Carson v. American Brands, Inc. Brief for the United States as Amicus Curiae

    No. 79-1236

3n ttje Supreme Court of ttjt gutted States
October T erm, 1979

Frank L. Carson, et al., petitioners

v.
A merican Brands, Inc ., et al.

ON PETITION FOR A W RIT OF CERTIORARI TO 
THE UNITED STATES COURT OF APPEALS FOR 

THE FOURTH CIRCUIT

BRIEF FOR THE UNITED STATES 
AS AMICUS CURIAE

W ade H. McC ree, J r. 
Solicitor General

D rew S. D ays, III 
Assistant Attorney General

Harlon L. D alton 
Assistant to the Solicitor 

General
Brian K. Landsberg 
Marie E. Klimesz 

A ttom e vs
Department of Justice , 
Washington, D.C. 20530



INDEX

Questions presented
Statement ..............
Discussion .............
Conclusion ...........

Page

2 

5 
1 I

CITATIONS

Cases:
Alexander v. Gardner-Denver Co.,

415 U.S. 36 ............................ ............. ................ 6
Baltimore Contractors, Inc. v. Bodinger,

348 U.S. 176 ............................... .................... . 7
Cohen v. Beneficial Industrial Loan Cor/).,

337 U.S. 541 ..... .......... ........ ....... ........ .........  7, 9
Coopers & Lybrand v. Livesav,

437 U.S. 463 ................................................... 6, 9
Gardner v. Westinghouse Broadcasting Co.,

437 U.S. 478 ...................................................  5, 7
Massachusetts Mutual Life Co. v. Ludwig,

426 U.S. 479 ............. !.......................................... 2
NLRB  v. Sears, Roebuck & Co.,

421 U.S. 132 ........................................................  2
Norman v. McKee, 431 F. 2d 769 ................  6, 10
Switzerland Cheese Ass’n v. E. Horne’s

Market, Inc., 385 U.S. 23 ............................  5, 7
United States v. City o f Alexandria,

614 F. 2d 1358 .....................................................  5

l



Page

Statutes and rule: .
Civil Rights Act of 1964, Title VII, Pub. L.

No. 88-352, 78 Stat. 253, 42 U.S.C.
2000e et seq..............................................  2, 4, 6, 9

28 U.S.C. 1291  ....................... 1, 4, 6, 9
28 U.S.C. 1292 ........................................................  7
28 U.S.C. 1292(a)(1) ............................  1, 4, 5, 7, 9
42 U.S.C. 1981 .... .................... .............................. 2
Fed. R. Civ. P. 23(e) .............................................  2

ii



3n % Sitpmne Court of the United States
O ctober T erm , 1979

No. 79-1236
F rank  L. C arson , et a l ., petition ers

v.
A m erican  Brands , In c ., et al.

ON PETITION FOR A W RIT OF CERTIORARI TO 
THE UNITED S T  A TES COURT OF APPEALS FOR 

THE FOURTH CIRCUIT

BRIEF FOR THE UNITED STATES 
AS AMICUS CURIAE

This brief is filed in response to the Court’s invitation 
of April 14, 1980.

QUESTIONS PRESENTED

1. Whether the district court’s order refusing to
approve a consent decree providing for injunctive relief in 
a Title VII case was appealable under 28 U.S.C. 
1292(a)(1) as an order refusing an injunction.

2. Whether the district court’s order refusing to
approve a consent decree was an appealable final decision 
under 28 U.S.C. 1291.'

'The remaining questions presented by the petition (Pet. 6-7), while 
raised below, were not passed upon by the court of appeals since the 
court determined that it lacked jurisdiction over the appeal. Under

(1)



2

STATEMENT

1. Petitioners, representing a class of black present and 
former seasonal employees and applicants for employ­
ment at the Richmond Leaf Department of the American 
Tobacco Company, a subsidiary of respondent American 
Brands, Inc., brought this suit on October 24, 1975 under 
Title VII of the Civil Rights Act of 1964, Pub. L. 
No. 88-352, 78 Stat. 253, 42 U.S.C. 2000e el seq. and 
under 42 U.S.C. 1981, alleging that the company and 
respondent union had discriminated against black 
workers in hiring, promotion, and transfer opportunities.

