Carson v. American Brands, Inc. Brief for the United States and the Equal Employment Opportunity Commission as Amici Curiae

    No. 79-1236

3 n  the Supreme (Court of tiro Jfiitteh ^tutes
O c t o b e r  T e r m , 1979

F r a n k  L. C a r s o n , e t  a l ., p e t it io n e r s

V.
A m e r ic a n  B r a n d s , I n c ., e t  a l .

ON WRIT OF CERTIORARI TO THE UNITED STATES 
COURT OF APPEALS FOR THE FOURTH CIRCUIT

BRIEF FOR THE UNITED STATES AND THE 
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 

AS AMICI CURIAE

L ero y  D. Clark  
General Counsel 
Equal Employment

Opportunity Commission 
Washington, D.C. 20506

W ad e  H. McCr e e , Jr .
Solicitor General

D r e w  S. Da y s , III
Assistant Attorney General

L a w r e n c e  G. W al l a c e
Deputy Solicitor General 

Harlo n  L. Dalton  
Assistant to the 

Solicitor General 
B r ia n  K. L a n d sb e r g  
Ma r ie  E. K lim esz  

Attorneys
Department of Justice 
Washington, D.C. 20530 
(202) 633-2217



3 n  the ^etprente Cimrt o f the J f niteh S tates
Oc t o b e r  T e r m , 1979

No. 79-1236

F r a n k  L . C a r s o n , e t  a l ., p e t it io n e r s *

v.

A m e r ic a n  B r a n d s , I n c ., e t  a l .

ON WRIT OF CERTIORARI TO THE UNITED STATES 
COURT OF APPEALS FOR THE FOURTH CIRCUIT

BRIEF FOR THE UNITED STATES AND THE 
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 

AS AMICI CURIAE

QUESTION PRESENTED

Whether a district court’s order refusing to enter a ten­
dered consent decree providing for injunctive relief in a 
Title VII case is appealable as either an order refusing an 
injunction under 28 U.S.C. 1292(a)(1) or a final decision 
under 28 U.S.C. 1291.

* Frank L. Carson, Lawrence Hatcher, and Stuart E. Mines were 
plaintiffs-appellants below and are petitioners herein. American 
Brands, Inc. (T/A The American Tobacco Company), Local 182 of the 
Tobacco Workers International Union, and the Tobacco Workers In­
ternational Union were defendants-appellees and are respondents 
herein.

I



TABLE OF CONTENTS
Page

Interest of the United States...................................  1
Statement........... ........................................................  1
Summary of argument.....................................   5
Argument..................................................................... 8

I. The district court’s order is appealable as
an order refusing an injunction under 28 
U.S.C. 1292 (a)(1).......................................  8
A. The order falls within the language of 

Section 1292(a)(1) and is of the type
the statute is intended to reach .......  9

B. Appealability is particularly appro­
priate here in light of an important 
congressional policy embodied in
Title V I I ....... ...................   14

II. The district court’s order is appealable as
a “collateral order” under 28 U.S.C. 1291 16

Conclusion........................    19

TABLE OF AUTHORITIES
Cases:

Abney v. United States, 431 U.S. 651.............  11
Alexander v. Gardner-Denver Co., 415 U.S.

3 6 ......................................................................  14
Baltimore Contractors, Inc., v. Bodinger, 348

U.S. 176.......................................................  6, 8, 10
Bryan v. Pittsburgh Plate Glass Co., 494 F.2d

799, cert, denied, 419 U.S. 900 ....................  17
City of Detroit v. Grinnell Corp., 495 F.2d

448 .....................................................................  17
Coopers & Lybrand v. Livesay, 437 U.S.

463 ........... .'.................................' ................. 7 ,8,16
Cotton v. Hinton, 559 F.2d 1326......................... 17
Emporium. Capwell Co. v. Western Addition

Community Organization, 420 U.S. 50 ...........  14

II



Ill

Cases—Continued: Page
Flinn v. FMC Corp., 528 F.2d 1169, cert, de­

nied, 424 U.S. 967 .................................. . 17
Forgay v. Conrad, 47 U.S. (6 How.) 2 0 1 .........  8
Gardner v. Westinghouse Broadcasting Co., 437

U.S. 478 .................................................... 4, 5, 12, 13
Grunin v. International House of Pancakes,

513 F.2d 114, cert, denied, 423 U.S. 864.......  17
Mandujano v. Basic Vegetable Products, Inc.,

541 F.2d 832...................................................... 17
Norman v. McKee, 431 F.2d 769, cert, denied,

401 U.S. 912 ...................................   17
Patterson v. Stovall, 528 F.2d 108....................  17
Switzerland Cheese Ass’n v. E. Horne’s Market,

Inc., 385 U.S. 23........................................... 4 ,5,11
United States v. Armour & Co., 402 U.S.

673 ....................................................................  10
United States v. City of Alexandria, 614 F.2d

1358 .......................... '...................................  8, 9, 16
United States v. City of Jackson, Mississippi,

519 F.2d 1 1 4 7 . . . . . . . . . ...................................  15
United Steelworkers of America, AFL-CIO-CLC

v. Weber, 443 U.S.' 193...................................  16

Statutes and rule:
Civil Rights Act of 1964, Title VII, Pub. L. No.

