Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 1 FILED United States Court of Appeals Tenth Circuit UNITED STATES COURT OF APPEALS October 30, 2024 FOR THE TENTH CIRCUIT _________________________________ Christopher M. Wolpert Clerk of Court ABIGAIL KNOWLTON; OSCAR DANIEL LOPEZ-GARCIA; MICHAELA BACA; TERRIANNE SCAZZERO, individually and on behalf of all others similarly situated,
Plaintiffs - Appellees,
v. No. 23-2143 (D.C. No. 1:88-CV-00385-KG-JHR) KARI ARMIJO, Acting Secretary of (D. N.M.) New Mexico Human Services Department,
Defendant - Appellant,
and
ZACHARY SCHANDLER,
Defendant. _________________________________
ORDER AND JUDGMENT* _________________________________
Before CARSON, ROSSMAN, and FEDERICO, Circuit Judges. _________________________________
* This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 2
This interlocutory appeal arises from a long-running class action
lawsuit challenging the state of New Mexico’s administration of federal
social benefits programs. Appellant New Mexico Human Services
Department (HSD) seeks review of the district court’s August 21, 2023 order
denying its motion to dismiss. We must dismiss for lack of appellate
jurisdiction.
I
This case has a complex procedural history with which the parties are
familiar. We briefly describe some of the facts relevant to the appeal before
us.
A
New Mexico participates in a comprehensive federal-state system of
administering food, public-assistance, and medical programs to low-income
individuals, households, and families. Aplt. App. at 56–57. HSD is the state
agency designated to administer the food stamp, Aid to Families with
Dependent Children (AFDC), and Medicaid programs in New Mexico. It
must comply with the federal policies and procedures governing its
participation. See Aplt. App. at 57 (citing federal laws and regulations
governing New Mexico’s administration of these programs1).
1 See 7 U.S.C. § 2020(d), (e); 7 C.F.R. § 272.2 (2024); 42 U.S.C. §§ 601,
602; Id. §§ 1396, 1396a; 42 C.F.R. §§ 431.40–70 (2023). 2 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 3
In 1988, Ms. Debra Hatten-Gonzales filed a class action lawsuit in
federal district court challenging HSD’s compliance with federal law in
administering benefits programs. She alleged, among other things, that
HSD “failed to complete certification of and provide a food stamp allotment
to plaintiff,” “failed to provide AFDC and/or Medicaid benefits to plaintiff,”
and “failed to provide plaintiff with timely, adequate, written notice of its
determination of plaintiff’s eligibility for food stamps, AFDC, and/or
Medicaid.” Aplt. App. 67.
Certified in 1989, the class included “[a]ll present and future
applicants to the federal food stamp program, Medicaid program, or [AFDC
program] who have not or will not receive an eligibility determination or
benefits under these programs from [HSD] within the time limits imposed
by law.” Aplt. App. at 75. The district court approved a settlement
agreement in 1990. In 1998, the district court entered a modified settlement
agreement. The parties entered and the district court approved the
3 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 4
operative consent decree2—the Second Revised Modified Settlement
Agreement and Order—in 2018.3
B
Litigation ensued, including in this court. See, e.g., Hatten-Gonzales
v. Hyde, 579 F.3d 1159, 1162–65 (10th Cir. 2009) (Hatten-Gonzales I)
(describing more procedural history); Hatten-Gonzales v. Earnest, 688 F.
App’x 586 (10th Cir. 2017) (Hatten-Gonzalez II); Hatten-Gonzales v. Scrase,
No. 22-2115, 2023 WL 4881437 (10th Cir. Aug. 1, 2023) (Hatten-Gonzales
III).
As relevant here, in 2005, Plaintiffs moved to enforce HSD’s
compliance with the consent decree. Hatten-Gonzales I, 579 F.3d at 1164.
The district court granted Plaintiffs’ motion. Id. HSD then moved to
dismiss, citing “a jurisdictional question concerning the Plaintiffs’ apparent
lack of authority to continue monitoring [HSD’s] compliance.” Id. (alteration
in original) (quoting Motion to Dismiss and Memeorandum [sic] in Support
2 The operative agreement defines itself as a consent decree, and the
parties refer to it as a consent decree, so we do as well. A consent decree is a court decree to which all parties have agreed. Decree, Black’s Law Dictionary (12th ed. 2024).
