UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


EVANS, JOY

v.

WILLIAMS, ANTHONY A.


99-7058a

D.C. Cir. 2000


*	*	*


Silberman, Circuit Judge: The District of Columbia ap- peals from an
order of the district court imposing contempt  fines of $5,096,340 on
it for its failure to comply with a  consent decree. We agree with
appellant that the fine was a  criminal sanction that could not be
imposed without a criminal  trial; we also agree that the district
court abused its discre- tion in refusing to modify the consent
decree. We therefore  reverse.


I.


This case started back in 1976, when residents of Forest  Haven, the
District of Columbia's institution for the mentally  retarded, brought
a class action alleging a panoply of consti- tutional violations
resulting from poor conditions at the facili- ty. Named as defendants
were the Mayor and four other  District officials (collectively, the
"District"), all sued in their  official capacities. The United States
soon intervened on the  side of the plaintiffs.


In 1978, the parties agreed to a consent judgment that  called for
closing Forest Haven and placing its residents in  "community living
arrangements." Over the next few years  the district court entered
additional consent decrees. In 1983  it approved the order that
underlies this dispute. That  decree governs almost every aspect of
the District's treat-


ment of the mentally retarded. In particular, it requires the  District
to place specified numbers of Forest Haven residents  in community
institutions and to "insure that all vendors are  paid for their goods
and services no later than thirty days  following their submission of
acceptable vouchers."


By the mid-1990s, the District was confronted with finan- cial problems
of "horrendous proportions" and faced "its  worst crisis in over a
century." H.R. Rep. No. 96, 104th  Cong., 1st Sess. 4 (1995). It was
running an annual deficit of  over $600 million, and a congressional
committee found that  "[t]he District of Columbia is insolvent: The
City does not  have enough cash to pay all of its bills." Id. at 5.
The  District began missing some of the payment deadlines set out  in
the consent decree. In April 1995, on the motion of the  plaintiffs,
the district court issued an order to show cause why  the defendants
should not be held in contempt. It ultimately  so held but did not
impose sanctions. Instead, it appointed a  special master to develop a
remedial plan through which the  defendants could purge themselves of
contempt, and it or- dered that the plan include "specific monetary
penalties for  noncompliance."


The special master completed her report in January 1996  and issued a
supplemental report recommending prospective  sanctions a few months
later. The defendants objected,  arguing that the prospective fines
proposed were "unduly  harsh and punitive" and that delays in making
payments were  "not due to any unwillingness to pay but due to a cash
short  fall." But the district court adopted the master's proposed 
remedial plan with only slight modifications. The plan pro- vided that
whenever the defendants failed to pay an invoice  within thirty days
of submission a fine equal to twice the  amount of the invoice would
be imposed. Services provided  by some of the facilities caring for
the mentally retarded  qualify for Medicaid reimbursement. Because the
District  made all Medicaid payments for each month at one time, and 
because the payments due to the care providers averaged  approximately
$2.8 million per month, a fine equal to twice  the amount of any
Medicaid arrearage would have been very  large. The court therefore
applied the doubling fines only to 


non-Medicaid payments. Late Medicaid payments, regard- less of amount,
were to result in a fine of $5,000 per day.


The District continued to miss payment deadlines, and in  April 1997
the plaintiffs moved for the imposition of sanctions.  While the
sanctions motion was pending, the District sought  to modify the
consent decree so that it would require that  vendors be paid within
45 days, rather than 30 days. Its  motion to that effect included
affidavits from the District's  financial officials explaining that
cash flow problems required  a 45-day payment cycle. The court
referred both motions to  the special master.


The master concluded that the motion for sanctions was  unnecessary
because the remedial plans made fines automat- ic. She thought the
fines were civil coercive sanctions, so the  defendants were not
entitled to the protections of criminal  procedures. Although she did
not formally find that circum- stances had changed so as to warrant
modifying the order as  the defendants requested, she did recommend
three changes  to the schedule of sanctions which essentially, at
least pro- spectively, gave the District the relief it sought. First,
fines  for missed payments would be forgiven unless the non- payment
continued until the 45th day. Second, fines for  delays in
non-Medicaid payments would be reduced to $1,000  per day, regardless
of the amount of the payment, and third,  fines for delays in Medicaid
payments would be increased  from $5,000 per day to $10,000 per day.


