LABOR/COMMUNITY STRATEGY V L.A. COUNTY MET. TRANSPORTATION

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

LABOR/COMMUNITY STRATEGY

CENTER; BUS RIDERS UNION;

SOUTHERN CHRISTIAN LEADERSHIP

CONFERENCE OF GREATER LOS

ANGELES COUNTY; KOREN

IMMIGRANT WORKERS ADVOCATES;

MARIA GUARDADO; RICARDO

ZELADA; NOEMI ZELADA; PEARL

DANIELS,

Plaintiffs-Appellees,

and

HENRY FREDERICK RAMEY, JR.; O.

HOWARD WATTS; WILLIAM TUT No. 99-56581

HAYES; VICTOR DIBAS,

D.C. No. Plaintiffs-Intervenors, CV-94-05936-TJH v.

OPINION

LOS ANGELES COUNTY

METROPOLITAN TRANSPORTATION

AUTHORITY,

Defendant-Appellant,

and

FRANKLIN E. WHITE, MTA Chief

Executive Officer in his individual

and official capacities; JOSEPH NMI

DREW, MTA Acting Chief

Executive Officer in his individual

and official capacities,

Defendants.

Appeal from the United States District Court

for the Central District of California

Terry J. Hatter, Jr., District Judge, Presiding

Argued and Submitted

May 2, 2000--Pasadena, California

Filed August 31, 2001

Before: James R. Browning, Cynthia Holcomb Hall, and

Barry G. Silverman, Circuit Judges.

Opinion by Judge Silverman;

Dissent by Judge Hall

11984

Shirley M. Hufstedler, Morrison & Foerster, Los Angeles,

California, for the defendant-appellant.

E. Richard Larson, NAACP Legal Defense and Educational

Fund, Inc., Los Angeles, California for the plaintiffs-

appellees.

Raul F. Salinas, Alvarado, Smith & Sanchez, for the amicus.

Robert Garcia, Environmental Defense Fund; Joel Reynolds,

Natural Resources Defense Council, Coalition for Clean Air;

Stewart Kwoh, Asian Pacific American Legal Center of

Southern California; Scott Kuhn, Communities for a Better

Environment, for the amicus.

_________________________________________________________________

OPINION

SILVERMAN, Circuit Judge:

A district court approved a consent decree that settled a

civil rights lawsuit between a group of bus passengers and the

Los Angeles County Metropolitan Transportation Authority

("MTA") concerning the quality of bus service in their com-

munity. Fourteen months later, after certain service improve-

ment goals had not been met, the district court--first through

a Special Master, then directly--entered detailed orders con-

cerning the operation of the L.A. County transportation sys-

tem, including an order that MTA immediately acquire 248

additional buses to reduce passenger overcrowding even if

that meant diverting funds from other transportation services

under MTA's jurisdiction. MTA appealed. Holding that the

Special Master and district court correctly interpreted and

applied the Consent Decree, and that the Special Master and

district court acted within their power, we affirm the district

court.

I. Facts

On August 31, 1994, a plaintiff class of Los Angeles

County bus riders filed suit against MTA, alleging that

MTA's transportation policies discriminated against minori-

ties in violation of the Civil Rights Act of 1964 and the Four-

teenth Amendment to the United States Constitution. MTA is

the statutorily created regional transportation planning, con-

struction, funding, and operating agency for Los Angeles

County. The suit alleged that MTA was spending a dispropor-

tionately large portion of its budget on rail lines and suburban

bus systems that would primarily benefit white suburban com-

muters, while intentionally neglecting inner-city and transit-

dependent minority bus riders who relied on the city bus sys-

tem. The lawsuit was triggered by MTA's decision to spend

several hundred million dollars on a new rail line, foregoing

an opportunity to reduce overcrowding problems on city

buses, while at the same time increasing bus fares and elimi-

nating monthly discount passes. In October 1996, after over

two years of discovery and just before a trial was scheduled

to begin, the parties reached a settlement and submitted to the

district court a proposed consent decree that set forth a

detailed plan to improve bus service.

A. The Consent Decree

Under the consent decree's terms, MTA agreed to make

service improvements in the bus fleet to alleviate overcrowd-

ing and agreed to a set fare structure and fare increase proce-

dure. In order to reduce bus overcrowding, the decree set forth

specific "load factor targets" ("LFTs") 1 that were to be met by

specific dates:

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1 A "load factor" is a numerical representation of the number of people

standing on a bus in relation to the number of seats. It is calculated by

Improved Performance Goal: Reduced Load Fac- tor Targets. MTA's performance in meeting this crit- ical objective of responding to consumer demand for bus services efficiently shall be measured by the reduction in levels of crowding on board buses. MTA shall establish as a five-year goal to be reached by the end of the fifth complete fiscal year following the approval of this Consent Decree, the reduction of the maximum load factor ceiling for all bus routes from 1.45 to 1.2 in the following increments ("target load factors"): December 31, 1997, 1.35 June 30, 2000, 1.25 June 30, 2002, 1.2 Thereafter, MTA shall maintain the 1.2 load factor for the duration of this Consent Decree.

