                                                Filed:   May 4, 2005

                   UNITED STATES COURT OF APPEALS

                       FOR THE FOURTH CIRCUIT


                            No. 04-1535
                          (CA-05-309-MJG)



CARMEN THOMPSON; RHONDA HARRIS; JOANN
BOYD; DORIS TINSLEY; LORRAINE JOHNSON;
ISAAC J. NEAL, on behalf of themselves
and all others similarly situated,

                                            Plaintiffs - Appellees,

          versus

U.S. DEPARTMENT OF HOUSING & URBAN
DEVELOPMENT; ALPHONSO JACKSON, in his
official capacity as United States Acting
Secretary of Housing and Urban Development,

                                            Defendants - Appellants,

          and

HOUSING AUTHORITY OF BALTIMORE CITY; DANIEL
P. HENSON, III, in his official capacity as
Executive Director of the Housing Authority
of Baltimore City and the Commissioner of
the Baltimore City Department of Housing and
Community Development; MAYOR AND CITY COUNCIL
OF BALTIMORE CITY,

                                                         Defendants.

--------------------------------------------

JONESTOWN PLANNING COUNCIL, INCORPORATED,

                                                             Movant.
                               O R D E R


     The court amends its opinion filed April 15, 2005, as follows:

     On page 3, last paragraph, line 4 -- “HUD’S” is corrected to

read “HUD’s.”

     On page 13, first paragraph, line 30 -- an apostrophe is added

after the word “Defendants.”



                                           For the Court - By Direction



                                               /s/ Patricia S. Connor
                                                       Clerk
                            PUBLISHED

UNITED STATES COURT OF APPEALS
                 FOR THE FOURTH CIRCUIT


CARMEN THOMPSON; RHONDA HARRIS;           
JOANN BOYD; DORIS TINSLEY;
LORRAINE JOHNSON; ISAAC J. NEAL,
on behalf of themselves and all
others similarly situated,
                  Plaintiffs-Appellees,
                  v.
U.S. DEPARTMENT OF HOUSING &
URBAN DEVELOPMENT; ALPHONSO
JACKSON, in his official capacity as
United States Acting Secretary of
Housing and Urban Development,
              Defendants-Appellants,
                 and
HOUSING AUTHORITY OF BALTIMORE               No. 04-1535
CITY; DANIEL P. HENSON, III, in his
official capacity as Executive
Director of the Housing Authority
of Baltimore City and the
Commissioner of the Baltimore City
Department of Housing and
Community Development;
MAYOR AND CITY COUNCIL OF
BALTIMORE CITY,
                         Defendants.


JONESTOWN PLANNING COUNCIL,
INCORPORATED,
                         Movant.
                                          
2                        THOMPSON v. HUD
           Appeal from the United States District Court
            for the District of Maryland, at Baltimore.
             Marvin J. Garbis, Senior District Judge.
                         (CA-05-309-MJG)

                    Argued: December 2, 2004

                     Decided: April 15, 2005

          Before WILKINS, Chief Judge, and MICHAEL
                 and TRAXLER, Circuit Judges.



Affirmed by published opinion. Judge Traxler wrote the opinion, in
which Chief Judge Wilkins and Judge Michael concurred.



                            COUNSEL

ARGUED: Thomas Mark Bondy, UNITED STATES DEPART-
MENT OF JUSTICE, Civil Division, Appellate Section, Washington,
D.C., for Appellants. Wilma A. Lewis, CROWELL & MORING,
Washington, D.C., for Appellees. ON BRIEF: Howard M.
Schmeltzer, Assistant General Counsel for Litigation, David M.
Reizes, Trial Attorney, UNITED STATES DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT, Office of General
Counsel, Washington, D.C.; Peter D. Keisler, Assistant Attorney Gen-
eral, Thomas M. DiBiagio, United States Attorney, Mark B. Stern,
Appellate Staff, Civil Division, UNITED STATES DEPARTMENT
OF JUSTICE, Washington, D.C., for Appellants. Andrew D. Free-
man, BROWN, GOLDSTEIN & LEVY, L.L.P., Baltimore, Mary-
land; David L. Haga, CROWELL & MORING, L.L.P., Washington,
D.C., for Appellees.
                           THOMPSON v. HUD                              3
                               OPINION

TRAXLER, Circuit Judge:

   In 1995, African-American public housing residents (the "Plain-
tiffs") filed a class action against the United States Department of
Housing and Urban Development and its then-Secretary Henry Cisne-
ros (referred to together as "HUD"), along with the Housing Authority
of Baltimore City and various Baltimore officials (together, the
"Local Defendants"), seeking to eliminate racial segregation and dis-
crimination in Baltimore’s public housing system. In 1996, the parties
entered into a Partial Consent Decree (the "Consent Decree") resolv-
ing some of the issues raised in the complaint. The Consent Decree
stated that the district court would exercise jurisdiction for only a lim-
ited period of time.

