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October 15, 1985


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



The dispute over the Consent Decree in this unique desegregation case returns to the district court for the third time. The case is here, assigned to a new judge, following the Seventh Circuit's second opinion in the case. See United States v. Board of Education of Chicago, 744 F.2d 1300 (7th Cir. 1984) ("Second Opinion"), cert. denied, ___ U.S. ___, 105 S.Ct. 2358, 86 L.Ed.2d 259 (1985). Although the United States won the appeal, the Court of Appeals concluded its opinion with an admonition to the United States that its conduct in connection with the case had been less than honorable:

744 F.2d at 1308. Such conduct continues. The United States continues its hard line approach to its obligations under ¶ 15.1 of the Consent Decree, which provides:

  Each party is obligated to make every good faith
  effort to find and provide every available form
  of financial resources adequate for
  implementation of the desegregation plan.

Rather than make this "good faith effort," the government has made and continues to make every possible effort to minimize its obligations under ¶ 15.1, even as narrowed by the Second Opinion. In this opinion, we hold that the United States has violated the letter, as well as the spirit, of the Decree.

A consent decree is both an enforceable contract and an order of the court.*fn1 It quickly became clear to this Court that the United States has had little respect for ¶ 15.1, whether viewed as contractual promise or judicial command. As the Court of Appeals implicitly recognized, 744 F.2d at 1308, changes in administration and philosophy since 1980, when the decree was signed, have been largely responsible for generating the conflict in this case. This change in philosophy apparently includes the belief that promises made by previous administrations need not be honored and that court orders need not be followed if they contradict prevailing ideology. If such a belief exists, it will not prevail, as this opinion will explain.

Since receiving the case, the Court has had to quickly learn the complex history of the case, and resolve pre-trial disputes, see 610 F. Supp. 695 (1985); 610 F. Supp. 702 (1985), as the parties feverishly worked to prepare evidence and supporting material for this merits opinion. We appreciate the hard work of the parties and their briefs, which were very long — totalling about 450 pages, not counting the thousands of pages of appendices — but very helpful.

Remarkably, the parties devoted well over 150 pages of their briefs to arguments over what the Court of Appeals meant in the Second Opinion, which itself spanned just nine published pages. Obviously, much of this case hinges on our interpretation of the Second Opinion. Accordingly, before entering our Findings of Fact and Conclusions of Law concerning the evidence submitted by the parties, we set forth first an extensive preliminary opinion, which interprets the Second Opinion, thereby defining the context shaping the Findings and Conclusions which follow.

Technically, pending before the Court is the Board's motion for declaratory and injunctive relief, which essentially alleges that the United States violated ¶ 15.1 of the Consent Decree in many ways in 1984 and earlier years. For the reasons stated in the Preliminary Opinion and the Findings and Conclusions that follow, that motion is granted in large part.


1. Background

The Consent Decree embodying the unique funding provision was entered and approved by the Court on September 24, 1980, the same day that the United States sued the Board for allegedly operating racially segregated schools in violation of the Fourteenth Amendment and Titles IV and VI of the Civil Rights Act of 1964. The history surrounding the Consent Decree is detailed at length in previous opinions and repeated in part in Chapter I of our extensive Findings of Fact below. For present purposes, we need only repeat the undisputed proposition that the desegregation plan envisioned by the Decree and the funding provisions of the Decree were unique and pioneering. The Plan ultimately developed by the Board, endorsed by the United States and approved by the District Court, see United States v. Bd. of Education of Chicago, 554 F. Supp. 912 (N.D. Ill. 1983), created a broad range of costly educational programs designed to remedy the effects of past segregation on Chicago's black and Hispanic students. The Plan eschewed forced desegregation methods, e.g. busing, in favor of voluntary desegregation made possible by the Plan's educational programs. The Plan recognized that Chicago's demographics made complete and lasting desegregation impossible. Thus, the Plan as approved by the Court created compensatory educational programs targeted to those schools which would remain segregated. These programs are intended to remedy the past and continuing effects of segregation. See, e.g., Findings of Fact ("Findings") 106-107.

Frustrated by what it considered the United States' unwillingness to help fund the Plan, the Board petitioned the District Court on May 31, 1983, for an order enforcing the funding obligations of the United States under ¶ 15.1. The United States contended that the Decree did not constrain its discretion in the funding process, and that to honor the decree it need only help the Board apply for funds. The Court rejected this argument, embracing the Board's position, which was that ¶ 15.1 unambiguously required the United States to provide available funds to the Board. 567 F. Supp. 272, 282. The Court held that the United States violated ¶ 15.1 by failing to take affirmative steps to find and provide available funds, as well as by working to make funds unavailable to the Board. Id. at 283-85. The United States was obligated, said the Court, to provide presently available funds, to find other available funds, to support certain legislative initiatives and to seek appropriations which could be used to aid the Board's Plan. The Court enjoined the United States from spending certain Department of Education funds until the Board's entitlement to them could be finally determined. Id. at 289.

On appeal, the United States continued to assert that it had no funding obligations under ¶ 15.1. The Court rejected this assertion. Although disagreeing with the District Court's conclusion that ¶ 15.1 was unambiguous on that issue, it affirmed the District Court's alternative holding that the extrinsic evidence supports the conclusion that ¶ 15.1 requires the United States to "go beyond assisting the Board in locating and applying for federal funds, and . . . imposes a substantial obligation on the government to provide available funds to the Board." 717 F.2d 378, 383. However, the Court questioned whether the District Court was correct in concluding that the United States had violated ¶ 15.1 by supporting broad legislative policy decisions which effectively reduced the pool of funds available to the Board. Id. It did not decide this question, though, but instead affirmed the District Court's finding of lack of good faith "on the narrower and more discernible ground" that the lower court had also found that the United States actually had funds available for the Board but had failed to provide them. Specifically the Court referred to the District Court's Findings of Fact 34-35 and 42-43, which had identified the Title IV fund and the "Discretionary Fund" as having available funds. Id. The Court also vacated the remedies ordered by the lower court, holding the "principles of comity" between the judicial and executive branches made it appropriate to let the United States have first crack at proposing how it would comply with its funding obligations, as well as remedy past non-compliance. Id. at 384.

