EEOC v. Richard and Shauna Kidman, d/b/a RDs Drive In/Exxon (9th Cir.)
Brief as appellee and cross-appellant
March 31, 2005






Case No. 04-17005


IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT


	EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

		Plaintiff/Appellee,

			and

	DORETTA BENALLY, ROXANNE CAHOON,
	FREDA DOUGLAS, and ELVA JOSLEY BEGAY,


	Plaintiff-Intervenor-Appellees,

			v.

	RICHARD O. KIDMAN and SHAUNA KIDMAN,
	d/b/a RDs DRIVE IN/EXXON,


		Defendant/Appellants.

	On Appeal from the United States District Court
	for the District of Arizona, No. CV 02-01911-SMM
	The Honorable Stephen M. McNamee, Presiding

	ANSWER BRIEF OF THE EQUAL EMPLOYMENT
	OPPORTUNITY COMMISSION AS APPELLEE
	and OPENING BRIEF AS CROSS-APPELLANT

ERIC S. DREIBAND
General Counsel

SUSAN R. OXFORD
Attorney

CAROLYN L. WHEELER
Acting Associate General Counsel

EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION
1801 L Street, N.W., Room 7010
Washington, D.C.  20507

LORRAINE C. DAVIS
Assistant General Counsel



		TABLE OF CONTENTS
					page

TABLE OF CONTENTS			i

TABLE OF AUTHORITIES			iii

STATEMENT REGARDING ORAL ARGUMENT	viii

STATEMENT OF JURISDICTION		1

STATEMENT OF ISSUES			1

STATEMENT OF THE CASE			2

STATEMENT OF FACTS			3

	Decision Below			11

STANDARD OF REVIEW			15

SUMMARY OF ARGUMENT (RDs APPEAL)	16

ARGUMENT

	THE DISTRICT COURTS ENFORCEMENT ORDER
	SHOULD BE AFFIRMED			18

	A. The District Courts Factual Finding that the Parties
	Reached Agreement on the Nine Settlement Terms
	Enforced by the District Court is Amply Supported by
	Evidence in the Record and Plausible in Light of the Record
	as a Whole and, Therefore, is Not Clearly Erroneous.		21

	1. The district court correctly found that on September
	3, 2003, the Kidmans manifested their assent to a
	settlement agreement resolving EEOCs lawsuit against them.	21


	2. The district court properly found the nine enumerated terms
	constitute the parties settlement agreement.			29

	B. The District Court Properly Exercised its Discretion
	in Enforcing the Parties Settlement Agreement.			35


SUMMARY OF ARGUMENT (EEOCS CROSS-APPEAL)				48

ARGUMENT

	THE DISTRICT COURTS ENFORCEMENT ORDER SHOULD
	BE READ TO INCLUDE THE CONDITIONS TO WHICH THE
	PARTIES AGREED FOR ANY FUTURE READOPTION OF AN
	ENGLISH-ONLY POLICY AT RDS OR, ALTERNATIVELY,
	FAILURE TO INCLUDE THOSE CONDITIONS CONSTITUTES
	AN ABUSE OF THE DISTRICT COURTS DISCRETION.			49

CONCLUSION								55

CERTIFICATE OF COMPLIANCE						56

CERTIFICATE OF SERVICE




		TABLE OF AUTHORITIES

		Federal Cases
						page

Ahern v. Cent. Pac. Freight Lines,
	846 F.2d 47 (9th Cir.1988)		15, 22, 23, 36

Alexander v. Gardner-Denver Co.,
	415 U.S. 36 (1977)			36

Alexander v. Indus. of the Blind,
	901 F.2d 40 (4th Cir. 1990)		20

Alvarez v. City of New York,
	146 F. Supp. 2d 327 (S.D.N.Y. 2001)	39

American Intl Enter. v. F.D.I.C.,
	3 F.3d 1263 (9th Cir. 1993)		19, 38

Anchorage-Hynning & Co. v. Moringiello,
	697 F.2d 356 (D.C. Cir. 1983)		43

Anderson v. City of Bessemer,
	470 U.S. 564 (1985)			15, 23

Arnold v. United States,
	816 F.2d 1306 (9th Cir. 1987)		42

Bills Coal Co. v. Bd. of Public Util. of Springfield,
	682 F.2d 883 (10th Cir. 1982)		47

Bowden v. United States,
	106 F.3d 433 (D.C. Cir. 1997)		40

Callie v. Near,
	829 F.2d 888 (9th Cir. 1987)		16, 18, 26, 34, 37, 48

Chavez v. New Mexico,
	397 F.3d 826 (10th Cir. 2005)		40

Ciaramella v. Readers Digest Assoc.,
	131 F.3d 320 (2d Cir. 1997)		26, 27, 40


Conway v. Brooklyn Union Gas Co.,
	236 F. Supp. 2d 241 (E.D.N.Y. 2002)	39

Cornell v. Delco Electronics Corp.,
	103 F. Supp. 2d 1116 (S.D. Ind. 2000)	39, 47

Doi v. Halekulani Corp.,
	276 F.3d 1131 (9th Cir. 2002)		16, 29, 30, 48

First Interstate Bank v. Small Bus. Admin.,
	868 F.2d 340 (9th Cir.1989)		39

Flight Sys. v. Elec. Data Sys. Corp.,
	112 F.3d 1247 (3d Cir. 1997)		45

Fulgence v. J. Ray McDermott & Co.,
	662 F.2d 1207 (5th Cir. 1981)		20, 37, 39, 42

Gibson v. Arnold,
	288 F.3d 1242 (10th Cir. 2002)		43, 44, 45

Glass v. Rock Island Refining Corp.,
	788 F.2d 450 (7th Cir. 1986)		20, 24

Hanna v. Plumer,
	380 U.S. 460 (1965)			42

Jeff D. v. Andrus,
	899 F.2d 753 (9th Cir. 1989)		18, 35, 37

Husain v. Olympic Airways,
	316 F.3d 829 (9th Cir. 2002),
	affd 540 U.S. 644 (2004)		15, 16

Kennewick Irrigation Dist. v. U.S.,
	880 F.2d 1018 (9th Cir. 1989)		19

Kirkland v. Legion Ins. Co.,
	343 F.3d 1135 (9th Cir. 2003)		16

Lozier v. Auto Owners Ins. Co.,
	951 F.2d 251 (9th Cir.1991)		15

Mardan Corp. v. CGC Music, Ltd.,
	804 F.2d 1454 (9th Cir. 1986)		40, 41

Metronet Servs. Corp. v. U.S. West Communications,
	329 F.3d 986 (9th Cir. 2003),
	judgment vacated on other grounds,
	540 U.S. 1147 (2004)			18, 25, 27

Moore v. City of San Jose,
	615 F.2d 1265 (9th Cir. 1980)		36

Morgan v. South Bend Cmty. Sch. Corp.,
	797 F.2d 471 (7th Cir. 1986)		19

Officers for Justice v. Civil Serv. Commn of San Francisco,
	688 F.2d 615 (9th Cir. 1982)		36

Rabouin v. Natl Labor Relations Bd.,
	195 F.2d 906 (2d 1952)			47

Reich v. Best Built Homes,
	895 F. Supp. 47 (W.D.N.Y. 1995)		39

Rogers v. Gen. Elec. Co.,
	781 F.2d 452 (5th Cir. 1986)		36

Role v. Eureka Lodge No. 434,  F.3d  ,
	2005 WL 668452 (2d Cir. March 23, 2005)	20

S.E.C. v. Rubera,
	350 F.3d 1084 (9th Cir. 2003)		15

Sheng v. Starkey Labs. (Sheng I),
	53 F.3d 192 (8th Cir. 1995)		18, 19, 31, 32, 34

Sheng v. Starkey Labs. (Sheng II),
	117 F.3d 1081 (8th Cir. 1997)		21, 31, 33, 34, 40

Snider v. Circle K Corp.,
	923 F.2d 1404 (10th Cir. 1991)		39

Stroman v. West Coast Grocery Co.,
	884 F.2d 458 (9th Cir. 1989)		36, 37, 39

Taylor v. Gordon Flesch Co.,
	793 F.2d 858 (7th Cir. 1986)  		26, 28, 30, 37

Turner v. United States,
	875 F. Supp. 1430 (D. Nev. 1995),
	affd o.b., 91 F.3d 1274
	(9th Cir. 1996)				19, 38

Worthy v. McKesson Corp.,
	756 F.2d 1370 (8th Cir. 1985)		20, 33, 34

United States v. Kimbell Foods,
	440 U.S. 715 (1979)			38


		State Cases
		-----------

Arizona Bd. of Regents v. Main Street Mesa Assocs.,
	891 P.2d 889 (Ariz. App. 1994)		35

Campbell v. Territory,
	125 P. 717 (1912)			35

Chicago Title Ins. Co. v. Renaissance Homes,
	679 P.2d 517 (Ariz. App. 1983)		35

Davis v. Roberts,
	563 N.W.2d 16 (Iowa Ct. App. 1997)	43, 44

Jenkins v. Irvin, 178 P. 33 (Ariz. 1919)	34

Key Design v. Moser,
	138 Wash.2d 875,
	983 P.2d 653 (Wash. 1999)		45

Martino v. Frumkin,
	462 P.2d 853 (Ariz. App. 1969)		37

Paris Util. Dist. v. A.C. Lawrence Leather Co.,
	665 F. Supp. 944 (D.Me. 1987),
	affd on other grounds,
	861 F.2d 1 (1st Cir. 1988)		44, 46

Tabler v. Indus. Commn of Ariz.,
	47 P.3d 1156 (Ariz. 2002) (in banc)	40

Timberlake v. Heflin, 180 W. Va.
	644, 379 S.E.2d 149 (W.Va. 1989)	43, 44

Wemhoff v. Investors Mgmt. Corp. of America,
	528 A.2d 1205 (D.C. 1987)		44



		Federal Statutes
		----------------


28 U.S.C. 451			1

28 U.S.C.  1291		1

28 U.S.C.  1331		1

28 U.S.C.  1337		1

28 U.S.C.  1343		1

28 U.S.C.  1345		1

42 U.S.C.  1981a		1, 2

42 U.S.C.  2000e-1 et seq.	2

42 U.S.C.  2000e-5(b)		36

42 U.S.C.  2000e-5(f)(1),(3)	1


		State Statutes
		--------------

Ariz. Rev. Stat.  44-101(5)	41


		Court Rules
		-----------

16Ariz. R. Civ. P. 80(d)	42


		Miscellaneous
		-------------

2A Corbin, Corbin on Contracts  498
	(1950 & 1984 Supp.)			43


		STATEMENT REGARDING ORAL ARGUMENT

The issues in these cross-appeals  both of which pertain to whether the 
district court properly enforced the parties settlement agreement   
involve a straightforward application of well-established legal principles 
to district court findings that are amply supported by the testimony and 
documents from the evidentiary hearing conducted below.  Notwithstanding 
Defendants efforts to present a very different view of the facts, the 
factual record is clear, and there is nothing novel or complex about the 
district courts application of these well-established legal principles.  
Nevertheless, because Defendants Richard and Shauna Kidman ask this Court to 
rely on legal principles that, in our view, are inapplicable (and that the 
district court properly declined to apply), we believe oral argument might 
assist this Court in resolving the issues presented in this appeal.

