Court Filings: Court of Appeals, brief for appellant Little Rock School District (LRSD)

The transcript for this item was created using Optical Character Recognition (OCR) and may contain some errors. I I I I I I I I I I I I I I I I I I I IN THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT No. 96-2047EALR LITTLE ROCK SCHOOL DISTRICT v. SERVICEMASTER MANAGEMENT SERVICES Appeal From The United States District Court For the Eastern District of Arkansas Western Division Honorable Susan Webber Wright, District Judge BRIEF FOR APPELLANT LITTLE ROCK SCHOOL DISTRICT Christopher Heller John c. Fendley, Jr. APPELLANT APPELLEE Friday, Eldredge & Clark 2000 First Commercial Bldg. 400 West Capitol Little Rock, AR 72201 (501) 376-2011 Attorneys for Little Rock School District I I I I I I I I I I I I I I I I I I I summary And Request For oral Argument This appeal arises from the Pulaski County, Arkansas school desegregation case. The two issues presented by this appeal concern the district court's March 11, 1996 Memorandum and Order. The first issue concerns enforcement of the 1989 Settlement Agreement among the parties. The Settlement Agreement requires dismissal of this case with prejudice except that the district court may retain jurisdiction to enforce the terms of the Settlement Agreement and the desegregation plans presently being implemented by the Pulaski County school districts. The district court declined to issue an order dismissing this case. The second issue concerns a contract between the Little Rock School District and Servicemaster Management Services. The Little Rock School District challenges the district court's finding that a clause in that contract violates public policy. The Little Rock School District requests oral argument. i I I I I I I I I I I I I I I I I I I I Table of contents Summary and Request For Oral Argument. Table of Contents .. Table of Authorities Preliminary Statement Statement of the Case Summary of Argument Argument Conclusion Addendum Order, March 11, 1996 Release of All Claims Against The LRSD. Agreement Regarding Litigation Among Joshua and the Districts .... Order, December 11, 1995 Relevant Excerpts From Pulaski County Desegregation . i ii iii . 1 2 6 . 7 13 . 1 12 24 25 Case Settlement Agreement . . . . . . . . . . . . . . 4 ii I I I I I I I I I I I I I I I I I I I Table of Authorities cases Continental Bank & Trust Co. v. American Bonding 630 F.2d 606, 608 (8th Cir. 1980) ..... Klein v. Arkoma Production Co. 73 F.3d 779 (8th Cir. 1996) Liddell v. State of Missouri 731 F.2d 1294 (8th Cir. 1984) LRSD v. PCSSD, 921 F.2d 1371 (8th Cir. 1990) LRSD v. PCSSD, 971 F.2d 160 (8th Cir. 1992) . Thornton v. Carter, 109 F.2d 316 (8th Cir. 1940) Page 9 9, 10 . 9 . 1, 2, 7 1, 6, 7, 9, 10 10 Union National Bank v. Federal National Mortgage Association 860F.2d 847 (8th Cir. 1988) ........... 1, 12, 14 28 u.s.c. S 1291 28 u.s.c. S 1331 28 u.s.c. S 1343(3) 28 u.s.c. S 1343(4) 28 u.s.c. 2201 28 u.s.c. S 2202 statutes iii . 1 . . 1 . 1 . . 1 . . 1 . 1 I I I I I I I I I I I I I I I I I I I Preliminary Statement The decisions below were rendered by Judge Susan Webber Wright, United States District Court, Eastern District of Arkansas. The jurisdiction of the district court was invoked under 28 u.s.c. 1331, 1343(3) and (4), 2201 and 2202. This Court's jurisdiction is invoked under 28 u.s.c. S 1291. The orders from which these appeals have been taken are final. The district court's order of March 11, 1996, by which the district court (1) refused to enter an order dismissing this case with prejudice according to the tei;:-ms of the Settlement Agreement among the parties and (2) invalidated a provision of the contract between the Little Rock School District (LRSD) and Servicemaster Management Services ( Servicemaster) , was appealed by LRSD by Notice of Appeal filed on April 9, 1996. 1. 2. Issues Presented on Appeal Did the district court err by refusing to enter an order dismissing this case with prejudice as required by the Settlement Agreement approved by this Court? LRSD v. PCSSD, 921 F.2d 1371 (8th Cir. 1990) LRSD v. PCSSD, 971 F.2d 160 (8th Cir. 1992) Did the district court err in finding that the "pending litigation clause" of LRSD's agreement with Servicemaster violates public policy? Union National Bank v. Federal National Mortgage Association. 