The decree also called for the formation of a Joint Working Group ("JWG") made up of an equal number of representa- tives from the plaintiffs' class and MTA. The decree outlined the process by which the load factor targets were to be met:

MTA Plans to Meet Targets. MTA will plan to make available sufficient additional buses and other vehicles to meet these target load factors. While MTA will have the discretion in determining how the targets will be met, MTA will consult with the JWG in formulating and implementing this plan. MTA will prepare at least 90 days prior to the begin-

_________________________________________________________________ dividing the total number of bus passengers riding a bus during a specific period of time (20 minutes in this case) by the total number of seats on the bus. A load factor of 1.35, for example, means that the average number of standees on a given bus during a given 20-minute period exceeds the number of seats by a factor of .35.

ning of each fiscal year, and make publicly available, a report setting forth its plan to meet the targets as of the date the report is issued, recognizing that changes in ridership, fares, the economy and other factors may require modifications to the plan. In addition, when MTA makes its scheduled modifica- tions to its long range plan it shall incorporate plans to insure the availability and operation of the addi- tional buses and other vehicles required to meet these targets. If ridership shall increase by more than 15 percent on any bus line MTA shall nevertheless make its best efforts to meet the target for that line and the target for that line may be deferred one (and only one) year. In addition, the JWG will designate a list of bus lines which may be exempted from the load factor requirement, such as lines with low fre- quency service.

As to how the improvements in load factors would be paid for, the decree stated:

Consistent with MTA's other statutory responsibili- ties and obligations, MTA's first priority for the use of all bus-eligible revenue realized in excess of funds already specifically budgeted for other purposes shall be to improve bus service for the transit- dependent by implementing MTA's obligations pur- suant to this Consent Decree. If sufficient funding is not provided to meet the obligations set forth in this Consent Decree, the matter shall be addressed in accordance with the procedures set forth in this Con- sent Decree.

The decree also outlined a procedure to be followed in the event that MTA failed to meet the required LFTs by the dates scheduled:

Failure to Meet Targets. If MTA fails to meet the target load factors for all bus lines by the dates speci- fied . . . , MTA shall meet the target as soon as possi- ble and reallocate sufficient funds from other programs to meet the next lower target load factor as scheduled. The reprogrammed funds, which may include but not be limited to revenues from Proposi- tions A and C discretionary funds, shall be used to meet the target load factors. Any dispute concerning whether the targets have been met; or if targets have not been met, whether sufficient funds have been reprogrammed to meet the next target will be reviewed by the JWG. If the JWG cannot resolve the matter it will be referred to the Special Master. The failure of MTA to meet the target load factors shall not be deemed a changed or unforeseen factual con- dition for purposes of seeking a modification of this Consent Decree by MTA.

The decree also provided for the appointment of a Special Master to facilitate the resolution of disputes. As to this dis- pute resolution process, the decree provided:

Any dispute arising under any provision of Sec- tions I through IV [which included the schedule of target load factor deadlines and funding reallocation requirements] of this Consent Decree in which the JWG has a role shall initially be addressed by the JWG. If the JWG cannot resolve the matter, or if the JWG does not have a role in the disputed function, this dispute shall be referred to the attorneys to the parties. If the attorneys cannot resolve the matter informally, the attorneys shall refer the matter to the Special Master for resolution, pursuant to procedures set forth by the Special Master. Any matter resolved by or referred to the Special Master may be reviewed by the District Court, along with the recommenda- tions of the Special Master, if any, upon motion by either of the parties.

On October 29, 1996, the district court approved the consent decree.

B. The Special Master

Fourteen months later, soon after the first LFT deadline

passed on December 31, 1997, the Special Master was

pressed into service. The plaintiffs alleged that MTA had

failed to meet the first LFT. In addition, the parties disputed

the meaning of the LFTs, the extent to which MTA had or had

not met its obligations under the consent decree, and the

proper remedy to achieve compliance with the decree. After

going through the preliminary dispute resolution procedure

involving the JWG outlined in the decree, the parties submit-

ted the dispute to the Special Master.

The Special Master set out a bifurcated procedure for

resolving the matter. First, the parties were to brief the issue

of how to measure compliance with the decree. 2 Second, once

_________________________________________________________________

the Special Master had determined a method for measuring

compliance, the matter was to be referred back to the JWG to

determine whether MTA had fulfilled its obligations, and to

craft a remedial plan if it had not. If the JWG could not agree

on a remedial plan, the parties would then submit their respec-

tive remedial proposals to the Special Master for resolution of

the issue.

In September 1998, the JWG found that MTA had failed to

meet the decree's December 31, 1997, 1.35 LFT on 75 out of

the 79 bus lines measured. The JWG could not agree on a

remedial plan, so the parties again submitted briefs to the Spe-

cial Master assessing the violations and proposing remedies.

