William Langton and David Leblanc v. William Hogan, Jr. , 71 F.3d 930 ( 1995 )

KEETON, District Judge.

This is an appeal by Defendants-Appellants from a 1995 Judgment of the district court modifying, on motion of Defendants-Appellants, but not to the full extent they requested, a Permanent Injunction ordered in 1984. We treat the 1995 Judgment as in essence a ruling on a motion for modification of a consent decree that did no more than decide the issues before the court, as the matter was presented by Defendants-Appellants. Discerning no error of law, no clearly erroneous finding of fact, and no abuse of discretion, we affirm.

I. Background Facts and Procedural History

In 1979, the Plaintíffs-Appellees, two inmates of a Massachusetts correctional institution, filed a civil action under 42 U.S.C. § 1988, claiming, among other things, that predecessors of Defendants-Appellants in positions of authority in the institution and the state correctional system had violated and were continuing to violate constitutionally protected rights of the inmates by intercepting and monitoring their telephone calls, including calls to their counsel as well as other private calls, and that such interception and monitoring violated the federal and state wiretapping statutes, 18 U.S.C. §§ 2510 et seq. and Mass.Gen.L. ch. 272, §§ 99 et seq.

For convenience, we will refer to Plaintiffs-Appellees as plaintiffs or by name, and Defendants-Appellants as defendants or the Department of Correction.

In 1984, after negotiations of the parties, and consultations of counsel and the judge to whom the case had been randomly assigned, the parties entered into a Settlement Stipulation, dated October 17, 1984, providing for a Permanent Injunction in the form of an attached exhibit, and a Judgment of Dismissal in the form of another attached exhibit. The district court (Zobel, D.J.) approved the settlement and made the two orders. One was the Judgment of Dismissal, reciting that, in view of the Settlement Stipulation,

all of the claims by both plaintiffs in this action are dismissed with prejudice and without costs or attorney’s fees to any party.

App. 000029.

The other was a Permanent Injunction in view of the Settlement Stipulation:

1. All officers, agents, servants, employees and attorneys of the Department of Correction are enjoined permanently, under both 18 U.S.C. §§ 2510 et seq. and M.G.L. c. 272, §§ 99 et seq., from intercepting, endeavoring to intercept or procuring any other person to intercept, any wire communication by or to William Langton or David LeBlanc, inmates within the custody of the Department, without a specific court order or legislative authorization to do so, except as specifically permitted by these statutes, taken together, as they have been amended or may be amended and as they have been construed in reported decisions that are binding in this Court or in the state courts of Massachusetts.

2. This Permanent Injunction, entered pursuant to the Settlement Stipulation dated October 15,1984, shall operate prospectively only. It shall not of its own force affect the rights of inmates of the Department other than William Langton and David LeBlanc.

App. 000030-31.

The Department of Correction apparently complied with the Permanent Injunction without incident for almost a decade, until April 1994, when it promulgated new regulations governing telephone access and use by inmates, 103 C.M.R. §§ 482.00 et seq. (hereinafter “the Regulations”). These Regulations, ostensibly applicable to all inmates in all Department institutions and facilities, instituted a system of routine monitoring of inmate telephone calls by the Department of Correction and required inmates to sign a form consenting to having their calls monitored, or be deprived of their telephone access. The Regulations also limited the number of telephone calls that could be made by inmates to ten monitored calls to non-lawyers, and five non-monitored calls to lawyers. All telephone calls, whether lawyer or non-lawyer, were required to be pre-approved.

The Department of Correction sought to apply the new Regulations to plaintiffs. Plaintiffs refused to sign the consent forms and were denied telephone access. In June 1994, plaintiffs filed a Petition for Contempt alleging that the Department of Correction had prohibited plaintiffs from placing telephone calls unless they agreed to permit the recording of all their telephone calls. Defendants moved to dismiss the petition for contempt, and plaintiffs filed an opposition to the motion to dismiss.

While the motion to dismiss was still pending, defendants filed, in January 1995, a Motion to Modify the Permanent Injunction

to allow for the restrictions, monitoring and recording of plaintiffs’ telephone use in accordance with the Department of Correction’s new telephone regulations, 103 CMR 482.00 et seq.

App. 000077.