The District objected to the special master's report and  demanded a
jury trial. In Evans v. Williams, 35 F. Supp. 2d  88 (D.D.C. 1999),
the district court adopted the special mas- ter's factual findings.
Although it disagreed with the mas- ter's conclusion that the fines
were automatic (noting that  automatic fines would amount to summary
punishment for an  indirect contempt, a violation of due process), it
granted the  plaintiffs' motion to impose fines. The district judge
agreed  with the special master that the fines were civil rather than 
criminal. Therefore provision of criminal procedures was  unwarranted,
and the court rejected the District's objection  that changed
circumstances had made the imposition of sanc-


tions unjust. It also adopted the special master's conclusions  with
respect to modification of the order and the remedial  plan. But it
modified the remedial plan only prospectively  from the date of its
decision, which was almost two years  after the defendants had sought
the modification.


The court ordered the District to pay $5,096,340 in fines,  and the
District appealed.


II.


This case turns entirely on the proper characterization of  the
contempt fine. Was it civil or criminal? If the fine was  criminal
then it may be imposed only if the District's non- compliance--which
the District claims was practically un- avoidable--is proven beyond a
reasonable doubt to be willful.  See United States v. Rapone, 131 F.3d
188, 195 (D.C. Cir.  1997). If it was civil the District would have
had to show that  compliance was impossible to avoid the sanction.
Perhaps of  even greater significance, if the judge's order is
criminal in  character (and the fine is serious), then the District is
entitled  to a jury trial. See Bloom v. Illinois, 391 U.S. 194, 198 


Traditionally, whether a contempt is civil or criminal has  depended on
the "character and purpose" of the sanction. A  sanction is considered
civil if it is "remedial, and for the  benefit of the complainant. But
if it is for criminal contempt  the sentence is punitive, to vindicate
the authority of the  court." Gompers v. Buck's Stove & Range Co., 221
U.S. 418,  441 (1911). There also has been a traditional distinction 
between mandatory and prohibitory orders. The "paradig- matic
coercive, civil contempt sanction ... involves confining  a contemnor
indefinitely until he complies with an affirmative  command."
International Union, United Mine Workers of  America v. Bagwell, 512
U.S. 821, 828 (1994). On the other  hand, a fixed term of imprisonment
imposed retroactively to  punish an act of disobedience is criminal.
This distinction has  been extended to fines, so that "a per diem fine
imposed for  each day a contemnor fails to comply with an affirmative 
court order" is civil, but an unconditional fine imposed "after 


a finding of contempt is criminal if the contemnor has no  subsequent
opportunity to reduce or avoid the fine through  compliance." Id. at
829.


The District argues that the fines were indisputably not  compensatory
(a classic aspect of a civil fine), for they were  paid to the court
and not at all calibrated to the damage  caused by the District's
conduct. Moreover, the fines, ac- cording to the District, were fixed
and determinate; there  was no opportunity to escape their
consequences by altering  behavior, i.e., to purge them once they were
imposed. In  other words, the fines were designed primarily to punish
past  acts rather than coerce future conduct and therefore should  be
thought punitive.1


Appellees argue instead that the fines should be seen as  coercive and
therefore civil in character because the schedule  of prospective
fines was announced in advance. The District  therefore had the
capacity to avoid the fines, so to speak to  purge itself of contempt,
by altering its conduct prior to the  time the fines accrued. The
United States makes a similar  argument: the fines "were imposed for
each day or month in  which the defendants failed to comply with the
30-day pay- ment requirement, and ended once the defendants complied 
with the requirement." In effect, the government would  treat the
defendants' contempt as one ongoing systemic prob- lem of
noncompliance with the consent decree. Each missed  bill payment
deadline would be another instance of the ongo- ing contempt. On this
view the fines for missed bill pay- ments were coercive sanctions that
were imposed only so long  as the defendants remained in contempt and
that stopped  being imposed once the defendants began to comply.


Recently the Supreme Court in Bagwell had occasion to  struggle with
the elusive distinction between civil and crimi- nal contempt fines.
In Bagwell a state court had imposed 




__________

n 1 The District does not challenge the per diem fines associated  with
late Medicaid payments (even to the extent of raising an 
impossibility defense). We therefore discuss only the doubling fines 
associated with non-Medicaid payments.


fines of $52 million against the United Mine Workers for  repeated
violations of an injunction prohibiting the union and  its members
from engaging in illegal picketing practices,  including throwing
rocks at employees and obstructing access  to company facilities. The
court had set forth a prospective  schedule of fines, which it too had
characterized as "civil and  coercive," saying that payment "would
only be required if it  were shown the defendants disobeyed the
Court's orders." Id.  at 824. The Supreme Court nevertheless held that
the  sanctions were criminal and that the union was entitled (due 
process) to the protections of criminal procedures.


