V. LOCATING "GENERAL PRINCIPLES OF FINALITY AND REPOSE": FROM LORD BACON TO RUFO
The data described in Part IV indicate that the Court does not actually apply principles of res judicata consistently and uniformly. Moreover, as the case studies in Part III suggest, this may be a good thing: the Court often has good reasons for revisiting its judgments. In search of a superior standard for modifying prior decrees, I trace the history of finality principles and explain what "general principles of finality and repose" should mean in the context of original jurisdiction cases. (101)
Finality of Judgments: The Flexibility of Equity
For centuries, courts have tried to develop standards for when they will reconsider their judgments. (102) The ancient division between law and equity permeates this history. Although law and equity have been nominally merged, the history of modifications in equity courts provides helpful guidance for choosing a principle for decree modification in the original jurisdiction.
Traditionally, at law, English and American judges retained power to modify their judgments until the expiration of the term at which the judgment was entered; (103) thereafter, parties could seek modification only under limited circumstances through a petition for a writ of error coram nobis. (104) In equity, judges similarly retained power to modify a decree until it was "enrolled"; thereafter, a petitioner would need to request a bill of review. (165)
The difference between finality principles at law and in equity is illustrated in the Court's explanation of final judgments and congressional authority to change them. In Plant v. Spendthrift Farm, Inc., (166) the Court held that Congress may not reverse the judiciary's final disposition of a case because Article III "gives the Federal Judiciary the power, not merely to rule on cases, but to decide them." (167) A significant corollary to this rule, first articulated in Wheeling & Belmont Bridge, is that Congress does have the authority to change substantive law in a way that forces a court to modify a prospective decree. (168) In other words, although an injunction is "a final judgment for purposes of appeal, it is not the last word of the judicial department." (169) Rather, the issuing court may be called upon to construe or enforce the decree at some time in the future; because of this "continuing supervisory jurisdiction," modifications to the underlying law allow modifications of the decree itself. (170) Therefore, a judgment at law is immune from congressional challenge, but in equity, changes of law can justify decree modifications.
For more than a century, the distinction between law and equity persisted in federal common law. (171) But in 1938, the Federal Rules of Civil Procedure nominally merged law and equity, subsuming the legal writ of error coram nobis and the equitable bill of review into a single "motion for relief from judgment." (172) Nevertheless, the merger did not rob history of its significance. (173) In the district courts, prospective decrees are still subject to modification if enforcement would be inequitable. (174)
From Bacon to Horne: Development of the Flexible Test in Equity
Tracing the development of the standard for modifying judgments in cases at equity illuminates the rationale behind the flexible standard that trial courts have adopted and that the Supreme Court should also adopt for its original jurisdiction cases. When the old equity courts were presented with bills of review, they asked two questions: (175) first, whether reconsideration is justified at all; second, if so, whether the court will exercise its equitable discretion in modifying the decree. The first inquiry was more formulaic: a party had to fall into one of several prescribed categories to qualify for a bill of review. (176) The second involved the court's traditional equitable discretion. (177) This Section concentrates on the first step in the analysis: the threshold showing that a party must make in order to convince the court to reconsider its prior weighing of the equities, which varies depending on the finality principle at issue. (178)
As a foundational matter, a court always retains supervisory jurisdiction over a final decree; (179) the defendant remains bound to obey under penalty of contempt. Thus justice requires that the court retain jurisdiction to modify that decree if it becomes inequitable. This intuition dates back to Lord Bacon's ordinances in 1969. (180) Bacon, the Lord Chancellor at the time, considered the same question we consider today: when should the court exercise this jurisdiction to modify a decree? He propounded the following guidelines:
No decree shall be reversed, altered, or explained, being once under the great seal, but upon bill of review: and no bill of review shall be admitted, except it contain either [(1)] error in law, appearing in the body of the decree without farther examination of matters in fact, or [(2)] some new matter which hath risen in time after the decree, and not any new proof which might have been used when the decree was made: nevertheless [(3)] upon new proof, that is come to light after the decree made, and could not possibly have been used at the time when the decree passed, a bill of review may be grounded by the special license of the court, and not otherwise. (180) Lord Bacon's tripartite test set forth broad categories that are still relevant to courts' decree modification inquiries today.
