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Jackson v. Los Lunas Center

United States District Court, D. New Mexico

June 21, 2019

WALTER STEVEN JACKSON, et al., Plaintiffs,
LOS LUNAS CENTER, et al., Defendants, and THE ARC OF NEW MEXICO, Intervenors, and MARY TERRAZAS, et al., Intervenors, pro se.


         Plaintiffs Walter Stephen Jackson et al. (Plaintiffs), Intervenor Arc of New Mexico (Arc) and pro se Intervenors Mary Terrazas, et al. (jointly, Intervenors), and Defendants Los Lunas Center, et. al. (Defendants), seek final approval of a joint settlement agreement[1] that provides a resolution to a dispute over Defendants' treatment of class members.

         On April 17, 2019, the parties jointly filed a motion asking the Court to give preliminary approval to the Settlement Agreement.[2] On April 18, 2019, the Court held a hearing on the motion. During the hearing, counsel clarified provisions of the Preliminary SA. On April 19, 2020, the Court approved the Preliminary SA as clarified and directed the parties to issue Notice to all Plaintiff Class Members and Intervenors.[3]

         On June 4, 2019, the parties filed their Joint Motion for Final Approval, Joint Memorandum, and final Settlement Agreement, which as directed by the Court's Preliminary Approval Order, clarified the language of the Preliminary SA.[4]

         On June 12, 2019, the Court held a hearing on final approval of the Settlement Agreement. Present for the Plaintiffs were Steven Schwarz, Peter Cubra, Cathy Costanza, Tim Gardner, Philip Davis, Ann McCartney, and Debra Poulin. Present for Defendants were Jerry A. Walz, Kathyleen Kunkel, Billy Jimenez, Jason Cornwell, and Matthew Garcia. Present for the Intervenors were Maureen Sanders and Jacqueline Mader.[5] At the hearing the following five guardians and/or family members of Jackson class members addressed the Court with expressions of concern: Julie Bisbee, Hector Romero, Audrey Quintanta, Therese Quintana Doolittle, and Sophia Nolte. Prior to the hearing, pro se Intervenor Ava Peets filed written comments expressing concern, [6] and at the hearing, she addressed the Court.

         After considering the long history of the case, the Settlement Agreement, the arguments of counsel, and the comments of pro se Intervenor, guardians and/or family representatives of members of the class, the Court will grant final approval of the Settlement Agreement. Additionally, the Court will vacate the Scheduling Order.[7] Moreover, the Court will vacate all other orders in this case except Jackson by Jackson v. Fort Stanton Hosp. and Training School, 757 F.Supp. 1243 (D. N.M. 1990) rev'd in part, 964 F.2d 980 (10th Cir. 1992) (Jackson I) (Doc. No. 679), [8] the Memorandum Opinion and Order (Doc. No. 831) (granting Plaintiffs' motion to amend the Complaint by interlineation to include a claim under the American with Disabilities Act, 42 U.S.C. § 12101 et. seq. (ADA)), and the Memorandum Opinion and Order (Doc. No. 890) (reconfiguring the class).


         A trial court has the discretionary authority to approve a settlement of a class action. Jones v. Nuclear Pharmacy, Inc., 741 F.2d 322, 324 (10th Cir. 1984). Federal Rule of Civil Procedure 23(e) provides the following procedure:

(e) Settlement, Voluntary Dismissal, or Compromise. The claims, issues, or defenses of a certified class may be settled, voluntarily dismissed, or compromised only with the court's approval. The following procedures apply to a proposed settlement, voluntary dismissal, or compromise:
(1) The court must direct notice in a reasonable manner to all class members who would be bound by the proposal.
(2) If the proposal would bind class members, the court may approve it only after a hearing and on finding that it is fair, reasonable, and adequate.
(3) The parties seeking approval must file a statement identifying any agreement made in connection with the proposal.
(5) Any class member may object to the proposal if it requires court approval under this subdivision (e); the objection may be withdrawn only with the court's approval.

         The notice requirements of Rule 23 are designed to satisfy due process by providing class members notice of settlement and a right to be heard. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 174 (1974). “[N]otice must be ‘reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.'” Id. at 174 (internal quotation marks omitted) (quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950) and like cases).

         Under Rule 23(e)(2) a court may approve a settlement agreement as fair, reasonable and adequate if the settlement agreement meets four criteria: (1) the settlement was fairly and honestly negotiated; (2) serious legal and factual questions place the litigation's outcome in doubt; (3) the immediate recovery is more valuable than the mere possibility of a more favorable outcome after further litigation; and (4) the parties believe the settlement is fair and reasonable. Tennille v. Western Union Co., 785 F.3d 422, 434 (10th Cir. 2015). “[T]he district court must independently analyze the evidence before it in making its determination[.]” Gottlieb v. Wiles, 11 F.3d 1004, 1015 (10th Cir. 1993) (emphasis in original) abrogated on other grounds by Devlin v. Scardelletti, 536 U.S. 1 (2002).