		STATEMENT OF JURISDICTION

The district court had jurisdiction over this matter under 28 U.S.C. 451, 
1331, 1337, 1343 and 1345 and 42 U.S.C.  1981a and 2000e-5(f)(1) & (3).  
The district courts final judgment entered on October 13, 2004, R.155, is a 
final decision this Court has jurisdiction to review under 28 U.S.C. 1291. 
  Defendants Richard and Shauna Kidman d/b/a RDs Drive In/Exxon (RDs or 
Defendants) filed a notice of appeal on October 1, 2004.  R.153 (ER565).  
Plaintiff Equal Employment Opportunity Commission (EEOC or Commission) 
filed a notice of cross-appeal on December 10, 2004.  R.159 (ER573).1

		STATEMENT OF ISSUES

1. ON RDs APPEAL:  Whether the district courts factual finding that the 
parties reached a settlement agreement is not clearly erroneous, and whether 
the district court properly exercised its discretion in enforcing the 
settlement terms enumerated in the district courts Order and Judgment.

2. ON EEOCs CROSS-APPEAL: Whether the district courts enforcement of the 
Kidmans agreement to rescind their English-only policy includes the 
conditions to which the parties agreed for any future re-adoption of an 
English-only policy at RDs and, if not, whether the district court abused 
its discretion by not enforcing these agreed-upon conditions.

		STATEMENT OF THE CASE

EEOC filed this lawsuit against Defendants Richard and Shauna Kidman d/b/a 
RDs Drive In/Exxon alleging the companys implementation of a 
speak-English-only policy for the workplace discriminated on the basis of 
national origin (Navajo) in violation of Title VII of the Civil Rights Act 
of 1964 (Title VII), as amended, 42U.S.C.  2000e-1 et seq. and 42 
U.S.C.  1981a.  R.1.  EEOCs complaint further alleged that RDs violated 
the anti-retaliation provision of Title VII when it fired several employees 
for objecting to the policy.  Id.  The four discharged employees intervened 
in EEOCs lawsuit as plaintiff-intervenors.  R.26.

On September 3, 2003, EEOC, RDs and Plaintiff-Intervenors reached a mutual 
agreement to resolve this litigation based on a number of specified terms.  
R.106 (Magistrates minute order).  Defendants thereafter declined to sign a 
written document embodying the parties agreement and indicated they no 
longer intended to honor the settlement agreement.  On January 9, 2004, EEOC 
moved to enforce the settlement agreement.  R.130 (ER27).  After conducting 
an evidentiary hearing, the district court granted EEOCs motion on 
September 14, 2004, with respect to nine enumerated settlement terms.  R.152 
(ER550).  The district court entered final judgment on October 13, 2004.  
R.155 (ER569).

On October 1, 2004, RDs appealed the district courts decision to enforce 
the settlement agreement.  R.153 (ER565).  On October 14, 2004, the district 
court granted RDs motion for a stay pending appeal.  R.156 (ER571).  The 
court retain[ed] jurisdiction to enforce or clarify any provisions of the 
injunctive relief, to the extent that it exists, in this case for three 
years [following the appeal].  Id. (ER572).  On December 10, 2004, EEOC 
cross-appealed the district courts failure to explicitly include in its 
enforcement order the parties agreed-upon conditions for any re-adoption of 
an English-only policy in the future.  R.159 (ER573).


		STATEMENT OF FACTS

RDs Drive In is a fast food restaurant located in Page, Arizona.  The 
restaurant employs between 20 and 25 individuals, most of whom are members 
of the Navajo Nation.  R.152 (Memorandum Decision and Order (MDO)) at 1-2 
(ER550-51).  EEOC sued RDs in 2002 to challenge RDs adoption of an 
English-only policy and the companys retaliatory discharge of four 
employees who objected to the policy.  R.1.  The policy stated:

The owner of this business can speak and understand only English.  While the 
owner is paying you as an employee, you are required to use English at all 
times.  The only exception is when the customer can not understand English.  
If you feel unable to comply with this requirement, you may find another 
job.

		R.152 (MDO) at 2 (ER551).

Shortly after EEOC filed this lawsuit, ProEnglish, an organization dedicated 
to ensuring English is the official language throughout the United States, 
approached the Kidmans, ER252-53, 289, and offered to pay half their 
litigation expenses to defend this lawsuit (up to $45,000), provided the 
Kidmans obtain ProEnglishs prior written approval of any settlement 
agreement.  ER308, 475-76.  EEOC eventually learned of this arrangement and 
brought it to the district courts attention.  ER489-90.

On September 3, 2003, the parties attended a settlement conference conducted 
by Magistrate Verkamp.  EEOC counsel appeared along with the four 
Plaintiff-Intervenors and their counsel.  ER159.  Richard and Shauna Kidman 
attended, along with their counsel, David Selden, and ProEnglish official 
Robert Park, who remained in the courthouse throughout the day.  ER154, 209. 
  After a day of negotiations under the magistrates guidance, throughout 
which Selden consulted the Kidmans repeatedly, ER290, 342-43, the parties 
announced they had reached a settlement.  ER97, 357-58.  The agreement was 
reflected in a typed draft consent decree supplied by EEOC which the parties 
had amended by hand throughout the day, and several additional handwritten 
sections that counsel for EEOC, the intervenors, and Defendants jointly 
crafted during the negotiations.  Neither the Kidmans nor their counsel 
indicated there was anything left to be worked out, ER168, or that 
settlement was contingent on any additional consideration or approvals.  
See, e.g., ER96-97, 124, 155, 308, 357-58, 361.  Before leaving the 
courtroom, the Kidmans and Plaintiff-Intervenors posed for two group 
pictures to commemorate their resolution of the dispute.  ER164, 166-67.

EEOCs counsel and Selden, who was authorized by the Kidmans to settle the 
case, ER180, later testified that the parties reached agreement on September 
3rd on the following terms:  (1) the agreement would be memorialized in a 
writing filed in court (ER73, 184); (2) the Kidmans would pay $7,400 to the 
intervenors (ER74, 89, 184); (3) Defendants would be enjoined from 
discriminating or retaliating (ER74, 185); (4) Defendants would discontinue 
RDs English-only policy, with any future readoption subject to the 
conditions specified in paragraph 15" (ER74, 179-80, 185); (5) the parties 
would jointly sponsor a community symposium (ER185-86); (6)the parties 
would issue a joint statement on the resolution of the case, which the 
parties handwrote during negotiations (ER74, 181-83, 186); (7)each party 
would bear its own attorneys fees (ER75, 187); (8)Defendants would post a 
notice at RDs concerning discrimination and retaliation that Selden 
hand-drafted during negotiations (ER75, 187); and (9)Defendants would hold 
quarterly staff meetings to discuss issues, problems, concerns and employee 
policies (ER75, 187).

Several provisions were negotiated word-for-word on September 3rd and are 
reflected in handwritten paragraphs that were drafted by both EEOC and 
Defendants counsel and then photocopied and distributed to all counsel at 
the end of the day.  ER96.  These include: paragraph 15 governing the 
discontinuation of RDs English-only policy and the conditions for any 
future re-adoption (ER84-86, 179-80; see ER401-03); the joint statement 
the Kidmans and Intervenors agreed to sign (ER90-94, 126-27, 181-83; see 
Exhibit B, ER398-400); and the notice the Kidmans agreed to post at RDs 
(ER99; see ER404-05).  Thus, the parties did not simply agree to broad 
principles for resolving the case and leave the details for later.  Where 
wording mattered, the parties worked that out before advising the magistrate 
that a deal had been reached.  E.g. ER342-43 (negotiations over specific 
terms in paragraph 15).  Asked at the evidentiary hearing if EEOC intended 
the agreement to be contingent on a subsequent written, signed document, 
EEOCs counsel said, We thought we had an agreement that day.  ER144-45.

The Kidmans likewise confirmed that the agreement reached on September 3rd 
included: payment of $7,400 to Plaintiff-Intervenors (ER259, 293, 306); 
suspension of the English-only policy (ER261, 294); participation in a 
community symposium intended to improve relations in the Page community 
(ER267, 294, 320); issuance of a joint statement (ER262); posting a notice 
at RDs (ER320); and quarterly staff meetings to discuss employee concerns 
(ER267-68, 294).  Shauna Kidman testified that she and her husband gave 
their permission to Selden to agree to these settlement terms.  See ER265 
(Shauna Kidman gave her permission and her husband probably gave his).  As 
Mrs. Kidman explained, [A]t the end of the day on September the 3rd ... 
there was agreement ... on the basic terms of the settlement.  ER271.  If 
the subsequent memorialization had been written the way [she] thought it 
should be, she was prepared to sign it.  ER269; see also ER264 (waiting to 
see deal on paper [t]o make sure the deal was correct).  Richard Kidman 
verified his agreement, ER298, and testified that if the written document 
had been worded acceptably, he would have signed it the following day.  
ER307-08.

As Selden later testified, The objective [on September 3rd] was to try to 
get it documented the next day, before Selden left for vacation.  ER245; 
see also ER97-98.  On September 4, 2003, Selden e-mailed EEOC asking about 
the status of the settlement documentation.  SER1.  Selden suggested if the 
parties were unable to conclude the documentation that day, they should 
notify the district court we have a settlement and finalize the settlement 
when Selden returned on September 22, 2003.  Id.  Seldens email said 
nothing about the need for any further consideration or approval by the 
Kidmans or anyone else.  Id.

Shortly afterward, EEOC e-mailed Selden the re-typed consent decree, having 
added boiler-plate language and details to some of the terms, but 
transcribing the three handwritten sections verbatim.  ER100-01; see 
ER536-47.  Later that day, Selden and EEOC discussed the provision requiring 
the Kidmans to take a Navajo language class at the local community college.  
ER190.  Believing the Kidmans had agreed to this, ER102-03, 156, 178-79, 
EEOC urged inclusion of this term.  ER132-34, 533.  Selden maintained his 
clients had not agreed to this, ER102, but did not otherwise question or 
contest any other provision in EEOCs draft.  ER103.3  Before leaving for 
vacation, Selden forwarded EEOCs draft to the Kidmans, ER292, who sent it 
to ProEnglish a few days later.  ER308.

The magistrate entered a minute order on September 5, 2003, indicating the 
case had settled.  R.106.  The same day, Selden began a two-week vacation.  
Since Selden had said he planned to work on the matter during the first part 
of his vacation, ER191-93, EEOC and the intervenors inquired about the 
status of the documentation during Seldens absence.  ER106-07.  On 
September 11, 2003, EEOC attorney David Lopez e-mailed Selden asking if 
there was any news on the finalization process.  ER407.  Selden dictated a 
response that his secretary e-mailed the next day stating it had not been 
possible to finalize settlement documentation that week, but they would 
finalize the settlement documentation after he returned.  Selden suggested 
advising the district courts chambers that we are working on the 
documentation of the settlement, which I presume they already know from the 
Minute Entry issued by Judge Verkamp.  Id. (emphasis added).  In response 
to a second EEOC inquiry, another attorney in Seldens office reviewed the 
prior e-mails and confirmed there was no disagreement that a settlement has 
been reached.  ER534.  At no time during this period did Defendants object 
to the magistrates minute entry indicating the case had settled.

When Selden returned, he appeared before the district court on September 22, 
2003, and reiterated that the parties [had] reached what they believed to 
be a settlement.  ER4.  Selden said he planned to revise EEOCs draft 
document and then go back to try to, you know, dot the is and cross the 
ts and work on any remaining . . . issues that exist, wrapping things up 
in short order, probably two weeks.  ER45.  Selden mentioned no 
substantive concerns with EEOCs September 4th draft.  See ER4-8.

Thereafter, matters broke down.  Selden circulated a revised document on 
September 24, 2003.  ER199-200, 413.  Defendants version contained all the 
terms eventually enforced by the district court, ER111-13, including 
paragraph 15 providing for Defendants rescission of their English-only 
policy with the identical conditions for any re-adoption of such a policy in 
the future as specified in EEOCs September 4th version.  ER419-20  11.A.4  
Defendants version, however, altered the joint statement, ER108-11, 
204-05, and added several new terms, R.152 (MDO) at 10-11(ER559-60), some of 
which EEOC had expressly rejected on September 3rd and others never 
discussed.  ER428.  EEOC rejected this version as inconsistent with the 
parties September 3rd agreement.  Id.

