Jоhnny REYNOLDS, individually on behalf of himself and as representative of a class of black employees of the Highway Department, State of Alabama, similarly situated, Plaintiff-Appellee-Cross-Appellant, Cecil Parker, et al., Intervenors-Appellees-Cross-Appellants, v. G.M. ROBERTS, in his official capacity as Director for the Alabama Department of Transportation, et al., Defendants-Appellants.
No. 97-6349.
United States Court of Appeals, Eleventh Circuit.
Feb. 2, 2000.
202 F.3d 1303
Bill Pryor, Montgomery, AL, Robert L. Wiggins, Jr., Stanley Wade Logan, Gordon, Silberman, Wiggins & Childs, Russell Wayne Adams, Burr & Forman, Birmingham, AL, for Plaintiff-Appellee-Cross-Appellant and Intervenors-Appellees-Cross-Appellants.
Thomas R. Elliott, Jr., London, Yancey, L.L.C., Birmingham, AL, Jim Jr. Ippolito, Jr., Montgomery, AL, for Intervenors-Appellees-Cross-Appellants.
Raymond P. Fitzpatrick, Jr., J. Michael Cooper, Richard Scott Clark, Fitzpatrick, Cooper & Clark, Lisa W. Border, Dennis Hughes, Birmingham, AL, Evan Tager, Washington, DC, for Defendants-Appellants.
Before TJOFLAT and DUBINA, Circuit Judges, and STORY*, District Judge.
TJOFLAT, Circuit Judge:
This appeal arises out of a long-standing racial discrimination class action brought by job applicants and two groups of employees and former employees against the Alabama Department of Transportation. After the parties entered into a race-neutral consent decree providing for prospective relief relating to job qualifications and promotion criteria, the district court, sua sponte, entered a judgment awarding the members of one of the employee groups (of current and former employees) back pay in the sum of $17,450,077, plus interest in the sum of $17,282,410. Reynolds v. Alabama Dep‘t of Transp., 996 F.Supp. 1156 (M.D.Ala.1998). The Department of Transportation appeals. We vacate the judgment and remand the case for further proceedings consistent with this opinion.
I.
The named plaintiffs brought this suit against the Department of Transportation (the “Department“) in May 1985 on behalf of all black “merit” and “non-merit” em-
In October 1986, the court certified three plaintiff classes. The first class consisted of any black person who unsuccessfully applied for a merit position in the Department at any time after May 21, 1979. The second class included all blacks employed by the Department at any time after May 21, 1979 who were permanent employees under the Department‘s merit system (the “merit” employees) and therefore eligible for promotion. The third class consisted of a portion of the blacks employed by the Department at any time after May 21, 1979 as temporary employees (the “non-merit” employees). During their employment in the Department, these employees had applied for merit positions, but the Department allegedly had rejected their applications on account of their race. Each class sought injunctive relief in the form of an order direсting the Department to discontinue its current hiring and promotion policies and practices and requiring it to implement an affirmative action program. In addition, each class member sought injunctive and compensatory relief. The members of the first class sought the positions they would have received but for the Department‘s discriminatory hiring policies, together with the pay they would have earned. Each member of the second class contended that he or she had been denied promotion(s) on account of race, and therefore sought an order granting the promotion(s) and/or back pay. Each member of the third class contended that, while employed in the Department, he or she had applied for, but had been denied, merit-employee status on account of race, and therefore sought instatement in such status and/or back pay.
After the parties joined issue, and engaged in discovery, they entered into settlement negotiations. In 1988, and again in 1991, they presented a proposed consent decree to the district court for approval.
In June 1992, the case proceeded to trial before the court. Near the end of the plaintiffs’ case, the parties asked the court to recess the proceeding indefinitely so that they could engage in further settlement negotiations. The court granted their request. In November 1993, they reached a partial settlement, in the form of a proposed consent decree. The proposed decree provided a range of prospective class-wide injunctive relief. Among other things, it set hiring and promotion quotas for blacks—thirty-three percent of the positions in each job classification in the Department would be set aside for blacks. To ensure an adequate pool for this set-aside program, the decree directed the Department to mount an aggressive recruiting campaign at historically black colleges and universities. Finally, the decree required the Department to establish a grievance procedure for its employees.