The first ground, "error in law," is generally left to appeals courts today, but this notion is still reflected in the common-law power of courts to correct their own clerical errors. (182) Another progeny of this category is the idea that courts have inherent power to modify their own decrees to make their terms unambiguous. (183) The third ground for review--newly discovered evidence that was not available at trial--has remained a distinct category. (184)
The second ground, "new matter," is the most capacious and the most contentious. By the middle of the twentieth century, courts recognized two broad types of new matter that could ground an argument for decree modification: changes of law and changes of fact. (185)
Changes of law may require courts to reconsider a decree. (186) For instance, in the Wheeling & Belmont Bridge case, the Supreme Court determined that the erection of a bridge was unlawful and decreed that the bridge must be destroyed. (187) Then Congress specifically blessed the bridge by statute. (188) The defendant asked the Court for release from its obligations under the decree, and the Court acquiesced. (189) This result is not surprising: it is aligned with our separation-of-powers understanding that the political branches should be able to repeal and update our laws without being hemmed in by ossified decrees. This outcome is less obvious when the decree was entered by consent, with no determination of liability. However, the Supreme Court has held that even in such cases, given that bargaining was accomplished in the shadow of the law, the removal of the statute casting that shadow requires reevaluation of the underlying decree. (190)
In addition to changes of law, "new matter" can also arise from changes of fact. (191) Original jurisdiction examples abound--avulsion may have caused an interstate boundary to freeze in place; (192) a new technology may have called into question a court's earlier equitable apportionment of water. (193) When changes in fact happen after the entry of decrees, trial courts consider these changes as possible justifications for reweighing the equities. (194)
In the early twentieth century, the Supreme Court's appellate case law sharply curtailed this approach with what has become known as the "grievous wrong" test. The test was crafted by Justice Cardozo in the 1932 case United States v. Swift & Co., and it set a very high bar: "Nothing less than a clear showing of grievous wrong evoked by new and unforeseen conditions should lead us to change what was decreed after years of litigation with the consent of all concerned." (195) Scholars and lower courts gradually pushed back against Swift's stringent requirements. (196) In New York State Association for Retarded Children, Inc. v. Carey, (197) the Second Circuit was confronted with the challenge of applying Swift to an institutional reform case. Judge Friendly found that because of their complexity and longevity, institutional reform decrees would be particularly unmanageable under the "grievous wrong" test. He explained, "The power of a court of equity to modify a decree of injunctive relief is long-established, broad, and flexible." (198)
The Supreme Court was eventually convinced by Judge Friendly's arguments. In Rufo v. Inmates of Suffolk County Jail, the Court described a flexible test for district courts to apply when considering requests for modifications of their decrees. (199) The Court noted that "the 'grievous wrong' language of Swift was not intended to take on a talismanic quality, warding off virtually all efforts to modify consent decrees." (200) Emphasizing "the need for flexibility in administering consent decrees," (201) the Court noted that "a sound judicial discretion may call for the modification of the terms of an injunctive decree if the circumstances, whether of law or fact, obtaining at the time of its issuance have changed, or new ones have since arisen." (202) The Court added that in the time since the Court adopted the "grievous wrong" test, the Federal Rules of Civil Procedure had been adopted, and Rule 60's standard is liberal. (203)
Rufo lists situations in which a change of facts could justify a decree modification: (1) "changes in circumstances that were beyond the defendants' control and were not contemplated by the court or the parties when the decree was entered"; (204) (2) "achieving the goals" of the underlying litigation; (205) and (3) advancing the public...