Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-02326/USCOURTS-azd-2_09-cv-02326-2/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1331 Federal Question: Other Civil Rights

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Calvin Matthews; Tyrone Hunt; Michael

Buckner, 

Plaintiffs, 

vs.

NPMG Acquisition Sub, LLC, 

Defendant. 

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No. CV 09-2326-PHX-FJM

ORDER

We have before us defendant's motion for summary judgment (doc. 55), defendant's

statement of undisputed facts in support of motion for summary judgment ("DSOF") (doc.

56), plaintiffs' response (doc. 62), plaintiffs' statement of facts in support of opposition to

motion for summary judgment ("PSOF") (doc. 63), defendant's reply (doc. 66), and

defendant's response to plaintiffs' statement of facts (doc. 67).

I

In November and December 2006, plaintiffs each filed charges of race discrimination

and harassment with the Equal Employment Opportunity Commission ("EEOC"). They also

alleged that they had been terminated by defendant due to their race. In February 2009, the

EEOC filed a Title VII class action lawsuit against defendant, naming the plaintiffs as

charging parties. On September 15, 2009, Judge Bolton entered the Consent Decree

negotiated by the EEOC and defendant (doc. 36, ex. 1). EEOC v. iPayment, Inc. & NPMG

Case 2:09-cv-02326-FJM Document 68 Filed 09/13/11 Page 1 of 4
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Acquisition Sub, LLC, No. CV 08-01790. On November 4, 2009, plaintiffs filed a complaint

against defendant alleging a violation of 42 U.S.C. § 1981, based on the same conduct at

issue in the EEOC's action (doc. 1). Defendant filed a motion to dismiss on January 6, 2010

(doc. 12). On July 30, 2010, Judge Murguia granted this motion for failure to state a claim

for relief under Rule 12(b)(6), Fed. R. Civ. P. (doc. 21). Matthews v. NPMG Acquisition

Sub, LLC, 2010 WL 3023300 (D. Ariz. July 30, 2010). Judge Murguia allowed plaintiffs

fifteen days to amend their complaint. When plaintiffs failed to meet this deadline, a

judgment was entered against them on August 24, 2010 (doc. 23). Nevertheless, the court

later granted plaintiffs' motion to vacate and allowed plaintiffs to file an amended complaint

on March 22, 2011 (docs. 34, 36). Defendant now moves for summary judgment (doc. 55).

II

The first paragraph of the Consent Decree states: 

This Consent Decree resolves all claims of the Commission and of Mssrs.

Matthews, Hunt, Buckner, Gawarecki (each a "Charging Party," and

collectively the "Charging Parties") . . . against Defendant . . . arising out of

the issues that were or could have been raised in this lawsuit up until the date

of the execution of this Consent Decree by the parties.

Plaintiff's First Amended Complaint, ex. 1 at 8.

When interpreting a consent decree, we follow contract principles and look first to the

language's plain meaning. If the language is clear, then extrinsic evidence cannot be used

to vary its terms. Judge Murguia previously concluded that "paragraph 1 of the Consent

Decree is unmistakably clear; all claims of Plaintiffs Matthews, Hunt, and Buckner, that

could have been raised in EEOC v. iPayment have been expressly waived." Matthews v.

NPMG Acquisition Sub, LLC, 2010 WL 3023300, at *2 (D. Ariz. July 30, 2010). Thus, if

plaintiffs are bound by the Consent Decree, they may not bring a claim under 42 U.S.C. §

1981 because they could have raised this claim in the earlier action. 

The crux of plaintiffs' complaint is that they should not be bound because they were

not parties to the EEOC lawsuit or Consent Decree. Thus, they argue they did not waive

their § 1981 claim by failing to intervene. This argument is without merit. Plaintiffs did not

sign the Consent Decree, but they did accept the benefits of it. They "cannot now request

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additional monetary relief merely because [they are] dissatisfied with the amount [they]

voluntarily agreed to accept in the settlement as compensation for [their] claims." Strozier

v. General Motors Corp. (Lakewood Assembly Plant), 635 F.2d 424, 426 (5th Cir. 1981). 

