to undertake a broad-based legal
obligation from which it never dissented until the district court
proceedings were about to be closed. The language of the consent
decree, and the well-informed findings of the district court
regarding the parties' post-decree course of compliance with the
decree, demonstrate that the Commonwealth intended, at the time the
decree was approved in 1977, to submit to the jurisdiction of the
United States District Court all collateral mental health facili-
ties involved in the contemplated decentralization of mental health
services previously provided at Rio Piedras. The majority's
analysis, on the other hand, seems rooted in its concern that the
district court may have loosed itself from the jurisdictional
constraints imposed by the language of the consent decree, armed
with its own charter to regulate all public mental health facili-
ties and patients in the Commonwealth. While there can be no doubt
that such an arrogation of power would warrant firm remediation,
neither the district court nor the plaintiffs have interpreted the
consent decree to confer any such unlimited or ambiguous jurisdic-
tional license as the majority suggests.
The majority proceeds on the doubtful assumption that
the decentralization provision operated ab initio as an unmitigated
burden on the Commonwealth. On the contrary, the Commonwealth
gained the benefits of flexibility, affording it the option either
to upgrade facilities at Rio Piedras to accommodate its initial
patient population, or to convert Rio Piedras to a downscaled
facility through periodic patient transfers to alternate sites of
its own choosing. Under the majority's view, the Commonwealth
would have been faced with a new lawsuit, with all its attendant
litigational burdens, as to each different collateral facility to
which a member of the plaintiff class was transferred. The consent
decree, on the other hand, contemplated from its inception that
certain as-yet unidentifiable patient services then being provided
at the overcrowded Rio Piedras facility might no longer be offered
at those premises by the time the litigation was brought to a
conclusion. At the present time, Rio Piedras apparently is in
compliance with the stipulations in the consent decree. Compliance
was achieved, however, as understood and agreed by all concerned,
only through the transfer of numerous former Rio Piedras patients
to various collateral support facilities, such as the 144-bed
module at Guerrero þþ the facility at issue on appeal. Further-
more, no other Puerto Rico mental health facility will be brought
under the jurisdiction of the court in the future. Rio Piedras and
its support facilities now constitute the fixed-size, decentralized
form of the Hospital, and the plaintiff class includes only present
and future residents of the "institution" as it is presently
composed. As the district court itself noted, "persons treated in
their community mental health centers who have never been patients
of the Hospital, do not fall under the court's jurisdiction."
Under the explicit language of the consent decree, the
plaintiff class is comprised of present and future "residents" of
the "institution." The jurisdiction of the district court
consequently extended to Rio Piedras and all collateral facilities
utilized to depopulate and decentralize Rio Piedras in order to
bring it into compliance with the minimum physical standards
prescribed by the consent decree. The restrictive interpretation
advanced by the majority is dependent entirely on the unrealistic
assumption that a significant subset of the plaintiff class, namely
all patients transferred from Rio Piedras, accepted a consent
decree requiring improvements at Rio Piedras but imposing no
obligation on the Commonwealth regarding the quality of care
available at the collateral facilities to which those same patients
were to be transferred. Viewed in its litigation context, I
believe that the consent decree requires the interpretation given
it by the district court and that the interpretation adopted by the
majority is unwarranted by either the language of the decree, the
extended course of compliance and superintendence under the decree,
or the nature and aims of the class action.
I. Plain Language of Consent Decree
Although federalism concerns offer an arguable basis
for de novo appellate review of the jurisdictional reach of a
consent decree governing public institutional reform litigation,
the majority's plenary scanning of the plain language of the
consent decree substitutes appellate interpretation of the
stipulations of the parties for the interpretation of the
superintending court, unconstrained even by the "ordinary contract
principles" alluded to by the majority.
The proper interpretation of a consent decree basically
presents a question of law, as does the preliminary determination
whether the disputed language is ambiguous. See AMF, Inc. v.