On October 6, 2003, counsel met at Seldens office, and Selden announced the 
Kidmans had decided not to honor the settlement agreement.  ER115, 117, 127, 
360; see ER436.  On October 9, 2003, Colorado-based Mountain States Legal 
Foundation (MSLF) announced it had agreed to represent the Kidmans in this 
action, free of charge.  SER2-3.  When the parties next appeared before the 
district court on October 20, 2003, Selden significantly re-characterized 
the results of the September 3rd settlement conference, stating: The 
settlement discussions in Flagstaff . . . did not produce a complete and 
final settlement agreement.  There was still documentation to be done and 
revisions to be made.  ER15.

The district court thereafter admitted MSLF counsel pro hac vice to 
represent the Kidmans.  R.116-18.  On October 23, 2003, EEOC circulated 
another draft consent decree in an effort to address Defendants expressed 
concerns with EEOCs September 4th draft.  ER120-21; 443-59.  MSLF advised 
EEOC, on November 7, 2003, that the Kidmans rejected this draft, as well, 
and now would only settle if EEOC apologized for bringing the action, issued 
a statement that there had been no illegal activity by RDs, paid all of the 
Kidmans costs and attorneys fees, and dismissed the lawsuit with 
prejudice.  ER121-22, 461-62.

On January 12, 2004, EEOC moved in district court to enforce the September 
3, 2003, settlement agreement.  R.130.  The Kidmans opposed the motion, 
asserting for the first time that Selden did not have settlement authority 
on September 3, 2003, when he advised the magistrate that the matter was 
resolved.  R.133, 135.  The Kidmans and Selden further represented that 
Selden did not act for the Kidmans when, on September 24, 2003, he 
circulated a proposed consent decree containing terms virtually identical to 
those EEOC asked the district court to enforce.  Id.


Decision Below

After a two-day evidentiary hearing on July 30 and August 6, 2004, R.141, 
144, during which the district court heard testimony from seven individuals 
and accepted 52 exhibits into evidence, see ER60-374, the district court 
issued its order on September 14, 2004, enforcing the nine settlement terms 
to which the parties agreed on September 3, 2003. << EEOC also sought, 
initially, to have the settlement embodied in a consent decree and to 
enforce two additional provisions: (1) training for the Kidmans on Navajo 
culture, language and tradition, and (2) limitation of any waiver or release 
to the issues raised in EEOCs lawsuit.  ER28-29. At closing arguments, EEOC 
advised the court that it no longer sought enforcement of the consent decree 
format and the waiver provision.  ER378.  Those two provisions, as well as 
the Navajo cultural training, are not included in the district courts 
enforcement order. ER563.>> R.152 (ER550-64).

The district court looked to federal law for the appropriate legal 
standards.  Id. at 4-6 (ER553-55).  The court noted that an enforceable 
settlement agreement requires a knowing and voluntary agreement as to all 
material terms, but need not be in writing and signed by the parties to be 
enforced.  Rather, [i]n Title VII actions, if a party authorizes a 
settlement agreement but later changes his mind when presented with the 
settlement documents, that party remains bound by the terms of the 
agreement.  Id. at 6-7 (citations omitted) (ER555-56).

The district court noted that the parties advised the magistrate on 
September 3, 2003, that a settlement had been reached, and the magistrate 
stated as much, on the record in the presence of all parties and their 
counsel.  Id. at 7 (ER556).  The district court found the parties left the 
settlement conference intent on finalizing the terms of a settlement 
agreement and reiterated that intention to the district court on September 
22, 2003.  Id.  The district court expressly found Selden had authority to 
settle the matter on the Kidmans behalf and Mr. Kidmans testimony to the 
contrary was not credible.  Id. at 11 (ER560).  The district court 
reasoned that the Kidmans were present at the settlement conference, during 
which Selden kept the Kidmans apprized of the entire process and the 
proposed terms.  The district court further reasoned that the Kidmans were 
present on two separate occasions when their counsel represented to the 
court that a settlement had been reached.  Id.  On this basis, the district 
court concluded that [t]he Kidmans cannot now say that they were unaware of 
what was going on when it is clear that they were.  Id.

The district court compared the September 3rd marked-up draft and 
hand-written addenda with EEOCs September 4th version and Defendants 
September 24th version and found, with respect to the monetary payment, that 
the amount was not in dispute and [h]ow the payment was to be made was not 
a material part of the agreement.  Id. at 8 (ER557).  The district court 
further noted that Defendants did not dispute the community symposium 
provision, but objected only to EEOC lengthening the deadline for the event 
and to working with EEOC to plan the event.  The district court found the 
first objection immaterial given the parties uniform view that the 
original deadline was unrealistic, and found the second objection 
irrelevant, suggesting EEOC let Defendants and Intervenors plan and 
conduct the symposium.  Id. at 9 (ER558).

The district court rejected RDs contention that it did not agree to hold 
all-employee meetings.  The district court noted that Defendants 
September 24th proposed Consent Decree included the all-employee language 
and that, according to Mrs. Kidmans testimony, the dispute with this 
provision was simply logistic in nature because of the difficulty of 
getting all of RDs . . . employees to the restaurant at the same time.  
Id. at 10 (ER559).  The district court also found that Defendants addition 
of a new provision allegedly reserving Defendants right to implement an 
English-language policy in the future to the full extent permitted by EEOC 
Guidelines, statutes and court decisions applicable at the time in question 
had not been contemplated during negotiations and was redundant, as the 
requirements for reinstating an English-only policy is [sic] separately 
addressed in both parties proposed settlement documents.  Id.  Similarly, 
the district court found that Defendants proposed new Exhibit B  Handbook 
Section Regarding Language  was not discussed in the settlement 
negotiations except to the extent that any English-only policy was subject 
to EEOC approval.  Id. at 10-11 (ER559-60).

Following the district courts entry of judgment on October 13, 2004, R.155 
(ER569-70), the district court issued a Supplemental Order on October 14, 
2004, staying its enforcement order pending appeal to this Court.  R.156 
(ER571).  The district court further retain[ed] jurisdiction to enforce or 
clarify the provisions of injunctive relief in this case for three (3) 
years following issuance of an opinion by this Court, if this Court affirms 
the district courts order enforcing the settlement agreement.  Id. (ER572).


		STANDARD OF REVIEW

This Court reviews for clear error a district courts factual finding that 
the parties reached a settlement agreement on specified terms.  See Ahern v. 
Cent. Pac. Freight Lines, 846 F.2d 47, 48 (9th Cir. 1988) (The district 
court's finding that [the objecting party] assented to the settlement and 
intended to be bound by it must be affirmed unless it is clearly 
erroneous.).  Clear error review is deferential to the district court, 
requiring a definite and firm conviction that a mistake has been made.  
Husain v. Olympic Airways, 316 F.3d 829, 835 (9th Cir. 2002), affd 540 U.S. 
644 (2004).  In reviewing a district courts factual findings for clear 
error, this Court views the evidence in the light most favorable to the 
prevailing party.  Lozier v. Auto Owners Ins. Co., 951 F.2d 251, 253 (9th 
Cir. 1991).  Where there are two permissible views of the evidence, the 
factfinders choice between them cannot be clearly erroneous.  Anderson v. 
City of Bessemer, 470 U.S. 564, 574 (1985) (citations omitted).  If the 
district courts view of the evidence is plausible in light of the record 
viewed in its entirety, it can not be clearly erroneous, even if this 
Court is convinced it would have weighed the evidence differently and 
reached a different conclusion had it sat as the trier of fact.  S.E.C. v. 
Rubera, 350 F.3d 1084, 1093-94 (9th Cir. 2003) (citing Anderson, 470 U.S. at 
57374 (1985)).  Courts accord particular deference to findings based on a 
district courts determinations of  witness credibility.  Anderson, 470 U.S. 
at 575-76 (citations omitted).

This Court reviews the district courts decision to enforce a settlement 
agreement for abuse of discretion.  Kirkland v. Legion Ins. Co., 343 F.3d 
1135, 1140 (9th Cir. 2003) (citing Doi v. Halekulani Corp., 276 F.3d 1131, 
1136 (9th Cir. 2002)); see also Callie v. Near, 829 F.2d 888, 890 (9th Cir. 
1987).  This Court reviews a district courts conclusions of law de novo, 
but if the application of the law to the facts requires an inquiry that is 
essentially factual, review is for clear error.  Husain, 316 F.3d at 835.


		RDS APPEAL

		SUMMARY OF ARGUMENT

The district courts factual finding that the parties settled this case on 
September 3, 2003, is not only amply supported by the evidence as a whole, 
it is virtually compelled by this evidence.  The district court correctly 
enforced this settlement agreement based on the parties objective 
manifestations of their intent.  In finding the Kidmans intended to be bound 
by the nine settlement terms, the district court also relied on express 
credibility determinations, to which this Court gives particular deference.  
Under the clearly erroneous standard of review for factual findings, the 
district courts finding that a settlement was reached in this case that 
included the nine enumerated terms must be upheld on this record.

Having found, as a matter of fact, that the parties reached agreement on 
these nine settlement terms on September 3, 2003, the district court acted 
well within its discretionary authority when it enforced the settlement 
based on the parties oral agreement.  The district court correctly found 
that the nine enumerated terms constituted the parties complete agreement 
on all material terms of the settlement.  Although the parties contemplated 
memorializing their agreement in a signed, written document, the district 
court correctly found that Defendants did not express an intent to remain 
unbound until the agreement was reduced to writing and signed.

In enforcing the agreement, the district court properly applied federal 
rather than state decisional standards because this lawsuit arises under a 
federal anti-discrimination statute and involves a federal agency exercising 
its enforcement responsibilities under that federal law.  Alternatively, 
even if a court should ordinarily look to state contract law for guidance in 
formulating the federal standards for a case such as this, the district 
court properly declined to apply the Arizona Statute of Frauds here.  In 
situations where federal courts properly look to state law for guidance, 
federal courts are not required to adopt the entire body of state law 
wholesale.  To the contrary, this Court has stated that federal courts 
should reject any state rules that are inconsistent with federal interests.  
The Arizona Statute of Frauds is inconsistent, in this context, with the 
strong federal interest in resolving discrimination claims through voluntary 
agreements, including voluntary agreements that the parties enter into 
orally with the intent to memorialize them later in writing, and even where 
one of the agreeing parties later changes its mind when it receives the 
memorializing document.  In addition, the Statute of Frauds should not be 
applied here because Defendants admitted in their testimony that they agreed 
to settle this case.  A growing number of states are recognizing an 
exception to state statutes of frauds based on this type of judicial 
admission, and this Court can confidently anticipate Arizona would follow 
suit.  Since federal law and Arizona state contract law are otherwise 
comparable or would lead to the same result here, the district courts 
decision should be affirmed regardless of whether federal common law or 
state contract law applies.

	ARGUMENT

	THE DISTRICT COURTS ENFORCEMENT
	ORDER SHOULD BE AFFIRMED.