860 F.2d 847 (8th Cir. 1988) 1 I I I I I I I I I I I I I I I I I I I statement of the Case This appeal concerns two separate issues: The district court's refusal to enter an order dismissing this case with prejudice in accordance with the Settlement Agreement approved by this Court; and the district court's finding that the "pending litigation clause" of LRSD's contract with Servicemaster violates public policy. These issues will be addressed separately in both the Statement of the Case and the Argument. I. Dismissal With Prejudice This Court approved the Settlement Agreement among the parties to this case on December 12, 1990. LRSD v, PCSSD, 921 F.2d 1371 (8th Cir. 1990). The purpose of the Settlement Agreement was to end the litigation among the parties. That intent, inherent in any settlement, is clearly expressed in the provisions of the Settlement Agreement which require release of all claims against the school districts and the provision regarding litigation among or between the Joshua Intervenors, the Knight Intervenors and any of the school districts. Attachment B to the Settlement Agreement is a "Release of All Claims Against The LRSD" which contains the following requirement: It is further understood and agreed that the litigation now pending in the United States District Court for the Eastern District of Arkansas, Western Division, entitled Little Rock School District v. Pulaski county special School District No. 1, et al, No. LR-C-82-866 and cases consolidated therein and their predecessors (including, but not limited to, Cooper v. Aaron, Norwood v. Tucker, and Clark v. Board of Education of the Little Rock School District) (the "Litigation") is to be dismissed with prejudice as to the LRSD and 2 I I I I I I I I I I I I I I I I I I I the former and current members of its board of education named in the Litigation. This dismissal is final for all purposes except that the court may retain jurisdiction to address issues regarding the implementation of the Plans. Pulaski County Desegregation Case Settlement Agreement, Attachment B, p. 2 (Add. p. 13). The Settlement Agreement also requires that this case be dismissed with prejudice with respect to the Pulaski County Special School District and the North Little Rock School District. Settlement Agreement, Attachment c, p. 2 (Add. p. 17) and Attachment D, p. 2 (Add. p. 21). Finally, the Settlement Agreement contains the following "Agreement Regarding Litigation Among Joshua And The Districts": Joshua releases the Districts of all liability for issues which have been raised, or could have been raised, in this Litigation and commits that there will be no further litigation among or between Joshua, Knight and any of the districts, other than proceedings to enforce the terms of this settlement or the terms of the Plans. The requirement of the releases that this case "is to be dismissed with prejudice" has never been implemented. LRSD filed a motion on November 30, 1995 asking the district court to enter the required order. Even though the ; district court found that "the claims involved in this ongoing litigation were dismissed, at least as a technical matter, 11 that court refused to enter an order 3 I I dismissing this case. 1 Memorandum and Order, March 11, 1996 (Add. I I I I I I I I I I I I I I I I I 8-9). II. The Servicemaster contract On September 20, 1995, LRSD entered into a five year management agreement with Servicemaster Management Services. LRSD App. p., 69. While the agreement was being negotiated, the Joshua Intervenors ("Joshua") filed a motion to enjoin LRSD from entering into an agreement with Servicemaster. Docket No. 2506. The District Court had taken no action on Joshua's motion by the time an agreement was reached between LRSD and Servicemaster, and accordingly, the following clause was included in the September 2 O, 1995 agreement: 14.12 Pending litigation. Each of the parties agrees that as of the date of the execution of this Agreement, a motion to enjoin School from entering into this Agreement with ServiceMaster is now pending in the United States District Court, Eastern District of Arkansas, Western Division, styled "Little Rock School District v. Pulaski County School District No. 1, et al.", No. LR-C- 82-866. ServiceMaster does hereby release and forever discharge school from any and all actions, causes of action, claims or demands which ServiceMaster may hereinafter have arising out of or in any way relating directly or indirectly, from orders issued by the United States District Court which may terminate or modify this Agreement. School is under no obligation or duty to appeal any decisions of the United States District Court affecting this Agreement. Further, the school's liability hereunder will be subject to the outcome (through either settlement, order of the court or otherwise) of that litigation. LRSD App., p. 84. ("Pending Litigation Clause"). 1The district court apparently misread LRSD's motion as seeking an order "dismissing this case without prejudice." The Settlement Agreement requires, and LRSD sought, an order dismissing the case with prejudice. 