Jewett, 711 F.2d 1096, 1100-01 (1st Cir. 1983); Massachusetts Ass'n
for Retarded Citizens, Inc. v. King, 668 F.2d 602, 607 (1st Cir.
1981) (citing United States v. ITT Continental Baking Co., 420 U.S.
223, 238 (1975)); see also Fashion House, Inc. v. K Mart Corp., 892
F.2d 1076, 1083 (1st Cir. 1989). The majority suggests that the
terms "institution" and "Rio Piedras Hospital" were used inter-
changeably and synonymously throughout the decree, and that perhaps
the definition of "institution" þþ as consisting of the "Common-
wealth of Puerto Rico Psychiatric Hospital as presently constituted
or in Decentralized form" þþ was included merely to ensure that an
internally-restructured facility at Rio Piedras, or any other
mental health facilities subsequently placed under the direct
administrative control of the Rio Piedras Hospital, would be
covered by the terms of the decree.
The massive overcrowding at the Rio Piedras facility in
1977 manifested to all the parties that the system of care provided
at Rio Piedras in 1977 might well be "decentralized" over time.
Yet the parties could not then know, with any precision, which or
how many collateral mental health facilities would be needed to
accommodate the patients who would have to be transferred from Rio
Piedras. Plaintiffs contend that the definition of "institution"
incorporated in the decree was deliberately phrased in broad terms
because the parties needed to make express allowance for future
contingencies as to what form the systemic "institution" ultimately
would take. Such inherent flexibility is one of the major
advantages of utilizing consent decrees in public institutional
reform litigation. Thus, even assuming that we are to confine
ourselves to a "four corners" interpretation of the decree, as
advocated by the majority, I cannot agree that the majority has
demonstrated that its interpretations of "institution" and
"decentralized form" are permissible in light of the explicit
language of the consent decree.
First, the majority converts the pivotal definition of
"institution" into virtual surplusage by suggesting two implausible
reasons for its inclusion in the consent decree. Because the
particular array of services provided at the Rio Piedras facility
was almost certain to change during the course of the Common-
wealth's compliance, the majority posits the theory that the
parties included the definition of "institution" only to ensure
that the stipulations in the decree would continue to apply to this
internally-restructured facility. We should be very reluctant to
conclude that prominent language in a decree, which has received
the imprimatur of the parties and the superintending court, is
superfluous and without legal import. See, e.g., Systemized of New
England, Inc. v. SCM, Inc., 732 F.2d 1030, 1034 (1st Cir. 1984);
J.E. Faltin Motor Transp., Inc. v. Eazor Express, Inc., 273 F.2d
444, 445 (3d Cir. 1960). The majority fails to explain why, if the
Rio Piedras facility were to remain an intact entity at its
original location, the simple phrase "Rio Piedras Hospital" would
not have sufficed to ensure the application of the stipulations to
the restructured facility. Under the majority's interpretation,
any further elaboration of the term "institution" would have been
superfluous.
The majority next suggests that the parties may have
included the definition of "institution" to encompass any new
branches of the Rio Piedras facility opened by the Commonwealth at
other locations throughout Puerto Rico and placed under the same
administrative control as Rio Piedras. See supra at n.4. The
suggested interpretation is totally at odds with the underlying
goal of the litigation and the consent decree, which was to fix the
obligations of the Commonwealth to all members of the plaintiff
class. We cannot plausibly suppose that the parties would have had
any reason to insert in the decree a prominent provision whose only
purpose would be to govern the Commonwealth's unilateral decision
to "reshuffle" the organization within its Department of Health.
After all, the Commonwealth ultimately controls all public mental
health facilities in Puerto Rico, regardless of the number of
discrete administrative units into which it might choose to parcel
its mental health program. Given that reality, the majority fails
to explain how such administrative reshuffling would even be
material to the resolution of the problems to be addressed by the
present litigation. By emphasizing the bureaucratic form of the
Hospital, rather than the substantive goals of the litigation and
the consent decree as a whole, the majority interpretation renders
the Commonwealth's obligation totally illusory. See, e.g.,
Shakey's Inc. v. Covalt, 704 F.2d 426, 434 (9th Cir. 1983)
(preference given to contract interpretation that does not render
obligations illusory). According to the majority view, the
Commonwealth would be free at any time to redefine its obligations
under the consent decree, artificially, by placing various
facilities under the nominal control of an administrative unit of
the Department of Health separate from the Rio Piedras facility.