On remand, the United States filed its November 10, 1983 "Plan for Supporting the Desegregation Plan of the Board" ("November 10 Plan"). Ostensibly a plan for complying with the Court of Appeals opinion, the November 10 Plan was essentially a legal brief arguing for dismissal of the Board's petition and accompanied a motion to dismiss. Among other things, the government argued that recent legislative activities rendered 1984 funds unavailable to the Board, except for $20 million dollars allocated as part of those activities.*fn2 However, the government finally and for the first time acknowledged that it was ready to give the Board some priority in dividing up desegregation funds. This promise was laden with conditions: The Plan stated that "in reviewing applications under any desegregation programs that provide operational support to local educational agencies, the Department [of Education] would give the Board a competitive priority under any criterion related to need, to the extent consistent with the statute and regulations." The United States calls this a "commitment," but this is difficult to understand, for it was made in the context of its concurrent arguments that no funds were then available to the Board, and that no desegregation programs provided operational support to local educational agencies. In fact, the Plan did not include Title IV or the Discretionary Funds in the priority, despite the Court of Appeals' then-recent holding concerning those funds.

In March 1984, the District Court held an evidentiary hearing, and in June, issued a lengthy and comprehensive opinion. See 588 F. Supp. 132 (N.D.Ill. 1984). It is not necessary to discuss that opinion in detail. In a nutshell, the Court reviewed the history of the proceedings, including the parties' understandings when they entered the Consent Decree. It found that most of the programs under the Board's desegregation plan materially aid the successful implementation of the Plan, and that their costs were reasonable.*fn3 The Court also found that the funding requirements of the Plan for the 1984-85 school year had climbed to about $170 million; that the Board had exerted its best efforts to fund the Plan, but fell some $104 million short of doing so; that the United States was bound under ¶ 15.1 to make good faith efforts to find and provide this balance of $104 million. The Court held that various actions and inactions of the United States constituted bad faith, including submission of the November 10, 1983 Plan, failing to provide funds to the Board, failing to ask Congress for money for the Board, failing to reprogram funds for use by the Board, deciding to curtail direct desegregation grants to local educational agencies, lobbying Congress specifically to make funds unavailable to the Board and redrafting regulations in the Discretionary Fund thereby rendering funds unavailable to the Board.

The United States appealed, and the Seventh Circuit vacated the District Court's 1984 opinion and its subsequent remedial order. At the outset we observe that the Court did not address most of the District Court's Findings of Fact and specifically reversed only its finding that as a matter of construction ¶ 15.1 required the Executive Branch to lobby in Congress and findings of bad faith which depended on this finding. Instead of examining the lengthy District Court Opinion in fine detail, the Court in a brief but broadly worded opinion altered the framework for approaching this case and remanded for application of this approach. Before embarking on its legal analysis, the Court set out the principal issues before it. First, it said it had to decide whether ¶ 15.1 required the Executive Branch "to engage in legislative activity, to make up the difference between the funds necessary for implementing the desegregation plan and the funds that the Board has budgeted for this purpose, and to award Title IV funds and Discretionary Funds to the Board without regard to other grantees." 744 F.2d at 1304. If it would have ruled for the Board on these issues, the Court said it would have had to decide whether the doctrine of separation of powers rendered the Decree unenforceable. The Court resolved the first set of questions in favor of the United States, so it never expressly addressed the constitutional issue. However, it is clear that the separation of powers doctrine lurked beneath the surface of the Court's opinion.

In Part II(A) of the opinion, the Court interpreted ¶ 15.1, as that section's heading states. It reaffirmed its 1983 holding that ¶ 15.1 imposes "a substantial obligation on the government to provide available funds to the Board." Id. at 1304. The Court then noted that on remand, the government had stated in its November 10, 1983 Plan that it was prepared to give the Board priority in the distribution of desegregation funds under existing federal programs." Id. at 1305. At oral argument, the Court had asked government counsel what the government's priority meant. Counsel went beyond the literal terms of the Plan spelled above, and stated that under the system of priority, the Department of Education "will 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." Id. This "top of the list priority" applied to Title IV, guaranteeing that the Board will receive its "`equitable fair share' of funding under Title IV criteria," id., and that this funding will be earmarked for Chicago and set apart from the usual block grant funding. Counsel also conceded that the priority applies to the Discretionary Fund.

The Court "considered" these representations and held that

  by guaranteeing 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 and would fulfill its substantial
  obligation to provide available funds.

Id. at 1305-06. The Court added that ¶ 15.1 binds the Secretary of Education's discretion "with respect to funds that may be used for school desegregation pursuant to Congressional appropriation." Id. at 1306 n. 7. The Court also held that this ruling meant that, as a general rule, ¶ 15.1 does not force the government to try to make funds available through legislative activity. Id. at 1306. By so doing, the Court did not expressly address the alternative separation of powers arguments raised by the United States.

The Court concluded this section with its remand instructions. It remanded the case for this Court to determine 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 Court added that so long as the Board has unmet needs, the government also has a continuing "duty to search" for "unencumbered funds [in the Department of Education and other federal agencies] that may be used to advance the Board's desegregation plan." Id. at 1306-07.

Thus, in Part II(A) the Court answered the "lobbying" question in favor of the government. It also ruled that ¶ 15.1 cannot guarantee the Board all funds made available by Congress. The Board deserves only an "equitable fair share" following "priority" consideration.

The Court in Section II(B), titled "Bad Faith," turned to the District Court's findings of bad faith, which had supported its remedial ruling that the United States had an unconditional obligation to pay $104 million to the Board for 1984-85. The Seventh Circuit vacated all the findings of bad faith but one. Working from its holding in Part II(A) that ¶ 15.1 does not require the government to lobby for desegregation funds, the Court held that it was not bad faith for the government to fail to take certain legislative actions, such as (1) failing to request Congressional appropriations for the Board, (2) failing to "reprogram"*fn4 funds for the Board, (3) administratively deciding not to provide direct grants for school desegregation, and (4) redrafting administrative regulations limiting grants of Discretionary Funds. In support of points (3) and (4), the Court reasoned that the decisions were general and nationwide, and therefore did not indicate that the United States specifically intended to avoid ¶ 15.1. Id. at 1307 & nn. 9, 10. The Court did not reverse the lower court's "most significant finding of bad faith," concerning the government's lobbying activities which tried to make funds unavailable to the Board. The Court assumed that these activities constituted bad faith, but held that the District Court abused its discretion by ordering a $100 million remedy for this violation. This remedy would have rendered funding unavailable to other grantees and was thus held to be unreasonable. A civil contempt citation would have been the appropriate remedy, but the time for such action had passed. Id. at 1307-08. The Court concluded by scolding the Executive Branch for its activities, as noted above in our introduction. It remanded for proceedings under Section II(A) of the opinion and directed under Circuit Rule 18 that a new district judge take over the case. The case was reassigned by lot to this Court.

