Pedreira v. Sunrise Children’s Servs., Inc., No. 14-5879 (6th Cir. Oct. 6, 2015).
Sunrise Children’s Services, an organization whose mission is inspired by Christianity, runs foster homes for children in Kentucky. Some of these children have said that Sunrise pressured them into becoming Christians. About two-thirds of Sunrise’s revenue comes from the Commonwealth of Kentucky.
Kentucky taxpayers brought this lawsuit against both Sunrise and the Commonwealth some fifteen years ago, alleging that Kentucky’s payments to Sunrise violated the Establishment Clause. Eventually, the plaintiffs and Kentucky agreed to a settlement under which the lawsuit would be dismissed. Sunrise was not a party to the settlement.
Under the settlement, Kentucky must send periodic reports about Sunrise to the ACLU and Americans United for the Separation of Church and State. Sunrise objects to the settlement.
The settlement agreement, which the district court incorporated into its order of dismissal, clothed the court with continued jurisdiction to enforce the agreement. These features, the Sixth Circuit holds, make the agreement a consent decree rather than a purely private settlement. And courts must review consent decrees for fairness, adequacy, and reasonableness. Here, though, the district court treated the settlement as a private agreement. The Sixth Circuit now remands for the district court to scrutinize the consent decree, asking it to consider the fact that the consent decree “singles out Sunrise by name” and subjects it “to unique reputational harm” without “a chance to clear its name.”
District Judge Black dissents. He questions whether the settlement counts as a consent decree, since it contemplated policing by the parties and not the court. And anyway, as he reads the record, the district court did review the settlement for fairness to Sunrise. He would defer to the district court’s conclusion that the settlement was fair to Sunrise, since the settlement explicitly denied that Sunrise or the Commonwealth had violated the rights of any child. It did nothing to impugn Sunrise’s reputation.