   With the end of the court’s jurisdiction over HUD looming, the
Plaintiffs filed a motion requesting that the district court modify the
Consent Decree to extend the period during which it would exercise
jurisdiction over HUD. The district court granted the motion, and
HUD appeals. For the reasons set forth below, we affirm.

                                    I.

   Baltimore’s public housing system began in the 1930s as an offi-
cially segregated program. The city abandoned its official segregation
policies shortly after the Supreme Court’s decision in Brown v. Board
of Education, 347 U.S. 483 (1954). In their class action complaint, the
Plaintiffs alleged, inter alia, that while the formal policy of segrega-
tion was no longer in place, the Local Defendants were perpetuating
the former de jure segregation through their racially based assign-
ments of public housing applicants and through their decisions
regarding the placement of new housing projects.

   The parties ultimately agreed to settle some of the claims asserted
in the class action, an agreement that was formalized in the Consent
Decree. The Consent Decree imposes numerous obligations on the
Local Defendants and HUD. Many of HUD’s obligations under the
Decree are related to the obligations imposed on the Local Defen-
4                         THOMPSON v. HUD
dants, in that most (if not all) of the steps that the Local Defendants
are required to take under the Consent Decree require HUD’S cooper-
ation and approval. The Consent Decree provides that the district
court will have jurisdiction over the Local Defendants until their obli-
gations under the decree have been satisfied, and that the court will
have jurisdiction over HUD for seven years after the approval of the
Decree. The Consent Decree was approved on June 25, 1996; under
the terms of the Consent Decree, the district court’s jurisdiction over
HUD was to expire on June 25, 2003. HUD acknowledges, however,
that it has obligations under the Consent Decree that extend well
beyond June 2003.

   Although the Consent Decree has been in effect since 1996, the
Local Defendants have fallen jaw-droppingly short of fulfilling their
obligations. The Local Defendants are woefully behind schedule with
regard to many provisions of the Consent Decree, but one failing is
of primary importance to this case. Among other things, the Consent
Decree requires that the Local Defendants make available 911 "hard"
housing units—that is, actual housing units, as opposed to rent
vouchers—in areas of Baltimore referred to in the Decree as "Non-
impacted areas."1 The 911 hard units of housing were to be made
available within six and a half years after the approval of the Decree
—i.e., December 2002. By that date, however, the Local Defendants
had managed to supply only eight of the required units.

   Faced with the utter failure of the Local Defendants to comply with
the terms of the Consent Decree and the impending termination of the
district court’s jurisdiction over HUD, the Plaintiffs in May 2003 filed
a motion asking the district court to modify the Consent Decree to
extend the term of its jurisdiction over HUD. The Plaintiffs argued
that the failure of the Local Defendants to comply with the Decree
was a significant change of circumstance warranting a modification
of the Decree. The Plaintiffs contended that since HUD must approve
the plans and actions required of the Local Defendants under the Con-
sent Decree, the district court should retain jurisdiction over HUD.
Under the original terms of the Consent Decree, the district court’s
    1
   Generally speaking, non-impacted areas are those without high con-
centrations of minority residents or public housing. See Thompson v.
HUD, 220 F.3d 241, 244 (4th Cir. 2000).
                          THOMPSON v. HUD                            5
jurisdiction over HUD terminated six months after the date that the
Local Defendants were to have provided the 911 hard units of public
housing. The Plaintiffs therefore requested that the district court
extend its jurisdiction over HUD for an additional three years, which
would give the court jurisdiction for six months after the date by
which the Local Defendants projected they would be able to provide
the required 911 housing units.

   The district court granted the Plaintiffs’ motion to modify the
Decree. The court held that the Local Defendants’ "level of compli-
ance fell so far short of complete as to be beyond any reasonable
degree of expectations or acceptability." J.A. 509. The district court
concluded that the magnitude of the Local Defendants’ non-
compliance amounted to a change of circumstance sufficient to war-
rant modification of the Consent Decree, notwithstanding the fact that
HUD was not responsible for the delays of the Local Defendants. The
district court, however, declined to extend its jurisdiction over HUD
by the three years requested by the Plaintiffs. Instead, the district
court extended its jurisdiction "until such time as HUD shows that its
obligations have been fulfilled approximately to the same extent as
the parties and the Court originally and reasonably contemplated
would have been fulfilled by June 25, 2003." J.A. 516-17. This appeal
followed.

                                  II.