88-352, 78 Stat. 253, 42 U.S.C. (& Supp. II)
2000e et seq. :

42 U.S.C. 2000e et s eq .:............................  1
42 U.S.C. 2000e-5...................................... 15
42 U.S.C. 2000e-5(b).................................. 14
42 U.S.C. 2000e-5(f) .................................. 14
42 U.S.C. 2000e-5(f)(l)..............................  1
42 U.S.C. 2000e-6 .....................................  15
42 U.S.C. (& Supp. II) 2000e-6 .................  1, 14

28 U.S.C. 1254(3) ................................................  13
28 U.S.C. 1291....... .................................... 4, 7, 11, 16



IV

Statutes—Continued: Page

28 U.S.C. 1292(a) ...............................................  8
28 U.S.C. 1292(a)(1).......................................... passim
28 U.S.C. 1292(b)...............................................  13
42 U.S.C, 1981..................................................... 1
Fed. R. Civ. P. 23(e)........................................... 2

Miscellaneous:
3A A. Corbin, Contracts (1960)..........................  18



INTEREST OF THE UNITED STATES

In response to this Court’s invitation of April 14, 1980, 
the United States filed a brief suggesting that the petition 
for a writ of certiorari should be granted both because a 
conflict exists among the circuits concerning the question 
presented and because the decision of the court of appeals 
“frustrates an important congressional policy embodied in 
Title VII of the Civil Rights Act of 1964” (May 1980 Brief 
for the United States As Amicus Curiae 6). The petition 
having been granted, we file this brief in support of 
petitioners’ contention that the judgment below should be 
reversed.

Federal enforcement of Title VII has been vested by 
Congress in the Equal Employment Opportunity Commis­
sion and the Department of Justice. The Equal Employ­
ment Opportunity Commission has authority to bring civil 
actions against private employers under 42 U.S.C. 
2000e—5(f)(1). The Attorney General has enforcement re­
sponsibility when the employer is a state government, 
governmental agency, or political subdivision. 42 U.S.C. 
(& Supp. II) 2000e-6.

STATEMENT

1. Petitioners, representing a class of black present and 
former seasonal employees and applicants for employment 
at the Richmond Leaf Department of the American To­
bacco Company, commenced this action on October 24, 
1975. The complaint alleged that respondents had violated 
Title VII of the Civil Rights Act of 1964, Pub. L. No. 88- 
352, 78 Stat. 253, 42 U.S.C. 2000e et seq., and 42 U.S.C. 
1981 by discriminating against black employees and appli­
cants in, inter alia, hiring, promotion, transfer and on- 
the-job training opportunities, thereby restricting 
petitioners to lower paying, less desirable jobs tradi­
tionally reserved for black employees (A. 4).1

1“A .” refers to the Appendix filed in the court of appeals.

1



2

After engaging in extensive discovery, the parties 
reached an agreement settling petitioners’ claims. They 
then prepared a consent decree, signed it, and submitted 
it to the district court on April 1, 1977 for approval pur­
suant to Fed. R. Civ. P. 23(e). On June 2, 1977, the dis­
trict court issued a memorandum opinion and order (Pet. 
App. 28a-51a) refusing to enter the proposed decree on 
the ground that it illegally granted racial preferences to 
black employees.

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

2. The district court accepted as true for the purpose of 
considering the proposed settlement the following facts 
recited by petitioners in their brief in support of entry of 
the decree.

Respondent American Brands, Inc. operates the 
Richmond Leaf Department of the American Tobacco 
Company where it processes and stores leaf tobacco (Pet. 
App. 29a). Respondent Local 182, a member of respondent 
Tobacco Workers International Union, is the exclusive 
bargaining agent for all hourly paid production unit em­
ployees of the Richmond Leaf Department (ibid.).

Two categories o f persons are em ployed in the 
Richmond Leaf Department— regular employees who 
work year-round and seasonal employees who work an av­
erage of six months a year (Pet. App. 29a-30a). Prior to 
September 1963, certain of the regular job classifications, 
including that of watchman, were reserved for whites only 
(id. at 30a). At the time the consent decree was presented 
to the district court, the company employed approximately 
150 seasonal employees, all of whom are black, and ap­
proximately 100 regular employees, 66% of whom are 
black. To petitioners’ knowledge no white person has ever 
been employed on a seasonal basis in the Richmond Leaf 
Department (ibid.).

Separate seniority rosters are maintained for regular 
and seasonal employees. A seasonal employee may trans­



3

fer to a regular position only if no regular employee is 
interested in the vacant position, and in so doing loses all 
accumulated seniority (Pet. App. 30a). The loss of senior­
ity affects the employee’s status for promotions, demo­
tions, layoffs, recalls and vacations (id. at 31a).

While blacks constitute 84% of the company’s production 
unit employees,2 they hold only 20% of the supervisory po­
sitions (Pet. App. 31a). As of February 15, 1976, only one 
of the 16 persons employed in the position of watchman, a 
job formerly reserved for whites, was black (id. at 30a).

