WASHINGTON — The Department of Justice filed a civil rights lawsuit against Ferguson, Mo., on Wednesday, less than a day after the city rejected an agreement to overhaul its beleaguered criminal justice system and address allegations of widespread abuses by its police department.  “Their decision leaves us no further choice,” Attorney General Loretta E. Lynch said at a news conference announcing the suit.  The federal and local authorities had spent months negotiating a settlement that would have prohibited police officers from making arrests without probable cause, installed a federal monitor and barred officers from using stun guns as punishment. But after city officials raised concerns about the cost of the settlement, the Ferguson City Council voted, 6 to 0, on Tuesday night to change the terms — knowing that the Department of Justice had promised to respond with a lawsuit.  For city officials, calling the bluff of the Obama administration was a risky move. Ms. Lynch and her predecessor, Eric H. Holder Jr., have brought an unprecedented number of civil rights lawsuits against municipal police departments. Ferguson’s own lawyer has said that fighting a suit will probably cost millions of dollars, well more than the city has budgeted. Nevertheless, Mayor James Knowles III said, “It will cost more to implement the agreement than it will be to fight a lawsuit.” He added, “There’s no point in agreeing to something we can’t afford.”  Loretta E. Lynch, the United States attorney general, said on Wednesday that law enforcement decisions in Ferguson, Mo., “were profoundly and fundamentally unconstitutional.”  In announcing the Justice Department’s move, Ms. Lynch, who has a reputation for delivering impassive and guarded public remarks, was as animated as she has been in nearly a year as attorney general. “The City of Ferguson had a real opportunity here to step forward, and instead they’ve turned backwards,” she said. “They’ve chosen to live in the past.”  A St. Louis suburb of about 21,000 people, Ferguson has been at the center of the national debate over police tactics since 2014, when a white police officer fatally shot an unarmed black 18-year-old, Michael Brown. The shooting was deemed justified, but it galvanized protesters, helped start the Black Lives Matter movement and brought the attention of the Department of Justice to the city’s police practices.  The result of the federal investigation was a scathing report that concluded last year that Ferguson’s criminal justice system was broken at every level. It said police officers used excessive force almost exclusively against African-Americans and did not know the basic standard for making an arrest. Investigators concluded that the city’s Police Department and court operated not as independent bodies but as a moneymaking venture to pad Ferguson’s budget.  After months of negotiating with the Obama administration, city officials tentatively agreed last month on a deal that would have avoided a lawsuit. In addition to new guidelines on arrests and the use of stun guns, the officials agreed that police officers would not shoot at moving cars. The agreement demanded that the municipal court be independent of the Police Department, and called for the repeal of some laws, like a vague jaywalking ordinance that was used almost exclusively against black residents.  It was an expensive deal. It called for Ferguson to pay for an independent monitor, provide new training and give raises to police officers in order to attract qualified applicants. Ferguson has been running an operating deficit of about $2.5 million since the unrest of a year and a half ago, but Mr. Knowles said at the time that he was optimistic the City Council would approve the deal.  Ms. Lynch said the federal government was sensitive to Ferguson’s concerns. The Department of Justice had agreed to cap the costs and provide free help to the city.  But at a crowded public hearing on Tuesday, the agreement fell apart. Council members and some residents said they could not afford the cost, which could have required a tax increase. The city said that giving pay raises to police officers could necessitate similar raises for other municipal employees.  With senior Justice Department officials watching from Washington on a video feed, the Council voted to reject the deal as written and send it back with changes. Members of the Council proposed eliminating the pay raises for police officers and, most significant, striking a provision that would have required the city to abide by the deal even if it dissolved the Police Department and turned police duties over to an outside agency.  Ferguson’s strategy in the face of a looming lawsuit is unclear. Mr. Knowles told The Associated Press on Wednesday that the city was not trying to reopen negotiations with the federal government, but at a news conference a few hours later, city leaders said that was exactly the goal. They said it was the Department of Justice that had dragged the case into court.  Here’s what you need to know about events in Ferguson, Mo.  “We hope the D.O.J. is willing to sit down and talk to us and continue negotiations,” Councilman Wesley Bell said. “But if this case goes to court, it will not be because of the City of Ferguson.”  The Department of Justice’s top civil rights prosecutor, Vanita Gupta, had made it clear that since city negotiators had already agreed on the terms, anything short of a vote for approval would result in a lawsuit. Dan Webb, the city’s lawyer, said this week that if the deal was rejected, there was “no chance the D.O.J. will not file a lawsuit.”  By Wednesday, the city’s specific objections to the settlement were beside the point. Ms. Lynch said that the federal government and the city had negotiated a final deal, and that the city had reneged at the last minute, threatening to delay the process even further.  “The residents of Ferguson have suffered the deprivation of their constitutional rights — the rights guaranteed to all Americans — for decades,” Ms. Lynch said. “They should not be forced to wait any longer.”  Fighting the Department of Justice in such cases is expensive, which is why it is also rare. In 2012, the Justice Department sued Sheriff Joe Arpaio of Maricopa County, Ariz., over allegations of discrimination against Latino immigrants. Like Ferguson, the county rejected settlement deals and fought the case in court, ringing up about $5 million in legal fees. Three years later, Maricopa County agreed to settle the case.  Mr. Webb has put the cost of a lawsuit at $4 million to $8 million. Mr. Knowles, the mayor, said there was about $500,000 in the budget to either fight a lawsuit or overhaul the city government. The multimillion-dollar figures would apply only if the court case drags on; the sides can still negotiate a settlement at any time.  While the expense and risk are greater for Ferguson, both sides have an interest in keeping the matter out of court. In civil rights settlements, the federal government typically gets more concessions than it would even if it prevailed in court. The city typically benefits by saving money.  Civil rights investigations normally target large cities; rarely do local officials worry that a settlement will require large tax increases or significant spending cuts. So while most who spoke at Tuesday’s Council meeting said they supported the settlement, some urged city officials to take their chances in court.  “This consent decree will be viewed as a moral victory by many in the social justice movement,” said Blake Ashby, a city resident. “But it will be an economic defeat for the people of Ferguson.”  City officials said they had already begun making changes to Ferguson’s police and court procedures. Mr. Knowles, for instance, has taken steps to form a civilian oversight panel to review allegations of police abuse. And officials said they would continue making changes, lawsuit or not.  “We don’t feel that we need an agreement to start making reforms and moving forward,” Mr. Bell said.
City leaders rejected a deal to overhaul the police force, setting up a court fight over excessive policing in a city that came to symbolize it.