The Special Master issued a "Memorandum Decision and

Order" that attempted to steer a middle course between the

competing remedial plans. In analyzing the submitted data,

the Special Master found that the LFT violations were caused

primarily by two factors: 1) "missing buses" -- buses that

were already in MTA's fleet and scheduled to run, but failed

to show up on a given day for some reason (usually mechani-

cal problems, but also lack of a driver, traffic problems, etc.);

and 2) "insufficient capacity" -- simply not having enough

buses available in MTA's fleet to schedule sufficient service

to meet demand on a particular line.

On the question of missing buses, the plaintiffs argued that

333 new buses were needed to solve the problem. However,

_________________________________________________________________

by MTA, called the "fixed window" approach. The Special Master

rejected this interpretation, holding that data could be gathered during any

20-minute period as long as that 20-minute window did not overlap with

another 20-minute period. This was known as the"sliding window"

approach. The Special Master based his interpretation on the language in

the decree requiring the load ceiling to be achieved during "any" 20-

minute period, and because he determined that the sliding window

approach would provide a more accurate assessment of the load factor

conditions on the buses.

the Special Master concluded that MTA's remedial plan to

accelerate procurement of new buses and to convert unreliable

alternative fuel vehicles to diesel power would adequately

address the missing bus problem, and that no additional bus

purchases were needed.

As to insufficient capacity, MTA proposed purchasing 130

new buses by June 2000, in addition to 53 that were already

scheduled to be procured for fleet expansion. MTA also

claimed that by more effectively managing its existing bus

fleet it could increase the operating capacity of the fleet, in

effect getting more work out of the buses it already had rather

than buying new buses to do that work. On the other hand, the

plaintiffs proposed the purchase of 553 additional buses to

meet the insufficient capacity problem. They argued that any

reliance on MTA increasing its capacity through improved

management would have been misplaced, given that MTA

could have implemented the proposals earlier if they were

really workable.

The Special Master ruled that MTA had overestimated the

extent to which better management could resolve insufficient

capacity problems and concluded that MTA's remedy would

not resolve adequately the LFT violations. However, the Spe-

cial Master also held that the plaintiffs had overestimated the

number of buses required to fix the problem. Accordingly, the

Special Master found that:

[T]o remedy the load factor violations caused by `insufficient capacity' the MTA would need to add a total of 430 new buses to the fleet (277 plus 55 spares to meet the [missed December 31, 1997] 1.35 LFT and 126 plus 25 spares to meet the [then- upcoming June 30, 2000] 1.25 LFT, minus 53 buses already scheduled by MTA for purchase).

Because of the inherent delay in the procurement process, the Special Master also held that further action was necessary:

I have concluded that [the plaintiffs are] correct in [their] assertion that the MTA likely cannot meet the 1.35 load factor target "as soon as possible" (and the 1.25 load factor target by June 2000) unless it acts immediately to obtain additional buses on a tempo- rary basis to remedy the load factor violations caused by insufficient capacity. In order to meet the require- ments of Section II.A of the Consent Decree [setting forth the LFT deadlines], the MTA therefore should use its best efforts to lease or obtain, by whatever means available, at least 277 additional buses of any type appropriate for service on the MTA system. These buses should be scheduled for delivery on or before December 31, 1999 and should remain in ser- vice until the new buses required by the remedial plan are delivered. (Footnote omitted.) 3

C. District Court

In accordance with the appeal provision of the consent

decree, MTA challenged the Special Master's ruling in dis-

trict court, claiming: 1) that the remedy imposed was based on

an erroneous interpretation of the consent decree; and 2) the

remedy ordered by the Special Master exceeded both his

power and the power of the district court. The district court

affirmed the authority of the Special Master and the district

court to order a remedy under the decree. The court also

found that "the Special Master's findings regarding compli-

ance with the consent decree were not clearly erroneous." As

to the Special Master's remedial plan, the district court stated

its ruling as follows:

1. The Special Master's determination that 248 4 _________________________________________________________________ 3 Although the Special Master initially ordered MTA to acquire 277 new buses, plus 55 spares, he reduced that number to 248 plus spares on May 14, 1999, following MTA's motion for clarification and modification of the March 6, 1999 order.

4 The district court's bus count mirrors the Special Master's final order.

additional buses are needed, and must be purchased immediately, to resolve "insufficient capacity " viola- tions so as to meet the 1.35 target load factor that should have been met be December 31, 1997 is affirmed. The MTA shall, within thirty days, through lease or by other means, obtain 248 buses on a tem- porary basis until the 248 purchased buses arrive. 5 2. Given the apparent increased reliability of the MTA's current fleet, the Special Master shall recon- sider whether the additional 49 6 buses he ordered the MTA to purchase for spares are still needed. 3. The Court believes that it is too early to deter- mine whether MTA is incapable of meeting the 1.25 target load factor by June 30, 2000, given the current progress apparently made by the MTA and the age of the point check data presented to the Special Mas- ter and the Court. Therefore, the Special Master shall re-evaluate the likelihood of the MTA meeting the 1.25 target load factor after he is presented with more up-to-date point check date [sic]. (Footnotes added.)