The consent decree negotiated by the parties proposed 
that the company’s seniority and transfer policies be mod­
ified to allow seasonal workers to maintain seniority upon 
transfer to regular positions,3 and to require that before 
outside hiring is attempted seasonal employees be given 
the opportunity to fill vacancies not filled by regular em­
ployees for all hourly paid permanent production jobs and 
for the job of watchman (Pet. App. 32a-33a). The decree 
also eliminated the requirement that seasonal employees 
serve a probationary period after transferring to regular 
positions (id. at 33a). In addition, the decree set a goal for 
the filling of production supervisory positions with qual­
ified blacks so that one-third of such positions would be 
held by blacks by December 31, 1980 (ibid.).

Finally, the proposed decree contained an injunction 
prohibiting respondents from discriminating against black 
employees of the Richmond Leaf Department and a 
three-year reporting requirement so that compliance with 
its provisions could be monitored (Pet. 14; A. 51, 55).4

2 Since 1971, more than 90% of new hires at the Richmond Leaf De­
partment have been black (Pet. App. 31a).

3 The agreement also provided that employees already in regular po­
sitions would be credited with any time worked as seasonal employees, 
to be calculated according to the terms of the collective bargaining 
agreement (Pet. App. 32a).

4 The proposed decree included a specific finding that the company 
was not engaged in any discriminatory hiring practices at the 
Richmond Leaf Department. Accordingly, it provided no relief for 
black applicants for employment (Pet. App. 32a).



4

3. The district court refused to approve the settlement, 
reasoning that in view of respondents’ express denial of 
discrimination against the plaintiff class, the foregoing 
provisions of the decree (which benefitted only seasonal 
employees all of whom are black) constituted preferential 
treatment based on race and were thus violative of Title 
VII and the Constitution (Pet. App. 32a, 45a-48a). The 
court also determined that even if the parties had pre­
sented 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 the actual victims of such discrimination (Pet. App. 
39a-42a, 46a).

The court concluded by stating (Pet. App. 50a):
When the parties have settled their differences 

without a violation of the law and without violating 
the right of any class members, the Court will enter 
an appropriate order without prejudice to the right of 
any person to seek redress for racial discrimination. 
But this Court will not, by entering the proposed 
Consent Decree provide the parties with a judicial 
license to practice racial discrimination. 4

4. After full briefing and argument, the court of appeals 
dismissed petitioners’ 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). It analogized the order to the denial of 
a motion for summary judgment in a case where a contrary 
decision would have resulted in entry of an injunction, and 
to the denial of class certification where the complaint 
seeks broad injunctive relief. Noting that in both such cir­
cumstances this Court has held that no appeal would lie 
(Switzerland Cheese Ass’n v. E. Horne’s Market, Inc., 
385 U.S. 23 (1966); Gardner v. Westinghouse Broadcast­
ing Co., 437 U.S. 478 (1978) ), the court of appeals saw no 
reason to reach a different result here (Pet. App. 5a-6a).

In addition to concluding that the district’s court’s order 
did not irreparably harm petitioners because they retained



5

the right to proceed to trial on their claim for injunctive 
relief and thereafter to seek appellate review of the re­
fusal to enter the decree (Pet. App. 10a), the court of ap­
peals observed that the parties were free to propose alter­
native decrees which the district court might approve 
(ibid.). Underlying the court’s analysis was its view that 
district courts should maintain full control over the course 
of litigation through the entry of final judgment, and in so 
doing should guide the parties’ efforts to compromise their 
claims (Pet. App. 7a-9a).

Three of the seven judges dissented, concluding in an 
opinion by Judge Winter that the order refusing to ap­
prove the consent decree is appealable under 28 U.S.C. 
1292(a)(1) (Pet. App. 18a). The dissenting judges distin­
guished the district court’s order from the refusal to cer­
tify a class in Gard)ier, supra, and from the denial of 
summary judgment in Switzerland Cheese, supra, rea­
soning that here the district court conclusively determined 
important issues that cannot effectively be reviewed fol­
lowing final judgment (Pet. App. 21a).5

SUMMARY OF ARGUMENT

The district court’s order in this Title VII case refusing 
to approve a jointly proposed consent decree is appealable 
under 28 U.S.C. 1292(a)(1) as an order refusing an injunc­
tion. First, the order falls within the literal terms of the 
statute. The consent decree, if entered, would have com­
pelled respondents to make specified changes in American 
Tobacco Company’s employment practices and to refrain 
from discriminating in the future. In a word, the consent 
decree constituted an injunction. Had it been entered, the 
order doing so would have been appealable under Section 
1292(a)(1). The district court’s order refusing to enter the

5Reaching the merits, the dissenting judges concluded that the dis­
trict 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 the subclass of applicants for 
whom no relief was provided in the settlement. See note 4, supra.



6

consent decree is likewise appealable under Section 
1292(a)(1).