3 Section I of the operative consent decree contains definitions; Section
II addresses the timely processing of applications; Section III addresses the correct processing of applications; and Section IV addresses case file reviews and other implementation requirements. See Aplt. App. at 78–90, 94–95. 4 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 5
at 1, Hatten-Gonzalez v. Hyde, No. 1:88-cv-00385-KG-JHR (D.N.M. July 9,
2007), ECF No. 340). The district court denied HSD’s motion, and HSD
appealed. Id. We dismissed the appeal for lack of appellate jurisdiction. Id.
at 1167. “As a general matter,” we explained, “we review only final decisions
of the district courts,” but the order there “did not end this enduring
litigation.” Id. at 1165–66 (citing 28 U.S.C. § 1291). Nor did the order fit
into an exception for orders “granting, continuing, modifying, refusing or
dissolving injunctions, or refusing to dissolve or modify injunctions,” in part
because “HSD did not request dissolution or modification of an injunction.”
Id. (quoting 28 U.S.C. § 1292(a)(1)).
In 2020, the district court modified the operative consent decree. In
2022, a special master—appointed to administer the decree—recommended
case file review procedures. See Hatten-Gonzales III, 2023 WL 4881437, at
*1. Both parties objected, and the district court overruled most of their
objections. HSD again appealed, “seeking ‘review of an interlocutory order
modifying an injunction.’” See id. at *2 (quoting Aplt. Br. at 4, Hatten-
Gonzales III, 2023 WL 4881437 (No. 22-2115)). Again, we dismissed the
appeal for lack of appellate jurisdiction. Id. at *1, *3. The district “court did
not change the consent decree’s compliance mandates [or] enforcement
mechanisms, or otherwise alter ‘the command of the earlier injunction,
relax its prohibitions, or release any respondent from its grip.’” Id. at *3
5 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 6
(quoting Pimentel & Sons Guitar Makers, Inc. v. Pimentel, 477 F.3d 1151,
1154 (10th Cir. 2007)). Litigation continued in the district court while
Hatten-Gonzalez III was pending, because the district court certified as
frivolous much of HSD’s appeal.4
C
We now arrive at the facts underlying HSD’s latest appeal. In
November 2022, HSD again moved to dismiss.5 HSD raised arguments
about “the non-existence of a viable plaintiff class,” including that “the class
injury . . . had been redressed” and that class counsel had not adequately
communicated with class representatives. Aplt. App. at 119–23. HSD asked
the district court to “grant the motion and enter an Order terminating the
Consent Decree.” Aplt. App. at 119. Weeks later, HSD filed a similarly
reasoned motion to “relieve the Defendant” from the consent decree under
4 A frivolity determination allows the district court to maintain jurisdiction during the pendency of an appeal. See Stewart v. Donges, 915 F.2d 572, 576 (10th Cir. 1990) (“Upon . . . an explicit finding that the claim raised on appeal was frivolous, the district ‘court should not be held divested of jurisdiction.’” (quoting United States v. Hines, 689 F.2d 934, 937 (10th Cir. 1982))). According to the district court, HSD’s appeal was “a delay tactic.” Supp. App. at 312.
5 HSD did not identify any particular federal rule as the basis for the
motion, but its arguments seem grounded in Rule 12(b)(1). See Fed. R. Civ. P. 12(b) (providing “a party may assert the following defense[] by motion: (1) lack of subject-matter jurisdiction”). 6 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 7
Federal Rule of Civil Procedure 60(b)(6)—the catch-all provision for
requesting relief from an order or judgment. Aplt. App. at 127–28.
The district court denied HSD’s motions. HSD appealed the denial of
its motion to dismiss, but not the denial of its Rule 60(b) motion. We ordered
the parties to address “the jurisdictional basis for the appeal including
whether the [motion-to-dismiss] order is appealable under 28 U.S.C. §
1292(a) or another statutory basis.” Order at 1, Knowlton v. Armijo, No. 23-
2143 (10th Cir. Sept. 21, 2023), ECF No. 13. The parties did so in their
merits briefing. See Opening Br. at 3; Response Br. at 5–9; Reply Br. at 3–
5. The district court again certified HSD’s appeal as frivolous, reasoning it
“evinces a pattern of dilatory tactics,” including because Plaintiffs had
recently filed a Motion to Enforce Compliance that HSD sought to avoid.
