CARSON v. AMERICAN BRANDS, INC.
Legal provision: 28 U.S.C. 1292
ORAL ARGUMENT OF NAPOLEON B. WILLIAMS, JR., ESQ., ON BEHALF OF THE PETITIONERS
Chief Justice Burger: We'll hear arguments first this morning in No. 79-1236, Carson et al. v. American Brands, Inc..
Mr. Williams, you may proceed whenever you are ready.
Mr. Williams: Mr. Chief Justice and may it please the Court:
This case is here on a writ of certiorari to the Court of Appeals for the 4th Circuit.
The issue presented for decision in this case arises in the context of an employment discrimination suit commenced under Title VII of the Civil Rights Act of 1964, and 42 U.S.C. 1981.
It is a case of first impression for the Court.
The Court of Appeals for the 4th Circuit sitting en banc with Circuit Judge Hall writing the opinion for the majority, held in the decision of that court that the petitioners could not appeal an order of the district court below which rejected the parties' jointly proposed consent decree on the grounds that the injunctive provisions of that decree were in violation of Title VII, and on the grounds that the enforcement of those provisions would violate the Fifth Amendment to the Constitution of the United States.
Unidentified Justice: Mr. Williams, I get some impression from the papers that the respondents may have a different view about going ahead with the consent decree.
Whenever you wish, would you comment on whether that is the fact, if you know it, and if so, are they free to withdraw?
And of course your friend will tell us something about that too, perhaps.
Mr. Williams: Your Honor, we do not think that they are free to withdraw.
We think that is a matter of contractual obligation.
They made a motion in the district court; that court has stayed all further consideration of this matter until a decision by this Court.
Your Honor, Chief Judge Haynsworth and Circuit Judges Winter and Butzner dissented.
They believe that the order of the district court was appealable under Section 1292(a)(1) as an interlocutory order denying an injunction.
The petitioners believe that the 4th Circuit made an error in holding that this order could not be immediately appealable.
In our brief, petitioners presented two arguments in support of the appealability of the district court order.
First, we believe that the order is appealable as an order denying an injunction under Section 1292(a)(1).
Secondly, we believe that it is appealable under the collateral order exception that this Court announced with regard to Section 1291 in Cohen v. Beneficial Industrial Loan Company.
Before I present my argument on the... Mr. Justice?
Would you feel that it qualifies under both sections?
Yes, I do, Your Honor.
Unidentified Justice: You don't feel there is any inconsistency in that position?
Mr. Williams: No, I do not, Your Honor, for the simple reason that this is a case where the order said so many things that it had the effect of deciding some things on the merits and some things that were collateral to the merits.
Unidentified Justice: In any event, you would be willing to win on either issue?
Mr. Williams: Yes, Your Honor, I certainly would.
Unidentified Justice: Did you argue the Cohen matter in the Court of Appeals?
Mr. Williams: The matter was presented to the Court of Appeals, Your Honor.
Also, if Your Honor would take a look at the decision by the 4th Circuit below, it's quite clear that one of the decisions that the 4th Circuit felt was dispositive of the matter was the 2nd Circuit decision in Seigal v. Merrick, which was decided entirely under Section 1291.
Your Honor, let me give you some of the background to this case.
Unidentified Justice: Before you do that, counsel, since as I understand the Cohen Doctrine it has to be not related to the merits, if you were successful in appealing this order under the Cohen Doctrine, could you appeal that part that related to the merits, too.
Mr. Williams: Your Honor, I think it's quite clear from the decisions of this Court that once an appellate court has jurisdiction by virtue of the ancillary jurisdiction that the Court has it can then reach out and decide all other issues in the case that require reversal.
Your Honor, this suit concerns employment discrimination in the tobacco industry.
This is an industry which has had a long history of official segregation and discrimination with respect to blacks.
The parties have reached a proposed consent order in this case.
This is an order, Your Honor, which was reached after long discussions and after extensive discovery.
It was a matter that was reached after the parties were quite aware, in part because of the discovery, of the basic strengths and weaknesses of their case.
The heart of the consent decree was contained in a series of provisions which enjoin the employer and the unions from further discriminating against the plaintiffs.
Moreover, that consent degree had provisions which require the employer and the unions to take remedial action with respect to changing the seniority and the transfer rules so that those rules will not further discriminate against seasonal workers.
In common with other consent decrees, Your Honor, that settlement also had an exculpatory clause whereby the respondents could suffer the injury of a judgment against them without admitting liability.
Because this action was a class action, it was necessary to get approval of the district court under Rule 23(e) of the Federal Rules of Civil Procedure.
The parties by virtue of this rule went to the district court.
Now, at this point, and for the first time, Your Honor, the parties found themselves at loggerheads with the district court over the question of the legality of the proposed settlement.
The district court by virtue of its powers under Rule 23(e) decided that the proposed consent decree with respect to those injunctive provisions to which I referred a moment ago was illegal, because those provisions, it said, violated Title VII and the enforcement of those provisions by a federal court, it said, would be arbitrary and capricious actions which would violate the Fifth Amendment to the Constitution of the United States.
Petitioners sought review of that determination in the Court of Appeals.
The Court of Appeals, however, decided that it was not appealable.
They said it was not appealable because that decision by the district court was simply what it deemed a step toward trial.
That court did not deem the matter to be a decision of the district court which passed on the merits of the action commenced by the plaintiff.
That was rather surprising, Your Honors, since that same court also said that it was not appealable, no matter what the reasons were for the district court refusing the injunctive decree.
Now, let me give you some of the reasons for refusing that decree, which were stated by the district court in the opinion that accompanied this order.
First, the district court said that preferential treatment on the basis of race was unlawful except in those cases where the defendants had themselves committed discrimination against those persons who were part of the plaintiffs' class.
Secondly it said that since all of the seasonal workers were black any relief that was given to seasonal workers would in effect be preferential treatment based upon race and therefore barred, again, by the Fifth Amendment and also by Title VII.
Unidentified Justice: Mr. Williams?
Mr. Williams: Yes?
Unidentified Justice: The merits aren't before us, are they?