2.  Issues Raised by the Opinion

The second Court of Appeals opinion ("Second Opinion") is clear about several things, which the Board does not dispute. As a general rule, ¶ 15.1 no longer affirmatively requires the Executive Branch to engage in legislative activity supporting the Board.*fn5 It does not require that the Board receive funds without any regard for other grantees. It also precludes the Court from finding that failure to lobby or reprogram amounts to bad faith per se, or that the mere act of creating a general policy which effectively limits the funds available to the Board amounts to bad faith (absent evidence of intent to hurt the Board). The Board also concedes that, to a large extent, the Secretary is free to obligate portions of otherwise theoretically "available" funds to other purposes and grantees.

However, the parties bitterly disagree about much of the rest of the opinion. To paraphrase the Circuit Court, the process of dispute resolution continues to fail remarkably in this case. See 744 F.2d at 1304. The parties have raised several broad, but crucial, issues of interpretation of the Second Opinion. We must decide the dispute over what the Second Opinion means in order to know how to carry out its remand instructions. The nature of the Second Opinion explains why so many questions remain unanswered. The Court's purpose was to change the approach to the case, not to resolve the case. The unresolved dispute divides into three general, overlapping issues, which the Board has appropriately dubbed the "scope," the "pipeline" and the "share" issues. Resolution of these issues will give meaning to ¶ 15.1's words, "every available form of financial resources."

The "scope" question asks how broadly the ¶ 15.1 funding priority sweeps. In which Congressional programs are funds "available" for the Board's Plan and subject to priority treatment? The United States contends that the Second Opinion limits the "top of the list" priority (which it repeatedly demotes to a "competitive priority," a point we shall return to) only to programs specifically designated by Congress in whole or in part as a "desegregation" program. The Board argues that neither ¶ 15.1 nor the Second Opinion limits the government's duty to programs which carry an explicit "desegregation" label. Rather, the "scope" of the priority covers any program which can materially aid the Board's desegregation plan and for which the Board's own programs qualify under statutory criteria. In other words, according to the Board, a "desegregation" program is that which is contained in the Board's "desegregation plan."*fn6

While the scope issue cuts horizontally across various Congressional programs, the "pipeline" issue has both vertical and horizontal components within a given Congressional program. The "pipeline" question asks when the Secretary's discretion is bound and how it is bound. The "when" question is one of vertical priority: when during the administrative funding process — from the point where money enters the "pipeline," i.e., when Congress allocates funds, to where it exits the pipeline, i.e., when the Secretary writes checks to grantees — does the Consent Decree affect the Secretary's discretion? The United States argues that, until the last phase of the granting process, it is free to exercise its discretion with nary a glance at the Consent Decree; only after it passes regulations, sets priorities and refines program criteria must it take the Consent Decree into account. That is, only when the Board applies for funds in competition with other applicants does it get a priority, says the United States. The Board, of course, argues that the Secretary must consider the Consent Decree much earlier in the funding process. Although not specific about what particular steps the Secretary must take (it does detail steps the Secretary could take, see Board's Merits Memorandum at 46-72), the Board says that ¶ 15.1 binds executive discretion at the entrance of the pipeline, ensuring that the Board's needs are considered from that point on as a priority along with the myriad other priorities. In that sense, the pipeline issue is "horizontal," since the United States would have to balance the Board's priority against other priorities within the pipeline.

The "share" issue depends heavily on the outcome of the scope and pipeline issues. It asks what "share" of available funds, that is, the dollar or percentage amount, the Board should get because of the priority. This question is horizontal as between the Board and other grantees. Out of a pool of given funds, what does the Board get and what do the others get, after applying the priorities as defined by the "scope" and "pipeline" issues?

The scope and pipeline issues depend mostly upon the teachings of the Second Opinion and the meaning of ¶ 15.1. Therefore we address those questions next. The share issue essentially is the issue specified in the Court of Appeals remand instructions. We decide that in Chapter IX of this opinion, after entering our Findings of Fact and Conclusions of Law.

3.  The Scope Issue

Unfortunately, the Second Opinion is not clear on its face as to the scope issue. The length of the parties' submissions on this issue alone underscores that point. Nevertheless, after carefully considering the Second Opinion in the context of the Consent Decree and its history and of the First Opinion, we hold that the Board's position on this issue is correct: The ¶ 15.1 priority extends to any statutory program which could materially further the Board's desegregation plan, so long as a project in that Plan may qualify for funding under relevant statutory criteria.

In reaching this result, we begin by considering the Second Opinion. Because of its broad, vision-shifting approach, the Court never explicitly addressed the scope issue now before us. Probably this explains the opinion's ambiguity on this point. As noted earlier, the Court said it was answering a different question, that is, whether ¶ 15.1 requires the Executive Branch to lobby Congress to make up the difference between what the Board has spent on its Plan and what the Plan needs. 744 F.2d at 1304. In answering "no" to this question, the Court several times used language which is relevant to the current scope question. Both sides argue that this language supports their positions. First, in summarizing the government's representations at oral argument, the Court said that the proposed priority system would 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 1305 (emphasis added). It then discussed Title IV and the Discretionary Fund, both of which list desegregation as a statutory purpose. In its holding, the Court said that the Board must be "funded on a priority basis under existing school desegregation programs, the amount of which funding is determined by program criteria. . . ." Id. (emphasis added). The Court added that ¶ 15.1 binds the Secretary's discretion "with respect to the funds that may be used for school desegregation pursuant to congressional appropriation." Id. at 1306 n. 7. In explicitly rejecting the District Court's findings that ¶ 15.1 required lobbying, the Court held that no evidence showed "that the parties had any federal funding sources in mind other than programs that could be used, consistent with the intent of Congress, to fund school desegregation efforts." Id. at 1306. Finally, in its remand instruction the Court ruled that this Court should determine 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.

Each party vigorously contends that this language unambiguously supports its position. But because this language is facially ambiguous, we must disagree with both sides that the opinion's language is itself determinative. On the one hand, the Board argues quite reasonably that the language of the opinion supports a broad reading of the scope issue. Nowhere does the opinion explicitly limit ¶ 15.1 to desegregation-label programs. Rather, it speaks about "any program grants that can be applied to desegregation assistance"; about "funds that may be used for school desegregation pursuant to congressional appropriation"; about "programs through which funds for desegregation can be disbursed." (Emphasis added.) All of this language can be read to mean that the Board may receive funds to aid its desegregation plan (hence, receive "desegregation assistance") so long as programs in its Plan qualify under statutory criteria.

