Carson v. American Brands, Inc. Brief for Petitioners
Public Court Documents
January 1, 1980
Cite this item
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Brief Collection, LDF Court Filings. Carson v. American Brands, Inc. Brief for Petitioners, 1980. 7791d8fa-ac9a-ee11-be37-00224827e97b. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/4b2b59f2-7abb-4836-9313-90338d421623/carson-v-american-brands-inc-brief-for-petitioners. Accessed October 10, 2025.
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No. 79-1236
In t h e
Bupnmv (tart uf % llmtib States
October Term, 1980
F rank L. Carson, L awrence H atcher, and Stuart E. M ines,
P etition ers,
v.
A merican Brands, I nc ., t/a T he A merican Tobacco Co m pany ;
L ocal 182, T obacco W orkers I nternational Union ,
______ R espondents.
ON A WRIT OP CERTIORARI TO THE UNITED STATES
COURT OP APPEALS FOR THE FOURTH CIRCUIT
BRIEF FOR PETITIONERS
H enry L. Marsh , I I I
W illiam H. Bass, I I I
Randall G. Johnson
H ill , T ucker & Marsh
214 East Clay Street
P. 0. Box 27363
Richmond, Virginia 23261
(804) 648-9073
John W. Scott, Jr.
615 Caroline Street
Fredericksburg, Virginia 22401
(703) 371-3700
Jack Greenberg
Counsel of Record
James M. Nabrit, I I I
N apoleon B. W illiams, Jr.
10 Columbus Circle
Suite 2030
New York, New York 10019
(212) 586-8397
Barry L. Goldstein
806 15th Street, N.W.
Suite 940
Washington, D.C. 20006
(202) 638-3278
Counsel fo r P etitioners
September 2, 1980
QUESTIONS PRESENTED
1. Whether the Court of Appeals for the Fourth
C i r c u i t e r r ed in h o ld in g that an o rde r o f the
d i s t r i c t court, which refused to enter a j o i n t l y
proposed consent d ecree on the grounds o f i t s
a l leged i l l e g a l i t y , was not appealable under 28
U.S.C. §1291 as a c o l l a t e r a l order pursuant to
the C o u r t ' s d e c i s i o n in Cohen v . Bene f i c i a l
I n d u s t r i a l Loan C orp . , 377 U.S. 541 (1949 )?
2. Whether th ere was e r r o r in the Fourth
C i r c u i t ' s h o ld in g th a t the d i s t r i c t c o u r t ' s
order, which denied approval to a proposed consent
decree g ra n t in g a permanent in ju n c t i o n on the
ground o f the decree 's a l leged i l l e g a l i t y , was
not a p p ea lab le under 28 U.S.C. § 1 2 9 2 ( a ) ( l ) as
an in ter locu tory order re fus ing an injunction?
l
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED. . .................. i
TABLE OF AUTHORITIES ............................................. iv
CITATION TO OPINION BELOW. . . . . . ...... ............. . 1
JURISDICTION............................................................ 2
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED... . ....... .................. 2
STATEMENT OF THE CASE. ............ 5
SUMMARY OF ARGUMENT........ .................... 21
A. Appea lab i l i ty Under §1291............. 21
B. Appea lab i l i ty Under §1292 (a ) ( 1 ) . . . . 22
ARGUMENT........................................................ 22
1. INTRODUCTION. ........................................... 23
2. THE DISTRICT COURT'S ORDER RE
FUSING TO APPROVE THE PARTIES'
JOINTLY PRESENTED CONSENT ORDER
WAS A COLLATERAL ORDER WHICH WAS
APPEALABLE AS AN EXCEPTION TO
THE FINAL JUDGMENT REQUIREMENT
OF 28 U.S.C. §1291. . ................. 25
A. General.................... ........................... 25
B. The Applicable L a w . . . . . . . .......... .. 27
C. App l icat ion of the Cohen
C r i t e r i a . ............................. 30
Page
3. THE DISTRICT COURT'S ORDER
BELOW IS APPEALABLE UNDER
28 U.S.C. 11292(a)(1) AS AN
INTERLOCUTORY ORDER DENYING
AN INJUNCTION....................................... 44
A. The Appl icab le Law....................... 44
B. C r i t e r ia Governing The
App l icat ion o f § 1 2 9 2 (a ) ( l ) ........... 47
1. General ...................................... 47
2. In ter locutory Order.............. 48
3. In junct ive R e l i e f .............. 49
4. Character is t ics o f an
Injunction. ............................... 55
a. More Than a Mere
P r e - t r i a l Order.............. 55
b. Determining the
M er i ts ................................ 56
5. I rreparab le In ju ry ................ 61
C. App l icat ion of the C r i t e r i a
Under § 1 2 9 2 (a ) ( l ) .......................... 61
CONCLUSION.............................................. 76
i l l
Table o f Author i t ies
Alexander v. Gardner-Denver C o . ,
415 U.S. 36 (1974)...................... ...............24,26,35,75
Baltimore Contractors v. Bodinger,
348 U.S. 176 (1955)...... .............................46,47,49,55
Brown v. Chote,
411 U.S. 542 (1973) .......... ......................... 43
Gatl in v. United States,
370 U.S. 294 (1962)........ 27
Chappell & Co. v. Frankel,
367 F . 2d 197 (2d Cir . 1966).............. . 57,65
Cohen v. Bene f ic ia l Loan Corp . ,
377 U.S. 541 ( 1 9 4 9 ) . . . . .............................. 20,23,25,28
30,47
Cobbledick v. United States,
309 U.S. 323 ( 1 9 4 9 ) . . . . . . . . . ............... 27,28
Coopers & Lybrand v. Livesay,
437 U.S. 463 ( 1 9 7 8 ) . . . . . . . . ...................... 35,36,71
Dent v. St. Louis-San Francisco Ry Co.
406 F . 2d 399 (5th Cir . 1969).................. 35
Dickinson v. Petroleum Conversion Corp.
338 U.S. 507 (1950) ............ 28,30,40
Eisen v. C a r l i s l e & Jacquelin,
417 U.S. 156 (1974)........... 30,40,41
Enelow v. New York L i f e Ins. Co . ,
293 U.S. 379 (1935)........ 45
Cases Page
- iv -
Cases V Page
Ette lson v. Metropol itan L i f e Ins. Co.
317 U.S. 188 (1942) .................................... 45
Franks v. Bowman Transportat ion C o . ,
424 U.S. 747 (1978)................ ................... 11
Gardner v. Westinghouse Broad
casting Co.
437 U.S. 478 (1978)......................................35,40,46,48
56,59,66,68
69
General E l e c t r i c Co. v. Marvel Rare
Metals C o . ,
287 U.S. 430 (1932)..................................... 56,65
George v. V ic tor Talking Machine Co.,
293 U.S. 377 (1934)..................................... 50
G i l l e sp i e v. U.S. Stee l Corp . ,
379 U.S. 148 (1948).................................... 40
Goldstein v. Cox,
396 U.S. 471 (1970)..................................... 51,52
L iber ty Mutual Ins. Co. v. Wetzel,
424 U.S. 737 (1976)..................................... 68
Maxwell v. Enterprise Wall Paper Co. ,
131 F2d 400 (3rd Cir. 1942 ) . .............. .. 46
Mercanti le National Bank at Dallas v.
Langdeau,
371 U.S. 555 (1963)..................................... 30
Morgens tern Chemical Co. Inc. v.
Schering Corp. ,
181 F . 2d 160 (3rd C ir . 1950)........................ 46,57,65
v
Cases Page
Morgantown v. Royal Ins. Co.,
337 U.S. 254 (1949) ........ ........................... 45,49
Norman v. McKee,
431 F .2d 769 (9th Cir . 1970),
ce r t , denied, IS I v. Myers,
401 U.S. 912 ( 1 9 7 1 ) . . .............. .................20,30,39,43
73
Osborne v. Missouri P.R. Co.,
147 U.S. 248 (1893) .................................. .. 43
Peter Pan Fabrics, Inc. v. Dixon
T e x t i l e Corp . ,
280 F .2d 805 (2d Cir . I 9 6 0 ) . . . ............ . 55
Radio Stat ion WOW, Inc. v.Johnson,
326 U.S. 120 (1945). .............................. .. . 27
Russel l v. American Tobacco Company,
528 F .2d 357 (4th Cir. 1975),
cer t , denied, 425 U.S. 935 (1976)........ 8,16
Safe F l i gh t Instrument Corp. v.
McDonnel-Douglas Corp. ,
482 F .2d 1086 (9th Cir . ) ,
c e r t . denied, 414U.S . 1 1 3 . . . . . ............ 59
Sampson v. Murray,
416 U.S. 61 (1974).............. ........................ 61,65
Se ige l v. Merrick,
590 F . 2d 35 (2d Cir . 1 9 7 8 ) . . ...... ...........19,37,38,39
69,70,73
Shanferoke Coal & Supply Corp. v.
Westchester Serv ice Corp . ,
293 U.S. 449 ( 1 9 3 5 ) . . . . ........ ................... 49
vi -
Gases Page
Smith v. Vulcan Iron Works,
165 U.S. 518 (1897).................................. .24,52,53,55
Stewart-Warner Corp. v. Westinghouse
Elec. Corp. ,
325 F .2d 822 (2d Cir . 1963),
ce r t , denied, 376 U.S. 11........ .............. . 44,46,60
Switzerland Cheese Association,
Inc. v. E. Horne's Market, Inc . ,
385 U.S. 23 (1966) .................................... .24,45,47,48
50,55,56,59
66,68
Teamsters v. United States,
431 U.S. 324 (1977) .................................. 31,66
United States v. Allegheny-Ludlum
Industr ies , Inc . ,
517 F .2d 826 (5th Cir. 1975)................ 35
United States v. American Friends
Service Committee,
419 U.S. 7 (1974)................................ .. . . 43
U.S. v. City o f Alexandria,
F . 2d (5th Cir. ),
22 EPD K30, 828, Ap r i l 10, 1980.......... 26
United States v. City o f Miami,
F .2d (5th Cir. ) ,
7 7 EPDT30,821, Apr i l 10, 1 9 8 0 . . . . . . . 26
United Steelworkers o f America,
AFL-CIO-CLC v. Weber,
443 U.S. 193, 61 L.Ed. 2d 480 (1979). .21,22,31,32
34,35,36,41
67,74,75,76
- v i i -
Cases Page
V irg in ia Petroleum Jobbers Assn. v.
FPC,
259 F .2d 921 (D.C. Cir. 1 9 5 8 ) . . . . ........ 61
Weber v. United Steelworkers of
America, AFL-CIO,
563 F .2d 216 (5th Cir. 1 9 7 7 ) . . . . . . . . . . ’ 22
W.L. Gore & Assoc ia tes , Inc. v.
C a r l i s l e Corp . ,
529 F . 2d 614 (3rd Cir. 1 9 7 6 ) . . . . . _____ 52
Const itut ional Provis ions
F i f th Amendment to the Consti tution o f
the United S t a t e s . ....................................... 2, 7
Statutes
28 U.S.C. § 1 2 5 4 ( 1 ) . . . . . . . ____ 2
28 U.S.C. §1253 . ........................ . 50,51,52
28 U.S.C. §1291 . . . . . . . . ___ 2,19,21,23,24
25,27,28,29,31,39
28 U.S.C. 81292 (a ) (1 ) ................. 2,19,20,21
22,23,24,27,44,45
46,47,49,50,52,55
56,58,61,63,67,70
42 U.S.C. § 1 9 8 1 . . . . . . . . . . ____ 6
Evarts Act o f 1891,
26 Stat. 8 2 6 . . . . . . . . . . . .......... .. 44,53,54
- viii -
Statutes Page
T i t l e V I I , C i v i l Rights Act
o f 1964, as amended, 42 U.S.C.
§ §2000e et seq ...................... . . . . 3 ,6 ,7 ,1 7 ,2 5
26,30,31,32,35
39,64,65,66,67
Rules
Rule 23 (e ) , Federal Rules o f
C i v i l Procedure............................ 5,13,23,25
30,36*38
Rule 41 (c ) , Federal Rules o f
C i v i l Procedure.................... 34
Rule 68, Federal Rules o f
C i v i l Procedure.................... 34
L e g i s l a t i v e History
Remarks o f Senator Hubert
Humphrey, 110 Cong. R ec . ,
6548, concerning T i t l e V I I
C i v i l Rights Act o f 1964,
as amended, 42 U.S.C.
§§2000e et seq .............................. 74
Other Author i t ies
Note, Appea lab i l i ty in the
Federal Courts,
75 Harv. L. Rev. 351 (1952 ) . . . 45
Wright & M i l l e r , Federal
Pract ice and ProcedureT . .......... 45,48,52
Abbreviated Form
References to "Joint Appendix below" are
to the Joint Appendix f i l e d in the Court o f
Appeals fo r the Fourth C ircu i t .
IX
IN THE
SUPREME COURT OF THE UNITED STATES
October Term, 1980
No. 79-1236
FRANK L. CARSON, LAWRENCE HATCHER,
and STUART E. MINES,
Pe t i t i on e rs ,
v.
AMERICAN BRANDS, INC., T/A THE
AMERICAN TOBACCO COMPANY; LOCAL 182,
TOBACCO WORKERS INTERNATIONAL,
TOBACCO WORKERS INTERNATIONAL UNION,
Respondents.
ON A WRIT OF CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FOURTH CIRCUIT
CITATION TO OPINION BELOW
The opinion of the Court o f Appeals fo r the
Fourth C ircu i t is reported at 606 F .2d 420. The
opinion and judgment o f the Court o f Appeals are
set forth in the Appendix to the P e t i t i o n for a
Writ of C e r t io ra r i , pp. la , 52a. The opinion o f
the D i s t r i c t Court for the Eastern D i s t r i c t of
V i r g i n i a i s r ep o r t e d at 446 F.Supp. 790. The
opinion and judgment o f the D i s t r i c t Court are
a lso set for th in the Appendix to the P e t i t i o n for
a Writ of C e r t io ra r i , pp. 28a, 51a. .
- 2 -
JURISDICTION
J u r isd ic t io n o f th is Court is invoked pur
suant to 28 U.S.C. §1254(1). The judgment o f the
Court o f Appeals d ismissing the appeal was entered
on September 14, 1979. On June 16, 1980, th is
Court g ra n ted the p e t i t i o n f o r a w r i t o f c e r
t i o r a r i l im it ed to Question 1 presented by the
p e t i t i o n . On Ju ly 24, 1980, the C l e r k o f the
Supreme Court granted p e t i t i o n e r s , pursuant to
request , u n t i l September 2, 1980 in which to f i l e
a b r i e f .
CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED
This case invo lves the F i f t h Amendment to the
Const i tut ion o f the United States.