As this Court recently noted, a district court has inherent power to 
enforce a settlement agreement in a case pending before it.  Metronet 
Servs. Corp. v. U.S. West Communications, 329 F.3d 986, 1013-14 (9th Cir. 
2003) (citation omitted), judgment vacated on other grounds, 540 U.S. 1147 
(2004); see also Callie, 829 F.2d at 890 (well settled that district court 
has equitable power to enforce agreement to settle a case pending before 
it).  The enforceability of a settlement agreement is governed by familiar 
principles of contract law.  Jeff D. v. Andrus, 899 F.2d 753, 759 (9th Cir. 
1989); see also Sheng v. Starkey Labs., 53 F.3d 192, 194 (8th Cir. 1995) 
(Sheng I) (settlement agreements governed by basic principles of contract 
law).  Whether the governing legal principles are derived from state 
contract law or federal common law depends on a number of circumstances, see 
pp3739, infra, but when the United States is a party to a contract 
entered pursuant to federal law, federal law controls.  Kennewick 
Irrigation Dist. v. U.S., 880 F.2d 1018, 1032 (9th Cir. 1989); Turner v. 
United States, 875 F. Supp. 1430, 1433-34 (D. Nev. 1995), affd o.b., 91 
F.3d 1274 (9th Cir. 1996).  See also Morgan v. South Bend Cmty. Sch. Corp., 
797 F.2d 471, 475 (7th Cir. 1986) (Supreme Court has applied federal common 
law to disputes involving United States where Court thought the dispute 
should be governed by a rule applicable throughout the nation) (citations 
omitted); but see American Intl Enter. v. F.D.I.C., 3 F.3d 1263, 1267-70 
(9th Cir. 1993) (where a uniform federal rule is not needed and no federal 
policies are implicated or undermined, court looks to state contract law for 
relevant legal standards).

The district court correctly found, in this instance, that the parties 
reached agreement on September 3, 2003, on the terms of a settlement of this 
case.  An enforceable settlement agreement requires mutual assent as to all 
material terms.  Sheng I, 53 F.3d at 194.  As we explain, the district court 
found that the parties communicated their mutual assent to the magistrate 
on September 3rd and to the district court on September 22nd.  Although the 
specific settlement terms were not read into the court record at the time, 
the district court conducted an evidentiary hearing and determined that the 
parties agreed on September 3rd to nine settlement terms.

Under federal common law, a settlement agreement need not be reduced to 
writing to be enforced.  Glass v. Rock Island Refining Corp., 788 F.2d 450, 
454 (7th Cir. 1986).  As long as a party has not expressed its intent to be 
bound only upon execution of a signed, written document, an oral settlement 
agreement is just as enforceable as a written agreement, even if the parties 
intend ultimately to memorialize their agreement in writing.  Thus, a party 
that has entered into or authorized an oral agreement to settle a Title VII 
lawsuit is bound by the terms of the agreement, even if the party later 
changes its mind.  Id. at 454-55; Worthy v. McKesson Corp., 756 F.2d 1370, 
1373 (8th Cir. 1985); Fulgence v. J. Ray McDermott & Co., 662 F.2d 1207, 
1209 (5th Cir. 1981); see Alexander v. Indus. of the Blind, 901 F.2d 40, 41 
(4th Cir. 1990) (refusal to enforce Title VII settlement agreement solely 
because it was oral is contrary to circuit precedent); cf. Role v. Eureka 
Lodge No. 434,  F.3d  , 2005 WL 668452 (2d Cir. March 23, 2005) (oral 
stipulation of dismissal on the record, based on parties settlement of 
federal and state claims, enforceable even if agreement never reduced to 
writing and signed).  As we explain, the district court properly found an 
enforceable oral settlement agreement in this case.


A. The District Courts Factual Finding that the Parties Reached Agreement 
	on the Nine Settlement Terms Enforced by the District Court is Amply 
	Supported 	by Evidence in the Record and Plausible in Light of the 	Record 
as a Whole and, Therefore, Is Not Clearly Erroneous.

The intent of the settling parties is an issue of fact, reviewed only for 
clear error.  Sheng v. Starkey Labs., 117 F.3d 1081, 1084 (8th Cir. 1997) 
(Sheng II).  The district courts factual finding that the parties reached 
a settlement agreement on September 3, 2003, encompassing the nine 
enumerated  terms is amply supported by the record evidence overall, 
including witness testimony at the evidentiary hearing and documentary 
evidence submitted by the parties.  This finding, therefore, is not clearly 
erroneous and should be affirmed by this Court.

1. The district court correctly found that on September 3, 2003, the Kidmans 
manifested their assent to a settlement agreement resolving EEOCs lawsuit 
against them.

At the evidentiary hearing below, counsel for EEOC and counsel for 
Plaintiff-Intervenors testified that at the end of the day on September 3, 
2003, after several hours of back-and-forth negotiations, the parties 
announced to Magistrate Verkamp they had reached a settlement.  ER97, 
357-58.  The Kidmans as well as their attorney were present for this 
announcement, and no one said the settlement was incomplete or subject to 
additional review or approvals.  ER97, 357-58; see also ER124 (at no time 
did Selden or the Kidmans tell Magistrate Verkamp they lacked full 
settlement authority), 168 (neither Kidmans nor their counsel told Judge 
Verkamp there was anything left to be worked out).  Mr. Kidman admitted 
under oath that if a written document had been delivered to him on September 
4th that in his opinion accurately reflected the terms to which he had 
agreed on September 3rd, he would have signed it that day, and he understood 
he would have been bound to the terms.  ER307 ([O]f course I ... would 
have signed it then.  Id have signed it the following day.).  Mrs. Kidman 
was even more explicit in her sworn testimony, attesting that at the end of 
the day on September the 3rd . . . there was agreement . . . on the basic 
terms of the settlement, ER271, and agreeing with her husband that if the 
subsequent memorialization had been written the way [she] thought it should 
be, she was prepared to sign it.  ER269.

The district courts determination that the Kidmans assented to the 
settlement agreement on September 3rd is further supported by the actions of 
the Kidmans and their attorney following the announcement of a settlement.  
Assent to the terms of a settlement agreement can be implied from the 
circumstances, and conduct inconsistent with a refusal of the terms raises a 
presumption of assent on which others may rely.  Ahern, 846 F.2d at 49 
(citation omitted).  Before leaving the courthouse on September 3rd, the 
four Plaintiff-Intervenors and the Kidmans posed for two group pictures to 
commemorate the resolution of their dispute.  ER96, 163, 166-67.  Two days 
after the settlement conference, Magistrate Verkamp entered a minute order 
noting that the case had settled.  Defendants counsel was aware of this 
minute order, making reference to it on September 12, 2003, in 
correspondence to EEOC, ER407, but did not protest to the magistrate or the 
district court that the entry was inaccurate.  The correspondence between 
September 3 and 22, 2003, confirms that the parties were in the process of 
documenting the settlement reached on September 3rd, not that they were 
still engaged in negotiating the parameters of an agreement.  See pp 7-9, 
supra.  Finally, when the parties appeared before the district court on 
September 22, Defendants did not advise the court they were still engaged in 
settlement negotiations.  Rather, Selden told the court the parties [had] 
reached what they believed to be a settlement and all that remained was to 
memorialize the settlement by dotting the is and crossing the ts.  ER4.  
As this Court found in Ahern, 846 F.2d at 49, Defendants outward 
manifestations of assent to the settlement agreement support the district 
courts well-grounded conclusion that the parties reached a mutual agreement 
to settle this case.

This Court should particularly defer to the district courts factual finding 
that Defendants assented to the settlement because it is based not only on 
witness testimony and documents, but also on the lower courts credibility 
determinations.  [W]hen a trial judge's finding is based on his decision to 
credit the testimony of one of two or more witnesses, each of whom has told 
a coherent and facially plausible story that is not contradicted by 
extrinsic evidence, that finding, if not internally inconsistent, can 
virtually never be clear error."  Anderson, 470 U.S. at 575-76 (citations 
omitted); see also Glass , 788 F.2d at 455.  In this instance, the district 
court expressly found that Mr. Selden had authority to settle this matter 
on behalf of the Kidmans and that Mr. Kidmans testimony to the contrary 
is not credible.  RE560.  Thus, the district courts finding that 
Defendants manifested an intent to be bound by the settlement agreement 
reached on September 3, 2003, rests critically on the district courts 
credibility findings with respect to witness testimony the court heard, 
where the district court was able to assess the witnesses demeanor and 
judge their credibility.  The district courts decision to reject Mr. 
Kidmans credibility on this crucial point is consistent with the coherent 
and facially plausible testimony of other witnesses, and is not contradicted 
by the documentary evidence.  Therefore, this Court should not disturb the 
district courts resulting factual finding that the Kidmans manifested an 
intent to be bound by the oral settlement agreement.

Defendants argue, however, that EEOC knew the Kidmans would not manifest an 
intent to be bound by a settlement agreement absent a review of settlement 
documents by ProEnglish.  RDs Brf at 29-30.  Defendants did not verbalize 
this to either EEOC or Magistrate Verkamp on September 3, 2003, see ER96-97, 
124, 155, 361, although they very easily could have.  Thus, Defendants are 
essentially asking this Court to look into their minds and read their 
unexpressed thoughts of September 3, 2003.  That is not the standard, 
however.  In determining whether parties intend to be bound by a settlement 
agreement, courts consider the objective manifestations of the parties 
intent rather than the parties subjective beliefs.  See, e.g., Metronet 
Servs., 329 F.3d at 1014-15 (9th Cir. 2003).

The district court looked at the objective manifestations of the Kidmans 
intent on September 3, 2003, and the weeks that followed, and concluded the 
parties had reached a settlement on September 3rd.  As the district court 
explained:

The Kidmans were present during the entire day of the settlement conference. 
  Mr. Selden kept the Kidmans apprized of the entire process and the 
proposed terms.  More importantly, the Kidmans were present when, on two 
occasions, the parties and counsel represented to the Court that a 
settlement had been reached. . . . The Kidmans cannot now say that they were 
unaware of what was going on when it is clear that they were.

ER560.  Moreover, a ProEnglish representative accompanied the Kidmans to the 
settlement conference and was in the courthouse all day long.  ER209.  As 
far as EEOC knew, the Kidmans or their counsel discussed the proposed terms 
with the ProEnglish representative at some point during the day, or began 
the days negotiations with pre-arranged parameters for what ProEnglish 
considered acceptable.  ER154.  Thus, EEOCs knowledge of the ProEnglish 
agreement in no way undermines the district courts proper determination 
that the Kidmans manifested their intent to be bound by the agreement 
reached on September 3, 2003.

More importantly, what EEOC knew or did not know is ultimately immaterial in 
light of the Kidmans outward manifestation of their assent to the 
settlement agreement.  If the Kidmans had wanted to review the settlement 
terms with ProEnglish before agreeing to them, it was incumbent on the 
Kidmans to say so on September 3rd.  Likewise, if the magistrates September 
5th minute order, indicating the parties had settled, was in error, it was 
incumbent on the Kidmans promptly to advise the district court of that 
error.  Not only did Defendants fail to take either of these actions, e.g. 
ER155, Selden actually appeared before the district court on September 22nd 
and apparently ratified the magistrates minute order by stating that all 
that was left to do was to dot the is and cross the ts.  ER4.  Neither 
EEOC nor the district court was required to look beyond the Kidmans outward 
manifestations of assent to try to guess whether they were actually thinking 
something different.

