The 10th Circuit Court of Appeals on May 4 vacated a district court’s order requiring Denver officials to give extra notice before conducting homeless camp sweeps. The opinion is the latest chapter in legal challenges to Denver’s camping ban and its impact on those experiencing homelessness.
The opinion came out of a class action suit brought in October 2020 by Denver Homeless Out Loud and plaintiffs experiencing homelessness against Colorado and Denver officials over three camp sweeps during the COVID-19 pandemic. The complaint alleged that officials violated a 2019 settlement agreement as well as the Fourth Amendment, the 14th Amendment and several Colorado laws.
After three days of testimony in January 2021, federal Judge William Martinez issued a preliminary injunction in the case ordering Denver to provide a written, seven-day notice before conducting sweeps and email the plaintiffs’ counsel and any city council member representing the district where the sweep will occur. Emergency sweeps were allowed with 48-hour notice in the event that health authorities find there’s a justifiable public health risk at a camp. The 10th Circuit Court of Appeals declined to issue preliminary injunctive relief for Denver pending the order’s appeal.
The lawsuit centered on claims by DHOL that city officials broke a 2019 settlement agreement in a similar class action case, Lyall v. City of Denver. Denver enacted a camping ban that impacts many people without homes who might live in parks, medians or other parts of the city. To enforce the ban, city officials conduct “sweeps,” which can involve taking possession of any property in a camp and requiring anyone living in a camp to relocate.
In Lyall and the latest class action case, Denver Homeless Out Loud v. Denver, the plaintiffs claimed, among other things, that city officials violated their rights to due process by confiscating or destroying property without adequate notice. The Lyall settlement detailed protocols that city officials would need to follow to enforce Denver’s camping ban. The plaintiffs in the latest suit claimed that three sweeps during 2020 violated the Lyall settlement as well as legal protections over property, due process and more.
The district court correctly found it didn’t have jurisdiction to enforce the Lyall agreement, the 10th Circuit held, but it should’ve considered the if the agreement prevented the new class action lawsuit even though Denver didn’t raise that argument.
Denver raised the argument that the Lyall settlement precluded DHOL from bringing claims when the class action case was first brought, but didn’t bring up the preclusion argument during the trial or on appeal. Nevertheless, the 10th Circuit found, the district court needed to consider on its own, or sua sponte, if Lyall precluded the plaintiffs from bringing their lawsuit.
The case is a “special circumstance” like those that the U.S. Supreme Court in its 2000 decision in Arizona v. California has urged courts to raise sua sponte. Specifically, the latest class action was a case where the “court is on notice that it has previously decided the issue presented,” so considering a claim that isn’t raised by a party is in the best interest of the court to avoid “unnecessary judicial waste.” The Supreme Court has also advised courts against considering issues that preceded and could dispose of an issue presented, even on issues that aren’t raised during appeals. The Lyall settlement was one of these, the 10th Circuit held, which “forecloses the procedural due process claim,” meaning “that claim will necessarily fail on the merits and cannot serve as the basis for a preliminary injunction.”
Looking at the Lyall settlement, the 10th Circuit Court of Appeals found it precluded the new civil suit.
Under federal law, res judicata, or claim preclusion, applies when there is a final judgment on the merits in an earlier case, the parties in the suits are the same and their cause of action is the same. Res judicata has exceptions when the party resisting didn’t have a full and fair opportunity to litigate the previous case. Since settlements are contractual, the terms of each settlement can impact if claim preclusion applies if the parties clearly meant to include preclusion as part of the settlement.
“We hold the Lyall settlement agreement intended to, and does, preclude the specific procedural due process claim the DHOL Plaintiffs assert here,” wrote Judge Carolyn McHugh for the court’s majority.
Part of the Lyall settlement includes a release that “all persons in the City and County of Denver whose personal belongings may in the future be taken or destroyed without due process on account of the City and County of Denver’s alleged custom or practice… . hereby release, acquit and forever discharge the City and County of Denver, and any [and] all other related persons and entities… of and from any and all liabilities, claims, demands, rights, controversies, agreements, damages, actions, causes of actions, expenses, attorney fees, interest, compensation, judgment and any and all consequential and punitive damages, of whatsoever kind and nature…which might exist or might be in any way related to or giving rise to the above referenced lawsuit.”
The broad language barred the Lyall plaintiffs and any other class members, including future class members, from bringing any further legal action, the 10th Circuit ruled. That included the plaintiffs in DHOL’s latest class action case. The plaintiffs in the latest class action, Denver employees or elected officials, were also covered by the Lyall settlement, the court ruled.
The merits of DHOL’s 2020 class action suit were based on the practices of city employees conducting sweeps, the 10th Circuit found, and “the very activity discharged by the Lyall settlement agreement.” The appeals panel disagreed with DHOL’s argument that the cause of action in the latest suit was different than in Lyall and rejected the argument that the circumstances of the pandemic made the latest sweeps different from the Lyall sweeps.
“We conclude the Lyall settlement agreement expressly releases all of the Denver Defendants from the instant procedural due process claim, which arises from the same municipal custom of sweeping homeless encampments at issue in Lyall. As a result, the DHOL Plaintiffs’ procedural due process claim is claim-precluded,” wrote the unanimous circuit.
The 10th Circuit Court of Appeals vacated the district court’s order to provide increased notices and remanded the case back for proceedings.
Dissenting from the panel majority, Judge Veronica Rossman disagreed that the 10th Circuit or the district court should’ve raised the preclusion argument sua sponte. She also disagreed with the majority’s interpretation of Lyall to preclude all due process claims.
“Recall, this is the very constitutional claim that, after a three-day evidentiary hearing, the district court determined was likely to succeed on the merits,” wrote Rossman, adding that the judge overseeing the latest action also approved the Lyall settlement, “and therefore presumably knew something about its scope.”
The Lyall settlement left terms of release ambiguous, according to Rossman, and didn’t explicitly express the intent of the parties. “The Lyall settlement agreement is at best ambiguous, making the claim preclusion question here unsuitable for resolution as a pure matter of law,” she wrote.
Rossman also raised doubt that the latest class action case was so identical in merits and circumstance to Lyall that preclusion applies.
“But even attempting to engage with preclusion on the merits is not justified at this stage,” wrote Rossman, “given the open questions surrounding the doctrinal framework governing our disposition and the fact-intensive inquiry it compels.”