Knowlton v. Armijo, No. 88-0385 KG/GBW, 2023 WL 7114676, at *3 (D.N.M.
Oct. 27, 2023).
II
HSD urges reversal, contending the district court lacks subject matter
jurisdiction and “the case should be dismissed.” Opening Br. at 2. According
to HSD, the class lacks Article III standing. Opening Br. at 2, 9; see Opening
Br. at 9 (“To establish Article III standing, an injury must be ‘concrete,
particularized, and actual or imminent; fairly traceable to the challenged
action; and redressable by a favorable ruling.’” (quoting Monsanto Co. v.
7 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 8
Geertson Seed Farms, 561 U.S. 139, 149 (2010))). HSD makes two
arguments to this end. First, “the definition of the class contained in the
1989 class certification was fundamentally flawed,” HSD insists, because
“[a]llegations of possible future injury do not satisfy the requirements of
Article III.” Opening Br. at 8–11 (heading capitalization omitted) (quoting
Whitmore v. Arkansas, 495 U.S. 149, 158 (1990)). Second, HSD argues the
district court recognized “the class injury” as fully redressed when it
modified the consent decree in 2020. See Opening Br. at 7, 11–14.
In addition to responding on the merits, Plaintiffs maintain we should
not reach HSD’s claims because we lack appellate jurisdiction. Response Br.
at 5. We agree we lack jurisdiction.
The appellant “bears the burden to establish appellate jurisdiction.”
EEOC v. PJ Utah, LLC, 822 F.3d 536, 542 n.7 (10th Cir. 2016). An appellant
can do this “by demonstrating the finality of the challenged decision or [by]
identifying a specific grant of jurisdiction.” C.W. ex rel. B.W. v. Denver Cnty.
Sch. Dist. No. 1, 994 F.3d 1215, 1220 (10th Cir. 2021) (quoting Zen Magnets,
LLC v. Consumer Prod. Safety Comm’n, 968 F.3d 1156, 1164 (10th Cir.
2020)).
“In general, the appellate jurisdiction of the courts of appeals is
governed by the final-judgment rule of 28 U.S.C. § 1291 . . . .” DiTucci v.
8 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 9
Bowser, 985 F.3d 804, 808 (10th Cir. 2021); see 28 U.S.C. § 1291 (extending
jurisdiction to “appeals from all final decisions of the district courts of the
United States”). Nobody contends the order on appeal—the denial of HSD’s
motion to dismiss—is a “final decision” under 28 U.S.C. § 1291. See Decker
v. IHC Hosps., Inc., 982 F.2d 433, 435 (10th Cir. 1992) (“In general, an order
denying a motion to dismiss is not final because it ‘ensures that litigation
will continue in the District Court.’” (quoting Gulfstream Aerospace Corp.
v. Mayacamas Corp., 485 U.S. 271, 275 (1988))). To establish appellate
jurisdiction, then, HSD must show the order on appeal falls within one of
the “limited exception[s] to the final-judgment rule.” Hutchinson v. Pfeil,
105 F.3d 566, 569 (10th Cir. 1997). HSD asserts two possible bases for
appellate jurisdiction, but neither is availing.
HSD first suggests we may always hear an appeal about a defect in the
district court’s subject matter jurisdiction. See Opening Br. at 3 (“[T]his Court
has jurisdiction over this appeal to address the jurisdictional issue of standing
because such an issue may be raised by the Court at any point in the
litigation.”) (citing Buchwald v. Univ. of N.M. Sch. of Med., 159 F.3d 487, 492
(10th Cir. 1998)). That is incorrect.
