Appeal from the United States District Court for the Northern District of Illinois. No. 80 C 5124 -- Milton I. Shadur, Judge.
Cummings, Chief Judge, Wood and Flaum, Circuit Judges.
This is an appeal from a June 30, 1983, order of the district court, as modified by two orders entered on July 26, 1983, which interpreted and enforced a consent decree that was executed by the United States and the Board of Education of Chicago ("Board") in 1980. For the reasons set forth below, we affirm in part and vacate in part.
On September 24, 1980, the United States filed a complaint against the Board charging that Chicago's public school system was racially segregated in violation of the fourteenth amendment and titles IV and VI of the Civil Rights Act of 1964. On the same day, the parties filed a previously-negotiated consent decree ("Decree"), in which they agreed that the Board would develop and implement a system-wide plan to remedy the effects of past segregation of black and Hispanic students in Chicago schools. The Decree also provides, in para. 15.1, that
each party is obligated to make every good faith effort to find and provide every available form of financial resources adequate for the implementation of the desegregation plan.
The Board developed and implemented a desegregation plan beginning in 1981. The district court upheld the constitutionality of the plan on January 6, 1983. See United States v. Board of Education of Chicago, 554 F. Supp. 912 (N.D. Ill. 1983).
On May 31, 1983, the Board filed a petition for an order directing the United States to comply with para. 15.1 of the Decree, and it requested declaratory and injunctive relief. Among other things, the Board asked the district court: (1) to find that the United States had violated para. 15.1; (2) to direct the United States to identify funds that could be made available to the Board for the desegregation plan; and (3) to order the United States to provide immediate financial assistance to the Board to the extent that funds were identified as available and needed by the Board to implement the plan.
After five days of hearings, the district court entered an order on June 30, 1983, ruling that while the Board had made every good faith effort to "find and provide every available form of financial resources,"*fn1 the United States had not. The district court found that the United States had violated para. 15.1 by failing to provide available desegregation funding, by taking no affirmative steps to find and provide such funding, and by taking affirmative steps to minimize and eliminate available sources of funding. The court ruled that the Decree obligates the United States to provide, from "available" federal funds, the level of funding that the Board needs to implement adequately its desegregation plan, and that the Board is unable to obtain from other sources. United States v. Board of Education of Chicago, 567 F. Supp. 272 (1983) (No. 80 C 5124), ("Order of June 30"). The court determined the obligation of the United States for funding the Board's desegregation plan in the 1983-84 school year to be not less than $14.6 million,*fn2 and it directed the United States to undertake an "active and affirmative program of making every good faith effort to find and provide" the $14.6 million and such further levels of funding as the district court may determine. Id. Slip op. at 7-8.
The court identified three sources of federal funding that are potentially "available" to the Board to satisfy the federal government's commitment: approximately $8.9 million in the Secretary of Education's Discretionary Fund;*fn3 $24 million in Title IV funds;*fn4 and $28.08 million in the Special Programs and Populations Account.*fn5 In addition, the district court ordered the Executive Branch to identify and support any available legislative initiatives that would provide financial assistance to the Board for desegregation expenditures. To effectuate its order and to insure that the funds would remain available pending final resolution of the case, the court enjoined the United States from spending or obligating certain funds in the Secretary's Discretionary Fund and the Department of Eduction's Special Programs and Populations Account. Finally, the United States was ordered to undertake an affirmative program to preserve the continued availability of $250 million in excess Guaranteed Student Loan funds*fn6 and to support legislative initiatives to set aside this $250 million in an escrow fund, for potential use in fulfilling the United States' obligations under para. 15.1 over the next five years.
In appealing the district court's orders, the United States essentially raises two issues: first, whether the district court correctly interpreted the nature and extent of the United States' obligation under para. 15.1 of the Decree; and second, if its interpretation was correct, whether the remedies imposed by the district court constitute an abuse of discretion.
INTERPRETATION OF PARAGRAPH 15.1
In interpreting para. 15.1, the district court found that para. 15.1 imposes an obligation on the United States to do more than merely assist the Board in looking for and applying for federal funds. See Transcript of June 8, 1983, at 15; Transcript of June 27, 1983, at 23. Furthermore, the court determined that "the United States' promise to make every good faith effort ' to find and provide available funds entails a serious and substantial obligation." Conclusion of Law No. 8. In line with this interpretation of para. 15.1, the district court concluded that, under this provision, the United States cannot work actively to make financial resources unavailable. Conclusion of Law No. 4. Finding that the ...