   It has long been recognized that courts are vested with the inherent
power to modify injunctions they have issued. That same authority
also exists with regard to a court’s consent decrees, which regulate
future conduct and thus operate as injunctions:

       We are not doubtful of the power of a court of equity to
    modify an injunction in adaptation to changed conditions
    though it was entered by consent. . . . Power to modify the
    decree was reserved by its very terms, and so from the
    beginning went hand in hand with its restraints. If the reser-
    vation had been omitted, power there still would be by force
    of principles inherent in the jurisdiction of the chancery. A
    continuing decree of injunction directed to events to come
    is subject always to adaptation as events may shape the
6                         THOMPSON v. HUD
    need. The distinction is between restraints that give protec-
    tion to rights fully accrued upon facts so nearly permanent
    as to be substantially impervious to change, and those that
    involve the supervision of changing conduct or conditions
    and are thus provisional and tentative. The result is all one
    whether the decree has been entered after litigation or by
    consent. In either event, a court does not abdicate its power
    to revoke or modify its mandate if satisfied that what it has
    been doing has been turned through changing circumstances
    into an instrument of wrong. We reject the argument for the
    interveners that a decree entered upon consent is to be
    treated as a contract and not as a judicial act.

United States v. Swift & Co., 286 U.S. 106, 114-15 (1932) (citations
omitted); see Benjamin v. Jacobson, 172 F.3d 144, 161 (2d Cir. 1999)
(en banc) ("The proposition that a court has the authority to alter the
prospective effect of an injunction in light of changes in the law or
the circumstances is, of course, well established."); Sweeton v. Brown,
27 F.3d 1162, 1166 (6th Cir. 1994) ("Anglo-American courts have
always had the inherent equitable power to modify consent decrees
imposing ongoing injunctive relief.").

   The court’s inherent authority to modify a consent decree or other
injunction is now encompassed in Rule 60(b)(5) of the Federal Rules
of Civil Procedure. See Plyler v. Evatt, 924 F.2d 1321, 1324 (4th Cir.
1991); Money Store, Inc. v. Harriscorp Fin., Inc., 885 F.2d 369, 372
(7th Cir. 1989). Under Rule 60(b)(5), a court may relieve a party from
an order if "it is no longer equitable that the judgment should have
prospective application." Fed. R. Civ. P. 60(b)(5).

   In Rufo v. Inmates of Suffolk County, 502 U.S. 367 (1992), the
Supreme Court considered the application of Rule 60(b)(5) to consent
decrees, like this one, springing from institutional reform litigation.
The Court noted that, traditionally, the standard for modifying con-
sent decrees was quite flexible, see id. at 379, and that the need for
a flexible approach was particularly great as to consent decrees aris-
ing out of institutional reform litigation:

       The upsurge in institutional reform litigation since Brown
    v. Board of Education . . . has made the ability of a district
                          THOMPSON v. HUD                             7
    court to modify a decree in response to changed circum-
    stances all the more important. Because such decrees often
    remain in place for extended periods of time, the likelihood
    of significant changes occurring during the life of the decree
    is increased. . . .

       The experience of the District Courts and Courts of
    Appeals in implementing and modifying such decrees has
    demonstrated that a flexible approach is often essential to
    achieving the goals of reform litigation. The Courts of
    Appeals have also observed that the public interest is a par-
    ticularly significant reason for applying a flexible modifica-
    tion standard in institutional reform litigation because such
    decrees reach beyond the parties involved directly in the suit
    and impact on the public’s right to the sound and efficient
    operation of its institutions.

Id. at 380-81 (citations and internal quotation marks omitted). The
Court emphasized, however, that while "a district court should exer-
cise flexibility in considering requests for modification of an institu-
tional reform consent decree, it does not follow that a modification
will be warranted in all circumstances." Id. at 383.

   The Court articulated the standard by which requests for modifica-
tions to consent decrees should be judged:

    [A] party seeking modification of a consent decree bears the
    burden of establishing that a significant change in circum-
    stances warrants revision of the decree. If the moving party
    meets this standard, the court should consider whether the
    proposed modification is suitably tailored to the changed
    circumstance.

Id. A "significant change either in factual conditions or in law" can
support a requested modification. Id. at 384. A significant change in
the factual conditions can support a modification if the changed con-
ditions "make compliance with the decree substantially more oner-
ous," if the decree "proves to be unworkable because of unforeseen
obstacles," or if "enforcement of the decree without the modification
would be detrimental to the public interest." Id.; see Thompson v.
8                         THOMPSON v. HUD
HUD, 220 F.3d 241, 247 (4th Cir. 2000) ("Thompson I"). "Ordinarily,
however, modification should not be granted where a party relies
upon events that actually were anticipated at the time it entered into
a decree." Rufo, 502 U.S. at 385.

                                 III.