9 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 10
To be sure, “[s]tanding represents a jurisdictional requirement which
remains open to review at all stages of the litigation.” Nat’l Org. for Women,
Inc. v. Scheidler, 510 U.S. 249, 255 (1994). But we cannot consider the district
court’s subject matter jurisdiction if we lack appellate jurisdiction. “Without
jurisdiction the court cannot proceed at all in any cause. Jurisdiction is power
to declare the law, and when it ceases to exist, the only function remaining to
the court is that of announcing the fact and dismissing the cause.” Ex parte
McCardle, 74 U.S. (7 Wall.) 506, 514 (1868). Accordingly, “the question of this
Court’s jurisdiction (i.e., our appellate jurisdiction) is antecedent to all other
questions, including the question of the subject matter [jurisdiction] of the
District Court.” In re Lang, 414 F.3d 1191, 1195 (10th Cir. 2005) (quoting
Petroleos Mexicanos Refinacion v. M/T KING A (Ex–TBILISI), 377 F.3d 329,
333 n.4 (3d Cir. 2004)); see Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83,
94 (1998) (we address jurisdiction “first, of this court, and then of the court
from which the record comes” (quoting Great S. Fire Proof Hotel Co. v. Jones,
177 U.S. 449, 453 (1900)). We next consider—and reject—HSD’s other
argument for appellate jurisdiction.
As in its prior appeals, HSD invokes 28 U.S.C. § 1292(a)(1). Recall, §
1292(a)(1) authorizes appellate review of “orders . . . granting, continuing,
modifying, refusing or dissolving injunctions, or refusing to dissolve or
10 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 11
modify injunctions.” We previously recognized the consent decree in this
case is effectively an injunction. See Hatten-Gonzalez I, 579 F.3d at 1168–
70 (noting the 1998 consent decree “contain[s] mandatory language
prohibiting the parties from engaging in certain activities and would appear
to subject a non-compliant party to contempt”); Hatten-Gonzalez III, 2023
WL 4881437, at *1, *3 (recognizing the operative consent decree also serves
as an injunction).
We have developed “two strands of analysis . . . for § 1292(a)(1)
appeals.” Utah State Dep’t of Health v. Kennecott Corp., 14 F.3d 1489, 1496
(10th Cir. 1994). First, a district court order “expressly granting or denying
injunctive relief” is appealable. Tri-State Generation & Transmission Ass’n,
Inc. v. Shoshone River Power, Inc., 874 F.2d 1346, 1351 (10th Cir. 1989)
(emphasis added). Here, the district court’s order did not expressly or
clearly address injunctive relief. See Aplt. App. at 147. And HSD does not
appear to argue otherwise. See Reply Br. at 4 (“The key point is whether the
granting of the motion would effectively end the litigation.” (emphasis
added)).6
6 We have also said orders “ruling on express motions for injunctive
relief” are appealable without a further showing. MAI Basic Four, Inc. v. Basis, Inc., 962 F.2d 978, 982 (10th Cir. 1992) (emphasis added); Utah State Dep’t of Health v. Kennecott Corp., 14 F.3d 1489, 1496 (10th Cir. 1994) (emphasis added). We decline to read the single request to dissolve the
11 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 12
This case involves our second strand of analysis. Because the order on
appeal does not expressly address injunctive relief, we use the Carson test
to determine whether the order triggered § 1292(a)(1) by “effectively”
refusing to dissolve an injunction.7 See Carson v. American Brands, Inc.,
450 U.S. 79 (1981). In Carson, the Supreme Court held an order declining
to enter a consent decree triggered review under § 1292(a)(1) when the order
“did not in terms ‘refus[e]’ an ‘injunctio[n],’” but the requested decree would
have effectively “enjoined respondents from discriminating against black
employees.” Id. at 83–84 (alterations in original) (also listing other effects
of the order). The Court went on: “For an interlocutory order to be
immediately appealable under § 1292(a)(1), however, a litigant must show
consent decree in HSD’s motion to dismiss as transforming it into an “express motion for injunctive relief”—particularly when HSD does not argue otherwise, and HSD did file a separate Rule 60(b) motion to “vacat[e]” the consent decree shortly after its motion to dismiss. Aplt. App. at 119, 127–34; see also New Mexico v. Trujillo, 813 F.3d 1308, 1319 (10th Cir. 2016) (“When determining whether an order expressly grants a request for an injunction, we consider the substance rather than the form of the motion and order.”); Kennecott, 14 F.3d at 1496 (noting appellants “acknowledge that no express motion for injunctive relief is pending”).