Second, the district court’s order is one of “ serious, 
perhaps irreparable, consequence.” Baltimore Contrac­
tors, Inc., v. Bodinger, 348 U.S. 176, 181 (1955) (foot­
note omitted). Many of the benefits that flow from the 
parties’ agreement to settle their differences by consent 
decree will be lost if the case has to be tried. The factors 
that m otivate parties to enter into settlem ent 
agreements— savings of time and expense and the reduc­
tion of risk— evaporate once a case goes to trial. In addi­
tion, defendants lose the opportunity to influence both the 
form and the terms of the relief awarded plaintiffs. De­
fendants also lose the opportunity to protect their good 
name from a judicial determination that they have violated 
the law. And unrecoverable judicial resources are ex­
pended.

The district court’s order here is particularly one of 
“ serious, perhaps irreparable, consequence” in view of 
Title VII’s statutorily expressed preference for voluntary 
resolution of charges of discrimination. Once a dispute has 
reached the litigation stage this policy can best be im­
plemented by encouraging judgments on consent. Indeed, 
the consent decree has proven to be the dominant means 
by which the government resolves Title VII disputes.

Third, the district court’s order cannot adequately be 
reviewed following a litigated final judgment. The parties’ 
perceptions at the time of settlement, their assessment of 
the strengths and weaknesses of their case and the case 
against them, and the value they place on avoiding a trial 
cannot be recaptured once intervening events, including 
the trial they sought to avoid, have altered their perspec­
tive and the court’s. Moreover, to the extent that a party 
fares better under a litigated judgment than under an im­
properly rejected consent decree, its willingness to chal­
lenge that rejection will likely fade. While the party dis­
appointed after trial can be expected to appeal the refusal 
to enter the proposed consent decree, it may well be 
placed in the untenable position of trying to convince the



7

court of appeals to enforce a settlement providing relief 
not fully consistent with the facts actually adduced at trial.

Finally, prompt review would further the policies un­
derlying the finality rule. Immediate appellate review of 
refusals to enter consent decrees would advance rather 
than hinder the course of litigation by eliminating un­
necessary trials and the delay and expense that attend 
them. While appeals could conceivably be taken for dila­
tory purposes, the reasons underlying parties’ willingness 
to enter into settlement agreements and the dynamics that 
take over once an initial settlement has been hammered 
out strongly suggest that rarely would an appeal be taken 
other than in good faith following a substantial effort to 
find an alternative common ground.

The district court’s order is also appealable as a collat­
eral order under 28 U.S.C. 1291. It “conclusively deter­
mine^] the disputed question, resolve[s] an important 
issue completely separate from the merits of the action, 
and [is] effectively unreviewable on appeal from a final 
judgment.” Coopers & Lybrand v. Livesay, 437 U.S. 463, 
468 (1978) (footnote omitted). For the reasons outlined 
above, the first and third prongs of this test have been 
satisfied. As for the second, although in evaluating a pro­
posed settlement a district court must take a peek at the 
merits, the issue of whether the settlement should be ap­
proved is quite distinct from the post-trial issue of who is 
to prevail. A court may not reject a settlement merely be­
cause on the same facts it would, after trial, impose obli­
gations and distribute benefits differently than did the 
parties, or because it doubts that at trial the parties could 
prove the facts on which they agree for purposes of set­
tlement. Rather, the court’s role is to assure that the set­
tlement is fair, adequate, reasonable and noncollusive. 
Thus, the merits of the district court’s refusal to enter the 
proposed consent decree in the instant case presents an 
issue separate from, and collateral to, the merits of the 
claims the parties seek to compromise.



8

ARGUMENT

I. t h e  DISTRICT COURT’S ORDER IS A P­
PEALABLE AS AN ORDER REFUSING AN 
INJUNCTION UNDER 28 U.S.C. 1292(a)(1)

For as long as it has sat, Congress has generally limited 
appellate review to final decrees and judgments, eschew­
ing piecemeal appeals and the delays they engender. For- 
gay v. Conrad, 47 U.S. (6 How.) 201, 205 (1848). How­
ever, Congress has also recognized, as has this Court, that 
the interests of justice are furthered by allowing appeals 
from nonfinal decisions in certain circumstances.

Thus, 28 U.S.C. 1292(a) provides that “ [t]he courts of 
appeals shall have jurisdiction of appeals from: (1) [inter­
locutory orders * * * granting, continuing, modifying, re­
fusing or dissolving injunctions, * * * except where direct 
review may be had in the Supreme Court.” This legislative 
exception to the finality rule “spring[s] from a developing 
need to permit litigants to effectually challenge interlocu­
tory orders of serious, perhaps irreparable, consequence.” 
Baltimore Contractors, Inc., v. Bodinger, 348 U.S. 176, 
181 (1955) (footnote omitted).