On February 21, 1995, Judge Zobel signed a Memorandum of Decision, the last paragraph of which is as follows:

Defendants’ motion to modify the permanent injunction is allowed to the extent that the Department of Correction may limit plaintiffs’ access in accordance with the Regulations, 403 CMR §§ 482.00 et seq. It is denied to the extent that defendants shall not monitor plaintiffs’ calls and § 482.10 shall not apply to plaintiffs. Counsel shall submit a form of judgment reflecting the modification allowed.

App. 000103.

Counsel having failed to agree upon a form of judgment reflecting the modification allowed, Judge Zobel, on May 3,1995, signed a Judgment as follows:

After hearing on the defendants’ Motion to Modify the Permanent injunction, and in accordance with the Court’s Memorandum of Decision dated February 21, 1995, it is hereby ordered and adjudged:

1. The defendants shall not monitor or record the telephone calls of the plaintiffs, William Langton and David LeBlanc.

2. The provisions of 403 CMR § 482.10, shall not apply to the plaintiffs (except for call detailing, which shall apply to the plaintiffs) pending further order of the court upon application of the defendants.

3. Acceptance by each plaintiff of a PIN and use of inmate telephones shall not be deemed as consent to the conditions and restrictions placed upon inmate telephone calls, including call monitoring or recording.

4. The defendants shall notify by letter each non-attorney whose name appears on the plaintiffs’ lists of preauthorized telephone numbers that the message regarding recording and monitoring should be disregarded and that calls made by the plaintiffs are not subject to monitoring and recording.

5. The plaintiffs may request changes in their preauthorized telephone numbers at any time. Such changes shall be made expeditiously by the defendants provided they are in compliance with the restrictions on the total number of personal and attorney numbers plaintiffs are allowed to call pursuant to 403 CMR 482 et seq. If, at any time, defendants believe plaintiffs are abusing this arrangement, they may petition the court for further relief.

6. Defendants’ Motion to Modify the Permanent Injunction is allowed to the extent that the Department of Correction may limit plaintiffs’ access in accordance with the Regulations, 403 CMR § 482.00 et seq., as amended, so long as such amendments do not change the substance of this order.

7. Modification of the Permanent Injunction entered by this court on October 15, 1984 is required for the Department of Correction to apply new inmate telephone access regulations to the plaintiffs.

App. 000104-106.

II. The 1984 Permanent Injunction and Judgment of Dismissal

The 1984 Permanent Injunction was not in the classic mold of consent decrees, as two orders were made rather than a single integrated consent decree. The terms of these two orders, however, were as surely part of the terms of the settlement as were the recitations in the document entitled Settlement Stipulation. In this case, we take account of the terms of all three documents in construing each, and we conclude that they do not support the interpretation urged upon the district court, and here, as the primary contention of defendants.

This is an appeal from the district court’s ruling on a motion for modification, yet defendants have not presented arguments as to why the 1995 Judgment should be modified, in light of changes in law or fact, to allow the Regulations to be applied to the plaintiffs. Defendants instead contend that the Regulations should be applied to the plaintiffs because the Regulations do not violate, and never have violated, the 1984 Permanent Injunction. Defendants argue that the federal and state wiretapping statutes, as they interpret those statutes, do not prohibit the Regulations, and therefore the Permanent Injunction does not prohibit the Regulations.

Rather than argue for modification, defendants, in essence, argue that the Permanent Injunction did no more than prohibit them from violating law, that there was never any adjudication that they had violated any constitutionally protected right of plaintiffs, that they yielded nothing with regard to any reasonably disputable issue of law or mixed-legal-factual issue but merely stipulated that they would not commit certain types of violations of law in the future, and therefore that when the district court in 1995 purportedly granted in part but not fully their motion for modification of the Permanent Injunction, the court was in effect enlarging the injunction in plaintiffs’ favor rather than granting limited modifications in defendants’ favor in order appropriately to tailor relief to defendants’ showing, on the record before the district court at the time it made its 1995 ruling, of changes in law or fact that warranted modification of the Permanent Injunction.

We conclude that the position of Defendants-Appellants is flawed in several ways, as explained below.