Furthermore, under the majority's thesis, the Commonwealth would
have been permitted to effect a unilateral shutdown of the entire
Rio Piedras facility, transferring all its patients to other
facilities, without any further obligation to former Rio Piedras
patients. I believe it inappropriate to trivialize a judicial
decree in this manner, particularly a consent decree.
Second, the majority emphasizes that the decree
specifically describes physical conditions at the Rio Piedras
facility, while omitting any description of the physical conditions
at other facilities mentioned in the decree, such as the mental
health programs at Cayey and Bayamon. The majority proposes to
interpret the absence of such descriptions as an indication that
the stipulations in the consent decree were not meant to apply to
any facility other than Rio Piedras.
The significance of the asserted "omission" must be
viewed in conjunction with the broad definition of "institution"
set out earlier in the consent decree. It is a common drafting
technique (expressio unius est exclusio alterius) to omit specific
examples (Cayey and Bayamon) where their inclusion might imply that
the specific examples completely exhaust the scope of a broader
category previously defined. See generally 2A Norman J. Singer,
Sutherland Statutory Construction 47.23, 47.24 n.6, at 194, 203,
205 (4th ed. 1984) (discussion of exclusio doctrine in interpreting
statutes and contracts). The inclusion of a specific description
of the physical conditions at Cayey and Bayamon might well have
been considered a reasonable basis for inferring that Cayey and
Bayamon comprised the entire fixed "decentralized form" of the
Hospital, and that no other collateral facilities, such as
Guerrero, could have been considered part of the "institution" in
the future. Thus, the "omission" relied on as support for the
narrower interpretation advanced by the majority provides per-
suasive support for the interpretation given by the district court.
Furthermore, as previously noted, the particular
physical conditions at Cayey and Bayamon were not the primary or
immediate focus of the consent decree. The decree requires that
the Rio Piedras facility be brought into compliance with the
stipulations in the decree. At such time as the Commonwealth were
to achieve compliance at the Rio Piedras facility, the court would
be required to determine that the collateral support facilities to
which Rio Piedras patients had been transferred in order to achieve
compliance at Rio Piedras were also in compliance with the minimum
standards stipulated in the consent decree. Conceivably, the Cayey
and Bayamon facilities might not have remained as permanent parts
of the "institution" if, between 1977 and 1989, the Commonwealth
decided that the patients initially transferred to those facilities
would be better placed in some other collateral facility. Thus,
the decree envisioned that the ultimate scope of the "institution"
would remain open to final definition through reference to its
culminating eventuality, the achievement of full compliance with
the consent decree by the Rio Piedras facility.
Third, the majority suggests that the provisions of the
decree relating to the internal procedures for screening the
medical requirements of incoming and transferring patients
demonstrate that the terms "institution" and "Hospital" are used
interchangeably by the parties. The interpretation of a pivotal
provision in a consent decree should not be approached under the
assumption that it is the product of poor draftsmanship or an
indiscriminate use of terms. Instead, at least when the resulting
interpretation fully accords with the language and context of the
consent decree, it is appropriate to credit the parties with a
mutual intention to use different terms to import distinctive
meanings. Read in context, the language cited by the majority does
not equate the terms "Hospital" and "institution." Rather, it is
clear that the screening provision prescribes distinct requirements
for intra-institutional patient transfers, namely transfers of
patients between Rio Piedras and its collateral component facili-
ties, and inter-institutional patient transfers, namely transfers
of patients from outside the "institution" into Rio Piedras or one
of its collateral facilities.