This case a lso invo lves the f o l l o w in g f ede ra l
s t a tu t e s :
a. 28 U.S.C. §1291
The cou r t o f appea ls s h a l l have
ju r i s d i c t i o n o f appeals from a l l f i n a l
dec is ions o f the d i s t r i c t courts o f the
United States , the United States D is
t r i c t Court f o r the D i s t r i c t o f the
Canal Zone, the D i s t r i c t Court o f Guam,
and the D i s t r i c t Court o f the V i r g i n
Is lands, except where a d i r e c t rev iew
may be had in the Supreme Court.
b. 28 U.S.C. §1292(a)
The c o u r t o f appea ls s h a l l have
ju r i s d i c t i o n o f appeals from:
(1 ) In te r lo cu to ry orders o f the
d i s t r i c t courts o f the United States ,
3
the United States D i s t r i c t Court f o r the
D i s t r i c t o f the Canal Zone, the D i s t r i c t
Court o f Guam, and the D i s t r i c t Court of
the V i r g i n I s l a n d s , or o f the judges
thereo f , grant ing , continuing, modify
ing, re fus ing or d is so lv ing in junct ions,
o r r e f u s i n g t o d i s s o l v e o r m o d i f y
i n j u n c t i o n s , e x c ep t where a d i r e c t
rev iew may be had in the Supreme Court.
c. 42 U.S.C. §2000e-2
(a ) I t sha l l be an unlawful employment
p ra c t i c e fo r an employer—
(1 ) to f a i l or re fuse to h ire or
to discharge any ind iv idua l , or o ther
wise to d iscr im inate against any i n d i v i
dual with respect to h is compensation,
terms, c o n d i t i o n s , o r p r i v i l e g e s o f
employment, because o f such in d iv id u a l ' s
race, co lo r , r e l i g i o n , sex, or nat ional
o r i g in ; or
( 2 ) t o l i m i t , s e g r e g a t e , o r
c l a s s i f y h is employees or applicants f o r
em p loym ent in any way wh ich w ou ld
depr ive or tend to depr ive any i n d i v i
dual o f employment o p p o r t u n i t i e s or
otherwise adverse ly a f f e c t h is status as
an employee , because o f such i n d i v i
dua l 's race, c o lo r , r e l i g i o n , sex, or
nat ional o r i g in .
- 4 -
( c ) I t sha l l be an unlawful employment
p r a c t i c e f o r a l a b o r o r g a n i z a t i o n - -
( 1 ) t o exc lude o r to e x p e l
from i t s membership, or otherwise
t o d i s c r i m i n a t e a g a i n s t , any
i n d i v i d u a l because o f h i s r a ce ,
c o lo r , r e l i g i o n , sex, or nat ional
o r i g in ;
(2 ) to l im i t , segregate , or
c l a s s i f y i t s membership or a p p l i
cants f o r membership, or to c la s
s i f y or f a i l or re fuse fb r e f e r for
employment any ind iv idua l , in any
way which would depr ive or tend to
depr ive any ind iv idua l o f employ
ment oppor tun i t ies , or would l im i t
such em p loym ent o p p o r t u n i t i e s
or otherwise adverse ly a f f e c t h is
s t a tu s as an employee or as an
appl icant f o r employment, because
o f such in d iv id u a l ' s race, co lo r ,
r e l i g i o n , sex, or na t iona l o r i g in ;
or
( 3 ) to cause or a t tempt to
cause an employer to d iscr iminate
against an ind iv idua l in v i o l a t i o n
o f th is sect ion.
( j ) N o th ing c o n ta in ed in t h i s sub
chapter sha l l be in terp re ted to require
any employer, employment agency, labor
organ iza t ion , or j o in t labor-management
committee subject to th is subchapter to
g ran t p r e f e r e n t i a l t r ea tm en t to any
ind iv idua l or to any group because o f
the r a c e , c o l o r , r e l i g i o n , sex , or
na t iona l o r i g in o f such ind iv idua l or
group on account o f an imbalance which
may e x i s t w i th r e s p e c t to the t o t a l
number or percentage o f persons o f any
race, c o lo r , r e l i g i o n , sex, or nat ional
o r i g i n e m p lo y e d by any e m p l o y e r ,
r e f e r r ed or c l a s s i f i e d f o r employment by
any employment agency or labor organiza
t ion , admitted to membership or c la s
s i f i e d by any l a b o r o r g a n i z a t i o n ,
o r adm it ted t o , o r employed in , any
apprenticeship or other t ra in ing pro
gram, in comparison w i th the t o t a l
number or percentage o f persons o f such
race, co lo r , r e l i g i o n , sex, or nat ional
o r i g in in any community, State , sec t ion ,
or other area, or in the a va i lab le work
fo rce in any community, State , sect ion ,
or other area.
d . Rule 2 3 ( e ) , Federal Rules o f C i v i l Pro-
cedure
- 5 -
A c lass act ion sha l l not be d i s
m is s e d o r com prom ised w i t h o u t th e
approval o f the court, and no t ice o f the
proposed d i s m is s a l s h a l l be g i v e n to
a l l members o f the c lass in such manner
as the court d i r e c t s .
STATEMENT OF THE CASE
General . On October 24, 1975, p e t i t i o n e rs ,
p re s en t and fo rm er seasona l employees at the
Richmond Leaf Department o f the American Tobacco
Company, a subsidiary o f American Brands, In c . ,
which is located in Richmond, V i r g in ia , f i l e d a
complaint on beha l f o f themselves and other black
employees at the Richmond Leaf Department.
The complaint charged that defendant Ameri
can Brands, I n c . , d e fen dan t Tobacco W orkers '
In te rna t iona l Union, and defendant Local 182 o f
the Tobacco W o rke rs ' I n t e r n a t i o n a l Union, in
v i o l a t i o n o f the C i v i l R ig h ts Ac t o f 1964, 42
U .S .C . § §2000e, e t s e q . , and 42 U.S.C §1981,
d i s c r i m i n a t o r i l y d en ied b la ck workers h i r i n g ,
promotion, and t ran s fe r opportun it ies and d i s -
c r i m i n a t o r i l y r e s t r i c t e d b la ck workers to low
paying and otherwise undesirab le jobs.
A f t e r the conduct o f extens ive d iscovery , the
d i s t r i c t c o u r t , on March 1, 1977, c e r t i f i e d a
c lass cons is t ing o f (1 ) black persons, current ly
and formerly employed who were seasonal employees
o f the American Tobacco Company's Richmond Leaf
Department on or a f t e r September 9, 1972, and (2 )
black persons who applied f o r seasonal employment
at the American Tobacco Company's Richmond Lea f
Plant on or a f t e r September 9, 1972.
The pa r t i e s reached a settlement o f p la in
t i f f s ' claims, entered into a proposed consent
decree, Joint Appendix 24, and j o i n t l y moved for
- 6 -
7
approval and entry o f the proposed decree. The
d i s t r i c t court denied the motion on the ground
that the proposed decree v i o l a t e d the prov is ions
o f T i t l e V I I o f the C i v i l Rights Act o f 1964, as
amended, 42 U .S.C . §§2000e e t seq. . in th a t i t
provided, in the absence o f proof that defendants
had engaged in r a c i a l l y d iscr im inatory actions or
that p l a i n t i f f s and c lass members were v ic tims o f
r a c ia l d iscr im inat ion by defendants, f o r p re fe ren
t i a l treatment o f black employees on the basis of
race and co lo r . 446 F.Supp. at 788-791.
A d d i t i o n a l l y , i t h e ld th a t both T i t l e V I I
and the F i f t h Amendment to the Const i tut ion o f the
U n ited S t a t e s p rec luded a d i s t r i c t c ou r t from
plac ing what i t termed a " f e d e r a l stamp o f appro
v a l " upon an agreement which provided p r e f e r e n t ia l
t r ea tm en t on the ba is o f r a c e or c o l o r in the
absence o f proo f o f d iscr im inat ion by defendant
and in the absence o f proof that p l a i n t i f f and
c l a s s members were v i c t im s o f d i s c r i m in a t i o n .
446 F.Supp. at 784
On May 14, 1979, the United States Court o f
Appeals f o r the Fourth C ircu i t ordered the merits
o f the appea l to be de te rm ined ejn banc . On
September 14, 1979, however, the Court o f Appeals
ordered the appeal dismissed on the ground that
- 8 -
the order appealed from below was not appealable
w i t h i n the intendment o f 28 U .S .C . §§1291 and
V
1292. Chief Judge Haynsworth and C ircu i t Judges
Winter and Butzner d issented in an opinion ho ld ing
that the order was appealable and that the consent
decree should have been approved.
His tory o f Rac ia l D iscr im inat ion . American
Brands, In c . , employs 150 seasonal employees and
100 regu lar , or f u l l - t im e , employees to process
and s t o r e l e a f t o ba cco at the Richmond L e a f
Department o f the American Tobacco Company in
Richmond, V i r g in i a .— The seasonal employees, a l l
o f whom are b l a c k , work between s i x and n ine
months dur ing the y ea r . By c o n t r a s t , r e g u l a r
employees, o f whom 34% are white , work throughout
u 2/
the y ea r .— Both the seasonal and regular
1J The fa c ts concerning employment s t a t i s t i c s o f
defendant American Brands, Inc. are contained in
that defendant 's answer to p l a i n t i f f s ' i n t e r r o
ga to r i e s , r e levant portions o f which are included
in the Record below as the p a r t i e s ' Joint Appendix,
and are a l s o c o n ta in e d in the op in ion s be low .
Moreover, the operat ion o f the American Tobacco
Co. is descr ibed in Russell v. American Tobacco
Co■ , 528 F . 2d 357 (4th C i r . 1975), c e r t . denied,
425 U.S. 935 (1976).
2/ The fo l l o w in g tab le represents the r a c ia l
c om p os i t i on o f the employees a t the Richmond
Leaf Department from 1968-1976:
employees are represented by defendant Local 182,
Tobacco Workers' In ternat ional Union (her ina f te r
"T .W . I .U . " ) .
P r io r to September 16, 1963, union ju r i s d i c
t i o n ove r job p o s i t i o n s at the Richmond L ea f
Department was div ided betweeen Local 182 o f the
T .W . I .U . and L oca l 214 o f the T .W . I .U . The
former, whose membership was then a l l white, had
exc lus ive ju r i s d i c t i o n over regular job c lass
i f i c a t i o n s . Local 214's membership was l imited
to black employees who were seasonal workers at
3/
the Richmond Leaf Department.—
While the exis tence of two separate unions at
the Department was o f f i c i a l l y te rm inated on
September 16, 1963, the p re -ex is t ing patterns o f
- 9 -
2/ (con 'd )
Year Regular Employees Seasonal Employees
1968
Whites
4 1
Blacks
5 2
Whites
0
Blacks
~TT5
1970 40 59 0 175
1973 40 56 0 176
1976 37 57 0 135
See defendant American Brand' s answer
Tnterrogatory #14 in Joint Appendix below.
- 10
r a c i a l d i s c r i m in a t i o n , however , c on t inu ed in
e f f e c t at the Richmond L e a f Department as a
consequence o f regu la t ions and procedures estab
l i s h i n g the system o f s e n i o r i t y and t r a n s f e r
r igh ts o f employees.
4/
Sen io r i ty and Transfer R igh ts .— P r io r to
September 16, 1963, permanent job vacancies were
f i l l e d by c a n va ss in g the employees w i t h in the
bargain ing unit o f the union having ju r i s d i c t i o n
o f the jobs in which the v a c a n c ie s e x i s t e d .
This procedure b en e f i t t ed the white members o f
Local 182 in the compet it ion fo r permanent job
p o s i t i o n s .
F o l l o w in g the 1963 merger o f the l o c a l s ,
the rules governing the f i l l i n g o f vacancies in
the fu l l - t im e pos i t ions continued to exclude or
d is a d va n ta g e the b la ck workers who had been
d is c r im in a to r i l y assigned to seasonal pos i t ions .
When management r e q u e s t s a job t r a n s f e r o f a
r e g u l a r employee tha t employee does not l o s e
s e n io r i t y r i g h ts , but when management requests a
4/ See defendant American Brand's answers to
In te r ro ga to r i e s #20-56 in Joint Appendix below.
11 -
seasonal employee t̂ o t ran s fe r to fu l l - t im e work
that employee loses his s e n io r i t y r i gh ts .
M oreove r , when a r e g u l a r worker t r a n s f e r s
from one fu l l - t im e job to another one the employee
reta ins a l l o f h is s e n io r i t y r i g h ts , but when a
seasonal worker t rans fe rs to a fu l l - t im e job he
5/
lo s e s a l l o f h i s s e n i o r i t y r i g h t s . - F u r t h e r
more, a seasonal worker who transfers to a f u l l
t ime p o s i t i o n a lmost always must e n t e r at a
bot tom - leve l p os i t ion because the regular workers
have the f i r s t opportunity to move to the vacan
c ies in fu l l - t im e pos i t ions .
Accord ing ly , i f a seasonal worker is employed
in a seasonal pos i t i o n above the e n t r y - l e v e l , he
f requent ly w i l l be required to su f f e r a short-term
pay cut in order to move in to a fu l l - t im e pos i t ion .
The imposit ion o f these p ena l t ies , the loss o f
s e n io r i t y and the poss ib le reduction in short-term
pay, serve to lock in the e f f e c t s o f the h i s t o r i c a l
5/ The t ran s fe r r in g seasonal worker loses not
only his "com pet i t i v e " s e n io r i t y r i gh ts , e . g .,
r igh ts fo r job secu r i ty and promotion, but also
his " b e n e f i t " s e n io r i t y r i gh ts , e . g . , r i gh t fo r
sick leave and vacat ion, except for retirement
bene f i t s . Cf. Franks v. Bowman Transportat ion
Co., 424 U.S. 747, 765 (1976T.
- 12 -
d i s c r i m in a t o r y p r a c t i c e s which e x i s t e d at the
Richmond L e a f D i v i s i o n . These p r a c t i c e s were
responsib le , as o f February 13, 1976 f o r c reat ion
o f a s i tu a t ion in which only one o f the 16 p os i -
6 /
t ions o f watchman was held by a black employee.™
The h i s t o r i c a l p rac t ices o f d iscr im inat ion
have continued to l im i t the employment opportuni
t i e s o f b la ck workers f o r s u p e r v i s o r y as w e l l
as h o u r ly j o b s . A lmost in v a r a b l y the Company
s e lec ts i t s superv isory employees from i t s f u l l
t ime s t a f f . The Company has n e v e r promoted a
seasonal worker d i r e c t l y to a superv isory pos i
t ion . The cont inuat ion o f the e f f e c t s o f the past
segrega t ive p rac t ices has resu lted in the s e l e c
t ion o f a d isp ropo r t iona te ly small group o f the
Company's b la ck employees as s u p e r v i s o r s . As
o f A p r i l , 1976, only 20% o f these pos i t ions were
f i l l e d by b lacks.—^
6/ See de fendant American Brand 's answer to
In te r roga tory #15(c) continued in Joint Appendix
be low.
7/ Id. In te r roga tory #65.
13
Proposed Consent D e c r e e . D i s c o v e r y con
ducted by the par t ies fo l l o w in g the commencement
o f th is lawsuit showed dramat ica l ly the degree to
which p a r t i c u l a r job c l a s s i f i c a t i o n s cou ld be
i d e n t i f i e d by race. I t a lso showed the extent
to which s e n i o r i t y r u l e s and t r a n s f e r r u l e s
impinged on the capacity o f defendants to e ra d i
cate the v e s t i g e s o f past r a c ia l d iscr im inat ion .
The p a r t i e s , o f course, had d i f f e r i n g views on the
extent to which such l in g e r in g e f f e c t s e x i s t . To
r e s o l v e t h e i r d isagreem ent and to s e t t l e the
controversy, the par t ies negot ia ted a proposed
consent decree s e t t l i n g a l l claims outstanding
between them and p re s en ted i t t o the d i s t r i c t
c o u r t , in accordance w i th Rule 2 3 ( e ) o f the
Federal Rules o f C i v i l Procedure.