MTA appealed the district court's ruling, and obtained a stay pending the appeal.

_________________________________________________________________

5 The district court amended this portion of the order on October 6,

1999. The amended order required that, "MTA shall, by November 5,

1999, contract to obtain 248 buses on a temporary basis until the 248 pur-

chased buses arrive. The 248 temporary buses shall be placed into opera-

tion no later than January 3, 2000."

6 The 49 spare buses number appears to reflect the application of a stan-

dard 20% reserve replacement figure that the Special Master had used to

calculate the number of new buses needed to the revised number of tempo-

rary buses ordered by the district court. Twenty percent of the 248 buses

the district court ordered procured is approximately 49.

II. Standard of Review

A consent decree is enforceable as a judicial decree and "is

subject to the rules generally applicable to other judgments

and decrees." Rufo v. Inmates of the Suffolk County Jail, 502

U.S. 367, 378 (1992). This court reviews de novo the district

court's interpretation of the consent decree, but must defer to

the district court's factual findings underlying the interpreta-

tion unless they are clearly erroneous. Gates v. Gomez, 60

F.3d 525, 530 (9th Cir. 1995); United States v. Gila Valley

Irrigation Dist., 31 F.3d 1428, 1432 (9th Cir. 1994). We must

"give deference to the district court's interpretation based on

the court's extensive oversight of the decree from the com-

mencement of the litigation to the current appeal. " Gates, 60

F.3d at 530 (quoting Officers for Justice v. Civil Serv.

Comm'n, 934 F.2d 1092, 1094 (9th Cir. 1991)).

A district court order requiring modification of a defen-

dant's policy to comply with the consent decree"is effec-

tively an injunction and will be reversed `only where the

district court abused its discretion or based its decision on an

erroneous legal standard or clearly erroneous findings of

fact.' " Id. A federal court enjoys broad equitable powers; its

choice of equitable remedies is reviewed for an abuse of dis-

cretion. Stone v. City and County of San Francisco, 968 F.2d

850, 861 (9th Cir. 1992); Kasper v. Board of Election

Comm'rs, 814 F.2d 332, 339 (7th Cir. 1987).

III. Discussion

MTA advances the same two arguments to this court that

it advanced to the district court: 1) the remedial plan imposed

by the district court and the Special Master was based on a

misinterpretation of the consent decree; and 2) the district

court and the Special Master did not have the power to order

MTA to implement the remedial plan. MTA is wrong about

the first; the remedial plan was based on a correct interpreta-

tion of the consent decree, and MTA's claims to the contrary

are without merit. Whether the court and the Special Master

had the power to order MTA to immediately buy 248 new

buses is a more difficult question.

A. Interpretation of the Consent Decree

1. Best Efforts

MTA's primary argument on the interpretation of the con-

sent decree is that the load factor targets were simply perfor-

mance goals that MTA promised to use its "best efforts" to

meet, but with which the decree only required "substantial

compliance." This argument is refuted by a reading of the

decree as a whole. The decree set out a mathematically pre-

cise method of measuring bus overcrowding and a detailed

schedule of load factor targets that were to be met by specific

dates. After the five year schedule of descending load factor

targets, the decree provided that "MTA shall maintain the 1.2

load factor for the duration of this Consent Decree. " (Empha-

sis added.) The decree also provided that in the event MTA

missed one of the scheduled LFTs, MTA "shall meet the tar-

get as soon as possible and reallocate sufficient funds from

other programs to meet the next lower target load factor as

scheduled." (Emphasis added.) To say that MTA's"best

efforts" are enough for compliance would be to ignore the

precise load factor schedule set out in the decree.

MTA cites "best efforts" language in the decree out of

context as support for its position. In context, however, the

language actually weighs against MTA's argument. The

decree provided that: "If ridership shall increase by more than

15 percent on any bus line MTA shall nevertheless make its

best efforts to meet the target for that line and the target for

that line may be deferred one (and only one) year. " The pas-

sage clearly indicates that MTA was required to meet the load

factor targets as scheduled. In the event of a large unexpected

ridership increase, the decree released MTA from that obliga-

tion for one and only one year. It is clear that MTA's obliga-

tion was to meet the scheduled load factor targets, not simply

to use its "best efforts."

2. Statutory Obligations

MTA claims that because it does not have sufficient funds

to purchase new buses under the Special Master's remedial

plan, the decree excuses compliance to the extent that the

remedial plan would prevent MTA from meeting its other

statutory obligations. In support of this claim, MTA cites to

the following language in the consent decree:

Consistent with MTA's other statutory responsi- bilities and obligations, MTA's first priority for the use of all bus-eligible revenue realized in excess of funds already specifically budgeted for other pur- poses shall be to improve bus service for the transit- dependent by implementing MTA's obligations pur- suant to this Consent Decree.