4 I I I I I I I I I On December 4, 1995, Joshua purported to accept a proposed settlement offer2 made by LRSD related to Servicemaster. LRSD App. , p. 2 06. The settlement agreement recognized that substantial questions existed as to the legality of LRSD's agreement with Servicemaster. LRSD App., p. 200. On September 29, 1995, Arkansas Attorney General Winston Bryant issued a formal opinion finding that LRSD's agreement with Servicemaster violated state law and was void. App., p. 195. At the October 28, 1995, hearing, the District Court commented that she believed LRSD's agreement with Servicemaster violated state law. Hearing Transcript, October 28, 1995, p. 140. Accordingly, the settlement terminated LRSD' s agreement with Servicemaster. LRSD App., p. 203. On December 11, 1995, the District Court rejected the settlement agreement finding that the Pending Litigation Clause of LRSD's agreement with Servicemaster violated public policy. Add. p. 30. In a Memorandum and Order filed March 11, 1996, the district I I court denied Joshua's motion for reconsideration of her December I 11, 1995 Order. Add. p. 5. From this order, LRSD appeals. I I I I I I I 2LRSD denies that a settlement offer was made to Joshua. Even so, LRSD is pursuing this appeal to maintain its right, as established by the Pending Litigation Clause, to enter into a settlement agreement which would effectively terminate its agreement with Servicemaster. The District Court declined to rule on the issue of whether a settlement was actually reached. LRSD Add. p. 29. 5 I I I I I I I I I I I I I I I I I I I Summary of Argument I. Dismissal With Prejudice The 1989 Settlement Agreement among the parties to this case waw designed to end this litigation. The Settlement Agreement requires that this case be dismissed with prejudice and also provides that the district court may retain jurisdiction to enforce the terms of the Settlement Agreement and the terms of the desegregation plans adopted by the three Pulaski County school districts. This Court approved the Settlement Agreement in its entirety as written by the parties and, in a case directly on point, directed the district court to implement the entire agreement. LRSD v. PCSSD. 971 F.2d 160 (8th Cir. 1992) .The district court has declined to enter an order dismissing this case with prejudice as required by the Settlement Agreement. II. servicemaster Contract LRSD contracted with Servicemaster to provide certain management services. Pending at the time of the contract was the Joshua Intervenor's motion to enjoin LRSD from entering the contract. LRSD and Servicemaster therefore agreed upon contract language which recognized the pending litigation and protected LRSD against liability to Servicemaster if the pending litigation resulted, whether through settlement or otherwise, in the termination or modification of the contract. The Pending Litigation Clause was agreed upon following arms length negotiations between LRSD and Servicemaster. The district court improperly voided the Pending Litigation Clause, concluding 6 I I I I I I I I I I I I I I I I I I I "that it would not be consistent with public policy to permit one party to a contract to escape its obligations unilaterally without a similar provision for the other contracting party." The district court's conclusion is incorrect and should be reversed. Arkansas law, as interpreted by this Court, recognizes the validity of a contract provision permitting unilateral termination of the contract without cause. I. Argument The District court Erred In Refusing To Enter The order Of Dismissal Required By The settlement Agreement. This Court approved the parties' Settlement Agreement on December 12, 1990 and directed the district court "to approve the parties' Settlement Agreement as written by them." LRSD y. PCSSD. 921 F.2d 1371, 1394 (8th Cir. 1990). On January 18, 1991, the district court ordered that "[t]he parties' settlement agreement is hereby approved as written by them." Docket #1418. According to the terms of the Settlement Agreement set forth in the Statement of the Case and reproduced in its Appendix, LRSD, PCSSD and NLRSD were entitled to an order of dismissal with prejudice upon the district court's approval of the Settlement Agreement. 3 The question of whether a particular component of the Settlement Agreement should be implemented has arisen once before 3The order of dismissal with prejudice required by the Settlement Agreement will not affect the district court's authority under the Settlement Agreement "to address issues regarding the implementation of the Plans" (Settlement Agreement, Attachment B, p. 2) (Add. p. 13) or to preside over "proceedings to enforce the terms" of the Settlement Agreement or the desegregation plans. (Settlement Agreement, p. 19 (Add. p. 24). 