Defendants incorrectly argue that language in EEOCs September 4, 2003, 
draft consent decree indicates the parties contemplated not being bound by 
the agreement until it was executed by the parties and entered by the Court. 
  RDs Brf at 30-31 (citing ER543 19-21).  Parties to a contract may or may 
not require, as a part of their agreement, that there be an agreed, written 
document setting forth the terms of their settlement before such a 
settlement can be deemed final.  Taylor v. Gordon Flesch Co., 793 F.2d 858, 
862 (7th Cir. 1986).  Whether the parties intend to be bound only upon 
execution of a written agreement is a factual question to be determined by 
examining the totality of circumstances.  Ciaramella v. Readers Digest 
Assoc., 131 F.3d 320, 322 (2d Cir. 1997); Callie, 829 F.2d at 890-91.  In 
answering this question, courts look to the objective manifestations of 
the parties intent rather than their post-hoc testimony concerning what 
they maintain they were thinking at the time.  See Metronet Servs., 329 F.3d 
at 1014 (court imputes to a person an intention corresponding to reasonable 
meaning of persons words and acts). Mr. Kidman admitted he could not recall 
ever telling the magistrate he did not consider himself bound to anything 
until it was in writing.  ER308; see also ER361.  The language Defendants 
point to in the parties written drafts likewise does not indicate an 
intention to be bound only upon execution of a written settlement agreement. 
  EEOCs September 4, 2003, draft, for example, states that the duration of 
the agreement would be twenty-four months from its entry (19); that absent 
extension, the decree would expire by its own terms at the end of 
twenty-four months (20); and that the parties agree to entry of this 
Decree and judgment subject to final approval by the Court (21).  ER543.  
If anything, this language confirms the parties testimony that they 
contemplated memorializing the settlement in a consent decree to be entered 
by the district court; it does not indicate there was no settlement absent a 
written and signed document.  Courts that have found an intention not to be 
bound until a written agreement was signed have relied on language far more 
explicit than that pointed to by Defendants.  See, e.g., Ciaramella, 131 
F.3d at 324-25 (unsigned settlement agreement expressly provided it shall 
not become effective . . . until it is signed by Mr. Ciaramella . . . .).  
In cases such as this, where there is no such explicit language limiting a 
binding agreement to a signed document, the parties oral agreement to 
settle is simply . . . an agreement which, if not honored, a party will be 
forced to protect by proving the existence and terms of the oral agreement. 
  Taylor, 793 F.2d at 862.  That is precisely what the district court found 
EEOC did below.

Defendants reliance on Mr. Kidmans testimony that he and his wife did not 
intend to be bound unless and until the agreement was reduced to writing and 
they signed it, see RDs Brf at 30-31, also fails in light of the Kidmans 
failure to communicate this to the court and their objective manifestations 
of intent to settle, as discussed above.  In any event, the district court 
expressly found Mr. Kidmans testimony on this point not to be credible.  
See ER560.  Likewise, the fact that the Kidmans did not change how they 
operated their business after September 3rd does not prove lack of agreement 
on September 3rd.  See RDs Brf at 31-32. There is no dispute that the 
parties anticipated memorializing their agreement in writing, and it would 
be reasonable for the Kidmans to wait until the agreement was signed to 
begin performing under it.  Thus, the Kidmans failure to begin implementing 
the settlement agreement does not demonstrate an absence of intent to be 
bound on September 3rd.

2. The district court properly found the nine enumerated terms constitute 
the parties settlement agreement.

After concluding that the Kidmans had assented to a settlement agreement on 
September 3, 2003, the district court reviewed the documents the parties 
exchanged in the following weeks, considered the parties testimony, and 
found nine material settlement terms that were agreed upon by the parties 
and are therefore enforceable.  ER560-61; see pp 13-14, supra.  The 
district courts conclusion that the parties settlement agreement consists 
of these nine terms is amply supported by the record as a whole.  See, e.g., 
pp 5-10, supra.  This finding is, therefore, not clearly erroneous and 
should be affirmed by this Court.

The district court did not retroactively cobble together the material 
terms of a settlement agreement from rejected offers and counter-offers 
post-September 3rd, as Defendants try to argue.  See RDs Brf at 28.  The 
parties in this case did not reach their settlement through an exchange of 
written drafts over a period of days or weeks, a typical process that can 
entail extra evidentiary difficulties.  See Doi, 276 F.3d at 1141 
(understandable how a party could dispute having made a binding agreement 
where parties negotiated by exchang[ing] phone calls and e-mails, and 
perhaps even drafts of a settlement agreement, outside of court).  Rather, 
here the parties negotiated in person, under the magistrates oversight and 
direction.  When they reached agreement at the end of the day, they so 
advised Magistrate Verkamp before leaving his courtroom.  When EEOC later 
sought to enforce the settlement agreement, the Commission did not simply 
seek to enforce the terms common to the parties post-September 3rd 
correspondence, but the terms that were important to the parties that day. 
  ER152.

That the parties did not put the specific settlement terms on the record 
before leaving the courthouse on September 3rd does not mean those terms are 
unenforceable.  Placing terms on the record makes them easier to prove, Doi, 
276F.3d at 1141; see ER246 (Selden testified that in this case recitation 
of settlement terms on the record would have been a very constructive thing 
to do), but other means of proof are also available.  In this case, the 
district court considered the post-September 3rd correspondence not to 
create a settlement agreement for the parties, but as additional 
corroborating evidence (along with witness testimony) from which to 
determine what terms comprised the parties announced settlement agreement 
of September 3, 2003.  See Taylor, 793 F.2d at 862 (similar provisions in 
drafts exchanged by parties after entering oral agreement evidence[d] the 
intent of both parties that the settlement documents memorialize the 
agreement the parties had already reached).

Defendants do not directly challenge any of these nine settlement terms.  
Instead, Defendants argue that four additional terms on which the district 
court found no agreement, RE561, were also material, and that the absence 
of agreement on these four items defeats the entire agreement.  See RDs Brf 
at 23-28, 34-36.  As we explain, however, the district court properly 
concluded that these four terms were ancillary to the parties agreement to 
settle the lawsuit.  Thus, the district courts finding of no agreement on 
these four items does not undermine the district courts well-supported 
finding that the parties reached agreement on all material terms.

Unlike some kinds of agreements, such as a contract to purchase land or 
goods or services,  no particular terms are per se material in an agreement 
to resolve pending Title VII litigation.  Rather, the parties themselves 
determine, on a case-by-case basis through mutual assent, what constitutes 
the material terms of any particular settlement agreement, and whether 
particular terms are material or essential to an agreement is determined 
as of the time the agreement was allegedly formed.  Sheng I, 53 F.3d at 194. 
  Settlement agreements that do not expressly resolve ancillary issues can, 
nevertheless, be enforceable.  Sheng II, 117 F.3d at 1083.  Defendants 
effort, on appeal, to establish these four terms as material and, on that 
basis, to demonstrate an absence of mutual assent is simply unpersuasive.

For instance, the district court found agreement that Defendants would pay 
$7400 over a period of sixteen (16) months, but expressly found no 
agreement that the payment was to be characterized as back pay or 
compensatory damages. ER560; see ER91.  The district court thus directed: 
How the payments are denominated is in the purview of Defendants.  
ER560-61.  Defendants argue that the characterization of the monetary 
payment was important  because characterizing it as back pay affects the 
amount and characterizing it as compensatory damages infers guilt.  RDs 
Brf at 25-26.  EEOC, however, did not characterize the payments as back 
pay in any of its post-September 3rd draft agreements memorializing the 
settlement.  See, e.g., ER539  6.  Although EEOCs September 4th draft 
characterized the payments as compensatory damages, see id., such a 
characterization does not inherently connote guilt, but is generally 
recognized as a means of compensating an individual for a loss or injury 
suffered.

More importantly, recognizing there was no agreement on the characterization 
of the payments, see ER91,  EEOC incorporated Defendants good will 
language into EEOCs October 23, 2003, draft and subsequently sought to 
enforce only the monetary amount, not its characterization.  ER28.  EEOCs 
counsel later testified that characterization of the payments was not a 
material element of the agreement, ER155-56, and the district court ruled, 
on this basis, that [h]ow the payments are denominated is in the purview of 
the Defendants.  ER560-61.  Given Defendants prevailed on this point, they 
offer no plausible basis on appeal for their contention that the parties 
failure to agree on EEOCs suggested characterization of the monetary 
payment should defeat the settlement agreement in its entirety.

The payment characterization in this case is very similar to the unresolved 
tax treatment of the Title VII payment in Sheng.  See Sheng I, 53 F.3d at 
193 & nn 2, 3.  As the Eighth Circuit Court of Appeals properly concluded in 
that case, the fact that the parties left some details for counsel to work 
out during the memorialization process does not abrogate an otherwise valid 
agreement.  See Sheng II, 117 F.3d at 1083.  Likewise, the district court 
properly concluded here that the parties failure to agree on the 
characterization of the monetary payments does not undermine the existence 
of a complete agreement on September 3rd as to all material terms.

Defendants offer no particular reasons why the other three terms are 
material, other than the fact they were included in a draft circulated by 
EEOC on September 4, 2003, and EEOC strongly urged inclusion of the Navajo 
language class provision.  RDs Brf at 24-28.  This, alone, does not 
automatically render these terms material.  See, e.g., Worthy, 756 F.2d at 
1373 (inclusion of several terms not part of plaintiffs earlier express 
agreement are [not] so significant that they can be used to abrogate the 
agreement).  Parties often seek to add boilerplate language and other 
details to a written settlement agreement after they reach agreement on the 
basic settlement terms, and parties are sometimes mistaken as to agreement 
on a particular provision.  See, e.g., ER102-05 (EEOC believed the Kidmans 
had agreed to take Navajo language classes).  The critical inquiry is not 
whether one of the parties sought to include additional terms during the 
memorialization process, but what was the scope of the parties agreement as 
of the date settlement was reached.  See Worthy, 756 F.2d at 1373 (fact that 
parties left insubstantial matters for later negotiation does not vitiate 
the validity of the agreement reached) (citations omitted).  Although the 
Navajo language class provision was neither boilerplate nor 
insubstantial, ER133-34, the district court properly found that it did not 
go to the essence of the parties September 3rd settlement agreement.  See 
ER156-57.

EEOC is not trying to de-materialize these terms retroactively, as 
defendants assert.  RDs Brf at 36.  A factual dispute concerning the scope 
of a settlement agreement does not automatically translate into no 
settlement.  Instead, the district court is required to conduct an 
evidentiary hearing to determine what material terms were agreed to.  See 
Callie, 276 F.3d at 1137-38; Sheng I, 53 F.3d at 194-95.  After conducting 
an evidentiary hearing here, the district court found no agreement on four 
terms and, by implication, found those terms were not material to the 
parties on the date the agreement was reached.  See ER560-61.  Defendants 
offer no persuasive reasons why this factual finding is clearly erroneous. 
  See, e.g., RDs Brf at 25-28.  Like the Eighth Circuit Court of Appeals in 
Worthy, 756 F.2d at 1373, and Sheng II, 117 F.3d at 1083, this Court should 
affirm the district courts finding.6

In any event, the terms as to which the district court found no agreement  
were all resolved in the Kidmans favor.  Defendants cannot now turn their 
success on these points around and offer it as grounds to defeat the basic 
agreement the parties reached on the nine material terms in the district 
courts enforcement order.  Such twisted logic is simply unavailing.

In sum, the district courts factual findings that a settlement was reached 
in this case encompassing the nine enumerated terms is amply supported by 
witness testimony, documentary evidence, and the district courts 
credibility determinations.  Under the clearly erroneous standard of 
review, these factual findings must be upheld.