The parties presented the proposed decree to the district court, which, in turn, scheduled a hearing for January 19, 1994 to entertаin any objections members of the plaintiff classes, or others likely to be affected (like white employees of the Department), might have to the terms of the proposed decree. On January 13, a group of white Department employees (the “Adams Intervenors“) moved the court for leave to intervene on behalf of the Department‘s non-black employees in order to challenge the race-conscious provisions of the proposed decree—specifically, the thirty-three percent quota requirement for all job classifications in the Department. The court granted the motion, Reynolds v. Roberts, 846 F.Supp. 948, 953-54 (M.D.Ala.1994), and subsequently certified an additional class, consisting of the Department‘s non-black employees.
The January 19 hearing was held as scheduled. Over 200 people attended the hearing, including many non-black employees of the Department. The objections to the race-conscious aspects of the proposed consent decree were such that the parties withdrew it and, with leave of court, went back to the drawing board. By late February 1994, the plaintiffs and the Department decided to divide the previously proposed decree into three рarts, called Consent Decrees I, II, and III. Consent Decree I contained the provisions that all sides agreed provided only race-neutral prospective relief. Consent Decrees II and III contained provisions that were acceptable to the plaintiffs and the Department, but opposed as race-conscious by the Adams Intervenors.
The parties submitted Consent Decree I to the district court for approval, and, on March 7, the court held a hearing on the fairness of the proposal. No one other than the parties’ attorneys appeared at the hearing, and no one objected to the entry of the decree. The court approved the decree and, by order entered March 16, 1994, adopted it in full.3
Consent Decree I is composed of a series of “Articles” which revamped the process by which the Department hires, promotes, classifies, and pays its employees. The decree abolished the system of “employment registers” from which positions were filled and promotions were granted, and created new qualifications and procedures for hiring and promotion. It also created new procedures for, аmong other things, rotation of job duties, recruitment, and training.
The Preamble to the Consent Decree states:
The following terms and provisions of this Consent Decree are accordingly agreed to in final and complete resolution of all class issues which have been asserted in the case, subject to the provisions of this Decree providing for further proceedings, including but not limited to Article[] 20. . . .
Similar language is repeated in Article 19, titled “General“:
Subject to the provisions of this Decree permitting or requiring further proceedings, including but not limited to, Article[] 20 . . ., this Decree constitutes full and complete relief on all claims, causes of action, and allegations which have been asserted in this action.
Article 20 explains how the members of the three plaintiff classes and the Department are to proceed with the individual claims of racе discrimination. Because this article is at the heart of the dispute in this case, we reprint the article in its entirety:
ARTICLE 20
FURTHER PROCEEDINGS REGARDING CLASS MEMBERS
- Further negotiations and proceedings are required to resolve the claims for monetary and non-monetary remedies for individual members of the class[es] (including the named plaintiffs and intervenors), provided however, that this Decree does not in and of itself entitled [sic] any such class member to such remedies. Such claims shall be resolved first by settlement negotiations and then, to the extent not resolved by settlement negotiations, by the Court.
- The parties will make all reasonable efforts to resolve all such claims of the members of the class (including the named plaintiffs and intervenors) according to a schedule to be mutually agreed upon within 10 days after preliminary approval of this Decree by the Court or, in the event the parties cannot mutually agree on such schedule within such 10 day period, the Court will enter an Order embodying a schedule. Regardless of whether the schedule is mutually agreed upon by the parties or embodied in an Order entered by the Court, such schedule shall contain specific deadlines for the exchange of information and for offers and counter-offers to enable settlement negotiations on such claims to take place within 90 days after the effective date of this Consent Decree and, in the event such settlement cannot be achieved, for trial on that phase of the case to commence no later than 180 days after the effective date of this Decree.