7 I I in this case. In LRSD v. PCSSD, 971 F.2d 160 (8th Cir. 1992), this Court confronted the issue of whether the district court was I I I I I I I I I I I I I I I I I required to extend certain millages in accordance with Item M of the Settlement Agreement. The district court had "thought it 'unwise to infer from the court of appeals' approval of the settlement agreement that [the district court was] required to extend the omitted millages.'" Ig. at 164 (emphasis in original). This court said: What the district court failed to recognize is that we directed it to "approve the parties' settlement agreement as written by them." " [A] s written by them, " the settlement agreement included Item M, which corrected the problem of the omitted millages. The extension of the omitted millages is therefore settled as law of the case. .Ig. at 165 (citations omitted, emphasis in original). One of the reasons the district court had given for declining to implement Item M was that, even though this Court had approved the Settlement Agreement in its entirety, it had not specifically mentioned Item Min its opinion. Id. at 164. This Court made it clear that the parties are entitled to implementation of all of the terms of the settlement Agreement: The Special Master approved the agreement, including Item M, as did the district court. Most importantly, when the matter came before this Court on appeal from the district court, we held that the settlement agreement as drafted by the parties met constitutional standards and directed the district court to approve the settlement agreement as submitted by the parties. We do not, therefore, agree with the district court that it is necessary to infer an approval of Item M from our earlier opinion. Our language was clear in its 8 I I I I I I I I I I I I I I I I I I I approval of the entire agreement, including Item M. lg. at 165 (emphasis in original) This Court's decision requiring the district court to recognize and uphold each component of the Settlement Agreement was based upon the law of the case doctrine. ,lg. at 165. That doctrine "prevents repeated litigation of . the same issue and promotes uniformity of decision." Liddell v. state of Missouri, 731 F. 2d 1294, 1304-05 (8th Cir. 1984). This Court has held that it "will reconsider a previously decided issue only on a showing of clear error and manifest injustice," .i,g., or if the facts of the case have changed substantially since the first appeal.~ Continental Bank & Trust co. y. American Bonding. 630 F.2d 606, 608 (8th cir. 1980). When a case has been decided by this Court and remanded to the district court, every question which was before this Court and disposed of by its decree is finally settled and determined. Klein v. Arkoma Production Co., 73 F.3d 779, 784 (8th Cir. 1996). In rejecting LRSD's effort to secure an order of dismissal with prejudice, the district court did not find either that this Court's previous opinion approving the Settlement Agreement resulted in clear error or manifest injustice or that the facts of the case have changed. The only question, therefore, should be whether this Court has previously ordered that this case be dismissed with prejudice. LRSD v. PCSSD, 971 F.2d 160, 165 (8th Cir. 1992). The language of the court-approved Settlement Agreement makes it clear that this case "is to be dismissed with prejudice" and that the "dismissal is final for all purposes except that the 9 I I I I I I I I I I I I I I I I I I I court may retain jurisdiction to address issues regarding the implementation" of the desegregation plans agreed upon by the parties. Settlement Agreement, Attachment B, p. 2 (Add. p. 13). The parties further agreed that there would be "no further litigation" among them other than proceedings to enforce the Settlement Agreement or the desegregation plans. Settlement Agreement, p. 19 (Add. p. 24). This Court approved the agreement. It is the law of the case. In accordance with the law of the case doctrine previously applied to this Settlement Agreement by this Court, the district court should be directed to enter an order dismissing this case with prejudice in accordance with the terms of the settlement Agreement. LRSD v. Pesso. 