After conducting extensive discovery, the parties 
reached an agreement settling petitioners’ claims, and 
jointly moved the district court for approval of the 
settlement pursuant to Fed. R. Civ. P. 23(e) and entry of 
a proposed consent decree. The district court, in a 
memorandum opinion and order filed June 2, 1977, 
refused to enter the proposed decree on the ground that it 
illegally granted racial preferences to black employees 
(Pet. App. 28a-51a).

On September 14, 1979, the court of appeals, sitting en 
banc, dismissed petitioners’ appeal for lack of jurisdiction, 
with Chief Judge Haynsworth and Circuit Judges Winter 
and Butzner dissenting (Pet. App. la-27a).

2. The facts accepted as true by the district court for 
the purpose of considering the consent decree 
demonstrated that American Brands, Inc. has two 
categories of employees—regular employees who work 
year-round and seasonal employees who work an average 
of six months a year (Pet. App. 29a-30a). Prior to 
September 1963, certain of the regular job classifications

such circumstances, this Court ordinarily declines to consider issues. 
See NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 163-164 (1975); 
Massachusetts Mutual Life Insurance Co. v. Ludwig, 426 IJ.S. 479 
(1976).



3

were reserved for whites and all seasonal employees were 
black (Pet. App. 30a). Although blacks were hired after 
September 1963 into regular job classifications and, as of 
February 1976, constituted 66% of the regular employees, 
seasonal employees continue to be all black (ibid.).

Separate seniority rosters are maintained for regular 
and seasonal employees. Seasonal employees may transfer 
to regular positions only when no regular employee is 
interested in the particular position, and in so doing they 
lose all accumulated seniority (Pet. App. 30a). Since 
seniority governs promotions, demotions, layoffs, recalls 
and vacations, the loss incurred by transfer to a regular 
position is significant (Pet. App. 31a).

Although blacks constitute 66% of the company’s 
regular employees and 84% of its production unit, only 
20% of the supervisory positions are held by blacks (Pet. 
App. 31a).

The consent decree negotiated by the parties proposed 
modifications of the seniority and transfer policies which 
would allow seasonal workers to maintain their seniority 
upon transfer to regular positions and would require that, 
prior to hiring from the outside, seasonal employees be 
given the opportunity to fill vacancies not filled by regular 
employees for all hourly paid permanent production jobs 
and for the job of watchman, formerly reserved for 
whites (Pet. App. 32a-33a).2 The decree also eliminated 
the requirement that seasonal employees serve an 
additional probationary period after transfer to regular 
positions (Pet. App. 33a). In addition, the decree set a

2Of 16 watchmen employed by the company in February 1976, only 
one was black (Pet. App. 30a).



4

goal for the filling of production supervisory positions 
with qualified blacks so that 1/3 of such positions would 
be held by blacks by December 31, 1980 (Pet. App. 33a).

Finally, the proposed decree contained an injunction 
prohibiting respondents from discriminating against black 
workers and a three-year reporting requirement so that 
compliance with its provisions could be monitored (Pet. 
14).

3. The district court concluded that because 
respondents expressly denied having discriminated against 
the class of petitioners, the foregoing provisions of the 
decree (which benefitted only seasonal employees all of 
whom are black) constitute preferential treatment 
prohibited by Title Vll and the Constitution (Pet. App. 
32a, 45a-48a). The court also concluded that even if there 
was evidence of present discrimination or the present 
effects of past discrimination, the relief envisioned by the 
decree would be inappropriate because it was not limited 
to actual victims of that discrimination (Pet. App. 39a- 
42a, 46a).