On the other hand, the United States' position is plausible from the face of the opinion. The Court held that the priority applies to "existing school desegregation programs," id. at 1305, that is, "programs that could be used, consistent with the intent of Congress, to fund school desegregation efforts." Id. at 1306. As the government argues, this language could be read to mean that Congress must specifically intend that the money be spent for desegregation. The Court's specification of only Title IV and the Discretionary Fund — two desegregation-label programs — bolsters this reading. Yet this reading is not inevitable. The other language quoted earlier very much supports the Board's position. The word "existing" probably is there to underscore the Court's paramount concerns with lobbying rather than to impose a desegregation-label requirement. And the language, "consistent with the intent of Congress," could support the Board's reading. The Court used that language in the context of ruling that ¶ 15.1 does not, as a matter of construction, require lobbying. In the context of all the other quotations, it could plausibly be read to mean ¶ 15.1 does not require lobbying, but only covers "programs that could be used, not inconsistent with the intent of Congress, to fund the Board's desegregation efforts." This reading becomes much more plausible when one realizes that everyone, including the Court of Appeals, knew that the Board's unique Plan contained many "non-desegregation" programs in it.

In sum, the Court simply did not unequivocally answer the current scope question: in the unique context of this case, is a "school desegregation program" one that is labelled as such, or one that could aid the Board's desegregation plan? We conclude that the Board's position is correct, not because the language of the opinion inevitably reads that way, but because that language, considered in the context of ¶ 15.1 and the extrinsic evidence, makes the Board's position the more logical and reasonable one.

The language of ¶ 15.1 itself plainly implies no limitation to programs which Congress has labelled "desegregation." Such an implication would actually run contrary to the thrust of the Consent Decree, which the parties agree was and is unique and pioneering.*fn7 Provisions of a Consent Decree must be read in the context of the whole agreement, see, e.g. Alliance to End Repression v. City of Chicago, 742 F.2d 1007, 1011 (7th Cir. 1984) (en banc). The Decree contemplated a broad, system-wide plan. It anticipated the use of many educational programs, both to encourage voluntary desegregation and to compensate children in segregated schools for inevitable continued desegregation.*fn8 The vital funding provision for this Plan, ¶ 15.1, expressly incorporates no artificial limitation. It binds both parties "to make every good faith effort to find and provide every available form of financial resources adequate for implementation of the desegregation plan." This language does not reasonably suggest that the funding duty is limited to desegregation-label programs. Instead it is obviously broad and inclusive, suggesting no limitation of the kind offered by the United States. Indeed, the United States' reading flies in the face of this language. The comprehensive nature of the Board's Plan and the Consent Decree, see Findings 101-110, shows that the parties took an approach that cut away traditional labels and old ways of dealing with desegregation cases. The case involved a novel approach to desegregation, using many costly "non-desegregation" educational programs. It simply does not make any sense that ¶ 15.1, the lifeblood of this Plan, would silently draw a line between programs with and without desegregation labels when the rest of the Consent Decree draws no such line.

The extrinsic evidence surrounding the Consent Decree buttresses the Board's position on the scope issue. While the United States is correct that during the negotiations the Board was concerned about its previous difficulties in getting funding under desegregation-label programs,*fn9 these negotiations were unfruitful. After a new Board was appointed and new counsel retained, the parties' focus shifted to general principles rather than specific dollar values. As the United States has stipulated ("1984 Stipulation 104"), ¶ 15.1 was not designed to incorporate any specific discussions, but to establish a general and flexible obligation "which would be interpreted and applied as appropriate in whatever future circumstances might arise." Thus, Judge Shadur found in 1984 (a finding which we adopt below in Chapter I) that the extrinsic evidence does not support a reading that ¶ 15.1 was limited to the ESAA program or the historical amounts of that program. See Findings 101-110.

One piece of evidence, relied upon by the Seventh Circuit in the First Opinion, also supports the broader reading of the scope issue. Shortly after signing the Decree, the General Counsel of the Department of Education wrote in a memorandum that the Decree compelled the Department to "ensure that the Chicago School Board . . . receives the maximum amount of financial and technical assistance that this Department can provide." 717 F.2d at 382 n. 7. This memorandum supported the Appeals Court's holding that ¶ 15.1 binds the Secretary to provide available resources. We also think it strengthens the conclusion that this "duty to provide" contains no implicit limits concerning desegregation-label programs. See also Findings 110, 126. The words "maximum amount of . . . assistance" imply no such limits*fn10 and neither do the Court of Appeals' two holdings that the United States' obligation under the Decree is "substantial."

In short, the broad language of the Consent Decree and extrinsic evidence concerning its history and the history of this case supports the Board's reading of the scope issue. If the Court of Appeals had meant to reject such a reading, it would have had to deal with the language of the Consent Decree, the extrinsic evidence and Judge Shadur's relevant factual findings. Its failure to do so confirms our belief that it was not addressing the current scope issue directly, which explains the ambiguity.

The United States concedes that ¶ 15.1 applies to programs which do not carry a desegregation label. It acknowledges that ¶ 15.1 imposes a duty to "find" (but not "provide") funds in "non-desegregation" programs. In fact, the government stipulated in 1984 that the discussions leading to ¶ 15.1 addressed "funding possibilities, relating not only to the Department of Education . . . but also other federal agencies such as the Department of Justice, the Department of Transportation, and the Department of Housing and Urban Development." See 588 F. Supp. at 141 (Finding of Fact 104, based on 1984 Stipulation 104). Thus, while it admits that ¶ 15.1 in some form applies to such programs, it attempts to mitigate the significance of this admission by arguing ¶ 15.1 imposes only a "finding" duty to these programs. The government thereby attempts to bifurcate the phrase "find and provide" in ¶ 15.1. This does not wash.

In its "bifurcation theory," the government draws a new line in ¶ 15.1, arguing, in effect, that it should be read to mean:

  The United States has two obligations. First, it
  must make every good faith effort to
  find funds appropriated by Congress to programs
  which could materially aid the Board's
  desegregation Plan. It must help the Board apply
  for such funds, but it owes the Board no special
  treatment in providing such funds. Second, the
  United States will make every good faith effort to
  provide only funds appropriated to programs which
  Congress has labelled "desegregation."

This construction tortures the language of ¶ 15.1. As noted above, the plain language of ¶ 15.1 creates one duty concerning one pool of funds: "make every good faith effort to find and provide every available form of financial resources adequate for implementation of the desegregation plan." The language suggests no above bifurcated duty to find one sort of funds and provide another.*fn11 Rather, it suggests the opposite since the "Plan" includes many "non-desegregation" programs.