971 F,2d 160 (8th Cir. 1992) . The district court offered no persuasive justification for declining to enter the required order. The court said that "no useful purpose would be served by entering an order of dismissal at this time." Memorandum and Order, March 11, 1996, (Add. p. 8). Once the entire Agreement has been approved and established as law of the case, it is not necessary for a party seeking to secure the benefits of the Agreement to convince the district court that each particular component of the Agreement serves some useful purpose. Id. The district court is bound by this Court's decision and must carry it into execution according to the mandate. Klein v. Arkoma Production Co., 73 F.3d 779,784 (8th Cir. 1996). "It may not 'alter it, examine it except for purposes of execution, or give it any further or other relief or review it for apparent error with 10 I I respect to any question decided on appeal.'" lg. (quoting Thornton I I I I I I I I I I I I I I I I I v. carter, 109 F.2d 316, 319-20 (8th cir. 1940). If, as the district court found, "the claims involved in this on-going litigation were dismissed, at least as a technical matter," there should be no impediment to formalizing that dismissal as required by the Settlement Agreement. The district court also criticized LRSD's implementation of its desegregation plans and found "that an order of dismissal should be deferred in order to insure compliance with the plans and the agreement." This argument completely ignores the language of the Settlement Agreement which authorizes the district court to "retain jurisdiction to address issues regarding implementation" of the desegregation plans. Settlement Agreement, Attachment B, p. 2 (Add. p. 13). The Settlement Agreement precludes further litigation among the parties except for proceedings to enforce the terms of the Settlement Agreement and the terms of the desegregation plans. Settlement Agreement, p. 19. (Add. p. 24). The Settlement Agreement provides for both dismissal of this case with prejudice and for continued district court enforcement of the Settlement Agreement and the desegregation plans. It is not necessary for the district court to defer an order of dismissal in order to ensure compliance with the plans or the agreement. 4In accordance with the terms of the Settlement Agreement, the State of Arkansas has been dismissed as a party to this case. Order, January 18, 1991 (Docket #1418). The district court nevertheless continues to monitor the State's implementation of its obligations under the Settlement Agreement and to enforce the Settlement Agreement against the State. The district court's January 13, 1995 decision, which was affirmed in part and reversed 11 I I I I I I I I I I I I I I I I I I I II. The District Court Erred In Litigation Clause" of LRSD's Violates Public Policy. Bolding That contract With The "Pending Servicemaster A. Pending Litigation Clause Does Hot Violate Public Policy. The district court, citing no authority, concluded that "it would not be consistent with public policy to permit one party to a contract to escape its obligations unilaterally without a similar provision for the other contracting party." Add., p. 5. The district court's conclusion is incorrect and should be reversed. In Union National Bank v. Federal National Mortgage Association, 860 F.2d 847, 853 (8th cir. 1988), this Court, applying Arkansas law, held that a contract provision providing for the unilateral termination of the contract without cause did not violate public policy. 5 The Pending Litigation Clause cannot be considered more offensive to public policy than a provision permitting unilateral termination without cause. The clause merely anticipated the possibility that substantial questions would be raised as to the validity of the agreement. In that event, LRSD wanted to be able to take whatever action was necessary without incurring liability to Servicemaster, and it negotiated at arms in part by this panel on May 15, 1996 (83 F.3d 1013), provides a recent example. 5The district court attempted to distinguish Union National Bank stating that the present case "involves a purported settlement between a contracting party and a third party allowing the contracting party to escape its obligations unilaterally without a similar provision for the non-settling party." LRSD Add., p. 5. The district court does not explain how these facts distinguish Union National Bank from the present case. None of the facts noted by the district court require an outcome in the present case different from Union National Bank. 12 I I I I I I I I I I I I I I I length for that right as embodied in the Pending Litigation Clause. B. The Pending Litigation Clause Expressly Contemplates Resolution By settlement. As an alterative basis for rejecting the settlement agreement, the District Court found that: (T]he parties to this case