Judge Greer's Order of May 10, 2011, (below) denies the City's requests regarding civil penalties previously imposed against the City and "reluctantly" grants the City's request for additional time to complete the rehabilitation of the Witt Sewer Line, a problem known by the City for approximately six years or more. In granting additional time for rehab of the sewer line, Judge Greer sets out specific benchmarks that the City must meet. Judge Greer also notes that the City's financial problems with illegal fund transfers, etc. were the result of the City's own malfeasance. The Order is printed below with omission of citations .
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TENNESSEE AT GREENEVILLE
PATRICIA STEPHENS, ET AL.
v. CITY OF MORRISTOWN, TENNESSEE
On April 28, 2011, this Court held a hearing on a portion of defendant’s motion to alter or amend the judgment, . The defendant moved this Court to alter or amend its Orders,, and its Judgment, , in four ways. These include: (1) adopt a new schedule for carrying out the rehabilitation of the Witt Sewer Line in accord with the defendant’s newly proposed schedule; (2) grant the defendant 45 days to install odor filters on the manholes along the gravity line between the Witt 2 and Witt 3 pump stations; (3) reduce the amount of civil penalties imposed to no greater than those imposed on Koch Foods, a former codefendant; and (4) allow the civil penalties imposed to be waived upon the defendant meeting Court-established benchmarks for completing the rehabilitation of the Witt Sewer line.
This Court decided issues two through four in an Order filed on April 25, 2011, [Doc. 328]. Basically, issue two was moot because the City installed the filters, albeit late. As to issues three and four, this Court denied the defendant’s motion. Also, regarding issues three and four, the defendant asked at the April 28, 2011 hearing that the Court reconsider its decision. This oral motion to reconsider and issue one will be addressed in turn after setting forth a brief summary of the facts and the standards of review. For the reasons set forth below, the defendant’s oral motion to reconsider is DENIED and the motion to alter or amend the Order, , and Judgment, , is reluctantly GRANTED.
I. FACTS AND PROCEDURAL HISTORY
Many of the facts are set forth in this Court’s April 25, 2011 Order, , and they will not be restated here. The City introduced additional evidence at the April 28, 2011 hearing as to efforts taken by the City to secure funding for rehabilitation of the Witt sewer line.
Again, the City’s financial condition is important in analyzing the issue of whether to alter or amend the judgment as to civil penalties and the rehabilitation of the Witt sewer line. Several letters submitted by the City show that Anthony W. Cox, the City Administrator, and Lamar Dunn, an engineer working with the City, have been communicating with the State Comptroller’s Office and the Tennessee Department of Environment and Conservation (“TDEC”) on satisfying the Comptroller’s conditions and TDEC’s requirements for securing the SRF loan, which will fund the rehabilitation of the line.
There was evidence and testimony that the City had included the funding for the rehabilitation of the line in its fiscal year 2011 budget; however, Mr. Cox explained that the budget reflected the amount of the SRF loan which had not been secured. Evidence showed that the City tried to get permission to use other funds from another SRF loan to fund the rehabilitation of the line. Nonetheless, TDEC did not allow this. There was also evidence that the City had placed a higher priority on other projects instead of the Witt sewer line.
Perhaps the most troubling evidence presented was a letter from Mr. Dunn to Bryan Fowler, the City’s Director of Wastewater Operations, on July 30, 2009. The letter was a cover letter to Mr. Dunn’s plans and specifications for the rehabilitation of the Witt line, which the City had requested. More importantly, it states that it is Mr. Dunn’s understanding “that the City has no desire to move forward with this project at the present time.”