The United States suggested no such bifurcation in 1983 when it simply ignored the word "provide" and argued that it had a unitary duty only to help the Board "find" and apply for funds. The Court of Appeals suggested no such bifurcation in 1983 when it held that ¶ 15.1 imposes a substantial obligation on the United States to provide available funds.*fn12 The November 10, 1983 Plan suggests some sort of bifurcation, but at oral argument on appeal (during which the government went well beyond that Plan, as we discuss below) the government did not distinguish the duty to search from that to provide.*fn13

Despite the unreasonableness of the bifurcation theory, the United States argues that certain language in the Second Opinion supports bifurcation. In its remand instruction the Court first declared that we must determine whether the Board has received "the maximum level of funding available under the criteria of programs through which funds for desegregation can be disbursed." 744 F.2d at 1306. The Court added:

  In the likely event that the Board has financial
  needs that are still unmet, we note that the
  government has admitted that it has a "duty to
  search among funds that Congress had indeed
  made . . . available." Transcript of April 5, 1984,
  at 1416. The best proof that the government is
  fulfilling this duty would be the assignment of
  personnel to the task of periodically reviewing
  federal funding programs, in the Department of
  Education and in other federal agencies, for
  unencumbered funds that may be used to advance the
  Board's desegregation plan.

Id. at 1306-07 (emphasis added). We disagree with the government that this language supports its bifurcation theory. First, if the Court meant to adopt such an approach, it would have had to deal directly with the unitary language of the Consent Decree, the extrinsic evidence and the District Court's 1984 opinion, all of which strongly militate against the bifurcation theory. We do not believe the Court would ignore this history if it were to reach such a conclusion. It is incredible that the Court would casually bifurcate ¶ 15.1 without discussing its language or the extrinsic evidence. When the court did construe ¶ 15.1, it did explicitly discuss its language and relevant extrinsic evidence. See 717 F.2d at 382-83; 744 F.2d at 1306.*fn14

We agree with the Board that the Court in the "search" quotation was stating something much simpler and less controversial. The excerpt merely underscores the fact that the United States' obligation under ¶ 15.1 is a continuing one, which is not discharged even if this Court decides that the Board has in fact received "the maximum level of available funds" under a known program. For even under the Board's reading of the scope issue, it will have large "financial needs that are still unmet" even after receiving the "maximum" level of funding. So long as such a shortfall exists, the United States must continue to search diligently for "unencumbered" funds. This surely does not imply that it has no duty to "provide" such funds if "found," or that the funds will not be subject to priority treatment. What is the point in finding but not providing such funds? And such an implication is especially unreasonable in light of the Court's failure to discuss ¶ 15.1, the extrinsic evidence, or the bifurcation theory itself.

We therefore reject the United States' bifurcation theory. We must also reject the premise upon which it, as well as much of the government's case, is based, namely, that the Court of Appeals "endorsed" or "adopted" the priority system and bifurcation espoused in the November 10, 1983 Plan. The United States claims that its November Plan articulated its bifurcated duty, that the Assistant Attorney General simply "explained" the priority to the Appeals Court at oral argument, and that the Second Opinion merely endorsed the Plan as explained at oral argument. From these premises flow many of the government's arguments, including its bifurcation theory on the scope issue and its restrictive position on the pipeline issue. Thus, its claim that the Court of Appeals essentially incorporated the November 10 Plan as law merits close attention.

The government's argument uses the Court of Appeals opinion to replace the language and background of ¶ 15.1 with its own November 10 Plan, which was in actuality filed as an offer of how it was to comply with (not replace) ¶ 15.1 in light of the First Opinion. Consistent with this approach, the government diverts attention from the consent decree itself and the extrinsic evidence, arguing instead that what it says its own priority means is entitled to great deference.

The government's position is patently wrong. The Plan was just one step in of the United States' glacial move toward compliance with ¶ 15.1, not the standard by which to read ¶ 15.1. Before the First Opinion the government maintained that ¶ 15.1 imposed no special funding obligation. The Court of Appeals rejected this position, 717 F.2d at 381-82, and remanded to the United States to propose how it intended to comply with ¶ 15.1. The government thus filed its Plan, in which it repeated its position regarding "technical assistance," but also first promised a "competitive priority" which would apply only to "desegregation programs that provide operational support to local educational agencies." November 10, 1983 Plan, ¶ 3. However, this offered priority was hollow, since the government was also asserting that no such funds were available and that there were no desegregation programs providing operational support to local agencies. Moreover, the priority offered did not cover Title IV, which was discussed separately in the Plan, see ¶ 4, and the Plan did not even mention the Discretionary Fund. Nowhere does the Plan use phrases like "top of the list priority" or "equitable fair share." Indeed, it was not until March of 1984 that the United States indicated that its priority might extend to Title IV. See United States' Pre-Trial Memorandum (March 13, 1984) at 24.*fn15 Moreover, the United States concedes that phrases like "top of the list" were not developed until the Appeal. And the Discretionary Fund was not included until then. See Conclusion 518 below. In sum, the November 10 Plan is not even a distant cousin of the standard enunciated in the Second Opinion. Indeed, that opinion could not possibly have "endorsed" the priority offered in the Plan because the United States itself substantially changed its articulation of the priority by the time it walked into the Appeals Court.

The government's oral argument on appeal illustrates this point. The Assistant Attorney General did not even mention the Plan or use the Plan's phrase "competitive priority." Rather, he coined much more expansive phrases like "top of the list priority" and "equitable fair share." And he expressly extended this expanded priority to Title IV and the Discretionary Fund, while conceding that the Executive's discretion was subject to court review. Given this overhaul of the November 1983 Plan for purposes of appeal, the government now strains its own credibility by suggesting that the Court of Appeals "endorsed" the Plan.

If the Court of Appeals had meant to endorse the Plan it could have simply said so instead of bothering to write an opinion. But it did not, nor did it even quote from the Plan or analyze its terms. It mentioned that the Plan was the first time the government had offered the Board a priority, and that the District Court had rejected the Plan. 744 F.2d at 1305. It mentioned the Plan no more. Instead, it went on to summarize the description of the priority made at oral argument, one which, as we have seen, differs greatly from that contained in the Plan. Its holding and remand instructions do not instruct this Court to confirm that the government is fulfilling the narrowly defined promises of the Plan, but rather tell us to determine whether the Board is receiving "the maximum level of funding available in desegregation programs under program criteria." In short, the November 10 Plan has no bearing on these remand proceedings. It surely is not the standard by which to interpret ¶ 15.1 or the Second Opinion. It merely represents one historical step that the government has taken in its begrudging march toward compliance with ¶ 15.1.

The representations made at oral argument, however, are another matter. Undoubtedly, the Court of Appeals relied heavily on these representations in reaching its holding in Section II(A) of the Second Opinion. Both parties quote extensively from the oral argument in their efforts to interpret that opinion. Thus, even the Board concedes that the statements are important. The United States goes further and essentially argues that the representations carry the weight of the opinion itself, since the Court smiled upon these statements in its opinion. While the oral statements are important, we obviously cannot accord them the force and effect of law. They simply provide some clues to what the Court of Appeals, which speaks law, meant. In our effort to discern what the Court of Appeals meant we must view the representations carefully, since they were made for the first time on appeal, in bitter litigation, were based on facts then outside of the record and were not then subject to evidentiary challenge. The representations are much more relevant to the pipeline issue than the scope issue. For now, we will discuss them only to the extent they relate to the scope issue.