The courts of appeals are in conflict concerning whether 
a district court order refusing to enter a proposed consent 
decree is among those for which Congress intended to au­
thorize immediate appeal. The court below concluded that 
it is not. In contrast, the Fifth Circuit concluded in United 
States v. City of Alexandria, 614 F.2d 1358 (1980), that 
such an order in a Title VII action falls within the literal 
terms of, and is appealable under, 28 U.S.C. 1292(a)(1).6

6 The Fifth Circuit reached this result based upon its own prior deci­
sion that an order approving a settlement providing for injunctive re­
lief was an order “granting” an injunction within the meaning of Sec­
tion 1292(a)(1). It followed, in the court’s view, that an order refusing 
approval of such a settlement is an order “refusing” an injunction. 614 
F.2d at 1361 n.5. Although the court sought to distinguish the instant 
case as relating to a class action {ibid.), “ [t]he appealability of any 
order entered in a class action is determined by the same standards 
that govern appealability in other types of litigation.” Coopers & 
Lybrand v. Livesay, 437 U.S. 463, 470 (1978).



9

In our view, the result reached by the Fifth Circuit is the 
correct one.

A . T h e  O r d e r  F a l l s  W it h in  T h e  L a n g u a g e  
O f  S e c t io n  1292(a)(1) A n d  Is Of  T h e  T y p e  
T h e  S t a t u t e  I s I n t e n d e d  T o R e a c h

At the outset we stress, as did the Fifth Circuit in 
United States v. City of Alexandria, supra, that the order 
appealed from falls within the literal terms of Section 
1292(a)(1). Had the district court signed the proposed con­
sent decree, respondents would have been compelled to 
make specified changes in American Tobacco Company’s 
seniority, transfer and promotion practices, to work to­
ward a specified goal for placing qualified blacks in pro­
duction supervisory positions, and to refrain from there­
inafter discriminating against black employees. Quite evi­
dently, then, had the consent decree been entered, it 
would have constituted an order “granting” an injunction 
within the meaning of Section 1292(a)(1). By a parity of 
reasoning the district court’s order rejecting the decree 
constitutes an order “refusing” an injunction.

While it is true, as the court below observed, that in­
sofar as they remain free to go to trial petitioners have not 
altogether lost “ their claims for final injunctive relief” 
(Pet. App. 10a), that fact does not strip the proposed con­
sent decree of its injunctive character nor place the order 
refusing to enter the decree outside the reach of Section 
1292(a)(1). First, an order refusing to enter a consent de­
cree denies the parties to it “ final injunctive relief” on the 
terms perceived by them to be most mutually advanta­
geous. See pages 10-11, infra. Second, even if injunctive 
relief is eventually granted, a refusal to enter a consent 
decree deprives the parties of that relief while the case 
wends its way toward final judgment. In that sense, an 
order refusing to enter a consent decree containing injunc­
tive provisions is akin to an order refusing a preliminary 
injunction, and is appealable to the same extent.

As noted above, Section 1292(a)(1) was enacted so that 
review could be had of “ interlocutory orders of serious,



10

perhaps irreparable, consequence.” Baltimore Contrac­
tors, Inc., v. Bodinger, supra, 348 U.S. at 181 (footnote 
omitted). The order petitioners seek to appeal fits 
squarely within that category inasmuch as it effectively 
denies petitioners and respondents alike the opportunity 
to settle their dispute voluntarily, and to enjoy the bene­
fits of having done so.7

A consent decree and a judgment following trial are not 
fungible. Both, of course, confer rights and impose duties 
on the parties they cover. However, a consent decree by 
its nature produces benefits that are eroded when a case 
goes to trial. One of the primary reasons litigants enter 
into voluntary settlements is to avoid the expense, delay 
and risk associated with litigation. As this Court explained 
in United States v. Armour & Co., 402 U.S. 673, 681 
(1971):

Consent decrees are entered into by parties to a 
case after careful negotiation has produced agreement 
on their precise terms. The parties waive their right 
to litigate the issues involved in the case and thus 
save themselves the time, expense, and inevitable 
risk of litigation. Naturally, the agreement reached 
normally embodies a compromise; in exchange for the 
saving of cost and elimination of risk, the parties each 
gave up something they might have won had they 
proceeded with the litigation.

A second advantage of negotiated settlements is that 
they afford defendants an opportunity to influence the 
form as well as the terms of the relief granted plaintiffs. 
In Title VII proceedings this means that employers may 
seek to structure remedies compatible with their business

7The court of appeals stressed (Pet. App. 8a) that the district court 
remained free to reconsider its refusal to enter the proposed decree, 
and that the parties remained free to submit alternative proposals 
more likely to find favor with the court. However, it is manifest that 
nothing short of an admission of discrimination by the respondents 
would persuade the district court in this case to approve any relief 
proposed by the parties, and that the specific class relief contained in 
the proposed decree will not be approved unless the parties demon­
strate that every class member was an actual victim of discrimination. 
See page 4, supra.



11

interests. Another characteristic of negotiated settlements 
is that defendants are able to protect their good will by 
avoiding a judicial determination that they have discrimi­
nated.8 Finally, settlements free judicial resources for use 
in other cases. These benefits are irretrievably lost once 
litigants proceed to trial. Even if a refusal to enter a con­
sent decree could be overturned on appeal from a fully liti­
gated judgment, great harm already would have been 
done. Cf. Abney v. United States, 431 U.S. 651, 660-662 
(1977) (pretrial order rejecting claim of former jeopardy 
appealable under 28 U.S.C. 1291 since even if subsequent 
conviction reversed on appeal, defendant forced to endure 
trial that Double Jeopardy Clause designed to prohibit). 
Thus, the district court’s order refusing to enter the con­
sent decree was both serious and, most likely, irreparable.