One o f the p r in c ipa l features o f the proposed
7/ . . .
consent decree— was a s e n io r i t y clause requ ir ing
7/ Pa r t I I I o f the proposed consent d ec re e
stated the fo l low ing :
" I I I . INJUNCTIVE RELIEF FOR THE CLASS
In f u l l and f i n a l settlement o f any and
a l l claims fo r in junct ive r e l i e f a l l e g ed in the
Complaint, the par t ies agree to the fo l low ing :
1. For the purposes o f determining e l i g i b
i l i t y f o r vacations and f o r promotions,
14
curren t and fu tu re employees to be c r e d i t e d
with actual time worked at the plant as seasonal
employees. Another f e a t u r e o f the proposed
7/ (contd. )
l a y - o f f s and r e c a l l s , e v e ry curren t
and future regular hourly paid produc
t i o n employee o f the Richmond L ea f
Department w i l l be cred i ted with actual
t ime worked as a seasona l employee
commencing with the date o f h i r e o f the
las t period of continuing employment as
a seasonal employee in accordance with
Section 1 o f A r t i c l e 7 o f the current
c o l l e c t i v e bargaining agreement govern
ing seasonal employees. The combined
t o t a l o f such seasona l and r e g u la r
employment w i l l apply toward s e r v i c e
requ irem ents f o r v a c a t i o n s , and f o r
promot ions , demotions, l a y - o f f s and
r e c a l l s .
2. Regular employees who have served the
p r o b a t i o n a r y p e r i o d as a s e a s o n a l
employee during the last period of his
or her continuous seasonal employment
at Leaf p r io r to being transferred to
r e g u la r Lear employment w i l l become
e l i g i b l e f o r m e d i c a l b e n e f i t s and
s i ck b e n e f i t s immediate ly upon such
transfer to regular employment.
15
consent decree a l lowed seasona l employees to
t rans fer to permanent job posit ions as vacancies
occurred provided, o f course, no regular employees
7/ (contd. )
3. In the event that vacancies in hourly
paid permanent production job c l a s s i f i
cat ions at the Richmond Leaf Department
are not f i l l e d by r e g u la r p roduc t ion
employees, then a l l q u a l i f i e d hou r ly
paid seasona l p rodu c t ion employees
w i l l be g iven the opportunity to f i l l
such vacancies p r io r to h i r ing from the
outside.
4. In the even t tha t va canc ies in the
job c l a s s i f i c a t i o n , Watchman, at the
Richmond Leaf Department are not f i l l e d
by regular production employees, then
a l l q u a l i f i e d hou r ly paid seasona l
production w i l l be given the opportunity
to f i l l such vacancies p r io r to h ir ing
from the outside.
5. The Richmond Leaf Department adopts a
goal o f f i l l i n g the production super
v iso ry pos it ions of Foreman and Ass is
tan t Foreman w i th q u a l i f i e d b lacks
un t i l the percentage o f blacks in such
p o s i t i o n s equals 1/3 o f the t o t a l o f
such pos i t ions. The date o f December
31, 1980 is hereby established fo r the
accomplishment o f th is goal.
See Joint Appendix at 27a-28a.
- 16
desired the pos i t ions .
These p r o v i s i o n s were pa t te rn ed a f t e r the
r e l i e f fashioned for seasonal workers in Russell
v. American Tobacco Company, supra, 528 F.2d 357,
362-64 (4th Cir. 1975), c e r t . denied, 425 U.S. 935
(1976). Under the f i r s t above-mentioned feature
of the proposed consent decree, seasonal workers
are a l lowed to ma inta in t h e i r s e n i o r i t y upon
trans fe r to regular pos i t ions . Under the second
feature, seasonal employees are permitted to bid
on vacancies in c l a s s i f i c a t i o n s , such as watch
men, which were once reserved for whites.
In a d d i t i o n , the proposed consent decree
contained, in Part I I I , sect ion 5, an a f f i rm at iv e
action prov is ion to reduce a h i s t o r i c a l underrep
resentat ion of blacks which had ex is ted in the
supervisory pos i t ions. This prov is ion provided
th a t :
The Richmond Leaf Department adopts a
goal o f f i l l i n g the production super
v isory posit ions o f Foreman and Ass is
tant Foreman with q u a l i f i e d blacks u n t i l
the percentage o f blacks in such pos i
t ions equals 1/3 o f the to ta l o f such
p o s i t i o n s . The da te o f December 31,
1980 i s hereby e s t a b l i s h e d f o r the
accomplishment of th is goal.
Joint Appendix at 31a.
Furthermore, the consent decree el iminated
the requirement that seasonal workers must serve a
17
p ro b a t ion a ry p e r io d when they t r a n s f e r to a
fu l l - t im e pos i t ion . F ina l ly , the decree contained
a general in junction p roh ib i t ing the defendants
from d i s c r im in a t i n g a g a in s t b lack workers and
a report ing provis ion requiring the Company to
submit fo r a three-year period s p e c i f i c reports
d e t a i l i n g compliance w i th the Decree . J o in t
Appendix at 31a.
A l l o f the par t ies found that these p ro v i
sions represented, in l i g h t o f the h is to ry o f the
Richmond Leaf Department, a settlement that was
8 /reasonable, just , and f a i r to a l l concerned— .
Despite the i r agreement, the d i s t r i c t court, by
order f i l e d June 2, 1977, denied the jo in t motion
o f the par t ies to approve and enter the proposed
consent decree.
Several reasons were o f f e red by the d i s t r i c t
court in support o f i t s r e f u s a l to grant the
motion. F i r s t , the d i s t r i c t court judge stated
that T i t l e V I I o f the C i v i l Rights Act and the
due process clause o f the F i f th Amendment to the
8/ See the Memorandum in Support o f Entry o f
Proposed Consent Decree f i l e d by defendant Ameri
can Brands, Inc. in the d i s t r i c t court. Also, see
Memorandum in Support o f Entry o f Proposed Consent
Dec ree f i l e d in the d i s t r i c t cour t by the two
union defendants on A p r i l 15, 1977.
18
Const i tu t ion p roh ib i ted the defendant employer,
defendant, unions, and the d i s t r i c t court from
granting p r e f e r e n t i a l treatment to employees based
upon race except upon a showing o f past or present
d i s c r i m in a t i o n committed by the d e fen da n ts .
Second, the d i s t r i c t c ou r t s a id th a t the
proposed consent d ec re e was f a t a l l y f l aw ed in
seeking to provide f o r p r e f e r e n t i a l treatment fo r
black employees who were not shown to be v ic t ims
o f d iscr im inat ion . Moreover, because the in t r o
ductory sect ion o f the proposed consent decree
contained a p rov is ion in which defendants denied
that th e i r actions had been d iscr iminatory or un
lawful , and contained another p rov is ion in which
p l a i n t i f f s stated that they did not admit that
d e f e n d a n t s ' a c t i o n s were l a w fu l , the d i s t r i c t
court concluded that there was not " c r e a t e (d ) any
fac tua l basis upon which r e l i e f may be g ranted ."
446 F.Supp. at 788-789.
The d i s t r i c t court conceded, however, that
p r io r to September 1963, the " r egu la r job c l a s s i
f i c a t i o n s o f truck d r i v e r , watchman, maintenance,
storage , and b o i l e r operator . . . were reserved
f o r whites on ly " , 446 F.Supp. at 782, and that, as
o f A p r i l 5, 1976, only 20% o f the 35 superv isory
pos i t ions were f i l l e d with black employees. I d .
at 783.
19
P e t i t i o n e r s appea led the d i s t r i c t c o u r t ' s
order to the Fourth C ircu i t . That court dismissed
the appeal on the ground that the order was non-
appealable under 28 U.S.C. §§1291 and 1292 ( a ) ( 1 ) .
In holding that the d i s t r i c t cour t 's judgment
was not a p p ea lab le as an i n t e r l o c u t o r y decree
denying an injunction, the Court o f Appeals said,
"Here, in junct ive r e l i e f was not f i n a l l y denied;
i t was merely not granted at this stage o f the
proceedings." 600 F.2d at 423. I t regarded the
order as deciding only that the case should go to
t r i a l . I d . at 423.
Fol lowing the ra t iona le o f the Second C ircuit
in Se iga l v. Merr ick, 590 F.2d 35 (2d Cir. 1978),
i t held that disallowance o f the inter locutory
appeal would strengthen the power o f the d i s t r i c t
courts to draw part ies into presenting more favor
ab le s e t t l e m e n t p ro p osa ls . The d e n ia l o f one
agreement, i t said, did not necessar i ly prevent a
more "sweetened" agreement from being approved.
606 F.2d at 423-24. The court was obl iv ious to
whether the order dec ided the m er i ts o f the
action. I t stated that "whatever the d i s t r i c t
court 's reasons fo r re fus ing a decree, appeals o f
r i g h t s from those r e fu s a l s would encourage an
endless s tr ing o f appeals and destroy the d i s t r i c t
court 's superv is ion of the action as contemplated
by Fed.R.Civ .Proc. 2 3 (e ) " . Id. at 424.
20
The Fourth C ircu it recognized that i t s d ec i
sion was contrary to the decis ion in Norman v.
McKee, 431 F.2d 769 (9th Cir , 1970), c e r t . denied,
IS I v, Meyers, 401 U.S. 912 (1971), where the Ninth
C ircu it had held that orders disapproving proposed
settlements of s tockholder 's d e r iva t iv e suits are
9/
appealable as c o l l a t e r a l orders .— However, i t
merely noted the exis tence o f the case and did
9f Although the opinion in the Fourth Circuit
below im p l ied that p e t i t i o n e r s on ly sought an
inter locutory appeal under 28 U.S.C. § 1 29 2 (a ) ( l ) ,
606 F.2d at 421, p e t i t i o n e rs , in f a c t , appealed
the decis ion under both §1291 and § 1 29 2 (a ) ( l ) . To
help c l a r i f y the matter, the facts concerning the
appeal are stated herein.
By l e t t e r to the Clerk o f the Fourth C ircuit
Court o f Appeals dated January 13, 1978, p e t i
t ioners stated that the d i s t r i c t court 's order
below was appealable under 28 U.S.C. §1291. Sub
sequently, however, p e t i t i on e rs f i l e d , on February
9, 1979 a supplemental memorandum in which they
stated, on page 2, that the case did not invo lve
the c o l l a t e r a l order doctr ine o f Cohen v. Bene f i
c i a l I n d u s t r i a l C orp . , 3 77 U.sT 541 (1949) .
On February 20, 1979, p e t i t i o n e r s f i l e d a
Supplemental Reply Memorandum in which they noted
the existence o f a c o n f l i c t between the c i r cu i t s
on the issue of appea lab i l i t y under §1291 o f a
d i s t r i c t court 's order disapproving a proposed
settlement of a de r i va t i v e action. Because the
proposed decree contained a request for an in
junction, pe t i t ion e rs stated that ju r i sd i c t i o n
could be upheld under §1292 (a ) ( l ) without reaching
21-
not s tate why the court 's analysis there was not
persuasive.
SUMMARY OF ARGUMENT
A. Appea lab i l i ty Under §1291
P e t i t i o n e r s contend that the order o f the
d i s t r i c t court denying approval to the p a r t i e s '
j o i n t l y proposed consent decree was appealable as
a c o l l a t e r a l order. Separate and apart from the
issue o f whether defendants have pract iced ra c ia l
d iscr iminat ion against p l a i n t i f f s , th is Court has
established that a p r iva te employer and union can
vo lu n ta r i l y es tab l ish an a f f i rm a t iv e action plan
on behal f o f black employees in an industry in
which there is an imbalance o f black employees
with respect to white employees a r is ing out of a
9/ ( c on td . )
the issue under §1291. They cautioned, however,
that the court would be confronted with deciding
the appea lab i l i ty o f the order as a c o l l a t e r a l
order under §1291 i f the court could not sustain
ju r i s d i c t i o n under § 1 29 2 (a ) ( l ) . See p e t i t i o n e r s '
Reply to B r ie f in Opposition to C e r t io ra r i , n.4.
Although pe t i t ioners subsequently emphasized
the appea lab i l i ty o f the d i s t r i c t court 's order
under §1292 (a ) ( l ) in the i r Supplemental B r ie f fo r
the Appellants On Consideration En Banc, they did
not, at any time, waive or drop the ir ins istence
that the o rde r was ap pea lab le as a c o l l a t e r a l
order under §1291.
22
h i s t o r i c a l exclusion o f blacks. See United S t e e l -
workers o f America, AFL-CIO-CLC v. Weber, 443 U.S.
193 (1979). The denial o f the r igh t to s e t t l e
v o lun ta r i ly the instant action in accordance with
p r inc ip les set forth in Weber, supra, is there fore
a c o l l a t e r a l order a f f e c t in g r igh ts c o l l a t e r a l to
the merits o f the action and thus was appealable
under §1291.
B Appea lab i l i t y Under §1292 (a ) ( l )
P e t i t i on e rs contend that an examination o f
the grounds stated by the d i s t r i c t court in sup
port o f i t s order denying approval to entry o f a
consent decree granting a permanent injunct ion,
d iscloses that the order reso lved the merits of
the in junct ive claims and o f the T i t l e V I I claims.
Since these grounds prec luded the f i l i n g o f a
subsequent motion by p e t i t ion e rs f o r a prel iminary
in junction, the d i s t r i c t cour t 's order was appeal-
able under §1292 (a ) ( l ) as an in ter locutory order
refusing an injunct ion.
ARGUMENT
I
INTRODUCTION
This case concerns the a p p e a l a b i l i t y o f a
d i s t r i c t court 's order which, on the basis o f the
- 23
F i f t h C i r c u i t ' s opinion in Weber v. United S t e e l
workers o f America, AFL-CIO, 563 F .2d 216 (5th
Cir. 1977), subsequently reversed by th is Court in
Un ited S t e e lw o rk e rs o f America, AFL-CIO-CLC v .
Weber, 443 U.S. 193 (1979), refused to approve,
pursuant to Rule 23 o f the Fed. R. C iv . P. , a
j o in t motion by the part ies to enter a proposed
consent decree g ra n t in g permanent in ju n c t i o n
P e t i t i o n e r s contend that the order o f the
d i s t r i c t cour t i s a p p ea lab le , pursuant to the
c o l l a t e r a l order doctr ine, see Cohen v. B ene f ic ia l
Industr ia l Loan Corp. , 377 U.S. 541 (1949), as an
exception to the f i n a l i t y requirement o f 28 U.S.C.
§1291. P e t i t i on e rs also submit that the order is
appea lab le under 28 U.S.C. 1 1 2 9 2 (a ) (1 ) as an
in ter locu tory order denying in junct ive r e l i e f .
The a p p e a l a b i l i t y o f a d i s t r i c t c o u r t ' s o rde r
which refuses to enter a j o i n t l y proposed consent
decree s e t t l in g the action and granting a perma
nent in junction, is a case o f f i r s t impression
in th is Court.
The in ter locu tory order o f the d i s t r i c t court
denied approval, under Rule 23 (e ) , o f the p a r t i e s '
j o i n t l y proposed consent decree and thereby
denied the i r j o in t request f o r a permanent injunc
tion. The appea lab i l i t y o f orders o f the d i s t r i c t
- 24 -
cour ts r e fu s in g to approve proposed consent
decrees has not been prev iously determined by the
Court. Furthermore, the Court has not, in general,
determined when i n t e r l o c u t o r y orders deny ing
permanent injunctions are appealable under §1292
( a ) ( 1 ) . Compare, e . g . , Smith v. Vulcan Iron Works,
165 U.S. 518 (1897) with Switzerland Cheese Asso-
t ion , Inc, v. E. Horne's Market, In c . , 385 U.S.
23, 23-25 (1966).