The Court of Appeals quite clearly endorsed the government's position concerning the scope issue then before it, namely, how ¶ 15.1 affects the Executive in its dealings with Congress. Both the government and the Court of Appeals agreed that ¶ 15.1 does not affect what Congress says is "available" or how the Executive lobbies Congress. However, the Assistant Attorney General only briefly alluded to the scope issue now before us. As noted earlier, he never mentioned the bifurcation theory. Thus, his representations have little bearing on the scope issue. Nevertheless, we will briefly deal with what he did say. When he was describing the "top of the list" priority system, he said it applied to "funds . . . that Congress has said are available for desegregation purposes." Transcript of Oral Argument at 4. The panel asked him to name these funds, and he first identified only Title IV. Id. The panel pressed him for other programs, and he identified the Discretionary Fund. The panel did not ask him to name other programs, and he, of course, volunteered none. All of this is not surprising, since, as we have noted, the current scope issue was not the focus on appeal. In the opinion the Court noted that the Assistant Attorney General had said that the priority applied to Title IV and the Discretionary Fund. 744 F.2d at 1305. But, although it could have easily done so, the Court did not itself limit the priority to these programs.*fn16 It spoke in general terms about "existing school desegregation programs" or "programs through which funds for desegregation can be disbursed." With such general language, the Court obviously left the door open to the possibility that other programs might qualify for the priority. And as we have discussed earlier, the Court never said that such programs must carry a desegregation label. The government may have suggested it in passing at oral argument, but the Court did not discuss or adopt this language. As we have noted earlier, we seriously doubt that the Court would read such a narrow limitation into ¶ 15.1 without explicitly considering its language, the extrinsic evidence and Judge Shadur's findings.

Indeed, the Court did not simply and mindlessly adopt everything the Assistant Attorney General said. It surely adopted his general position on lobbying and his general, vague articulation of the priority, "top of the list" or "equitable fair share." But the judges did not simply sign their names to the transcript of oral argument. The Assistant Attorney General told the Court that some $400,000 in 1984 Title IV funds had been earmarked for the Board, twice as much as received by any other school district, and that the Board would "get what its projects called for" in applying for funds from the Discretionary Fund. Had the Court thought this alone sufficient, it could have simply said so, reversed and ordered this Court to confirm the oral representations. But it did not do so. It used its own general language, noted above, and went beyond the representations, ordering this Court to "determine" whether the Board is — in the Court's words — receiving "the maximum level of funding" available. As we have said, the Court was shifting the direction of the case, but not resolving all of the issues, like the scope issue. In sum, the Court of Appeals began by noting the November 1983 Plan; it then considered, relied upon and generally favored the new, oral representations of government counsel; and it concluded by articulating its own, broader general standard for the priority treatment due the Board. Because this was a new standard, it was general and somewhat open-ended, so that this Court could interpret it in the first instance in light of that opinion, ¶ 15.1, and existing programs. In sum, the representations at oral argument do not compel us to embrace the government's position on the scope issue.

Finally, before moving to the pipeline issue, we must briefly reject the government's remaining arguments concerning the scope issue. First, it is not relevant that Congress has historically used desegregation labels when it specifically intends that money be used to further desegregation. What is relevant is what the parties intended in ¶ 15.1 as funding sources for the Plan. The Executive could have easily pushed for such a restriction, but did not do so. Second, contrary to the government's worries, our construction does not open its coffers wide to the "voracious" Board. The government's obligation applies only to programs which "materially aid the success of the overall desegregation effort." 588 F. Supp. at 215, citing Arthur v. Nyquist, 712 F.2d 809 (2d Cir. 1983), cert. denied sub nom Griffin v. Board of Education, 466 U.S. 936, 104 S.Ct. 1907, 80 L.Ed.2d 456 (1984) and Liddell v. Missouri, 731 F.2d 1294 (8th Cir. 1984), cert. denied, ___ U.S. ___, 105 S.Ct. 82, 83 L.Ed.2d 30 (1984). As noted earlier, the government knew that the Board's Plan would contain extensive and expensive remedial educational components, see Consent Decree ¶ 7, yet ¶ 15.1 draws no literal distinction between types of programs subject to ¶ 15. 1. And the government conceded at oral argument that the Board's Plan is reasonable. See also Findings 118-121 below. More significant, the Board's Plan is subject to the continuing review of this Court. We will not let the Board pack its Plan with irrelevant programs which turn the Plan into a black hole sucking up all unencumbered funds. Also, Congressional criteria limit the Board's entitlement. The Board cannot receive funds for any of its programs unless it qualifies under all relevant Congressional criteria. And our resolution of the "pipeline" issues and "share" below indicates that the Board cannot receive anything remotely approaching "all" funds in any program within the broad "scope" of ¶ 15.1. In sum, our resolution of the scope issue does not open up limitless funds to the Board. It simply interprets "available" to include a broad range of programs, not a large share of funds within those programs.

4. The Pipeline Issue

The issue here is at which point in the funding process, from Congressional appropriation to check-writing, are funds in a Congressional program which can aid the Board's Plan "available" such that ¶ 15.1 affects administrative discretion? We hold below that the Board's answer is correct. The language of ¶ 15.1, the representations made at oral argument, the Second Opinion itself and logic support the construction that ¶ 15.1 must affect administrative discretion at the beginning of the pipeline when Congress defines and passes "available" money into administrative hands.