The Supreme Court began its analysis by noting that the  fines were not
compensatory because they were paid to the  court and not the company
that was injured by the union's  conduct. Then, it recognized the
futility of distinguishing  between coercing affirmative acts and
punishing prohibited  conduct (pointing out, for example, that "an
injunction order- ing the union: 'Do not strike,' would appear to be
prohibitory  and criminal, while an injunction ordering the union:
'Contin- ue working,' would be mandatory and civil"). Id. at 835. Nor 
did it attach significance to the fact that the trial court had 
prospectively announced a schedule of sanctions, reasoning  that "the
union's ability to avoid the contempt fines was  indistinguishable
from the ability of any ordinary citizen to  avoid a criminal sanction
by conforming his behavior to the  law." Id. at 837. It thought that
the fines were most closely  analogous to fixed, determinate criminal
fines that the union  had no chance to purge once imposed.


Appellees' and intervenor's effort to lump together each  District
action or inaction in a continuous course of non- compliance is
inconsistent with the Supreme Court's Bagwell  analysis. If their
approach governed, the United Mine Work- ers' contempt would have been
treated not as a series of  discrete acts but as an ongoing pattern of
noncompliance with  the order to refrain from violence. Each fine
would have  been thought imposed not for a particular violent act but
as  additional coercion (like a per diem fine) for a continuation of 
the ongoing contempt. Accordingly, drawing upon Bagwell, it  is
improper to regard the District as capable of purging itself 


of contempt by paying a bill before the thirtieth day--it  simply was
not in contempt until it failed to pay on the  thirtieth day. Each
missed payment was a separate violation  of the consent decree and a
separate act of contempt. And  for each act of contempt, the District
was subjected to a one- time determinate fine; once it was imposed,
there was no  opportunity to eliminate it through future compliance.
To be  sure, the District could have avoided liability had it paid
each  bill before the thirtieth day. But as the Bagwell Court  pointed
out, this is no different from any citizen's ability to  avoid
punishment by conforming his conduct to the law.


Appellees also argue that the fines are not large enough to  be
scrutinized under Bagwell.2 They do not suggest that a  fine of over
$5 million is not "serious"--obviously it is.  Instead, they contend
that the many smaller fines that make  up the $5 million should be
evaluated separately. This over- looks the large size even of some of
the component fines (for  example, a $104,600 bill paid on the 31st
day produced a  $209,200 fine). More fundamentally, it is at odds with
the  approach taken by Bagwell, which considered the amount of  the
total fine. See id. at 837 ("The fines assessed were  serious,
totaling over $52 million.") (emphasis added); see  also NOW v.
Operation Rescue, 37 F.3d 646, 660 (D.C. Cir.  1994) (Aggregate fine
of $193,623 was "large enough to invite  our scrutiny under the
principles enunciated in Bagwell.").


In any event, it was the nature of the injunction itself,  rather than
the form or amount of the fines, that appears to  have been the key to
the Court's determination that the  contempt was criminal in character
in Bagwell. The Court  described the injunction as establishing a
"detailed code of  conduct," Bagwell, 512 U.S. at 836, and it was that
"consider- ation" that convinced the court that the fines were
criminal.


The union's sanctionable conduct did not occur in the  court's presence
or otherwise implicate the court's ability  to maintain order and
adjudicate the proceedings before 




__________

n 2 Neither the appellees nor the intervenors argue that, even if  the
fine is criminal, it is nevertheless "petty" and could be imposed 
without a jury trial. Cf. Taylor v. Hayes, 418 U.S. 488 (1974).


it. Nor did the union's contumacy involve simple, affir- mative acts,
such as the paradigmatic civil contempts  examined in Gompers.
Instead, the Virginia trial court  levied contempt fines for
widespread, ongoing, out-of- court violations of a complex injunction.
In so doing, the  court effectively policed petitioners' compliance
with an  entire code of conduct that the court itself had imposed. 
The union's contumacy lasted many months and spanned  a substantial


Id. at 837-38.