This argument overlooks other language in the "Failure to Meet Targets" section of the decree that addressed this spe- cific situation and required MTA to "reallocate sufficient funds from other programs to meet the next lower target load factor as scheduled." Any dispute about the fund reallocation was to be settled by the JWG, or if necessary, the Special Master. The Special Master pointed out that MTA had failed to demonstrate that it lacked sufficient funds to otherwise meet its statutory obligations:

In the MTA's May 4, 1998 draft Restructuring Plan, the MTA identifies the many funding sources for which bus capital and/or operating expenses are eli- gible . . . . For many of these bus-eligible funding categories, no funds at all have been allocated to buses . . . . Thus, the fact that the MTA apparently has not applied for, allocated or received these bus- eligible funds somewhat undercuts the MTA's argu- ment that it will be forced to tap already-committed funds, and therefore violate its other statutory obliga- tions, to comply with the Decree.

The Special Master's factual findings are entitled to deference and are reviewed for clear error. Fed. R. Civ. P. 53(e)(2). MTA has not pointed to any evidence suggesting that the Spe- cial Master's factual finding that MTA had not exhausted all sources of funding was clearly erroneous.

B. Power to Require Compliance with the Decree

1. Special Master as Mediator

MTA argues that the consent decree reflected the parties'

contemplation that the Special Master would mediate dis-

putes, not resolve them. This argument is without merit.

In outlining the procedure for resolving disputes, the

decree explicitly provided that if the lawyers could not

resolve a problem referred from the JWG, they "shall refer the

matter to the Special Master for resolution, pursuant to proce-

dures set out by the Special Master." (Emphasis added.) Not

for mediation. Not for suggestions. For resolution. The fact

that the decree allowed the parties to challenge the Special

Master's decisions in the district court is further evidence that

the Special Master was intended to be a decisionmaker. For

there to be something to appeal from, the Special Master must

have had the power to make a decision.

MTA's argument also is quite disingenuous. Previously,

when it suited MTA's purposes, it had claimed that the decree

gave the Special Master vast powers to decide matters involv-

ing the parties. For example, when the plaintiffs began to

organize a fare strike against MTA in retaliation for MTA's

noncompliance with the load factor targets, MTA was only

too happy to petition the Special Master for a temporary

restraining order to enjoin the strike. In arguing for the

restraining order, MTA contended that even though the con-

sent decree was silent about the Special Master's power to

issue a TRO to enjoin a strike, the Special Master had broad

powers unless specifically limited by the decree. At that time,

MTA argued:

[T]he Special Master was appointed to monitor the parties' compliance with, and resolve any disputes arising under, the Consent Decree. The Consent Decree does not impose any limitations on the Spe- cial Master's powers or authorities [sic] to effectuate these objectives. Accordingly, the Special Master has inherent authority to issue orders and resolve dis- putes arising under the Consent Decree.

(Emphasis added.) Under the decree's plain language, the Special Master had the power to resolve disputes, subject to appeal, and that is exactly what he did.

2. Scope and Intrusiveness of the Remedial Order

Finally, MTA raises federalism concerns regarding the Spe-

cial Master's and district court's remedial order. Specifically,

MTA contends that the order requires MTA to violate state

and federal environmental laws. We reject this contention and

find that the district court did not abuse its discretion because

(1) MTA consented to this dispute resolution, (2) MTA had

the opportunity to comply with the Consent Decree but failed

to do so, and (3) the remedial order does not require a viola-

tion of state or federal laws.

When imposing a remedial scheme on a state institu-

tion, a federal court must not unduly insert itself into the insti-

tution's management. However, "federalism concerns in

institutional reform litigation . . . do not automatically trump

the powers of federal courts to enforce the Constitution or a

consent decree." Stone, 698 F.2d at 861."[S]everal courts

have held that federalism concerns do not prevent a federal

court from enforcing a consent decree to which state officials

have consented." Id. at 861 n.20 (citing United States v. City

of Yonkers, 856 F.2d 444, 454 (2d Cir. 1988), rev'd in part

on other grounds sub nom. Spallone v. United States , 493

U.S. 265 (1990); Allen v. Alabama State Bd. of Educ., 816

F.2d 575, 577 (11th Cir. 1987); United States v. District of

Columbia, 654 F.2d 802, 808 & n.11 (D.C. Cir. 1981)).

MTA's consent to this form of dispute resolution relieves

many federalism concerns.

Moreover, the remedial order does not violate the gen-

eral principle that "federal courts in devising a remedy must

take into account the interests of state and local authorities in

managing their own affairs." Milliken v. Bradley, 433 U.S.

267, 280-81 (1977). MTA failed to comply with the Consent

Decree before there ever was a Special Master's order. After

being found in violation of the Consent Decree, MTA had the

opportunity to submit its own effective remedial scheme. The

Special Master made detailed findings, reasonably concluded

that MTA had submitted an inadequate remedial scheme, and

meticulously fashioned the remedial order.

Finally, the federal and state laws to which MTA refers

are simply funding provisions with which MTA may choose

to comply. The reward for compliance is state and federal

funding. However, failure to follow the requirements of the

funding mandates is not a violation of the law. At most, it

might disqualify MTA from entitlement to receive funds.