         This civil rights class action began 32 years ago on July 8, 1987 when 21 individual developmentally disabled citizens of New Mexico on behalf of themselves and other similarly situated individuals (JCMs)[9] filed a complaint to “redress the unconstitutional and illegal conditions” at Fort Stanton Hospital and Training School (Fort Stanton) and Los Lunas Hospital and Training School (Los Lunas) (jointly, institutions) that operated, in part, with federal funds.[10]Defendants were the institutions and individuals operating the institutions. On June 27, 1988, the Court granted parents and guardians of some of the residents of the institutions leave to intervene, [11] which they did on July 6, 1988.[12]

         On October 16, 1989, the merits trial commenced. On December 28, 1990, the Court ruled that Defendants had violated the JCMs' rights under § 504 of the Rehabilitation Act and the substantive due process clause of the Fourteenth Amendment of the United States Constitution. See Jackson by Jackson v. Fort Stanton Hosp. and Training School, 757 F.Supp. 1243 (D. N.M. 1990) rev'd in part, 964 F.2d 980 (10th Cir. 1992) (Jackson I). Since 1990, the parties have attempted to resolve compliance issues and achieve disengagement of Defendants' obligations to the JCMs.

         A. Jackson I

         In Jackson I, the Court made detailed findings of fact. The Court found 18 areas where Defendants' operation of state supported institutions for the developmentally disabled were deficient under federal law and the Constitution.[13] The Court ordered the parties to create a written plan of correction at each institution for each of the 18 identified deficiencies. The parties were to submit the plan to the Court no later than April 1, 1991. Jackson I, 757 F.Supp. at 1315. The plan was to include the following: a detailed written policy to be followed by each institution; identification of an individual who would be responsible for implementing the policy; a strategy for achieving the goals of the corrective plans; a timetable with guidelines for achieving the specific components of each plan; and a means of assuring continued compliance with the adopted standards. Id. at 1316. The Court asked that the plan of correction establish a timetable for correcting all deficiencies by September 10, 1991. Id.

         On September 27, 1991, Defendants completed a Systemic Plan, which was amended on November 19, 1993. On January 4, 1993, Defendants promulgated new polices and procedures for institutions which were reported to the Court on February 17, 1993.[14] On November 9, 1993, Plaintiffs moved to amend the Complaint by adding a claim under the American with Disabilities Act, 42 U.S.C. § 12101 et seq., [15] which the Court granted on January 27, 1994.[16]

         In April 1994, the parties filed a joint motion under Rule 60(b)(5) to modify Jackson I as it applied to Fort Stanton because by 1995, Fort Stanton would no longer serve JCMs.[17] The Court granted the motion on June 27, 1994, relieving Defendants from making further improvements to Fort Stanton.[18] In March 1995, Fort Stanton closed, and all residents were transferred to community-based services.

         In July 1997, after all residents in Los Lunas transitioned to community-based services, Los Lunas also closed.

         B. Consent Decrees

         After Jackson I, the Court entered various remedial orders and actively oversaw their enforcement. During the pendency of this case, there have been four consent decrees.[19] In 1997, the Court entered the first two consent decrees, a Joint Stipulation on Disengagement (JSD) and its attached Plan of Action.[20] In subsequent years, the Court entered two additional consent decrees: in 2005, Appendix A, [21] and the 2015 Revised Table IV.[22] All four documents attempt to resolve the areas of noncompliance identified in Jackson I. Each consent decree imposes additional obligations on Defendants.

         i. JSD

         In October 1997, the parties presented the Court with a joint motion requesting the Court approve their proposed JSD with a Plan of Action. The JSD states the criteria and process for disengagement from most of the identified obligations. Id. at 20-25. Because both institutions had closed, the JSD focused on preventing future harm to Plaintiffs' rights in community settings. See JSD (Doc. 1047-1) at 14. Toward that end, the JSD groups a specific area of obligations, identified as “Continued Improvement of Community Services, ” for a different disengagement procedure. To disengage from those obligations, Defendants were required to conduct an annual community audit and achieve a certain score for four years. Id. at 14-17. After a fairness hearing regarding the JSD on November 20, 1997, the Court entered an Order approving the JSD.[23]

         The JSD set a December 31, 1998 deadline for disengagement of most of its obligations but indicated that certain requirements would not be met until December 31, 2000. Id. at 20. These deadlines were not met.