In response to the District's claim that the order before us  is just
the same kind of complex injunction that was before  the Court in
Bagwell, appellees (and the intervenors) argue  that we should see the
consent decree as only addressing  various simple discrete acts; in
other words, they would  disaggregate the decree. But, if anything,
the decree here is  more far-reaching than the Bagwell injunction
which, after  all, did not seek to control the union's business. It
only  prohibited violence at a strike at one company. Here, by 
contrast, the decree governs the administration of an entire 
governmental program in the District of Columbia. It pre- scribes a
complete code of conduct--originally covering ev- erything from bill
payments to staffing to air conditioning-- that the district court has
enforced for years. Even the  payment requirement has complex elements
because the Dis- trict paid over one hundred non-Medicaid providers


Appellees complain that if sanctions such as these were  deemed
criminal and not civil, it would be difficult for the  court to manage
litigation seeking institutional reform. That  may well be so. Giving
alleged wrongdoers the benefit of a  hearing before a neutral
factfinder--particularly a jury--is  always in some sense an
impediment to judicial power. And  it is not surprising that district
courts around the country,  reluctant to surrender part of their power
to coerce obedience  to their decrees, have resisted the logic of




__________

n 3 See, e.g., Crowe v. Smith, 151 F.3d 217, 221 (5th Cir. 1998) 
(reversing order "imposing serious criminal sanctions ... via a 
manifestly civil process"); Mackler Prods., Inc. v. Cohen, 146 F.3d 


the Supreme Court noted, there are countervailing consider- ations.
When a district judge assumes the responsibility to  regulate the
activities of a large institution and then seeks to  identify and
punish violators of his or her injunction, he or  she comes perilously
close to fusing the powers which our  Constitution separates. See
Bagwell, 512 U.S. at 831 ("Un- like most areas of law, ... civil
contempt proceedings leave  the offended judge solely responsible for
identifying, prose- cuting, adjudicating, and sanctioning the
contumacious con- duct."). The Court was not unaware that its decision
would  lay "burdens on courts' ability to sanction widespread, indi-
rect contempts of complex injunctions," id. at 838--nor are  we.
Because the defendants were not given the benefit of  criminal
procedures, the order imposing the fine must be  reversed.4


III.


There remains the propriety of the district court's refusal  to modify
the consent decree. The practical consequence of  this issue has been
somewhat attenuated by the special  master's decision to modify the
fine structure, but the ques- tion remains relevant because the fines
were modified only  prospectively. The District still faces the
possibility of being  fined for late payments made between April 1997
(when it  made the motion to modify) and February 1999 (when the  fine
schedule was modified).


Federal Rule of Civil Procedure 60(b)(5) permits a court to  modify a
judgment or order when "it is no longer equitable  that the judgment
should have prospective application." Ap-




__________

n 126 (2d Cir. 1998) (reversing a $10,000 punitive fine imposed without
 criminal procedures); Law v. NCAA, 134 F.3d 1025 (10th Cir. 1998) 
(reversing retroactively imposed per diem fines); In re E.I. DuPont 
de Nemours & Co.-Benlate Litigation, 99 F.3d 363 (11th Cir. 1996) 
(reversing an over $13,000,000 punitive fine imposed without crimi-
nal procedures).


4 Because we have determined that the District must be given a 
criminal trial, we do not address the argument that the district 
court abused its discretion in refusing to consider the defense of 
impossibility.


pellant argues that under Rufo v. Inmates of the Suffolk  County Jail,
502 U.S. 367 (1992), the district court should  have granted its
motion to modify. Rufo held that the party  seeking a modification
need not make a "clear showing of  grievous wrong evoked by new and
unforeseen conditions"--a  standard that had been applied since United
States v. Swift &  Co., 286 U.S. 106, 119 (1932). It pointed out that
flexibility is  especially important in institutional reform
litigation: "Be- cause [consent] decrees often remain in place for
extended  periods of time, the likelihood of significant changes
occurring  during the life of the decree is increased." Rufo, 502 U.S.
at  380. In particular, "[m]odification of a consent decree may be 
warranted when changed factual conditions make compliance  with the
decree substantially more onerous." Id. at 384.  While a modification
should not be granted because of "events  that actually were
anticipated" by the parties, the party  seeking a modification need
not show that the changed cir- cumstances were unforeseeable. Id.