If the Permanent Injunction did not in any way enlarge the rights of plaintiffs beyond what they were under defendants’ proposed interpretation of the law, then defendants gave up nothing in settling the dispute. This is an unlikely interpretation and we do not accept it. If it were correct, no purpose would be served by the declaration in paragraph 2 that the Permanent Injunction “shall not of its own force affect the rights of inmates of the Department other than William Langton and David LeBlanc.” Defendants’ contention, in effect, asks us to hold that both paragraph 1 and paragraph 2 were illusory — stating nothing beyond what was already forbidden by law before the Permanent Injunction was entered. This is not a reasonable interpretation.

The usually understood meaning of a Settlement Stipulation is that each party is agreeing to give up something — to yield on one or more reasonably plausible contentions of law, or fact, or mixed-law-fact issues. “[T]he agreement reached normally embodies a compromise; in exchange for the saving of cost and elimination of risk, the parties each give up something they might have won had they proceeded with the litigation.” United States v. Armour & Co., 402 U.S. 673, at 681, 91 S.Ct. 1752, at 1757, 29 L.Ed.2d 256 (1971). When making an agreement for a consent decree, the parties to a ease are agreeing not to press any of their disputes to decision in court. The parties forego “their right to litigate issues involved in the case and thus save themselves the time, expense, and inevitable risk of litigation.” Armour, 402 U.S. at 681, 91 S.Ct. at 1757. We so interpret the Settlement Stipulation of the parties to this case. The parties’ disputes thus settled may include disputes about applicable law, disputes about facts, and disputes about mixed-legal-factual issues, including disputes about the materiality under rules of law (as finally determined in court proceedings at trial or on appeal) of particular disputes of fact.

In the present case, it was clear, before the Settlement Stipulation, that disputes of fact had been raised by the pleadings. It might reasonably be argued in support of the position now advanced by defendants, however, that rather than settling the merits of these disputes the Settlement Stipulation rendered them moot. Without so deciding, we assume in defendants’ favor that this is so as to any strictly factual disputes.

As to the reasonably disputable issues of law or mixed-legal-factual disputes, a settlement and consent decree in accordance with the settlement preclude the parties from reasserting their contrasting legal arguments on such issues without having first shown cause for vacating or modifying the consent decree. Whatever the law governing this case might have been just before the parties entered into the Settlement Stipulation, the Permanent Injunction was a lawfully entered order of court. The law as between the parties to the case is what it was agreed to be in the Permanent Injunction. The Supreme Court has stated:

[T]he scope of a consent decree must be discerned within its four comers, and not by reference to what might satisfy the purposes of one of the parties to it.... [T]he instrument must be construed as it is written, and not as it might have been written had the plaintiff [or defendants] established his [or their] factual claims and legal theories in litigation.

Armour, 402 U.S., at 681-82, 91 S.Ct. at 1757. Accord, Firefighters Local Union No. 1784 v. Stotts, 467 U.S. 561, 574, 104 S.Ct. 2576, 2585, 81 L.Ed.2d 483 (1984). The parties are not free to argue their contrasting legal theories of the meaning of the statutes that underlie the Injunction, because they gave up the right to have that dispute resolved by the court.

We take account of the fact that Armour was decided long before Rufo v. Inmates of Suffolk County Jail, 502 U.S. 367, 112 S.Ct. 748, 116 L.Ed.2d 867 (1992), and that Armour’s holdings must be read today, especially as applied to an institutional consent decree like that before us now, with sensitivity to any modification of precedent that the decision in Rufo has effected. As we note in Part IV below, however, this point bears principally upon whether modification of the Permanent Injunction should be made, not upon what the Permanent Injunction meant when entered, or meant in 1994 or 1995, absent modification.

We take account also of unsettled questions regarding whether Armour was modified by United States v. ITT Continental Baking Co., 420 U.S. 223, 95 S.Ct. 926, 43 L.Ed.2d 148 (1975). We conclude, however, that even if ITT is read as liberalizing to some degree the standard for going outside the text of a consent decree to assist in determining its meaning, defendants have not offered any persuasive reason for going outside the text of the Permanent Injunction in this case. Even if we were to assume that ambiguity of the meaning of the text of the Permanent Injunction warrants our consideration of extraneous sources of clarification, defendants’ position is not aided. Looking outside the text of the Permanent Injunction to then existing law, rather than clarifying defendants’ position, muddles it further, because the existing law was uncertain and yet to be determined (as explained in Part III below). We see no reason to permit defendants to argue that genuine disputes regarding what the state and federal statutes prohibited defendants from doing, or permitted them to do, should be resolved now in defendants’ favor and thereby control the meaning of the Permanent Injunction. Instead we hold that the Permanent Injunction (along with the associated documents) settled those underlying legal disputes.