This case seemingly presents an opportunity
fo r the Court to reso lve both issues. P e t i t i on e rs
submit, however, that there are spec ia l fac tors
operative here, such as the Congressional p r e f e r
ence for voluntary settlement of T i t l e V I I actions,
see Alexander v, Gardner-Denver Co. , 415 U.S. 36,
44 (1974), and the pecul iar nature o f the grounds
assigned by the d i s t r i c t court in support o f i t s
order, which w i l l permit the Court to decide th is
case without determining, in general, the appeal-
a b i l i t y o f o rde rs deny ing proposed s e t t l em en t
decrees or the appea lab i l i ty o f orders denying
permanent i n ju n c t i v e r e l i e f . However, these
spec ia l circumstances do warrant allowance o f an
appeal from the order below under both §1291 and
§1292 (a ) ( 1 ) .
25
THE DISTRICT COURT ORDER REFUSING TO
APPROVE THE PARTIES' JOINTLY PRESENTED
CONSENT ORDER WAS A COLLATERAL ORDER
WHICH WAS APPEALABLE AS AN EXCEPTION
TO THE FINAL JUDGMENT REQUIREMENT OF
28 U.S.C. §1291.
A. General
Sect ion 1291 o f T i t l e 28 o f the United States
Code authorizes an appeal to a federa l court o f
appeals o f a f i n a l "dec is ion " or judgment, o f a
federa l d i s t r i c t court. This Court, however, has,
in in terp re t ing the statute to e f fe c tua te i t s pur
poses, made exceptions to the " f i n a l judgment"
rule . One such exception is the c o l l a t e r a l order
doctr ine under which the Court has allowed the
appeal o f an in ter locutory orders which is c o l l a t
e r a l to the m er i ts o f the u n d e r l y in g a c t i o n .
See Cohen v. B en e f ic ia l Industr ia l Loan Corp. , 337
U.S. 541 (1949).
This doctr ine, pe t i t ioners contend, is a p p l i
cable to an order o f the d i s t r i c t court which, in
a T i t l e V I I action, denied, under Rule 23 o f the
Fed. R. Civ. P. , approval o f a proposed consent
decree, on the ground that the decree provided
p re f e ren t ia l treatment on the basis of race to
black employees who were not victims of r a c i a l l y
discr iminatory actions by defendants.
26
At the outset, pe t i t ione rs s tress the impor
tance of the issue involved. Voluntary settlement
o f employment discr im ination suits l i e s at the
heart o f the e f f o r t to enforce T i t l e V I I . This
Court has emphasized th a t " (c ) o o p e r a t i o n and
voluntary compliance were se lected as the p r e f e r
red means for achiev ing" the goal of equal oppor
tunity in employment. Alexander v. Gardner-Denver
Co. , 415 U.S. 36, 44 (1974). Judic ia l review in
the courts o f appeals of settlement decrees has
been extremely instrumental in carry ing out this
purpose of the statute . See, e . g . , . United States
v. City o f Miami, ___ F . 2d ___ (5th Cir. ) , 22 EPD
1130,821, Ap r i l 10, 1980; United States v. City o f
A l e x a n d r i a , _ F.2d ___ (5 th C i r . ) , 22 EPD
1130,828, Apr i l 10, 1980.
C onve rse ly , d i s a l l o w a n ce o f i n t e r l o c u t o r y
review o f orders disapproving proposed settlement
decrees is l i k e l y to f rust ra te the achievement o f
the purposes o f T i t l e V I I . Not only would i t put
a l l voluntary settlements of T i t l e V I I act ions at
the mercy o f d i s t r i c t judges but i t would also
force the part ies needless ly to undergo expensive,
time-consuming t r i a l s .
27
B. The Applicable Law
With the exception of 28 U.S.C. §1292, and
ce r ta in j u d i c i a l l y created except ions, the appeal-
a b i l i t y o f orders o f the d i s t r i c t court to the
federa l courts o f appeals is l im ited by 28 U.S.C.
§1291 to " f i n a l d ec is ions . " See Cobbledick v .
United S t a t e s , 309 U.S. 323 (1940 ) ; C a t l i n v .
United S ta tes , 370 U.S. 294 (1962). In i t s d e c i
sion in Cobbledick v. United S ta tes , supra, the
Court found that Congress, with the enactment o f
§1291, prohib ited "piecemeal d ispos i t ion on appeal
of what for p ra c t ica l purposes is a s ing le con
troversy . . . (and) set i t s e l f against enfeebling
ju d i c i a l admin is trat ion ." I d . 309 U.S. at 324.
Moreover, the Court has noted that the pur
pose of the f i n a l judgment rule is to avoid "the
obstruction to just claims that would come from
permitting the harassment and cost o f a succes
sion of separate appeals from the various rulings
to which a l i t i g a t i o n may g i v e r i s e , from i t s
i n i t i a t i o n to entry o f judgment." Cobbledick v .
United S ta tes , supra, 309 U.S. at 324. Thus, the
f in a l judgment ru le , which "has the support o f
c o n s id e r a t i o n s g e n e r a l l y a p p l i c a b l e to good
ju d ic ia l adminis trat ion" , Radio Station WOW, In c ,
v. Johnson, 326 U.S. 120 (1945), i s , in the f in a l
analys is , designed to enable courts and l i t i g a n t s
- 28 -
to avoid "the mischief of economic waste and o f
delayed j u s t i c e . " I d . 326 U.S. at 123. Also see
Dickinson v. Petroleum Conversion Corp. , 338 U.S.
507, 511.
D esp i t e the laudab le goa ls o f §1291, the
courts have discovered that there are occasions
where a s t r i c t app l ica t ion o f the f i n a l judgment
r u l e w i l l not e f f e c t u a t e the purposes o f the
statute and instead "would p ra c t i c a l l y defeat the
r igh t o f any review at a l l . " Cobbledick v . United
S ta tes , 309 U.S. at 324. In these cases, denial
o f the r i g h t t o an immediate a p p e l l a t e r ev iew
would cause irreparable- injury to the party seek
ing review. This i s the basic j u s t i f i c a t i o n for
the C o u r t ' s adopt ion o f the c o l l a t e r a l order
doctr ine under which cer ta in in ter locutory orders
can be immediately appealed despite the absence of
a f in a l judgment terminating the action.
The c o l l a t e r a l order doctr ine was ar t icu la ted
and applied in Cohen v. B en e f ic ia l Industr ia l Loan
Corp. , 337 U.S. 541 (1949). There, the Court, in
uphold ing an i n t e r l o c u t o r y appea l o f an order
denying a request by defendant for the posting o f
a bond by p l a i n t i f f , observed that the
order o f the D i s t r i c t Court did not make
any step toward f i n a l d ispos i t ion o f the
merits o f the case and w i l l not be mer
ged in f in a l judgment. When that time
comes, i t w i l l be too la te e f f e c t i v e l y
29
t o r e v i e w the p re s en t o r d e r , and the
r i gh ts conferred by the statu te i f i t
i s a p p l i c a b l e , w i l l have been l o s t ,
probably i r r epe rab ly We conclude that
the m at te r s embraced in the d e c i s i o n
appealed from are not o f such an i n t e r
locutory nature as to a f f e c t , or to be
a f f e c t ed by, dec is ion o f the mer its of
th is case.
Id . a t 546. A c c o r d i n g l y , i t h e ld the o rde r
appealable on the grounds that i t :
appears to f a l l in th a t smal l c l a s s
w h ich f i n a l l y d e t e r m i n e c l a i m s o f
r i g h t separable from, and c o l l a t e r a l to ,
r i g h t s a s s e r t e d in the a c t i o n , t o o
important to be denied rev iew and too
independent o f the cause i t s e l f to
r e q u i r e tha t a p p e l l a t e c o n s i d e r a t i o n
be d e f e r r e d u n t i l the whole case is
adjudicated.
I d . at 546.
The Cohen ru le requ ires that an order must
have three basic ch a ra c te r i s t i c s be fore i t can
qu a l i fy as a c o l l a t e r a l order. F i r s t , the order
must adverse ly a f f e c t a r i gh t that is separate
and independent from whatever r igh ts are asserted
in the act ion . Second, the order must cons t i tu te
a f i n a l determinat ion o f those r i gh ts . Third, the
order must be one whose review cannot be postponed
u n t i l f i n a l judgment because delayed rev iew w i l l
cause i r r e p a r a b l e harm by caus ing the r i g h t s
conferred to be i r r e t r i e v a b l y l o s t .
In a p p ly in g th ese c r i t e r i a to de term ine
a p p ea la b i l i t y , a court must adopt a "p r a c t i c a l
rather than a techn ica l construct ion" o f §1291.
- 30 -
Cohen v. B en e f ic ia l Industr ia l Loan Corp. , supra,
337 U.S. at 546. Such an approach w i l l neces
s i t a t e an evaluat ion o f the competing considera
tions o f "the inconvenience and costs o f piecemeal
review on the one hand and the danger o f denying
j u s t i c e by de lay on the o th e r . "12.̂ E isen v .
C a r l i s l e & Jacquelin, 417 U.S. 156, 171 (1974),
c i t i n g D ick inson v. Petroleum Conversion Corp.,
338 U.S. 507, 511 (1950).
C. App l icat ion o f the Cohen C r i t e r ia
This Court has defined a c o l l a t e r a l issue as
an issue which i s "a s epa ra te and independent
matter, anter ior to the merits and not enmeshed in
the factual and l ega l issues comprising p la in
t i f f ' s cause o f ac t ion . " Mercanti le Nat ional Bank
at Dallas v. Langdeau, 371 U.S. 555, 558 (1963).
The r i g h t to reach a l a w fu l s e t t l e m e n t o f a
T i t l e V I I employment d iscr im inat ion case pursuant
to the g u id e l in e s se t f o r t h by t h i s Court in
Weber, supra , i s s epa ra te and a n t e r i o r to the
m er i ts o f the c la ims in the T i t l e V I I a c t i o n .
10/ In Norman v. McKee, 431 F.2d 769 (9th Cir.
1970) c e r t , d e n i e d , 401 U.S. 912, the Ninth
C ircu it allowed an appeal from a d i s t r i c t court 's
r e j e c t io n o f a settlement agreement. The court
said that the settlement o f a class action under
Fed.R.Civ. P. 23 is appealable as a f in a l decis ion
- 31
The issues in a T i t l e V I I a c t i o n concern
issues such as the fo l low ing : (1 ) the existence
o f d iscr im inatory employment pract ices by defen
dant; (2 ) v i c t im iza t i o n o f p l a i n t i f f by defen
d a n t ' s d i s c r im in a t o r y p r a c t i c e s ; and (3 ) the
f a s h io n in g o f remedies that are commensurate
in scope with the defendant's v i o l a t i o n o f law.
See, e . g . , Teamsters v. United S ta tes , 431 U.S.
324 (1977).
By c o n t r a s t , as t h i s Court i n d i c a t e d in
U n i t e d S t e e l w o r k e r s o f America, AFL-CIO-CLC
v. Weber, supra, where i t upheld the lawfulness
o f a ra c e - c o n sc iou s a f f i r m a t i v e a c t i o n plan
r e s e r v in g 50% o f the openings in an in -p la n t
c ra f t tra in ing program for black employees, the
re levant issues in determining the lawfulness o f a
p r iva te , v o lu n ta r i ly negotiated a f f i rm a t iv e act ion
plan are (1 ) the extent to which the plan operates
to reduce or l e s s en , p r e - e x i s t i n g p a t te rn s o f
r ac ia l segregation and hierarchy by opening em
ployment opportunities to blacks in occupational
areas which have been t r a d i t i o n a l l y c lo s ed to
10/ (contd . )
under 28 U.S.C. §1291, because the " inconvenience
of piecemeal rev iew o f an order disapproving a
settlement is outweighed by the danger o f denying
ju s t ic e by d e la y . " 431 F.2d at 774.
- 32 -
areas which have been t r a d i t i o n a l l y c l o s ed to
them; (2 ) the degree to which the plan unneces
s a r i l y trammels the in teres ts o f white and other
workers or creates a bar to the advancement o f
t h e i r l e g i t i m a t e i n t e r e s t s ; (3 ) the temporary
nature o f the plan; (4 ) the extent to which the
plan is intended to e l iminate a manifest r a c ia l
imbalance and not to maintain r a c ia l balance; and
(5 ) the extent to which the s ignator ies to the
a f f i r m a t i v e a c t i o n agreement adopted the p lan
vo lu n ta r i l y . See United Steelworkers o f America,
AFL-CIO-CLC v . Weber , supra , 443 U.S. at 208.
M oreover , the Court in Weber, supra , e x
p l i c i t l y noted that the lawfulness o f a p r iva te ,
voluntary a f f i rm a t iv e action plan is separate and
apart from the issue o f a v i o l a t i o n o f T i t l e V I I .
I t said
" ( S ) i n c e the Kaiser-USWA p lan was
adopted v o lu n ta r i l y , we are not con
cerned with what T i t l e V I I requires or
with what a court might order to remedy
a past proved v i o l a t i o n of the A c t . "
I d . 443 U.S. at 200. Thus, the issue o f whether
p l a i n t i f f s and defendants can vo lun ta r i ly agree
upon a bona f i d e a f f i r m a t i v e a c t i o n p lan that
grants r a c i a l p r e f e r e n c e s is a n t e r i o r to and
not enmeshed in the issues o f a T i t l e V I I su i t .
Weber, supra, 443 U.S. at 200.
33
The C o u r t ' s d e c i s i o n in Weber, supra, not
only established that the issue o f the v a l i d i t y
of p r iva te a f f i rm a t iv e action plans f o r blacks is
separate and independent of lega l issues ar is ing
in a T i t l e V I I a c t i o n , but a l s o a f f i rm e d that
p r iva te employers, and unions have a r ight under
T i t l e V I I to enter vo lun tar i ly into such plans.
Moreover, the Court, in Weber, supra, protected
the exerc ise o f th is r igh t against opposing claims
o f th ird par t ies , such as employees who pre fer to
see the plans abandoned. 443 U.S. at 200-209.
Of course, the r igh t to in s t i tu t e an a f f i rm a
t i v e action plan, such as the one in Weber, only
ex is ts when the plan complies with the c r i t e r i a
set for th in Weber, supra, 443 U.S. at 208. As
the Court noted in Weber, the adoption o f race
conscious, a f f i rm a t iv e action plans
f a l l s w i th in the area o f d i s c r e t i o n
l e f t by T i t l e V I I to the pr ivate sector
vo lu n ta r i l y to adopt a f f i rm at ive act ion
plans designed to el iminate conspicuous
ra c ia l imbalance in t r a d i t i o n a l l y se
gregated job categor ies .
443 U.S. 209.
I t is undisputed, in the present act ion, that
" r e g u l a r job c l a s s i f i c a t i o n s o f truck d r i v e r ,
watchman, maintenance, storage, and b o i l e r oper
ator . . . were reserved fo r whites only" pr ior to
- 34 -
September 1963. 446 F.Supp. at 782. S im i la r ly , i t
i s undisputed th a t , p r i o r to September 1963,
there ex is ted separate unions f o r black and white
workers . F i n a l l y , i t i s undisputed tha t the
j u r i s d i c t i o n o f the union r ep r e se n t ing b lack
employees was, p r io r to September 1963, r e s t r i c t ed
to seasonal employees and that the ju r i s d i c t i o n
o f the union representing white employees was, at
that time, r e s t r i c t e d to nonseasonal, regular job
c l a s s i f i c a t i o n s .
