Petition — Carson v. American Brands, Inc.
Supreme Court brief1981
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IN THE
Supreme Comut of the United States
OcToBER TERM, 1979
No, @ 9 1236
FraNK L. Carson, LAWRENCE HATCHER,
and Stuart E. MINEs,
Petitioners,
v.
AMERICAN Branps, INC., t/a THE AMERICAN ToBacco COMPANY;
Loca 182, Topacco WorKERS INTERNATIONAL, TOBACCO WoRK-
ERS INTERNATIONAL UNION,
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
Henry L. Marsy, III
Wiuiam H. Bass, III
RANDALL G. JOHNSON
Hill, Tucker & Marsh
214 East Clay Street
P.O. Box 27363
Richmond, Virginia 23261
JoH~ W. Scort, Jr.
015 Caroline Street
Fredericksburg, Virginia 22401
JACK GREENBERG
JaMEs M. Nasait, III
Barry L. GOLDSTEIN
NApPoLeon B. WILuiAMs, JR.
Suite 2030
10 Columbus Circle
New York, New York 10019
Counsel for Petitioners
TABLE OF CONTENTS
CITATION TO OPINION BELOW .....ccecseccccces
JURISDICTION eoeeseeste7#nee#seet#ernreneteeneteeeenseeeeneeeeeee
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED .....ceercccvvveees
QUESTIONS PRESENTED ......ccceccves eee ercees
STATEMENT OF THE CASE .ncccccccccccccccecess
HOW THE FEDERAL QUESTIONS WERE RAISED
BELOW eeeeoeeeeeeeeeeeseeeseeeeeeeeeeeeeeee@
REASONS FOR GRANTING THE WRIT .......ceeee0.
I. THE DISTRICT COURT'S ORDER DENYING
THE PARTIES' JOINT MOTION IS APPEALABLE
AS A COLLATERAL ORDER UNDER
26 U.G.C. GLZPL a ccaciignwsnesceseeeien
II. THE DISTRICT COURT'S DISAPPROVAL OF
THE PROPOSED CONSENT DECREE IS
APPEALABLE AS AN INTERLOCUTORY
ORDER UNDER 28 U.S.C. §1292 (a)(1)
III. RULE 23(e) DOES NOT AUTHORIZE A
FEDERAL DISTRICT COURT TO DISAPPROVE
A SETTLEMENT MEETING THE REQUIREMENTS
OF WEBER ON THE GROUND THAT THE CLASS
MEMBERS ARE NOT NECESSARILY VICTIMS
OF DISCRIMINATION BY THE DEFENDANTS ...
CONCLUS ION eeeee#e3e2e+eeste*ee#*ense#ee#eenseerseereesetcee#8e#e#8eeeeeee#ee#e
AP PEENDIX
Opinion of the Court of Appeals .......
Opinion of the District Court .........
Judgment of the District Court ........
Judgment of the Court of Appeals .......
-i-
Page
19
24
28
33
la
28a
5la
52a
TABLE OF AUTHORITIES
Page
Cases:
Alexander v. Gardner-Denver Co., 415 U.S.
2S eee NO CRO04 bbn beds ew OO ees 18, 30
Baltimore Contractors v. Bodinger,
BUR LED Pos ciccwccesccsevees 26
Catlin v. United States, 324 U.S 229
DT CEveveeaGe seve eceoesseenseececs +. 19
Cohen v. Beneficial Industrial Loan
Corp. 377 U.S. 541 (1949) ...... 17,19, 20,24
Cold Metal Process Co. v. United
Eng'r & Foundry Co., 351 U.S.
Pe Ube btheen ebsse6esoecvevcse ee 27
Cooper & Lybrand v. Livesay, 437
Mee SEOPOD cecicese ieee ena peceoves 19,23
Eisen v. Carlisle & Jacquelin, 417
MEE Cvs ck pene cvecectees seeds 19
Flinn v. FMC Corporation, 528 F.2d 1169
(4th Cir. 1975), cert. denied
Oe CASIO? cc cncesssedccccsecs 31
Franks v. Bowman Transportation Co.,
ie PF CEUIO) coccancsccecrececes 11,22
In re International House of Pancakes
Franchise Litigation, 487
re Cem GAP, LOTS) sccccecccccces 16
Gardner v. Westinghouse Broadcasting Co.,
EE EE REOIED ccccccdecsecvecss 19,25, 26
Gillespie v. U.S. Steel Corp., 379
PE CEE? ious dboracesevcecccesen 23
Liberty Mutual Ins. Co. v. Wetzel,
BOG BoB FST CASTE) eon ckes bua 606 ctvnde’s 25
Mercantile National Bank at Dallas
v. Lemgdeas, 371 U.S 555 (1963) ....... 23,24
Norman v. McKee, 431 F.2d 769 (9th
Cir. 1970) cert. denied, 401
ee ae |S Ra R er err ee 16
Patterson v. Newspaper & Mail Del. U. of
N.Y. Vic., 514 F.2d 767 (2d
Cir. 1975), cert. denied, 427 U.S.
DES LIGIER cies tees cekeuw eh (aaias ibis sis 31
Regents of the University of California
v. Bakke, 438:°U.8 265 (1978) ....scees 18,21
Russell v. American Tobacco Company,
528 F.2d 357 (4th Cir.
1975), cert. denied, 425 U.S.
DES LAGROE KAS eAas obese 4 60 p48 6 ooninne 13
Sears, Roebuck & Co. v. Mackey, 351 U.S.
et rrr ee eee ee ee ee 27
Seigal v. Merrick, 590 F.2d 35 (2d
CEG TEPOs SR KORRES RENE 9484860 8SS OOS 16,17
Switzerland Cheese Association, Inc.
v. E. Horne's Market, Inc., 385
G.8.. 23: 429GG? na ve Teer ee Te Ter Trae re 25,26
Teamsters v. United States, 431 U.S. 324
CSOT S)) icaldv ada cnlaclashsesaedtaas ie'asue 22,24
United Steelworkers of America, AFL-CIO-
CLC v. Weber, U.S.
61 0.86. -20-O00 CISTO) Bocuse ces reer ©. %
21,22, 29,27.
28, 30, 32
- iii -
Constitutional Provisions
Fifth Amendment to the Constitution
OF Cie Wasted SEREOE 2c cccececes ce: a
Statutes
Oe Pea th Se ere ere ea 2
Oe DiS Gc? SIRE h.secsocsdees ceca 3,6,8,16,
17, 18,19
- Oy ee eS ee ceeuwe> 3,6,8,16,
17,18, 24,
25,26
Na ec BENE 40.448 645 6 eka Ss bs ORERES ES 6,7
Title VII, Civil Rights Act of 1964,
as amended, 42 U.S.C. §§2000e et
seq. ee ee#eee e*eeeees+5+erskefeenseeeke#er#e . Sms Po taa ls
BB, 22, 20% 276
28, 30
Rules
Rule 23(e), Federal Rules of
GOOLE PeGeeOeed: «ia sede ceccvoas Pe en & ey. 8
28
Legislative History
Remarks of Senator Hubert Hemphrey,
110 Cong. Rec., 6548, concerning
Title VII, Civil Rights Act of
1964, as amended, 42 U.S.C.
$§2G00e et Seq. op .ceececesceeceseseees 30
IN THE
SUPREME COURT OF THE UNITED STATES
October Term, 1979
No.
FRANK L. CARSON, LAWRENCE HATCHER,
and STUART E. MINES,
Petitioners,
Vv.
AMERICAN BRANDS, INC., T/A THE
AMERICAN TOBACCO COMPANY; LOCAL 182,
TOBACCO WORKERS INTERNATIONAL,
TOBACCO WORKERS INTERNATIONAL UNION,
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
Frank L. Carson, Lawrence Hatcher, and Stuart
E. Mines, petition for a writ of certiorari to
review the judgment of the United States Court of
Appeals for the Fourth Circuit, entered on Septem-
ber 14, 1979, dismissing an appeal by petitioners
from an order, entered June 2, 1977, by the
United States District Court for the Eastern
District of Virginia, Richmond Division, denying a
joint motion by the parties to approve and enter a
consent decree.
CITATION TO OPINION BELOW
The opinion of the Court of Appeals is
reported at 606 F.2d 420 and is set forth in
the Appendix. The opinion of the District
Court is reported at 446 F.Supp. 790 and is set
out in the Appendix.
JURISDICTION
The judgment of the Court of Appeals dismis-
sing the appeal was entered on September 14,
1979. See Appendix. Following this dismissal,
petitioners filed a motion with this Court for an
extension of time in which to file a petition for
a writ of certiorari. On December 6, 1979, the
Court granted the motion and ordered the time for
petitioners to file a writ of certiorari extended
until, and including, February 11, 1980.
Jurisdiction of this Court is invoked pur-
suant to 28 U.S.C. §1254(1).
oe
CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED
This case involves the Fifth Amendment to the
Constitution of the United States.
This case also involves the following federal
statutes:
a. 28 U.S.C. §1291
The court of appeals shall have
jurisdiction of appeals from all final
decisions of the district courts of the
United States, the United States Dis-
trict Court for the District of the
Canal Zone, the District Court of Guam,
and the District Court of the Virgin
Islands, except where a direct review
may be had in the Supreme Court.
b. 28 U.S.C. §1292(a)
The court of appeals shall have
jurisdiction of appeals from:
(1) Interlocutory orders of the
district courts of the United States,
the United States District Court for the
District of the Canal Zone, the District
Court of Guam, and the District Court of
the Virgin Islands, or of the judges
thereof, granting, continuing, modify-
ing, refusing or dissolving injunctions,
or refusing to dissolve or modify
injunctions, except where a direct
review may be had in the Supreme Court.
C. 42 U.S.C. §2000e-2
(a) It shall be an unlawful
employment practice for an employer--
(1) to fail or refuse to hire or
to discharge any individual, or other-
wise to discriminate against any indivi-
dual with respect to his compensation,
terms, conditions, or privileges of
employment, because of such individual's
race, color, religion, sex, or national
Origin; or
(2) to limit, segregate, or
classify his employees or applicants for
employment in any way which would
deprive or tend to deprive any indivi-
dual of employment opportunities or
otherwise adversely affect his status as
an employee, because of such indivi-
dual's race, color, religion, sex, or
national origin.
(c) It shall be an unlawful employment
practice for a labor organization--
(1) to exclude or to expel
from its membership, or otherwise
to discriminate against, any
individual because of his race,
color, religion, sex, or national
origin;
(2) to limit, segregate, or
classify its membership or appli-
cants for membership, or to clas-
sify or fail or refuse to refer for
employment any individual, in any
way which would deprive or tend to
deprive any individual of employ-
ment opportunities, or would limit
such employment opportunities
or otherwise adversely affect his
status as an employee or as an
applicant for employment, because
of such individual's race, color,
religion, sex, or national origin;
or
(3) to cause or attempt to
cause an employer to discriminate
against an individual in violation
of this section.
(j) Nothing contained in this sub-
chapter shall be interpreted to require
any employer, employment agency, labor
organization, or joint labor-management
committee subject to this subchapter to
grant preferential treatment to any
individual or to any group because of
the race, color, religion, sex, or
national origin of such individual or
group on account of an imbalance which
may exist with respect to the total
number or percentage of persons of any
race, color, religion, sex, or national
origin employed by any employer,
referred or classified for employment by
any employment agency or labor organiza-
tion, admitted to membership or clas-
sified by any labor organization,
or admitted to, or employed in, any
apprenticeship or other training pro-
gram, in comparison with the total
number or percentage of persons of such
race, color, religion, sex, or national
Origin in any community, State, section,
or other area, or in the available work
force in any community, State, section,
or other area.
d. Rule 23(e), Federal Rules of Civil Pro-
cedure
A class action shall not be dis-
missed or compromised without the
approval of the court, and notice of the
proposed dismissal shall be given to
all members of the class in such manner
as the court directs.
QUESTIONS PRESENTED
Rs Whether the Court of Appeals erred in
holding that petitioners were not entitled under
28 U.S.C. §§1291 and 1292(a)(1) to appeal a denial
by the district court of a joint motion by the
parties to approve and enter a proposed consent
decree enjoining defendants from engaging in
unlawful discriminatory actions under Title VII of
the Civil Rights Act of 1964, as amended, 42
U.S.C. §§2000e, et seq., and 42 U.S.C §1981?
2. Whether the federal district court below
erred in holding that the due process clause of
the Fifth Amendment to the Constitution of the
United States and Title VII of the Civil Rights
Act of 1964, prohibit federal courts from judi-
cially approving, in the absence of discrimination
by defendants against plaintiffs and other class
members, proposed consent decrees providing for
a
—
remedial use of race-conscious affirmative action
program in accordance with requirements set forth
in United Steelworkers of America, AFL-CIO-CLC v.
Weber, U.S. » 61 L.Ed. 2d 480 (1979)?
3. Whether the district court below applied
proper criteria, or otherwise abused its discre-
tion, under Federal Rules of Civil Procedure 23(e)
in refusing to approve a proposed settlement by
the parties of a Title VII class action?
STATEMENT OF THE CASE
General. On October 24, 1975, petitioners,
present and former seasonal employees at the
Richmond Leaf Department of the American Tobacco
Company, a subsidiary of American Brands, Inc.,
which is located in Richmond, Virginia, filed a
complaint on behalf of themselves and other black
employees at the Richmond Leaf Department. The
complaint charged that defendant American Brands,
Inc., defendant Tobacco Workers’ International
Union, and defendant Local 182 of the Tobacco
Workers' International Union, in violation of the
Civil Rights Act of 1964, 42 U.S.C. §§2000e, et
seq., and 42 U.S.C §1981, discriminatorily denied
black workers hiring, promotion, and transfer
opportunities and discriminatorily restricted
black workers to low paying and otherwise un-
desirable jobs.
After the conduct of extensive discovery, the
district court, on March l, 1977, certified a
class consisting of (1) black persons, currently
and formerly employed who were seasonal employees
of the American Tobacco Company's Richmond Leaf
Department on or after September 9, 1972, and (2)
black persons who applied for seasonal employment
at the American Tobacco Company's Richmond Leaf
Plant on or after September 9, 1972.
The parties reached a settlement of plain-
tiffs' claims, entered into a proposed consent
decree, and jointly moved for approval and entry
of the proposed decree. The district court denied
the motion on June 1, 1977.