Mr. Williams: That's correct, Your Honor.
Unidentified Justice: Just the appealability, whether the district court was right or wrong in what he said about the propriety of the decree.
Mr. Williams: That's correct, Your Honor, The only reason for going into the merits at all is so that this Court can make a preliminary assessment as to whether or not with respect to the argument under Section 1292(a) the merits were touched upon by the decree, and also to see if the collateral interests which the petitioners claim were adversely affected were separate and apart from those merits.
Unidentified Justice: Had you asked for a preliminary injunction?
Mr. Williams: Your Honor, we had not asked for a preliminary injunction and in view of the determination made by the district court, it is quite clear that a preliminary injunction would not and could not have been granted, because that court found that there were no vestiges of discrimination to be corrected or remedied.
And given the fact that it is necessary with respect to a preliminary injunction to establish that you have a prima facie case or that you have a substantial chance of prevailing on the merits, it was clear to the petitioners and I think it would have been clear to the district court as well that burden could not have been met by petitioners.
Unidentified Justice: Would you say that a denial of a temporary restraining order was appealable?
Mr. Williams: A denial of a temporary restraining order?
Unidentified Justice: Did you ask for ex parte pending a hearing on a request for a preliminary injunction?
Mr. Williams: No, we did not, Your Honor, but with respect to the denial of the temporary restraining order, I think the law is quite clear that is not appealable under Section 1292(a)(1), although the denial of a preliminary injunction is of course appealable.
One further thing which the district court said, and I think I basically mentioned this before, Your Honor, is that despite the long history of segregation and discrimination which had existed in the tobacco industry, that there were no vestiges of discrimination to be overcome.
Now, as I tried to indicate before to Your Honors, petitioners have two arguments which they wish to present to this Court, one based on Section 1292(a)(1) and one based on the collateral order doctrine.
Common to these arguments are certain policy considerations which I think must be kept in mind as you make a determination as to whether or not this order was appealable.
The first point which I want to emphasize is that there comes a time in every lawsuit when the parties have to make a basic decision as to whether or not this is a case which will be settled or a case which will be litigated.
Petitioners believe that sound judicial administration requires that artificial barriers not be put in the place of parties attempting to reach settlement in a case.
Whether a settlement can be reached in any case, Your Honor, is a function of many factors.
One factor that the parties will always consider is the expense of further litigation, especially the expense of further litigation in relationship to the expenses which have already been incurred.
Another factor... and this is a factor, we think, Your Honor, which is quite important in racial discrimination cases and in labor management cases, and that is the desirability which the parties have to keep down forces of civil strife in the workplace.
We think, Your Honor, that this is one of the reasons why the Congress of the United States has endorsed the idea that voluntary settlement and cooperation should be preferred means of resolving, racial discrimination cases brought under the Civil Rights Act of 1964.
A third factor which affects settlement possibilities would be the parties' assessment of their chances of winning or losing a lawsuit.
Now, this is an assessment, Your Honor, which will of course depend upon the time.
The further a lawsuit progresses, the more likely the parties will tend to reach a different assessment as to their chances of prevailing, and therefore the terms of a settlement will vary with the progress of time.
Therefore, Your Honor, in a case like this, if the parties are denied the settlement that they themselves want and are forced to litigate further then the parties are being put in a position whereby they may never be able to retrieve the opportunity which they once had.
Unidentified Justice: Which way, Mr. Williams, do you think the negative aspects of piecemeal appeals cuts in this case?
Mr. Williams: Well, I think, Your Honor, in light of your past decisions, it is quite clear that one of the reasons why this Court has decided that piecemeal adjudication is bad is because of the expense and the time that it consumes, and also the cost to the parties and the Court and the public interest as a whole.
And here one of the factors we're considering is the question of cost and the question of time and expense.
So, in this particular instance, Your Honor, I think that where you have parties who do not themselves want to litigate and who are trying not to litigate, that to give them the opportunity not to litigate is the policy that best furthers the policies behind the avoidance of piecemeal litigation.
If in a case like this, where the district court erects a legal barrier to the parties' ability to settle the case, that matter should be reviewed, we believe, by an appellate court so that the parties can determine if they can or should not go further.
Unidentified Justice: I suppose part of your argument is that if you allow an appeal you avoid piecemeal litigation, because if the appeal comes out a certain way the case is over.
Mr. Williams: That's correct, Your Honor, and that is exactly the case here.
If an appeal were allowed and if this case were decided favorably to the petitioners, that would be an end to this litigation.
Any other course, we think, would result in litigation for at least the next two or three years.
Unidentified Justice: Is it not generally true that on the problem of piecemeal appeals that one of the propositions is that if it comes out one way, it will terminate the litigation, and if it comes out the other way, it does not?
Isn't that always true?
Mr. Williams: Well, Your Honor, the only thing that the parties would have suffered in that particular case would have been a certain amount of delay if it comes out adversely, in this case, for example, to the petitioners.
But here you have parties who have been willing, certainly up until now, to settle their claim, so that if it were determined that the district court was wrong in its ascertainment of the legal principles that govern decision in this case, then that would have helped the parties to have resolved this matter prior to the matter coming to this Court.
Unidentified Justice: But, you're making more of a Cohen's argument now than anything, I take it, and this kind of an argument would lead you to say that any denial of a motion for summary judgment would be appealable; because if that denial is reversed, the case is over.
Mr. Williams: No, we don't think the argument leads to that conclusion, Your Honor.
We think that it's, for the reason that was indicated in Goldstein v. Cox.
Goldstein points out that your decision in Switzerland Cheese was not an order denying an injunction because the decision in that case turned upon an assessment of the facts, not on a determination of the legal principles.
Where a motion for summary judgment is made and it is denied as a matter of law, then Goldstein v. Cox makes it clear that is for this Court an open question.
But also, Your Honor, in this particular case it's clear that the order of the district court reached the merits.
Your Honor, I would like to reserve for further discussion five minutes of rebuttal time.
My white light is on, my time is concluded.
Unidentified Justice: Could I ask you one question, Mr. Williams?