Since the terms o f the proposed consent
decree were in a l l other respects in compliance
with the c r i t e r i a set fo r th in Weber, supra, p e t i
t ioners had a r i gh t to s e t t l e the action as pro
vided by the decis ion in Weber, supra. E i ther
Rule 41(c ) or Rule 68 o f Fed.R.Civ .P, could have
been u t i l i z e d by the part ies to f a c i l i t a t e s e t t
l in g th e i r grievances without in tervent ion o f the
„ 11/courts. —
11/ Fed. R. C iv . P . , 4 1 (a ) p ro v id e s th a t an
action may be vo lu n ta r i ly dismissed by the p la in
t i f f with the consent of a l l par t ies . S im i lar ly ,
Rule 68 provides that
"At any time more than 10 days b e f o r e the
t r i a l b eg in s , a p a r t y d e fen d in g a g a in s t a
c la im may s e rve upon the adverse p a r ty an
o f f e r to al low judgment to be taken against
him . . . to the e f f e c t sp ec i f i ed in his o f f e r .
I f w ith in 10 days a f t e r the serv ice of the
- 35
This Court has s ta t ed that courts should
accord deference to the processes of voluntary
c o n c i l i a t i o n and settlement. See, e . g . , Alexander
v. Gardner-Denver Co. , 415 U.S. 36, 44 (1974).
S i m i l a r l y , the lower courts have sanct ioned
settlement e f fo rt 's in c i v i l r ights act ions. As
the F i f t h C ircu i t said in United States v. A l l e g -
heny-Ludlum Industr ies , In c . , 517 F . 2d S26, 846
(5 th C i r . 1975) , c i t i n g Dent v . St. Lou is-San
Francisco Ry. Co. , 406 F.2d 399, 402 (5th Cir.
1969),
I t is quite apparent that the basic
philosopy o f these statutory provisions
is that voluntary compliance is p re fe r
able to court action and that e f f o r t s
should-be made to reso lve these employ
ment r igh ts by conc i la t ion both before
and a f t e r court action.
The exis tence of a r igh t to s e t t l e a T i t l e
V I I act ion in accordance with the standards set
for th in Weber, supra, d istinguishes th is case from
Coopers & Lybrand v. L iv esay , 437 U.S. 463, 467
(1978) and Gardner v. Westinghouse Broadcasting
11/ (contd. )
o f f e r the adverse party serves wr i t ten notice
that the o f f e r is accepted, e i ther party may
then f i l e the o f f e r and notice of acceptance
together with proof o f serv ice thereof and
thereupon the c lerk shall enter judgment."
- 36 -
Co., 437 U.S. 478 (1978). In Coopers & Lybrand
and Gardner, th is Court held that an order re fus
ing c e r t i f i c a t i o n o f a class was not appealable as
a c o l l a t e r a l order or as an in ter locutory order
denying an injunction.
The p l a i n t i f f s there had no substantive r igh t
to have the action c e r t i f i e d as a class act ion
under Rule 23. Nor did denial o f th e i r claim for
class c e r t i f i c a t i o n a f f e c t any substantive r ights
o f th e i rs . By contrast , p e t i t i on e rs here have a
substantive r igh t which is based upon the Court 's
decis ion in Weber, supra, and which i s supported
by Congressional p o l ic y promoting settlements of
T i t l e VI I actions.
Although F ed e ra l Rule o f C i v i l P rocedure
23 (e ) , to be sure, prevents par t ies from having an
unencumbered r igh t to s e t t l e class actions, Rule
23(e) does not negate the p a r t i e s ' l e ga l r i gh t to
s e t t l e the case in accordance with standards set
forth in Weber, supra.
The p o l i c y behind Rule 2 3 (e ) stems from a
need to p r o t e c t the i n t e r e s t s o f those c la s s
members who are absent during settlement negot ia
t i o n s . The need to p r o t e c t the absent c la s s
members, however is minimal in a case, such as
here, where the only r i gh t o f p ro tec t ion advanced
in the ir behalf is one which th is court re jec ted
- 37
in United Steelworkers v. Weber, supra. A d i s
t r i c t court cannot, under the guise o f e f f e c tu a t
ing Rule 23 (e ) , c o l l a t e r a l l y attack the holding
and ra t iona le of the Court 's dec is ion in Weber.
Inso far as the r ights o f th ird part ies seek
ing p ro tec t ion under Rule 23(a) do not d i f f e r from
those asserted by p l a i n t i f f Weber in United S t e e l
workers o f America v. Weber, supra, Rule 23(a ) , as
a m atte r o f law, cannot be used to d e f e a t the
r igh ts of p r iva te part ies to in s t i tu t e an a f f i rm a
t i v e action plan which conforms to the requ ire
ments o f the Court se t f o r t h in Un ited S t e e l
workers o f America v. Weber, supra. Such a rule
of law is a necessary requirement i f the proposed
consent order is one which, l i k e here, does not r e
quire the discharge o f white workers, does not
unnecessari ly trammel upon the in teres t o f white
employees, is vo lun ta r i ly adopted, is designed to
el iminate t ra d i t i o n a l patterns of r a c ia l segrega
t ion and hierarchy, is temporary, is created to
el iminate a manifest r a c ia l balance and not to
maintain a r a c ia l balance, and does not require a
percentage o f black employees greater than that o f
blacks in the re levant labor force.
P e t i t i o n e r s ' r igh ts under Weber, supra, were
thus denied as a resu l t of the d i s t r i c t court 's
r e j e c t i o n o f the proposed decree on the basis of
38
the inclusion of an a f f i rm a t iv e action plan with in
the decree. By r e j e c t in g the decree, the d i s t r i c t
Court therefore made a f in a l determination o f the
p a r t i e s ' c o l l a t e r a l r igh t to s e t t l e the act ion in
accordance with the decis ion in Weber.
This aspect o f the case d i s t in g u i s h e s i t
from Seiga l v. Merr ick, 590 F.2d 35 (2d Cir. 1978),
which was r e l i e d upon by the Court o f Appeals
below. In S e ig a l , the Second C ircu i t held that
a d i s t r i c t cour t 's disapproval of a settlement
agreement in a stockholder 's d e r i va t i v e act ion
was not appealable as a c o l l a t e r a l order.
Objections were raised in Siegal v, Merr ick ,
supra , to the proposed s e t t l em en t because o f
disagreements concerning the date on which the
value of an option was measured and concerning the
c r i t e r i a by which the value of the option should
be measured. These objec t ions , however, were not,
as here, contrary to l e ga l pr inc ip les enunciated
by t h i s Court. Rather , they were based upon
concepts o f f a i r n e s s and e q u i t y which had not
p r e v i o u s l y been d e f i n i t i v e l y r e s o l v e d by th i s
Court. To th is extent, there fore , the facts of
Siegal v. Merr ick, supra, are d is t inguishable from
the facts of the present case.
The duty o f the d i s t r i c t court in S iega l v,
Merrick, supra, was to determine, pursuant to Rule
- 39
23 whether the proposed settlement o f the stock
ho lder 's d e r i v a t i v e act ion was, in l i g h t o f the
object ions made to i t , f a i r and equitable . A l
though the d i s t r i c t court below also had a duty
to determine i f the terms o f the proposed consent
decree were f a i r and e q u i t a b l e , i t a l s o had
imposed upon i t a duty to insure that i t s de ter
m inat ion o f what is f a i r and e q u i t a b l e was in
accordance with the purposes o f T i t l e V I I and with
appl icab le l e ga l pr inc ip les determined by this
Court. This Court 's dec is ion in Weber, supra,
demonstrates that the d i s t r i c t court below f a i l e d
to s a t i s f y th is ob l iga t ion .
These c o n s id e r a t i o n s show that the Second
C i r c u i t ' s dec is ion in S iega l v. Merr ick, supra, is
inapplicable to the facts o f th is case. The op
posing decis ion of the Ninth C ircu it in Norman v .
McKee, supra, in which the court held that orders
refusing proposed settlements are appealable as
c o l l a t e r a l orders, states the be t te r ru le , espe
c i a l l y in cases such as here where the basis for
the order refusing the consent decree is based
upon a v i o l a t i o n o f important, substantive in
terests which the Congress has sought to protect
and maintain.
The second prong of the Cohen tes t requires
that an order const i tutes a f in a l determination o f
- 40
the c o l l a t e r a l r igh ts involved before an appeal
under §1291 is al lowed. The Court, however, has
recognized that the determination o f when a r igh t
has been f i n a l l y decided and is thereby r ip e fo r
appeal under the c o l l a t e r a l order doctr ine , i s not
an exact science; In Dick inson v. Petroleum Con-
vers ion Corp. , supra, 338 U.S. at 511, Mr. Justice
Jackson emphasized that there was no set formula
for determining the f i n a l i t y o f a decree. The only
r e l i a b l e guide which the Court has found is the
avoidance o f any r i g i d ins is tence on te chn ica l i ty
which c o n f l i c t s with the purposes o f §1291 and the
c o l l a t e r a l order doctr ine. This approach requires
a " p r a c t i c a l " inquiry to determine i f the nature
and the e f f e c t o f the d i s t r i c t cour t 's denia l o f
the the settlement decree i s such that review o f
the order cannot be postponed u n t i l the rendit ion
o f a f in a l judgment in the action See Eisen v .
C a r l i s l e & Jacquelin , 417 U.S. 156, 170 (1974);
G i l l e sp ie v. U.S. S tee l Corp. , 379 U.S. 148, 152
(1964).
One fac tor which bears on the f i n a l i t y o f a
c o l l a t e r a l order is whether the issue requir ing
review w i l l become moot i f the review i s delayed.
Thus, for instance, the d i s t r i c t court 's order in
Gardner v. Westinghouse C o . , 437 U.S. 478, (1978)
- 41
denying class c e r t i f i c a t i o n , was held not appeal-
able p rec is e ly because e f f e c t i v e r e l i e f could be
provided even a f t e r f i n a l judgment on the merits
o f the act ion, i f the p r io r denial o f r e l i e f was
shown to be in error . Id. 437 U.S. at 480. On
the other hand, in Eisen v. C a r l i s l e & Jacquel in ,
supra, the Court permitted an appeal o f a d i s t r i c t
court 's order which imposed 90% o f the cost o f
g iv ing no t ice to class members in a secur i t ies
fraud case upon the defendant. Disallowance of
the appeal would have made moot the c o l l a t e r a l
claim since i t was the order which permitted the
p l a i n t i f f s ' su it to proceed as a class action.
Id. 417 U.S. at 172.
In the p resen t case , the d i s t r i c t c o u r t ' s
order d ep r iv ed the p a r t i e s o f t h e i r r i g h t to
remedy the e f f e c t s o f p r io r segregated job prac
t ices by invoking th e i r r igh ts under Weber, supra,
and T i t l e V I I to s e t t l e the action vo lun tar i ly .
The teno r o f the d i s t r i c t c o u r t ' s op in ion
below tended to ind icate that a f in a l determina
t ion had been made. The opinion stated that the
Court would enter a consent decree only when "the
part ies have s e t t l e d the i r d i f fe rences without a
v i o l a t io n o f the law and without v i o l a t in g the
- 42
r igh t o f any c lass member. 446 F. Supp. at 791.
At another port ion o f the opinion, the d i s t r i c t
court claimed that " P r e f e r e n t i a l treatment on the
basis o f race - any race - v i o la t e s the Constitu
t i o n , " 446 F. Supp. at 788. I t also said that
"the Court perce ives no such v e s t i g e s " o f d i s
cr im inat ion ." 446 F. Supp. at 790.
These f indings and conclusions would, i f l e f t
s tand ing , u t t e r l y doom any p o s s i b i l i t y o f a
settlement. The p a r t i e s ' w i l l ingness to s e t t l e
th e i r d i f fe rences is dependent, at any time, upon
the prospects fo r ul t imate v i c to r y then as w e l l as
the probable costs in money, resources, and time,
o f seeking such a v i c to r y .
The d i s t r i c t judge , by s t a t i n g tha t he
perceived no evidence o f d iscr im inat ion by the
defendants, created an incent ive f o r defendants to
go to t r i a l to win the case. Once t r i a l , however,
had begun, th e re would be no way in which the
p a r t i e s , d e s p i t e whatever might be done upon
review o f a f i n a l judgment, could r e t r i e v e the
advantages which a settlement would have brought.
- 43
Moreover, the advantages o f a par t icu lar s e t t l e
ment which was p robab le at one time would be
fo rever l o s t . See Norman v. McKee, supra. Thus,
the d i s t r i c t c o u r t ' s o rd e r f i n a l l y determined
p e t i t i o n e r s ' c o l l a t e r a l r igh ts .
The th ird prong of the Cohen test requires
that the in ter locutory order must have an " i r
reparable" e f f e c t . This r e f e rs to the nature and
the extent o f the in jury , such as whether i t is
destruct ive , substant ia l, continuing or irremedi-
a l . See, e . g . , Osborne v. Missouri P.R. Co . , 147
U.S. 248, 258 (1893); Brown v. Chote, 411 U.S.
452, 456 (1973). Also, however, as the Court has
noted, "inadequacy o f ava i lab le remedies goes . .
. to the exis tence o f ir reparab le in ju ry . " United
States v. American Friends Service Committee, 419
U.S. 7, 11 (1974). For the reasons previously
mentioned, however , w i th r esp e c t to why the
d i s t r i c t cour t 's order in th is case was a f in a l
determination o f p e t i t i o n e r s ' c o l l a t e r a l r igh ts ,
the order caused p e t i t i o n e r s ' ir reparab le in jury .
I t was there fore appealable, pursuant to §1291, as
a c o l l a t e r a l order.
- 44
I I I
THE DISTRICT COURT'S ORDER BELOW IS
APPEALABLE UNDER 28 U.S.C. §1292 (a ) ( l )
AS AN INTERLOCUTORY ORDER DENYING AN
INJUNCTION
The second issue ra ised in th is case concerns
the appea lab i l i t y , under 28 U.S.C. § 1292 ( a ) ( I ) , o f
a d i s t r i c t court 's order which denied, as a matter
o f law, a j o in t motion by the part ies to s e t t l e
the a c t i o n in accordance w i th the terms o f a
proposed consent decree which granted a permanent
injunct ion.
A. The Applicable Law
Section 1292(a )(1 ) o f T i t l e 28 o f the United
States Code provides for the appeal o f ce r ta in
1 2 /
in ter locutory orders o f the d i s t r i c t courts.-—
12/ The appeal o f in ter locu tory orders o f federa l
d i s t r i c t courts to the courts of appeals was f i r s t
p ro v ided as a r e s u l t o f the enactment o f the
Evarts Act of 1891, 26 Stat. 826. As o r i g in a l l y
enacted, the Evarts Act authorized an in te r locu
tory appeal only "where . . . an in junct ion shal l
be granted or continued." In a subsequent amend
ment to the Act in 1895, the ju r i s d i c t i o n of the
court o f appeals was extended to encompass appeals
from orders of d i s t r i c t courts refusing requests
for injunctions. 28 Stat. 666. For a review o f the
h is to ry o f in ter locutory appeals in the federa l
curts, see Stewart-Warner Corp, v. Westinghouse
Elec. Corp. , 325 F.2d 822, 829-230 (2d Cir. 1963)
(F r i en d ly , J . , d issen t ing ) , c e r t i o r a r i denied,
376 U.S. 11.
- 45
The s tatute grants ju r i s d i c t i o n to the United States
Courts o f Appeals over appeals from:
( i )n t e r l o c u to r y orders o f the d is
t r i c t courts of the United States, or o f
the judges thereo f , granting continuing,
modifying, refusing or d isso lv ing in
junct ions, or re fus ing to d isso lve or
modify injunctions except where a d i rec t
review may be had in the Supreme Court.
