While Mayor Rahm Emanuel is preparing for large demonstrations at the upcoming G-8 and NATO conferences, his administration is moving to settle lawsuits that prompted a scathing judicial rebuke of the way the Chicago Police Department has treated protesters in the past.

The 2003 Iraq War demonstration, which began peacefully but frayed into confusion and led to more than 500 arrests, stands as a cautionary tale for the mayor and his Police Department.

A federal judge blasted the "idiocy" of the city's protest rules in those arrest cases, and the Emanuel administration is trying to address those concerns, both by adjusting police tactics and by making changes to the city's permit rules for demonstrations. Emanuel wants the City Council to approve the rule changes at its Wednesday meeting.

The administration's actions are in part a response to the March 2011 ruling by Judge Richard Posner of the 7th U.S. Circuit Court of Appeals, who rejected the city's attempt to dismiss two civil lawsuits alleging police violated the rights of hundreds of protesters.

Posner said the city's puzzling permit rules and poor decision-making by police led to mass confusion during the demonstration on March 20, 2003, with police informally deciding to let the march take over Lake Shore Drive with no firm understanding of where it would end.

But when police drew a hard line at preventing access to Michigan Avenue, hundreds of confused demonstrators who were unclear about the order became trapped at the intersection with Chicago Avenue. Although most told police they just wanted to go home, more than 800 people were detained for hours, with more than 500 of them arrested, held overnight and charged with crimes, Posner noted. All of the charges were dismissed in court, he wrote.

Posner said the evidence suggests that police "perhaps in some panic, resorted to mass arrests without justification."

The judge also wrote that the tense situation resulted in "considerable evidence of unprofessional behavior by police." In a lawsuit filed by 16 arrestees, a woman claimed she was leaving a business meeting on Michigan Avenue when she asked why police were arresting a protester and an officer responded with a misogynistic four-letter epithet and handcuffed her as well.

"This was a gross violation of people's constitutional rights. It was a peaceful protest," said Joey Mogul, one of the lawyers representing plaintiffs in a larger, class-action lawsuit representing more than 800 plaintiffs. "People were out to protest the Iraq War, and there was no reason to surround people."

The city hopes to settle both cases within weeks, said city Corporation Counsel Stephen Patton, who inherited the case when he was appointed by Emanuel last year.

Patton said the city also is trying to fix its 1930s-era parade permit rules to address the judge's criticism. He acknowledged the May 19-21 gatherings of world leaders in Chicago put a sharper focus on the issues.

"It's the law, and we the city have taken steps that going forward will comply" with the judge's ruling, Patton said.

The flaw that Posner seized on was the municipal code's requirement that a demonstration day and time be fixed well in advance, ignoring the fact that demonstrations are sometimes a spontaneous reaction to a political development. The city's practice of giving police leeway to accommodate spur-of-the-moment demonstrations without defining a route opened the door to confusion and potential chaos.

"The underlying problem is the basic idiocy of a permit system that does not allow a permit for a march to be granted if the date of the march can't be fixed in advance, but does allow the police to waive the permit requirement just by not prohibiting the demonstration," Posner wrote.

The proposed changes include giving city officials the authority to set terms and boundaries when a spontaneous demonstration "morphs into a march," Patton said. Along with that provision, police have the authority to close some streets and other public space to accommodate such a march.

But much of what went wrong in 2003 had to do with how authorities reacted to the anti-war demonstration as it unfolded, according to the court's ruling.

Changing the ordinance doesn't erase the possibility of bad decisions made on the street, either by police or organizers of a protest, said David Franklin, a constitutional law professor at DePaul University's College of Law.

"If there's any kind of organization to it, it seems pretty important to hold both sides to the metes and bounds of what they've agreed to," Franklin said.

City officials said they, and especially the Police Department, learned a lot from the mistakes of the 2003 demonstration. They point to the methodical use of a color-coded system at an Occupy Chicago demonstration in October to separate protesters who wanted to be arrested as an act of civil disobedience from those who wanted to leave.

But some on the City Council say that though they support improving the permit rules, they are concerned that higher fines and other changes will do little more than antagonize demonstrators.

"If people come here to break windows and commit crimes, we have laws right now on the books that deal with that," said Ald.Proco "Joe" Moreno, 1st, who was himself an activist on death penalty issues before he was appointed to the council. "I would rather err on the side of allowing people to freely assemble and protest rather than err on the side of moving toward a lockdown."

The restrictions risk creating more problems than they solve by taking the wrong tone with demonstrators, he said.

"I don't get it, because this mayor is a pragmatist," Moreno said. "The thing about protests, the more you antagonize (protesters), the more they're going to want to push back."

dheinzmann@tribune.com