intended that the contract would be performed in good faith unless this Court issued an Order allowing the LRSD to escape liability pursuant to 1 14.12 of the contract. The Court has not and will not at this time issue such an Order allowing the LRSD to escape liability under the contract. LRSD Add., p. 6. The district court's statement of the parties' intentions contradicts the express language of the Pending Litigation Clause. After stating that LRSD will incur no liability if the District Court terminates or modifies the agreement, the Pending Litigation Clause provides, "Further, the school's liability hereunder will be subject to the outcome (through either settlement, order of the court or otherwise) of that litigation." LRSD App., p. 84 (emphasis supplied). Thus, the Pending Litigation Clause expressly permits LRSD to reach a settlement without incurring any liability to Servicemaster. conclusion The 1989 Settlement Agreement was intended to end this litigation. The parties agreed that the case would be dismissed with prejudice. This Court and the district court have approved the settlement. It has become established as the law of the case. This court has previously held that the parties are entitled to all of I the benefits of the Settlement Agreement. The district court should I I I 13 I I I therefore be directed to enter an order dismissing this case with prejudice. LRSD and Servicemaster negotiated at arms length in agreeing to the Pending Litigation Clause. LRSD expressly reserved the I right to resolve the pending litigation with Joshua by way of I settlement. That the settlement calls for termination of LRSD's agreement with Servicemaster does not make the Pending Litigation I I I I I I I I I I I I I I Clause violative of public policy. See Union National Bank, 860 F.2d at 853. The District Court's finding to the contrary should be reversed and the case remanded for hearings to determine whether a settlement has been reached. Respectfully submitted, LITTLE ROCK SCHOOL DISTRICT FRIDAY, ELDREDGE & CLARK 2000 First Commercial Bldg. 400 West Capitol Little Rock, AR 72201 (501) 376-2011 Christopher Heller John C. Fendley, Jr. 14 Attorneys for Little Rock School District I I I I I I I I I I I I I I I I I I I CERTIFICATE OF SERVICE I certify that a copy of the foregoing Brief for Appellant, Little Rock School District has been served on the following by depositing copy of same in the United States mail on this 8th day of July, 1996: Mr. John w. Walker JOHN W. WALKER, P.A. 1723 Broadway Little Rock, AR 72206 Mr. Sam Jones WRIGHT, LINDSEY & JENNINGS 2200 Worthen Bank Bldg. 200 West Capitol Little Rock, AR 72201 Mr. Steve Jones JACK, LYON & JONES, P.A. 3400 TCBY Bldg. Capitol & Broadway Streets Little Rock, AR 72201 Mr. Richard Roachell First Federal Plaza 401 West Capitol, Suite 504 Little Rock, AR 72201 Ms. Ann Brown - HAND DELIVERED Desegregation Monitor Heritage West Bldg., Suite 510 201 East Markham Street Little Rock, AR 72201 Ms. Elizabeth Boyter Arkansas Dept. of Education 4 State Capitol Mall Little Rock, AR 72201 Mr. John c. Everett 3822 N. Parkview Drive P.O. Box 1646 Fayetteville, AR 72702 Mr. Josephs. Mowery 111 Center Little Rock, AR 72201 ~" 15 I I I I I I I . I I I I I I I I I I I I ADDENDUM I I I I I I I I I I I I II ,.1,r.,_~ US OIS7i-iCT COURT !;ASTERN DISTRICT ARt<ANSAS MAR 1 1 1996 IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS JAMcS WESTERN DIVISION By:_~.i...,..~l,J!,,,J,...l,L..ll~~ LITTLE ROCK SCHOOL DISTRICT vs. No. LR-C-82-866 PULASKI COUNTY SPECIAL SCHOOL DISTRICT No. 1, ET AL MRS. LORENE JOSHUA, ET AL KATHERINE KNIGHT, ET AL SERVICEMASTER MANAGEMENT SERVICES, A Limited Partnership MEMORANDUM AND ORDER PLAINTIFF DEFENDANTS INTERVENORS INTERVENORS INTERVENORS Before the Court are a number of motions (listed in the order filed) which the Court now addresses: (1) motion of the Pulaski county Special School District ("PCSSD") to withdraw supervision from three discrete areas of the PCSSD plan [doc.#2481); (2) motion of the Little Rock School District ("LRSD") for partial unitary status (doc.#2483); (3) motion of the Joshua Intervenors ("Joshua") to enjoin the LRSD from entering into a service contract without following bidding procedures, requests for information and without prior involvement of Joshua [doc.#2506); (4) motion of PCSSD to I clarify the PCSSD desegregation plan (doc.#2520); (5) motion of I I I I I I Joshua for the Court to set forth in detail the continuing obligations of the LRSD under the desegregation plan with respect to faculty and staff desegregation (doc.#2544); (6) motion of PCSSD for an Order regarding portable buildings (doc.