   As noted above, the district court concluded that the Local Defen-
dants’ nearly complete failure to comply with their obligations was a
sufficient change of circumstance to warrant modification of the Con-
sent Decree. On appeal, HUD challenges the district court’s decision
on several grounds. HUD contends that the parties anticipated that, at
the time the court’s jurisdiction over HUD was to expire, the Local
Defendants might not have fulfilled their obligations under the
Decree. HUD thus contends that because the Local Defendants’ lack
of compliance was anticipated, it cannot be a basis for modifying the
Consent Decree. HUD also contends that because it was not responsi-
ble for the Local Defendants’ failings, it was error for the district
court to use those failings as a reason to modify HUD’s obligations
under the Decree. Finally, HUD contends that the modification was
not suitably tailored to the problems identified by the district court.

   We review the district court’s decision to modify the Consent
Decree for abuse of discretion, see Thompson I, 220 F.3d at 246, and
"we accept the factual findings on which the district court’s decision
is based unless they are clearly erroneous," Small v. Hunt, 98 F.3d
789, 796 (4th Cir. 1996). Such a deferential standard of review is war-
ranted in view of the nature and purpose institutional-reform consent
decrees:

    The rule of broad discretion in public interest cases is
    designed to give the district court flexibility in deciding
    exactly how the numerous conditions of a complex consent
    decree are to be implemented in practice. In overseeing
    broad institutional reform litigation, the district court
    becomes in many ways more like a manager or policy plan-
    ner than a judge. Over time, the district court gains an inti-
    mate understanding of the workings of an institution and
    learns what specific changes are needed within that institu-
    tion in order to achieve the goals of the consent decree.
                          THOMPSON v. HUD                              9
Navarro-Ayala v. Hernandez-Colon, 951 F.2d 1325, 1338 (1st Cir.
1991); see also Ruiz v. Lynaugh, 811 F.2d 856, 861 (5th Cir. 1987)
("We note that a district court’s decision to modify a consent decree
in an ongoing institutional reform case is committed to that court’s
discretion because it is intimately involved in the often complex pro-
cess of institutional reformation. It has the personal knowledge, expe-
rience, and insight necessary to evaluate the parties’ intentions,
performances, and capabilities.").

                                   A.

   HUD contends that the district court’s decision to modify the Con-
sent Decree was in error because the circumstance upon which the
court based the modification—the lack of compliance by the Local
Defendants—was anticipated by the parties at they time they entered
into the Decree. HUD points out that the Consent Decree calls for the
district court to exercise jurisdiction over the Local Defendants until
they fulfilled their obligations under the Decree, but for the court to
exercise jurisdiction over HUD until June 2003—seven years after the
Decree was approved. HUD thus argues that the parties fully antici-
pated that HUD might be out of the picture before the Local Defen-
dants fulfilled their obligations under the Decree, and that the district
court therefore erred by modifying the Decree based on an anticipated
event. See Thompson I, 220 F.3d at 248-49 (reversing modification of
Consent Decree because modification was based on circumstances
that were anticipated at the time the Decree was entered into).

   We agree that the parties when executing the Consent Decree must
have anticipated the likelihood that HUD would be released from the
district court’s jurisdiction before the Local Defendants had com-
pleted their obligations under the Decree. The structure of the Decree
itself leaves no room for doubt on that score. But the district court did
not modify the Consent Decree because the Local Defendants had not
quite completed all of their obligations; the court modified the Decree
because the Local Defendants had done almost nothing that they were
required to do under the Decree.2
  2
   On this point it is worth restating the most salient fact: Of the 911
hard units of housing that were to have been provided by December
2002, the Local Defendants had managed to provide only eight.
10                         THOMPSON v. HUD
   HUD argues, however, that the magnitude of the Local Defen-
dants’ failure is irrelevant. Since the parties anticipated the possibility
that HUD would be released from the court’s jurisdiction at a time
when the Local Defendants were still performing under the Decree,
HUD contends that the modification was impermissible under Rufo
and Thompson I, even if the Local Defendants were farther behind
than anticipated. We disagree.