- Such schedule shall be presented to the Court for approval or modification, and once finalized shall be entered as an Order of the Court. In the absence of agreement on such schedule within 10 days of the preliminary approval of this Decree, the Court will enter its own schedule aimed at settlement negotiations taking place within 90 days after the effective date of this Decree and scheduling that phase of the trial of this
case to commence no later than 180 days after the effective date of this Decree.6
For reasons not appearing in the record, the parties could not agree on a schedule “for the exchange of information and for offers and counter-offers,” as required by Article 20; nor did the district court enter “its own schedule aimed at settlement negotiation . . . and scheduling that phase of the trial of this case,” involving thе claims of the individual class members, as contemplated. Further, neither counsel nor the court were able to adhere to the time table prescribed by Article 20. Rather, counsel for the plaintiffs and the Department undertook to establish a means to identify the members of the merit-employee class (both current and former employees) who might have meritorious claims that the Department, on account of their race, (1) either refused to assign them work that would qualify them for promotion to a higher job classification or (although they were qualified for such promotion) refused to promote them, or (2) treated them as if they had been promoted to a higher job classification by assigning them work in such classification, but refused to pay them the wage called for by that classification. Counsel were unsuccessful in this endeavor.
When counsel for the plaintiffs and the Department were unable to arrive at a means to identify the meritorious claims, plaintiffs’ counsel, in January 1995, filed a “Motion to Set Hearing to Determine Method of Back-Pay Calculation.” In that motion, plaintiffs’ counsel asserted for the first time that Consent Decree I had resolved that the Department had discriminated against еach member of the three plaintiff classes as alleged. In other words, in addition to conceding that its policies and practices for hiring, job assignment, and promotion were racially discriminatory and should be struck down, the Department had admitted that it had discriminated against the individual members of the plaintiff classes on account of their race when it denied them employment or promotion(s) and the wages they would have earned. In light of such an admission of liability, plaintiffs’ counsel contended, the litigation should proceed to the next step: a determination of the amount of back pay due the unsuccessful job applicants (for merit positions), the merit employees, and the non-merit employees. In short, everyone would recover something.
The plaintiffs moved the court to determine a method for calculating back pay in an effort to avoid a separate trial on the damages element of each individual class member‘s claim. If required to try each claim separately, plaintiffs suggested, the “process would degenerate into [a] quagmire of hypothetical judgments.” One of the methods plaintiffs proposed was “a formula of comparability or representative employee earnings formula.” With that method, “approximations are based on a group of employees, not injured by the discrimination, comparable in size, ability and length of employment—such as ‘adjacent persons on the seniority list or the average progress of persons with similar seniority‘—to the class of plaintiffs.”7
The Department‘s immediate response to the plaintiffs’ motion was to deny that Consent Decree I determined that it was liable to the individual class members as plaintiffs contended. Without deciding whether Consent Decree I had adjudicated
The parties began their negotiations by focusing on the class consisting of the merit employees (both current and former) who had been denied promotion(s). They deferred to another day discussion of formulae that would apply to the classes consisting of job applicants and non-merit employees (who were denied instatement in merit positions) because arriving at formulae for those classes would apparently be problematic. On August 28, 1995, the parties jointly filed a “Report of Points of Agreement and Disagreement Regarding Formula for Determination of Remedies under Article Twenty of Consent Decree I” (referred to herein as the “August 28 Report“), which summarized where the parties stood in their negotiations over a back pay formula for the merit employees.
The parties agreed to a basic framework for determining the amount a class member should recover; they disagreed, however, as to what a class member would have to demonstrate in order to recover. The plaintiffs’ position was that Consent Decree I had settled the liability issue; therefore, all a class member would have to show was the difference (if any) between what the member and a similarly situated white employee were paid during the class member‘s employment. The Department agreed that the amount of a class member‘s recovery should be determined by comparing the class member‘s pay with a similarly situated white employee‘s pay; it disagreed, however, as to which white employees would be used for comparison purposes (and whether members of the merit employee class should have the right to opt out and sue the Department separately). In addition, the Department continued to maintain that, in order to recover anything, a class member had to show that he or she had been denied promotion(s) on account of race.