Since the enactment of 1292(a ) (1 ) , the courts
have been plagued with problems concerning the
13 /s ta tu te 's proper in te rp re ta t ion and app l ica t ion .—
The d i f f i c u l t i e s in in terpre t ing and applying the
statute have been compounded because o f the fact
that " (n )o discussion o f the underlying reasons for
13/ See, e . g . , Enelow v. New York L i f e I ns .
Co. , 293 U.S. 379 (1935); Ette lson v~. Metropolitan
L i f e In s . Co. , 317 U.S. 188 (1942); Morgantown v.
Royal In s . Co. , 337 U.S. 254 (1949); Switzerland
Cheese A s s o c i a t i o n , Inc, v. Horne's Market In c . ,
385 U. ST 2 3 (19^6). Generally, see Note, Appeal-
a b i l i t y in the Federal Courts, 75 Harv. L. Rev.
351 (1952 ) ; Wright M i l l e r , F ed e ra l P r a c t i c e
and Procedure, §§3920, 3921-3924.
- 46
m od i fy in g the r u l e o f f i n a l i t y appears in the
14/
l e g i s l a t i v e h is to ry " o f 51292 (a ) (1 ) .— Baltimore
Contractors v. Bodinger, 348 U.S. 176, 181 (1955).
Th is Court has found that the purposes o f
§ 1292(a)(1) can best be achieved i f the appeal-
a b i l i t y o f an order is determined in accordance
with the nature and the e f f e c t o f the order,
see Gardner
14/ Despite the lack o f c lea r l e g i s l a t i v e h is to ry ,
i t has been poss ib le to conclude that the reasons
for amending the statute spring from a developing
need to permit l i t i g a n t s to e f f e c tu a l l y challenge
in ter locutory orders o f serious, perhaps i r repa r
ab le consequence. B a l t im ore C on t ra c to rs v.
Bodinger, supra, 348 U.S. at 181.
In Maxwell v. Enterprise Wall Paper Co. , 131
F . 2d 400j 402 (3rd C i r . 1942), the Third C ircu it
found, with respect to 51292(a)(1) that:
The manifest purpose o f the statute is
t o enab le a l i t i g a n t to seek prompt
rev iew in an appellate court from an
order or decree which in most instances
is e f f e c t i v e upon i t s rendit ion and is
d r a s t i c and f a r r ea ch ing in e f f e c t .
See a l s o Morgenstern Chemical Co. v . Scher ing
Corp. , 181 F .2d 160 (3rd Cir. 1950).
15/ In Stewart-Warner Corp. v. Westinghouse
E le c t r i c Corp. , supra, the major ity o f the Court
held that a dismissal o f an in tervenor 's claims
for in junct ive r e l i e f a l leged in a counterclaim
- 47
v. Westinghouse Broadcasting Co. , supra, 437 U.S.
at 480-481; Cohen v. B en e f ic ia l Industr ia l Loan
Corp. , supra, as measured by the impact i t has
upon the r igh ts o f the par t ies .
B. C r i t e r i a Governing The Appl icat ion o fTTT92TaTTi)
1. General
In a s e r i e s o f d e c i s i o n s , the Court has
narrowed the class of orders which are appealable
under §1 29 2 (a ) ( l ) . The Court's deci sions have
al lowed the appeal o f an order pursuant to §1292
( a ) ( 1 ) only when the order s a t i s f i e d f i v e basic
c r i t e r i a . F i r s t , the order must be in ter locutory .
S ee , Ba lt imore Contractors v. Bodinger, supra,
348 U.S. at 181; Switzerland Cheese Association v .
E, Horne 's Market, I n c . , 385 U.S. 23 (1966 ) .
Second, the o rde r must g ran t , deny, con t inue ,
modify or refuse to d isso lve or modify, an injunc
t ion. See, 28 U.S.C. §1292 (a ) ( l ) .
15/ (contd)
fo r patent infringement and unfa ir competit ion was
appealable under 28 U.S.C. §1292 (a ) ( l ) even i f the
basis fo r dismissal rested upon a conclusion that
the counterclaim improperly enlarged the action.
Judge Fr iendly , d issenting, charged that the order
was not a p p ea la b le . As he saw i t " ( a p p e a l -
a b i l i t y must turn on the nature of the order . " 325
F . 2d at 829.
- 48
Third, i t must determine more than that the
case should proceed to t r i a l ; s e e , Switzerland
Cheese A s s o c i a t i o n v . E. H o rn e ’ s Market , In c . ,
supra, 385 U.S. at 25. Fourth, i t must s e t t l e , or
t e n t a t i v e l y decide, an aspect o f the merits o f a
pa r ty ' s claim fo r in ju nc t iv e r e l i e f . See, Gardner
v. Westinghouse Broadcasting Co. , supra; 437 U.S.
a t 480-482. F i f t h , i t must cause a t h r e a t o f
serious, i r reparab le in jury which can be a l l e v i a t
ed on ly through a l lo w an ce o f an i n t e r l o c u t o r y
appeal. Gardner v. Westinghouse Broadcasting Co. ,
supra, 348 U.S. at 181.
2. In te r lo cu to ry Order
In te r lo cu to ry orders o f a d i s t r i c t court are
o rd e rs r en dered b e f o r e f i n a l judgment which
16/
advance a case towards f i n a l judgment.--- See,
16/ Although th is Court implied in i t s d ec is ion in
Switzer land Cheese Assoc ia t ion , Inc, v. E. Horne's
Market, Inc, supra, that in te r lo cu to ry orders are
orders which "touch on the merits o f the c la im ," 385
U.S. at 25, subsequent decis ions o f the Court as w e l l
as general p r in c ip le s , seem to ind ica te that the
in ter locu to ry nature o f an order i s separate from
the issue o f whether the order touches on the merits
o f the claim. See, e . g . , Gardner v. Westinghouse
Broadcasting Co. A lso see Wright & M i l l e r , Federal
P ract ice and Procedure, §3924, pp. 72-73 (1977).
- 49
e . g . , Baltimore v. Bodinger, supra, 348 U.S. at
183-184. Such in ter locutory orders however, do
not become appealable under the statute merely
because they are "important, and may determine the
outcome o f the l i t i g a t i o n . "Morgantown v. Royal
Ins, Corp. , . 337 U.S. 254, 258 (1949).
3. In junct ive R e l i e f
Although §1292 (a ) ( l ) i s appl icable only to
orders invo lv ing in junct ive r e l i e f , see Wright &
M i l l e r , F ed e ra l P r a c t i c e and P ro c ed u re , §3922
(1977), th is Court has not determined what const i
tu tes an in ju n c t i o n f o r the purposes o f §1292
( a ) ( 1 ) . S ee , e . g . , B a l t im ore C on t rac to rs v .
Bodinger, supra, where the issue was " (w)hether in
an act ion for accounting an in ter locutory order
denying a s ta y under S e c t i o n 3 o f the United
States A rb i t ra t ion Act should be regarded as a
d e n ia l o f an in ju n c t i o n from which an appeal
l i e s . " 348 U.S. at 177. See also, Shanferoke Coal
& Supply Corp. v. Westchester Service Corp. , 293
U.S. 449 (1935).
The Court has held, to be sure, that denials
o f r eq u es ts f o r p r e l im in a r y in ju n c t i o n s are
covered by the statute . Baltimore Contractors v.
Bod inger , supra, 348 U.S. at 182. See a l s o ,
50 -
George v . V ic to r Talking Machine Co. , 293 U. S.
377 (1934). Uncerta in ty , however, e x i s t s over the
extent to which 11292(a )(1 ) i s app l icab le to r e
quests f o r a permanent in junct ion .
For example, in Switzerland Cheese Assoc ia
t i o n , In c , v . E. H o rne 's Market , I n c . , supra,
where i t was held that the den ia l o f p l a i n t i f f s '
motion f o r summary judgment granting a permanent
in junct ion was not an appealable order under §1292
( a ) ( 1 ) — ■ , the Court said:
I t i s earnest ly argued, however, that
although th is order denied a. permanent
in junct ion , i t was nonetheless " i n t e r
locu tory " w i th in the meaning o f §1292
( a ) ( 1 ) because the motion fo r summary
judgment did s e rv ic e f o r a motion fo r
a pre l iminary in junct ion . . . and that
t h e r e f o r e " i n t e r l o c u t o r y " must a ls o
include a denia l o f a permanent
in junction.
We take the other view not because
" in t e r l o cu to r y " or pre l iminary may not
at times embrace denia ls o f permanent
in junct ions , but f o r the reason that the
denia l o f a motion f o r summary judgment
because o f u n re s o l v e d is su es o f f a c t
17/ In dea l ing with the somewhat analogous pro
v i s i o n s o f 28 U .S.C . §1253, p r o v i d in g th a t :
Except as otherwise provided by law,
any party may appeal to the Supreme Court
51
does not s e t t l e o r even t e n t a t i v e l y
decide anything about the merits o f the
claim.
385 U.S. at 24-25. Thus, requests fo r permanent
in junctions are not per se beyond the scope o f
app l ica t ion o f § 1292 ( a ) ( 1 ) .
Indeed , no such per se e x c lu s i o n cou ld be
j u s t i f i e d under the statute fo r the simple reason
that an " ( a )p p e a l under §1 29 2 (a ) ( l ) depends on the
17/ (contd )
from an order granting or denying, a f t e r
no t ice and hear ing, an in ter locu to ry or
permanent in junct ion in any c i v i l act ion,
su it or proceeding required by any Act of
Congress to be heard and determined by a
d i s t r i c t court o f three judges,
th is Court concluded that " the only in te r locu to ry
orders that we have power to review under that
p rov is ion are orders granting or denying p r e l im i -
nary in junc t ions " . Goldste in v. Cox, 396 U.S. 471
(1970).
The Court acknowledged, in Goldste in v. Cox,
su p ra , tha t " ( o ) n i t s f a c e , t h i s language is
subject to the construction that in te r locu to ry
orders denying permanent as w e l l as pre l iminary
in junctions can be appealed to th is Court . " 396
U.S. at 477. However, i t nonetheless "conclude(d )
that our ju r i s d i c t i o n over in te r locu to ry orders
under §1253 i s c on f in ed to o rd e rs g r a n t in g or
denying a pre l im inary in ju n c t i o n . " I d . at 478.
52
in te r locu tory nature o f the order involved, rather
than the in ter locu tory nature o f the in junct ive
r e l i e f requested ." Wright & M i l l e r , Federal Prac
t i c e and Procedures, supra, §§3924, p. 67.
Thus appeals under §1292 (a ) ( l ) can be made
from in ter locutory orders granting a permanent in
junction. See W.L, Gore & Associates, Inc, v.
C a r l i s l e Corp . , 529 F.2d 614 (3rd C i r . 1976).
Indeed, th is Court, in Smith v, Vulcan I ron Works,
165 U.S. 518 (1897), permitted an appeal from an
17/ (contd)
Despite the f a c i l e s im i la r i t y between §1253
and §1292 (a ) ( l ) there are important d i f fe rences
between them. F i r s t , §1253 e x p l i c i t l y r e f e r s to
permanent injunct ions. Moreover, i t e x p l i c i t l y
mentions both permanent injunct ions and in t e r lo cu
tory injunctions, thereby drawing a d is t in c t io n
between them. Second, §1253 expressly r e f e rs to
i n t e r l o c u t o r y in ju n c t ions whereas § 1 2 9 2 ( a ) ( l )
r e f e r s to i n t e r l o c u t o r y o rde rs g ra n t in g , con
tinuing, modifying, refusing, or d isso lv ing in
ju n c t i o n s . Thus § 1 2 9 2 ( a ) ( l ) i s broader w i th
respect to in ter locu tory orders. Moreover , i t does
not exclude in ter locutory orders re fus ing perma
nent injunct ions whereas §1253 does not include
in ter locu tory orders refusing permanent injunc
tions. Thus, the decis ion in Goldstein v . Cox
is inappl icable to the instant case.
- 53
in te r locu tory order granting a permanent injunc
t ion against patent infringement.
The i ssue in Smith v , Vulcan I ron Works,
supra , one o f the e a r l y cases cons t ru ing and
applying the Evarts Act, arose as fo l lows: The
d i s t r i c t court rendered an order which permanently
enjoined defendant from in f r ing ing the p l a i n t i f f ' s
patent. Final judgment, however, was reserved
pending the outcome o f the d i s t r i c t court 's r e f e r
ence o f the case to a master for an accounting.
Defendant f i l e d an appeal from the order granting
the permanent injunct ion. This Court allowed the
appeal.
The opinion of the Court reviewed the h is to ry
o f appeals of in ter locutory orders granting in
junctions in the English Court o f Chancery, the
House o f Lords , and in the Un ited S t a t e s . I t
stated:
But under the j u d i c i a l system o f the
United States, from the beginning un t i l
the passage o f the Act o f 1891, estab
l i s h i n g c i r c u i t courts o f appea ls ,
appeals from the c i r c u i t courts o f the
United States in equity or in admiralty,
l i k e w r i t s o f e r r o r s at common law,
would l i e only a f t e r f in a l judgment or
d e c r e e ; and an orde r or decree in a
patent cause, whether upon preliminary
- 54 -
a p p l i c a t i o n or upon f i n a l h e a r in g ,
grant ing an in junct ion and r e f e r r in g the
cause to a master f o r an account o f
p r o f i t s and damages, was in te r locu to ry
only, and not f i n a l , and there fore not
rev iewable on appeal be fo re the f in a l
decree in the cause.
165 U.S. at 524. I t concluded, however, that the
American po l i c y with respect to f i n a l i t y had been
a l te red by the passage o f the Evarts Act o f 1891.
In p a r t i cu la r , the court observed that §7 o f the
Evarts Act had, at that time, e x p l i c i t y provided
that "where upon a hear ing in equity . . . an in
junct ion sha l l be granted or continued by an in
te r locu to ry order or decree . . . an appeal may be
taken from such i n t e r l o c u t o r y o rd e r or d ec re e
granting or continuing such in ju n c t i o n . " Id . at
524. Thus, the Court concluded that the Evarts
Act contemplated the use o f in te r lo cu to ry orders
to grant permanent in junc t ive r e l i e f . According ly ,
i t al lowed the appeal o f an in ter locu to ry order
granting a permanent in junct ion.
The 1895 amendment to the Evarts Act provided
f o r an appeal o f a denia l o f an in junct ion in a l l
cases in which an appeal would be permitted f o r
the g r a n t in g o f an i n j u n c t i o n . Thus, in some
instances, i t is poss ib le , under the holding in
- 55
Smith v . Vulcan Iron Works, supra, to appeal an
in ter locu tory order granting a permanent injunc
t ion . Whether the appeal w i l l be al lowed depends,
of course, upon the extent to which the order is
i n t e r l o c u t o r y and o p e r a t e s , in p r a c t i c e , to
p re c lu de the g ra n t in g o f i n ju n c t i v e r e l i e f .
4. Character is t ics o f An Injunct ion
a. More Than a Mere P r e - t r i a l Order
In order to const i tu te an order granting or
denying in junct ive r e l i e f , an in ter locutory order
must, under 51292(a )(1 ), be more than a " p r e t r i a l
order that decides only one thing — that the case
should go to t r i a l " , Switzerland Cheese Associa-
t ion v. E. Horne's Market, supra, 385 U.S. at 25,
or an order which is only "a step in con tro l l ing
the l i t i g a t i o n before the t r i a l cour t . " Baltimore
Contractors v. Bodinger, supra, 348 U.S. at 185.