In this most important of respects, a refusal to enter an 
injunction by consent differs markedly from a simple de­
nial of summary judgment, the appealability of which this 
Court considered in Switzerland Cheese A ss ’n v. E. 
Home's Market, Inc., supra. The sole unrecoverable loss 
when a summary judgment motion is erroneously denied 
on the ground that genuine issues of material fact exist is 
the time and expense expended by the parties and the 
court in proceeding to trial. However, only the disputed 
facts need be tried, and to the extent the dispute proves to 
be illusory (i.e ., to the extent the trial court erred in not 
disposing of the case by way of summary judgment), the 
trial will likely be pro forma. Thus, little of consequence 
turns on the denial of a motion for summary judgment.

Not only are the benefits of settlement irretrievable 
once a case goes to trial. The propriety of the court’s re­

8To accomplish this, defendants customarily insert in consent de­
crees or the settlement agreements underlying them a disclaimer of 
liability. As the court of appeals judges who dissented in the instant 
case observed (Pet. App. 25a), “ [a] ruling [like the one made by the 
district court] that litigation may not be settled unless a party formally 
admits liability * * * or a court determines liability or a lack thereof, 
would defeat the general policy of the law to foster settlements since 
the very purpose of a settlement is usually to avoid an adjudication or a 
concession of rights.”



12

fusal to endorse a settlement cannot as appropriately be 
reviewed after a litigated final judgment (or a judgment 
based on an alternative agreement) is entered. A settle­
ment agreement reflects the parties’ best assessment at a 
given point of the strengths and weaknesses of their re­
spective cases, and of the advantages and disadvantages 
of, and risks and uncertainties inherent in, proceeding to 
trial. That state of facts, of mind, and of perspective can­
not faithfully be reconstructed once intervening events 
have altered the parties’ (and the court’s) view of the case. 
The dissenting judges below correctly perceived (Pet. 
App. 20a-21a) that once a case is tried, “as a practical 
matter the propriety of the proposed settlement will not 
be raised again either in the district court or” on appeal.

Should, however, the settlement issue surface after final 
judgment, the appellant would be a losing plaintiff who 
would have been granted relief under the disapproved 
consent decree, or an unsuccessful defendant whose obli­
gations would have been fewer under the decree. In either 
circumstance, where the refusal to enter the decree was 
improper but the trial court’s findings of fact vary suffi­
ciently from the facts as they appeared at the time the 
decree was disapproved to justify different relief, the 
court of appeals is placed in a rather difficult position. It 
can enforce the settlement even though subsequently de­
veloped facts prove its terms to be not fully justified, or it 
can enforce the litigated judgment even though to do so 
would deprive the parties of the benefits and risks of a 
bargain freely entered into and wrongly rejected by the 
trial court. Both approaches contain elements of unfair­
ness to the parties. Permitting an immediate appeal from 
refusals to enter consent decrees would spare appellate 
courts the need to choose either alternative.

Because of the injunctive provisions of the proposed 
consent decree and the difficulties inherent in reviewing 
the district court’s order once a litigated final judgment is 
entered, this case has little in common with Gardner v. 
Westinghouse Broadcasting Co., supra, in which the 
Court held (437 U.S. at 480) that a denial of class certifica­



13

tion was not appealable under Section 1292(a)(1), primarily 
because “ [i]t could be reviewed both prior to and after 
final judgment * * Gardner is further inapposite be­
cause the order involved in that case “did not pass on the 
legal sufficiency of any claims for injunctive relief” (437 
U.S. at 481; footnote omitted), whereas the order in the 
instant case was premised on the belief that the injunctive 
relief sought by the parties has no legal basis and is itself 
unlawful.

Finally, an appeal should be permitted here not only be­
cause the district court’s order comes within the language 
of Section 1292(a)(1) and is of serious, perhaps irreparable 
consequence, but also because prompt review would not 
lead to the evils the finality rule was designed to combat. 
Specifically, the availability of immediate appellate review 
from refusals to enter consent decrees would advance 
rather than disrupt the course of litigation and would not, 
as the court below feared (Pet. App. 8a-10a), involve the 
courts of appeals in a rash of appeals. The fact that an 
order is appealable does not, of course, mean that im­
mediate review will in fact be sought. As a practical mat­
ter, if following the rejection of a proposed consent decree 
the parties believe they can reach an alternative agree­
ment satisfactory to themselves and to the court, it is un­
likely that they would undertake the expense and suffer 
the delay of an appeal without first exploring seriously 
such alternatives. At the same time, the possibility that 
its order might be appealed would serve as a check on pre­
cipitous or unwarranted action by the district court. Thus, 
an appeal is likely only where even after a sober second 
look the parties and the court are unable to find a common 
ground.9 Given the parties’ typical commitment to a volun­
tary resolution once an initial settlement has been ham­
mered out (see note 13, infra) and the court’s interest in 
resolving disputes expeditiously, the spectre raised by the

9An irreconcilable impasse is most probable where, as here, the 
court’s refusal to enter the decree is based on its reading (or misread­
ing) of the applicable law. In such circumstances, a prompt appeal is 
particularly appropriate. Cf. 28 U.S.C. 1292(b); 28 U.S.C. 1254(3).