         ii. Plan of Action

          In addition to the JSD, the parties prepared a Plan of Action, [24] which was meant to provide a structure to enhance the community services system. See JSD (Doc. 1047-1) at 28.[25]Initially, the 1997 Plan of Action comprised thirteen components in thirteen appendices. Each appendix listed specific activities with their desired outcomes.[26] Over time, two additional appendices were added.[27]

         iii. Appendix A

         On May 20, 2005 the parties submitted Appendix A, which sought to resolve pending motions and to detail actions that would bring the Defendants into compliance with the JSD.[28]Appendix A contains a list of over 100 additional agreed actions which were meant to “facilitate compliance with the JSD, to promote completion of certain 1998 Audit Recommendations, to further address Case Management even though Plan of Action Desired Outcomes related to Case Management have been previously disengaged by an order of the Court and to address certain aspects of Vocational Rehabilitation.” Appendix A (Doc. 1473) at 1-2. Each action had a deadline, with the last one scheduled to be completed by the end of fiscal year 2007. Notably, the additional obligations in Appendix A did not change or end Defendants' obligations under the JSD and the Plan of Action. On May 20, 2005, the Court entered an Order approving Appendix A.[29]

         iv. 2015 Revised Table IV

         Between 2007 and 2010, Plaintiffs filed motions asserting that Defendants were non-compliant with the JSD, with the Plan of Action, and with Appendix A by failing to provide the JCMs adequate health care, a reasonably safe environment, and supported employment services.[30] The Court responded to the Plaintiff's first motion by appointing a Rule 706 expert.[31]The Court denied the second motion, deciding that an evidentiary hearing was necessary to examine the issues raised by the Plaintiffs.[32] The evidentiary hearing occurred in June 2011.

         After the evidentiary hearing, but before the Court issued a ruling, on November 2, 2011, Plaintiffs filed an opposed motion asking the Court to appoint a Jackson Compliance Administrator (JCA).[33] On November 14, 2011, Plaintiffs renewed their motion for remedial relief.[34] On October 12, 2012, the Court entered findings and conclusions and an order based on the evidentiary hearing.[35]

         In the 2012 Order, the Court found that Defendants were not in substantial compliance “with many outstanding health care, safety, and supported employment obligations” of the JSD, the Plan of Action, and Appendix A. 2012 Order (Doc. 1930) at 200. The Court granted Plaintiffs' motion to appoint a JCA, whose role as an administrator would have the “appropriate expertise and availability to prod Defendants into substantial compliance.” Id. On January 11, 2013, the Court vacated the Order Appointing the 706 Expert (Doc. 1610) and appointed Dr. Sue Gant as the JCA.[36]

         To address violations identified in the 2012 Order, the JCA, Plaintiffs, and Defendants were to develop a consolidated plan in the areas of health, safety, and supported employment. On June 12, 2015, the parties submitted a final list of objectives in the 2015 Revised Table IV.[37] Like Appendix A, the 2015 Revised Table IV did not replace existing decree obligations.[38] In addition to the obligations defined in the 2015 Revised Table IV, Defendants had to demonstrate substantial compliance with still outstanding obligations in the JSD, the Plan of Action, and Appendix A.

         C. Rule 60(b)(5) Motions

         Rule 60(b)(5) states that a court may relieve a party from a judgment, order, or proceeding if “applying [a judgment or order] prospectively is no longer equitable[.]” Fed.R.Civ.P. 60(b)(5). The Defendants have filed three motions[39] under Fed.R.Civ.P. 60(b)(5) seeking to end the Court's oversight of this class action.

         On April 2, 1999, Defendants filed their first Rule 60(b)(5) motion, asking the Court to dismiss the case and vacate the JSD because they had an Eleventh Amendment defense to the case and it was no longer equitable that the judgement should have prospective application.[40] On September 7, 1999, the Court denied the motion.[41] The Court found that Defendants did not have an Eleventh Amendment immunity defense to this case because the JSD “does not invade a ‘special sovereignty interest' of the State and does not provide for a form of improper legal relief.” Order (Doc. No. 1132) at 14.

         On April 26, 2011, the day before the pretrial conference scheduled to address the upcoming 2011 evidentiary hearing, Defendants filed their second Rule 60(b)(5) motion, asking the Court to vacate all existing orders and to end oversight of the case for the following reasons: 1) Defendants had made a reasonable effort to comply with the Court's orders; 2) Defendants had substantially complied with existing orders; and 3) changed factual circumstances made Defendant's continued compliance substantially onerous.[42] The Court suspended its ruling on the 2011 Rule 60(b)(5) Motion until after the conclusion of the 2011 evidentiary hearing so that the Defendants could cite evidence from the hearing in their briefing. See 2012 Order (Doc. 1930) at 12. Subsequently, the Court “terminated” the 2011 Rule 60(b)(5) Motion, which had not been fully briefed.