   Preliminarily, we note that the issue is whether the parties actually
anticipated the events giving rise to the modification request; that the
events were theoretically foreseeable does not foreclose a modifica-
tion. See Rufo, 507 U.S. at 385 (rejecting the argument that "modifi-
cation should be allowed only when a change in facts is both
‘unforeseen and unforeseeable,’" noting that "[l]itigants are not
required to anticipate every exigency that could conceivably arise
during the life of a consent decree"). In this case, there is nothing in
the Consent Decree or the record to suggest that Plaintiffs anticipated
the exceptional magnitude of the Local Defendants’ non-compliance.
J.A. 508 ("Certainly, the absence of complete compliance with a con-
sent decree is not necessarily extraordinary or unforeseeable. How-
ever, failed compliance of the magnitude confronted in the instant
case is nothing short of exceptional." (citation omitted)). If the parties
had actually anticipated that the Local Defendants would be so far
behind on their obligations at this stage in the proceedings, the Con-
sent Decree would never have been executed. The Plaintiffs would
not have given up their claims in exchange for an agreement that they
anticipated would not be followed, and the Local Defendants would
not have subjected themselves to the district court’s contempt powers
by agreeing to do something they knew they would not be able to do.
Cf. Rufo, 502 U.S. at 386 (expressing doubt about the argument that
rapid increase in prison population was anticipated when the consent
decree was executed: "It strikes us as somewhat strange, if a rapidly
increasing jail population had been contemplated, that respondents
would have settled for a new jail that would not have been adequate
to house pretrial detainees."). Under these circumstances, we cannot
conclude that the district court abused its discretion by determining
that the Plaintiffs did not anticipate the degree of the Local Defen-
dants’ non-compliance.3 See David C. v. Leavitt, 242 F.3d 1206, 1213
  3
   Because the degree of the Local Defendants’ non-compliance was not
anticipated, this case is not controlled by our prior decision in Thompson
                          THOMPSON v. HUD                             11
(10th Cir. 2001) (affirming district court’s decision to modify consent
decree by extending its enforcement period because of defendant’s
significant non-compliance with the terms of the decree: "[I]t would
defy logic for Appellees to agree to include the four-year Termination
Provision in the Agreement if they actually foresaw that Utah would
not be in substantial compliance with the terms of the Agreement at
the end of the four-year period."); see also Small, 98 F.3d at 796-97
(affirming decision to modify consent decree based on changed cir-
cumstance where defendant anticipated small increase in prison popu-
lation during life of decree but did not foresee the extent of actual
increases). Nor can we conclude that the district court abused its dis-
cretion by concluding that the change of circumstance was significant
enough to warrant a modification of the Consent Decree. See Holland
v. New Jersey Dep’t of Corr., 246 F.3d 267, 284 (3d Cir. 2001)
("Courts have extended a decree or parts of a decree when . . . one
party was in substantial non-compliance with the decree.").

                                   B.

   HUD contends, however, that even if the degree of the Local
Defendants’ failure to comply was not anticipated, the only failings
specifically identified by the district court were those of the Local
Defendants. HUD argues that since it was not at fault for the Local
Defendants’ delay in compliance, the delay should not have been the
basis for a modification of HUD’s obligations under the Decree. We
disagree.

   We first note that this argument seems to proceed on an assumption
that a consent decree may be modified only upon a showing of fault.
Quite the opposite is true. Consent decrees are frequently modified
when the change of circumstance was not brought about by the fault

I. In Thompson I, we reversed the district court’s modification of the
Consent Decree because the events the district court viewed as a signifi-
cant change of circumstance had been specifically anticipated by the par-
ties when they entered into the Decree, and important provisions of the
Decree were directed to the very set of circumstances that the district
court relied upon to support the modification. See Thompson I, 220 F.3d
at 248-49.
12                        THOMPSON v. HUD
of a party to the agreement. For example, we have held that modifica-
tions should be made to consent decrees entered in prison-condition
litigation where there was an unanticipated increase in the prison pop-
ulation. See Small, 98 F.3d at 796-97; Plyler v. Evatt, 846 F.2d 208,
215-16 (4th Cir. 1988). While the cases involved requests by the
defendants to modify the consent decree, there is nothing in Rufo or
our cases involving the modification of consent decrees suggesting
that plaintiffs are entitled to modification only if the relevant change
of circumstance was brought about by fault on the part of the defen-
dant. And just as the absence of fault does not preclude a modification
of a consent decree involving a single defendant, it does not preclude
a modification of the obligations of one party to a consent decree as
a result of the fault of another party to the decree.

   A court’s ability to modify a consent decree or other injunction
springs from the court’s inherent equitable power over its own judg-
ments. See United States v. City of Miami, 2 F.3d 1497, 1509 (11th
Cir. 1993) ("[A] district court’s decision on a request to terminate or
modify a consent decree is an exercise of that court’s equitable power
. . . ."); SEC v. Worthen, 98 F.3d 480, 482 (9th Cir. 1996) ("With
respect to permanent injunctions, we have held that Rule 60(b)(5) rep-
resents a codification of preexisting law, recognizing the inherent
power of a court sitting in equity to modify its decrees prospectively
to achieve equity." (internal quotation marks omitted)); Fed. R. Civ.
P. 60(b)(5) (explaining that a court may relieve a party from an order
if "it is no longer equitable that the judgment should have prospective
application"). The hallmark of equity, of course, is its flexibility:

     The essence of a court’s equity power lies in its inherent
     capacity to adjust remedies in a feasible and practical way
     to eliminate the conditions or redress the injuries caused by
     unlawful action. Equitable remedies must be flexible if these
     underlying principles are to be enforced with fairness and
     precision.