As with the scope question, the Court of Appeals never squarely addressed the exact pipeline issue now before us. It instead ruled in Part II(A) in favor of the government's arguments that ¶ 15.1 does not require the Executive Branch to engage in legislative activity (a pre-pipeline question) or to give to the Board all funds appropriated to Title IV and the Discretionary Fund without regard to other grantees (a "share" question). Given this context, it is not surprising that at oral argument the government (which was appealing a contrary decision) emphasized several times that funds "available" under ¶ 15.1 are limited to those appropriated by Congress, but not those which the Executive could ask Congress to appropriate. In drawing this line at the appropriation stage, the government repeated that the Consent Decree binds the Secretary's discretion with respect to funds made "available" by Congress, but not his discretion concerning legislative activity. Thus, counsel said the following things, among others, to the Court (emphasis added):

  a.  [¶ 15.1] requires us to give the City of
      Chicago priority consideration with respect
      to the available funding under different
      Congressional appropriations and in the
      context of that priority consideration to
      provide funds to Chicago that Congress has said
      are available for desegregation purposes.
      (Transcript p. 3).
  b.  What Chicago gets, and I think what the
      Decree contemplates — is going to get its full
      equitable share of whatever funds are available
      to the grantees, based on the eligibility
      criteria that the Secretary has to work
      with. . . ." (Transcript pp. 8-9).
  c.  The reason . . . a small amount of money [is
      available in the Discretionary Fund], just
      like the reason . . . a small amount of Title
      IV money [exists], has nothing to do with the
      Secretary's activity, it is the appropriation
      activity of Congress, and Congress is the one
      that has the power to make this kind of
      appropriation and to say it is either going to
      be subject to discretion or not. . . .
      (Transcript p. 13).
  d.  The Consent Decree speaks to
      available funds, and as we all have agreed,
      that word pertains to what Congress has
      appropriated. (Transcript p. 10).
  e.  What this decree does is it, I think quite
      clearly, binds the Secretary's discretion with
      respect to those funds that Congress has
      appropriated and has said should be allocated
      pursuant to that discretion. . . . [W]hat
      Chicago has gotten by this consent decree is
      the ability to come back into Court . . . to
      point to that Consent Decree, paragraph 15.1
      and enforce the obligation that is there, that
      indeed, that Chicago get its full equitable
      share of that particular amount of
      appropriation that is subject to the discretion
      of the Secretary. . . . (Transcript p. 44).

The quotations clearly indicate that the Assistant Attorney General was most concerned about drawing a line about which funds are available at the appropriation stage. But once the Secretary gets the money that Congress makes "available," his discretion is bound after appropriation. The government did not specify at which point after it receives the money the discretion is bound, probably because that was not the focus on appeal. But it clearly admitted in broad terms that its discretion was bound. And it concedes in its brief that as an initial matter Congress determines the availability of funds to which the priority applies. United States' Merit Brief at 70.

The Court relied upon these concessions. As with the scope issue, it did not precisely address the pipeline issue now before us, but it did make some remarks which relate to the issue. First, it confirmed that ¶ 15.1 binds the Secretary's discretion subject to court review. 744 F.2d at 1306 n. 7. The Court also drew a bright line at the appropriation stage. But when it came to which post-appropriation events are subject to review, the Court was less specific, using the general phrase like "top of the list," "equitable fair share," "get what the project called for," and "maximum level of available funding," none of which specify exactly how or when after appropriation the Secretary's discretion is affected. The Court did refer to "Title IV criteria" or "program criteria," as controlling, but did not specify whether such criteria are merely Congressional criteria or include administrative criteria created without regard to ¶ 15.1. However, the heavy emphasis laid on Congressional intent by government counsel and the Court,*fn17 suggest that Congress is free to determine the criteria of "availability," but that the Secretary cannot freely do so.

This conclusion rests on our assumption that the Court of Appeals must have meant for ¶ 15.1 to bind the Executive's discretion in some meaningful way. As a corollary to this uncontroversial proposition, we must assume that the Court would not allow the Executive to exercise unfettered discretion such that it could effectively reduce the Board's share of funds to close to zero. However, the government's position would let the Executive do precisely that. It would gut any sensible meaning from footnote 7, as well as from its concessions at oral argument. It claims that all meaningful administrative decisions in programs covered by ¶ 15.1 can be made without considering ¶ 15.1 and without judicial review. Only after it makes all these decisions does its priority spring up. When the Board applies for funds along with everyone else, it goes to the "top of the list" of applicants. This position rests on a second bifurcation theory.*fn18 Even though it concedes that Congress determines "available" funds subject to the priority and that it is able to apply the priority early in the pipeline, the government claims it is not obligated to apply a priority until the very end of the pipeline. The government thereby divides concededly "available" funds into two categories, funds that Congress has made "available" and funds that the government alone decides to keep "available." This is Orwellian doublespeak. In one breath the government concedes that its discretion is bound as to "available" funds, and that Congress determines "availability," but in the next breath, it claims it has unbound discretion to redefine what is "available."*fn19 This strips all meaning from the expansive language of ¶ 15.1 and from the two Court of Appeals holdings that the government owes a "substantial obligation" to provide (not unreviewably define) available funds.

Besides being grounded in common sense, our rejection of the government's position rests on traditional principles of contract construction. Consent decrees are to be construed like contracts. See, e.g., First Opinion, 717 F.2d at 382. Contracts should not be read in a way that places one party at the will or mercy of another. See, e.g., Padbloc Co. v. United States, 161 Ct.Cl. 369, 376-77 (1963). In this regard, the Seventh Circuit recently emphasized that a certain reading of a contract becomes implausible if it creates a situation that "one of the parties assumed enormous risks and got nothing in return." Alliance to End Repression v. City of Chicago, 742 F.2d 1007, 1013 (7th Cir. 1984) (en banc).*fn20

The government's reading works just the sort of mischief that these construction principles argue against. Under the United States' reading, by signing the Decree the Board assumed enormous risks — it has been pouring tens of millions of dollars into its Desegregation Plan. And the United States persists in arguing that the Board must pour more of its money each year into the Plan. Yet despite the plain reciprocity of ¶ 15.1, the government claims it can exercise its discretion such that it can unilaterally define its risk nearly out of existence. Likewise, under the government's theory the Board is placed at the government's mercy. It can freely ignore the ¶ 15.1 priority in setting other ones and thereby freeze the Board out of previously and concededly "available" funds.

Our holding does not suggest that "the government bartered away important public interests merely to avoid the expense of a trial." Alliance to End Repression, 742 F.2d at 1013. The government clearly retains substantial discretion to adjust national priorities and meet other needs. By saying its discretion is bound, we by no means say that its discretion is tiny or that it has simply bargained most of it away. Moreover, in agreeing to consider the Board as a competing priority, the Executive achieved much more than "merely avoiding the expense of trial." It secured a pioneering, voluntary*fn22 school desegregation plan, one which might not have been achieved through litigation. It created a national, experimental alternative to the traditional and controversial busing remedy. It did so relatively quickly, bringing remedies to Chicago's children much sooner than could have been achieved through litigation. And it helped work toward vindicating the federal Constitution and the public interest by desegregating Chicago's massive school system.*fn23 Given the Board's massive financial deficits, these gains could not have been achieved unless the federal government agreed to share the financial burdens. The United States' financial commitment under ¶ 15.1 was the principal quid pro quo for the Board's willingness to forego litigation and develop its Plan. See Findings 108-110. In return, the United States achieved the above gains.*fn24

Contrary to the claims of the government, this holding on the pipeline question is in full harmony with Part II(B) of the Second Opinion. As noted earlier, this case was remanded for "proceedings consistent with Part II(A)" of the Second Opinion. As its heading says, that section "interpreted" ¶ 15.1 defining in general terms the priority system and reading legislative activities outside of ¶ 15.1. Part II(B) addressed a separate question, the District Court's findings of bad faith which had supported its remedial order. It vacated the extraordinary remedy of $104 million because it found that the challenged government activities were not subjective bad faith attempts to flout ¶ 15.1. Some of these findings flowed from Part II(A). Its holding concerning legislative activities meant it was not bad faith to fail to ask Congress for appropriations or reprogramming of funds. The Court then made two findings that bear on the pipeline issue: neither the Secretary's decision not to provide direct grants for school desegregation nor his decision to redraft regulations limiting grants of Discretionary Funds constituted bad faith per se. 744 F.2d at 1307 & n. 10. The Court reasoned that such general policy decisions of national scope did not by themselves indicate governmental intent to evade ¶ 15.1.