Finally, the majority notes that Section B, which
contains both the definition of "institution" and the list of
stipulations, is prefaced by the heading "Standards to be Observed
at the Psychiatric Hospital." By equating the heading's reference
to "Psychiatric Hospital" with "Rio Piedras," the majority suggests
that the parties would have used the term "institution" or "covered
facilities" in the heading if they had intended to apply the
stipulations to facilities other than Rio Piedras, which con-
stituted the entire psychiatric hospital at the time of the decree.
Contrary to the majority's contention, heading "B"
refers generically to the "Psychiatric Hospital," and not to the
"San Juan Psychiatric Hospital," the term reserved elsewhere in the
decree to denote the Rio Piedras facility. If indicative at all,
heading "B" merely suggests that the parties contemplated, at the
time of the decree, a basic hospital structure different than the
one then existing at Rio Piedras. Moreover, a cardinal rule of
contract interpretation requires that no individual provision, even
a heading, be interpreted in isolation from its context within the
document as a whole. See Spartan Industries v. John Pilling Shoe,
385 F.2d 495, 499 (1st Cir. 1967); cf. United States v. Roemer, 514
F.2d 1377, 1380 (2d Cir. 1975) (rule of statutory construction
gives precedence to detailed text over generalized headings). The
definition of "institution" is the first substantive provision
following heading "B," a prominence further emphasized by the fact
that the lengthy list of definitions of which it is part is not
arranged alphabetically. It seems almost certain that the only
reasonable justification for placing the definition of "institu-
tion" in section B was to define the coverage and reach of the
stipulations contained in the very same section. This definition
makes clear that the form of the hospital at the time of the
consent decree (i.e., Rio Piedras) might not be determinative of
the scope of the stipulations should the Hospital ultimately
decentralize its services.
The district court interpretation ascribes meaningful
import to the disputed language, consistent with the overall
purposes of the other provisions of the consent decree. The
majority has not demonstrated that the decree is ambiguous, so as
to warrant an alternative interpretation of the terms "institution"
and "decentralized form."
II. Ambiguity and Extrinsic Evidence of Intent
Assuming, arguendo, that the disputed terms of the
decree are ambiguous, however, I cannot agree that the district
court interpretation is not due considerable deference. The
majority asserts that our normal deferential stance toward district
court interpretations in public institutional reform litigation is
inappropriate when the disputed language in the consent decree
involves the important question of jurisdiction, rather than mere
modes of compliance with the terms of the decree. If an ambiguous
decree must be interpreted as any other contract, however, the
majority does not explain why the district court cannot be
permitted to employ "ordinary contract principles" which look
beyond the confines of the "four corners" of the contract or decree
to determine the true intent underlying the parties' use of the
disputed language. Our customary "deference" to the trial court in
every other case of contract interpretation is based on the
recognition that the trial court is better situated to appraise the
probative value of this type of extrinsic evidence. I believe that
the majority opinion not only unnecessarily restricts the interpre-
tive inquiry to the "four corners" of the consent decree, but
discards appropriate interpretive tools for discovering the intent
of the parties as expressed in their consent decree and undervalues
the district court's superior opportunity to evaluate the pertinent
extrinsic evidence developed during the course of its superinten-
dence of public institutional reform litigation.
I cannot agree that the district court improperly
relied on the parties' post-decree conduct either to "revise"
retrospectively the terms of the decree or to deprive the
Commonwealth of its original bargain. Concededly, although the
court was at all times acutely mindful of the parties'
understanding of the scope of the decree, its opinion does not
contain a detailed analysis of the language of the decree.
Instead, the district court chose not to base its decision on the
ground that the phrase "decentralized form" was unambiguous as a
matter of law. Assuming some latent ambiguity, the court opted to
examine extrinsic evidence to determine the intent underlying the
jurisdictional provisions in the consent decree.