4. The court of appeals dismissed the appeal, holding 
that the district court’s order refusing to approve and 
enter the consent decree was neither a final decision 
appealable under 28 U.S.C. 1291 nor an order refusing an 
injunction under 28 U.S.C. 1292(a)(1) since “[t]he 
immediate consequence of the order is continuation of the 
litigation and * * * the merits of the decree can be 
reviewed following final judgment” (Pet. App. 2a). The 
court analogized the order to the denial of a motion for 
summary judgment which, if granted, would include 
injunctive relief, and to the denial of class certification 
where the complaint seeks broad injunctive relief. Noting 
that in both of those circumstances this Court has held



5

that no appeal would lie (Switzerland Cheese Ass’n v. E. 
Horne’s Market, Ine., 385 U,S. 23 (1966); Gardner v. 
Westinghouse Broadcasting Co., 437 U.S. 478 (1978)), the 
court of appeals concluded that the result should be the 
same here (Pet. App. 5a-6a).

Three of the seven judges dissented, concluding in an 
opinion by Judge Winter that the order declining to 
approve the consent decree was appealable under 28 
U.S.C. 1292(a)(1) (Pet. App. 18a). The dissenting judges 
distinguished the district court’s order from the refusal to 
certify a class in Gardner, supra, reasoning that a refusal 
to enter a consent decree cannot be effectively reviewed 
following final judgment (Pet. App. 2Qa-21a). Similarly, 
the dissenters distinguished the challenged order from the 
denial of summary judgment in Switzerland Cheese, 
supra, reasoning that here the district court conclusively 
determined important issues adversely to petitioners’ 
claims (Pet. App. 21a).3

DISCUSSION
The decision below is in conflict with the Fifth Circuit’s 

decision in United States v. City o f Alexandria, 614 F. 2d 
1358 (1980), regarding whether a district court order 
refusing to enter a consent decree containing injunctive 
provisions is an order refusing an injunction within the 
meaning of 28 U.S.C. 1292(a)(1).4 It is also in conflict

•Turning to the merits of the appeal, the dissenting judges 
concluded that the district court abused its discretion in refusing to 
approve the decree (Pet. App. 22a-26a). They would have modified 
the decree, however, to give notice and an opportunity to object to a 
sub-class for whom no relief was provided in the settlement.

T he court in City o f Alexandria sought to distinguish the instant 
case as “relating to” a class action. 614 F. 2d at 1361 n.5. However, 
“[t]he appealability of any order entered in a class action is



6

with the Ninth Circuit’s decision in Norman v. McKee, 
431 F. 2d 769 (1970), regarding whether an order refusing 
to enter a consent decree is a “final decision” within the 
meaning of 28 U.S.C. 1291, Accordingly, review by this 
Court is warranted.

Furthermore, the decision below frustrates an impor­
tant congressional policy embodied in Title VI1 of the 
Civil Rights Act of 1964. As this Court recognized in 
Alexander v. Gardner-Denver Co., 415 U.S. 36, 44 (1974) 
(citations omitted):

Congress enacted Title VII * * * to assure equality 
of employment opportunities by eliminating those 
practices and devices that discriminate on the basis of 
race, color, religion, sex, or national origin. 
* * * Cooperation and voluntary compliance were 
selected as the preferred means for achieving this 
goal.

If appellate review of a district court’s refusal to enter a 
consent decree is not available until after the case has 
been tried and a final judgment entered, the benefits 
envisioned by Congress from voluntary resolution of 
employment discrimination claims will be irrevocably lost 
to the parties. For this reason as well, further review is 
warranted.

1. As a general rule, appellate review of district court 
orders is limited by statute to final decisions. 28 U.S.C. 
1291; Coopers & Lvbrandv. Livesav, 437 U.S. 463 (1978); 
Gardner v. Westinghouse Broadcasting Co., supra. 
However, exceptions to the rule have been recognized

determined by the same standards that govern appealability in other 
types of litigation.” Coopers & Lvbrandv. Livesav. 437 IJ.S. 463, 470 
(1978).