On May 14, 1979, the United States Court of
Appeals for the Fourth Circuit ordered the merits
of the appeal to be determined en banc. On
September 14, 1979, however, the Court of Appeals
ordered the appeal dismissed on the ground that
the order appealed from below was not appealable
within the intendment of 28 U.S.C. §§1291 and
1292. Chief jud,e Haynsworth and circuit judges
Winter and Butzner dissented in an opinion holding
that the order was appealable and that the consent
decree should have been approved.
History of Racial Discrimination. American
Brands, Inc., employs 150 seasonal employees and
100 regular, or full-time, employees to process
and store leaf tobacco at the Richmond Leaf
Department of the American Tobacco Company in
Richmond, Virginia. The seasonal employees, all
of whom are black, work between six and nine
months during the year. By contrast, regular
employees, of whom 34% are white, work throughout
the wate a Both the seasonal and regular em-
ployees are represented by defendant Local 182,
Tobacco Workers' International Union (herinafter
“T.W.I.0.").
Prior to September 16, 1963, union jurisdic-
tion over job positions at the Richmond Leaf
Department was divided betweeen Local 182 of the
T.W.1.U. and Local 214 of the T.W.I.U. The
former, whose membership was then all white, had
exclusive jurisdiction over regular job class-
ifications. Local 214's membership was limited
1/ The following table represents the racial
composition of the employees at the Richmond
Leaf Department from 1968-1976:
Year Regular Employeed Seasonal Employees
Whites Blacks Whites Blacks
1968 41 52 0 116
1970 40 59 0 175
1973 40 56 0 176
1976 37 57 0 135
= 10 «
to black employees who were seasonal workers at
the Richmond Leaf Department.
While the existence of two separate unions at
the Department was officially terminated on
September 16, 1963, the pre-existing patterns of
racial discrimination, however, continued in
effect at the Richmond Leaf Department as a conse-
quence of regulations and procedures establishing
the system of seniority and transfer rights of
employees.
Seniority and Transfer Rights. Prior to
September 16, 1963, permanent job vacancies were
filled by canvassing the employees within the
bargaining unit of the union having jurisdiction
of the jobs in which the vacancies existed.
This procedure benefitted the white members of
Local 182 in the competition for permanent job
positions.
Following the 1963 merger of the Locals,
the rules governing the filling of vacancies in
the full-time positions continued to exclude or
disadvantage the black workers who had been
discriminatorily assigned to seasonal positions.
When management requests a job transfer of a
regular employee that employee does not lose
seniority rights, but when management requests a
seasonal employee to transfer to full-time work
= jli-
that employee loses his seniority rights. More-
over, when a regular worker transfers from one
full-time job to another one the employee retains
all of his seniority rights, but when a seasonal
worker transfers to a full-time job he loses all
of his seniority eights. Furthermore, a seasonal
worker who transfers to a full-time position
almost always must enter at a bottom-level posi-
tion because the regular workers have the first
opportunity to move to the vacancies in full-time
positions; accordingly, if a seasonal worker is
employed in a seasonal position above the entry-
level, he frequently will be required to suffer a
short-term pay cut in order to move into a full-
time position. The imposition of these penalties,
the loss of seniority and the possible reduction
in short-term pay, serve to lock in the effects of
the historical discriminatory practices which
existed at the Richmond Leaf Division. For
example, as of February 13, 1976 only one of the
16 positions of watchman was held by a black
employee.
2/ The transferring seasonal worker loses not
only his "competitive" seniority rights, e.g.,
rights for job security and promotion, but also
his "benefit" seniority rights, e.g., right for
sick leave and vacation, except for retirement
benefits. Cf. Franks v. Bowman Transportation
Co., 424 U.S. 747, 765 (1976).
- 12 -
The historical practices of discrimination
have continued to limit the employment opportuni-
ties of black workers for supervisory as well as
hourly jobs. Almost invarably the Company selects
its supervisory employees from its full-time
staff. The Company has never promoted a seasonal
worker directly to a supervisory position.
The continuation of the effects of the past
segregative practices has resulted in the selec-
tion of a disproportionately small group of the
Company's black employees as supervisors. As
of April, 1976, only 20% of these positions were
filled by blacks.
Proposed Consent Decree. Discovery con-
ducted by the parties following the commencement
of this Lawsuit showed dramatically the degree to
which particular job classifications could be
identified by race. It also showed the extent to
which seniority rules and transfer rules impinged
on the capacity of defendants to eradicate the
vestiges of past racial discrimination. The
parties, of course, had differing views on the
extent to which such lingering effects exist. To
resolve their disagreement and to settle the
controversy, the parties negotiated a proposed
consent decree settling all claims outstanding
between them and presented it to the district
» 13 <
court, in accordance with Rule 23(e) of the
Federal Rules of Civil Procedure.
One of the principal features of the proposed
consent decree was a seniority clause requiring
current and future employees to be credited with
actual time worked at the plant as seasonal
employees. Another feature of the proposed
consent decree allowed seasonal employees to
transfer to permanent job positions as vacancies
occurred provided, of course, no regular employees
desired the positions. These provisions were
patterned after the relief fashioned for seasonal
workers in Russell v. American Tobacco Company,
supra, 528 F.2d 357, 362-64 (4th Cir. 1975), cert.
denied, 425 U.S. 935 (1976). Under the first
above-mentioned feature of the proposed consent
decree, seasonal workers are allowed to maintain
their seniority upon transfer to regular posi-
tions. Under the second feature, seasonal employ-
ees are permitted to bid on vacancies in class-
ifications, such as watchmen, which were once
reserved for whites.
In addition, the proposed consent decree
contained, in Part III, section 5, an affirmative
action provision to reduce a historical underrep-
resentation of blacks which had existed in the
» th
supervisory positions. This provision provided
that:
The Richmond Leaf Department adopts a goal of
filling the production supervisory positions
of Foreman and Assistant Foreman with quali-
fied blacks until the percentage of blacks
in such positions equals 1/3 of the total of
such positions. The date of December 31,
1980 is hereby established for the accom-
plishment of this goal.
Furthermore, the consent decree eliminated
the requirement that seasonal workers must serve a
probationary period when they transfer to a
full-time position. Finally, the decree contained
a general injunction prohibiting the defendants
from discriminating against black workers and
a reporting provision requiring the Company to
submit for a three-year period specific reports
detailing compliance with the Decree.
All of the parties found that these provi-
sions represented, in light of the history of the
Richmond Leaf Department, a settlement that was
reasonable, just, and fair to all concerned.
Despite their agreement, the district court, by
order filed June 2, 1977, denied the joint motion
of the parties to approve and enter the proposed
consent decree.
- 1§ -
HOW THE FEDERAL QUESTIONS WERE RAISED BELOW
A joint motion was made by the parties to the
district court to approve and enter, pursuant to
the requirements of Rule 23(e) of the Federal
Rules of Civil Procedure, the proposed consent
decree. The motion was denied. The district
court offered several reasons in support of its
refusal to grant the motion. First, the court
stated that Title VII of the Civil Rights Act and
the due process clause of the Fifth Amendment to
the Constitution prohibited the court and the
defendant employers and unions from awarding
preferential treatment to employees based upon
race except upon a showing of past or present
discrimination. Second, the court said the
proposed consent decree was fatally flawed in
seeking to provide preferential treatment for
black employees who were not shown to have been
victims of discrimination. The court stated that
the absence of discrimination was established
by the fact that the proposed consent decree
contained a provision in which the defendants
denied that their actions had been discriminatory.
The issue of the appealability of the dis-
trict court's order was raised when, upon appeal,
the Court of Appeals for the Fourth Circuit
= 16 «
dismissed the appeal on the ground that the order
was nonappealable under 28 U.S.C. §§1291 and
1292 (a)(1).
REASONS FOR GRANTING THE WRIT
The petition should be granted because of a
conflict between the circuits. The importance
and complexity of the issues are demonstrated by
the convening of an en banc court and by the fact
that the other two Circuit Courts of Appeals which
have explicitly considered the issues have ren-
dered conflicting decisions. The Fourth Circuit
specifically noted that its decision was in accord
with that of the Second Circuit in Seigal v.
Merrick, 590 F.2d 35 (2d Cir. 1978) and contrary
to the decision of the Ninth Circuit in Norman v.
McKee, 431 F.2d 769 (9th Cir. 1970) cert. denied,
401 U.S. 912 (1971). The Fourth Circuit's deci-
Sion also conflicts with the decision of the
Eighth Circuit in Re International House of Pan-
cakes Franchise Litigation, 487 F.2d 303 (8th Cir.
1973). The Second Circuit in Seigal v. Merrick,
supra, like the Fourth Circuit, explicitly stated
that its decision there was in conflict with
Norman v. McKee, supra.
Circuit Judges, Winter, Butzner, and Chief
Judge Haynsworth dissented below, holding that the
-l7-
order was appealable under §1292(a)(1) as an
interlocutory order refusing an injunction.
The petition should also be granted because
of the importance of the issues raised. Two of
the issues concern appealability of orders under
the federal appeals statutes. The third, and
final, issue concerns the ability of litigants
to settle Title VII class actions, pursuant to
Rule 23(e) of the Federal Rules of Civil Proce-
dure, in accordance with criteria set forth by
this Court in United Steelworkers of America,
AFL-CIO-CLC v. Weber, supra.
The first issue on appealability is whether a
district court's refusal to approve a proposed
consent decree is appealable, notwithstanding the
"finality" requirement of 28 U.S.C. §1291, under
the "collateral order" doctrine described in Cohen
v. Beneficial Industrial Loan Corp., 337 U.S.
3
541 (1949) .—" The second issue raised in this
petition is whether such an order is appealable
under 28 U.S.C. §1292(a)(1) if the proposed
consent decree includes, as here, a request for
injunctive relief and if the court's disapproval
of the decree is based upon its determination that
approval is prohibited by federal law. The
3/ On this issue, the decision in Norman
v. McKee, supra, is in conflict with the decision
in Seigal v. Merrick, supra, and with the decision
by the Court of Appeals below.
- 18 -
answers to these questions turn upon the proper
interpretation and application of 28 U.S.C. §§1291
and 1292 (a)(1). This Court's response to these
issues will be of crucial importance to the
ability of litigants to settle actions and the
effectuation of Congressional and judicial poli-
cies favoring settlement of actions by litigants
themselves. Accord: Alexander v. Gardner-Denver
Co., 415 U.S 36, 44 (1974); Regents of the Uni-
versity of California v. Bakke, 438 U.S 265,
364-65 (1978) (Opinion of Justices Bennan, White,
Marshall, and Blackmun).
The Court's resolution of the third issue
will decide whether the decision in Weber, supra,
can be used by litigants in pending actions as a
basis for settlement of private Title VII actions.
In particular, it will resolve the question of
whether a district court can seize upon the
parties' inclusion, in a proposed consent order,
of an exculpatory clause, whereby defendant is
permitted to deny any discrimination against
plaintiff, as a basis for denying approval of a
consent decree which is in strict compliance with
Weber.
= 19 «-
Es
THE DISTRICT COURT'S ORDER DENYING THE
PARTIES' JOINT MOTION IS APPEALABLE AS
A COLLATERAL ORDER UNDER 28 U.S.C. §1291.
Petitioners agree that the policy of 28 U.S.C.
§1291 disfavoring appeals from nonfinal orders is
salutary and must be respected. Cooper & Lybrand
v. Livesay, 437 U.S 463, 471 (1978); Gardner
v. Westinghouse Broadcasting Co., 437 U.S. 478,
480 (1978). Judicial orders which do not result
in a judgment terminating the entire action are
generally not final judgments within the intend-
ment of §1291. Catlin v. United States, 324 U.S.
229 (1945). The purpose of the finality require-
ment is to prevent the debilitation of judicial
administration caused by piecemeal reviews of a
Single controversy. Eisen v. Carlisle & Jacque-
lin, 417 U.S 156, 170 (1974). Catlin v. United
States, 324 U.S. at 233. See Cohen v. Beneficial
Industrial Loan Corp., supra, 337 U.S. at 546.
This policy, however, is not frustrated by per-
mitting appeals on certain collateral orders that
cannot be reviewed effectively on appeal from a
final judgment. Cohen v. Beneficial Industrial
Loan Corp., supra, 337 U.S. at 546.
To insure that courts do not use this excep-
tion permitting appeals of collateral orders to
defeat the obvious intent of the statute, this
Court has held that the exception is only applic-
able to the small class of orders which
- 20 ~
finally determine claims of right separable
from and collateral to, rights asserted in
the action, too important to be denied review
and too independent of the cause itself to
require that appellate consideration be
defined until the whole case is adjudicated.
Cohen, supra, 337 U.S. at 546.
The collateral order doctrine is applicable
if (1) the merits of the collateral order are
separate and independent from the merits of the
action itself, (2) the collateral order has
finally determined the "collateral" rights, (3)
serious and irreparable injury has been caused by
the collateral order, and (4) the collateral order
cannot be effectively reviewed on appeal.
The order of the district court below sat-
isfies each of these four criteria. The district
court's order denying approval of the proposed
consent decree determined conclusively and finally
for the parties herein whether an affirmative
action plan satisfying the requirements of Weber
can be used as the basis for settling the litiga-
tion. In Weber, this Court upheld the validity of
an affirmative action plan providing remedial
relief to minorities who worked in occupations
which had traditionally been closed to them. This
Court noted that the plan approved in Weber
between the United Steelworkers of America and
Kaiser Aluminum & Chemical Corp., like the one
here, did not require the discharge of white
= 9]
workers or otherwise unnecessarily trammel upon
the interests of white employees. Moreover, the
plan, again like here, was voluntary and designed
to break down traditional patterns of racial
segregation and hierarchy. Additionally, the plan
in Weber, like the plan here, did not create an
absolute bar to the advancement of white employ-
ees. It was temporary and was created to elimin-
ate a manifest racial balance and not to maintain
racial balance. Finally, both the plan in Weber
and the plan envisioned by the consent decree did
not require a percentage of black employees
greater than that of blacks in the labor force.