In earlier cases treating the proper interpretation of
an ambiguous consent decree, the Supreme Court implicitly confined
the proper focus to the "four corners" of the decree, abjuring
recourse to extrinsic evidence. See United States v. Armour & Co.,
402 U.S. 673, 681-82 (1971). In later caselaw, however, the
Supreme Court disparaged such a narrow reading of Armour:
Since a consent decree or order is to be
construed for enforcement purposes
basically as a contract, reliance upon
certain aids to construction is proper, as
with any other contract. Such aids
include the circumstances surrounding the
formation of the consent order, any
technical meaning words used may have had
to the parties, and any other documents
expressly incorporated in the decree.
Such reliance does not in any way depart
from the "four corners" rule of Armour.
United States v. ITT Continental Baking Co., 420 U.S. 223, 238
(1975) (emphasis added). As noted, this type of "extrinsic
evidence" analysis does not seek to modify the terms of the
original consent decree without the parties' consent. Rather, as
with all other methods of contract interpretation, the court may
use extrinsic evidence to discover the original intent of the
parties in settling upon the particular language used in the
consent decree. See, e.g., Raymond Keith Foster, Keith Foster Mfg.
Co. v. Hallco Mfg. Co., No. 90-1299, 1991 U.S. App. LEXIS 22446, at
*37 (Fed. Cir. Sept. 27, 1991); United States v. O'Rourke, No. 90-
6263, 1991 U.S. App. LEXIS 19497, at *19-20 (2d Cir. August 21,
1991); North Shore Labs. Corp. v. Cohen, 721 F.2d 514, 519, 520 n.5
(5th Cir. 1983).
Under a well-established rule of contract
interpretation, the court may look to the parties' post-contract
course of conduct and performance to ascertain the "practical
interpretation and application" that the parties themselves
attached to ambiguous contract language:
In the process of interpretation of the
terms of a contract, the court can
frequently get great assistance from the
interpreting statements made by the
parties themselves or from their conduct
in rendering or in receiving performance
under it. . . . The process of practical
interpretation and application, however,
is not regarded by the parties as a
remaking of the contract; nor do the
courts so regard it. Instead, it is
merely a further expression by the parties
of the meaning that they give and have
given to the terms of their contract
previously made. There is no good reason
why the courts should not give great
weight to these further expressions by the
parties, in view of the fact that they
still have the same freedom of contract
that they had originally. In cases so
numerous as to be impossible of full
citation here, the courts have held that
evidence of practical interpretation and
construction by the parties is admissible
to aid in choosing the meaning to which
legal effect will be given. Oral testi-
mony is admissible and frequently is
absolutely necessary, even in cases where
the terms are fully "integrated" in
writing, to demonstrate the application of
the terms to the property, persons, and
events to which they are related. The
parties may employ language the
application of which they know to be
uncertain and to which they are too indif-
ferent at the time of executing the
contract to take the trouble to make
certain. This does not prevent the
existence of a valid contract; but it
causes much greater dependence to be put
upon their subsequent practical
interpretation and construction.
3 Arthur L. Corbin, Corbin on Contracts 558, at 249-253 (1960)
(emphasis added). Through the performance rendered by the parties,
the court gains invaluable insight into the practical interpreta-
tion mutually intended by the contract language. See, e.g., U.S.I.
Properties Corp. v. M.D. Constr. Co., Inc., 860 F.2d 1, 10 (1st
Cir. 1988), cert. denied, 490 U.S. 1065 (1988).
Unlike a simple contract action where the post-contract
conduct of the parties usually must be presented to the court in
the form of controverted extrinsic evidence, much relevant post-
consent decree conduct in public institution reform litigation
takes place before the district court in the course of its ongoing
superintendence of the performance required under the decree.
During the required performance, the district court is uniquely
positioned to evaluate typical modes of expression by the parties
and the significance of their silence or acquiescence in the face
of representations by the court and the conduct and representations
of opposing parties. It seems most appropriate that district court
findings based on extrinsic evidence should be reviewed for clear
error only. See, e.g., Fox v. United States Dept. of Hous. & Urban
Dev., 680 F.2d 315, 319 (3d Cir. 1982) (resort to use of extrinsic
evidence in interpretation of consent decree converts issue to one
of fact). Thus, it seems particularly inappropriate in the present
context to deny deference to the district court's interpretation of
the consent decree.