Freeman v. Pitts, 503 U.S. 467, 487 (1992); accord Brown v. Board
of Educ., 349 U.S. 294, 300 (1955) ("[E]quity has been characterized
by a practical flexibility in shaping its remedies and by a facility for
adjusting and reconciling public and private needs.").
                          THOMPSON v. HUD                             13
   HUD’s view is that the modification of its responsibilities under
the Consent Decree is inappropriate because it has done nothing
wrong and bears no responsibility for the lack of compliance upon
which the district court based its decision to modify the decree. We
believe that such a position would improperly tie the district court’s
hands and severely limit the ability to fashion the necessary relief.
Institutional reform litigation frequently involves multiple parties
with interrelated obligations, such that a breach of duty by one party
can require an adjustment to the duties of another party. The district
court must be free to exercise its equitable powers as necessary to
remedy the problem. See Rufo, 502 U.S. at 382 (noting that "rigidity
[in applying Rule 60(b)(5)] is neither required . . . nor appropriate in
the context of institutional reform litigation"); Waste Mgmt. of Ohio,
Inc. v. City of Dayton, 132 F.3d 1142, 1145 (6th Cir. 1997)
("Equitable considerations are clearly factors a district court can
address when they are related to a court’s power and duty to modify,
interpret, and oversee a consent decree."); Berger v. Heckler, 771
F.2d 1556, 1568 (2d Cir. 1985) ("[B]readth and flexibility are inher-
ent in equitable remedies." (internal quotation marks omitted)). This
power must include the right, in appropriate cases, to modify the obli-
gations of a party who was without fault in creating the change of cir-
cumstance that gave rise to the need for modification. See New York
State Ass’n for Retarded Children, Inc. v. Carey, 706 F.2d 956, 969
(2d Cir. 1983) ("It is well recognized that in institutional reform liti-
gation such as this judicially-imposed remedies must be open to adap-
tation when unforeseen obstacles present themselves, to improvement
when a better understanding of the problem emerges, and to accom-
modation of a wider constellation of interests than is represented in
the adversarial setting of the courtroom."). Thus, the fact that HUD
bears no responsibility for the Local Defendants' failure to comply
with their obligations does not preclude a modification of HUD’s
obligations under the Consent Decree.

   Accordingly, we conclude that the district court did not abuse its
discretion when concluding that the Local Defendants’ lack of com-
pliance with their obligations under the Consent Decree was an unan-
ticipated and substantial change of circumstance. We likewise
conclude that the absence of fault on the part of HUD does not pre-
clude a modification of HUD’s duties under the Consent Decree. The
14                        THOMPSON v. HUD
question thus becomes whether the modification imposed by the dis-
trict court was proper.

                                  C.

   "Once a court has determined that changed circumstances warrant
a modification in a consent decree, the focus should be on whether the
proposed modification is tailored to resolve the problems created by
the change in circumstances." Rufo, 502 U.S. at 391. "A court should
do no more, for a consent decree is a final judgment that may be
reopened only to the extent that equity requires." Id.

   The district court concluded that enforcement of the Consent
Decree would be substantially more difficult if it did not extend the
period of jurisdiction over HUD. The court thus concluded that
extending the period of its jurisdiction over HUD would serve the
public interest, by ensuring the most efficient means of enforcing the
decree. The court determined that its jurisdiction over HUD should be
"extended only to the extent necessary to meet the original reasonable
expectations of the parties and the Court." J.A. at 516. Noting that the
Consent Decree called for the court’s jurisdiction over HUD to end
on June 25, 2003, six months after the date that the Local Defendants
were to have provided the 911 hard units of public housing, the dis-
trict court extended its period of jurisdiction over HUD "until such
time as HUD shows that its obligations have been fulfilled approxi-
mately to the same extent as the parties and the Court originally and
reasonably contemplated would have been fulfilled by June 25,
2003." J.A. 516-17.

   In our view, the modification implemented by the district court
nicely meets Rufo’s requirement that any modification be "suitably
tailored to the changed circumstance." Rufo, 502 U.S. at 391.
Although the Local Defendants bear most of the substantive obliga-
tions under the Consent Decree, the Decree also imposes various obli-
gations on HUD, many of which are related to the obligations of the
Local Defendants.4 Given that the Local Defendants are so far behind
  4
  For example, section 3.2.15 of the Consent Decree requires HUD to
make available to the Local Defendants certain FHA single- and multi-
                           THOMPSON v. HUD                             15
in fulfilling their obligations under the Consent Decree and that many
of the obligations of the parties are inter-related, the district court
properly recognized the utility of retaining jurisdiction over HUD, so
as to ensure that the Decree can be efficiently enforced. And by
extending the period of jurisdiction only until the Local Defendants
reach the milestones that should already have been reached when
jurisdiction over HUD originally was to expire, the district court mod-
ified the decree no more than was necessary to approximate the posi-
tions the parties would have occupied had the Local Defendants lived
up to their obligations under the Consent Decree.5 See Pigford v.
Veneman, 292 F.3d 918, 927 (D.C. Cir. 2002) ("[A] ‘suitably tailored’
order would return both parties as nearly as possible to where they
would have been absent [the changed circumstance giving rise to the
modification request]."); Vanguards of Cleveland v. City of
Cleveland, 23 F.3d 1013, 1020 (6th Cir. 1994) (finding district court’s
modification of consent decree to be suitably tailored to the changed
circumstance because, among other things, "the modification operates