In approving the validity of the Kaiser plan,
this Court held that the validity of the plan was
independent of whether Kaiser or United Steel-
workers had discriminated against blacks and was
independent of whether any of the black employees
who were to benefit from the plan were themselves
victims of discrimination by either Kaiser or
United Scesiwecners The proposed consent
decree rejected by the district court below
had an affirmative action component exactly like
4/ To this extent the decision in Weber tracks
the decision in Regents of the University of Calif-
ornia v. Bakke, 438 U.S. 265 (1978) where the
Court approved the limited use of race-conscious
plans without restricting their use to victims of
discrimination by the originators of the plans.
- 22 <
the plan in Weber. Moreover, the sole basis for
the district court's rejection of the proposed
decree was the inclusion of an affirmative action
plan in the absence of proof of discrimination
by defendants against plaintiffs and the class
members.
Thus, in rejecting the decree, the district
court made a final determination of the parties’
right to settle the action with a judicial decree
incorporating a program of affirmative action
based upon Weber. The opinion of the district
court that a legal impediment existed to approval
of the consent decree was a final determination
which was not conditioned upon any further action
being taken by one or both of the parties. The
issues thereby decided by the district court were
separate and independent of the issues raised in
the Title VII action since, in order to prevail in
that action, the petitioners must show that they
and the members of the class are victims of
discrimination by defendants. See Franks v.
Bowman Transportation Co., 424 U.S. 747 (1976);
Teamsters v. United States, 431 U.S. 324 (1977).
Moreover, the order of the district court
below cannot be effectively reviewed upon appeal
from a final judgment in this case since such a
judgment would merely confirm that the petitioners
had lost the very right which they were seeking to
-» 93 «
protect, namely the right to settle the action
without going to trial. The order will unques-
tionably cause irreparable injury to petitoners
and respondents since it requires them to conduct
an unnecessary, expensive, and time-consuming
trial.
Sanctioning an appeal in this case is not
inconsistent with the decision in Cooper and
Lybrand v. Livesay, 437 U.S 463 (1978), where the
Court, in not permitting an appeal of a district
court's denial of a class certification order,
warned against appellate courts indiscriminately
thrusting themselves into the trial process. 437
U.S at 476. What is at issue here is the validity
of a rule of law promulgated by the district
court which asserts that the principles enunciat-
ed in Weber cannot lawfully be incorporated into a
class action settlement. It is not an indis-
criminate intrusion into the trial process to say
that the order embodying this rule of law is
reviewable upon appeal.
The considerations favoring appealability in
this case parallel those in Gillespie v. U.S.
Steel Corp., 379 U.S 148 (1964), where the Court
allowed an appeal from a ruling of the district
court striking various allegations of the com-
plaint permitting recovery, and in Mercantile
National Bank at Dallas v. Langdeau, 371 U.S. 555
o 94 «
(1963), where an appeal was permitted of an order
by the Texas Supreme Court rejecting the defen-
dant's venue objections. These cases recognized
that a collateral order is appealable when the
merits of the collateral controversy are separate
and apart from the merits of the main action.
In light of this Court's decision in United States
Steelworkers of America, AFL-CIO-CLC v. Weber,
supra, the district court's order disapproving the
proposed consent decree does not involve the
important factual and legal issues raised in the
Title VII action. See Teamsters v. United States,
supra.
II.
THE DISTRICT COURT'S DISAPPROVAL OF THE
PROPOSED CONSENT DECREE IS APPEALABLE AS AN
INTERLOCUTORY ORDER UNDER 28 U.S.C. §1292
(a)(1).
Read literally, §1292(a)(1), providing for
appeals of interlocutory orders of district courts
granting or refusing injunctions, is clearly
applicable to the order of the district court
below. It was so held by the dissenting judges
_ os «<= aaa
5/ Application of Cohen requires that the merits
of the collateral order not be “enmeshed in the
factual and legal issues comprising the plain-
tiff's cause of action." Mercantile Nat. Bank v.
Langdeau, supra, 371 U.S at 558.
- 25 -
below. They held that the order of the district
judge was an interlocutory order refusing an
injunction. The contrary decision of the majority
was based upon their belief that decisions of this
Court have put a gloss on the plain meaning of the
statute. See Switzerland Cheese Association, Inc.
v. E. Horne's Market, Inc., 385 U.S. 23 (1966);
Liberty Mutual Ins. Co. v. Wetzel, 424 U.S 737
(1976); Gardner v. Westinghouse Broadcasting Co.,
437 U.S. 478 (1978).
The majority of the Court of Appeals held
that these decisions limit the application of
§1292(a)(1) to orders that are "interlocutory" in
a special sense of the meaning of the term inter-
locutory. Cases such as Switzerland Cheese
Association, Inc. v. E. Horne's Market, Inc.,
supra (disallowing an appeal of an order denying
a motion for summary judgment requesting injunc-
tive relief) and Liberty Mutual Ins. Co. v.
Wetzel, supra (denying appeal of a judgment fixing
liability while postponing determination on a
request for permanent injunctive relief) were
cited as authority for this proposition.
Petitioners contend that this Court's deci-
sions have set forth the following criteria for
application of §1292(a)(1). First, the order must
be preliminary, i.e., one that is made before
trial and is unconditional. Switzerland Cheese
~ 2 =
Association v. E. Horne's Market, Inc., supra, 385
U.S at 25. Second, the order must do more than
merely direct the case to proceed to trial. Id.,
385 U.S. at 25. Also, Baltimore Contractors, Inc.
v. Bodinger, 348 U.S 176 (1955) (an order refusing
to stay referral of an issue from arbitration is
not appealable under §1292(a)(1)).
Third, the order must settle, either ten-
tatively or finally, some aspects of the merits of
the claims. Switzerland Cheese Association v. E.
Horne's Market, Inc., supra, 385 U.S at 25;
Gardner v. Westinghouse Broadcasting Co., supra,
437 U.S. at 481-82. Fourth, the order must "pass
on the legal sufficiency of the claim for injunc-
tive relief." Gardner, supra, 437 U.S. at 481.
Fifth, the order must have an “irreparable"
effect. Id., 437 U.S. at 480. Finally, the order
must not be one which can be reviewed "both prior
to and after final judgment." Id.
Whether these six criteria are the proper
ones for determining the appealability of an
interlocutory decree under §1292(a)(1) and whether
an order refusing approval of a proposed consent
order encompassing a request for injunctive
relief statisfies these criteria are important
issues affecting successful administration
of §1292(a)(1).
- 27 -
Petitioners contend that each of these six
criteria is satisfied by the district court's
decree disapproving the proposed consent decree.
There is no doubt that the decree herein was
preliminary, unconditional, and that it decided
something other than that the parties must go to
trial. The order effectively decided that an
affrimative action plan identical to that in Weber
could not be used, absent proof of discrimination,
as a basis for settlement of a Title VII action.
Thus, the order had the legal effect of precluding
defendants from withdrawing their defense of prior
discrimination, or from admitting the occurrence
of such discrimination, and continuing the litiga-
tion on that basis. In this light, the order of
the district court, when considered from the per-
spective of its legal impact on defendants' abili-
ty to modify or withdraw their defense, is analo-
gous to the situations in Sears, Roebuck & Co. v.
Mackey, 351 U.S. 427 (1956)(appeal is allowable
from order dismissing two of plaintiff's claims)
and in Cold Metal Process Co. v. United Eng'r &
Foundry Co., 351 U.S. 445 (1956) (appeal allowed
of order dismissing counterclaim where it was
based on transactions similar to those in plain-
tiff's claims).
~ 98 -
The order disapproving the consent decree
touched on the merits of plaintiffs' claims in a
unique and significant way. It preliminarily
resolved the issue of the legal sufficiency of
the Title VII claims by holding that the history
of defendants’ employment practices and policies
did not disclose an adequate legal basis for
concluding that defendants had ever discriminated
against blacks. Although this aspect of the order
might conceivably be reviewable upon appeal from a
final judgment, that aspect of the judgment which
deprived the parties of the opportunity to fashion
a settlement in accordance with Weber cannot be so
reviewed. Finally, the order had an irreparable
effect on the parties by forcing them to undergo
an expensive, unwanted, and unwarranted, trial.
III
RULE 23(e) DOES NOT AUTHORIZE A FEDERAL
DISTRICT COURT TO DISAPPROVE A SETTLEMENT
MEETING THE REQUIREMENTS OF WEBER ON THE
GROUND THAT THE CLASS MEMBERS ARE NOT NECES-
SARILY VICTIMS OF DISCRIMINATION BY THE
DEFENDANTS
The parties' evaluation of discovery data and
their assessement of the merits, established a
basis for settlement of the action on terms
reasonable and fair. The negotiatiohs for
the settlement were complex and difficult. For
= 29 «
two months, from February 1977 to March 1977,
counsel labored at trying to find terms which were
acceptable to all affected. In the proposed
decree, each party stated that it was not ad-
mitting that it previously stated position was
ee Based upon the data disclosed through
discovery, reasonable settlement required the
correction of the vestiges of earlier discrimina-
tion. The proposed consent decree purported to do
this by undoing the effects of the discriminatory
practices. Defendants were specifically enjoined
to take action which had the effect of reversing
the discriminatory rules.
- -—_— as ewe
6/ Thus, the final draft of the agreement pro-
vided that
Defendants expressly deny any violation
of the Fourteenth Amendment of the United
States Constitution, Title VII of the Civil
Rights Act of 1964, as amended, or any other
equal employment law, regulation or order.
This Decree and Consent hereto does not
constitute a finding or admission of any
unlawful or discrimintory conduct by defen-
dants.
Plaintiffs' consent to this Decree does
not constitute a finding or admission that
any of the employment practices of the
Richmond Leaf Department of the American
Tobacco Company, a division of American
Brands, Inc., are unlawful.
= 30 «
The action of the district court in rejecting
for the reasons which it did the parties’ joint
motion for approval of the proposed consent decree
has seriously undermined this Court's decision in
United Steelworkers of America v. Weber, supra, as
well as undermined the successful implementation of
Congressional policies favoring voluntary settle-
ment of discrimination cases. See Alexander v.
Gardner-Denver Co., supra, 415 U.S. at 44. In its
recent decision in Weber, this Court took great
pains to emphasize to private parties covered by
Title VII that they could, without fear of being
held in violation of Title VII, voluntarily nego-
tiate and implement race-conscious, remedial plans
whenever those plans were properly designed so that
they did no more than carry out the essential pur-
poses of Title VII.
Those purposes are basically as follows: (1)
to break down old patterns of racial hierarchy;
(2) to "open employment opportunities for Negroes
in occupations which have been traditionally
closed to them," Remarks of Senator Hubert Hum-
phrey, 110 Cong. Rec. 6548; (3) to eliminate in-
stances of manifest racial balance; and (4) to
prohibit undue efforts to maintain racial bal-
ances. This Court held in Weber that affirmative
action plans effectuating these purposes were
a oe
lawful as long as they did not unnecessarily
trammel upon the interests of white employees by
requiring their discharge or by creating an
absolute bar to their advancement or by permitting
a greater percentage of minority employees to be
benefitted under the plan than which exists in
the local labor force. Such plans were also
required to be temporary since otherwise they
would foreseeably operate to maintain an improper
racial balance.
Although a decision on the correctness
of the district court's disapproval of the pro-
posed consent decree necessarily raises the
general issue of what criteria are to govern an
exercise of the district court's power to accept
or reject settlements under Rule 23(e), see
Flinn v. FMC Corporation, 528 F.2d 1169 (4th Cir.
1975), cert. denied, 424 U.S. 969 (1976); Patter-
son v. Newspaper & Mail Del. U. of N.Y. & Vic.,
514 F.2d 767 (2d Cir. 1975), cert. denied, 427
U.S 911 (1976), the only specific issue which must
be determined here is the power of the district
court to disapprove a proposed consent order
merely because it provides for an affirmative
action plan based on principles approved in Weber
and instituted on behalf of minority employees who
= 32 =
have not been shown to be victims of discrimina-
tion by defendants.
Put another way, the precise question which
has to be decided is whether Rule 23(e) can
be utilized by a district court to effectively
"overrule" this Court's decision in Weber and to
frustrate federal policies favoring voluntary
settlement of legal disputes. Subsumed under
this question is the question of whether the
district court, under the guise of exercising its
discretion under Rule 23(e), can determine, as
it did, that, as a matter of federal law, the
implementation of a remedial scheme of preferen-
tial employment for minorities based upon prin-
ciples set forth in Weber infringe thereby, in the
absence of proof of discrimination by defendants
against minority employees, upon the constitu-
tional rights and statutory rights of white
employees. Petitioners contend that such an
action by a district court is an abuse of power
under Rule 23(e) which requires immediate correc-
tion.
- 33-
CONCLUSION
For the reasons set forth herein, petitioners
request that their petition be granted.
Respectfully submitted,
HENRY L. MARSH, III
WILLIAM H. BASS, LII
RANDALL G. JOHNSON
Hill, Tucker & Marsh
214 East Clay Street
P.O. Box 27363
Richmond, Virginia 23261
JOHN W. SCOTT, JR.
615 Caroline Sreet
Fredericksburg, Virginia 22401
JACK GREENBERG
JAMES M. NABRIT, III
BARRY L. GOLDSTEIN
NAPOLEON B. WILLIAMS, JR.
Suite 2030
10 Columbus Circle
New York, New York 10019
COUNSEL FOR PETITIONERS
APPENDIX
Decisions of the Courts Below
Opinion of the United States Court of Appeals
UNITED STATES COURT OF APPEALS
For tHE FourtH Circuit
No. 77-2260
Frank L. Carson, Lawrence HatcHer, Stuart E. Mings,
Appellants,
v.
American Branps, Inc., t/a THe American Topacco Com-
PANY; Locat 182, Topacco Workers INTERNATIONAL,
Topacco WoRKERS INTERNATIONAL UNION,
Appellees.
Appeal from the United States District Court
For the District of Richmond, Virginia
Decided En Bane September 14, 1979
Reported at 606 F.2d 420
Before
Haynswortu, Chief Judge,
and WinTER, Butzner, Russet, WIDENER,
Hawt and Pures, Circuit Judges.
K. K. Haun, Circuit Judge:
Plaintiffs seek an interlocutory appeal under 28 U.S.C.