B. The District Court Properly Exercised Its Discretion in Enforcing the 
	Parties Settlement Agreement.


Having determined, as a matter of fact, that the parties reached a 
settlement agreement on September 3, 2003, the district court acted well 
within its inherent discretionary authority when it enforced this agreement 
with respect to the nine enumerated terms.  Sound public policy favors 
voluntary settlement of litigation.  See Jeff D., 899 F.2d at 759 
(settlements favored and encouraged to conserve judicial resources and to 
limit costly litigation); Ahern, 846 F.2d at 48 (noting overriding public 
interest in settling . . . litigation to conserve judicial time and limit 
expensive litigation).  This public policy preference applies equally to 
settlement of employment discrimination claims brought under Title VII.  
Stroman v. West Coast Grocery Co., 884 F.2d 458, 460-61 (9th Cir. 1989) 
(quoting Rogers v. Gen. Elec. Co., 781 F.2d 452, 454 (5th Cir. 1986)).  
Indeed, Congress expressly indicated as much in Title VII when it directed 
the Commission, before filing a lawsuit, to endeavor to eliminate any such 
alleged unlawful employment practices by informal methods of conference, 
conciliation, and persuasion.  42 U.S.C. 2000e-5(b); see also Civil 
Rights Act of 1991, Pub. L. No. 102-166,  118 (42 U.S.C.  1981 note) 
(alternative dispute resolution is encouraged to resolve disputes arising 
under [Title VII]).  Courts have since repeatedly acknowledged this 
Congressional preference.  See, e.g., Alexander v. Gardner-Denver Co., 415 
U.S. 36, 44 (1977) (Congress selected voluntary compliance as preferred 
means for eliminating discriminatory employment practices); Officers for 
Justice v. Civil Serv. Commn of San Francisco, 688 F.2d 615, 625 (9th Cir. 
1982) (same); Moore v. City of San Jose, 615 F.2d 1265, 1271 (9th Cir. 1980) 
(In enacting Title VII, Congress has specifically endorsed voluntary 
compliance and settlement as the preferred means of achieving the 
elimination of unlawful employment discrimination.).

Courts have inherent, equitable power to enforce settlements reached in 
litigation pending before them.  Callie, 829 F.2d at 890.  Of course, the 
preference for voluntary settlements does not permit a court to force terms 
on an unwilling party.  See Jeff D., 899 F.2d at 758 (courts may not modify 
settlement terms or rewrite agreements reached by parties).  Rather, as 
Defendants note, RDs Brf at 24:  [T]he primary duty of the courts is to 
determine and give effect to the intention of the parties by placing 
themselves in the position of the contracting parties . . . at the time [the 
agreement] was made.  Martino v. Frumkin, 462 P.2d 853, 855 (Ariz. App. 
1969) (emphasis added) (applying Arizona state contract law).  Where, as 
here, the parties voluntarily reached an agreement to settle pending 
litigation and then later announced as much to the magistrate and the 
district court, the district court acted well within its authority to hold 
the parties to their announced agreement even where the specific terms were 
not placed on the record or memorialized in writing.

The district court properly applied federal rather than state law in 
determining whether to enforce the parties settlement agreement.  See 
ER554-55, citing, inter alia, Stroman, 884 F.2d at 461 ( validity of release 
of claims under Title VII governed by federal law); Fulgence, 662 F.2d at 
1209 (federal law determines validity of oral settlement agreements in Title 
VII actions); Taylor, 793 F.2d at 862 (federal law governs enforceability 
of settlements in Title VII actions) (internal citations omitted).  As a 
general matter, federal law governs questions involving the rights of the 
United States arising under nationwide federal programs.  United States v. 
Kimbell Foods, 440 U.S. 715, 726 (1979); American Intl Enter., 3 F.3d at 
1268; see Turner, 875 F. Supp. at 1433-34 ([W]hen the United States is 
party to a contract entered pursuant to federal law, federal law 
controls.).  Where the federal statute at issue does not set forth the rule 
of decision for the case, this court appl[ies] the traditional common law 
technique of decision and draw[s] upon the sources of common law.  Id.  In 
this endeavor, deciding [w]hether to adopt state law or to fashion a 
nationwide federal rule is a matter of judicial policy dependent upon a 
variety of considerations always relevant to the nature of the specific 
governmental interests and to the effects upon them of applying state law. 
  Kimbell, 440 U.S. at 728 (citation omitted); American Intl Enter., 3 F.3d 
at 1268.  The Kimbell consideration pertinent to this appeal is whether 
application of state law would frustrate specific objectives of the federal 
programs.  If so, the court must fashion special rules solicitous of those 
federal interests.7

Although Title VII settlement agreements are contracts, they are 
inextricably linked to Title VII.   Snider v. Circle K Corp., 923 F.2d 
1404, 1407 (10th Cir. 1991) (suit enforcing administrative settlement of 
Title VII claim).  For this reason, this Court and others have held that 
[f]ederal common law governs the enforcement and interpretation of such 
agreements because the rights of the litigants and the operative legal 
policies derive from a federal source.  See id.; see also Stroman, 884 
F.2d at 460-61; Fulgence, 662 F.2d at 1208-09.  Federal contract law is 
determined by reference to traditional common law principles.  First 
Interstate Bank v. Small Bus. Admin., 868 F.2d 340, 343 n.3 (9th Cir. 1989). 
  Under these traditional common law principles, parties that knowingly and 
voluntarily reach an oral agreement to settle a Title VII lawsuit  either 
directly or through their attorney  are bound to abide by that agreement, 
even if they change their minds after being presented with settlement 
documents to sign.  Fulgence, 662F.2d at 1208-09.  Although this principle 
is often applied against Title VII plaintiffs, see, e.g., Conway v. Brooklyn 
Union Gas Co., 236 F. Supp. 2d 241 (E.D.N.Y. 2002); Alvarez v. City of New 
York, 146 F. Supp. 2d 327 (S.D.N.Y. 2001); Cornell v. Delco Electronics 
Corp., 103 F. Supp. 2d 1116 (S.D. Ind. 2000), it applies equally to hold 
Title VII defendants to their settlement agreements.  See Reich v. Best 
Built Homes, 895 F. Supp. 47, 50 (W.D.N.Y. 1995) (law provides no warming 
remedy for defendants that get cold feet).  Under this well-established 
federal legal principle, the district court correctly enforced the 
settlement terms on which it found the parties reached agreement on 
September 3, 2003.

In the alternative, even if this Court were to conclude that courts should 
look to state contract law for guidance in a case such as this, the district 
courts decision to enforce this settlement agreement is still proper.  In 
many contexts, state law furnishes an appropriate and convenient measure 
of governing federal law, see, e.g., Mardan Corp. v. CGC Music, Ltd., 804 
F.2d 1454, 1458 (9th Cir. 1986), and there is frequently no material 
difference between the applicable federal and state standards for 
enforcement of Title VII settlements.  See, e.g., Chavez v. New Mexico, 397 
F.3d 826, 830-31 (10th Cir. 2005) (applicable principles of contract law 
not different in federal and New Mexico law); Ciaramella, 131 F.3d at 322 
(no material difference between applicable federal common law and New York 
contract law); Sheng II, 117 F.3d at 1083 n.1 (no practical difference 
between Minnesota and federal law); Bowden v. United States, 106 F.3d 433, 
439 (D.C. Cir. 1997) (declining to decide whether federal common law or 
state law governs interpretation of settlement agreement under Title VII 
where both sources of law dictate same result).  Likewise here, where the 
parties oral settlement agreement is measured against basic contract 
principles, federal common law is generally comparable to Arizona state 
contract law.  See Tabler v. Indus. Commn of Ariz., 47 P.3d 1156, 1159-60 
(Ariz. 2002) (in banc).

The only relevant difference in this case between federal common law and 
Arizona state law is the Arizona Statute of Frauds.  This potential clash of 
interests is readily reconciled, however.  The Arizona Statute of Frauds 
bars a party from bringing an action in court on any agreement that is not 
to be performed within one year of its making, unless the agreement is in 
writing and signed by the party to be charged or a lawfully-authorized 
agent.  Ariz. Rev. Stat.  44-101(5).  The district court properly did not 
apply the Statute of Frauds here because it would have undermined an 
important federal interest  the expeditious resolution of employment 
discrimination claims through voluntary agreements between the parties.  As 
this Court noted in Mardan, federal courts that look to state law to provide 
content to federal legal standards are not required to adopt each and every 
state rule.  To the contrary, federal courts should . . . reject specific 
state rules that are aberrant or hostile to federal interests.  804 F.2d at 
1458.

The Statute of Frauds, if applied here, would undermine the strong federal 
preference for resolving discrimination claims through voluntary agreement 
of the parties, see pp 35-36, supra, because it would permit Defendants to 
back out of a settlement agreement to which they verbally  and voluntarily 
 consented on September 3, 2003, not because of an absence of agreement on 
the terms, but because Defendants later had second thoughts.  Parties who 
have memorialized an agreement in a written, signed document are not 
permitted to change their minds, disavow the settlement, and re-activate the 
litigation.  See Arnold v. United States, 816 F.2d 1306, 1309 (9th Cir. 
1987).  There is no sound reason to permit defendant employers like the 
Kidmans to change their minds and back out of a settlement agreement just 
because the agreement was not yet memorialized in writing, if the parties 
intent can otherwise be discerned by the court.  Title VII plaintiffs and 
intervenors are entitled to receive agreed-upon compensation, and the public 
is entitled to receive the benefits of agreed-upon general injunctive 
relief, without the unnecessary and unfair delay that would result from 
permitting defendants who agree to settlement terms but later change their 
minds before completing the memorialization process to be relieved from 
their bargain, particularly where, as in this case, Defendants acknowledged 
the agreement to both the magistrate and the district court.  Application of 
the Arizona Statute of Frauds here would create just such an inequity.  See 
Fulgence, 662 F.2d at 1209.  For this reason, the district court correctly 
declined to invalidate the parties oral settlement agreement under the 
Statute of Frauds and properly held, instead, that under federal law, the 
settlement agreement did not have to be in writing to be enforced.  ER555.8

Even under state contract law, the statute of frauds would be inapplicable 
in a situation such as this, under the judicial admission exception.  When 
a party resisting enforcement of an oral agreement admits the existence and 
terms of the agreement in a pleading or testimony, more than a dozen 
jurisdictions now recognize a judicially-created exception to the Statute of 
Frauds.  See Gibson v. Arnold, 288 F.3d 1242, 1245-46 (10th Cir. 2002) 
(collecting cases).  The fundamental objective of the Statute of Frauds is 
to remove the incentive for perjured testimony by a party asserting the 
existence of an agreement, by requiring that certain contracts be proven by 
a writing.  Anchorage-Hynning & Co. v. Moringiello, 697 F.2d 356, 362 (D.C. 
Cir. 1983).  The provision is not a substantive rule of law, and it does not 
forbid oral contracts on the matters included in the rule.  Rather, it is a 
rule of evidence limiting how parties may prove a contract that falls within 
the provision.  Davis v. Roberts, 563 N.W.2d 16, 20 (Iowa Ct. App. 1997).  
Its purpose is to prevent the fraudulent enforcement of unmade contracts, 
not the legitimate enforcement of contracts that were in fact made.  
Timberlake v. Heflin, 180 W. Va. 644, 379 S.E.2d 149, 153 (W.Va. 1989) 
(citing 2A Corbin, Corbin on Contracts  498 (1950 & 1984 Supp.)).  	In 
light of this purpose, a growing number of courts now recognize that when a 
party opposing enforcement admits in a pleading or in testimony that the 
oral agreement was made, the agreement is enforceable even though it 
otherwise falls within the Statute of Frauds.  Paris Util. Dist. v. A.C. 
Lawrence Leather Co., 665 F. Supp. 944, 956-57 (D.Me. 1987), affd on other 
grounds, 861 F.2d 1 (1st Cir. 1988).  It does not matter that the party who 
made the admission might attempt to draw different legal conclusions from 
the admitted facts, as long as the party has admitted the existence of 
facts necessary to the formation of the oral agreement.  Id. at 957.  Even 
if the testimony arguably was not an explicit admission of the contract, and 
even if the testimony was not a complete statement of all the essential 
contract terms, as long as the testimony provides substantial evidence on 
which to find that the alleged agreement was formed, it will suffice to 
create a judicial admission exemption from the Statute of Frauds.  Davis, 
563 N.W.2d at 21; Wemhoff v. Investors Mgmt. Corp. of America, 528 A.2d 
1205, 1207 (D.C. 1987).