14

court below (Pet. App. 9a) of “an endless string of ap­
peals” does not loom very large.

B. A p p e a l a b i l i t y  I s P a r t i c u l a r l y  A p p r o ­
p r ia t e  H e r e  I n  L ig h t  O f  A n I m p o r t a n t  
C o n g r e s s io n a l  P o l ic y  E m b o d ie d  I n  T it l e  
VII

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. Coopera­
tion and voluntary compliance were selected as the 
preferred means for achieving this goal.

To that end, Title VII is structured so that a person 
claiming to be aggrieved by an unlawful employment prac­
tice must file a charge with the Equal Employment Oppor­
tunity Commission prior to instituting a civil action in the 
district court. 42 U.S.C. 2000e-5(b), (f). When a charge is 
filed and the Commission determines, after investigation, 
that there is reasonable cause to believe that the charge is 
meritorious, it “shall endeavor to eliminate any such al­
leged unlawful employment practice by informal methods 
of conference, conciliation, and persuasion.” 42 U.S.C. 
2000e-5(b).10 As this Court noted in Emporium Capwell 
Co. v. Western Addition Community Organization, 420 
U.S. 50, 72 (1975):

Congress chose to encourage voluntary compliance 
with Title VII by emphasizing conciliatory procedures 
before federal coercive powers could be invoked.

As a practical matter, once a dispute has reached the 
courts this policy of voluntary resolution can best be im­

10 The Attorney General has authority under the statute to bring 
suits against state and local government employers. 42 U.S.C. (& 
Supp. II) 2000e-6. In such suits, it is particularly appropriate to seek a 
non-litigated resolution of the dispute in order to minimize the strain 
on federal-state relations. The decision below would, in some circum­
stances, force the United States to go to trial against a state or local 
government even though the latter is willing to comply with the law 
voluntarily.



15

plemented by encouraging settlement through consent de­
crees.11 This mechanism—the consent decree—has proven 
to be an invaluable means of enforcing Title VII.12 As the 
Fifth Circuit noted in United States v. City of Jackson, 
Mississippi, 519 F.2d 1147, 1151-1152 (1975) (footnotes 
omitted):

It is a highly useful tool for government agencies, 
since it maximizes the effectiveness of limited law 
enforcement resources; by reaching agreement with 
private parties as to the specifics of substantial com­
pliance, the government may avoid the risks as well 
as costs of full scale litigation of each point.

The court further observed (id. at 1152 n.9):
Because of the consensual nature of the decree, 

voluntary compliance is rendered more likely, and the 
government may have expeditious access to the court 
for appropriate sanctions if compliance is not forth­
coming. At the same time, the private parties in­
volved also minimize costly litigation and adverse 
publicity and avoid the collateral effects of adjudi­
cated guilt. [13]

11 Although it is theoretically possible for the plaintiff to dismiss and 
settle out-of-court, the only way to secure injunctive relief enforceable 
by a contempt proceeding in the district court is to obtain that court’s 
approval of the settlement agreement. It accordingly is the policy of 
both the EEOC and the Department of Justice to settle litigation by 
consent decree rather than by out-of-court agreement.

12 Department of Justice records indicate that from 1966 to the pres­
ent, the Department filed 193 suits under Sections 706 and 707 of Title 
VII, 42 U.S.C. 2000e-5 and 2000e-6. Of that number, 96 (49.7%) were 
settled by consent decree prior to trial. The Equal Employment Oppor­
tunity Commission has had similar experience. Its records show that 
between 1972 and 1979, the EEOC resolved approximately 1,021 of the 
1,500 suits it filed under Section 706 and obtained 708 settlements be­
fore trial (69.3%), the overwhelming majority of which were by consent 
decree. In addition, the EEOC obtained consent decrees in all five Sec­
tion 707 suits originally brought by the Department of Justice and 
transferred to the Commission pursuant to the 1972 amendments to 
Title VII, and has settled by consent 10 of the 15 Section 707 suits it 
has filed.

13 Most of these benefits are equally applicable to private plaintiffs. 
Moreover, although respondents in the instant case now seek to re­



16

In sum, the decision of the court of appeals that appel­
late 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 deprives the parties of this 
preferred mode of resolving Title VII disputes, contrary 
to the expressed will of Congress.

II. THE DISTRICT COURT’S ORDER IS AP­
PEALABLE AS A “ COLLATERAL ORDER” 
UNDER 28 U.S.C. 1291

In addition to its appealability under Section 1292(a)(1), 
the district-court’s order comes within a judicially recog­
nized exception to the final judgment rule as an order that 
“ conclusively determinefs] the disputed question, re- 
solve[s] an important issue completely separate from the 
merits of the action, and [is] effectively unreviewable on 
appeal from a final judgment.” Coopers & Lybrand v. 
Livesay, 437 U.S. 463, 468 (1978) (footnote omitted). For 
the reasons set out above (see pages 10-12, supra), the 
order appealed from meets the first and third elements of 
that standard. Therefore, the sole remaining question is 
whether it presents an issue completely separate from the 
merits.