§ 1292(a)(1) of the district court’s refusal to enter a con-
sent decree agreed to by the named parties in a Title VII
class action.
la
2a
Opinion of the United States Court of Appeals
The suit is based on claims of race discrimination and
is brought against employer and union on behalf of black
workers and black applicants for employment at an Amer-
ican Tobacco Company plant in Richmond, Virginia. The
decree would grant money damages and hiring and senior-
ity preferences to black employees and would set a goal re-
quiring the employer to give preference to blacks in hiring
for supervisory positions until a certain number of qualified
blacks were employed. The decree was negotiated by repre-
sentative plaintiffs, and it provides for notice to all class
members.
The named plaintiffs contend that this relief is injunctive
in nature, and, because the district court refused to enter
the decree, its order is immediately appealable under
§ 1292(a)(1) as a denial of injunctive relief. We disagree.
The district court’s order refusing entry of the decree
does not deny any relief, whatever its nature. It merely
requires the parties to either revise the decree or proceed
with the case by trial or motions for summary judgment.
The immediate consequence of the order is continuation of
the litigation and, because the merits of the decree can be
reviewed following final judgment, we think it is not an
appealable order under § 1292(a)(1). Accordingly, we dis-
miss the appeal.
I.
In Flinn v. FMC Corporation, 528 F.2d 1169 (4th Cir.
1975), cert. dented, 424 U.S. 967, 96 S.Ct. 1462, 47 L.Ed.2d
734 (1976), we heard the appeal of individual class plain-
tiffs alleging that the district court abused its discretion
by entry of a consent decree in a Title VII sex discrimina-
tion class action. There, the overwhelming majority of
class members had voted to adopt the decree, and the dis-
3a
Opinion of the United States Court of Appeals
trict court entered it on the “eve of trial.” With scholarly
care, Judge Russell surveyed various interests supporting
entry of the decree and posited the rule that, when a dis-
trict court is presented with a consent decree, it should
view the merits of the decree in light favorable to its
entry. That is, it should, without requiring technical per-
fection or legal certitude, determine whether the law and
the facts of record arguably support its terms. Under this
standard, he identified factors which the district court
should consider in exercising its discretion. These included
“the extent of discovery that has taken place, the stage of
the proceedings, the want of collusion in the settlement,
and the experience of counsel who may have represented
plaintiffs in the negotiation.” Id. at 1173.
Plaintiffs argue that the district court erred in failing to
consider the proposed decree under the liberal standards of
Flinn’ and that its refusal to enter the decree is immedi-
ately appealable. Although we think the district court
should have reviewed the proposed decree under Flinn, we
do not think its refusal to approve the decree is a matter
properly within our jurisdiction prior to final judgment.
In Flinn, the district court’s entry of the decree termi-
nated the action, whereas here the district court’s order
refusing it has no such effect—it continues the proceedings,
making our review of it an interlocutory appeal.
II.
As a general rule appeals of right from interlocutory
trial court decisions are not favored. 28 U.S.C. § 1291.
1 Counsel in this case failed to cite Flinn to the district court in
their three separate memoranda of law filed in support of the pro-
posed decree and failed to move the court following its order to
reconsider in light of that case. Instead, they immediately brought
this appeal.
4a
Opinion of the United States Court of Appeals
Baltimore Contractors, Inc. v. Bodinger, 348 U.S. 176, 75
S.Ct. 249, 99 L.Ed. 233 (1955) ; Coopers & Lybrand v. Live-
say, 437 U.S. 463, 98 S.Ct. 2454, 2459, 57 L.Ed.2d 351 (1978) ;
Gardner v. Westinghouse Broadcasting Co., 437 U.S. 478,
98 S.Ct. 2451, 2453, 57 L.Ed.2d 364 (1978). They disrupt
the trial process, slow the course of litigation and create
unnecessary multiple appeals. “A single appeal following
final judgment facilitates orderly litigation and comprehen-
sive appellate review of all issues presented, many of which
are dependent upon or related to other issues in the suit.
After final judgment, the fact issues have been settled in
the appropriate forum, and appellate review can be dis-
positive of all issues in the case. See, Coopers & Lybrand
v. Lwesay, 98 8.Ct. at 2460-61.
In the interests of justice, appeals of right from inter-
locutory orders are allowed when the delay in hearing an
appeal after final judgment poses some irreparable conse-
quence, Gardner v. Westinghouse Broadcasting Co., 98 S.Ct.
at 2453, or when the issue to be determined is sufficiently
collateral to the ongoing litigation that no disruption of the
trial process will attend early appellate review, see Cohen
v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546-47, 69
S.Ct. 1221, 93 L.Ed. 1528 ‘1949); Coopers & Lybrand v.
Invesay, 98 S.Ct. at 2459.
Special statutory exceptions to the final judgment rule
are set forth in 28 U.S.C. §1292(a). Plaintiffs argue that
characterization of the refused relief as “injunctive” is
sufficient to meet the plain terms of § 1292(a)(1), which
reads in pertinent part,
The court of appeals shall have jurisdiction of appeals
from: (1) Interlocutory orders of the [district courts]
granting, continuing, modifying, refusing or dissolving
da
Opinion of the United States Court of Appeals
injunctions, or refusing to dissolve or modify injunc-
tome...
But a mere labeling of relief is not sufficient. See City
of Morgantown, W. Va. v. Royal Ins, Co., 337 U.S. 254, 258,
69 S.Ct. 1067, 93 L.Ed. 1347 (1949). Courts look to the
consequence of postponing appellate review following final
judgment and weigh the need for immediate appeal against
the important judicial interests militating against piece-
meal review. See Gardner v. Westinghouse Broadcasting
Co., 98 S.Ct. at 2454; Coopers & Lybrand v. Livesay, 98
S.Ct. at 2460. This test is applied to appeals in class actions
as well as to those in ordinary litigation.? Under this test,
we find no appeal of right from orders refusing consent
decrees at any time before final judgment.
ITI.
The consequence of the district court’s order is not ir-
reparable. No right is forfeited as a result of delayed
review. Here, injunctive relief was not finally denied; it
was merely not granted at this stage in the proceedings.
See Liberiy Mutual Insurance Company v. Wetzel, 424 U.S.
737, 744-45, 96 S.Ct. 1202, 47 L.Ed.2d 435 (1976). Like the
denial of a motion for summary judgment which, if granted,
would include injunctive relief, the denial of this consent
decree decided “only one thing-—that the case should go to
2 As the Court noted in Coopers & Lybrand v. Livesay, 98 S.Ct.
at 2459:
There are special rules relating to class actions and, to that
extent, they are a special kind of litigation. Those rules do not,
however, contain any unique provisions governing appeals.
The appealability of any order entered in a class action is de-
termined by the same standards that govern appealability in
other types of litigation.
6a
Opinion of the United States Court of Appeals
trial.” Switzerland Cheese Association, Inc. v. E, Horne’s
Market, Inc., 385 U.S. 23, 25, 87 S.Ct, 193, 195, 17 L.Ed.2d
23 (1966).
In Gardner v. Westinghouse Broadcasting Co., 437 U.S.
478, 98 S.Ct. 2451, 57 L.Ed.2d 364 (1978), the Supreme
Court held that the pretrial denial of class certification in
a Title VII case was not appealable under § 1292(a)(1) as
a denial of injunctive relief. In that case, which involved
allegations of sex-based discrimination, the complainant
sought broad injunctive relief for the class similar to the
relief proposed in the decree before us. The Court reasoned
that the pretrial order denying class certification was not
one of irreparable consequence since it could be reviewed
at any stage of the proceedings either before or after final
judgment, did not affect the complainant’s personal claim
for injunctive relief, and did not pass on the legal sufficiency
of any claim for injunctive relief. Jd. 98 S.Ct. at 2453-54
and notes 7, 8 and 9 (citing Switzerland Cheese).
IV.
The analogous consequences of a district court’s disap-
proval of a settlement in a class action and its refusal to
grant summary judgment were considered by the Second
Cireuit in Seigal v. Merrick, 590 F.2d 35 (2nd Cir. 1978).
The issue there was whether, in a stockbroker derivative
action, the court’s order refusing settlement was appealable
before final judgment.
Relying upon the analysis in Coopers & Lybrand v. Live-
say, 437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978), a
case decided the same day as Gardner, the Seigal court
discussed the judicial and private interests always present
where the rights of represented and unrepresented indi-
viduals may be compromised by the court’s approval of a
7a
Opinion of the United States Court of Appeals
settlement. The court explained the purpose of requiriag
class action settlements to be presented to district courts
under Fed.R. Civ.Proc. 23.1.
[A]n order disapproving a settlement . . . is based,
in part, upon an assessment of the merit of the posi-
tions of the respective parties, and permits the parties
to proceed with the litigation or to propose a different
settlement.
A settlement in an ordinary civil litigation is nor-
mally the sole concern of the parties. In stockholder
derivative actions, on the other hand, because of the
vicarious representation involved, the court has a duty
to perform before an action can be “settled.” ... This
approval cannot be a rubber stamp adoption of what
the parties alone agree is fair and equitable.
Seigal v. Merrick, 590 F.2d at 37-38. The court pointed out
that disallowing appeals of right from each refusal to enter
a settlement had the practical effect of enhancing the dis-
trict court’s control over the litigation.
[T]he denial of one compromise does not necessarily
mean that a “sweetened” compromise may not be ap-
proved. The management of a derivative suit gives
the trial judge a chance not only to disapprove a com-
promise but to edge the parties toward more equitable
terms.
Id. at 39.
The Setgal court reasoned that a rule allowing appeals
of right from orders refusing entry of settlements was
unjustified. It would interrupt the litigation and thrust ap-
pellate courts indiscriminately into the trial process with-
8a
Opinion of the United States Court of Appeals
out appreciable benefit to class members whose interests
were to be protected.
Therefore, the court concluded that such an order was
not appealable before final judgment. See, Note, “Recent
Developments: Appealability of District Court Orders Dis-
approving Proposed Settlements in Shareholders Depriva-
tive Suits,’ 32 Vand. L.R. 985, 998-1001 (1979). Contra,
Norman v. McKee, 431 F.2d 769, 772-74 (9th Cir. 1970) cert.
denied, ISI v. Meyers, 401 U.S. 912, 91 S.Ct. 879, 27 L.Ed.2d
811 (1971).
V.
We think this Title VII interlocutory appeal should be
dismissed. Our review of this pretrial order has halted the
litigation for over two years pending review of the district
court’s exercise of discretion. Given this disruption and
the difficult burden on appeal of demonstrating an abuse
of discretion, plaintiffs have identified no consequence re-
quiring appellate review before final judgment. We per-
ceive none. Instead, we think our review is best left to
follow final judgment.
Under the Flinn analysis, the named parties may present
a proposed decree to the district court in any form and at
any stage in the proceedings. If one decree is refused an-
other may be proposed. At any time the district court can
reconsider its refusal to enter a decree. See Cohen v. Bene-
ficial Industrial Loan Corporation, 337 U.S. at 547, 69 S.Ct.
1221.
When a district court objects to the terms of a decree,
alternative provisions can be presented, and perhaps a dis-
approved decree may be entered with further development
of the record. If the district court refuses a decree because
9a
Opinion of the United States Court of Appeals
it is presented too early in the litigation, it may be later
approved, perhaps following a decisive vote by class mem-
bers. Whatever the district court’s reasons for refusing a
decree, appeals of right from those refusals would encour-
age an endless string of appeals and destroy the district
court’s supervision of the action as contemplated by Fed.R.
Civ.Proc. 23(e).
A rule allowing review after final judgment, on the other
hand, facilitates the district court’s supervision of the liti-
gation and enhances appellate review. The district court’s
consideration and reconsideration of various proposed de-
crees—in whatever form and whenever presented during
the litigation—can be reviewed effectively after final judg-
ment, A single appellate review of all alternative proposals
would be dispositive of the Flinn issue.’ Also, after final
judgment, important legal questions would rest on a firm
factual setting with the parties arguing the importance of
the law and facts as they appeared when the decree was
proposed. Where alternative or revised decrees have been
presented, the parties could advocate on appeal the alterna-
tive most favorable to their positions in light of the law
and facts appearing when it was presented... Such argument
is vital when appellate courts must authoritatively opine
about important unsettled legal issues of the highest social
concern in the amorphous context of reviewing a trial
3 For all our consideration of the merits of this decree, if we al-
lowed the appeal our decision would not be dispositive. See Coopers
& Lybrand v. Livesay, 98 S.Ct. at 2460-61; Seigal v. Merrick, 590
F.2d at 39. The ultimate composition of the decree would remain
an open matter pending response by individual class members to
the class notice. Although the named parties are bound to the terms
of the decree as proposed, in fairness to class members, we think our
approval of it would have to be conditioned upon acceptance of its
terms by at least a majority of the members.
10a
Opinion of the United States Court of Appeals
court’s exercise of discretion.‘ In all, we think the admoni-
tion of Judge Clark is apt,
A district judge’s orders advancing a case to trial
ought not to be critically examined and re-examined by
the cumbersome method of appeal before he has ap-
proached the stage of adjudication. * * * I believe this
an intolerable burden for us, an improper and uncer-
tain interference with trial court discretion, and a con-
fusing invitation to indiscriminate appeals in the fu-
ture—all contrary to settled federal law against
piecemeal appeals.
Peter Pan Fabrics, Inc. v. Dixon Textile Corp., 280 F.2d
800, 805-06 (2nd Cir. 1960). (Judge Clark dissenting).
Ly
In conclusion, the district court’s discretionary decision
to send the parties to trial, in lieu of granting immediate
injunctive relief before the facts are settled, is not a ruling
of irreparable consequence. Plaintiffs may proceed to trial
with no loss of either their cleims for final injunctive relief
or their right of appellate review of the Flinn issue. Short
of going to trial, the parties may propose alternative de-
erees to the district court, one of which may be entered.
Appellate review of the order is best effected following final
judgment. Such review preserves the trial court’s exclusive
control over the progress of the litigation and facilitates its
supervision of the class action.
4 As noted by the Supreme Court in Coopers & Lybrand vy. Live-
say, 98 S.Ct. at 2461, Congress wisely provided in § 1292(b) for
appellate review of important legal issues before final judgment
only as a matter of discretion by the courts involved. Such review
is allowed with approval of both the district court and the court of
appeals.
lla
Opinion of the United States Court of Appeals
Therefore, we hold that the district court’s order refus-
ing entry of the proposed consent decree is not appealable,
and, accordingly, the appeal is dismissed.
Appeal Dismissed.