7 The parties do not discuss Carson. See Carson v. American Brands,
Inc., 450 U.S. 79 (1981). We apply Carson because “[w]hen an issue or claim is properly before the court, the court is not limited to the particular legal theories advanced by the parties, but rather retains the independent power to identify and apply the proper construction of governing law.” United States v. Mobley, 971 F.3d 1187, 1198 (10th Cir. 2020) (quoting Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90, 99 (1991)).
12 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 13
more than [(1)] that the order has the practical effect of refusing an
injunction.” Id. at 84. A litigant must also show (2) that the order “might
have a ‘serious, perhaps irreparable, consequence,’ and [(3)] that the order
can be ‘effectually challenged’ only by immediate appeal.” Id. (quoting Balt.
Contractors, Inc. v. Bodinger, 348 U.S. 176, 181 (1955)); see also
Hutchinson, 105 F.3d at 569 (applying the three-part Carson test).8 As we
have acknowledged, § 1292(a)(1) “should be narrowly construed” to
vindicate “the ‘long-established policy against piecemeal appeals.’”
Pimentel, 477 F.3d at 1153 (quoting Gardner v. Westinghouse Broad. Co.,
437 U.S. 478, 480 (1978)).
8 We also have articulated the Carson test as having two steps. See
DiTucci v. Bowser, 985 F.3d 804, 809 (10th Cir. 2021) (“[T]o appeal under § 1292(a)(1) an interlocutory order not expressly denominated as an injunction, a party must show that the order (1) “threaten[s] a serious, perhaps irreparable, consequence,” and (2) “[can] be effectually challenged only by immediate appeal.” (internal quotation marks omitted)); see also Miller v. Basic Rsch., LLC, 750 F.3d 1173, 1176 (10th Cir. 2014) (similar); Trujillo, 813 F.3d at 1319 n.6 (similar). Under that formulation, we still conduct a threshold inquiry into whether the order on appeal has practical effects of injunctive relief. See DiTucci, 985 F.3d at 809–11 (applying Carson “assuming that the Order has earmarks of an injunction”); Trujillo, 813 F.3d at 1319 (stating Carson applies when “the court enters an order having the practical effect of granting or denying injunctive relief”); Miller, 750 F.3d at 1176–77 (stating Carson applies to “an order that has the practical effect of an injunction” and applying Carson “assuming that the order has the practical effect of an injunction”). Put differently, the threshold inquiry in the two-step test serves the same purpose as the first step of the three- step test. Ultimately, it does not matter whether we use a two-step or three- step Carson test here, because we find HSD fails to meet its burden on the two steps included in both articulations. 13 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 14
We have applied Carson to orders purportedly refusing to grant
injunctions, e.g., Hutchinson, 105 F.3d at 569, orders purportedly granting
injunctions, e.g., DiTucci, 985 F.3d at 810, and an order that could be
understood as refusing to modify an injunction or refusing to grant an
injunction, United States v. Colorado, 937 F.2d 505, 507–09 (10th Cir.
1991). We see no reason to treat an order purportedly refusing to dissolve
an injunction differently, particularly because we invoked Carson when
analyzing an order purportedly refusing to dissolve an injunction in Hatten-
Gonzalez I, 579 F.3d at 1165 (Ҥ 1292(a)(1) will be available only in
circumstances where an appeal will further the statutory purpose of
permitting litigants to . . . challenge orders of serious, perhaps irreparable,
consequence.” (quoting Carson, 450 U.S. at 84)). Hatten-Gonzalez I did not
more extensively discuss Carson only because the order on appeal there
clearly failed Carson step one: it did not effectively refuse to dissolve an
injunction. Id. at 1167. The same statutory provision grants jurisdiction
over orders refusing to grant injunctions, orders granting injunctions, and
orders refusing to dissolve injunctions, so it is unsurprising the same
Carson test would apply to orders that purportedly have the effect of doing
any of the three. See 28 U.S.C. § 1292(a)(1); see also Salazar ex rel. Salazar
v. District of Columbia, 671 F.3d 1258, 1262 (D.C. Cir. 2012) (applying
14 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 15
Carson to order purportedly refusing to dissolve injunction); Roberts v. St.