#2546]; (7) motion of LRSD for an Order dismissing this case without prejudice with respect to LRSD, PCSSD, and the North Little Rock School District ("NLRSD") (doc.#2573]; (8) motion of Joshua for reconsideration of 1 2 6 40 I I I I I I I I I I I I I I I I I I I the Court's Order of December 11, 1995, and for completion of the hearing [doc.#2594]; and (9) motion of PCSSD regarding the replacement of portable buildings with permanent construction, dated October 25, 1995 (doc.#2612). I. The Court first addresses PCSSD's motion to withdraw supervision from three discrete areas of the PCSSD plan (doc.#2481) and LRSD's motion for partial unitary status [doc.#2483). The PCSSD states that it has substantially complied with plan provisions regarding library media services, staff development and counseling services, while the LRSD states that it has substantially complied with LRSD plan provisions regarding Home Instructional Program for Preschool Youngsters ("HIPPY") , Rockefeller Early Childhood Program, Parkview Science Magnet Program, and Job Training Partnership Act/Summer Learning Program ("JTPA"). Both the PCSSD and the LRSD argue that the Court should withdraw supervision from these areas of the respective plans. The PCSSD's and LRSD's motions were both filed on August 23, 1995. on February 9, 1996, the parties entered into a Stipulation whereby it was agreed that the PCSSD, LRSD, and NLRSD should be released from court supervision and monitoring in certain discrete areas of the desegregation plans. The parties further stated that they are in the process of assessing what additional areas of the ctesegregation plans are ripe for release from Court supervision and monitoring and to identify what areas of the desegregation plans -2- I I I I I I I I I I I I I I I I I I I remain deficient in terms of compliance. The additional hearings that were scheduled to address the motions to withdraw were cancelled at the parties' request as a result of the Stipulation. In light of the Stipulation and subsequent cancellation of the hearings, the Court finds that both the PCSSD's motion to withdraw (doc.#2481) and the LRSD's motion for partial unitary status [doc.#2483) have both been superseded by the Stipulation. Accordingly, these motions are denied as moot. II. On August 31, 1995, Joshua filed a motion to enjoin the LRSD from entering into a service contract without following bidding procedures, requests for information and without prior involvement of the Joshua Intervenors [doc.#2506). In its motion Joshua argues that ( 1) the LRSD had not discussed the proposed management services contract with the Joshua Intervenors, (2) the proposed management contract has a potential adverse racial effect and impact, (3) the proposed management contract has not been let for bids and is not a part of the program, research and evaluation instrument for the next five years, (4) the proposed management contract has potential adverse monetary effects upon financial resources of the district and has the potential for adversely affecting the ability of the school district to meet its desegregation obligations, and (5) the proposed management contract was not negotiated at arms' length and was designed to provide special favor to some unknown person in the school district. -3- 3 I I I I The Court held a hearing on Joshua's motion on Saturday, October 28, 1995, and again on Friday, December 8, 1995. At the hearing on December 8th, counsel for Joshua tendered into evidence a document entitled "Settlement," which Joshua maintains constitutes a settlement offer by LRSD that was accepted by Joshua with respect to the ServiceMaster contract. Joshua claims that this constitutes an offer by LRSD to settle the matter with Joshua by having the Court enter an Order enjoining the LRSD from entering I I into the ServiceMaster agreement and terminating the district's I liability pursuant to Paragraph 14.12 of the contract. The LRSD, however, contends that this document was not intended as an offer I I I I I I I I I I I I to settle, in that it is stamped "Draft" and is not signed by any party or the attorney for any party. On December 11, 1995, this Court issued an Order in which it ruled as follows: This Court declines to rule on whether this 'settlement' constitutes a binding agreement on the district or on whether the board of directors delegated Mr. Malone the authority to enter into it with Joshua. The court finds that even if Mr. Malone had the authority and even if it was an offer to settle which Joshua accepted, public policy prohibits this type of settlement. This 'settlement' purports to create a situation in which this Court, by agreement of Joshua and