Winter, Circuit Judge, with whom Haynsworrtu, Chief
Judge, and Butrzner, Circuit Judge, join, dissenting:
In this Title VII class action, the district court declined
to approve and to enter a consent decree which the parties
had negotiated in settlement of the action. Plaintiffs ap-
peal, Unlike the majority, we think that the order denying
approval of the settlement and declining to enter it was
appealable. As to the merits, we conclude that in the main
the district court abused its discretion in declining to ap-
prove and enter the decree. We would require that such
approval be given, although we would authorize the district
court to require a modification of the decree with respect to
the notice to be given certain members of the subclass whose
alleged rights are to be abandoned as part of the settlement.
We therefore respectfully dissent.
I.
This Title VII class action was brought against the em-
ployer, American Brands, Inc. (American) and Tobacco
Workers International Union and its Local 182 (union) on
behalf of black employees and black persons who sought
employment at American’s Richmond, Virginia, leaf de-
partment. The complaint contained general allegations
that defendants denied equal opportunities for hiring, pro-
motion, transfer and on-the-job training for blacks, thus re-
stricting them to lower paying and less desirable jobs, that
defendants pay lower wages to blacks for like work than
12a
Opinion of the United States Court of Appeals
they pay to white employees, that the union has failed to
represent blacks fairly, has acquiesced in discrimination
against them and has entered into collective bargaining
agreements intended to discriminate against them, and that
the defendants have disciplined and discharged black em-
ployees solely because of their race.
After answers were filed, the parties engaged in extensive
discovery for a period exceeding one year. The discovery
included the taking of nineteen depositions and the analysis
of boxes of written material tendered in response to some of
the six sets of interrogatories. By March 1, 1977, the scope
of the action was restricted; and on that date the district
court, pursuant to F.R.Civ.P. 23(b)(2), certified a class
consisting of :
1. All black persons, whether currently employed or not,
who were seasonal employees of American Tobacco
Company’s Richmond Leaf Plant on or after Sep-
tember 9, 1972; and
2. All black persons who applied for seasonal employ-
ment at the American Tobacco Company’s Richmond
Leaf Plant at any time on or after September 9, 1972.
The facts, accepted by the district court for the purpose
of deciding whether to approve and enter the decree, were
that American operates the Richmond Leaf Department
for the purpose of processing and storing leaf tobacco. It
has two types of employees: seasonal, whose period of
employment is between six and nine months each year, and
regular, who are employed full-time for the entire year.
The union has exclusive bargaining rights for all hourly-
paid production unit positions.
13a
Opinion of the United States Court of Appeals
American employs approximately 150 seasonal employ-
ees, all of whom, as of June 2, 1977, were black, and ap-
proximately 100 regular employees, of whom 66% were
black. Plaintiffs are not aware of any white individuals
who have ever been employed as seasonal employees.
Prior to September 1963, the regular job classifications
of truck driver, watchman, maintenance storage, and boiler
operator at the Leaf Plant were reserved for whites only.
As of February 15, 1976, these positions were staffed as
follows:
Position Whites Blacks
Truck Drivers 5 4
Watchmen 15 1
Maintenance Storage 1 0
Boiler Operators 0 3
Regular employees have the right to obtain any perma-
nent position for which the union has bargaining rights
within the Richmond Leaf Department. Seasonal employ-
ees have the right to obtain any seasonal position for which
the union has bargaining rights within the Richmond Leaf
Plant. Seasonal employees may transfer to positions in
regular classifications only when no regular employee de-
sires that position. Should the seasonal employee transfer
to a regular position, he loses all of his seniority and is
treated as a new hire for seniority purposes. Separate
seniority rosters are maintained for regular and for sea-
sonal employees.
When a seasonal employee transfers to a regular posi-
tion, he is placed at the bottom of the regular seniority
roster irrespective of the number of years he has worked
as a seasonal employee with American. This loss of senior-
14a
Opinion of the United States Court of Appeals
ity affects his status for promotions, demotions, lay-offs,
recalls and vacations, and, in short, the principal terms
and conditions of his employment.
Since 1971, the vast majority of applicants and new
hires at all of American’s locations in the Richmond area
have been black, as indicated by the following chart:
Applicants New Hires
Year Blacks Whites Blacks Whites
1971 97 1 88 1
1972 118 5 97 2
1973 94 4 93 1
1974 71 7 64 2
1975 77 3 22 2
The racial composition of the production unit at the
Richmond Leaf Department is as follows:
Regular Seasonal
Employees Employees
Year Whites Blacks Whites Blacks
1968 41 52 — 116
1970 40 59 — 175
1973 40 56 — 176
1976 37 57 — 135
Of the 35 supervisory positions at American’s Richmond
Leaf Department as of April 5, 1976, seven, or 20% were
filled by blacks. Of the 229 persons in hourly paid produc-
tion unit jobs at the Richmond Leaf Department in that
same year, 192, or 84% were black.
The consent decree was negotiated by counsel during the
months of February and March, 1977. Agreement was
15a
Opinion of the United States Court of Appeals
reached less than a week before the trial of the case was
scheduled to begin. Counsel were all thoroughly experi-
enced in Title VII class action litigation, including, but not
limited to, such suits in the tobacco industry.
The proposed consent decree contained five substantive
provisions :
1. Every current and future regular hourly-paid produc-
tion employee would be credited with seniority for
actual time worked as a seasonal employee. Thus, sea-
sonal employees would not lose seasonal seniority by
transferring to regular positions and the seniority de-
terrence to transfers from seasonal to regular em-
ployment would be removed.
2. Regular employees who successfully served a pro-
bationary period as seasonal employees would not be
required to serve another probationary period to be-
come eligible for medical and sick benefits. Again, a
deterrence to transfers from seasonal to regular em-
ployment was removed.
3. In the event that vacancies in hourly-paid permanent
production job classifications are not filled by regular
production employees, seasonal production employees
will be given the opportunity to fill them before there
is hiring from the outside. This gives seasonal em-
ployees the opportunity to bid on vacancies in regular
production jobs, some of which were at one time re-
served for whites only, before any outside hiring.
4, Seasonal employees shall have the opportunity to bid
on vacancies in the watchman job classification prior
to hiring from the outside. This provision duplicates
“3,” except that it is restricted to the watchman classi-
l6a
Opinion of the United States Court of Appeals
fication. The watchman classification was probably
given separate treatment because as of February 15,
1976, there had been less black penetration than in any
other formerly all-white classification.
5. A goal is set for the Leaf Department for the filling
of Foreman and Assistant Foreman supervisory posi-
tions with qualified blacks until one-third of such
positions are filled with blacks, The date of December
31, 1980 is fixed as the date for accomplishment of this
goal.
With respect to monetary claims of individual members
of the class, the consent decree recites that there was no
discriminatory hiring and therefore the members of Class
2 (black persons who applied for seasonal employment on
or after September 9, 1972, but were not hired) are entitled
to no monetary relief. By contrast, those falling into Class
1 may be entitled to monetary relief and the procedures for
proving and asserting a claim are specified. Notice of the
proposed decree will be given to members of Class 1 with
an opportunity for them to object before the decree becomes
final. No notice is to be given to members of Class 2 not-
withstanding that the decree adversely adjudicates their
claim to monetary relief.
After all counsel tendered the consent decree, the district
court conferred with counsel and required them to file
memoranda of facts and of law in support of the decree.
After the memoranda were filed and considered, the district
court filed its memorandum disapproving the consent de-
cree and declining to enter it.
The major premise of the district court’s memorandum
was that it should neither approve nor enter a consent de-
cree that perpetuates, promulgates or acquiesces in dis-
17a
Opinion of the United States Court of Appeals
crimination on the basis of race. The district court then
made a general review of the decided cases construing Title
VII and some of its legislative history; and after deducing
what it thought were applicable general principles, it
turned to a consideration of the five substantive provisions
of the proposed decree. It disapproved of giving seniority
credit for seasonal employment, because seasonal em-
ployees have always been black; and therefore the effect of
giving seniority credit for seasonal employment will be to
give preferential treatment on the basis of race in violation
of Title VII. For the same reason, it disapproved of the
provision excusing regular employees from a probationary
period when they had successfully served a probationary
period as seasonal employees. Similarly, the provisions
giving seasonal employees a right to bid on vacancies in
hourly-paid permanent production job classifications and
the watchman classification before hiring from the outside
were disapproved as illegal preferential treatment of blacks
solely on the basis of race since only blacks were seasonal
employees. Finally, the district court construed the goal
for filling the supervisory force as an illegal racial quota
and disapproved it.
II.
_ We consider first the question of our jurisdiction. We do
so in the light of the congressionally articulate policy to
redress discrimination in employment “by informal meth-
ods of conference, conciliation, and persuasion.” 42 U.S.C.
§ 2000e-5(b). This policy, in our view, favors settlement of
claims of discrimination in employment. When, as here,
the parties’ settlement of their dispute has been rejected
by the district court, there is a compelling reason to review
the propriety of the rejection if review is arguably per-
mitted under established appellate jurisdiction.
18a
Opinion of the United States Court of Appeals
The order from which this appeal is taken is interlocu-
tory. We agree with the majority that there is no right to
appeal every interlocutory decision of a district court.
However, there are exceptions to this general rule, both
judge-made, i.e., Cohen v. Beneficial Industrial Loan Corp.,
337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), and stat-
utory. The significant exception to be considered here is
that contained in 28 U.S.C. § 1292(a) (1):
The courts of appeals shall have jurisdiction of ap-
peals from:
(1) Interlocutory orders of the district courts...
granting, continuing, modifying, refusing or dissolving
imjunctions, or refusing to dissolve or modify injunc-
tions. . . . (Emphasis added.)
It is our view that the order declining to approve the
settlement was an order refusing an injunction. As we have
earlier set out, the settlement would have required Ameri-
can and the union to take a number of affirmative steps. It
would have required that hourly-paid production employ-
ees be given seniority for service as seasonal employees; it
would have required that such employees be eligible for
medical and sick benefits without serving another proba-
tionary period; it would have given seasonal employees a
preference for employment in certain permanent positions;
it would have given seasonal employees a preference over
outsiders in bidding for vacancies in the watchman classifi-
cation; and it would have fixed a goal in the hiring of quali-
fied blacks in the positions of Foreman and Assistant
Foreman. The parties themselves termed the proposed
consent decree as one “enjoining” American and the union
from discriminating against black employees and titled the
19a
Opinion of the United States Court of Appeals
five affirmative actions that we have described as “Injunc-
tive Relief For the Class.”
In Lewis v. Tobacco Workers’ International Union, 577
I’.2d 1135 (4 Cir. 1978), cert. denied, 439 U.S. 1089, 99 S.Ct.
871, 59 L.Ed.2d 56 (1979), a panel of the court held that
an interlocutory order in an employment discrimination
case which adopted guidelines proposed by plaintiffs was
appealable. Those guidelines required the employer and
the union to supply a list of members eligible for back
pay, required them to pay interim attorneys’ fees, required
the development of job descriptions, required that certain
transfers of employees not be limited, required the hiring
of permanent and seasonal employees, required that em-
ployees be advised of vacancies, and required that em-
ployment applications remain viable for not less than
one year. In rejecting the argument that the order was
not appealable because it was not a final order granting
relief, the court said:
We believe the guidelines, requiring the defendants to
act in some instances and forbidding them to act in
others, to be an injunction. We do not agree with
the plaintiffs’ position that the guidelines, although
requiring present affirmative action or restraint, are
yet unappealable. (Footnote eliminated.)
577 F.2d at 1139.
Surely Lewis was correctly decided, and surely it is
indistinguishable from the instant case. The proposed
consent decree was an injunction,' and had it been entered
it would have been appealable under Lewis. The refusal
1 We note that even the majority concedes that the consent decree
was an injunction. “Here, injunctive relief was not finally denied ;
it was merely not granted at this stage in the proceedings.” Ma-
jority op. p. 423.
20a
Opinion of the United States Court of Appeals
to enter the proposed consent decree is equally appealable,
because § 1292(a)(1) authorizes an appeal from an inter-
locutory order “refusing” an injunction.
We are at a loss to understand why the majority fails
to conclude that Lewis decides this case and why the ma-
jority holds the order in the instant case non-appealable.
Certainly the holding in Seigal v. Merrick, 590 F.2d 35 (2
Cir. 1978), does not support that result. Seigal concerned
the settlement of a derivative stockholders’ suit. The grant-
ing of stock options in exchange for certain cash consid-
eration bears little resemblance to the entry of an injunc-
tion. Indeed, in Seigal the only issue litigated was whether
the order refusing approval of the settlement was appeal-
able under 28 U.S.C. §1291 under the collateral order
doctrine of Cohen v. Beneficial Industrial Loan Corp.,
supra.? No claim was made that, as here, the order was
appealable under 28 U.S.C. § 1292(a) (1).
Nor do we think that Gardner v. Westinghouse Broad-
casting Co., 437 U.S. 478, 98 S.Ct. 2451, 57 L.Ed.2d 364
(1978), holding that pretrial denial of class certification in
a Title VII case is not appealable under § 1292(a)(1), con-
trols here. The rationale of that case is that the order
denying certification “could be reviewed both prior to and
after final judgment; it did not affect the merits of peti-
tioner’s own claim; and it did not pass on the legal suffi-
ciency of any claims for injunctive relief.” Jd. at 480-81,
98 S.Ct. at 2453. By contrast, if the consent decree in the
instant case is not approved now, as a practical matter
2 It should be noted that, in Norman v. McKee, 431 F.2d 769 (9
Cir. 1970), cert. denied, 401 U.S. 912, 91 S.Ct. 879, 27 L.Ed.2d 811
(1971), the Ninth Circuit reached the opposite result and held that
the refusal to enter a settlement of a derivative stockholders’ suit
was appealable.
21a
Opinion of the United States Court of Appeals
the propriety of the proposed settlement will not be raised
again either in the district court or before us. The consent
decree, if entered, would settle finally the rights of the
parties, subject only to possible modification at the instance
of a dissatisfied member of the class; and, notwithstanding
the standard recital that defendants disclaimed liability,
it would in actuality hold them to have violated Title VII.