Regis Paper Co., 653 F.2d 166, 170 (5th Cir. 1981) (same).
HSD argues appellate jurisdiction is proper under § 1292(a)(1)
because “HSD’s motion, if granted, would have dismissed the case and
terminated the” consent decree. Reply Br. at 4. HSD distinguishes Hatten-
Gonzales I, where the motion “would not have led to the dissolution of the”
consent decree. Reply Br. at 4. For instance, here, unlike in Hatten-Gonzales
I, the motion to dismiss “explicitly requested” that the district court dissolve
the decree. Reply Br. at 4–5. HSD also observes “standing was not at issue
in” Hatten-Gonzalez I. Reply Br. at 3. HSD does not explain that assertion.
It may imply the consent decree would have become void if the district court
granted the instant motion, because the district court would have lacked
jurisdiction to order relief.
We need not address these arguments. HSD has failed to carry its
burden to show that the order “might have a ‘serious, perhaps irreparable,
consequence,’” or “that the order can be ‘effectually challenged’ only by
immediate appeal.” Carson, 450 U.S. at 84 (quoting Balt. Contractors, 348
U.S. at 181). HSD has not even attempted to make this showing. See PJ
Utah, 822 F.3d at 542 n.7 (noting the appellant “bears the burden to
establish appellate jurisdiction”); see also Hutchinson, 105 F.3d at 570
(“Hutchinson has not even alleged that the district court’s order may cause
15 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 16
serious or irreparable injury, nor could he in good faith.”); DiTucci, 985 F.3d
at 811 (“[E]ven assuming that the Order has earmarks of an injunction, . .
. Mr. Bowser has failed to show that the Order threatened serious, perhaps
irreparable, consequences.”). We decline “to conjure up possible theories to
invoke our legal authority to hear [this] appeal.” Raley v. Hyundai Motor
Co, Ltd., 642 F.3d 1271, 1275 (10th Cir. 2011).
Nor are we ignoring any unbriefed but obvious basis in the record on
which HSD could satisfy Carson. The district court suggested the timing of
HSD’s appeal “evinces a pattern of dilatory tactics.” And HSD had the
opportunity to appeal the district court’s refusal to modify or dissolve the
consent decree in response to HSD’s Rule 60(b)(6) motion, but it chose not
to do so. Under the circumstances here, we cannot say HSD has carried its
burden to establish appellate jurisdiction.
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III
We lack appellate jurisdiction to review the order denying HSD’s
motion to dismiss. The appeal is DISMISSED.
Entered for the Court
Veronica S. Rossman Circuit Judge
17 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 18
Knowlton, et al v. Armijo, al, No. 23-2143 FEDERICO, Circuit Judge, concurring
I am pleased to join in full the majority’s opinion. I write separately to
emphasize the importance of this litigation and to suggest that if New Mexico’s
Human Services Department (HSD) continues down the path of filing another
frivolous appeal or pursuing an obstructionist legal strategy in the district
court, a future panel of this court (and/or the district court) should consider
taking additional steps – including sanctions, if appropriate – against HSD and
its litigation counsel.
The history of this litigation is both frustrating and extraordinary. The
district court has certified HSD’s last two appeals as “frivolous.” Knowlton v.
Armijo, No. CV 88-0385 KG/GBW, 2023 WL 7114676, at *1 (D.N.M. Oct. 27,
2023). Including the dismissal of this appeal, this court has now dismissed four
consecutive HSD appeals for lack of jurisdiction. See, e.g., Hatten-Gonzales v.
Hyde, 579 F.3d 1159, 1162–65 (10th Cir. 2009) (Hatten-Gonzales I); Hatten-
Gonzales v. Earnest, 688 F. App’x 586, 588–89 (10th Cir. 2017) (unpublished)
(Hatten-Gonzalez II); Hatten-Gonzales v. Scrase, No. 22-2115, 2023 WL
4881437, at *1 (10th Cir. Aug. 1, 2023) (per curiam and unpublished) (Hatten-
Gonzales III).