MTA's compliance with the district court's order would no

more violate federal law than would a state legislature's deci-

sion to lower the statutory drinking age below twenty-one in

spite of the federal law that conditions receipt of federal funds

on a drinking age of twenty-one or older, 23 U.S.C.§ 158.

See South Dakota v. Dole, 483 U.S. 203 (1987). The state

might lose federal highway funds under federal law, but it

would not be in violation of that law. Thus, the district court

did not abuse its discretion.

The district court's order is AFFIRMED.

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HALL, Circuit Judge, dissenting:

It is firmly established that, in tailoring a remedy, "federal

courts should `exercise the least possible power adequate to

the end proposed.' " Stone v. San Francisco, 968 F.2d 850,

861 (9th Cir. 1992) (quoting Spallone v. United States, 493

U.S. 265, 280 (1990)). Where the remedy is directed toward

a state or local governmental entity, the federal court also

must give "appropriate consideration . . . to principles of fed-

eralism in determining the availability and scope of equitable

relief." Rizzo v. Goode, 423 U.S. 362, 379 (1976); see also

Stone, 968 F.2d at 860-61. Federal courts "should always seek

to minimize interference with legitimate state activities in tail-

oring remedies." Id. at 860. Because I believe the district

court failed to fully account for these limitations on its reme-

dial authority, I respectfully dissent.

I.

The majority concludes that MTA's consent to the dispute

resolution mechanism in the consent decree "relieves many

federalism concerns." Supra at 12002. Some courts have con-

cluded that potential federalism problems posed by a consent

decree involving a state governmental entity do not arise

because the state entity has consented to the provisions of the

decree, thus "waiving" any federalism objections. See Alan

Effron, Federalism and Federal Consent Decrees Against

State Governmental Entities, 88 Colum. L. Rev. 1796, 1801

n.31 (1988) (citing United States v. City of Yonkers, 856 F.2d

444, 454 (2d Cir. 1988), rev'd in part on other grounds sub

nom. , Spallone v. United States, 493 U.S. 265 (1990); Allen

v. Alabama State Bd. of Educ., 816 F.2d 575, 577 (11th Cir.

1987); United States v. District of Columbia, 654 F.2d 802,

808 & n.11 (D.C. Cir. 1981); Duran v. Carruthers , 678 F.

Supp. 839, 847, 852-53 (D.N.M. 1988); see also Massachu-

setts Ass'n for Retarded Citizens v. King, 643 F.2d 899, 904

(1st Cir. 1981)). Other courts, however, have recognized that

the state entity's consent to a consent decree does not elimi-

nate all federalism concerns, particularly the federalism limi-

tations on the power of a federal court to intrude on matters

of state governance. See Federalism and Federal Consent

Decrees, 1801 n.32 & 33 (citing Kasper v. Board of Election

Comm'rs, 814 F.2d 332, 340-41 (7th Cir. 1987); Georgevich

v. Strauss, 772 F.2d 1078, 1085 (3d Cir. 1985) (en banc);

Duran v. Elrod, 713 F.2d 292, 297 (7th Cir. 1983); United

States v. Michigan, 116 F.R.D. 655, 661 (W.D. Mich. 1987)).

Our own circuit has expressed skepticism that a state's con-

sent to a consent decree eliminates federalism concerns. See

Stone, 968 F.2d at 861 n.20 ("We hesitate to follow those

cases that hold that the state waives federalism objections

when it enters a consent decree because the state actors

involved in th[e] case have not clearly consented to the feder-

alism intrusions.").

Yet even if MTA's consent to the decree eliminated the

federalism problems posed by the entry of the decree itself,

MTA's consent does not extend to any and all remedies

ordered for MTA's failure to comply with the decree. MTA

consented to the terms of the decree, including the Load Fac-

tor Targets ("LFTs") and the special master's role in resolving

disputes. MTA did not, however, consent to the particular

remedy ordered for its failure to meet the LFTs. Although the

terms of any remedial order must be consistent with the terms

of the consent decree, it does not follow that the remedial

order is a part of the consent decree to which MTA consented.

Thus, to whatever extent MTA's consent to the decree elimi-

nated the potential federalism problems posed by the entry of

the decree, MTA's "waiver," if any, of its federalism objec-

tions does not extend to eliminate the federalism problems

raised by the remedial order. Instead, the proper scope of the

remedy in the instant dispute over LFTs is governed by the

principles in Rizzo and Stone, and federalism concerns must

be considered.

Federalism concerns also are not eliminated simply by per-

mitting MTA to submit a proposed remedy before the court

orders a remedy of its own. See supra at 12001-02. State and

local governments maintain a substantial interest"in manag-

ing their own affairs," even when a federal court is forced to

step in. Milliken v. Bradley, 433 U.S. 267, 280-81 (1977).

Merely providing the state entity an opportunity to submit a

suggested remedy, which is then subject to substantial alter-

ation by the court, will not always satisfy that interest. The

court must take care that its remedy does not interfere in the

state entity's legitimate activities any more than is necessary

to remedy the precise violation at issue. See Spallone, 493

U.S. at 280.