Similarly, a holding that the denial of a motion for sum-
mary judgment, which if granted would include injunctive
relief, is not appealable, Switzerland Cheese Association,
Inc. v. E. Horne’s Market, Inc., 385 U.S. 23, 87 S.Ct. 193,
17 L.Ed.2d 23 (1966), does not decide this case. “[T]he
denial of a motion for summary judgment because of un-
resolved issues of fact does not settle or even tentatively
decide anything about the merits of the claim. It is strictly
a pretrial order that decides only one thing—that the case
should go to trial.” Jd. at 25, 87 S.Ct. at 195. By contrast,
the order appealed from in the instant case does much
more; in rejecting the consent decree, the district court
relied on conclusions adverse to plaintiffs’ claims on the
merits—conclusions which plaintiffs now ask us to review.
Nor is the instant case decided by Liberty Mutual Ins. Co.
v. Wetzel, 424 U.S. 737, 96 S.Ct. 1202, 47 L.Ed.2d 435
(1976). There, the district court granted partial summary
judgment as to liability in a Title VII employment case,
but before an actual injunction was formulated and entered,
the employer appealed. The Court held that the order was
not appealable under § 1292(a)(1) since no injunction had
been issued, nor had an injunction been refused. Signifi-
cantly, it added that “had [the district court] granted in-
junctive relief but had not ruled on respondents’ other re-
quests for relief, this interlocutory order would have been
22a
Opinion of the United States Court of Appeals
appealable under $1292(a)(1).” Id. at 744, 96 S.Ct. at
1207.
Thus, we conclude that we have and should exercise
appellate jurisdiction.
III.
Because we would hold that we possess and should exer-
cise appellate jurisdiction, we are brought to the merits
of the case.
The law of this circuit with reference to the function
of the district court in approving or disapproving a settle-
ment of Title VII sex discrimination litigation, as well as
our function on appeal, was settled ins Flinn v. FMC Cor-
poration, 528 F.2d 1169 (4 Cir. 1975), cert. denied, 424
U.S. 969, 96 S.Ct. 1462, 47 L.Ed.2d 734 (1976). We think
that the same standards apply to settlement of Title VII
race discrimination litigation.
In Flinn, to summarize Judge Russell’s detailed and
scholarly opinion, we said that the most important factor
that the district court must consider is the strength of
the plaintiffs’ claims on the merits and that, in making
that evaluation, the district court should consider the ex-
tent of discovery that has taken place, the stage of the
proceedings, the want of collusion in the settlement and
the experience of plaintiffs’ counsel who negotiated the
settlement. These elements are important, Judge Russell
wrote, because the completion of discovery ordinarily per-
mits a reasonable evaluation of the merits of a claim, and
the opinion of competent counsel, absent a showing of col-
lusion and bad faith, is entitled to great weight. Also to
be considered is the attitude of the class members and
whether they favor or oppose the settlement. Judge Russell
cautioned that while the adequacy of a settlement should
23a
Opinion of the United States Court of Appeals
be appraised, the district court should not turn its con-
sideration of the settlement into a trial or rehearsal of
the trial or make dispositive conclusions on the unsettled
legal issues in the case. Finally, Judge Russell called at-
tention to the legislative intent to encourage settlements,
expressed in Title VII. 528 F.2d at 1172-74.
Although our review is limited to determining whether
the district court abused its discretion in the action that
it took, 528 F.2d at 1172, we are persuaded that in the
instant case there was an abuse of discretion, in disapprov-
ing the settlement, except in one small particular with re-
spect to notice to members of Class 2 plaintiffs whose
rights were being adjudicated adversely to them. We reach
this conclusion from a consideration of the factors iden-
tified in Flinn.
There can be no doubt that counsel for all parties to
this litigation are highly competent and experienced law-
yers with substantial experience in dealing with Title VII
racial discrimination employment cases. They reached a
settlement on the eve of trial after all reasonable discovery
had been completed and after lengthy negotiations. There
is not the slightest basis to suggest that they negotiated
collusively or in bad faith. The fact that they, who know
the case best and know their respective clients’ strengths
and weaknesses with respect to the issues, have agreed
to the settlement and recommend it to the court is entitled
to very great weight.
The attitude of members of the class is as yet unknown
since the decree will not be exhibited to them until it is
entered. But the entry will be in effect an order nisi and
the district court will have full opportunity to assess the
objections, if any, of the members of Doth classes and to
enter such further orders as are proper.
24a
Opinion of the United States Court of Appeals
Of course the recommendations of even experienced,
competent counsel will not suffice to warrant the entry of
a consent decree if its terms depart markedly from the
plaintiffs’ case. We do not disagree with the district court’s
major premise that a consent decree should not be entered
which is in violation of law, but it is manifest since the
decision in United Steelworkers of America v. Weber, ——
US. , 99 S.Ct. 2721, 61 L.Ed.2d 480 (1979), which was
announced after the submission of the case to the in banc
court, that the proposed consent decree does not fall into
that category. Weber unequivocally held that a private,
voluntary, race-conscious affirmative action plan which re-
served for black employees 50% of the openings in an in-
plant craft training program until the percentage of black
craft workers in the plant is commensurate with the per-
centage of blacks in the local labor force did not violate
Title VII. Since the plan was adopted by private parties,
there was no question presented of an alleged violation of
the Equal Protection Clause of the Constitution.
In the light of Weber, we would have little difficulty in
holding that, by voluntary agreement, seasonal employees,
all of whom were black, could be given seniority credit
for the time that they worked as seasonal employees as
well as credit toward their eligibility for medical and sick
benefits, that they could be given preference in bidding
for vacancies in hourly-paid permanent production job
classifications, that they could be given preference in bid-
ding for vacancies in the watchman job classification, and
that a goal to fill supervisory positions in the Leaf De-
partment with qualified blacks until one-third of the posi-
tions are filled with blacks could be set, all without violating
Title VII.
25a
Opinion of the United States Court of Appeals
We do not fault the district court for not anticipating
Weber: But now that Weber has been decided, it is ob-
vious that the district court fell into error as a result of
its failure to recognize that the parties agreed to the
substantive provisions of the consent decree to redress
past discrimination and the present effects of past dis-
crimination. Remedial steps of the type employed are
legal and proper to redress discrimination, They were
included not to favor plaintiffs because they are black
but to make them equal by undoing the unlawful discrim-
inations which had been practiced against them because
they were black. This is the whole purpose of Title VII
and of this lawsuit. The fact that the consent decree
contained language to the effect that American and the
union deny “discriminatory conduct,” while plaintiffs sim-
ilarly withhold any admission that any of American’s em-
ployment practices are legal, should not hide the fact that
plaintiffs, arguably at least, have a cause of action under
Title VII for racial discrimination in employment and
although American and the union, arguably at least, have
good defenses, the parties, consistent with the intent of
Title VII, should be allowed to compose their differences
and reach an amicable settlement of the matter. Dis-
claimers of liability and disclaimers of admissions of legal-
ity are not uncommon in settlement agreements, as well
as in consent decrees. A ruling that litigation may not
be settled unless a party formally admits liability, or
formally concedes legality, 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 con-
cession of rights. Certainly it would ban settlements in
26a
Opinion of the United States Court of Appeals
Title VII cases in violation of congressional ini. nt where
the purpose of the settlement is to avoid an adjudication.
Since Title VII encourages settlements and since the
settlement embodied in the proposed consent decree was
one negotiated by competent, experienced counsel in full
possession of all discoverable facts, and since we perceive
no unfairness or manifest illegality in the manner in which
the parties propose to compose their differences, we think
that it was an abuse of discretion for the district court to
decline to approve and to refuse to enter the consent
decree. |
IV.
We would therefore assert jurisdiction over this appeal,
reverse the judgment of the district court, and direct it
to enter the proposed decree, modified only with respect ‘
to notice to members of Class 2, see note 3 supra. Because
3'We think that the proposed decree should be modified in-one
minor respect. The consent decree provides that after its entry
notice of its terms will be given to all members of Class 1 (black
persons, whether currently employed or not, who were seasonal em-
ployees at any time after September 9, 1972), by posting on Ameri-
can’s bulletin boards and by mail to each person included in the
class. The notice must advise every class member that he has a right
to object to the decree, the time in which to lodge an objection and
the place to file written objections. Similar notice is not required
to be given to members of Class 2 (black persons who sought but
did not obtain seasonal employment after September 9, 1972), al-
though the decree provides that they “are not entitled to assert
claims for monetary relief.”
We think that the consent decree should give the same notice to
members of Class 2 as will be given to members of Class 1. If,
notice to members of Class 2 having been given, an objection to the
decree, having arguable merit, is lodged, there will be need for a
new representative of the class. See Goodman v. Schlesinger, 584
F.2d 1325 (4 Cir. 1978), and Coz v. Babcock & Wilcoz, 471 F.2d
13 (4 Cir. 1972).
27a
Opinion of the United States Court of Appeals
the majority finds that it lacks jurisdiction over this ap-
peal, we are constrained to add a further comment. The
majority’s jurisdictional decision in no way touches the
merits or approves the action taken by the district court.
Moreover, it is grounded firmly on the fact that the order
of the district court refusing to enter the consent decree
is not a final judgment:
Under the Flinn analysis, the named parties may
present a proposed decree to the district court in any
form and at any stage in the proceedings. If one de-
cree is refused another may be proposed. At any
time the district court can reconsider its refusal to
enter a decree.
Majority op. at 424.
We agree that the district court has the power to
reconsider its order. Further, we believe that Weber
so undercuts the theory on which the district court
declined to enter the consent decree that, when the
ease is returned to the district court, it may well, on
its own motion or at the instance of counsel for plain-
tiffs, conclude to reconsider its ruling in light of
Weber. If reconsidered, we feel confident that the
district court will conclude that Title VII presents
no bar to approval of the consent decree.
28a
Opinion of the District Court
September 14, 1979
UNITED STATES DISTRICT COURT
For tHe District oF RicHMOND, VIRGINIA
No. 77-2260
Frank L. Carson, Lawrence Hatcuer, Stuart E. Mines,
Appellants,
v.
American Branps Inc., t/a Toe American Tosacco Com-
PANY; Locat 182, Tospacco WorKkexs INTERNATIONAL,
Topacco WorKERs INTERNATIONAL UNION,
Appellees.
This Opinion is recorded at 446 F. Supp. 780.
MEMORANDUM
Warriner, District Judge.
I
Plaintiffs brought this class action against the above-
named defendants under Title VII of the Civil Rights Act
of 1964, 42 U.S.C. § 2000e et seg. as amended, 42 U.S.C.
§ 1981 and the Fourteenth Amendment. Jurisdiction is
invoked pursuant to 42 U.S.C. § 2000e 5(f) and 28 U.S.C.
§ 1343(4).
Negotiations in an attempt to settle the issues raised
by the complaint have resulted in a proposed Consent
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Opinion of the District Court
Decree which the parties requested the Court to enter at
the final pretrial conference on 1 April 1977. At that con-
ference, the Court expressed concern that certain provi-
sions of the Decree might be violative of the law and that
provisions of the Decree would affect parties other than
those before the Court. The Court noted that the parties
were jointly seeking entry of the Decree and to that ex-
tent were no longer in an adversary posture. The Court
requested counsel to brief the issues of concern. The
briefs having been filed the Court must now decide whether
or not it is just and proper and in accordance with the
law to enter the Decree.
II
Plaintiffs have included a statement of facts in their
brief in support of the proposed Consent Decree. For this
purpose only, we accept these facts to be true as follows:
The defendant American Brands, Inc. (hereinafter re-
ferred to as the “Company”), operates the Richmond Leaf
Department of the American Tobacco Company in Rich-
mond, Virginia, for the purpose of processing and storing
leaf tobacco. The defendant Local 182 Tobacco Workers
International Union has exclusive bargaining rights for
the establishment of wage rates and other terms and con-
ditions of employment for all hourly paid production unit
positions at the Richmond Leaf Department. The defen-
dant Tobacco Workers International Union is a national
organization consisting of local unions, including Local 182.
The plaintiffs are present and former black seasonal] em-
ployees at the Richmond Leaf Department and held jobs
under the jurisdiction of Local 182, TWIU, during their
employment. As seasonal employees, the plaintiffs all
worked at the Richmond Leaf Plan an average of six
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Opinion of the District Court
months each year. Regular employees worked at this same
facility all year.
The Company employs approximately 150 seasonal em-
ployees, all of whom at the present time are black, and
approximately 100 regular employees, of whom 66% are
black. Plaintiffs are not aware of any white individuals
who have ever been employed as seasonal employees at
the Company’s Richmond Leaf Plant.
Prior to September 1963, the regular job classifications
of truck driver, watchman, maintenance, storage, and
boiler operator at the Leaf Plant were reserved for whites
only. As of 15 February 1976 these positions were staffed
as follows:
Position Whites Blacks
Truck Drivers 5 4
Watchmen 15 1
Maintenance Storage 1 0
Boiler Operators 0 3
Regular employees have the right to obtain any per-
manent position for which the TWIU has bargaining rights
within the Richmond Leaf Department. Seasonal em-
ployees have the right to obtain any seasonal position for
which the TWIU has bargaining rights within the Rich-
mond Leaf Plant. Seasonal employees may transfer to
positions in regular classifications only when no regular
employee desires that position. Should the seasonal em-
ployee transfer to a regular position, he loses all of his
seniority and is treated as a new hire for seniority pur-
poses. Separate seniority rosters are maintained for reg-
ular and for seasonal employees.
When a seasonal employee transfers to a regular posi-
tion he is placed at the bottom of the regular seniority
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Opinion of the District Court
roster irrespective of the number of years he has worked
as a seasonal employee with the Company. This loss of
seniority affects his status for promotions, demotions, lay-
offs, recalls and vacations, and, in short, the principal
terms and conditions of his employment.
Since 1971, the vast majority of applicants and new
hires at all of the Company’s locations in the Richmond
area have been black, as indicated by the following chart:
Year Applicants New Hires
Blacks Whites Blacks Whites
1971 97 1 88 1
1972 118 5) 97 2
1973 94 4 93 1
1974 71 7 64 2
1975 77 3 22 2
The racial composition of the production unit at the
Richmond Leaf Department is as follows:
Regular Seasonal
Year Employees Employees
Whites Blacks Whites Blacks
1968 41 52 — 116
1970 40 59 — 175
1973 40 56 _- 176
1976 37 57 — 135
Of the 35 supervisory positions at the Company’s Rich-
mond Leaf Department as of 5 April 1976, seven, or 20%,
were filled by blacks. Of the 229 persons in hourly paid
production unit jobs at the Richmond Leaf Department
in that same year, 192, or 84% were black.