After this appeal was filed, HSD filed a motion in the district court
asking it to stay all proceedings pending our resolution of the appeal. The Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 19
district court not only denied that motion, but also certified HSD’s appeal
before us as “frivolous.” Knowlton, 2023 WL 7114676, at *1. The district court’s
opinion shines a light on HSD’s repeated attempts to evade and obstruct the
annual case reviews needed to ensure HSD is delivering food assistance and
medical benefits to vulnerable New Mexicans who rely on HSD for their very
survival. See id. at *1–3.
The district court provided several reasons why HSD’s latest appeal was
not only “frivolous,” but also designed to obstruct and delay enforcement of the
operative consent decree. Id. Because this is the fourth time we have dismissed
an appeal by HSD, it is worth detailing each of these reasons.
The first reason offered by the district court for certifying the appeal as
“frivolous” is HSD’s failure to follow our repeated guidance on seeking
dissolution of an injunction. Id. at *2. In fact, HSD’s motion to dismiss the
operative consent decree lacked any legal standard and did not cite 28 U.S.C.
§ 1292 or Federal Rule of Civil Procedure 60, which govern dissolutions of
injunctions. It also made no effort to comply with our previous guidance in
Hatten-Gonzales I, which provided specific instructions for HSD to follow if it
again sought to dissolve an injunction. Id. at *2 (“Here, like Hatten-Gonzales,
HSD’s Motion to Dismiss ‘did not seek to alter or eliminate any of the terms of
2 Appellate Case: 23-2143 Document: 65-1 Date Filed: 10/30/2024 Page: 20
the [Modified Settlement Agreement], nor did it cite Rule 60(b)(5) or the
standards from obtaining relief from an order.’” (quoting Hatten-Gonzales I,
579 F.3d at 1167) (alteration in original)).
The district court next emphasized that HSD lacked a good faith basis to
argue that the 2020 amendment to the operative consent decree deprived the
district court of subject matter jurisdiction. Id. at *2 (“[I]t is not lost on this
Court that HSD’s argument that this Court lacks subject-matter jurisdiction
relies on the Court granting HSD’s Motion to Modify in 2020.”). As the district
court explained, it granted HSD’s 2020 request to modify the operative consent
decree only because “HSD argued for piecemeal dismissal of only specific
sections and subsections of the Modified Settlement Agreement (MSA) relating
to timeliness—acknowledging the MSA’s remaining sections would remain
effective.” Id. And from the time the district court modified the MSA in 2020
until August 2022, “HSD was working toward compliance” and acting “with
agreement that there would be a case review.” Id. Then, “in an abrupt about-
face, HSD argue[d] that no controversy exist[ed] given [the district court’s]
2020 order modifying the MSA.” Id. The district court, thus, concluded that
“[s]uch a reversal further demonstrates HSD’s dilatory tactics.” Id.
Third, the district court explained:
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HSD is aware that the class scope has never been as narrow as it now contends. In fact, the class scope has been well-defined for decades. Each version of the settlement agreement explains that the class scope includes not only those who received untimely benefits but also those who applied for benefits and were erroneously denied. The Court finds HSD’s effort to narrow the class scope—after decades of clarity—is just another delay tactic.
Id. (citation and footnote omitted).
HSD argues in this appeal that the 1989 class definition dictates how to
interpret and enforce the operative consent decree in 2024. But a consent
decree is not a class action settlement; instead, it is “a negotiated agreement
that is entered as a judgment of the court.” Johnson v. Lodge #93, 393 F.3d
1096, 1101 (10th Cir. 2004). Consent decrees are finalized and entered only
“after careful negotiation has produced agreement on their precise terms.”