family properties, properties that the Local Defendants are to develop as
part of the hard housing units required under the Decree. Section 3.2 of
the Decree requires the Local Defendants and HUD to work together to
create a plan for a home ownership program. Implementation of many
aspects of the plan is dependent on HUD approval. The Consent Decree
also imposes on HUD and the Local Defendants numerous continuing
obligations with regard to the Mobility Counseling Services program cre-
ated by the Decree.
   5
     HUD contends that the Consent Decree’s provision retaining jurisdic-
tion over it for seven years was in no way linked to the other provisions
of the Decree requiring the Local Defendants to comply with various
obligations within six and a half years. Thus, HUD argues that it was
improper to structure the modification to reflect a similar time frame. We
disagree. To be sure, the Consent Decree does not contain language link-
ing the two time frames—that is, the Decree does not state that the court
will retain jurisdiction over HUD for six months past the date that the
Local Defendants provide the required hard units of housing. Nonethe-
less, the Consent Decree as a factual matter did just that —provided for
the retention of jurisdiction over HUD for a period that happened to be
six months after the date that the Local Defendants were to have deliv-
ered the housing units. It was thus entirely proper for the district court
to modify the Decree in a way that reflected a similar time frame.
16                          THOMPSON v. HUD
along the lines of the consent decree" and "the modification merely
allows additional time in which to promote the minority firefighters
as would have occurred under the consent decree, if the minority pass
rates on the 1984 and 1985 promotional examinations had not been
lower than expected").

   HUD, however, argues that the relief fashioned by the district court
was not suitably tailored to remedy the problem at hand. According
to HUD, the Consent Decree’s retention-of-jurisdiction provision was
"the heart" of its bargain, Brief of Appellants at 18, and the district
court’s re-writing of that clause can hardly be considered a suitably
tailored remedy.6
  6
    This argument, as well as others made by HUD, seems to teeter on
the edge of asserting that the modification was improper because it was
inconsistent with the terms of the Consent Decree. Such an argument, of
course, would be doomed to fail. Issues of interpretation and enforce-
ment of a consent decree typically are subject to traditional rules of con-
tract interpretation, and the district court’s authority is thus constrained
by the language of the decree. See Johnson v. Robinson, 987 F.2d 1043,
1046 (4th Cir. 1993) ("A federal district court may not use its power of
enforcing consent decrees to enlarge or diminish the duties on which the
parties have agreed and which the court has approved." (emphasis
added)). A court’s inherent power to modify a consent decree, however,
is not circumscribed by the language of the decree. See System Fed’n No.
91 v. Wright, 364 U.S. 642, 651 (1961) (noting that the Court "has never
departed from th[e] general rule" that a court always retains the authority
to modify a consent decree; "[t]he parties cannot, by giving each other
consideration, purchase from a court of equity a continuing injunction");
David C., 242 F.3d at 1210-11 ("[A] court’s equitable power to modify
its own order in the face of changed circumstances is an inherent judicial
power that cannot be limited simply because an agreement by the parties
purports to do so. . . . To hold otherwise would allow the parties, by the
terms of their agreement, to divest a court of its equitable power or sig-
nificantly constrain that power by dictating its parameters."); Johnson,
987 F.2d at 1050 (explaining that "a district court may, of course, modify
a consent decree to impose new duties upon a party"); South v. Rowe,
759 F.2d 610, 613 (7th Cir. 1985) ("[T]he parties could not agree to
restrict the court’s equitable powers to modify its judgment enforcing the
consent decree, including the two-year limitation period, in light of
‘changed circumstances.’").
                          THOMPSON v. HUD                           17
   We recognize that, generally speaking, a district court modifying
a consent decree should strive to "preserve the essence of the parties’
bargain." Pigford, 292 F.3d at 927. The retention-of-jurisdiction
clause, however, is but one part of a more than 80-page agreement,
an agreement that imposes numerous obligations on HUD. While we
do not doubt the importance of the clause to HUD, that importance
simply does not place the clause beyond the reach of the district
court’s inherent modification powers. See Rufo, 502 U.S. at 387 ("If
modification of one term of a consent decree defeats the purpose of
the decree, obviously modification would be all but impossible. That
cannot be the rule."); see also Holland, 246 F.3d at 282 ("[T]he broad
remedial power contained within the modification and compliance
enforcement powers can be used to extend a consent decree."); David
C., 242 F.3d at 1210 (rejecting argument that "courts have no equita-
ble power to modify material provisions" of a consent decree).