The way in which a consent judgment or consent decree resolves, between the parties, a dispute over a legal issue is not a ruling on the merits of the legal issue that either (1) becomes precedent applicable to any other proceedings under the law of stare decisis or (2) applies to others under the law of claim preclusion or issue preclusion. See Martin v. Wilks, 490 U.S. 755, 109 S.Ct. 2180, 104 L.Ed.2d 835 (1989) (parties to litigation cannot enter into a consent judgment that will preclude a person not made a party from bringing a later suit alleging violation of his or her legal rights). The resolution of the legal dispute by consent judgment is nonetheless binding on the parties to the case in which the consent judgment is entered. The parties to this case are bound by the rules of law declared in the Permanent Injunction, although no other parties are so bound.

We state the point more generally. When a dispute of law exists between parties to a case and they agree to a settlement of that dispute and entry of a judgment with prejudice based on that settlement, then the terms of that judgment in relation to that legal issue are subject to res judicata principles. A judgment that is entered with prejudice under the terms of a settlement, whether by stipulated dismissal, a consent judgment, or a confession of judgment, is not subject to collateral attack by a party or a person in privity, and it bars a second suit on the same claim or cause of action. See IB Moore’s Federal Practice ¶.409[5] (2d ed. 1995). Such a judgment has the force of res judicata until further order of that or a higher court modifying that consent judgment. This proposition is supported in a large body of precedent. See, e.g., In re Medomak Canning, 922 F.2d 895 (1st Cir.1990) (generally a court-approved settlement receives the same res judicata effect as a litigated judgment); accord, In Re Laing, 31 F.3d 1050 (10th Cir.1994); Keith v. Aldridge, 900 F.2d 736 (4th Cir.1990), cert. denied, 498 U.S. 900, 111 S.Ct. 257, 112 L.Ed.2d 215 (1990); Epic Metals Corp. v. H.H. Robertson Co., 870 F.2d 1574 (Fed.Cir.1989), cert. denied, 493 U.S. 855, 110 S.Ct. 160, 107 L.Ed.2d 117 (1989); Kurzweg v. Marple, 841 F.2d 635 (5th Cir.1988); Amalgamated Sugar Co. v. NL Industries, 825 F.2d 634 (2d Cir.1987), cert. denied, 484 U.S. 992, 108 S.Ct. 511, 98 L.Ed.2d 511 (1987).

III. Settling Disputable Issues of Law

Defendants have not called attention to any “specific court order or legislative authorization” occurring after the entry of the Permanent Injunction. Defendants’ position is not salvaged by the language in the Permanent Injunction stating that defendants are enjoined under the state and federal acts from intercepting telephone calls,

except as specifically permitted by these statutes, taken together, as they have been amended or may be amended and as they have been construed in reported decisions that are binding in this Court or in the state courts of Massachusetts.

The statutes do not “specifically permit” the Regulations, and the meaning of the statutory provisions for permitted interception and monitoring, as “amended” or “construed” in “binding” decisions, is at least reasonably susceptible to a construction contrary to defendants’ proposed interpretation.

Defendants contend that the Regulations do not violate the state or federal wiretapping statutes for three reasons. Even now, reasonable arguments can be advanced against, as well as for, each of defendants’ contentions about the applicable law.

First, defendants argue that the Massachusetts Wiretap Act, Mass.Gen.L. ch. 272, §§ 99 et seq., prohibits only secret “interception”, and monitoring under the Regulations is not secret and therefore not prohibited. The 1984 Permanent Injunction, however, prohibited conduct that would amount to “interception” under federal law, even if that conduct would not amount to “interception” under state law. The federal wiretap act, 18 U.S.C. §§ 2510, et seq., does not make secrecy decisive. That act, as of 1984, defined the term “intercept” as simply “the aural acquisition of the contents of any wire, or oral communication through the use of any electronic, mechanical, or other device.” 18 U.S.C. § 2510(4). Monitoring and recording ■of plaintiffs’ telephone calls under the Regulations thus constitutes “interception” under the 1984 Permanent Injunction, despite its being performed openly and without secrecy.