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Opinion of the District Court
Il
In the proposed Consent Decree defendants “expressly
deny any violation of ... any... equal employment law,
regulation, or order.” Plaintiffs conversely state that “con-
sent to this Decree does not constitute a finding or admis-
sion that any of the employment practices of . . . [defen-
dants] are lawful.” The proposed Decree further states
that “the Court finds from the evidence previously filed in
the form of answers to interrogatories that there are no
discriminatory hiring practices at the Richmond Leaf De-
partment.”
In light of the facts outlined above, the foregoing pro-
visions, and the applicable law, the Court questioned the
propriety of the following provisions of the proposed Con-
sent Decree:
In full and final settlement of any and all claims for
injunctive relief alleged in the Complaint, the parties
agree to the following:
1. For the purposes of determining eligibility for vaca-
tions and for promotions, demotions, lay-offs and
recalls, every current and future regular hourly
paid production employee of the Richmond Leaf
Department will be credited with actual time worked
as a seasonal employee commencing with the date
of hire of the last period of continuous employ-
ment as a seasonal employee in accordance with
Section 1 of Article 7 of the current collective bar-
gaining agreement governing seasonal employees.
The combined total of such seasonal and regular
employment will apply toward service requirements
for vacations, and for promotions, demotions, lay-
offs and recalls.
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Opinion of the District Court
2. Regular employees who have served the proba-
tionary period as a seasonal employee during the
last period of his or her continuous seasonal em-
ployment at Leaf prior to being transferred to reg-
ular Leaf employment will become eligible for
medical benefits and sick benefits immediately upon
such transfer to regular employment.
3. In the event that vacancies in hourly paid perma-
nent production job classifications at the Richmond
Leaf Department are not filled by regular produc-
tion employees, then all qualified hourly paid sea-
sonal production employees will be given the op-
portunity to fill such vacancies prior to hiring from
the outside.
4. In the event that vacanies in the job classification,
Watchman, at the Richmond Leaf Department are
not filled by regular production employees, then
all qualified hourly paid seasonal production em-
ployees will be given the opportunity to fill such
vacancies prior to hiring from the outside.
5. The Richmond Leaf Department adopts a goal of
filling the production supervisory positions of Fore-
man and Assistant Foreman with qualified blacks
until the percentage of blacks in such postions
equals 14 of the total of such positions. The date
of December 31, 1980 is hereby established for the
accomplishment of this goal.
IV
Before discussing these provisions specifically, a general
discussion of what this Court perceives to be the control-
ling law is appropriate.
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Opinion of the District Court
Plaintiffs based this suit on Title VII, Section 1981 and
the Fourteenth Amendment. As defendants herein are
private parties, the Court does not find the precepts of
the Fourteenth Amendment to be applicable per se. But
the guarantees of the Equal Protection clause against
State action by the Fourteenth Amendment nevertheless
are afforded plaintiffs by Title VII and Section 1981 which,
with respect to private parties defendant, have their under-
pinnings in the Thirteenth Amendment. This Court is also
cognizant that the Supreme Court of the United States
has read the guarantees of the Equal Protection clause
into the Due Process clause of the Fifth Amendment pro-
tecting against arbitrary and capricious’ federal action.
Thus, the Fifth Amendment may well protect citizens
against arbitrary and capricious federal action in the form
of a federal court Consent Decree that would place a fed-
eral stamp of approval, with the full force and effect of
contempt proceedings, to what would otherwise be a mere
agreement between private parties. See Shelley v. Krae-
mer, 334 U.S. 1, 68 S.Ct. 836, 92 L.Ed. 1161 (1947). In sum,
we opinion that the mandates of the United States Consti-
tion as well as the statutes invoked by plaintiffs require
us to insure that this Court plays no role in perpetuating,
promulgating or acquiescing in improper discrimination on
the basis of race.
V
Keeping the above in mind, we shall focus on the law
of Title VII as this statute speaks specifically to the area
1 See e.g., Richardson v. Belcher, 404 U.S. 78, 81-82, 92 S.Ct. 254,
30 L.Ed.2d 231 (1971) ; Flemming v. Nestor, 383 U.S. 603, 612, 80
S.Ct. 1367, 4 L.Ed.2d 1435 (1960) ; Bolling v. Sharpe, 347 U.S. 497,
499, 74 S.Ct. 693, 98 L.Ed. 884 (1934).
35a
Opinion of the District Court
of concern herein, that is, discriminatory employment
practices.
Title VII states in pertinent part that it is unlawful:
(1) to fail or refuse to hire or to discharge any indi-
vidual, or otherwise to discriminate against any indi-
vidual with respect to his compensation, terms, con-
ditions, or privileges of employment, because of such
individual’s race, color, religion, sex, or national ori-
gin; or |
(2) to limit, segregate, or classify his employees or
applicants for employment in any way which would
deprive or tend to deprive any individual of employ-
ment opportunities or otherwise adversely affect his
status as an employee, because of such individual’s
race, color, religion, sex, or national origin. [42 U.S.C.
§ 2000e-2(a) ].
The provisions of Subsection (j) read as follows:
(j) Preferential treatment not required on account of
numerical or percentage imbalance. Nothing contained
in this title [42 U.S.C.S. §$§ 2000e—2000e-17] shall
be interpreted to require any employer, employment
agency, labor organization, or joint labor-management
committee subject to this title ... to grant preferen-
tial treatment to any individual or to any group be-
cause of the race, color, religion, sex, or national
origin of such individual or group on account of an
imbalance which may exist with respect to the total
number or percentage of persons of any race, color,
religion, sex, or national origin employed by an em-
ployer, referred or classified for employment by any
employment agency or labor organization, admitted
36a)
Opinion of the District Court
to membership or classified by any labor organization,
or admitted to, or employed in, any apprenticeship
or other training program, in comparison with the
total number or percentage of persons of such race,
color, religion, sex, or national origin in any commu-
nity, State, section, or other area, or in the avail-
able work force in any community, State, section, or
other area.
Title VII plainly and distinctly prohibits racial discrim-
ination in any and all aspects of employment practices
including but not limited to recruitment, promotions, se-
niority and benefits. The language clearly prohibits dis-
crimination against whites as well as blacks on account of
race and clearly makes no exception for alleged benign
motives such as rectifying the effects of past discrimina-
tion. Indeed, Subsection (j) explicitly states that prefer-
ential treatment is not required to rectify racial imbalance.
To be sure, Title VII does not exclude use of extraordi-
nary measures to make those individuals who actually
suffer from the results of past or present discrimination
whole, but such action is more aptly characterized as
equitable, not preferential, treatment. And even in this
context, the courts have been careful to minimize what-
ever adverse effects may result with respect to innocent
third parties.
The legislative history of Title VII clearly supports what
this Court understands to be its clear and unequivocal
mandate. In response to a charge that the Title VII ap-
peared to force employers to grant preferential treatment,
Senator Harrison Williams retorted:
Those opposed to H.R. 7152 should realize that to
hire a Negro solely because he is a Negro is racial
37a
Opinion of the District Court
discrimination, just as much as a “white only” em-
ployment policy. Both forms of discrimination are
prohibited by Title VII of this Act. The language of
that title simply states that race is not a qualification
for employment. Every man must be judged according
to his ability. In that respect, all men are to have an
equal opportunity to be considered for a particular
job. Some people charge that H.R. 7152 favors the
Negro, at the expense of the white majority. But how
can the language of equality favor one race over an-
other? Equality can have only one meaning, and that
meaning is self-evident to reasonable men. [Legisla-
‘tive History of Title VII and XI of the Civil Rights
Act of 1964, United States Equal Employment Oppor-
tunity Commission, U.S. Government Printing Office,
1969, page 3189.]
Senator Williams’ understanding as above expressed in
advocating passage of Title VII was shared by Senators
Clark and Case:
There is no requirement that an employer maintain
a racial balance in his work force, On the contrary,
any deliberate attempt to maintain a racial balance,
whatever the imbalance may be, would involve a viola-
tion of Title VII because maintaining such a balance
would require an employer to hire or refuse to hire
on the basis of race. It must be emphasized that dis-
crimination is prohibited as to any individual. [110
Cong.Rec. 7213, April 8, 1964]
Further, at the behest of the bill’s sponsors, the De-
partment of Justice submitted a memorandum stating:
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Opinion of the District Court
Finally, it has been asserted that Title VII would
impose a requirement of “racial balance.” This is
incorrect. There is no provision, either in Title VII
or in any other part of this bill that requires or au-
thorizes any federal agency or federal court to re-
quire preferential treatment for any individual group
for the purpose of achieving racial balance.
No employer is required to hire an individual be-
cause that individual is a Negro. No employer is re-
quired to maintain any ratio of Negroes to whites,
Jews to gentiles, Italians to English, or women to men.
[110 Cong.Rec. 7207, April 8, 1964.]
Neither the Supreme Court nor the Fourth Circuit has
dealt squarely with the question of the legality of prefer-
ence and/or quotas under Title VII. However, both Courts
have discussed the issue in dicta. In Griggs v. Duke Power
Co., 401 U.S. 424, 430 431, 91 S.Ct. 8.4, 28 L.Ed.2d 158
(1971) the Supreme Court stated:
Congress did not intend by Title VII to guarantee
a job to every person regardless of qualifications. In
short, the Act does not command that any person be
hired simply because he was formerly the subject of
discrimination, or because he is a member of a minor-
ity group. Discriminatory preference for any group,
minority or majority, is precisely and only what Con-
gress has proscribed. What is required by Congress
is the removal of artificial, arbitrary, and unnecessary
barriers to employment when the barriers operate in-
vidiously to discriminate on the basis of racial or other
impermissible classification. [401 U.S. at 430-431, 91
S.Ct. at 853].
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Opinion of the District Court
The Supreme Court, in the more recent decision of
McDonald v. Santa Fe Transportation Co., 423 U.S. 923,
96 S.Ct. 264, 46 L.Ed.2d 248 (1976), made clear, though not
in the factual context of an affirmative action program,
that Title VII’s protection from racial discrimination ap-
plied to whites as well as blacks. Close in time to Mc-
Donald, the Court in Franks v. Bowman Transportation
Co., 423 U.S. 814, 96 S.Ct. 25, 46 L.Ed.2d 32 (1976) did
award constructive seniority and back pay to remedy racial
discrimination against blacks and this remedy may have
adversely affected seniority rights of innocent white em-
ployees. However, this relief was unequivocally restricted
to individual, identifiable, persons who were otherwise
qualified for the positions they sought but had been denied
on account of race.
Similarly, the Fourth Circuit has consistently limited
remedial relief under Title VII to actual persons who were
victims of unlawful discrimination, thereby minimizing
disruption of the working lives and expectations of other
innocent employees.
In Russell v. American Tobacco Co., 528 F.2d 357 (4th
Cir.) cert. denied 425 U.S. 935, 96 S.Ct. 1666, 48 L.Ed.2d
176 (1976), a case which appears to be factually close to
this one, the Court, with some modification, affirmed the
district court’s decree. Russell was a class action brought
by black employees against their employer and union for
engaging in racially discriminatory employment practices.
The discrimination involved three departments of the com-
pany: Leaf, Prefabrication and Fabrication. The Leaf
Department was located in Rockingham County and the
Prefabrication and Fabrication Departments were housed
in the Reidsville plant. Hach department had a separate
seniority roster. The district court found, inter alia, that
40a
Opinion of the District Court
defendant’s discriminatorily preserved higher-paying jobs
in the Fabrication Department for white employees after
enactment of Title VII. The Circuit Court clarified this
finding by holding that the disparity of treatment of the
employees at the Leaf Department and the Prefabrication
Department was also a product of this discriminatory
design:
Tf Branch and Leaf are both parts of the same opera-
tion, this case presents a straightforward application
of the well-accepted principle that discriminatory
hiring in departments of a business may be remedied
by requir’ag the company to allow transfers between
departments, based on plant-wide seniority. See e. g.
Robinson v. Lorillard Corp., 444 F.2d 791 (4th Cir.
1971); Quarles v. Philip Morris, Inc., 279 F.Supp. 505
(H.D. Va. 1968) . . . [Hence] we conclude that reg-
ular and seasonal black employees at Leaf who were
hired before the company eliminated discrimination
at fabrication should be permitted to transfer to that
department as permanent vacancies Occur in jobs they
can perform. Further, they should receive the train-
ing for which they qualify. A transferee’s new depart-
mental seniority should be computed from his em-
ployment seniority date. The class of employees en-
titled to back pay should also be enlarged to include
Leaf employees. [528 F.2d at 362-364] [Emphasis
added. |
Of particular significance, the Circuit Court affirmed the
district court’s disallowance of what would have amounted
to preferential treatment on the basis of race to those black
employees among the class of plaintiffs who were not
victims of discrimination:
4la
Opinion of the District Court
Regular and seasonal Leaf employees also seek entry
into the prefabrication department, and many seasonal
employees seek regular employment in Leaf on the
basis of their company seniority. The district court,
finding no racial discrimination in hiring at prefabri-
cation and Leaf, denied their requests. We affirm be-
cause the Act does not oblige a company to allow black
employees to transfer into departments that were al-
ways open to black applicants without discrimination.
United States v. Chesapeake & Ohio Ry. Co., 471 F.2d
582, 588, 593 (4th Cir. 1972); United States v. Bethle-
hem Steel Corp., 446 F.2d 652, 662 (2d Cir. 1971).
[528 F.2d at 364.]
The most recent Fourth Circuit case in this area is
Patterson v. American Tobacco Co., 5385 F.2d 257 (4th
Cir. 1976). This Court has discussed its reading of that
case at some length in Cramer v. Virginia Commonwealth
University, 415 F.Supp. 673, 679-680 (E.D.Va.1976). Suf-
fice it to say that Patterson did not hold that Title VII
allows preferential treatment solely on the basis of race
to compensate for unlawful past discrimination. More
important, insofar as Patterson relates to the facts herein,
it states that:
[Title VII] plainly bans the use of preferential hiring
to change a company’s racial imbalance that cannot
be attributed to unlawful discrimination. [535 F.2d at
273].