Mr. Williams: Yes, Your Honor.
Unidentified Justice: What if the district court had said there is now pending in the 4th Circuit a case which will decide the legality of this consent order and I think it will be decided in about three or four months so I'm going to withhold my consent until the 4th Circuit hands down its opinion.
Would you say that sort of a refusal to enter a consent decree by the district court may allow you to appeal?
Mr. Williams: It would not be appealable, Your Honor.
That would simply be a step towards further litigation of the case, and also it would not pass on the merits of the case.
Chief Justice Burger: Mr. Dalton.
ORAL ARGUMENT OF HARLON L. DALTON, ESQ., ON BEHALF OF THE UNITED STATES AND EEOC AS AMICI CURIAE
Mr. Dalton: Mr. Chief Justice, and may it please the Court:
More often than not Title VII suits brought by the Government end up in consent decrees, thus encouraging voluntary compliance and maximizing limited federal law enforcement resources.
Indeed, before even commencing lawsuits, the Justice Department typically contacts potential defendants and invites them to sit down and discuss settlement, and advises them that should settlement be reached, that agreement must be memorialized in a consent decree.
Thus to the extent that the Government is forced to try cases which but for the district court's unreasoned objection would result in a settlement that's fair to the defendants and that advances the rights of the parties, our ability to vigorously enforce Title VII and related statutes is seriously undermined.
Now, we submit that this is appealed from... is appealed both as an order refusing an injunction and as a collateral order.
Unidentified Justice: Mr. Dalton, you don't suggest that EEOC or Title VII actions are governed by different rules of appealability than are set forth in 1291 or 1292?
Mr. Dalton: No, not at all.
We are not asking for a special rule relating to Title VII.
But our peculiar interest in the case results from our experience under Title VII.
Unidentified Justice: Mr. Dalton, before you proceed would you state precisely the elements of the injunction as you perceive them, the injunction that was denied?
Mr. Dalton: My understanding is that there is a general element of prohibiting discrimination in the future, that there were--
Unidentified Justice: Prohibiting what?
Mr. Dalton: --Yes.
That there are mandatory features of the injunction.
For example, the requirement that supervisory... that hereinafter blacks be hired into supervisory positions until one-third of the supervisors are blacks.
Unidentified Justice: Well, I can ask Mr. Williams when he resumes his argument.
Mr. Dalton: I can do it but it's going to stretch me a bit.
Common to all appealability theories, in our view, is the question of whether or not the order at issue is reviewable following final judgment.
As my brother Mr. Williams indicated, settlements are based upon the parties' assessment of the strength and weaknesses of their own cases, their assessment of the facts that the court is likely to find credible.
After the evidence is in, those perceptions change.
Indeed, they're replaced by knowledge of the strengths and weaknesses of cases, of the parties' respective cases, by knowledge of what aspects of your... what vulnerabilities in your own case have managed to escape detection.
And once the final judgment is in, as a practical matter, the Court of Appeals can never return to the state of facts or perceptions that existed at the time the consent decree was entered into.
Because if the litigated judgment is not defective for reasons under it, in order to return to the settlement proposal that arguably was improperly rejected by the district court, the Court of Appeals would in essence have to base its reversal on facts other than those proved at trial, and on merits other than those, if they appear following a fully litigated case.
Nor can prejudgment review be presumed as the Court of Appeals did in this case.
There's no parallel in this kind of situation to Rule 23(c)(1) in the class action context where the rule invites the court to periodically reconsider the propriety of the class.
Certainly a refusal of a consent decree is final as to the terms in that particular consent decree.
Moreover, the notion that the Court of Appeals touched upon of reconsideration of the consent decree, in this case by the district court, is meaningless in cases such as this one, and such as the City of Alexandria case which we cite in our brief, in which the district court premised their refusal to enter the decree on their view that the decree itself has unlawful provisions and has no basis in fact, because there's no admission of liability on the part of the defendants.
Even in a case where the court premises its refusal to enter the decree on more equitable kinds of considerations rather than legal, reconsideration... the possibility that order may be reconsidered at some point by the district court is not an appropriate basis for denying appealability.
For example, the case of Santana v. Collazo, a case that began in the District Court of Puerto Rico and that ultimately wound up in the First Circuit Court of Appeals, Index No. 79-1531, the private plaintiffs and the Justice Department as intervenors on their side submitted three successive, entered into three successive consent decrees with their adversaries, who were the authorities in the Commonwealth of Puerto Rico responsible for the juvenile justice system.
On each occasion... the first occasion was the district court asked the parties to make certain modifications in the consent decree.
The parties returned to the table, made modifications, and in each instance the Court of Appeals rejected that consent decree.
So even where the court ostensibly is not basing its rejection on a view of the scope of Title VII, this motion for reconsideration is not the boon that one would guess from the Court of Appeals--
Unidentified Justice: Mr. Dalton, I take it that under your argument and that of your colleague, that the denial of the consent decree would be appealable by either party?
Mr. Dalton: --Oh, yes, absolutely.
Unidentified Justice: Or both?
Mr. Dalton: Yes.
Unidentified Justice: And does that cause you any kind of problem?
Mr. Dalton: No.
Unidentified Justice: They'd both be taking the same position?
Mr. Dalton: There may be difficulties, as indeed there were in this case, where no one wants to... well, in this case what happened was that the plaintiffs sought to appeal the denial of the consent decree and the respondent defendants wanted to take no position on that in the Court of Appeals, because they felt there were not in an adversary posture.
Courts have tried various means of dealing with that problem.
Some courts have invited the U.S. Attorney to file a brief.
Others have appointed counsel for purposes of the appeal to take the other side.
Unidentified Justice: I would suppose that in some cases it might be the other side that would be most eager to have the consent decree entered?
Mr. Dalton: Indeed, indeed.
As this Court said in Weber, there are often business reasons why employers very much want to enter into consent decrees.
Unidentified Justice: Is there any reason why the parties could not abide all the terms of the consent decree if they were in the posture Mr. Justice White suggested, abide those conditions voluntarily even if a district judge would not accept the decree?