Second, defendants attempt to argue that the new Regulations do not violate the 1984 Permanent Injunction because the definition of “interception” within the federal wiretapping act, at 18 U.S.C. § 2510(5), expressly excludes recording or monitoring performed “by an investigative or law enforcement officer in the ordinary course of his duties.” Defendants interpret the statute to mean that monitoring by corrections officials under the Regulations falls within the excluded category. The defendants have not shown beyond genuine dispute, however, that in monitoring conversations corrections officials would be acting as “investigative or law enforcement officer[s] in the ordinary course of [their] duties.” Defendants cite several cases from other courts that may be read as so holding. United States v. Sababu, 891 F.2d 1308, 1328 (7th Cir.1989); United States v. Paul, 614 F.2d 115, 117 (6th Cir.1980); State v. Fornino, 223 N.J.Super. 531, 539 A.2d 301, 308 (App.Div.1988). We are, however, aware of no reported decisions to this effect that are binding in this court or in the state courts of Massachusetts. In Campiti v. Walonis, 611 F.2d 387, 392 (1st Cir.1979), the First Circuit expressly reserved decision as to whether monitoring in accordance with an established prison policy of which the prisoners were informed could qualify as part of the ordinary course of business of a law enforcement officer. The issue in this circuit was in 1984, and still is, reasonably debatable.

Finally, defendants argue the new Regulations do not violate the 1984 Permanent Injunction because the federal act under 18 U.S.C. § 2511(2)(c) permits monitoring or recording by “a person acting under color of law” where “one of the parties to the communication has given prior consent to such interception.” Defendants contend that the Regulations meet the one-party consent exception of the federal act because inmates impliedly consent to be monitored when they use the telephone after being made aware that monitoring of calls is a condition for being allowed to use the telephone. Defendants have cited cases from other jurisdictions holding that execution of forms by inmates that acknowledge their understanding that their calls will be monitored constitutes consent under the federal act, even if inmates are denied telephone access if they do not sign the forms; and that calls placed by inmates despite express notice irom stickers on the telephones and the message from the automated operator that accompanies every call constitutes consent. See United States v. Horr, 963 F.2d 1124, 1126 (8th Cir.1992); United States v. Amen, 831 F.2d 373, 378-79 (2d Cir.1987); United States v. Willoughby, 860 F.2d 15, 20-21 (2d Cir.1988); United States v. Paul, 614 F.2d 115, 117 (6th Cir.1980); United States v. Valencia, 711 F.Supp. 608, 611 (S.D.Fla.1989); United States v. Green, 842 F.Supp. 68, 71-71 (W.D.N.Y.1994). Defendants also argue that because the Regulations require positive call acceptance from the recipient after hearing a recorded message, recipients are deemed to have impliedly consented. Defendants, however, cite no cases to this effect.

Once again, we are aware of no reported decisions that are binding in this court or in the state courts of Massachusetts, holding that this type of prison telephone monitoring system meets the one-party consent exception to the federal wiretapping act due to implied consent. It may reasonably be argued that “implied consent” in this sense is not a free and voluntary consent; it is instead no more than a choice between unattractive options — a limited choice imposed on plaintiffs by defendants. The issue then becomes whether the law allows the defendants to impose this limitation of choice on the defendants and call their response an implied consent. At the least, grounds exist for genuine dispute about whether defendants are authorized by law to impose such a limited choice on plaintiffs and whether “implied consent” under these circumstances is “consent” as that term is used in the federal act, and legally effective consent under the Department’s regulations. See Griggs-Ryan v. Smith, 904 F.2d 112 (1st Cir.1990) (holding that “implied consent” is consent in fact, inferred from associated circumstances indicating that a party knowingly agreed to surveillance).