The record provides overwhelming support for the
district court findings in this case. The court found that the
Commonwealth, by its course of compliance over a period of twelve
years, indicated that it intended to accede to district court
jurisdiction over any support facilities needed to decentralize
services previously administered on the Rio Piedras premises. The
court based its findings on several factors.
First, the court noted that in several reports made
prior to the Secretary of Health's submission of Plan 3, the
Special Master repeatedly emphasized "the systemic approach to
securing compliance [with the decree]." In fact, immediately
prior to the submission of Plan 3, the Secretary provided the
Master with budgetary information that covered the entire public
mental health network in Puerto Rico. The Master responded with a
letter, stating that
the report's budgetary information is ap-
parently based on a misconception of the
scope of the Court's jurisdiction. The
Court's authority does not encompass the
entire mental health system of Puerto
Rico, but only the following: the Rio
Piedras Psychiatric Hospital, pre-hospital
facilities such as mental health centers
and out-patient clinics which service
patients who otherwise would be treated by
the Hospital, and post-hospital transi-
tional and related services which receive
the Hospital's discharged patients.
Thus, the district court reasonably found that Plan 3 contained a
commitment by the Commonwealth to "deinstitutionalize" the Hospi-
tal, which included the later transfer of patients to Guerrero.
Second, while the Commonwealth contends that it im-
mediately filed a timely objection to the scope of the district
court's jurisdiction as proposed by the Secretary in Plan 3, its
so-called "objection" merely challenged the possible extension of
the court's jurisdiction to every public mental health facility in
Puerto Rico. Moreover, the Commonwealth's own exception continued
to treat the "institution" as including both Rio Piedras and its
support facilities. Unquestionably, the district court appro-
priately treated the Commonwealth's "objection" as strong extrinsic
evidence that the Commonwealth itself intended that the consent
decree cover Rio Piedras and whatever facilities were used to
decentralize the care of Rio Piedras patients.
Third, when the district court finally entered its
order incorporating Plan 3, thereby defining its jurisdiction to
include Rio Piedras' support facilities generally and Guerrero
specifically, the Commonwealth neither objected nor appealed. This
telltale silence on the part of the Commonwealth further reinforced
the district court's reading of the Commonwealth "objection" to
Plan 3 as an objection to any extension of jurisdiction to all
mental health facilities in the Commonwealth, and not as a chal-
lenge to district court jurisdiction over Rio Piedras and its
decentralized support system.
Finally, the district court noted that the Commonwealth
continued to allow tripartite evaluation visits to these transi-
tional facilities after 1987, clearly indicating that the physical
conditions at these facilities would be material to the issue of
full Commonwealth compliance with the consent decree. The
majority dismisses these tripartite visits by concluding that they
were "undertaken for the limited purpose of 'evaluat[ing] if
transferred patients were better off than if they remained in the
hospital.'" (emphasis added). Assuming, arguendo, that the
district court possessed only the very limited authority to compel
transfers out of Rio Piedras solely to ensure compliance with the
stipulations at Rio Piedras, the majority offers no explanation for
the Commonwealth's acquiescence to any such comparative study of
conditions at the collateral facilities. The only conceivable
purpose to be served by such a comparative study would have been to
ensure that the minimum conditions prescribed in the stipulations
were being applied throughout the "institution."
Since the case simply has not been made that the
district court's findings are clearly erroneous, and its findings
comport with a reasonable interpretation of "decentralized form,"
I believe we are required to defer to the district court's
"intimate understanding of the history and circumstances of the
litigation," United States v. Commonwealth of Massachusetts, 890
F.2d 507, 510 (1st Cir. 1989), especially in a case where there can
be no doubt that the district court engaged in a sensitive analysis
of the principles of federalism implicated by its decision.
Therefore, although I concur in Part I of the majority opinion, I
must respectfully dissent from Part II.