I f these condit ions, are not met, then i t is un
l i k e l y tha t there w i l l be a need f o r c r i t i c a l
examination and re-examination of the issue by the
cumbersome method o f appeal p r io r to f in a l adjudi
cation o f the action. See, Peter Pan Fabr ics ,
Inc. v. Dixon T e x t i l e Corp. , 280 F .2d 805 (2d Cir.
1960)(Judge Clark, d issen t ing ) .
- 56
b . Determining the merits
Orders addressed to a party which "touch on
the merits o f the c la im" o f the par ty , are less
l i k e l y , under § 1 2 9 2 (a ) ( l ) , to be deemed mere p re
t r i a l orders. Switzerland Cheese Assoc ia t ion v .
E. H orne 's M a rk e t , su p ra , 385 U.S. at 25. In
general , i t can be presumed that in te r locu to ry
orders which " a f f e c t the merits o f p e t i t i o n e r ' s
own c la im , " Gardner v. Westinghouse Broadcasting
Co., supra, 437 U.S. at 480-481 or which have a
" d i r e c t or i r reparab le impact on the merits of
the c o n t r o v e r s y " , _Id_. at 482, w i l l f a l l under
§ 1 2 9 2 (a ) ( l ) , e s p e c ia l l y i f they a lso "pass on the
l e ga l s u f f i c i e n cy o f any claims f o r in junct ive
r e l i e f . " I d . at 481.
Thus, a major fa c to r e f f e c t i n g a p p ea lab i l i t y
under § 1 2 9 2 (a ) ( l ) i s the extent to which the order
being appealed has the e f f e c t o f determining the
l e g a l s u f f i c i e n c y o f a c la im f o r i n j u n c t i v e
r e l i e f . Put another way, the c r i t i c a l i s su e
becomes whether the order denies appellant "the
p r o t e c t i o n o f the i n ju n c t i o n p r a y e d . " Genera l
E l e c t r i c Co. v. Marvel Rare Metals C o . , 287 U.S,
430, 433 (1932).
- 57
Many in t e r lo cu to ry orders in vo lv in g a per
manent in junct ion w i l l not meet th is c r i t e r i a .
For example, an order denying a motion f o r summary
judgment to g ran t a permanent in ju n c t i o n w i l l
not g en e ra l l y s a t i s f y the c r i t e r i a , s ee , e . g . ,
S w i t z e r l a n d Cheese A s s o c i a t i o n v . E. H orne 's
Market, In c . , supra, since i t w i l l not in genera l ,
preclude the f i l i n g o f a subsequent motion fo r a
, . . . . . 18/
prel iminary in junct ion .— See, Chappell & Co. v.
18/ The e a r l i e s t ra t ion a le f o r d isa l low ing an
appeal o f an order denying a motion fo r summary
judgment granting an in junct ion was set fo r th by
Judge Hastie in Morgenstern Chemical Co. Inc, v .
Sch er ing C orp . , 181 F .2d 160 (3 rd C i r . 1950) .
The act ion there was brought by p l a i n t i f f to
en jo in defendant's continued use o f a trade-mark.
The d i s t r i c t court denied p l a i n t i f f ' s motion f o r a
summary judgment granting a permanent in junction.
P l a i n t i f f appealed from the in ter locu to ry order.
In r e j e c t i n g the appea l , Judge H a s t i e s t a t e d
that
. . . so f a r as we have been ab le to
d e te rm in e , appea ls from r e f u s a l s o f
in junctions have been in cases where the
merits o f the app l ica t ions fo r injunc
t i v e r e l i e f had been passed upon in the
t r i a l courts . . . .
- 58
Frankel , supra, 367 F .2d 197, 203 (2d. C i r . 1966).
To the extent that an order denying a motion
f o r summary judgment is only a den ia l o f a request
f o r ac ce le ra t ion o f the t r i a l process and is not a
r e j e c t i o n o f the l e g a l s u f f i c i e n cy o f the injunc
t i v e claim, then the order i s not a r e fusa l o f an
in junct ion and i t is consequently not appealable under
§1292 ( a ) ( 1 ) .
18/ (con td . )
The den ia l o f summary judgment in the
court below has no comparable s i g n i f i
cance. The court has not reached, much
less decided, the merits o f p l a i n t i f f ' s
claim fo r in junct ion . . . . Nothing has
occurred in or as a resu l t o f the den ia l
o f the motion which precludes p l a i n t i f f
from seeking a temporary in junct ion in
accordance with es tab l ished procedure i f
he be l i e v e s immediate in junct ive r e l i e f
is necessary and proper. P l a i n t i f f is
merely re lega ted to the normal procedure
o f t r i a l which would have been the only
procedure be fore the adoption o f Rule 56
. . . . In c h a r a c t e r and im p a c t the
cou r t 's ac t ion was not g r e a t l y d i f f e r e n t
from an order continuing a cause already
calendered f o r t r i a l u n t i l some future
date in order that add i t iona l witnesses
may be ca l l ed .
181 F .2d at 162.
59
This analys is is consis tent with the dec is ion
o f the Court in Switzerland Cheese A ssoc ia t io n ,
Inc, v . E. Horne's Market, I n c . , supra, s ince the
denia l there o f the motion f o r summary judgment
granting a permanent in junct ion was based upon the
ground that there ex is t ed genuine issues o f fac ts
which were in dispute. Thus, the denia l o f the
motion was a r e j e c t i o n o f a request for a c c e l e r
a t ion o f the adjudicatory process. I t did not
decide anything about the meri ts o f the claim for
in ju nc t iv e r e l i e f . The question in every case, i t
seems, i s the e f f e c t o f the d e n ia l and the
grounds f o r i t . See, e . g . , Safe F l i gh t Instrument
Corp. v. McDonnel-Douglas Corp. , 482 F .2d 1086,
1093 (9th Cir . 1973), c e r t i o r a r i denied 414 U.S.
1113.
More s p e c i f i c a l l y , the re levant d i s t in c t i o n
appears to be between an order whose purpose, or
e f f e c t , is to deny in ju nc t iv e r e l i e f and an order
whose purpose, or e f f e c t , w i l l not p re c lu d e a
19/
subsequent grant o f s im i la r in junc t ive r e l i e f —
19/ This is perhaps the d i s t in c t i o n which th is
Court sought to invoke in Gardner v. Westinghouse
Broadcasting Co. , supra, 437 U.S. at 481, n. 7,
when i t quoted from Judge F r i en d ly ' s d issent ing
- 60 -
The grounds g iven in support o f the order can, in
p a r t , thus be used to de te rm ine i f the o rde r
e f f e c t i v e l y bars, as a p ra c t i ca l matter, a subse
quent claim on the merits f o r s im i la r in junct ive
19/ (contd. )
opinion in Stewart-Warner Corp. v. Westinghouse
E l e c t r i c Corp. , 325 F.2d 822, 829 (2d' C ir . 1963).
Judge F r iend ly , in opposing the cou r t 's allowance
o f an appeal from an order which had dismissed
in t e rvenor 's counterclaims f o r in junc t ive r e l i e f
on the ground that they would unduly enlarge the
scope of the act ion, stated that
" A p p e a l a b i l i t y must turn on the
nature o f the order . . . The d i s t in c t i o n
. . . was between a ' r e fu s a l ' based on an
a l l e g ed ly erroneous conclusion that the
law does not p e rm it the c la im f o r an
in junct ion to be heard in the act ion . . .
and one based on a l l e ged abuse o f a d i s
cre t ionary power over the scope o f the
a c t i o n . Where the o rd e r i s o f the
former type, the danger o f serious harm
from the cou r t ' s erroneous b e l i e f in the
e x i s t e n c e o f a l e g a l b a r r i e r to i t s
en te r ta in ing a claim fo r an in junct ion
has been thought to outweigh the general
u n des i rab i l i t y o f in te r lo cu to ry appeals.
The very fa c t that the second type o f
order hinges on the t r i a l c ou r t ' s d i s
c r e t i o n i s i t s e l f an i n d i c a t i o n that
such orders , r e l a t in g pr imar i ly to con
venience in l i t i g a t i o n , carry a l e sse r
threat o f harm.
- 61
r e l i e f . I f such r e l i e f is barred and the order
also causes i r reparab le in jury , then i t is appeal-
able under 11292(a)(1 ).
5. I rreparab le Injury
In Sampson v. Murray, 416 U.S. 61 (1974) the
Court r e c o g n i z e d tha t " th e p o s s i b i l i t y that
adequate compensatory or other co r re c t i v e r e l i e f
w i l l be a v a i l a b l e at a l a t e r da te , . . . weighs
h e a v i l y a g a in s t a c la im o f i r r e p a r a b l e harm."
416 U.S. at 90, quoting V i rg in ia Petroleum Jobbers
Assn, v. FPC, 259 F.2d 921, 925 (D.C.Cir. 1958).
The e x i s t e n c e o f i r r e p a r a b l e i n ju r y under
§12 9 2 ( a ) (1 ) may t h e r e f o r e be shown by demon
s t ra t ing that there is no adequate remedy for the
a p p e l l a n t ' s s u b s t a n t i a l in ju r y o th e r than by
allowing an in ter locutory appeal.
C. App l icat ion o f the C r i t e r ia
Under 81292(a)(1)
Unques t ionab ly , the o rde r o f the d i s t r i c t
court below denying approval of the proposed con
sent decree granting a permanent injunction was an
in ter locutory order denying an in junction with in
the meaning o f §1 29 2 (a ) ( l ) . The proposed decree
- 62
in c lu d ed an exp ress r eq u es t f o r a permanent
in junct ion en jo in ing defendants from d is c r im in a t
ing against p e t i t i o n e rs and c lass members, and
enjo in ing them to take ce r ta in a f f i rm a t i v e steps
. . . 20/to co r rec t the e f f e c t s o f the d is c r im ina t ion .---
20/ These steps included the fo l low ing :
(1 ) i n s t i t u t in g new rules and proce
dures , as s e t f o r t h in the proposed
decree, f o r determining s e n io r i t y , or
e l i g i b i l i t y , fo r vacat ions, promotions,
d e m o t i o n s , l a y - o f f s , and r e c a l l s ;
(2 ) prov id ing medical and s ick b en e f i t s ,
upon t rans fe r to regu lar employment, to
c e r ta in employees who served th e i r pro
bat ionary per iod as a seasonal employee;
(3 ) p rov id ing, under c e r ta in circum
stances, a pre ference f o r hourly paid
seasonal production employees to f i l l
v a c a n c ie s a r i s i n g in the h o u r ly paid
permanent production job c l a s s i f i c a t i o n ;
(4 ) granting hourly paid seasonal pro
duction employees a pre ference f o r f i l l
ing vacancies in the job c l a s s i f i c a t i o n
o f Watchman; and
(5 ) f i l l i n g by December 31, 1980, the
production superv isory pos i t ions o f foreman
and ass is tant foreman with q u a l i f i e d blacks
u n t i l the percentage of blacks in the
pos i t ion equals one-th ird o f the t o t a l .
Joint Appendix at 27a-28a.
63
The order o f the d i s t r i c t court s a t i s f i e s the
s p e c i f i c requirement under § 1 2 9 2 (a ) ( l ) that the
order must touch on the merits o f p e t i t i o n e rs '
c l a im . In f a c t , the grounds a ss ign ed by the
d i s t r i c t court in support o f i t s order c l e a r l y
ind ica te that i t determined simultaneously the
s u f f i c i e n cy o f the in junc t ive claim and the merits
o f the act ion.
For example, the d i s t r i c t c o u r t , in i t s
opinion, s p e c i f i c a l l y held that " r a c i a l p r e f e r
ences are forbidden in th is n a t ion . " 446 F.Supp.
at 770. This ho ld ing undermined the claim fo r
i n j u n c t i v e r e l i e f . In ano ther p o r t i o n o f the
opinion, the d i s t r i c t court concluded that the
"p roposed consent d ec re e h e r e i n , r a t h e r than
a id ing v ic t ims o f v i o l a t i o n s o f the law, would
i t s e l f v i o l a t e the law and v i c t i m i z e innocent
people both black and w h i t e . " I d . This conclu
sion a lso undermined the in junc t ive claim.
The d i s t r i c t court a lso c r i t i z e d the proposed
consent decree on the ground that "there was no
apparent considerat ion g iven to whether or not the
p re fe rred employees have been, are, or would be
subject to r a c i a l d iscr im inat ion. 446 F.Supp. at
789. This assessment undermined both the claim
- 64 -
under T i t l e V I I and the c la im f o r i n j u n c t i v e
r e l i e f . S im i la r ly , the cour t 's f ind ing that the
b e n e f i c i a l aspects o f the decree were not l im ited
to "v ic t ims o f r a c i a l d iscr im ina t ion " , I d . at 789,
and the f ind ing that there were no v e s t i g e s o f
d i s c r i m in a t i o n upon which the proposed d e c r e e
could be supported as a measure to overcome the
e f f e c t s o f d iscr im inat ion , I d . at 790, tended to
erode the basis f o r any recovery by p e t i t i o n e rs on
th e i r T i t l e V I I claims.
The grounds assigned by the d i s t r i c t court in
r e j e c t i o n o f the proposed settlement decree thus
determined the meri ts o f the in junc t ive claims
and the merits o f the act ion . As a matter o f law,
these claims were found to be l e g a l l y in s u f f i c i e n t .
Moreover, the a l l eged l e g a l i n s u f f i c i e n c y ^ o f the
claims was the so le basis fo r r e j e c t i o n o f the
proposed sett lement decree.
N ecessa r i ly , the the grounds s p e c i f i e d by the
d i s t r i c t court f o r r e j e c t i o n o f the decree pre
cluded a subsequent motion by p e t i t i on e rs f o r a
pre l iminary in junct ion granting a l l , or part , o f
the r e l i e f s p e c i f i e d in the proposed consent
decree. To obta in a pre l iminary in junct ion , the
p e t i t i o n e r s are r e q u i r e d to demonstra te the
exis tence o f a substant ia l l ik e l ih oo d that they
- 65
w i l l u l t i m a t e l y p r e v a i l on the m e r i t s . See
Sampson v. Murray, 416 U.S. 61 (1974).
G iven the f i n d in g s and c on c lu s io n s o f the
d i s t r i c t court, however, i t is c lea r that p e t i
t ioners could not have made such a showing, with
respect to any o f the r e l i e f s p e c i f i e d in the pro
posed decree, to the s a t i s f a c t i o n o f the d i s t r i c t
court , and there fo re could not have obtained a
p r e l im in a r y i n ju n c t i o n . See Chappel & Co. v .
F r a n k e l , su p ra , 367 F.2d at 203. A l s o see
M o r g e n s t e r n Chemical Co. v . Sch er ing C orp . ,
supra, 181 F . 2d at 162. Thus, the nature and the
e f f e c t o f the d i s t r i c t c o u r t ' s i n t e r l o c u t o r y
decree was to deny p e t i t i o n e rs " the p ro tec t ion o f
the in junct ion prayed". General E l e c t r i c Co. v.
Marvel Rare Metals Co. , supra, 287 U.S. at 433.