Mr. Dalton: Well, it is certain it's true that parties can enter into private settlements of lawsuits and any time a party--
Unidentified Justice: Most times they do, in private litigation.
Mr. Dalton: --Indeed.
And it is certainly true that when parties come to the point where they are willing to agree to terms of a settlement, they are much more inclined to abide by them voluntarily than not.
However, the Justice Department routinely enters into consent decrees because they are enforceable by, among other sanctions, contempt, and because in the event of changed circumstances it's often much more useful to put the question of whether or not the agreement should be modified or indeed dissolved to an impartial judicial tribunal rather than to parties.
So while it is certainly possible that parties could enter into a private agreement, consent decree is in the judgment of the Government a much more useful device all around, from the standpoint of all the parties and the court.
I'd like to touch upon briefly, Mr. Chief Justice, your question about which way the evils of piecemeal adjudication cut.
I agree with my brother that the general notion that interlocutory appeals slow down the trial process is not in this context a terribly useful sense.
What the parties are trying to do in a consent decree is to end the litigation.
It's true, as Mr. Justice White points out, that the same can be said of the summary judgment motion.
But what's left after a summary judgment motion even if a denial is upheld on appeal are only those issues as to which there is legitimate dispute, so that even though there may be a trial afterward it's a very truncated trial, and it's not the same kind of full trial on the merits.
Moreover, there are other independent reasons why this Court unanimously concluded, I think correctly, that a refusal to enter a summary judgment motion is not appealable, and those factors are not present here.
Moreover, I don't think that the floodgate of litigation feared by the Court of Appeals is an appropriate, is on balance a reasonable fear, when we're talking about refusals to enter consent decrees.
To the extent that other reasonable alternative decrees are available, it seems to me it's in the parties' perceived interests to search out and reach for those agreements.
The very factors that led the parties enter a settlement in the first place that Mr. Williams outlined and the desire to avoid the expense and delay of litigation would lead them to reach other reasonable agreements.
The kinds of cases that would result in an appeal are precisely like those at bar where the court's refusal to enter the decree is based upon a misapprehension of the scope of the statute or if the requirements of the law.
If there are no further questions--
Chief Justice Burger: Very well, Mr. Dalton.
ORAL ARGUMENT OF HENRY T. WICKHAM, ESQ., ON BEHALF OF RESPONDENT AMERICAN BRANDS, INC.
Mr. Wickham: Chief Justice Burger and may it please the Court:
I'd like to suggest that counsel left out another very good reason to avoid piecemeal litigation, and I think that the two opinions filed in the 4th Circuit bear this out, and that is they're interfering with the orderly processes of trial court.
And I think the reading of the two opinions in the 4th Circuit shows exactly the type of jungle that we're getting ourselves into, permitting appeals of the nature that stands before this Court.
Unidentified Justice: What is held up by the district court's action, except its proceeding with the trial?
Is that what you're referring to, that the trial cannot proceed in the district court now?
Mr. Wickham: Well, that's correct, but it's also the views expressed by the majority and the dissenting opinions concerning what the trial court did hold.
Did he hold conclusively that the plaintiffs had no case on the merits, or did he hold his actions were a collateral order?
And so forth and so on.
It just shows you where the appellate court should not be, in an order of this type.
The dissenting opinion went on to say that the trial judge abused his discretion, that... and so forth and so on.
It went into the merits of the case and stated what they thought were the merits of this case, and I think that this whole case illustrates that this type of order should be, could not be appealed until it becomes final.
Unidentified Justice: At some point would you comment on whether your client wishes to withdraw and if so whether you may withdraw or whether you're bound by some contractual consideration?
Mr. Wickham: Well, Your Honor, after 28 months had passed from the time the trial court had this case until it got back, we did file a motion requesting a pretrial conference for the purpose of setting a trial date, and in that motion we stated that we now withdrew consent to the proposed decree.
Unidentified Justice: Did you state that you do withdraw consent?
Mr. Wickham: Yes, sir.
Unidentified Justice: And did you ask for leave of the court to withdraw your consent, specifically?
Mr. Wickham: We went to the pretrial conference and the trial date was set for this case.
Unidentified Justice: The answer, then, is, no?
Mr. Wickham: No further order was entered or no further mention was made of the respondent's motion to withdraw its consent.
Unidentified Justice: Mr. Wickham, then I take it the answer to my question is that you made no formal motion to the court for leave to withdraw your consent?
Mr. Wickham: We did not make any formal motion except in the motion to ask for a pretrial conference and to set a trial date.
Unidentified Justice: In that motion, although it wasn't a motion to withdraw your consent, did you allege a right to withdraw or take the position you had a right to withdraw by reason of changed circumstances, or you just changed your mind about?
Mr. Wickham: We took, actually, no position, Your Honor.
Unidentified Justice: I see.
Mr. Wickham: We feel that changed circumstances would be a consideration for the trial court if we'd made a formal motion to withdraw out consent.
It would be in the nature of a Rule 60(b) motion.
In effect, the consent decree could be entered and then it would be a 60(b) motion.
Unidentified Justice: I see.
A motion, a post-decree motion, but we would still have the problem here of whether refusal to enter the decree was to refuse that or an injunction--
Mr. Wickham: Yes, sir, that really has nothing to do with why we're here today, as I see it Your Honor.
Unidentified Justice: --Mr. Wickham, was the request for the setting of the trial date made before or after the Court of Appeals decided the case?
Mr. Wickham: It was made after the the Court of Appeals decided the case.
We made no request at all when this case was appealed from the trial court and then some 28 months later it finally got back to the trial court and at that time we made a request for a jury trial.
Unidentified Justice: What jurisdiction did the district court have after a notice of appeal was filed?
Mr. Wickham: I don't think it would have any jurisdiction at that time.
I think that was--
Unidentified Justice: Once the notice of appeal had been filed, the district court could not address itself to the question whether you have the authority--
Mr. Wickham: --That is correct.
Unidentified Justice: --Or the power to withdraw your consent.
Mr. Wickham: That is correct.
Unidentified Justice: Was that considered by the Court of Appeals?
