Opinion ID: 3035057
Heading Depth: 3
Heading Rank: 1

Heading: Consent Decrees

Text: [3] Without question courts treat consent decrees as contracts for enforcement purposes. A consent decree, like a con15690 UNITED STATES v. ASARCO INC. tract, must be discerned within its four corners, extrinsic evidence being relevant only to resolve ambiguity in the decree. In United States v. Armour & Co., for example, the Supreme Court found that defendant, a meat packing company, did not violate the terms of the meat packers consent decree of 1920, which forbade meat packing companies from owning grocery stores, by allowing Greyhound to buy an ownership share of its stock while simultaneously owning grocery subsidiaries. 402 U.S. 673, 682-83 (1971). The Court reasoned that if the government wanted to prevent a single corporation like Greyhound from owning both meat packing companies and grocery stores, it should have provided such a prohibition in the decree. After all, “[c]onsent decrees are entered into by parties to a case after careful negotiation has produced agreement on their precise terms. . . . Naturally, the agreement reached normally embodies a compromise; in exchange for the saving of cost and elimination of risk, the parties each give up something they might have won had they proceeded with the litigation.” Id. at 681. The Supreme Court rearticulated its Armour holding in United States v. ITT Cont’l Baking Co., where it considered extrinsic evidence to interpret a vague term in a consent decree. 420 U.S. 223 (1975). The case involved a Federal Trade Commission consent order prohibiting baking companies such as ITT Continental from “acquiring” other baking companies. In construing the term “acquiring” in the decree, the Court took into account evidence of events surrounding the negotiation of, and other documents incorporated in, the decree. The Court explained that “[s]uch reliance [on extrinsic evidence] does not in any way depart from the ‘four corners’ rule of Armour” because where contract terms are ambiguous, “reliance upon certain aids to construction is proper, as with any other contract.” Id. at 238. This Court has applied contract principles in accordance with Supreme Court precedent when interpreting consent decrees. See Molski v. Gleich, 318 F.3d 937, 956 (9th Cir. UNITED STATES v. ASARCO INC. 15691 2003) (Graber, J., specially concurring) (stating that “[i]n construing a consent decree, we apply the same principles used to interpret a contract.”) (citing Thompson v. Enomoto, 915 F.2d 1383, 1388 (9th Cir. 1990)); Gates v. Shinn, 98 F.3d 463, 468 (9th Cir. 1996) (discussing how “[a] consent decree is . . . ‘in some respects contractual in nature’ ” and, as such, “[c]ourts must find the meaning of a consent decree ‘within its four corners[ ]’ ”) (citing Rufo, 502 U.S. at 378; Armour & Co., 402 U.S. at 681-82); Enomoto, 915 F.2d at 1388 (explaining that “[i]n construing consent decrees, courts use contract principles”).