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UNITED STATES v. BD. OF CITY OF CHICAGO

June 4, 1985

UNITED STATES OF AMERICA, PLAINTIFF,
v.
BOARD OF EDUCATION OF THE CITY OF CHICAGO, DEFENDANT.



The opinion of the court was delivered by: Aspen, District Judge:

MEMORANDUM OPINION AND ORDER

The Court must once again referee a skirmish in the ongoing battle between the United States and the Board of Education of Chicago ("the Board") over the obligations of the United States under the consent decree it signed in this desegregation action. The United States has moved to vacate a preliminary injunction which restrains certain Department of Education ("DOE") funds. The injunction was entered on June 30, 1983, see 567 F. Supp. 272, 285 (N.D.Ill. 1983) (Shadur, Jr.), affirmed by the Court of Appeals, 717 F.2d 378, 385 (7th Cir. 1983), and has remained in effect (with some modifications from time to time releasing small fractions of the money). For the reasons stated below, we deny the motion to vacate, except for some modifications of the amounts restrained.

I.

The complex history of this unique desegregation case has been detailed in the previous appellate and trial court opinions. See 744 F.2d 1300 (7th Cir. 1984), cert. denied, ___ U.S. ___, 105 S.Ct. 2358, 86 L.Ed.2d 259 (U.S. 1985) ("Board II"); 717 F.2d 385 (7th Cir. 1983) ("Board I"); 588 F. Supp. 132 (N.D.Ill. 1984); see also N. Devins & J. Stedman, New Federalism in Education: The Meaning of the Chicago School Desegregation Cases, 59 Notre Dame L. Rev. 1243 (1984). In view of the parties' need for a prompt ruling on the pending motion, we will not reproduce the extensive history printed in the above references. Rather, we will state only the most crucial facts and then develop facts as they become relevant in our legal discussion below.

The case centers on ¶ 15.1 of the consent decree entered in this case in 1980, which states:

  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 Seventh Circuit held that that provision "imposes a substantial obligation on the government to provide available funds to the Board." Board I, 717 F.2d at 383. But the most recent Seventh Circuit opinion narrowed the definition of "available funds" and the scope of the government's obligation to provide these funds. According to the higher court, ¶ 15.1 does not require the government to lobby for desegregation funds, to reprogram funds for use by the Board or to provide direct grants for school desegregation. 744 F.2d at 1307. But ¶ 15.1 does require the government to put the Board "at the top of the list' for any program grants that can be applied to desegregation assistance and for which the Board is eligible." 744 F.2d at 1305. The Court held that by so "guaranteeing that the Board will be funded on a priority basis under existing school desegregation programs, the amount of which funding is determined by program criteria and is subject to the review of the district court, the government would comply with our interpretation of ¶ 15.1. . . ." 744 F.2d at 1305-06. The Court remanded to this Court for a "determination of whether the Board is receiving the maximum level of funding that is available under the criteria of programs through which funds for desegregation can be disbursed." Id. at 1306.

The parties are concluding discovery and preparing briefs for this remand determination. Although the Court of Appeals was silent about the continuing restraint of DOE funds pending our decision, the United States has moved to vacate the restraint immediately, before this Court can fulfill its mission on remand of deciding whether the Board is entitled to some of the funds under restraint. The motion rests on two grounds. First, Congress passed a bill, the so-called "Weicker Amendment," ordering this Court to release the money, Pub.L. 98-139, 97 Stat. 871, § 309 (1983), and the United States argues that we must apply that law. Second, the United States asserts that traditional principles of equity no longer support continued injunctive relief.

In response, the Board has agreed to release some of the funds and conceded that Board II foreclosed its chances of recovering certain other funds. The Court issued a short order releasing these funds.*fn1 As for the rest of the money, the Board agrees that the Weicker Amendment orders this Court to release the funds, but it argues that the statute unconstitutionally violates basic principles of separation of powers. The Board also asserts that traditional equitable concerns demand continued restraint of the money.

Clearly, this Court should decide the equitable issue first. If we rule that equity no longer compels restraint, we moot the constitutional issue. If equity continues to warrant restraint, however, then we will grapple with the Weicker Amendment.

II.

A.

The funds were originally restrained because the Court thought they could potentially satisfy the government's obligations to the Board under the consent decree. They have been restrained to preserve the status quo until the Board's entitlement to them could be determined. "Given the possibility that these funds might otherwise be spent and given the need to protect the interests of the Board by preserving the status quo . . . the district court did not abuse its discretion by imposing the freeze." Board I, 717 F.2d at 385. The Board's entitlement to these funds still has not been finally determined. That is what these remand proceedings are all about. The motion to vacate, then, is an attempt to disrupt the status quo before we can determine the Board's entitlement to the funds. This attempt is made in good faith, since Board II has changed the Board's chances of recovering these funds. Nevertheless, we conclude below that concerns of equity still warrant preservation of the status quo through continuing restraint on the funds until we decide the merits in the next few weeks.

The Seventh Circuit recently redrafted the traditional equitable test for preliminary injunctive relief. To obtain relief the plaintiff must show that (1) he has no adequate remedy at law and will suffer irreparable harm if the preliminary injunction is not granted; (2) the irreparable harm he would suffer outweighs the irreparable harm defendant would suffer if the injunction is granted; (3) he has some likelihood of succeeding on the merits; and (4) the desired injunction would not frustrate the "public interest." Roland Machinery Co. v. Dresser Industries, 749 F.2d 380, 386-88 (7th Cir. 1984) (reh'g and reh'g en banc denied). The requirements of "irreparable harm" and "likelihood of success" are intertwined. As a threshold matter, the plaintiff must show that his chances "are better than negligible." Id. at 387. If the plaintiff shows this, the Court must decide how likely that success is, "because this affects the balance of relative harms." Id. A sliding scale applies. "The more likely the plaintiff is to win the less heavily need the balance of harms weigh in his favor; the less likely he is to win, the more need it weigh in his favor." Id.

The parties dispute whether, in light of Board II, the Board continues to meet the last two requirements β€” "likelihood of success" and relatively insignificant harm to "the public interest." Before reaching those two elements, we reaffirm that the Board easily satisfies the first two elements. It clearly has no remedy other than from the restrained funds. Were we to lift the restraint, the government would spend some of the money on other grantees (except for the amount it has decided, without this Court's approval, is proper to grant to the Board) and allow the rest to lapse into the Treasury. These events would surely harm the Board β€” and, of course, the children of Chicago β€” irreparably were we to rule on the merits that the Board is entitled under ΒΆ 15.1 to more than the Secretary has decided to grant. In sum, we agree completely with the Board that the restrained funds provide the only realistic and meaningful source of relief should it prevail on the merits. Second, the balance of harms viz. the Board and the government tips strongly in the Board's favor. Indeed, the ...


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