Mr. Wickham: The Court of Appeals did not know we had withdrawn our consent.
Our consent was not withdrawn until after the Court of Appeals... after the mandate issued and it had returned to the district court, Your Honor.
Unidentified Justice: Mr. Wickham, I don't understand.
If the Court of Appeals is correct in holding the order was not appealable, I don't why a notice of appeal would deprive the district court of jurisdiction, because the notice of appeal would be a nullity.
Mr. Wickham: Well, the district court granted a stay of these proceedings pending the petition for cert in this case, Your Honor.
Unidentified Justice: But in the interim, between the time the district court acted initially and the time the Court of Appeals acted, there was no jurisdiction in the district court was there?
Mr. Wickham: That's correct; no, sir.
Unidentified Justice: Well, isn't that the issue we're called upon to decide today?
If the appeal was improper--
Mr. Wickham: Well, theoretically that would be if there was no jurisdiction.
Unidentified Justice: --If it was an improper appeal, then the appeal didn't have any effect on the district court--
Mr. Wickham: Well, then, theoretically, the district court would have jurisdiction, but hardly would the district court assert such jurisdiction pending the decision of the 4th Circuit.
Unidentified Justice: --I understand that second point.
You won't know that for some little time yet, will you?
Mr. Wickham: That's correct.
Unidentified Justice: It the district court was deprived of jurisdiction and in fact the order... then it must be because there was a right to appeal, and if it retained jurisdiction, it must be because the appeal was improper and it just chose to await the outcome of the Court of Appeals decision.
Mr. Wickham: That's correct.
But we did not make any decision to withdraw our consent until after the Court of Appeals had handed down its mandate, Your Honor.
I guess that's the point I'm trying to make is that... because I don't think it's very material to, really, what we've got to get at here, insofar as to whether or not the 4th Circuit has applied the proper test laid down by Coopers & Lybrand and by Gardner, to see whether or not this order was indeed appealable under either Section 1291 or 1292(a)(1).
Unidentified Justice: If you didn't withdraw your consent, wouldn't the agreement that you entered into be enforceable as a private contract?
Mr. Wickham: Well, we take that position, that that is one aspect of withdrawal of consent is a contractual relationship, and if we violate it is the remedy a suit for damages or what?
The law is not clear on that subject at all, as far as we could find out.
But we contend here that the so-called Weber-type rights that the petitioners claim they have lost by this denial of appeal are, after all, private rights.
It's a voluntary, Weber-type right, which was made between the unions and the Company, and that same right could be agreed upon between the parties, and this case could be dismissed agreed, with prejudice, and the plaintiffs would lose none of their rights, the so-called Weber-type rights.
Unidentified Justice: Well, they could in fact sue you on the contract, I take it?
Mr. Wickham: That's certainly a possibility, Your Honor.
Unidentified Justice: Well, I suppose the contract has a clause in it whereby your clients agree to the entry of a consent decree?
Mr. Wickham: Well, you know--
Unidentified Justice: Isn't it?
Mr. Wickham: --Justice Powell asked what the provisions of the consent decree were.
The main provisions were--
Unidentified Justice: All I want to know is--
Mr. Wickham: --We agreed.
Unidentified Justice: --About the one provision.
Didn't you agree to the entry of the consent decree?
Mr. Wickham: We indeed agreed to the entry of the consent decree; that's correct.
Unidentified Justice: And so that is part of your contractual obligation?
Mr. Wickham: That's correct.
Unidentified Justice: And yet that part of the obligation, because of Rule 23, can be negated by the trial judge if he refuses to approve it, I suppose.
Mr. Wickham: Well, the only part that would be negated, it seems to me... we could still enter into a private agreement-like... a someone pointed out a little while ago, many cases are settled, agreed, and the cases are dismissed.
So the only thing that's really we're lacking here insofar as the plaintiffs are concerned would be a contempt proceeding if the respondents had indeed violated their agreement.
Unidentified Justice: But if you entered a 25-paragraph settlement agreement and one of the paragraphs says, we will enter a consent decree, and the district court rejects the consent decree, that doesn't necessarily void the other 24 paragraphs of the agreement that you've entered into voluntarily.
Mr. Wickham: It doesn't necessarily do so unless one of the parties would insist upon a consent decree should always be protected by a contempt proceedings for a violation.
Unidentified Justice: Well, I take it the Government suggests that it wouldn't enter into any settlements except in connection with a consent degree.
Mr. Wickham: I heard that suggestion, but this is a private action case.
This is not the Government... it's not the EEOC or any government agency in this case, Your Honor.
So what... I think the considerations are a little different.
It's no... absolutely nothing wrong with us entering into a contract and--
Unidentified Justice: Is the consent decree... is the agreement in the record?
Mr. Wickham: --Yes, sir.
Unidentified Justice: It isn't in the printed record, is it?
Mr. Wickham: You'll find it starting on page 26a, Your Honor.
Unidentified Justice: Oh, I see.
I had looked for that; I didn't find it.
Thank you very much.
That's just the consent decree on--
Mr. Wickham: Well, that is the agreement.
Is that what you asked me?
Unidentified Justice: --It really isn't the agreement.
Mr. Wickham: Well, that's all we have.
Unidentified Justice: There's no separate agreement to enter--
Mr. Wickham: No separate agreement, no, sir, I'm sorry.
It's no separate agreement.
We presented this proposed consent decree jointly at the last pretrial conference before trial.
Unidentified Justice: --And all of you moved for its adoption?
Mr. Wickham: And we moved for its adoption at that time.
So that there, really is no separate contract?
No separate agreement; no, sir.
Unidentified Justice: So there would be nothing... if the judge refuses to enter, the decree, the motions are just denied and there is no obligation on anybody's part from there on, of any kind.
Mr. Wickham: There's no obligation on anybody's part, that's correct, but there's also nothing to prevent the parties from negotiating a different type of agreement.
Unidentified Justice: Well, I know, but that hasn't been done.
Mr. Wickham: That has not been done.
Unidentified Justice: Was there an oral agreement?