Arizona state courts have apparently not yet indicated whether the judicial 
admission exception to the Statute of Frauds applies in Arizona.  If this 
Court concludes that the district court should have looked to Arizona state 
contract law, including the Statute of Frauds, in determining whether to 
enforce the parties settlement agreement, then we urge this Court likewise 
to conclude that the Arizona Supreme Court would follow what one court has 
described as the modern trend, Timberlake, 379 S.E.2d at 153, and adopt 
this Statute of Frauds exception in Arizona.  See Gibson, 288 F.3d at 
1245-46 (noting that since Oklahoma Supreme Court has not yet addressed 
issue, Tenth Circuit must predict how state court would rule; concluding 
Oklahoma would follow trend and adopt the exception).

There are sound policy reasons for concluding that the Arizona Supreme Court 
would adopt this exception.  The exception creates little or no risk of 
fraud being perpetrated on the objecting party, since enforcement occurs 
only if that party admits the existence of the agreement.  Without the rule, 
on the other hand, there is the strong possibility that a fraud will be 
perpetrated on the party seeking enforcement.  As the Tenth Circuit noted, 
the purpose of the Statute of Frauds is to shield parties from perjury, not 
to arm contracting parties with a sword they may use to escape bargains they 
rue.  Gibson, 288 F.3d at 1247; see also Flight Sys. v. Elec. Data Sys. 
Corp., 112 F.3d 124, 127 (3d Cir. 1997).  There may be specific factual 
circumstances where the exception is not warranted.  See, e.g., Key Design 
v. Moser, 138 Wash.2d 875, 983 P.2d 653, 659-61 (Wash. 1999) (rejecting 
judicial admission exception in sales of real property where written 
contract lacks a legal description of the property to be sold because the 
legal property description serves an important function in the process of 
buying and selling property).  No such special circumstances exist here, 
however.  Given the strong policy considerations favoring this exception, 
this Court should predict that Arizona, if faced with the question, would 
follow this modern trend and join the other states that have adopted the 
judicial admission exception to the Statute of Frauds.

Applied to these facts, the exception for judicial admissions supports the 
district courts decision not to apply the Statute of Frauds here.  At the 
evidentiary hearing below, Shauna and Richard Kidman both admitted they 
reached agreement with EEOC and Plaintiff-Intervenors on September 3, 2003, 
on many of the provisions the district court enforced.  In fact, Richard 
Kidman testified he would have signed the written document on September 4th 
if it had been worded acceptably.  ER307-08.  Shauna Kidman acknowledged 
that she and her husband had authorized David Selden to negotiate on their 
behalf, and Selden testified that the parties reached agreement on each of 
the nine terms enforced by the district court.  See discussion at pp 5-7, 
supra.  As Mrs. Kidman explained, [A]t the end of the day on September the 
3rd ... there was agreement ... on the basic terms of the settlement.  
ER271.

Granted, Defendants ask this Court to draw a different conclusion from these 
admitted facts.  Notwithstanding Seldens statements to the court, in the 
Kidmans presence, that the case had settled, the Kidmans assert variously 
that they believed there was no agreement until they signed the 
memorializing document, or that they did not intend to enter into a binding 
agreement until they received approval from ProEnglish.  As the court noted 
in Paris Util. Dist., 665 F. Supp. at 957, however, it does not matter if 
Defendants attempt to draw different legal conclusions from these facts.  
What matters is that these factual admissions,  made on the record below, 
are sufficient to support the district courts conclusion that the parties 
reached full agreement on September 3rd on the nine settlement terms the 
district court enforced.  Given these sworn admissions, the judicial 
admission exception supports the district courts decision not to apply the 
Statute of Frauds to bar enforcement of the oral settlement agreement 
reached in this case, even if the district court should have applied state 
contract law in this instance.

Finally, RDs anticipatory repudiation argument, RDs Brf at 45-46, lacks 
any merit.  Indeed, Defendants assertion of this argument is quite puzzling 
given they contend no agreement exists, yet this argument presupposes it 
does.  Cf. Cornell, 103F. Supp. 2d at 1121 (plaintiffs statements that 
written documents did not express what [he] agreed to implicitly 
acknowledge that he did agree to settle his case).  Nonetheless, 
anticipatory breach arises only when the disaffirmance of the contract is 
total and unconditional.  See Rabouin v. Natl Labor Relations Bd., 195 
F.2d 906, 911 (2d 1952) (citations omitted).  There is no anticipatory 
breach when a party simply urges inclusion of an additional contract term or 
provision, without stating unequivocally it will not otherwise perform.  
Bills Coal Co. v. Bd. of Public Util. of Springfield, 682 F.2d 883, 886 
(10th Cir. 1982).  Although EEOC urged inclusion of the Navajo language 
classes, believing they were part of Defendants agreement on September 3rd, 
EEOC did nothing to suggest the Commission otherwise planned to disavow the 
agreement.  ER191, 533.  To the contrary, when it became clear the Kidmans 
had not agreed to this term, EEOC omitted it from the Commissions draft 
agreement.  ER120-21; see generally ER446-56.  EEOC never disaffirmed that a 
settlement had been reached.

This Court reviews for abuse of discretion the district courts exercise of 
its inherent power to enforce settlement agreements in litigation pending 
before it.  Doi, 276 F.3d at 1136; Callie, 829 F.2d at 890.  Regardless of 
whether state or federal law is applied, Defendants have established no 
circumstances to demonstrate that the district courts decision here 
constitutes an abuse of the courts discretion.  Therefore, the district 
courts order to enforce the nine enumerated terms should be affirmed.
EEOCS CROSS APPEAL

SUMMARY OF ARGUMENT

The district courts enforcement of the provision requiring rescission of 
RDs current English-only policy is properly construed to include the 
conditions to which the parties agreed for any future re-adoption of an 
English-only policy at RDs.  In the alternative, should this Court read the 
district courts order as not encompassing these terms, the Commission 
asserts that the district court abused its discretion in failing to enforce 
the agreed-upon conditions.  The district court expressly found the parties 
agreed to these conditions when the Kidmans consented to rescind their 
English-only policy as part of the September 3, 2003, settlement agreement, 
and these conditions are essential to EEOC s bargained-for resolution of 
this matter.

ARGUMENT
      THE DISTRICT COURTS ENFORCEMENT ORDER SHOULD
      BE READ TO INCLUDE THE CONDITIONS TO WHICH THE
      PARTIES AGREED FOR ANY FUTURE READOPTION OF AN
      ENGLISH-ONLY POLICY AT RDS OR, ALTERNATIVELY,
      FAILURE TO INCLUDE THOSE CONDITIONS CONSTITUTES
      AN ABUSE OF THE DISTRICT COURTS DISCRETION.


The settlement provisions enforced by the district court include term #4: 
Defendants shall rescind their current English Language policy.  ER563.  
The parties careful and thoughtful negotiation of this term on September 
3rd is reflected in a three-page handwritten document (paragraph 15") 
penned jointly by EEOC attorney David Lopez and Defendants counsel, David 
Selden.  See ER84-86, 179-80, 401-03.  Among other things, this handwritten 
provision set out four requirements or conditions the Kidmans agreed to meet 
before exercising their expressly-reserved right to reinstate an 
English-only policy at RDs.  The Kidmans agreed:  (a) to consider 
alternative means of addressing the workforce issues sought to be addressed 
by an English-only policy; (b) to limit the scope of the policy so it does 
not prohibit the use of other languages during personal phone calls, lunch 
and breaks; (c) to discuss the policy with employees prior to 
re-instatement; and (d) to submit the policy to EEOC five days before 
implementation for comments.9  ER401-02.  Although the parties disputed a 
number of other things over the following weeks, the wording of these four 
conditions remained unchanged in any material sense.  Compare EEOCs 
proposed September 4, 2003, draft (ER541  14 (a)-(d)) with Defendants 
September 24, 2003, draft (ER419 11.A.(i)-(iv)) and EEOCs October 23, 2003, 
draft (ER453 11.A.(a)-(d)).10

The district court expressly recognized these agreed-upon conditions, 
stating in its memorandum decision that the requirements for reinstating an 
English-only policy [are] . . . addressed in both parties proposed 
settlement documents.  ER559.  The district court did not repeat these 
negotiated requirements in its enforcement order, see ER561, 563, but it is 
clear the district court recognized the parties agreement on this point.  
As with many of the other terms in the district courts enforcement order, 
this provision is properly read to include the conditions for reinstatement 
to which the parties agreed on September 3, 2003.

The district court enforced several settlement provisions where the parties 
had clearly reached agreement on important details during negotiations on 
September 3rd.  The district courts abbreviated enforcement order, however, 
fails to spell out any of these details.  For instance, there is no dispute 
that the parties intended the $7,400 would be paid over time rather than in 
one lump sum.  In fact, the parties agreed Defendants would pay a total of 
$1,000 ($250 per person) to each intervenor within ten days of the district 
courts entry of the consent decree, and then another $400 per month ($100 
per intervenor) on the 15th of each month for the next sixteen months, with 
copies of the checks sent to EEOC.  See ER539 (EEOCs 9/4/03 version), 
41718 (Defendants 9/24/03 version), 451 (EEOCs 10/23/03 version).11  
These payment details are not spelled out in the district courts findings, 
ER560-61, or in the courts enforcement order, ER563, 569, although there is 
no doubt the parties agreed to this procedure rather than a lump-sum 
disbursement of $7,400.

Similarly, the district court found that the parties agreed to a general 
injunctive paragraph enjoining Defendants from discrimination or 
retaliation.  ER561.  This finding is supported not only by the witness 
testimony, see discussion at pp 5-7, supra, but also by the documents the 
parties exchanged in the six weeks following September 3, 2003, which 
provide the specific language for this agreed-upon injunction.  See ER538 2 
(9/4/03); 416 2.B. (9/24/03); 450  2.B. (10/23/03).  The district court 
also found that the parties agreed to sign a joint statement and that 
Defendants agreed to post a notice at RDs concerning discrimination and 
retaliation.  ER561.  The courts opinion, findings, order and judgment do 
not spell out the language or content of the agreed-upon general injunctive 
paragraph, the joint statement or the notice.  See ER561, 563, 569-70, see 
generally ER550-61.  Nothing in the district courts opinion or order 
suggests it intended the parties to sit down and work out language for these 
provisions, however.  See id.  Rather, the parties had already drafted 
specific language on September 3rd before announcing their settlement 
agreement to the magistrate.  See ER390 (injunctive paragraph), 398-400 
(joint statement); 404-05 (notice).  This is the specific language EEOC 
sought to enforce in its motion.  R.130; see ER281 (district court 
acknowledged EEOC sought enforcement of the 11 essential terms from EEOCs 
September 4th document).  Therefore, it is only logical to read the district 
courts enforcement order as adopting the specific wording of these 
provisions, even though that language is not spelled out in the courts 
order.