United States v. Armour & Co., 402 U.S. 673, 681 (1971). As a result, we
interpret a consent decree “basically as a contract,” which means that “the
terms of the decree and the respective obligations of the parties must be found
within the four corners of the consent decree.” Sinclair Oil Corp. v. Scherer, 7
F.3d 191, 194 (10th Cir. 1993) (quoting United States v. ITT Continental
Baking Co., 420 U.S. 223, 238 (1975)) (emphasis added); accord Armour & Co.,
402 U.S. at 681–82 (“[T]he scope of a consent decree must be discerned within
its four corners, and not by reference to what might satisfy the purposes of one
of the parties to it.”). Thus, HSD may not stray outside the four corners of the
operative consent decree in an effort to rewrite its scope, let alone seek to do so
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by relying on a class definition from a 1989 class certification order predating
the modern amendments to Federal Rule of Civil Procedure 23.
Fourth, and most troubling, the district court observed that the timing
of HSD’s last two appeals and motions to stay display that HSD is using
litigation to try to dodge the annual case reviews required by the operative
consent decree. Knowlton, 2023 WL 7114676, at *3. As the district court
concluded, “[s]uch conspicuous timing evinces a pattern of dilatory tactics.” Id.
Any court should pause and consider carefully even the threat of
sanctions against a litigant or its counsel. Imposing sanctions against litigants
or their counsel is a serious step and one not to be taken lightly without good
cause and notice and an opportunity to be heard. Both Congress and this Court
have cautioned against imposing any sanction that would “dampen the
legitimate zeal of an attorney in representing [their] client.” Braley v.
Campbell, 832 F.2d 1504, 1512 (10th Cir. 1987) (en banc) (quoting H.R. Conf.
Rep. No. 1234, 96th Cong., 2d Sess. 8, reprinted in 1980 U.S. Code Cong. & Ad.
News 2716, 2781, 2782). Indeed, litigation often turns on unsettled or complex
areas of the law, and litigants and attorneys are often required to construct
novel or controversial arguments to advance or change the law.
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However, against this backdrop and the history of this litigation, if HSD
pursues yet again legal action that a court determines to be “frivolous,” then
sanctions against HSD and its litigation counsel should be strongly considered
under Federal Rule of Civil Procedure 11, Federal Rule of Appellate Procedure
38, and 28 U.S.C. § 1927. See, e.g., Braley, 832 F.2d at 1510 (discussing the
federal courts’ broad powers to impose sanctions on litigants and their counsel
“[t]o deter frivolous and abusive litigation” and to “promote justice and judicial
efficiency”); see id. at 1512 (“The power to assess costs, expenses, and attorney’s
fees against an attorney personally in the appropriate case is an essential tool
to protect both litigants and the ability of the federal courts to decide cases
expeditiously and fairly.”).
In my view, this appeal lands beyond the outer limits of reasonable
advocacy, and it reflects a pattern of recurring appeals used by HSD not to win
on the merits, but to avoid and delay enforcement of the operative consent
decree. As a state agency, HSD is a sophisticated litigant. According to its
website, it pledges that its mission is to “ensure that New Mexicans attain
their highest level of health by providing whole-person, cost-effective,
accessible, and high-quality health care and safety-net service.” New Mexico
Health Care Authority, https://www.hca.nm.gov/ (last visited Oct. 25, 2024),
[https://perma.cc/7KXB-83JZ].
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HSD should honor its pledge, because HSD’s failure to comply with the
operative consent decree has the potential to devastate the lives of New
Mexicans who depend on HSD to provide food assistance and medical benefits.
HSD administers programs to the neediest New Mexicans – Medicaid,
Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance
for Needy Families (TANF), Veterans Property Tax Exemptions, and others.
In its latest motion to stay filed before the district court, HSD argued
that it would suffer irreparable harm if forced to comply with the operative
consent decree. As the district court correctly explained, however, HSD
following a consent decree (an injunction it agreed to after a settlement and
negotiation) is not irreparable harm. Knowlton, 2023 WL 7114676, at *3–4.
Rather, it is HSD’s multi-decade failure to comply with federal law that might
continue to inflict irreparable harm on New Mexico’s most vulnerable citizens.
One more observation about this litigation. From the record, it is obvious
that HSD is frustrated too. I take it as a given that HSD is staffed by people
who care about its mission and the people it serves. My assumption is that
HSD is frustrated by having to operate under court supervision, even though
it agreed to do so as part of the settlement that created the consent decree.
However, the road to relief from this frustration is not frivolous litigation but
compliance.