Further, unlike MTA, federal courts are not in the business

of running and funding local transportation systems. See

Stone, 968 F.2d at 860 (recognizing that federalism concerns

include concerns of institutional competence). For this reason,

a substantial measure of deference to the local agency gener-

ally is appropriate. See id. at 863 (approving the numerous

opportunities afforded the city to formulate its own remedial

plan and bring itself into compliance with the decree). Unfor-

tunately, in the instant dispute, MTA put forward a remedial

plan that was based on data covering only 20 of the 79 bus

lines at issue. Because of MTA's failure to prepare a plan that

addressed all of its LFT violations, the special master and dis-

trict court could not fully defer to MTA's proposed plan.

Nonetheless, MTA's failure to submit an adequate plan does

not relieve the district court from its obligation to craft a rem-

edy that is no more intrusive than necessary, which, in my

view, the court failed to do.

II.

Before expanding its bus fleet, MTA is required by statute

to obtain numerous state and federal transportation and envi-

ronmental approvals. See, e.g., 23 U.S.C. §§ 103-05 (estab-

lishing eligibility and approvals required for expenditure of

National Highway System funds); 23 U.S.C. § 134 (requiring

a regional transportation planning process and establishing

requirements for expenditures of funds in a Transportation

Improvement Program); 23 U.S.C. § 149 (establishing eligible

uses of Congestion Mitigation and Air Quality Improvement

Act funds); 49 U.S.C. § 5303, et seq. (requiring a regional

transportation planning process, establishing criteria to be

used in the planning process, and setting forth requirements

for expenditures of funds); see also 42 U.S.C. § 4321-4347

(National Environmental Policy Act). MTA also is required to

obtain certain approvals before making significant expendi-

tures or before reprogramming funds from one purpose to

another. See, e.g., 49 U.S.C. § 5303, et seq. For example, the

Southern California Association of Governments must first

determine that the reallocation of resources will not worsen

the South Coast Air Basin's air quality before the amended

expenditure can be approved, and the new expenditures would

also require the approval of the Federal Highway Administra-

tion, the Federal Transit Administration, and the Environmen-

tal Protection Agency. See 23 U.S.C. § 134(h)(6); 49 U.S.C.

§ 5304(b) & (c). Other statutes require MTA to provide rea-

sonable public notice and allow the public a reasonable

opportunity to comment on the new purchases and the shift in

funds to buses from other programs. See, e.g., 49 U.S.C.

§ 5304(d); Cal. Pub. Util. Code § 130106. The only evidence

before the special master and district court regarding the time

required to obtain the necessary approvals was that it takes

approximately six months for the agencies to approve changes

in the programming of urban transportation funds and issue

the necessary approvals. But the district court and special

master neither gave MTA enough time to secure these

approvals nor made the remedy contingent upon obtaining

them.

The special master dismissed MTA's federal and state law

compliance concerns in a single paragraph:

The MTA expresses the further concern that envi- ronmental statutes may pose obstacles to the imple- mentation of the March 6 Memorandum Decision. Statutory obligations such as the National Environ- mental Policy Act (NEPA), the National Ambient Air Quality Standards (NAAQS) and the California Environmental Quality Act (CEQA) have always been an important consideration in planning any transportation project in California. Generally, adding additional bus capacity to improve service quantity should contribute positively to environmen- tal quality. If despite the MTA's good faith efforts to implement an approved remedial plan there are unavoidable delays in complying with statutory requirements, these issues should be addressed in the quarterly reports.

The assumption that the bus purchases would improve envi- ronmental quality is very much open to question, given that the remedy was intended to increase the number of buses on the streets in order to reduce the number of standees among the existing ridership, not as part of a program to lure people out of their cars and onto public transportation, and the rem- edy may very well require a shift in resources from electric light-rail to gas-powered buses. Therefore, the special master had no sound basis for assuming that the various state and federal approvals would be forthcoming. Further, the special master's argument that any failures in complying with federal law could be addressed at a later time was essentially abro- gated by the district court's order that the new buses be pur- chased immediately and that the temporary buses be leased within 30 days and placed on the road within 90 days. The only record evidence was that the required approvals usually take six months to obtain. Moreover, neither the special mas- ter nor the district court addressed MTA's statutory public comment obligations.

MTA could not consent away its governmental powers and

responsibilities or consent to override or ignore its statutory

obligations. Nor could a federal court order MTA to override

its statutory obligations, absent a violation of a federal right,

which has not been adjudicated in this case. See , e.g., Cleve-

land County Ass'n for Gov't by the People v. Cleveland

County Bd. of Comm'rs, 142 F.3d 468, 477 (D.C. Cir. 1998);

Keith v. Volpe, 118 F.3d 1386, 1393 (9th Cir. 1997). Compli-

ance with the remedial order, however, would require MTA

to violate its statutory obligations.