Likewise, the portion of the district courts order enforcing the Kidmans 
agreement to rescind their current English Language Policy is properly 
construed to include the conditions for any future readoption of an 
English-only policy at RDs.  As noted above, the parties worked out these 
conditions through careful negotiation on September 3rd, resulting in a 
handwritten paragraph 15" that reflects the handwriting of both EEOC 
attorney David Lopez and Defendants attorney David Selden.  ER84-86, 
179-80.  The district court expressly referenced these readoption conditions 
in its enforcement decision, noting the requirements for reinstating an 
English-only policy [are] separately addressed in both parties proposed 
settlement documents.  ER559-60; see ER541 14 (9/4/03); 41920 11 
(9/24/03); 453 11.A. (10/23/03).  As with the other provisions in which the 
district courts order is properly read to incorporate the details worked 
out by the parties on September 3rd, the district courts enforcement of 
Defendants agreement to rescind their current English-only policy should be 
read to incorporate the agreed-upon conditions for any future reinstatement 
by the Kidmans during the two-year life of the settlement agreement.  	In 
the alternative, if this Court does not read the district courts 
enforcement order as encompassing these readoption conditions, then the 
district court abused its discretion by not including those terms.  EEOCs 
express reference to hand-drafted paragraph 15 in our motion to enforce 
the settlement agreement, ER28-29, was indisputably not an attempt to put 
terms into the agreement to which the parties had not agreed.12  Indeed, the 
district courts own opinion recognizes that the parties agreed to these 
conditions for readoption.  ER559.  EEOCs attorney testified at the 
evidentiary hearing that whether the English-only policy was going to 
continue was really central to the case.  ER85.  A provision by which 
Defendants agree to rescind their English-only policy, but without any 
limitations on readoption, would fail entirely to meet this central concern 
of EEOCs.  On the other hand, if the district courts decision were to be 
construed as a permanent bar on Defendants readoption of an English-only 
policy, it would exceed the injunctive relief for which EEOC bargained and 
to which the Kidmans agreed.  The district court made clear that it sought 
to enforce those terms to which the parties agreed on September 3, 2003, not 
to impose any new or additional terms on the parties.

The conditions for readopting an English-only policy were indisputably a 
part of the parties agreed-upon terms.  Although the readoption conditions 
are very modest (requiring only that Defendants consider other alternatives 
first, keep any such policy narrowly tailored, discuss it with employees 
in advance, and give EEOC advance notice and a brief opportunity to comment 
before reinstating such a language limitation at RDs), they are significant 
to EEOC.  See ER85.  If the district courts enforcement order is not 
construed to encompass those terms by implication, then the district court 
committed a clear abuse of discretion which this Court should rectify by 
modifying the district courts order to include these conditions.

		CONCLUSION

For all of the foregoing reasons, EEOC respectfully urges this Court to 
affirm the district courts discretionary decision to enforce the parties 
settlement agreement in this case with respect to the nine terms the 
district court ordered enforced.  In addition, EEOC urges this Court to find 
that the district courts enforcement order and judgment implicitly includes 
the parties agreed-upon terms for any potential future re-adoption of a 
speak English only policy at RDs Drive In.  To the extent this Court 
believes these conditions are not implicitly included in the district 
courts order, we respectfully urge this Court to hold that the district 
courts failure to include the parties agreed-upon terms is an abuse of 
discretion, and to remand for further proceedings consistent with this 
holding.


	Respectfully submitted,

	ERIC S. DREIBAND
	General Counsel

	CAROLYN L. WHEELER
	Acting Associate General Counsel

	LORRAINE C. DAVIS
	Assistant General Counsel



	SUSAN R. OXFORD, Attorney
	U.S. Equal Employment Opportunity Commission
	1801 L Street, N.W., Room 7010
	Washington, D.C. 20507
	(202) 663-4791
	susan.oxford@eeoc.gov


Dated: March 31,2005

		CERTIFICATE OF COMPLIANCE

I certify that this brief complies with the type-volume limitation set forth 
in Fed. R. App. P. 32(a)(7)(B).  This brief contains 13,962 words.  See Fed. 
R. App. P. 32(a)(7)(B)(i).  The brief was prepared using the WordPerfect 9 
word processing system, in 14-point proportionally-spaced type for both text 
and footnotes.  See Fed. R. App. P. 32(a)(5).



March 31, 2005		Susan R. Oxford

		CERTIFICATE OF SERVICE

I, James Tucker, hereby certify that on this 31st day of March, 2005, I 
caused two copies of the attached brief, along with one copy of the 
accompanying Supplemental Excerpts of Record, to be sent by Federal Express, 
next-day delivery, postage prepaid, to counsel of record in this case at the 
following addresses:

	Joseph F. Becker, Esq.
	MOUNTAIN STATES LEGAL FOUNDATION
	2596 South Lewis Way
	Lakewood, Colorado   80227

	Franklin J. Hoover, Esq.
	MANGUM WALL STOOPS & WARDEN PLLC
	100 N. Elden; P.O. Box 10
	Flagstaff, Arizona   86002-0010


		James Tucker
		Attorney
		EEOC / Office of General Counsel
		1801 L Street, N.W., Room 7028
		Washington, D.C.  20507
		Tel. (202) 663-4870
		Fax. (202) 663-7090


<<NOTES>>

1 R. refers to the district courts docket entry number.  ER refers to 
RDs Excerpts of Record and SER refers to EEOCs Supplemental Excerpts of 
Record.

2 The parties reached a settlement agreement before EEOC was permitted to 
take depositions.  Consequently, the district courts opinion includes 
background information based solely on untested representations by the 
Kidmans, including:  all employees are fluent in English; Defendants 
received complaints that some employees spoke rudely or inappropriately in 
Navajo to some English-only-speaking employees; Intervenors resigned; and 
the circumstances surrounding Defendants decision to impose an English-only 
rule at RDs.  See MDO at 2 (ER551).  EEOC disagrees with much of this 
background information, as well as with Defendants characterizations of 
EEOCs legal claims.  See, e.g., RDs Brf at 47.  Since neither these 
background facts nor the merits of EEOCs legal claims are relevant to this 
appeal, we do not address them here.

3 Selden later acknowledged that EEOCs inclusion of the language classes 
was the result of a misunderstanding among the parties.  ER443; see also 
ER224.

4 The other enforced provisions are also reflected in Defendants September 
24, 2003, version although, as noted above, the joint statement was 
significantly altered.  See ER415, 422 (agreement to be filed with the 
court); ER417  4 (payment of $7,400 to Plaintiff-Intervenors);  ER416  
2.B. (general injunction); ER419 9 (community symposium); ER421 15 (each 
party to bear its own costs and fees); ER418  7 (notice); and ER420  12 
(quarterly all-employee shift meetings).

5 EEOC also sought, initially, to have the settlement embodied in a consent 
decree and to enforce two additional provisions: (1) training for the 
Kidmans on Navajo culture, language and tradition, and (2) limitation of any 
waiver or release to the issues raised in EEOCs lawsuit.  ER28-29.  At 
closing arguments, EEOC advised the court that it no longer sought 
enforcement of the consent decree format and the waiver provision.  ER378.  
Those two provisions, as well as the Navajo cultural training, are not 
included in the district courts enforcement order.  ER563.

6 Whether a term was material to the parties on September 3rd is a 
question of fact, and Defendants properly use the clearly erroneous 
standard in discussing whether the four non-agreed terms were material.  
See RDs Brf at 25-28.  Elsewhere, Defendants erroneously assert that the 
materiality of a settlement term is subject to de novo review either as a 
question of law, RDs Brf at 23, or a mixed question of law and fact.  RDs 
Brf at 32.  The cases Defendants cite involve contexts very different from 
this case and, therefore, do not support a de novo standard of review.  See, 
e.g., Jenkins v. Irvin, 178 P. 33, 34 (Ariz. 1919) (whether alteration, 
after signing, of real estate agents contract for real estate commissions 
was a material alteration) (dicta); Chicago Title Ins. Co. v. Renaissance 
Homes, 679 P.2d 517, 520 (Ariz. App. 1983) (whether deviation from public 
bidding conditions after bid was awarded to lowest bidder was a material 
deviation); Arizona Bd. of Regents v. Main Street Mesa Assocs., 891 P.2d 889 
(Ariz. App. 1994) (same); Campbell v. Territory, 125 P. 717, 721 (1912) 
(whether error in jury instructions in murder conviction was material or 
merely technical).

7 The other considerations developed in Kimbell require a court to consider, 
first, whether an issue requires a nationally uniform body of law.  If 
not, state law may be incorporated as the federal rule of decision.  Second, 
if application of a federal rule would disrupt commercial relationships 
predicated on state law, courts should decline to fashion a separate 
federal legal standard.  440 U.S. at 728-29.  In Kimbell, the Supreme Court 
applied this three-part test to determine the priority of liens stemming 
from federal lending programs and concluded state law should govern because 
there was no particular need for nationwide uniformity (the local offices of 
the two federal agencies involved were already functioning under state 
law);the Government had not identified any important national interests 
that might necessitate a separate federal rule; and businessmen engaged in 
these financial transactions typically depend on state commercial law to 
define parties rights in these types of transactions.  Id. at 732, 739-40.

8  For similar reasons, the district court properly did not apply the 
Arizona state procedural rule that [n]o agreement or consent between 
parties or attorneys in any matter is binding if disputed unless it is in 
writing, or made orally in open court.  16Ariz. R. Civ. P. 80(d); see RDs 
Brf at 40-42.  Moreover, federal courts are generally governed by federal 
rather than state rules of procedure.  See Hanna v. Plumer, 380 U.S. 460, 
465 (1965).  Even if Rule 80(d) does apply, it was satisfied here by 
Defendants admissions at the evidentiary hearing.  See pp 5-7, supra.

9 The district court apparently misread this latter condition.  The court 
stated that any English-only policy was subject to EEOC approval.  ER560.  
However, EEOC negotiated only the right to review and comment on any future 
English-only policy at least five days before Defendants begin 
implementation.  ER342-43.

10 In its September 24, 2003, version, Defendants added to the second 
sentence  Defendants agree to address all workforce conflict issues . . . 
through individual supervision, counseling and discipline  the phrase as 
Defendants contend has always been their supervisory practice.  ER419.  
Although this phrase was not in the parties handwritten version, see ER401, 
EEOC added this language to the Commissions October 23, 2003, version.  
ER453.

11 The EEOCs 9/4/03 and 10/23/03 versions mistakenly identify the monthly 
payments as $101.50 per person.  The amount should be $100.

12 The district courts opinion wrongly stated that EEOC, on more than one 
occasion, attempted to put terms into the agreement that clearly were not 
agreed to.  ER562.  EEOC takes issue with the district courts conclusion 
that certain terms were clearly negotiated out of the settlement agreement, 
only to be reinserted by the EEOC.  Id.  EEOC attorney Mary Jo ONeill 
explained in her testimony that Selden made some notations on the September 
3rd working draft document after conferring with his clients but before the 
parties sat down together to discuss the provisions.  EEOC xeroxed that 
version and used it to annotate the parties subsequent negotiations.  
ER155, 176, 211-12.  Defendants thereafter appeared to agree to several 
provisions Selden had previously crossed out or marked no.  See ER373-74.  
ONeill testified that EEOCs September 4th version also included some 
boilerplate terms not discussed on September 3rd that are standard in many 
EEOC consent decrees but are removed if defendants object.  E.g. ER116 
(judgment language); see ER135-36 (EEOCs September 4th draft included 
both material and immaterial terms).  EEOC removed all of the non-material 
language to which Defendants objected from EEOCs next draft (October 23, 
2003).  See ER120-21.

The district courts comment that EEOC continually reinserted terms that 
were specifically negotiated out of the agreement, ER562, is truly 
puzzling.  EEOC sent  Defendants a draft document on September 4, 2003, and 
in response to Seldens sole comment, re-sent the same document the same day 
with a single alteration (combining Navajo language classes with paragraph 
10) which ONeill believed addressed Seldens only articulated concern.  
EEOC did not generate any other drafts of the settlement agreement until 
October 23, 2003, when EEOC incorporated all of Defendants requested 
changes for the terms to which the parties had agreed, excluding only the 
new terms Defendants tried to add that were not discussed or agreed to on 
September 3, 2003.  ER120-21; see ER447-59.