At the outset, a distinction should be drawn between 
the merits of a proposed settlement and the merits of the 
claims it seeks to compromise. The question a district 
court must face in evaluating a settlement is not whether 
the parties would have prevailed to the same extent and in 
the same respects had a trial produced factual findings 
identical to those stipulated to by the parties, nor whether

pudiate the settlement (see note 14, infra), typically the value of the 
consent decree to the defendant is so great that the defendant will 
continue to support the decree on appeal after the district court has 
refused to enter it. See United States v. City o f Alexandria, supra, 
614 F.2d at 1360-1361. Cf. United Steelworkers o f America, AFL- 
CIO-CLC v. Weber, 443 U.S. 193 (1979). Indeed, respondents herein 
supported the proposed consent decree in the court of appeals and did 
not attempt to repudiate it until after the court had dismissed the ap­
peal. Thus, denial of the right to appeal disadvantages parties on both 
sides of the bargain.



17

the facts adduced at trial would have mirrored those on 
which the parties agreed for purposes of settlement. As 
the Second Circuit said in City of Detroit v. Grinnell 
Corp., 495 F.2d 448, 456 (1974), “ [i]t cannot be overem­
phasized that neither the trial court in approving [a] set­
tlement nor [appellate courts] in reviewing that approval 
have the right or the duty to reach any ultimate conclu­
sions on the issues of fact and law which underlie the 
merits of the dispute.” Rather, the role of the courts is 
more limited: to assure that a proposed settlement is fair, 
adequate, reasonable and noncollusive. City of Detroit v. 
Grinnell Corp., supra; Bryan v. Pittsburgh Plate Glass 
Co., 494 F.2d 799 (3d Cir.), cert, denied, 419 U.S. 900 
(1974); Flinn v. FMC Corp., 528 F.2d 1169 (4th Cir. 
1975), cert, denied, 424 U.S. 967 (1976); Cotton v. Hinton, 
559 F.2d 1326 (5th Cir. 1977); Patterson v. Stovall, 528 
F.2d 108 (7th Cir. 1976); Grunin v. International House 
of Pancakes, 513 F.2d 114 (8th Cir.), cert, denied, 423 
U.S. 864 (1975); Mandujano v. Basic Vegetable Products, 
Inc., 541 F.2d 832 (9th Cir. 1976).

Thus, the issue of whether a proposed settlement should 
be approved is quite distinct from the post-trial issue of 
who is entitled to prevail. As the Ninth Circuit observed 
in Norman v. McKee, 431 F.2d 769, 773 (1970), cert, de­
nied, 401 U.S. 912 (1971):

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 ingre­
dient 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 ap­
proval.

And, as detailed in point I of this brief (see pages 11-12, 
supra), the benefits to the parties of settlement are irre­
trievable once a case goes to trial.

It follows that the district court’s order in the instant 
case satisfies all three prongs of the collateral order excep­
tion to the final judgment rule. Moreover, as detailed ear-



18

Her in this brief (see pages 14-16, supra), the order’s ap­
pealability would further rather than frustrate the policies 
underlying the rule of advancing the course of litigation 
and maximizing judicial resources,14 and would promote 
the strong congressional policy favoring voluntary settle­
ment of Title VII claims.

14 Respondents contend (Br. in Opp. 6-10) that the questions pre­
sented in the petition have been rendered moot by respondents’ with­
drawal of consent to the entry of the decree. The reason given by re­
spondents for withdrawing their consent is that the law governing the 
substantive provisions of the decree has been changed by intervening 
decisions of this Court (id. at 8-9). However, in our view the consent 
decree signed by the parties is a conditional contract (conditioned upon 
approval by the district court in the proper exercise of its discretion) 
from which neither party has a right of revocation before the condition 
is met. 3A A. Corbin, Contracts § 649 (1960). Had one of the parties 
wished to repudiate the agreement before the district court had an op­
portunity 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 modifi­
cation of a decree). The same rule should apply on appeal. Otherwise, a 
party’s right to take an appeal would be conditioned on the acquies­
cence 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 pro­
posed consent decree. Nevertheless, underlying every settlement 
agreement, written or implied, is the implicit expectation that in de­
ciding whether to approve the settlement the district court will act 
nonarbitrarily and in conformity with the law.



19

CONCLUSION

The judgment of the court of appeals should be re­
versed.

Respectfully submitted.

L ero y  D. Clark
General Counsel

W ad e  H. Mc Cr e e , Jr .
Solicitor General

D r e w  S. Da y s , III
Assistant Attorney General

L a w r e n c e  G. W a llace
Deputy Solicitor General

H arlon  L. D alton  
Assistant to the Solicitor General

B r ia n  K. L a n d sb erg  
Ma r ie  E. K lim esz

Attorneys

Equal Employment
Opportunity Commission

A u g u s t  1980

*  U.S. G O VERNM ENT PRINTING OFFICE: 1980 326451 55