         On August 25, 2015, Defendants filed a third motion under Rule 60(b)(5).[43] As grounds Defendants identified four changed factual circumstances: 1) Defendants' decree obligations had grown substantially and compliance had become increasingly difficult because of the numerosity of the obligations and because they were not subject to objective measurement; 2) many of Defendants' obligations had become outdated; 3) Defendants' had remedied all constitutional violations; and 4) increased litigation costs inhibited New Mexico's ability to fund other important programs. Plaintiffs opposed the motion, contending that the Rule 60(b)(5) Motion was Defendants' attempt to avoid compliance.[44] On June 14, 2016, the Court denied the Rule 60(b)(5) Motion, finding that Defendants had not met their burden. See Jackson v. Los Lunas Center et. al., No. CIV 87-839, 2016 WL 9777237 (D.N.M. June 14, 2016) (Jackson II).

         The Court held that Defendants had not shown that there had been a significant change in fact that would warrant vacatur of all orders and decrees and termination of the case. Jackson II, 2016 WL 9777237 at *14. The Court based its holding on the following: 1) Defendants never pinpointed a moment in the case when circumstances had changed; 2) Defendants did not show that they had provided the JCMs with the essential purposes of the obligations, specifically adequate health care, a reasonably safe environment, and supported employment opportunity; 3) Defendants had not established that they had remedied all federal statutory and constitutional violations because, as Defendants conceded, they had not complied with all consent decree obligations which flowed directly from the violations found by Jackson I; and finally, 4) federalism concerns did not mandate the Court's termination of its oversight because the State had not fulfilled its obligations under federal law. Id. at 15-19. Defendants appealed.

         The Tenth Circuit reversed the Court, finding the Court had improperly focused on whether Defendants had substantially complied with the consent decrees, when it should have considered the broader question of whether “the State is meeting the requirements of the Fourteenth Amendment and the Rehabilitation Act by means other than those stated in the consent decrees.” Jackson v. Los Lunas Community Program et. al., 880 F.3d 1176, 1206 (10th Cir. 2018) (Jackson III). The Tenth Circuit found that two aspects of the Court's ruling required it to vacate the 2016 Order and to remand for further proceedings. Id. at 1204. First, the Tenth Circuit found that “the district court's determination that there are no chnged circumstances appears to be inconsistent with its factual findings.” Id. Second, the Tenth Circuit observed that “federalism concerns are heightened here because the decrees and the court's continued oversight have ‘the effect of dictating state . . . budget priorities.'” Id. at 1205 (quoting Horne v. Flores, 557 U.S. 433, 448 (2009)).

         The Tenth Circuit gave the Court three issues to examine on remand: 1) Are the Defendants currently violating class members' rights under the Fourteenth Amendment and the Rehabilitation Act; 2) If Defendants are not violating the class members' rights under federal law, then is the Defendant's remedy durable; and 3) If Defendants have implemented a durable remedy, is vacatur of all pertinent orders and termination of this case appropriate. Id. at 1207.

         On April 2, 2018, following the remand, Defendants supplemented the Rule 60(b)(5) motion.[45] The Court did not set a firm trial date, but indicated that trial would be set sometime in September or October of 2019.[46] From April 2018 through January 2019, the parties conducted fact discovery related to the Rule 60(b)(5) Motion and Supplement. Ultimately, the parties determined that “the most efficient and appropriate resolution of the Motion and this litigation is to enter a Settlement Agreement to Resolve the Litigation.” Settlement Agreement (Doc. 2299-1) at ¶ 3.

         The Settlement Agreement resolves all pending litigation disputes and is meant to “establish a durable remedy” that will survive the dismissal of the case. See Joint Memorandum (Doc. 2300) at 1-2. In their Joint Motion for Final Approval, the parties ask the Court to determine that the Settlement Agreement is fair, adequate, and reasonable.

         D. Settlement Agreement

         The parties structured the Settlement Agreement to close the gap between Defendants' policies and actions and thereby establish a durable remedy. The Settlement Agreement contemplates a deadline of 18 months from the Court's final approval for completion of its terms. The Settlement Agreement replaces all existing orders of the Court except Jackson I, the Memorandum and Order approving the motion to amend the complaint (Doc. 831) and the Memorandum and Order on class reconfiguration (Doc. 890). However, the Settlement Agreement incorporates, as of the date of its entry, current New Mexico state policies, procedures, practices, and waiver standards. The Settlement Agreement also introduces a new agreement: the Qualified Provider Agreement Initiative (QPAI). ...

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