The d i s t r i c t cou r t 's f ind ings and conclusions
on the merits o f the request f o r a f i n a l injunc
t ion a lso necessa r i ly determined the merits o f
p e t i t i o n e r s ' T i t l e V I I act ion. For p e t i t i o n e rs to
p r e v a i l on t h e i r T i t l e V I I c l a im s , they were
required to show that defendants had committed
d iscr im inatory act ions in v i o l a t i o n o f T i t l e V I I ,
that p e t i t i on e rs were v ic tims o f the d iscr im ina
t ion , and that the scope o f the r e l i e f requested
- 66 -
was commensurate w i th the scope o f the in ju r y
which defendants had caused through th e i r d is
criminatory pract ices . See Teamsters v. United
S ta tes , 431 U.S. 324 (1977). The d i s t r i c t court,
however, decided against pe t i t i on e rs on each o f
these th re e i s s u e s , 446 F. Supp. a t 788-791,
thereby foreshadowing u l t im a t e d e f e a t , on the
merits , o f p e t i t i o n e r s ' T i t l e V I I claims.
In sh o r t , the e f f e c t o f the i n t e r l o c u t o r y
order below was to "pass on the lega l su f f i c ien cy
o f . . . ( t h e ) c la ims f o r i n ju n c t i v e r e l i e f " ,
Gardner v. Westinghouse Broadcasting Co . , supra,
437 U.S. at 481, and thereby to s e t t l e , or tenta
t i v e l y d e c id e , the p e t i t i o n e r s ' c la ims on the
merits. See Switzerland Cheese Associat ion v.
E. Horne 's M arke t , supra , 385 U.S. at 24. I t
there fore s a t i s f i e d the essen t ia l p re requ is i te fo r
appea lab i l i ty under §1292(a ) (1)
21/ I t should, perhaps, be noted that p e t i t i o n
e r s ' argument tha t the d i s t r i c t c o u r t ' s order
below is simultaneously appealable as a c o l l a t e r a l
order and as an order re fus ing an in junction does
not i n v o l v e an in c o n s i s t e n c y . Al though the
appea lab i l i ty o f a c o l l a t e r a l order is premised
- 67
This a n a l y s i s shows that the court o f appeals
below had no basis , in fact or law, fo r holding
that " ( h ) e r e , in junct ive r e l i e f was not f i n a l l y
denied; i t was merely not granted at this stage in
the proceedings". 606 F .2d at 423.
21/ Cont.
upon a showing that the order f i n a l l y determines
r ights which are separate and independent o f the
merits , and the appealab l i ty o f an order re fus ing
an injunction is based upon a demonstration that
the order touches on or reso lves the merits , the
two apparently inconsistent posi t ions are eas i ly
reconc i lab le .
With r e s p e c t to the a p p e a l a b i l i t y o f the
o rd e r below as a c o l l a t e r a l o rd e r , the r i g h t
a f fe c ted is the p a r t i e s ' r igh t to s e t t l e the case,
p r io r to t r i a l , in accordance with standards set
for th in Weber, supra. This r igh t is , o f course,
separate and independent o f the r igh t sued upon
pursuant to T i t l e V I I .
On the other hand, the r igh t a f fec ted with
respect to the re fusa l o f an in junction concerns
p e t i t i o n e r s ' r i gh t under T i t l e V I I as w e l l as the
p a r t i e s ’ r igh t to in s t i tu t e an a f f im at ive act ion
plan. The former, o f course, is exact ly the r ight
sued upon and there fore an order adversely a f f e c t
ing i t touches on the m er i t s o f the a c t i o n .
Thus, the two pos i t ions are consistent with
one another since they invo lve d i f f e r e n t r igh ts .
- 68 -
In making th is hold ing, the Fourth C ircu i t
assumed th a t the f a c t s he re were analogous to
those in L ib e r ty Mutual Insurance Co. V. W e tz e l ,
424 U.S. 737 (1976); Switzerland Cheese Assoc ia
t ion , Inc, v. E. Horne's Market, I n c . , supra; and
Gardner v. Westinghouse Broadcasting C o . , supra.
These cases, however, are inapposite .
In L i b e r t y Mutual Insurance Co. v . W e t z e l ,
supra, where the i s sue was the a p p e a l a b i l i t y
o f an in te r lo cu to ry order determining l i a b i l i t y
but reserv ing dec is ion on the nature and extent o f
the r e l i e f to be granted, th is Court held §1292
( a ) ( 1 ) inapp l icab le because " there was no denia l
o f any in junct ion sought by p e t i t i o n e r " . 424 U.S.
at 745. By c o n t r a s t , the p e t i t i o n e r s in t h i s
act ion sought an in junct ion wnich was denied on
the merits .
The dec is ion in Switzerland Cheese Assoc ia
t i o n , In c , v . E. H orne 's Market , I n c . , supra,
i s c l e a r l y d i s t i n g u i s h a b l e from the p re s en t
case s ince the ex is tence there o f fac ts in dispute
rendered premature any d e t e r m in a t i o n on the
meri ts o f the in junc t ive c laim. Moreover, the
d e c i s i o n th e r e , u n l ik e the one he re , d id not
preclude the f i l i n g o f a subsequent motion f o r a
pre l iminary in junct ion.
- 69
In Gardner v . West inghouse B ro a d ca s t in g
Co. , supra, the issue was the a p p ea lab i l i t y o f a
d e n i a l o f c l a s s c e r t i f i c a t i o n . As the cour t
p o in t e d out th e r e , the o rd e r n e i t h e r den ied
in junc t ive r e l i e f nor determined the merits o f
a c t i o n s . I t s imply de term ined the range o f
persons who could b en e f i t from the judgment or who
would be bound by i t . Also, i t did not preclude
an attempt by any party to f i l e a request fo r a
pre l iminary in junct ion . Here, however, an in junc
t i o n was den ied on the grounds o f i t s l e g a l
s u f f i c i e n cy . Those grounds were s u f f i c i e n t to
bar, on the mer i ts , any l a t e r e f f o r t to request a
p r e l im in a r y i n ju n c t i o n . None o f these cases
there fo re supported the holding below o f the court
o f appeals.
In add it ion to i t s purported r e l iance upon
the decis ions o f th is Court, the court o f appeals
found the fac ts o f the present case to be ana
logous to the fac ts in Se iga l v. Merr ick , 590 F .2d
35 (2nd Cir . 1978), in which the Second C ircu i t
h e ld th a t a d i s t r i c t c o u r t ' s d i s a p p r o v a l o f a
settlement in a stockbroker 's d e r i v a t i v e act ion
was not appealable. Adopting the ra t ion a le o f the
cou r t in S e i g a l v . M e r r i c k , supra, the Fourth
70 -
C ircu i t held that the disal lowance o f appeals from
a r e fusa l to enter a sett lement had the "p r a c t i c a l
e f f e c t o f enhancing the d i s t r i c t c o u r t ' s contro l
over the l i t i g a t i o n . " 606 F.2d at 423. I t then
quoted from Se iga l the statement that
(T )he denia l o f one compromise does
not necessa r i ly mean that a "sweetened"
compromise may not be approved . The
management o f a d e r i v a t i v e suit g ives
the t r i a l judge a chance not on ly to
disapprove a compromise but to edge the
p a r t i e s toward more e q u i t a b l e terms.
Id . at 423-424, qu o t in g S e i g a l v . M e r r i c k ,
supra, 590 F.2d at 39. On th is basis i t concluded
that " (w )ha tever the d i s t r i c t c ou r t 's reasons f o r
re fus ing a decree, appeals o f r i gh t . . . would
encourage an endless s t r ing o f appeals and destroy
the d i s t r i c t c ou r t ' s superv is ion o f the ac t ion " .
606 F .2d at 424.
For s eve ra l reasons, the dec is ion in Se iga l v.
Merr ick , cannot be deemed d i s p o s i t i v e o f the issue
presented here. F i r s t , the dec is ion in Se iga l was
based upon §1291, not § 1292( a ) ( 1 ) . Second, the
appellant in Se iga l had not been denied a request
71
f o r i n j u n c t i v e r e l i e f . T h i r d , the d i s t r i c t
c ou r t 's den ia l there o f the proposed sett lement
had been based upon i t s assessment o f the fa i rness
o f the settlement as determined by the date on
which the value o f an option was to be measured
and by whether the value o f the option was to be
measured e n t i r e l y by market c o n s i d e r a t i o n s .
As a r esu l t of th is posture of the case, the
Second C ircu i t , as evidenced from i t s quotation o f
the admonition in Cooper & Lybrand v. L i v e sa y ,
supra, 437 U.S. at 477, that "a l low ing appeals o f
r igh ts from nonf ina l orders that turn on the fac ts
o f a pa r t i cu la r case thrusts appe l la te courts in
d iscr im ina te ly in to the t r i a l process" , seemed
to have regarded the d i s t r i c t c ou r t ' s order as
turning e s s s e n t i a l l y upon a fac tua l assessment
rather than a l e g a l assessment.
In the instant act ion, however, the order of
the d i s t r i c t court was based e n t i r e l y upon i t s
misapprehension o f app l icab le l e g a l p r in c ip le s .
The order thus f e l l in the category o f cases in
which the d i s t r i c t court has an "erroneous b e l i e f
in the ex is tence o f a l e ga l b a r r i e r to i t s en ter
ta in ing a claim fo r an in junct ion " . Gardner v.
Westinghouse Broadcasting C o . , supra, 437 U.S. at
- 72 -
481, n. 7. In such a case, the danger o f serious
harm r esu l t in g from a disallowance o f an appeal
"outwe igh (s ) the general u n d e s i r a b i l i t y o f i n t e r
locutory appeals ". Id.
As mentioned prev ious ly , the Fourth C ircu i t
assumed that the dec is ion o f the d i s t r i c t court
would not prevent the emergence o f a more "sweet
ened" compromise. Th is assumption, however ,
was d i r e c t l y contrary to the e x p l i c i t statement o f
the d i s t r i c t court that
"When the p a r t i e s have s e t t l e d
th e i r d i f f e r en ces without a v i o l a t i o n o f
the law and without v i o l a t in g the r igh t
o f any c l a s s members, the Court w i l l
enter an appropriate order . . . . But
t h i s Court w i l l no t , by e n t e r i n g the
proposed Consent Decree p ro v id e the
p a r t i e s w i th a j u d i c i a l l i c e n c e to
p rac t ice r a c ia l d is c r im in a t ion . "
446 F.Supp. at 791.
In v iew o f th is conclusion o f the d i s t r i c t
court, i t was p la in e rro r f o r the Fourth C ircu i t
to assume that the par t ies would be able to come
up with a more sweetened compromise that would be
s a t i s f a c t o r y to the d i s t r i c t court wh i le simul
taneously p ro t e c t i v e o f p e t i t i o n e r s '
73
in te res t in eradicat ing the adverse e f f e c t s of
segregated job c l a s s i f i c a t i o n s . For these reasons,
the decis ion in Se iga l v. Merrick is i r re levan t
to the present case.—
In short, the decis ion below, whatever may be
the general status o f the appea lab i l i t y o f orders
refusing to approve proposed consent decrees or
re fus ing to grant a permanent injunction, is an
order which, as a p ra c t i ca l matter, denied injunc
t i v e r e l i e f t o p e t i t i o n e r s on the ground that
th e i r claim was l e g a l l y in s u f f i c i en t .
The Fourth C ircuit also held that the conse
quence o f the order did not produce any i r repa r
able harm and that delayed review would not f o r
f e i t any o f p e t i t i o n e r s ' r igh ts . 606 F.2d at 423.
This erroneous holding was based on a t o t a l mis
conception o f the nature and e f f e c t of the d is
t r i c t c o u r t ' s o rd e r . I t i gno res the p a r t i e s '
22/ The ra t iona le and the holding in Seigal are
dTrectly contrary to the ra t iona le and holding o f
the Ninth C ircu i t in Norman v. Mckee, 431 F.2d 769
(9th Cir . 1970) cer t , denied, 401 U.S. 912 (1971)
74 -
loss o f the opportunity to s e t t l e the case on the
same basis which this Court permitted the union
and the employer to s e t t l e claims of d iscr imina
t i o n a g a in s t them in Un ited S tee lw o rke rs o f
America, AFL-CIO-CLC v. Weber, supra.
The race-conscious a f f i rm a t iv e action plan
which th is Court approved in Weber, supra, was the
resu l t o f voluntary act ion taken by Kaiser Aluminum
& Chemical Corp., and the United Steelworkers o f
America, AFL-CIO-CLC. I t was, as is true here,
designed to "break down old patterns o f r a c ia l
segregat ion and hierarchy" , 443 U.S. at 208, and
to "open employment opportunit ies fo r Negroes in
occupations which have been t r a d i t i o n a l l y closed
23/
to them."— -Id .
That a f f i rm a t iv e act ion program, l ik e the one
here, did not "unnecessari ly trammel the in teres ts
o f white employees". I d . Like the present plan,
i t was a temporary e f f o r t intended to el iminate
r a c ia l imbalance, and not to maintain r a c ia l ba l
ance. P r iva te a f f i rm a t iv e action plan sa t is fy ing
23/ These comments were taken from the remarks o f
Senator Hubert Humphrey, 110 Cong. Rec. 6548.
75
balance. P r iva te a f f i rm a t iv e act ion plan s a t i s f y
ing these c r i t e r i a can, under Weber, supra, be put
into place without fear o f unncessary ju d ic ia l
in tervent ion on behal f o f th ird par t ies who claim
r i g h t s den ied by the Court in Weber, supra .
Judic ia l action resu l t ing in the depr ivat ion of
th i s r i g h t c o n s t i t u t e s i r r e p a r a b l e in ju r y f o r
which p e t i t i on e rs have no other means of obtaining
r ed ress o the r than by ta k in g an i n t e r l o c u t o r y
appeal .
Moreover, i t is evident that, i f pe t i t ioners
are forced to go to t r i a l , the r igh t to s e t t l e the
case before t r i a l w i l l be i r r e t r i e v a b l y l o s t . As
a consequence, pe t i t ione rs w i l l be compelled to
undergo the burdens of an unnecessary, expensive,
and time-consuming t r i a l . Furthermore, such a
t r i a l is l i k e l y to be d isrupt ive to the preserva
t ion o f industr ia l peace and t ran q u i l i t y in the
workplace. This is an in teres t which the Congress,
by expressing a pre ference for voluntary s e t t l e
ments, see Alexander v. Gardner-Denver Co . , supra,
415 U.S. at 44, was obviously seeking to fos te r .
The o rde r o f the d i s t r i c t court th rea tens
these v i t a l in te res ts . I t s d i r e c t e f f e c t is to
force pe t i t ione rs to y i e l d r ights granted under
- 76
th is Court 's dec is ion in Weber, supra. I t thus
causes i r reparab le in jury to p e t i t i on e rs and class
members. The a l lowance o f an appeal from the
d i s t r i c t cour t 's order is the only means ava i lab le
fo r ameliorating the damage caused by the order.
P e t i t i o n e r s ' appeal t h e r e f o r e should not be
dismissed.
CONCLUSION
For the reasons indicated herein the decis ion
below should be vacated with instructions to al low
the appeal.
R e s p e c t f u l l y s u b m i t t e d ,
HENRY L. MARSH, I I I
WILLIAM H. BASS, I I I
RANDALL G. JOHNSON
Hall , Tucker & Marsh
214 East Clay Street
P.0. Box 27363
Richmond, V i r g i n i a 23261
Te l : (804) 648-9073
77
JOHN W. SCOTT, JR.
615 Caroline Street
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Tel: (703) 371-3700
JACK GREENBERG
Counsel o f Record
JAMES M. NABRIT, I I I
NAPOLEON B. WILLIAMS, JR.
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