Opinion ID: 181545
Heading Depth: 2
Heading Rank: 2

Heading: Contested Consent Judgment

Text: In light of this ambiguity, Sun urges, at a minimum, that the district court erred by refusing to allow discovery and an evidentiary hearing before entering a consent judgment to which it did not consent. Sun points out that Sanofi does not dispute that parol evidence may be used to interpret an ambiguous agreement. Sun also contends that Sanofi implicitly admits that Section 3.5 is ambiguous because it attempted to renegotiate the original proposed Consent Order and submitted a revised Consent Order to the district court. Appellant Reply Br. 15. Sanofi argues that the district court did not err because it simply enforced the parties’ contractual settlement obligations and entered a consent judgment consistent with those obligations. Sanofi asserts that under our precedent, the district court had “inherent power summarily to enforce a settlement agreement,” which included the power to enter a consent judgment that was consistent with the settlement terms. Appellee Br. 39. Sanofi also maintains that Sun’s arguments against entry of the revised consent judgment were fully and fairly heard in view of several letters written to the judge and a “hearing” the day before the district court entered the Consent Judgment. We agree with Sun. The district court erred by entering the contested Consent Judgment. The precedent cited by Sanofi does not give a court inherent authority to enter a contested Consent Judgment without a full and fair hearing as to material disputed language of the agreement. See Core-Vent Corp. v. Implant Innovations, Inc., SANOFI-AVENTIS v. SANDOZ 14 53 F.3d 1252, 1259 (Fed. Cir. 1995) (noting that courts have inherent authority to summarily enforce a settlement agreement where “there were not disputed issues of material fact that required a hearing.”). Sun was denied the opportunity to conduct formal discovery and gather evidence regarding the proper interpretation of material language in the license agreement. Sun was also denied the opportunity to submit its arguments either in formal briefing or during a hearing on the record. The Supreme Court has recognized that “[c]onsent decrees are entered into by parties to a case after careful negotiation has produced agreement on their precise terms . . . and the resultant decree embodies as much of those opposing purposes as the respective parties have the bargaining power and skill to achieve.” United States v. Armour & Co., 402 U.S. 673, 681 (1971). “[I]t is the parties’ agreement that serves as the source of the court’s authority to enter any judgment at all.” Local No. 93 v. City of Cleveland, 478 U.S. 501, 522 (1986); Harris v. Pernsley, 820 F.2d 592, 603 (3d Cir. 1987) (“The source of the district court’s authority to enter a consent decree is the parties’ agreement.”). Where a court enters a Consent Judgment and Order that is not the product of an agreement by the parties, entry of that Consent Judgment—without consent—is improper. See, e.g., Keen v. Adler, 65 F. App’x. 408 (3d Cir. 2003) (“[W]ithout the consent of the parties to the settlement, a court lacks the power to enter a judgment purportedly based on consent.”) (citing Reynolds v. Roberts, 251 F.3d 1350, 1357 (11th Cir. 2001)).