Mr. Wickham: Ah--
Unidentified Justice: I take it what you're saying is there's no written agreement.
Mr. Wickham: --Well, we agreed to propose the consent decree found in the Appendix to the... to the court, Justice White.
--It's hard for me to really say that we have agreed because everybody's looking toward a consent decree, at least the plaintiffs were looking for the consent decree, and they appealed the refusal to enter that order.
Unidentified Justice: All three of you moved the court to enter the decree, in any event.
Mr. Wickham: Yes, that's correct.
Unidentified Justice: And just filed memos in--
Mr. Wickham: And then the court asked us to file memos in support of that decree.
Unidentified Justice: --Are the motions in the printed record?
But I suppose they're in the record of trial here.
Mr. Wickham: --That's correct.
Well, if I'm not mistaken, it was an oral motion made at the final pretrial conference.
The decree was presented to the court at the final pretrial conference and--
Unidentified Justice: Every party moved for--
Mr. Wickham: --And every party moved to--
Unidentified Justice: --That must have been by agreement, via--
Mr. Wickham: --That's correct.
Unidentified Justice: --Was that by oral motion or by agreement?
Mr. Wickham: It was by oral motion.
We requested the court to have this proposed decree at the final pretrial conference.
I don't think you'll find a formal motion on that.
Unidentified Justice: Is it correct, then, Mr. Wickham to say that the consent decree contained the settlement agreement of the parties?
Mr. Wickham: That's correct, sir.
Unidentified Justice: And you wished to have the court approve it.
Mr. Wickham: The district court, yes, sir.
Unidentified Justice: Yes, yes.
Mr. Wickham: Yes, sir.
It seems clear that this is not a final order under 1291 for the... the court did make a collateral determination and that... it's also equally clear that it's not a final order under 1291 because the order did not conclusively determine claims for injunctive relief, and also it's clear that it's not final under 1291 because the petitioner can have an effective review of this order prior to and after final judgment.
Now, the same test seems to apply as laid down by Gardner for the refusal of the injunction relief.
Unidentified Justice: Well, the proposed decree here, the first paragraph, is that, your client agrees that... and a permanent injunction entered against them enjoining discrimination, and then, paragraph 3, it provides for further injunctive relief, doesn't it?
Mr. Wickham: Well, I think that if you read it--
Unidentified Justice: You certainly... if you didn't live up to this decree which contained an injunction, you would be subject to contempt.
Mr. Wickham: --No question about that, Your Honor.
But it's our position that under Rule 1292(a)(1) the test is whether or not these petitioners were--
Unidentified Justice: Right.
Mr. Wickham: --And if not, this type of injunctive relief is not such that it's covered by the provisions of 1292(a)(1), and it's very clear that if it had effective review, number one, as you pointed out, they could ask for a preliminary injunction.
They could have asked for that either before or after the refusal of consent decree.
That would certainly be appealable, the refusal of that.
Unidentified Justice: Why would that be?
But normally when three people go into court together to get a consent decree, it's not normal for one side to also ask for preliminary injunction, is it?
Is that the usual procedure?
Mr. Wickham: I don't think it is usual procedure, but it shows that... it shows that if you don't ask for a preliminary injunction you must not feel that you have any reparable interest to protect, or to lose, so to speak.
All I'm saying to you, Justice Marshall, is that under the test laid down in Gardner, that is an avenue open to the petitioners, and then--
Unidentified Justice: Yes, I know, but you have to consider Gardner along with General Electric and--
Mr. Wickham: --Yes, sir, and it's--
Unidentified Justice: --You have to consider them together.
Mr. Wickham: --And that's... and certainly after final judgment it's reviewable, and effectively reviewable, because if after trial on the merits the petitioners got more than the consent decree gave them, they certainly wouldn't be harmed.
And if they got less, they could argue to the Court of Appeals that the facts entitle them to more, entitle them to exactly the same relief that the consent decree gave them, or even more than that.
So, they got effective review in this case.
And finally, it's very clear that--
Unidentified Justice: They're not objecting to the review, they're objecting to the results of review.
Mr. Wickham: --Well, I'm saying that to have effective review, there's not a final order within the meaning of Section 1292(a)(2), Justice Marshall.
That's what I'm saying.
As to the fact that this Court has or has not conclusively passed on the sufficiency of the claim, the court itself, the district court itself, started out and says,
"The plaintiffs have included a statement of facts in their brief in support of the proposed consent decree. "
"For this purpose only we accept these facts to be true. "
Now, with that statement it's very clear that the court below, district court below did not conclusively find against the plaintiffs.
And if you look at the plaintiffs' brief and the statement of facts in their brief, you'll see a lot more facts in there, a lot more facts, but they didn't present those facts to the court below.
Now, you read those facts, and the respondents are very bad people, effectual discrimination is still present everywhere.
Those facts could have been presented to the trial court.
Why they weren't?
I don't know but it shows that the district court did not pass on the sufficiency of their claim for injunctive relief.
Thank you, Your Honors.
Chief Justice Burger: Mr. Levit.
ORAL ARGUMENT OF JAY J. LEVIT, ESQ., ON BEHALF OF RESPONDENT UNIONS
Mr. Levit: Mr. Chief Justice and Justices of the Supreme Court:
The reason the unions didn't make a formal motion to withdraw their consent was because it obviously wasn't necessary.
The district court judge had refused to enter the consent decree.
Unidentified Justice: Well, the union did not want to undermine the consent decree.
Why would they make a--
Mr. Levit: Well, I'm talking, Your Honor, with respect... when the case was remanded from the 4th Circuit back to the district court judge, and then at the time that a pretrial conference was requested by the respondents, in that motion requesting a pretrial conference, the respondents stated that they withdrew their consent.
They said nothing more except to say that they withdrew their consent.
And at some time during the discussion between the court and counsel the question was raised by one of the justices, were any formal grounds for withdrawal of consent set out?
And I felt that it would be--
Unidentified Justice: --What do you mean if they did not withdraw it, they said they would.
"In support of this motion, the defendants assert that they do not now consent to the entry of the proposed agreement. "
Mr. Levit: --Yes, sir.