Having been advised of the parties’ disagreements on the issues of the Department‘s liability (to the members of the three plaintiff classes) and an appropriate back pay formula (for the merit employees), the district court, in May 1996, held hearings on the back pay formula, and entertained testimony from plaintiffs’ and the Department‘s experts and from an expert the court had appointed. At the beginning of these hearings, the court addressed the threshold liability issue and announced (from the bench) that Consent Decree I had established “class-wide liability” against the Department on the claims of the individual members of each of the three plaintiff classes.8 The court further stated that its rulings on the back pay formula for the merit employees would “proceed . . . based on that finding [of liability].” After hearing evidence from the expert witnesses, the court struggled with the problem of identifying the white employees who should be compared with a given class member for purposes of determining how much back pay to award the class member. In the process of doing
By January 1997, the district court identified the members of the merit class whо were not entitled to relief (promotion or back pay): Any member of the class who had earned as much or more than the average pay earned by comparable white employees had not been injured and thus would neither be promoted nor receive back pay. The remaining members of the class would receive back pay in accordance with a court-modified version of the formulae the parties had submitted in the August 28 Report.11
Once the court made these rulings, the plaintiffs filed a “Motion for Entry of Judgment.” On April 16, 1997, the court granted the motion and gave the merit employees (who had been injured) judgment for $34,732,487. That sum consisted of $17,450,077 in back pay and $17,282,410 in interest.12
The Department appeals this judgment.13 The plaintiffs cross appeal, challenging the formula the district court used in identifying the class members who were not entitled to relief and in calculating the back pay for the remainder of the class. We conclude that the district court erred in interpreting Consent Decree I as an admission of liability by the Department—that it had discriminated against the three plaintiff classes, and the individual members thereof, with respect to its hiring and promotion decisions. We therefore vacate the judgment at issue and remand the case for further proceedings. Given this disposition, the plaintiffs’ appeal is moot, and we accordingly dismiss it.
II.
The Department contends that the district court erred in interpreting Consent Decree I to establish “class-wide liability” such that the merit employees could obtain relief without demonstrating that they were denied promotion(s) or back pay on account of their race. The plaintiffs, in addition to asking us to affirm the district court‘s judgment, contend that a waiver of appeal provision in Consent Decree I bars the Department‘s appeal.14 If the plaintiffs are correct, we need not consider the Department‘s appeal. We therefore address this issue first.
A.
The waiver of appeal provision relied upon by the plaintiffs appears in Article 19 of the consent decree:
All parties agree and stipulate that there will be no appeal from this Consent Decree or from any ruling, order, or decision entered by the Court in the case relating to any issue or subject encompassed within the terms of this Decree. Nothing herein shall prohibit the non-class employees or any other person not a party to this Decree from having the right to appeal any interpretation, ruling, decision or order.
As a general rule, “[a] party normally has no standing to appeal a judgment to which he or she consented.” 5 Am.Jur.2d Appellate Review § 619 (1995). See White v. Commissioner of Internal Revenue, 776 F.2d 976, 977 (11th Cir.1985). Accordingly, the words “there will be no appeal from this Consent Decree” were not needed to preclude appellate review of the decree‘s substantive provisions. There are exceptions to the general rule; one is that an appeal will lie if “the judgement allegedly deviates from the terms of the parties’ agreement.” 5 Am.Jur.2d Appellate Review § 619 (1995). The Department invokes this exception by contending that, in interpreting the decree to create “class-wide liability,” the district court effectively entered a new decree, one that “deviates from the terms of the parties’ agreement.” The district court‘s deviation, therefore, is subject to appellate review.
If the Department is correct, the plaintiffs respond, Article 19‘s waiver-of-appeal provision is meaningless—specifically, the words “there will be no appeal . . . from any ruling, order, or decision entered by the Court in the case relating to any issue or subject encompassed within the terms of this Decree.” The district court‘s interpretation of the decree to establish “class-wide liability,” including the Department‘s liability to the individual class members, necessarily relates to an “issue or subject encompassed within the terms” of the decree; accordingly, the plaintiffs contend, the interpretation is not subject to appellate review.
If the plaintiffs are correct, the waiver provision would bar appellate review of any interpretation the district court might give the decree. The provision would also bar appellate review of the court‘s disposition of the individual claims for instatement, promotion, or back pay—regardless of the errors the court might commit in disposing of those claims.15 In short, the waiver provision would give the district court unbridled discretion to rewrite Consent Decree I—as long as the court‘s “ruling, order or decision” “relat[es] to” or is “encompassed within the terms” of the decree.
Long standing precedent evinces a strong public policy against judicial rewriting of consent decrees. “[A] district court may not impose obligations on a party that are not unambiguously mandated by the decree itself.” King v. Allied Vision, Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995). As the following discussion makes clear, the district court rewrote Consent Decree I, and imposed an obligation on the Department that the decree did not “unambiguously mandate[ ],” when it declared that the Department, in entering into the decree, had conceded “class-wide liability,” including liability to the members of the three plaintiff classes. Accordingly, the waiver-of-appeal provision of Article 19 does not bar the Department‘s appeal, which we now consider.