The majority concludes that MTA's failure to comply with

its statutory obligations would not require it to violate any

federal laws because the obligations are part of consensual

funding programs. Supra at 12002. Although correct, that

statement addresses only part of the picture. It is through such

funding programs that MTA receives a substantial portion of

its funding. By failing to comply with the statutory funding

requirements, MTA risks incurring heavy penalties and losing

substantial federal transportation funds. See , e.g., 49 U.S.C.

§ 5305(e). MTA relies heavily on federal funds, and the loss

of these funds could prove crippling. See Revised Decl. of

David Yale (describing the sources of MTA's funds); see also

Cornelius v. Los Angeles County MTA, 57 Cal. Rptr. 2d 618,

628 (Ct. App. 1996) (noting that in FY 1994-95, MTA

received 29% of its revenues from the federal government).

Moreover, such a loss is inconsistent with the consent

decree's overall purpose to improve the quality of bus service

in Los Angeles. As this case demonstrates, improved bus ser-

vice requires substantial funding.

Further, if MTA "chooses" not to comply with the "strings"

attached to its receipt of funds and gives up the funds, there

is no evidence that MTA will otherwise be able to purchase

and operate the hundreds of new buses ordered by the district

court. Although there was evidence before the court to sup-

port the conclusion that MTA had not yet exhausted all possi-

ble sources of funding for new buses, that evidence also

showed that MTA would have to comply with various statu-

tory obligations in order to obtain those funds. There is no

evidence in the record that MTA could purchase and operate

the new buses without obtaining funds from programs that

require MTA to go through planning and approval processes,

the very same types of funding programs with which the

remedial order prevents MTA from complying. There is no

basis in the record for a remedial order that would require

MTA to purchase and operate new buses without going

through the steps necessary to allow MTA to fund the new

buses. On the contrary, MTA's financial constraints"are a

legitimate concern of governmental defendants in institutional

reform litigation." Rufo v. Inmates of Suffolk County, 502 U.S.

367, 1392-93 (1992).

Beyond the unnecessarily intrusive nature of the remedial

order, that the order prevents MTA from complying with the

requirements of federal funding programs raises additional

federalism problems. Congress uses cooperative funding

schemes such as those involved here as a means of promoting

federal policy. See New York v. United States , 505 U.S. 144,

167 (1992). Congress offers federal funds in exchange for the

state or local government's compliance with the federal policy

and conditions that Congress attaches to the use of the funds.

See id. at 166. The consensual nature of these schemes is pre-

cisely the reason why their constitutionality is not open to

question. See generally South Dakota v. Dole, 483 U.S. 203

(1987). Here, however, the remedial order took that choice

out of MTA's hands and in effect required MTA to take a cer-

tain position regarding federal policy. Where the state or local

government unambiguously agrees to forego federal funds in

the consent decree itself, fewer federalism concerns arise;

when the state or local government agrees to the terms of the

consent decree, it makes a choice to not participate in the fed-

eral program. But where a federal court's remedial order pre-

vents participation in the funding scheme, the state or local

government is denied its choice. In taking away that choice,

the district court effectively shifts power from the state to a

single branch of the federal government.

By taking the decision whether to comply with federal pol-

icy out of MTA's hands, the district court also raised trou-

bling political accountability concerns. Making decisions on

how to allocate resources among competing interests gener-

ally is not the role of federal courts. Nor is it the role of fed-

eral courts to make decisions on whether a state or local

governmental entity may participate in and comply with fed-

eral environmental and transportation schemes. As the

Supreme Court has noted, under cooperative funding pro-

grams, "[i]f a State's citizens view federal policy as suffi-

ciently contrary to local interests, they may elect to decline a

federal grant." New York, 505 U.S. at 168. But where a fed-

eral court makes the choice, "elected state officials cannot

regulate in accordance with the views of the local electorate."

Id. at 169. Accountability thus is diminished as the local offi-

cials "bear the brunt of public disapproval" while the federal

court that made the decision remains insulated. Id. These con-

cerns are particularly acute in the instant case because this suit

arose against the backdrop of a dispute between citizens who

wanted MTA to expand rail transportation and those who

wanted more buses. By ordering enormous expenditures on

buses while, at the same time, putting at risk a significant por-

tion of MTA's funding, the district court added fuel to the

fire, but hampered MTA's ability to respond.

MTA is not a private entity that has full discretionary

authority over its funding; MTA's funds come with strings

attached. The district court could have granted MTA suffi-

cient time to comply with the state and federal approval pro-

cesses or could have made the remedy contingent on MTA

obtaining the required approvals. Instead, the district court put

MTA in the position of either placing its funding at risk by

purchasing buses without obtaining the necessary approvals

or risking contempt of court by delaying its acquisition of

buses while the approvals were acquired. In my view, the dis-

trict court failed to appreciate the unnecessarily intrusive

nature of the remedy and failed to give appropriate consider-

ation to federalism principles in fashioning relief. I would

reverse and remand the case to permit the district court to

craft a remedy that accounts for MTA's financial and statu-

tory obligations. I therefore dissent.

12011