Unidentified Justice: What does that mean?
Mr. Levit: That means that the consent--
Unidentified Justice: That doesn't mean they're withdrawing it.
Mr. Levit: --Oh, I would submit, Your Honor--
Unidentified Justice: If they want to withdraw, they withdraw.
They don't say that word.
Mr. Levit: --Well, they do say, Your Honor; that they no longer consent, and I would submit to you that that's the same thing as withdrawing your consent.
Unidentified Justice: But don't you usually file a motion?
Mr. Levit: Oh, this was in a motion.
Unidentified Justice: But this was a motion to ask for a pretrial conference.
Mr. Levit: Yes, sir.
Unidentified Justice: That's what the motion is.
Mr. Levit: Yes, sir.
Unidentified Justice: This isn't a motion to withdraw.
Mr. Levit: Well, it's a statement--
Unidentified Justice: This isn't a motion to withdraw consent.
Mr. Levit: --Well, Your Honor, the reason--
Unidentified Justice: And they say that this will be presented to the court at the pretrial conference.
The record says that.
Mr. Levit: --There was no need for a motion, Your Honor.
The reason there wasn't a need for a formal motion to withdraw consent is because the district court judge had refused to enter the consent decree, so it was unnecessary to move him to do what he had already done.
Unidentified Justice: Then it was unnecessary to withdraw the consent.
Mr. Levit: Well, we wanted to, make it a matter of record that the consent didn't exist.
Unidentified Justice: But you didn't sign this, this written consent.
Mr. Levit: No, I signed it, Your Honor.
I believe it's page 67.
Unidentified Justice: Yes, down at the bottom.
Mr. Levit: We did sign it, Your Honor, the unions did sign that.
And we joined in that motion.
But we felt, at least it was our position, that no formal withdrawal was necessary for those reasons.
Unidentified Justice: Well, there never was any problem about withdrawing consent.
Actually, you filed a motion, or you'd made an oral motion to enter the decree?
Mr. Levit: We made a... well, at the time that the consent decree was proposed to the district court, there were supporting memoranda filed by the parties in support of the entry of the decree, yes, sir.
Unidentified Justice: But there... was there an oral motion, was there?
Or was it--
Mr. Levit: Well, I believe it was posed when we presented it to the district court.
We stated that we had a consent decree form and I believe counsel wrote the district court a letter indicating that a consent decree would be forth-coming to the court, that the parties were proposing to the court.
Unidentified Justice: --Well, you really... what you're really saying, that you withdraw... you're interested in withdrawing your motion that the consent decree be entered.
Mr. Levit: Well, the two things occurred in such--
Unidentified Justice: But your motion was denied?
Mr. Levit: --such distant points of time, Your Honor.
That's the time that the district... the consent decree was presented and the time that it went... and the appeal time, and the remand back, was a couple of years, and of course, one of the things I wanted to mention was that the evils of piecemeal litigation certainly involve the appellate court getting involved in the trial process.
Now, counsel for the petitioners distinguished the Court's decision in Switzerland Cheese on the ground that that was just a denial of motion for summary judgment, that there were material issues of fact.
But I submit to you that we may have and do have basically the same thing here.
If you look at the proposed consent decree, you'll see recitations in there where it's recited that the district court judge has reviewed the extensive discovery, and there was extensive discovery in this case.
There were numerous depositions and extensive written interrogatories, and production of documents.
And it recites that the district court has reviewed the discovery in this case.
So, the district court in denying entry of a consent decree may very well have done so for principles and on standards which would be quite similar in denying a motion for summary judgment.
And in that respect--
Unidentified Justice: But Mr. Levit, didn't he tell us why he did so?
Didn't he give his reasons?
Weren't his reasons legal reasons rather than the reasons you now describe?
Mr. Levit: --I think that the reasons that he gave would very well encompass precisely what I'm presenting to you that he felt that it was improper for several reasons that he stated but there's no question that he did review the record, that he did review the extensive discovery involved in the case.
And for the appellate court to take that prerogative away from him when he may feel that there's a material issue of fact... and I think it's apparent that he did feel that.
Unidentified Justice: Well, but that goes to the merits of whether he acted properly in refusing to enter the decree, it seems to me.
Mr. Levit: Yes, Your Honor, but the point is that the appellate court would have to get involved in the trial process, and the appellate court obviously didn't go through the discovery.
Unidentified Justice: Anytime you review a complicated matter you have to look at the record.
Mr. Levit: Well, I don't think the appellate court reviewed the discovery in this case.
And that's the point that we're trying to make, is that the appellate court did not review the discovery in this case the way the district court judge did, and that's why the appellate court would not properly get involved in the trial process here.
Unidentified Justice: Let me ask you one other question about your point that two years went by after you made your motion, and so that you didn't think it was necessary to allege changed circumstances... if the Court should hold that the order was appealable and sent it back to the Court of Appeals, and if the Court of Appeals should hold that the district court committed error in refusing to enter the decree, I suppose it would have the power to reverse and say the decree should have been entered.
And therefore it would have been necessary to allege some kind of post-decree events in order to get out of the bargain.
Mr. Levit: Well, Your Honor--
Unidentified Justice: But I suppose the review will take place as of the date that the district judge acted, and he either committed error on that date or he acted properly, one of the two.
Mr. Levit: --I don't think that that's necessarily so, Your Honor, because we can't ignore the terms of the proposed consent decree.
And right at the outset of the proposed consent decree the parties state that they want to avoid the time and expense of litigation.
And perhaps even more than the expense of litigation in this case is the time.
After all, the union has a collective bargaining agreement to administer and the Company has a business to run, and when these parties entered into this proposed consent decree it was with the anticipation it would be entered within a reasonable period of time.
And it may very well, from the union's point of view as a collective bargaining contract administrator result in utter chaos.
Time may be very, very much more important than expense here, for--
Unidentified Justice: Well, that goes to the merits of whether the district judge should be affirmed or reversed, rather than to whether anything's appealable.