Similarly, plaintiffs contend their claim is not barred by res judicata because they were

not parties in the previous lawsuit. "In order for res judicata to apply there must be: 1) an

identity of claims, 2) a final judgment on the merits, and 3) identity or privity between

parties." Western Radio Servs. Co. v. Glickman, 123 F.3d 1189, 1192 (9th Cir. 1997). The

first two elements are undisputedly present in this case. First, there is an identity of claims

because defendant's right to finality would be impaired by prosecution of this action, the

same evidence would be presented in both actions, both actions involve infringement of the

same rights, and both actions arise out of the same transactional nucleus of facts. See United

States v. Liquidators of European Fed. Credit Bank, 630 F.3d 1139, 1150 (9th Cir. 2011)

(listing four criteria to decide the identity of claims). Second, a consent decree is a final

judgment on the merits. SEC v. Randolph, 736 F.2d 525, 528 (9th Cir. 1984) ("A consent

decree is a judgment, [which] has the force of res judicata[.]"). Plaintiffs claim, however,

that the third element has not been met because they were not parties to the EEOC lawsuit

and privity is no longer a viable concept. Their understanding of Taylor v. Sturgell, 553 U.S.

880, 128 S. Ct. 2161 (2008), is misguided. In this case, the Supreme Court avoided the term

"privity" but confirmed the viability of nonparty preclusion based on substantive legal

relationships. Id. at 894 & n.8, 128 S. Ct. at 2172 & n.8. 

Defendant argues that privity exists between the EEOC and plaintiffs because the

EEOC brought an action on plaintiffs' behalf, plaintiffs were identified as charging parties,

they had a significant interest in that action, participated in that action, and accepted

settlement payments from defendant. The interests of the EEOC and aggrieved individuals

may occasionally diverge, however. The United States Court of Appeals for the Eleventh

Circuit has held that where there is "a clear divergence of interests," a consent decree is not

an absolute bar to an individual's subsequent lawsuit. Riddle v. Cerro Wire & Cable Group,

Inc., 902 F.2d 918, 922, 923 n.5 (11th Cir. 1990). While the factual record of the motion to

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dismiss was insufficient to determine if this showing had been made (doc. 21 at 8), it is now

apparent that plaintiffs' interests did not clearly diverge from those of the EEOC. 

In Riddle, the plaintiff did not receive any money and notified the EEOC and the

defendant before the consent decree was finalized that she was dissatisfied with the EEOC's

handling of her case. Id. at 923. Here, to the contrary, each plaintiff has received a payment

in the amount promised in the Consent Decree (doc. 36, ex. 1; DSOF ¶¶ 31-32, 66, 79).

Plaintiffs Matthews and Buckner never objected to the terms of the Consent Decree, either

before or after its entry. DSOF ¶ 37-39, 83. Nor did they notify the EEOC or defendant that

they were unhappy with the EEOC's handling of their case. Id. Plaintiff Hunt apparently

objected to the terms of the settlement before entry of the Consent Decree, and made his

objection known to an EEOC attorney. PSOF ¶ 60. Although the parties disagree about the

timing of Hunt's complaint, their disagreement is immaterial. It is undisputed that Hunt

received and cashed a check sent to him pursuant to the Consent Decree. DSOF ¶¶ 66, 68.

Therefore, this case does not fall within the narrow exception found in Riddle. The plaintiffs'

interests did not clearly diverge from the interests of the EEOC. As a result, there was privity

between plaintiffs and the EEOC. Because we find an identity of claims, a final judgment

on the merits, and privity between the parties, res judicata bars plaintiffs' § 1981 claim.

III

IT IS HEREBY ORDERED GRANTING defendant's motion for summary

judgment (doc. 55).

DATED this 13th day of September, 2011.

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