7

both by judicial decision (see, e.g., Cohen v. Beneficial 
Industrial Loan Corp., 337 U.S. 541, 545-547 (1949)), and 
by statute (28 U.S.C. 1292) where interlocutory review 
would serve the interests of justice.

Section 1292(a) provides that “[t]he courts of appeals 
shall have jurisdiction of appeals from: (1) [ijnterlocutory 
orders * * * granting, continuing, modifying, refusing or 
dissolving injunctions, or refusing to dissolve or modify 
injunctions, except where a direct review may be had in 
the Supreme Court.” An order refusing to approve a 
consent decree providing for injunctive relief would 
appear to come within that Section’s plain language. 
However, this Court has stressed that Section 1292(a)(1) 
“does not embrace orders that have no direct or 
irreparable impact on the merits of the controversy.” 
Gardner v. Westinghouse Broadcasting Co., supra, 437 
U.S. at 482. Thus, the touchstone for determining whether 
an order falls within the Section is whether it is “of 
serious, perhaps irreparable, consequence.” Baltimore 
Contractors, Inc. v. Bodinger, 348 U.S. 176, 18! (1955).

In Switzerland Cheese Ass’n v. E. Horne's Market, Inc., 
supra, this Court held that an order denying a motion for 
summary judgment was not “interlocutory” within the 
meaning of Section 1292(a)(1) because it related only to 
pretrial procedures and did not touch on the merits of the 
claim. The Court noted (385 U.S. at 25) that the order 
was “strictly a pretrial order that decides only one thing— 
that the case should go to trial.” And in Gardner v. 
Westinghouse Broadcasting Co., supra, this Court held 
(437 U.S. at 480-481) that a denial of class certification 
was not appealable under Section 1292(a)(1) because “[i]t 
could be reviewed both prior to and after final judgment; 
it did not affect the merits of [the plaintiffs] own claim; 
and it did not pass on the legal sufficiency of any claims



8

for injunctive relief.” In contrast, the district court’s order 
here did much more than merely advance the case to trial. 
It determined that the relief agreed upon by the parties 
could not legally be approved by the court. Since nothing 
short of an admission of discrimination by the 
respondents or a full trial on the merits (resulting in 
findings of fact different from those to which the parties 
stipulated for purposes of settlement) could have 
persuaded the district court to grant the relief provided in 
the consent decree, the parties were denied the opportuni­
ty to settle their dispute voluntarily.

That opportunity, of course, cannot be recaptured once 
the case goes to trial.5 Nor can the propriety of the court’s 
refusal to enter the decree be reviewed after final 
judgment. A settlement agreement reflects the parties’ 
assessment at a given point of the strengths and 
weaknesses of their respective cases, and their assessment 
of the advantages and disadvantages of, and risks and 
uncertainties inherent in, going to trial. That state of 
facts, of mind, and of perspective cannot faithfully be 
reconstructed once intervening events have altered the

Notwithstanding the court of appeals’ observation (Pet. App. 8a) 
that “[w]hen a district court objects to the terms of a decree, 
alternative provisions can be presented, and perhaps a disapproved 
decree may be entered with further development of the record,” as a 
practical matter a refusal to enter a consent decree should be viewed 
as a conclusive determination. Where alternative provisions prove 
satisfactory to the parties, no appeal would be taken even if available. 
On the other hand, where agreement cannot be reached, the 
theoretical existence of alternatives should not foreclose appeal if the 
court refuses to enter a decree for which agreement in fact has been 
reached. Moreover, in the instant case there is no realistic possibility 
of agreement on an alternative settlement since the district court’s 
decision hinged not on any unfairness to either side in the agreed 
upon settlement, but rather on the legal question whether the relief 
sought in the proposed decree violates Title VII and the Constitution 
in the absence of proven or admitted discrimination.