Mr. Levit: --But also, Your Honor, it goes very much to the merits of the proposed decree itself, because the parties weren't getting what they bargained for.
If we're going to talk about it in terms of a bargain, the parties are not getting what they bargained for, and what they expressly bargained for, right at the outset of the--
Unidentified Justice: Are you attacking the consent decree on its merits?
Mr. Levit: --I'm saying that the--
Unidentified Justice: The one that you agreed to?
Mr. Levit: --The one that we agreed to we would have been happy with if it had been promptly entered.
But what we anticipate--
Unidentified Justice: As of right now you're not quarreling with the merits... with the merits of it?
Mr. Levit: --We're not... what we're saying now is--
Unidentified Justice: You did sign it?
Mr. Levit: --Yes, we did.
There's no question about that.
Yes we did.
Unidentified Justice: You don't want to go behind that now, do you?
Mr. Levit: We have withdrawn our consent to it.
We feel that we have a basic right to do so.
Unidentified Justice: Well, show me where you withdrew.
Mr. Levit: We withdrew when we stated in the motion to the--
Unidentified Justice: That you wanted to withdraw it.
Mr. Levit: --That we no longer consented.
Unidentified Justice: That's right, and you wanted that to be discussed at the pretrial conference.
Was it discussed?
Mr. Levit: There was no need to discuss it.
Unidentified Justice: Well, why did you ask to do it if you didn't want to do it?
Mr. Levit: Because we wanted to make it a matter of record that our consent no longer existed on that document.
We didn't feel that we needed to set forth formal grounds or make a motion to have it withdrawn because the judge had already refused to enter it, and we felt it wasn't necessary under the circumstances to do it.
Unidentified Justice: How do we stand now?
Are you with the consent decree or not?
Mr. Levit: Well, we don't--
Unidentified Justice: You're against it now?
Mr. Levit: --Yes.
That doesn't mean that--
Unidentified Justice: You want your signature off of it.
That doesn't mean that you necessarily would have had the right to withdraw your consent.
You simply said you wanted to withdraw it if legally permissible.
Mr. Levit: --That's correct.
Unidentified Justice: Well, really none of this goes to the issues before us, which is the appealability of the denial of the entry of the decree.
Is that correct?
Mr. Levit: Well, I think it does.
Because I think that it's... if there is no--
Unidentified Justice: What happened two years later is really not... it hardly bears on that issue, does it?
Mr. Levit: --But if there is... I think it does, Your Honor, if there is no existing consent decree, then--
Unidentified Justice: There was at the time that it was appealed.
Mr. Levit: --But if there isn't one now--
Unidentified Justice: It's not being appealed.
Mr. Levit: --If there isn't one now, it's an exercise in futility.
Unidentified Justice: So you're really, your argument is really that the case has become moot?
Mr. Levit: Absolutely.
It has become moot.
There is no case or controversy, is our position.
Chief Justice Burger: Mr. Williams, do you have anything further?
Mr. Williams: Yes, sir.
Mr. Chief Justice, just a few minutes Your Honor, we do not believe that the case is moot.
The case is most only if the denial of the proposed consent decree is not appealable.
But that is the very question that we have been trying to seek review.
Your Honor, one of the advices which--
ORAL ARGUMENT OF NAPOLEON B. WILLIAMS, JR., ESQ., ON BEHALF OF THE PETITIONERS -- REBUTTAL
Unidentified Justice: I don't quite get that--
Mr. Williams: --The consent decree--
Unidentified Justice: --Suppose the consent decree had said, until this case becomes final either party may withdraw from it.
Suppose it said that and while the case was on appeal one of the parties withdraws?
Mr. Williams: --But that would be an entirely different matter, Your Honor.
That would be the--
Unidentified Justice: Well, I don't know what's so different.
The submission is that either party was free to withdraw and that one of them has withdrawn.
That's the submission.
Mr. Williams: --Well, that's the submission, Your Honor, but that's no basis in fact--
Unidentified Justice: What do you disagree with in that submission?
Mr. Williams: --Well, we believe that whether or not one can withdraw from a proposed consent decree would depend upon elements of basic contract law, as well as upon the principles set forth under the Federal Rules of Civil Procedure.
Unidentified Justice: Where do you find the agreement that the consent decree be entered?
Mr. Williams: Well, Your Honor, we think that's manifested by the conduct of the parties, and we think that's manifested by their written signatures to the agreement that was being moved for the court to accept.
But, Your Honor, one of the things that I want to point cut with respect to allowing a district court to make a legal determination as to what is allowable or not allowable without giving the power of review with respect to that determination, is that in effect it does affect the parties' agreement to come to terms even out of court.
Were the parties in this case to try to enter into an agreement that would basically achieve the same thing as this proposed consent decree, then the parties would find that with respect to third parties, there would be a question as to the legality of what they were doing because of noncompliance with Rule 23(e).
Two, they would find that the opinion of the district court could be used as a basis to collaterally attack the validity of that out-of-court agreement which they were then trying to voluntarily comply with.
Your Honor, we think that a consent decree is needed in addition to any type of agreement that the parties might reach voluntarily in a case like this, in part because of the need, as this Court found in United Steelworkers of America v. Weber, to decide the rights of third parties.
Secondly, we think that it is needed because of the need for enforcement with respect to those kinds of mandatory things that the parties are supposed to do or not to do.
Unidentified Justice: The Weber case didn't involve any consent decree, that was simply an agreement between the employer and the labor union.
Mr. Williams: That's correct, Your Honor, but it did decide the rights of third parties with respect to the validity of that agreement.
Thank you very much, Your Honors.
Unidentified Justice: Mr. Williams, before you sit down, maybe it's in the papers, but I did want to clear up one thing about the procedure.
The proposed decree purports, as I understand it, to get rid of all damages... for all members of the class.
Did the procedure that was contemplated involve notice to the class?
Mr. Williams: Yes, it did involve some notice, but there's a question as to whether or not those provisions are adequate, Your Honor.
But we don't think that that would affect the parties' ability to settle the case as such.
So, thank you.
Chief Justice Burger: Thank you, gentlemen.
The case is submitted.