To decide whether the District's financial problems were a  changed
circumstance, we first must answer the antecedent  question: changed
relative to when? The District looks to  the 1983 consent decree, the
appellees and the United States  to the 1996 remedial plan. But the
1996 remedial plan was  designed simply to implement the consent
decree and to  address the district's failure to make payments in
accordance  with it. The substantive obligations imposed on the
district  all stem from the 1983 decree. Our focus might be different 
if the remedial plan had been based on a comprehensive  reexamination
of the obligations in the 1983 decree. In that  case, it might be
thought that the District was obliged to  make its claim of financial
hardship then. But the aims of the  remedial plan were more modest:
the judge explained that its  purpose was simply "to bring the
District into compliance  with its outstanding obligations." It is
true that the judge  also invited the parties to seek appropriate
modifications of  the consent decree in light of changed
circumstances. But  even though the District did not in so many words
request  relief from the 30-day payment requirement, it did object 
(repeatedly) to being sanctioned for late payments, explaining 


that it expected to be unable to pay on time. In any event,  the
parties do not appear to have regarded the remedial plan  as a
complete solution to all of the problems that had arisen  under the
consent decree. They thought that the District's  financial
difficulties still might require a future solution. The  special
master noted that the possibility of further modifica- tions had been
discussed, and the judge observed that the  District was in a time of
"transition" and its ability to make  timely payments might be
contingent on the actions of Con- gress. We therefore think we must
look at whether circum- stances have changed since 1983 rather than at
whether they  have altered only in the last few years.


The District makes the obvious point that no one in 1983  anticipated
the District's insolvency or its crushing debt  burden. And as Rufo
explained, "[f]inancial constraints may  not be used to justify the
creation or perpetuation of consti- tutional violations, but they are
a legitimate concern of gov- ernment defendants in institutional
reform litigation and  therefore are appropriately considered in
tailoring a consent  decree modification." Id. at 392-93. Appellees
respond that  although this particular financial crisis was not
contemplated,  the parties certainly had in mind the District's
generic inabil- ity or refusal to pay the vendors--that was the very
reason  the 30-day requirement was part of the consent decree. But 
Rufo's modification standard does not require absolute un-
foreseeability. It is enough that the parties did not actually 
contemplate the changed circumstances. And the crisis of  the 1990s
was different in kind rather than degree. More- over, the 30-day
payment requirement likely was intended to  protect the class members
against bureaucratic neglect, not  against the District's
near-bankruptcy. In truth, the consent  decree was negotiated with the
expectation that the District  would be able to pay its bills. Once it


The appellees contend that even with the District's financial 
problems, a 30-day payment schedule is not unreasonable or  onerous.
But the District submitted affidavits to the con-


trary, and the district court seems at least implicitly to have 
resolved this question in its favor, for the effect of its ruling is 
to give the District the benefit of a 45-day payment schedule,  albeit
only after February 1999. The judge offered no reason  why the
District's relief from fines should not extend to the  point at which
it made the motion--nor can we think of one.


We do not of course suggest that a party may be relieved  from the
obligation to comply with an injunction simply by  making a motion for
a modification. But here the District  claimed that it could not
comply, despite making a good faith  effort to do so. If true, this
should have relieved it from  liability. See Tinsley v. Mitchell, 804
F.2d 1254, 1256 (D.C.  Cir. 1986) ("If a party lacks the financial
ability to comply  with an order, the court cannot hold him in
contempt for  failing to obey."). And the district court did not find
that the  District's claim was wrong. Instead, it adopted the master's
 report which simply pointed out that the District's financial 
situation was no worse than at the time the remedial plan was  adopted
in 1996--a fact that as we have explained is not  relevant.


Nor is the United States correct when it invokes the  collateral bar
rule of Walker v. City of Birmingham, 388 U.S.  307 (1967). Walker
provides that the invalidity of an injunc- tion is not a defense to
contempt, so that a party faced with  an invalid injunction must have
the injunction modified or  vacated; he cannot simply ignore it. The
theory behind that  rule is rather obvious, but it does not extend to
cases where a  party is faced with an injunction with which it is
unable to  comply. Walker cannot justify subjecting the District to 
liability for the period in which the district court was consid- ering
the modification motion.


We conclude that it was an abuse of discretion for the  district court
not to grant the District's motion retroactive to  the time at which
it was made.


* * * *


The order of the district court is reversed, and the case is  remanded
for further proceedings consistent with this opin- ion.


So ordered.