9

parties’ (and the court’s) view of the case. Moreover, to 
the extent the facts adduced at trial vary materially from 
the facts as they appeared at the time the consent decree 
was rejected by the court, entry of a judgment based on 
the terms of the decree is at least arguably improper.

Therefore, the district court’s order—given its un­
reviewability at a later date, its roots in the premise that 
the relief sought by the parties lacks a legal basis and is 
itself unlawful, the fact that it deprives the parties of the 
chance to settle their differences voluntarily, and the fact 
that it prolongs rather than expedites resolution of this 
case—comes within the purposes as well as the literal 
terms of Section 1292(a)(1).

2. For the same reasons, the district court’s order is 
appealable under 28 U.S.C. 1291 as a “collateral order.” 
As this Court has said (Coopers & Lvbrand v. Livesav, 
supra, 437 U.S. at 468), “[t]o come within the ‘small class’ 
of decisions excepted from the final-judgment rule by 
Cohen [v. Beneficial Industrial Loan Corp. ], the order 
must conclusively determine the disputed question, 
resolve an important issue completely separate from the 
merits of the action, and be effectively unreviewable on 
appeal from a final judgment.” Viewed one way, the 
district court’s order in this case touched significantly on 
the merits in that the refusal to enter the consent decree 
was based on the court’s opinion regarding what relief is 
proper under Title Vll and what constitutes “preferential 
treatment” under that statute. Viewed another way, the 
order is wholly separate (or separable) from the merits. 
Whether the consent decree should have been entered is a 
question separate and apart from whether the plaintiffs 
would prevail on the merits at trial were the facts 
underlying the settlement agreement proved. Moreover, a



10

judgment on the merits would rest on facts actually 
proved at trial rather than on the findings anticipated by 
the parties for purposes of settlement. As the Ninth 
Circuit observed in Norman v. McKee, supra, 43! F. 2d 
at 773: “The proposed settlement is independent of the 
merits of the case, it would not merge in final judgment. 
Disapproval of the settlement is not a step toward final 
disposition and it is not in any sense an ingredient of the 
cause of action. In itself, the district judge’s order is final 
on the question of whether the proposed settlement 
should be given judicial approval.”6

Respondents argue (Br. in Opp. 6-10) that the questions presented 
in the petition have been rendered moot by respondents’ withdrawal 
of consent to the entry of the decree: We disagree. In submitting the 
proposed decree to the court, the parties impliedly agreed to abide by 
its terms if they are judicially approved. Had one of the parties 
wished to repudiate the agreement before the district court had an 
opportunity to act, it would not have been free to do so under the 
terms of the agreement, though it would have remained free to argue 
to the court that because of unforeseeable changed circumstances the 
decree should not be entered (just as a party on like grounds can seek 
modification of a decree). The same rule should apply on appeal. 
Otherwise, a party’s right to take an appeal is conditioned on the 
acquiescence of its adversary. Nothing in the proposed decree agreed 
to by the parties to this case requires that result.

Parties should, of course, remain free to limit and condition their 
assent to a settlement agreement as they see fit. Here the parties did 
not enter into a separate agreement, but instead submitted a joint 
proposed consent decree. Nevertheless, underlying every settlement 
agreement, written or implied, is the implicit expectation that in 
deciding whether to approve the settlement the district court will act 
nonarbitrarily and in conformity with the law.



CONCLUSION

The petition for a writ of certiorari should be granted.
Respectfully submitted.

W ade H. M cC ree, J r .
Solicitor General

D rew  S. D ays, HI 
Assistant Attorney General

H arlon  L. D alton 
Assistant to the Solicitor 

General
Br ia n  K. Landsberg  
M arie E. K lim esz 

Attorneys
May 1980

D O J-1980-05



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