This evidence is most troubling because it was represented to this Court that this particular document was not produced to the plaintiffs prior to trial. Nevertheless, there is evidence presented which showed the City, after the May 2010 hearing, did seek funding and was pursuing the project. Mr. Dunn testified to a proposed schedule for rehabilitating the Witt sewer line. He proposed the following schedule:
Loan package sent to City from TDEC 04-21-11
Council action to authorize the accpetance and completion of the loan package 05-03-11 Submittal of completed loan package 05-03-11
Submittal of construction plans and specification for by TDEC 05-03-11
Approval from TDEC to advertise project for bids 45 days after receipt of plans
Receive bids 40 days after approval
Review of bids by Engineer with recommendation 10 days after of award bids
Council approval award subject to approval of TDEC first council meeting after recommendation
TDEC approval of “Authority to Award” construction 45 days after contract c o u n c i l action
Pre-Construction Conference 21 days after ATA
Contract execution for construction with Notice to Proceed 10 days after Pre-Construction Conference
Construction complete/system operational 2 3 0 d a y s after Notice to Proceed
Mr. Dunn testified that his schedule is reasonable in his opinion as an engineer with experience in this type of construction.
II. RULE 59(e) STANDARD OF REVIEW
A motion to alter or amend judgment pursuant to Federal Rule of Civil Procedure 59(e) may be granted (1) to correct a clear error of law; (2) to account for newly discovered evidence or an intervening change in the controlling law; or (3) to otherwise prevent manifest injustice. . A Rule 59(e) motion cannot be used to re-litigate previously decided issues, reargue a case, or raise new legal theories. These motions “are not the proper vehicle to attempt to obtain a reversal of a judgment by offering the same arguments previously presented.” . Furthermore, Rule 59(e) motions are “‘extraordinary in nature’” and “‘should be discouraged.’”  As such, these motions are “granted ‘ very sparingly.’” 
III. RULE 60 STANDARD OF REVIEW
A Rule 60 motion may be filed within one year after the entry of the judgment or order or within a reasonable time, depending upon the grounds upon which relief is sought. See Fed. R. Civ. P. 60(c)(1). Furthermore, Rule 60 motion may be granted only for certain specified reasons and is, thus, a significantly higher standard than that for granting a Rule 59 motion.  Federal Rule of Civil Procedure 60(b) states: On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);
(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;
(4) the judgment is void;
(5) the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or
(6) any other reason that justifies relief.
Fed. R. Civ. P. 60(b). Subsection (b)(6) should “apply ‘only in exceptional or extraordinary circumstances which are not addressed by the first five numbered clauses of the Rule.’” 
First, this Court will address the City’s oral request that the Court reconsider its April 25, 2011 decision regarding civil penalties. The City argued that the additional evidence presented should lead the Court to alter its conclusion that the City had made no effort to secure the SRF loan other than the initial request. The reconsideration of this conclusion, the City argues, should lead the Court to also change its conclusion as to the amount of civil penalties.
It is true that the evidence presented by the City at the hearing shows more effort on the City’s behalf to secure the SRF loan. However, the efforts the City had to undertake “to get its financial house in order” were a result of its own malfeasance. The State Comptroller’s Office required the City to meet certain conditions before the City was allowed to incur any new debt as a result of an illegal transfer and other issues found in an audit of the City’s finances. The Comptroller’s Office made this clear to the defendant on May 21, 2010, just 10 days after this Court’s hearing where the City represented to the Court that the rehabilitation of the line could be completed by June 30, 2011. The fact that the City could not incur new debt was reiterated to the City on June 21, 2010. Thus, it took time to satisfy the conditions, which delayed the SRF loan, and which delayed the rehabilitation of the line.
It is clear from the record that the City was aware as early as May 21, 2010, that it could not receive the funding to rehabilitate the line. However, the City did not inform this Court of the problems in receiving the funding necessary to rehabilitate the line. In the months thereafter, the City never communicated any difficulty in receiving funding to this Court. It never communicated to this Court that it could not meet the schedule it represented to the Court at the May 11, 2010 hearing. This failure is inexcusable. The City knew that its proposed schedule could not be met and that problems with the Witt sewer line would persist until the line could be fully rehabilitated. Evidence shows that overflows have continued, endangering the environment and human health. Such a failure to inform this Court cannot be ignored. For these reasons, the oral motion to reconsider the decision regarding the issuance of civil penalties is DENIED.