Title VII, by its own terms, does not require preferential
treatment to rectify racial imbalance. This language may
be interpreted to mean that, although permissible, it is
not mandated, Patterson states in no uncertain terms that
42a
Opinion of the District Court
preferential treatment is banned absent proof of discrim-
ination. As in Russell the Court in Patterson carefully
tailored the relief to cover only actual victims of discrim-
ination. See also, United States v. Chesapeake & Ohio Rail-
way Co., 471 F.2d 582 (4th Cir. 1972).
VI
Since Executive Order 11246 is also related to this area,
discusion on this point is warranted.
The Court has previously discussed this issue, citing ap-
propriate authority, in Cramer v. Virginia Commonwealth
University, 415 F.Supp. 673, 680-681 (E.D.Va.1976) hold-
ing that where Executive Order 11246 is inconsistent with
Title VII it is superseded thereby. This Court must addi-
tionally note however that the pertinent language of Ex-
ecutive Order 11246 is clearly consistent with the plain lan-
guage of Title VII:
(1) The contractor will not discriminate against any
employee or applicant for employment because of race,
color, religion, sex, or national origin. The contractor
will take affirmative action to ensure that applicants
are employed, and that employees are treated during
employment, without regard to their race, color, re-
ligion, sex, or national origin. Such action shall in-
clude, but not be limited to the following: employment,
upgrading, demotion, or transfer; recruitment or re-
cruitment advertising; layoff or termination; rates
of pay or other forms of compensation; and selection
for training, including apprenticeship. The contractor
agrees to post in conspicuous places, available to em-
ployees and applicants for employment, notices to be
43a
Opinion of the District Court
provided by the contracting officer setting forth the
provisions of this nondiscrimination clause.
It is rather the regulations adopted by the Secretary of
Labor pursuant to Executive Order 11246 that may be con-
flicting, in our opinion, with both Title VII and Executive
Order 11246. The Secretary’s regulations require that
contractors develop written affirmative action plans which
shall “provide in detail for specific steps to guarantee
equal employment opportunity keyed to problems and
needs of members of minority groups, including, when there
are deficiencies, the devolopment of specific goals and time
tables for prompt achievement of full and equal employ-
ment opportunity.” [41 C.F.R. 60 1.40(a) (1970)]. Insofar
as the above quoted regulation serves as an amorphous
and euphemistic mandate requiring preferential treatment
and imposition of quotas solely on the basis of race, it
contravenes the letter and spirit of Title VII. As Title
VII supersedes contravening Executive Orders, a fortiori,
it supersedes federal regulations represented to be adopted
pursuant to such orders.
Vil
Lastly, before examining the provisions in question,
something should be said about the nature and legal sig-
nificance of consent decrees in Title VII class actions.
A recent Fifth Circuit case, Myers v. Gilman Paper
Corp., 544 F.2d 837 (1977), affords some insight in this
area. Myers was a Title VII class action brought against
a company and union by black employees and former em-
ployees who sought affirmative relief for alleged racial
discrimination in employment, promotions and transfers.
The district court found the union liable on the merits. In
44a
Opinion of the District Court
addition the Court entered and approved a consent decree
between plaintiffs and the company. On appeal by the
union, the Circuit Court held, inter alia, that the district
court could not approve a consent decree negotiated be-
tween plaintiffs and the company that would allow the
substitution of a solution for past discrimination in place
of that achieved through collective bargaining unless it
first determined that the collectively bargained solution
either violated Title VII or was inadequate to cure the
effects of past discrimination. 544 F.2d at 858-859.
In the course of its memorandum the Court made a
number of pertinent remarks. It noted that “[b]efore a
court can grant any relief it must find that the defendants
engaged in the unlawful employment practice alleged in
the complaint” [544 F.2d at 854]. It further made clear
“that before a district court can modify seniority provi-
sions [by consent decree or otherwise] there must be a
challenge by the plaintiffs to the present provisions and
a finding by the court that the present provisions still
perpetuate discriminatory effects of prior action.” [544
F.2d at 855].
Myers is not on all fours with this case particularly in
that the union herein has consented to the decree in ques-
tion, but Myers is sufficiently analogous to be of some
import. First, and basic, consent decrees, although looked
upon favorably by the courts, are not immune from
scrutiny in terms of propriety and legality. This prin-
ciple is especially true in class actions where the effect of
the relief usually has widespread and considerable impact
both within and outside the class. For good reason Rule
23(e) of the Federal Rules of Civil Procedure requires
that “a class action shall not be dismissed or compromised
without the approval of the court....” Further, Myers
45a)
Opinion of the District Court
provides us with the foregoing guidelines in deciding
whether or not to grant this approval in a Title VII
context.
Vill
With the foregoing review of the law, the Court will
consider the several provisions of the proposed Consent
Decree.
Provision I of the Decree provides that current and
future employees who were, or are to be, employed as
seasonal workers at the Richmond Leaf Plant shall be
credited with seniority for actual time worked at the
plant from the beginning of their employment. Since the
pool of employees benefiting from this provision, that is
seasonal employees, has been traditionally and are now
all black, it appears that benefits are being bestowed on
the basis of race. Preferential treatment on the basis of
race—any race—violates the Constitution and Title VII.
It cannot be countenanced by a court sworn not to subvert
but to uphold the law. To be sure, legitimate nonracial
business reasons may underlie such a decision. But so
also, and more likely in this case, could illegitimate racial
considerations. If the reason is the former no decree is
required. If the reason is the latter no decree is permitted.
Plaintiffs, in their brief in support of the proposed Con-
sent Decree, say that the relief in Provision I is “exactly
the same relief” granted in Russell vy. American Tobacco
Co., supra. This assessment is incorrect. There are two
paramount distinctions between Russell and the instant
case: (1) in Russell the Court found present discrimina-
tion and present effects of past discrimination; (2) the
Russell Court carefully tailored the relief in an effort to
make whole the actual victims.
46a)
Opinion of the District Court
In the proposed Consent Decree the defendants “ex-
pressly deny .. . any unlawful or discriminatory conduct.”
Plaintiffs state that they make no “admission” that de-
fendant’s conduct, with the exception of present hiring
practices, is “lawful.” This dichotomy does not create any
factual basis upon which relief may be granted. Plaintiff
does not, by these words, even deny defendants’ assertion.
But assuming for the moment that there is evidence of
present discrimination or of the present effects of past
discrimination, Provision I is still not in line with Russell.
The Russell Court devised an equitable solution to effect
relief for actual victims of discrimination. The relief was
not granted to employees because they were black but
because they were actual, identifiable, victims of racial
discrimination. Indeed, that Court refused relief to cer-
tain blacks where no evidence existed that they had suf-
fered from racial discrimination. Contrawise, the parties
herein have agreed to allow seemingly preferential treat-
ment for “current and future” seasonal employees not be-
cause they are victims of racial discrimination, but be-
cause those current employees are black and those future
employees will almost surely be black. There was no
apparent consideration given to whether or not the pre-
ferred employees have been, are, or would be subject to
racial discrimination. In short, the considerations which
were the essence of Russell are absent here.
Provision II would allow all seasonal employees who
have already served a probationary period as a seasonal
employee to avoid having to serve the additional proba-
tionary period as a regular employee that would otherwise
be required as a condition precedent to eligibility for med-
ical benefits. The Court has the same concern with this
provision as it does with Provision I. If this is a business
47a,
Opinion of the District Court
decision it’s none of the Court’s business. If it is proposed
as relief for blacks it is unlawful as there is no showing
that the so-called relief applies and is limited to, victims
of racial discrimination and is reasonably related to making
such victims whole.
Provisions III and IV are somewhat similar in purpose
and effect and may be treated together. Provision III al-
lows seasonal employees to transfer to full time positions,
some of which were reserved at one time for whites only,
as vacancies occur. Provision IV parallels III but specifi-
cally includes “Watchman” classification because the com-
pany has a separate eligibility list for that position. Since,
as mentioned, the pool from which hires shall be made
(seasonal workers) is all black, it is clear that “hiring
from the pool” is simply another way of saying “hire black.”
To reiterate, if defendant chooses to hire from its seasonal
workers because they are seasonal employees it presum-
ably has a right to do so, but it has no right to a court
decree requiring that it do so thus protecting it from claims
that the facially neutral procedure was a pretext for pre-
ferring blacks over whites in hiring.’
Again, plaintiffs say that similar relief was granted in
Russell. We find nothing in Russell to indicate that the
class of plaintiffs therein were to be given preferential
treatment in hiring over outsiders, but in any event, the
foregoing distinctions mentioned with regard to Provisions
I and II are applicable here. Plaintiffs admit in their brief
that they “have not found any evidence of discriminatory
hiring for positions in the hourly production unit.” They
instead speak of present effects of past discrimination but
none of the parties explicate upon these effects, if any,
?But see McAleer v. American Telephone & Telegraph, 416
F.Supp. 435 (D.C. 1976).
48a
Opinion of the District Court
nor do they point with any specificity to the victims, no
less make any attempt to tailor the relief accordingly. The
result, whether intended or not, is preferential treatment
of blacks solely on the basis of race.
Provision V adopts a “goal” for the company to obtain
in filling its supervisory work force to be met by 1980.
Despite plaintiffs’ protest to the contrary, this Court sees
it for what it is, a quota, plain and simple. With respect
to quotas this Court reviewed the law recently in Cramer
v. Virginia Commonwealth University, supra, and found
that sex based quotas were contrary to both the letter and
spirit of the law. The parties have cited the Court to no
binding authority that the law is any different with respect
to racial quotas. The law reviewed earlier in this opinion
affirms the conclusion that racial preferences are forbidden
in this nation.
Ix
The parties suggest that the decree is intended to over-
come the last vestiges of racial discrimination, But the
Court perceives no such vestiges. Indeed, the facts ad-
mitted by the parties show that with great rapidity and
without any decree the artificial racial barriers have com-
pletely dissolved at the plant.
The parties further suggest that the decree is a mere
redundancy since Executive Order 11246 provides for pre-
cisely the procedure and quotas provided for in the Con-
sent Decree. While this Court has held that Executive
Order 11246 does not and cannot require racial quotas under
our present Constitution and laws, still, if the parties be
right this Court has other things to do than enter sur-
plusage in the form of a court order. Court orders are
not intended for anything but serious problems.
49a
Opinion of the District Court
Finally, the parties say that the mandate of Title VII
will be satisfied by adoption of the Consent Decree which
is to say that Title VII sanctions preferential treatment
and quotas. As we have heretofore demonstrated, Title VII
was never so intended. Its strongest supporters specifically
and unequivocally disclaimed any intention to turn this
country down the mirey road of quotas and racial pref-
erences.
This Court is sympathetic to the need and is aware of
the perplexity ef rectifying the effects of past racial dis-
crimination and eliminating present racial discrimination.
But the mere waving of the banner does not mean that it
is appropriately raised; it does not make that which is
illegal legal and does not make that which is unjust, just.
In Quarles v. Philip Morris, Inc., 279 F.Supp. 505, 516
(E.D. Va. 1967), the Court, speaking with regard to Title
VII, stated:
[T]he legislative history indicates that a discrim-
inatory seniority system established before the act
cannot be held lawful under the act. The history leads
the court to conclude that Congress did not intend to
require “reverse discrimination”; that is, the act does
not require that Negroes be preferred over white em-
ployees who possess employment seniority. It is also
apparent that Congress did not intend to freeze an
entire generation of Negro employees into discrim-
inatory patterns that existed before the act.
This is the essence of the dilemma courts are faced with
in racial discrimination cases. Where the Court has before
it victims of discrimination and innocent third parties it
has the hard task of fashioning a remedy that will attempt
to make the victims whole without unduly affecting the
p0a
Opinion of the District Court
rights of innocent third parties—a difficult problem in-
deed but one the Court must confront. The problem must
be solved by means of equitable relief, not preferential
treatment or quotas. The latter two methods serve to
evade and perpetuate rather than face the problem. They
apply cosmetic relief to the symptoms, but fail to address
the substance of the problem. They give employers and
unions a safe refuge from the rigors of non-discriminatory
hiring; so long as the quota is met they will be safe. Under
the Decree proposed herein any relief to victims of dis-
crimination is incidental, persons who do not deserve to
benefit, benefit; and persons who do not deserve to suffer,
suffer.
A popular theory is that every black is in some sense
a victim of racial discrimination and that all whites share
the guilt. This notion perhaps makes preferential treat-
ment and quotas more palatable to some. But a Court of
law cannot render decisions on the basis of guilt theories
nor may such theories be permitted to influence its judi-
cial thinking. A Court is constrained to perceive victims
as subjects of violations of the law and is constrained to
perceive guilt in terms of lep’al guilt. The proposed Con-
sent Decree herein, rather than aiding victims of viola-
tions of the law, would itself violate the law and victimize
innocent people both black and white.
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 par-
ties with a judicial license to practice racial discrimination.
An appropriate order shall issue.
dla
Order of the District Court
IN THE
UNITED STATES DISTRICT COURT
For tHE Hastern District oF VIRGINIA
RicHmMonp Division
Civil Action No. 75-0553-R
Frank L. Carson, et al.,
v.
American Branps, Ineo., e¢ al.
ORDER
For the reasons stated in the attached memorandum the
sketch for a Consent Decree tendered by the parties hereto
on 1 April 1977 is Rerusep.
Let the Clerk send a copy of this order to all counsel
of record.
/s/ WarRINER
Umted States District Judge
Date: 1 June 1977
Filed June 2 1977
Clerk, U.S. Dist. Court
Richmond, Va.
52a
Judgment of the United States Court of Appeals
UNITED STATES COURT OF APPEALS
For tHe Fourts Circuit
No. 77-2260
Frank L. Carson, Lawrence Hatcuer, Stuart EK. Mryzs,
Appellants,
v.
American Branps, Inc., t/a Toe AmeERicAN Tosacco Com-
paNy; Locat 182, Tospacco WorkKERS INTERNATIONAL;
Topacco WorkKERs INTERNATIONAL UNION,
Appellees.
AppraL From the United States District Court for the
Eastern District of Virginia.
Tuts Cause came on to be heard on the record from the
United States District Court for the Eastern District of
Virginia.
On ConsIDERATION WHEREOF, it is now here ordered and
adjudged by this Court that the appeal is dismissed.
Wruiam K. Sxats, Il
Clerk
Filed Sept. 14, 1979
Wuuum K. Suarts, Il
Clerk
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.