The issue of what constitutes “implied consent” in the prison context has not yet been directly addressed by this court, and we do not decide it here. It is sufficient to point out that plaintiffs in this case have not consented, impliedly or otherwise, to the monitoring scheme; plaintiffs instead brought a contempt action under the Permanent Injunction, an opposition to defendants’ motion to dismiss the contempt action, and an opposition to defendants’ motion for modification of the Permanent Injunction. We do not read Griggs-Rycm as supporting the view that an inmate has impliedly consented to the very scheme the inmate has challenged as a violation of the 1984 Permanent Injunction.

Defendants entered into a Settlement Stipulation under which each party gave up the right to have the dispute as to the meaning of the federal and state wiretapping statutes resolved by a court. The meaning of what was permitted under the state and federal wiretapping statutes was ambiguous and reasonably debatable. Defendants have no right to have that dispute now decided in their favor and then to use that resolution to interpret the terms of the Permanent Injunction.

Of course, this does not mean defendants are forever barred from moving that the court orders be vacated or modified. Special rules are applicable to institutional consent decrees, but they concern grounds for vacating or modifying a consent decree, rather than undermining the force of this body of precedent in relation to the effect of the consent decree until vacated or modified. We perceive no error in Judge Zobel’s invoking for guidance, in her consideration of the defendants’ motion for modification of the 1984 Permanent Injunction in this case, the body of precedent applicable to motions for modification of a consent decree. This body of precedent includes the case on which she relied especially, Rufo v. Inmates of Suffolk County Jail, 502 U.S. 867, 112 S.Ct. 748, 116 L.Ed.2d 867 (1992) (holding that a party seeking modification of a consent decree may meet its initial burden by showing a significant change either in factual conditions or in law). Under the guidance of Rufo, however, a court considering such a motion would be concerned with tailoring modifications according to intervening changes in law (as well as fact). It would not be deciding the original dispute about what would have been a court’s answer to the dispute had the parties not entered into their Settlement Stipulation.

IV. The Nature of the 1995 Judgment

When these legal principles are applied here, can it reasonably be said that the 1995 Judgment modified the consent decree in •plaintiffs’ favor, as defendants contend, rather than only in defendants’ favor though less substantially so than they requested? We conclude that, as properly construed in the way explained below, the 1995 Judgment modified the Permanent Injunction only in defendants’ favor. It was appropriately tailored to the only changes in law or in fact disclosed on the record before the district court as developed after ample opportunity for defendants to present both legal and evidentiary support for their motion for modification.

The only changed circumstances shown on the record before the district court at the time of its 1995 Judgment were changes of fact with respect to technology of initiating, detailing, effecting, monitoring, and recording electronic transmissions, including telephone calls. The only changes of law shown were those effected when the Department of Correction adopted new regulations, published in 403 CMR §§ 482.10 et seq. Rather than attempting to show that the district court’s modifications, recited in the 1995 Judgment, were not reasonably tailored to those changes, defendants seek to show that the 1984 Permanent Injunction was not in any respect a settlement of a disputed issue of law but instead preserved their unlimited right to assert their view of the law and have that dispute decided now in their favor.

Defendants ask us on this appeal to resolve that original dispute about the law in their favor, and argue that the district court should have done so instead of conceiving its duty as one of considering whether intervening changes of law (as well as fact) had occurred, and, if so, how to tailor modifications of the consent decree accordingly. We reject this contention.

The key modification of the 1984 Permanent Injunction that the 1995 judgment makes is explained:

Modification of the Permanent Injunction entered by this court on October 15, 1984 is required for the Department of Correction to apply new inmate telephone access regulations to the plaintiffs.

The 1995 judgment adds, for clarity, a statement of some of the terms that remain in effect. These terms are not enlargements of the terms of the Permanent Injunction in plaintiffs’ favor; they simply clarify limits on the scope of the modifications in defendants’ favor.

The 1995 judgment says nothing, either directly or impliedly, about how any future motion for modification with appropriate showing of cause and request for appropriately tailored relief should be heard and decided under the principles of Rufo, 502 U.S. 367. Nor do we. Instead, we leave such matters for decision in the future only if and when they are appropriately presented first in district court.

V. Conclusion

For the foregoing reasons Defendants-Appellants’ arguments fail. The 1995 judgment of the district court is AFFIRMED.