A first impression of this holding, especially footnote 10, could lead one to think that the Seventh Circuit endorsed the government's position on the pipeline issue.*fn25 However, careful consideration of the opinion, the First Opinion and the general context of the case show that this first impression is wrong.

It is one thing to say that it is not bad faith to make a specific policy decision of national scope which has the effect of reducing the pool of funds available to the Board. Such a decision does not by itself indicate subjective intent to harm the Board. Thus, such a decision does not support the extraordinary remedial order the government appealed from. But it is quite another thing to say that the Executive may therefore completely ignore ¶ 15.1 in making all policy decisions such that it reduces the pool of available funds to near zero.*fn26 A certain particular action may not be prohibited per se by ¶ 15.1, but ¶ 15.1 may require some affirmative conduct out of a whole range of possible actions such that the Board receives substantial funding.

This analysis leads exactly to the position we adopted earlier. Part II(B) teaches that the Executive is free to make many general policy decisions which have the effect of harming the Board, so long as it does not do so intending to harm the Board. This we stated before. But as also noted earlier, for Part II(A) to be meaningful, the Executive's discretion as a whole must be bound just after Congress defines the pool of available funds. The requirement of "priority" treatment does not preclude the government from weighing and setting other priorities, so long as it does not totally ignore the Board in setting those priorities.*fn27 In this way, Part II(B) harmonizes with Part II(A).

The United States would have Part II(B) vaporize Part II(A). Its position would have Part II(B) create an immunity for all general policy decisions such that footnote 7 of Part II(A) would be meaningless. It would have Part II(B) give the Executive unfettered discretion even though footnote 7 says this discretion is bound. It would render the "substantial obligation" of Part II(A) meaningless through a totality of unreviewable policy decisions. We will not construe Part II(B) to so contradict Part II(A). The Court of Appeals meant it when it said in Part II(A) that the government owes a "substantial obligation" to give the Board "priority consideration." Our reading of Part II(B) preserves that meaning, yet leaves the Secretary much flexibility so that Part II(B) is meaningful as well. Our analysis in Chapters V, VI, VIII and IX of our Findings and Conclusions will show how Parts II(A) and (B) harmonize in practice.

5. Summary

¶ 15.1 requires the United States "to find and provide every available form of financial resources." According to the Seventh Circuit, this duty means that the Board must receive the maximum level of funding "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." 744 F.2d at 1305-06. Our resolution of the scope issue interprets "existing school desegregation programs" to mean any existing statutory program which can, under statutory "program criteria," fund projects in the Board's Desegregation Plan. Our resolution of the pipeline issue holds that Congress determines the pool of "available" funds, and that the Executive's discretion "is subject to the review of the district court" from the moment it receives such available funds.*fn28 Having so interpreted the Second Opinion and laid to rest disputes over its meaning, we are ready to fulfill our remand instructions and determine whether the United States has been giving the Board "the maximum level of funding available" under program criteria.


Before setting forth our extensive Findings of Fact ("Findings") and Conclusions of Law ("Conclusions"), we must clear up a few preliminary matters.

  1.  The Applicability of Judge Shadur's 1984 Findings
      and Conclusions

The Findings fall into several "chapters" corresponding to various major areas of dispute. The first three chapters detail the history of this litigation. In large part, these sections restate the history as found by Judge Shadur in 1984. See 588 F. Supp. at 140-200. Although not everything in this history relates directly to the issues on remand, two reasons moved us to adopt these Findings. First, the Court of Appeals vacated Judge Shadur's whole opinion, although it did not discuss the great majority of his Findings. Thus, the status of these Findings was unsettled. Second, in its brief the United States seeks to relitigate some of these Findings, especially those in Chapter 1 concerning the history of the consent decree negotiations, and those in Chapter 3 concerning the Board's good faith. This factual history needs to be resolved once and for all.

Judicial economy and public policy dictate that litigation should come to an end. See, e.g., Devines v. Maier, 728 F.2d 876, 880 (7th Cir. 1984), cert. denied, ___ U.S. ___, 105 S.Ct. 130, 83 L.Ed.2d 71 (1984). Thus, district courts generally refuse to reconsider portions of an original district court judgment unaddressed on appeal except "for convincing reasons." 1B, J. Moore, J. Lucas & T. Currier, Moore's Federal Practice, ¶ 0.404[4.-1], [4.-3]. Of course, we must follow actual decisions of the appellate court. See, e.g., Gertz v. Robt. Welch, Inc., 680 F.2d 527, 532-33 (7th Cir. 1982), cert. denied, 459 U.S. 1226, 103 S.Ct. 1233, 75 L.Ed.2d 467 (1983). However, we need not re-examine district court findings and conclusions which were not explicitly or by necessary inference addressed on appeal, if there is no compelling new evidence or reason to do so. Id.; see also 1984 District Court Opinion, 588 F. Supp. at 212-214. It is clear in this case that the government has presented no new, let alone compelling, evidence or reason warranting reconsideration of Judge Shadur's unreversed comprehensive Findings and Conclusions. We perceive no injustice in adopting several of those Findings, to the extent relevant and uncontradicted by the Second Opinion. Indeed, policies of finality and economy compel such approach.

We therefore reject the United States' various attempts to revise the history of this case. In particular, we decline to reconsider his findings concerning the Board's good faith efforts to date,*fn29 and the meaning of the extrinsic evidence surrounding the Consent Decree. In any event, Judge Shadur's findings on these and other issues appear correct to us, on the basis of our review of both resubmitted evidence and new evidence. Thus, whether grounded in "the law of the case" or in a fresh assessment of the evidence, Judge Shadur's relevant, unreversed findings in Chapters 1-3 stand. Of course, in adopting these historical ...

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