Second, this Court will address the issue regarding the rehabilitation of the Witt sewer line. The City bases its motion on newly discovered evidence and to prevent manifest injustice. See Fed. R. Civ. P. 59. Alternatively, the City argues to alter or amend based on Rule 60 for the “same reasons.” . Despite the City’s specific written argument, it is actually asking this Court to alter the injunctive relief ordered in documents 307 and 312, namely that the City must rehabilitate the Witt sewer line by June 30, 2011. “A court has continuing jurisdiction to terminate or modify an injunction.”  Modifications or dissolution of injunctions must take place under Rule 60(b).  Rule 60(b)(5) provides that a party may obtain relief from a court order when ‘it is no longer equitable that the judgment should have prospective application,’ not when it is no longer convenient to live with the terms of a consent decree. Accordingly, a party seeking modification of a consent decree bears the burden of establishing that a significant change in circumstances warrants revision of the decree.” Id. “Modification of a consent decree may be warranted when changed factual conditions make compliance with the decree substantially more onerous.” .
In this case, the factual conditions suggest that a modification of the injunction is warranted. As stated above, the City presented evidence that it did make efforts to seek funding for the rehabilitation of the line after its initial request on February 15, 2010. It is also true, however, that the City knew as early as May 21, 2010, that it could not incur debt to fund the rehabilitation of the line. The City also represented to the Court at the April 28, 2011 hearing that the rehabilitation of the Witt line could not be accomplished without incurring debt in the form of the SRF loan. Due to the amount of time it took for the City to get its “financial house in order,” which the City did work actively and consistently to do, the securing of this loan was not possible. Thus, the line could not be rehabilitated by June 30, 2011. The plaintiffs do not dispute that the rehabilitation of the line by June 30, 2011 is impossible. However, they do argue for daily penalties after the June 30, 2011deadline until the line rehabilitation is complete. This Court declines to impose such penalties.
Moreover, despite the egregious error of not informing this Court of its efforts in securing the funding prior to the original Order, [ ], and Judgment, [ ], the City has apparently learned from its mistake. Since the entry of those orders, the City has consistently kept this Court informed of its progress. On May 3, 2011, the City informed the Court that it had completed all paperwork associated with the SRF Application. The package was then hand delivered to TDEC that same day. Therefore, it appears that the City is on schedule with the dates proposed in Mr. Dunn’s timeline, and it appears that it will continue to keep this Court informed of its progress on a timely basis. To be sure, however, this Court will order such updates as set forth below. In addition, the Court will order penalties if the City fails to meet periodic benchmark completions in fairness to the plaintiffs and to keep the City on track.
As such, the City is hereby ORDERED to comply with the following schedule in rehabilitating the Witt Sewer line. The City should note that this Court will likely not be forgiving as to any missed deadline, and the City must keep this Court informed of the progress. The amount of penalties for missing any deadline will not be determined at this time. Such penalties will be decided based on the benchmark missed and the specific reasons for failing to meet such benchmark.
Submittal of completed loan package May 3, 2011
Submittal of construction plans and specification for May 3, 2011 by TDEC
Approval from TDEC to advertise project for bids July 1, 2011
Receive bids August 10, 2011
Review of bids by Engineer with recommendation August 22, 2011 of award
Council approval award subject to approval of TDEC September 1, 2011
TDEC approval of “Authority to Award” construction October 17, 2011 contract
Pre-Construction Conference November 7, 2011
Contract execution for construction with Notice December 1, 2011 to Proceed
Construction complete/system operational August 1, 2012
As just stated, the City shall meet all deadlines listed above. A progress report shall be submitted to this Court within five days of each date listed. Any failure to meet the deadline will subject the City to penalties in an amount to be determined.
For the reasons stated above, the City’s oral motion to reconsider document 328 is DENIED. The motion to alter or amend Order number 307 and the Judgment, , regarding rehabilitation of the Witt sewer line is GRANTED.
The Order and the Judgment shall be amended as set forth above. So ordered.
s/J. RONNIE GREER
UNITED STATES DISTRICT JUDGE