Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_24-cv-03084/USCOURTS-azd-2_24-cv-03084-0/pdf.json

Parties Involved:
Denali Water Solutions LLC
Defendant
United States of America
Plaintiff

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America,

Plaintiff,

v. 

Denali Water Solutions LLC,

Defendant.

No. CV-24-03084-PHX-DWL

ORDER 

The United States initiated this action on November 7, 2024, by filing a complaint

against Denali Water Solutions LLC (“Defendant”). (Doc. 1.) The complaint alleges that, 

between January 2016 and August 2024, Defendant violated certain federal laws and 

regulations governing the management and land application of sewage sludge. (Id.) The 

only specific remedies sought in the complaint are (1) an award of civil penalties and (2) 

an award of costs. (Id. at 10.)

As it turns out, the filing of the complaint did not mark the beginning of a live 

dispute between the United States and Defendant. At the same time it filed the complaint, 

the United States filed a lengthy proposed consent decree it had already negotiated with 

Defendant: “[T]his Consent Decree has been negotiated by the Parties in good faith and 

will avoid litigation between the Parties . . . .” (Doc. 3-1 at 3.) The proposed consent 

decree calls for Defendant to make a one-time civil penalty payment of $610,000 to the 

United States. (Id. ¶ 7.) The proposed consent decree also calls for Defendant to follow 

certain “Compliance Requirements” and “Reporting Requirements” and, potentially, to 

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hire a “Third-Party Auditor” to verify Defendant’s compliance. (Id. ¶¶ 11-41.)

The only other litigation activity in this case, other than the filing of the complaint 

and proposed consent decree on November 7, 2024, occurred on January 3, 2025, when the 

United States filed an unopposed motion for approval of the consent decree. (Doc. 4.) The 

motion notes that “[i]n accordance with 28 C.F.R. § 50.7, the United States published 

notice of the proposed Decree in the Federal Register on November 14, 2024, for a thirtyday public comment period. The United States received no comments.” (Id. ¶ 1, citation 

omitted.)

If the Court were writing on a blank slate, it would have serious questions about 

whether this action ever presented the sort of “case or controversy” necessary to create 

subject-matter jurisdiction. Essentially, the parties arrived together in court with a prenegotiated settlement agreement, with the sole shared objective of obtaining judicial 

approval over that agreement. Other courts have raised thoughtful questions about the 

constitutional permissibility of this practice. Lexington Ins. Co. v. Ambassador Group 

LLC, 581 F. Supp. 3d 863, 865-66 (W.D. Ky. 2021) (“A consent decree is a strange hybrid 

in the law . . . [that] enjoys a privileged . . . position among the ranks of permissible judicial 

remedies. Certainly the law of this circuit tolerates, and even favors, their use in order to 

speed the resolution of the cases and controversies on federal dockets . . . [b]ut once the 

parties reach agreement, would the underlying disputes even qualify as ‘Cases’ and 

‘Controversies’ as used by the framers of Article III? And could justice proceed just as 

swiftly based on private settlement agreements alone? These are important constitutional 

questions whose answers are not obvious.”) (citations omitted). 

But the Court does not write on a blank slate. The Ninth Circuit has suggested that 

a district court has subject-matter jurisdiction over a request to approve a proposed consent 

decree even if “the parties arrived in court with the proposed judgment in hand.” SEC v. 

Randolph, 736 F.2d 525, 528 (9th Cir. 1984). The Court is bound to follow Randolph. 

Hasbrouck v. Texaco, Inc., 663 F.2d 930, 933 (9th Cir. 1981) (“District courts are bound 

by the law of their own circuit . . . no matter how egregiously in error they may feel their 

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own circuit to be.”). 

On the merits, Ninth Circuit law holds that a proposed consent decree “ought to be 

approved” unless it “is unfair, inadequate, or unreasonable.” Randolph, 736 F.2d at 529. 

Additionally, courts must “pay deference to the judgment of the government agency which 

has negotiated and submitted the proposed judgment.” Id. See also United States v. State 

of Or., 913 F.2d 576, 580 (9th Cir. 1990) (“Before approving a consent decree, a district 

court must be satisfied that it is at least fundamentally fair, adequate and reasonable. In 

addition, because it is a form of judgment, a consent decree must conform to applicable 

laws.”) (citations omitted). 

The Court will confess that, because it has had exactly zero involvement overseeing 

any contested litigation in this case, it is difficult to evaluate whether the proposed consent 

decree is unfair, inadequate, or unreasonable. For example, the government states that “[i]n 

determining whether a Consent Decree is substantively fair, courts also consider the

strength of the plaintiff’s case and the risks posed by litigation.” (Doc. 4-1 at 7.) But it is 

challenging, to put it mildly, for a court to evaluate the strength of the plaintiff’s case when

there has never been any evidentiary or adversarial presentation. At any rate, in light of 

the highly deferential standards set forth in Randolph and State of Oregon, and because 

nothing on the face of the proposed consent decree seems out of the ordinary, the Court 

concludes that the standard for approval has been satisfied. Cf. Lexington Ins. Co., 581 F. 

Supp. 3d at 870 (“Despite the uneasy relationship between consent decrees and federal 

courts’ limited Article III jurisdiction, the law of this circuit . . . authorize[s] and—on this 

Court’s reading, at least—effectively compel[s] approval of the parties’ proposed 

resolution, which satisfies the requirements articulated in this Circuit’s precedents.”).

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Accordingly,

IT IS ORDERED that the United States’ unopposed motion to approve consent 

decree (Doc. 4) is granted. The Court hereby enters the consent decree (Doc. 3-1) as an 

order of the Court. The Clerk of Court shall terminate this action.

Dated this 10th day of January, 2025.

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