  Finally, HUD suggests that the district court’s modification went
beyond what was necessary to address the changed circumstances,
because the modification imposes substantial new obligations on
HUD and has provided an opening for the Plaintiffs to seek to hold
HUD in contempt for violating the terms of the Consent Decree.
Again we disagree.

   As HUD concedes, it has obligations under the Consent Decree
that extend well beyond the date that the court’s jurisdiction over
HUD originally was to expire. Therefore, even if the district court had
declined to modify the retention-of-jurisdiction clause, the court’s
inherent authority over its own judgment would have provided it with
the continuing authority to enforce the Consent Decree against HUD.
See Frew v. Hawkins, 540 U.S. 431, 440 (2004) ("Federal courts are
not reduced to approving consent decrees and hoping for compliance.
Once entered, a consent decree may be enforced."); System Fed’n No.
91 v. Wright, 364 U.S. 642, 647 (1961) (explaining that injunctions
"often require[ ] continuing supervision by the issuing court and
always a continuing willingness to apply its powers and processes on
behalf of the party who obtained that equitable relief"); Brewster v.
Dukakis, 3 F.3d 488, 491 (1st Cir. 1993) ("[S]o long as the injunction
endures, the district court’s enforcement authority can always be
‘reawakened.’"); In re Pearson, 990 F.2d 653, 657 (1st Cir. 1993)
("[W]hen . . . an injunction entered pursuant to a consent decree has
18                          THOMPSON v. HUD
ongoing effects, the issuing court retains authority to enforce it.");
Hook v. Arizona Dep’t of Corr., 972 F.2d 1012, 1014 (9th Cir. 1992)
(concluding that district court had jurisdiction over motion to seeking
to hold defendants in contempt for violating consent decree in case
that had been closed for 16 years: "A district court retains jurisdiction
to enforce its judgments, including consent decrees. Because the
inmates allege a violation of the consent decree, the district court had
jurisdiction." (citation omitted)); United States v. Fisher, 864 F.2d
434, 436 (7th Cir. 1988) ("[W]hen a court issues an injunction, it
automatically retains jurisdiction to enforce it."); Waffenschmidt v.
Mackay, 763 F.2d 711, 716 (5th Cir. 1985) ("Courts possess the
inherent authority to enforce their own injunctive decrees. . . . Courts
do not sit for the idle ceremony of making orders and pronouncing
judgments, the enforcement of which may be flouted, obstructed, and
violated with impunity, with no power in the tribunal to punish the
offender." (internal citations omitted)). Thus, the modification of the
Consent Decree exposes HUD to no greater risk of contempt than if
the modification had not been granted.7
  7
    The district court in its order suggested that if it did not extend its
jurisdiction over HUD, enforcement of HUD’s continuing obligations
under the Decree would be relegated to the independent actions under the
Administrative Procedure Act with its strict arbitrary and capricious stan-
dard of review. See J.A. at 511-12. Given a court’s inherent power to
enforce a consent decree, we question whether the district court’s predic-
tion about future enforcement mechanisms was accurate. Nonetheless,
the court’s extension of its jurisdiction over HUD significantly improved
the court’s ability to monitor and enforce the Consent Decree. For exam-
ple, by virtue of the extension of jurisdiction, HUD remains an active
party to the litigation, and its presence and participation at hearings can
be required by the court. The district court has been intimately involved
with this case from the very beginning and is thus in the best position to
determine what actions might be necessary to enforce the Consent
Decree, and, ultimately, to bring this litigation to a close. Given the inter-
relatedness of the obligations of HUD and the Local Defendants, we can-
not say that the district court abused its discretion by concluding that
HUD’s active presence and participation in the litigation was necessary
to effectively monitor and enforce the Consent Decree. See Langton v.
Johnston, 928 F.2d 1206, 1221 (1st Cir. 1991) ("[T]he due administra-
tion of [an institutional reform consent] decree calls for a certain deftness
of touch.").
                           THOMPSON v. HUD                             19
                                   IV.

   To summarize, we conclude that the district court properly found
that the Local Defendants’ near total failure to comply with the terms
of the Consent Decree was an unanticipated change of circumstance
that warranted modifying the Consent Decree. Because many of the
obligations of HUD and the Local Defendants under the Decree are
inter-related, the district court did not abuse its discretion by conclud-
ing that the Decree should be modified to extend the period of the
court’s retention of jurisdiction over HUD. The district court’s modi-
fication of the Decree was suitably tailored to the problems created
by the change of circumstance, as required by Rufo. Accordingly, the
district court’s order modifying the Consent Decree is hereby
affirmed.

                                                             AFFIRMED