B.
As a general matter, the rules we use to interpret a consent decree are the same ones we use to interpret a contract—since a consent decree is a form of contract. See Jacksonville Branch, NAACP v. Duval County Sch. Bd., 978 F.2d 1574, 1578 (11th Cir.1992). What a contract provision means, or whether it is ambiguous, are questions of law, which we review de novo. See Equitable Life Assurance Soc‘y v. Sublett (In re Sublett), 895 F.2d 1381, 1384 (11th Cir.1990). If the contract provision is ambiguous and the trial court must look to extrinsic evidence to determine the parties’ intent, we review its findings of fact (or those of the jury) as to the parties’ intent for clear error. United Benefit Life Ins. Co. v. United States Life Ins. Co., 36 F.3d 1063, 1065 (11th Cir. 1994). With these principles in mind, we consider the Department‘s argument that Consent Decree I did not establish the liability the district court found.
The district court did not articulate its reasons for concluding that the consent decree rendered the Department liable for the relief the members of the three plaintiff classes wеre seeking until after the Department took this appeal on April 24, 1997. In fact, we suspended the briefing schedule for this appeal pending the district court‘s issuance of an order explaining the basis for its finding of liability—in particular, the basis for awarding the merit employees back pay relief without entertaining proof of their respective claims.
On March 18, 1998, the district court issued its order. Reynolds v. Alabama Dep‘t of Transp., 996 F.Supp. 1156 (M.D.Ala.1998). In that order, the court stated that “neither Consent Decree I, nor the August 28 report, expressly indicated whether class-wide discrimination ha[d] been established.” In fact, the most plausible reading of the consent decree “at first blush” was that “the issue [of liability] had been left open, with the plaintiffs and the defendants simply to litigate the issue upon resumption of the trial.” Id. at 1179.
Drawing on a phrase from the Preamble of the consent decree—that the decree constituted the “final and complete resolution of all class issues“—the court nonetheless concluded that “both the plaintiffs and the [Department] agree[d] that the decree should not be read as silent on the liability issue.” Id. (emphasis in original). The liability issue had been settled; the plaintiffs had made out a case for class-wide liability, and the Department had consented to the entry of a decree abolishing the Department‘s allegedly discriminatory employment and promotion policies.16 In the court‘s view, the Department‘s agreement that the plaintiffs did not have to offer further proof of discrimination in order to obtain the class-wide relief the decree provided constituted an admission that the Department had discriminated against the plaintiff classes as alleged in the complaint. The court expressed this point in its March 18, 1998 order: the Department‘s agreement to the relief afforded by the consent decree “[could not] be logically interpreted as anything other than as an extensive effort to redress existing class-wide discrimination.” Id. at 1182.
This admission, of course, did not answer the question whether the Department had conceded that it was liable to the individual class members for the relief they were seeking—instatement or promotion and/or back pay. To answer that question the court took the following approach. First, it concluded that the phrase “final and complete resolution of all class issues” in the decree‘s Preamble is ambiguous. Having drawn that conclusion, the court turned to several pieces of extrinsic evidence to resolve the ambiguity. They included: (1) a parаgraph in the notice sent to the plaintiff class members (prior to the entry of Consent Decree I)
After considering these pieces of evidence, the court found that the phrase “final and complete resolution of all class issues” meant that the Department‘s hiring and promotion policies, as implemented, had discriminated against all three plaintiff classes as alleged in the complaint, and warranted not only the prospective injunctive relief the consent decree provided, but the relief the individual class members were claiming as well. The court went on to find that even if this evidence did not establish such global liability, the August 28 Report rendered the Department liable to the merit employee class for back pay because, in that report, the Department agreed to a framework for a back pay formula.19 In effect, such agreement constituted a settlement of the back pay claims of the merit class members.
We cannot accept the district court‘s conclusions that the consent decree established that the Department had discriminated against the members of the three plaintiff classes and, therefore, was hable for the class-wide prospective relief the decree granted and relief the individual class members were seeking. Finally, we cannot accept the contention that the August 28 Report rendered the Department liable for the back pay the court awarded the merit employees on April 16, 1997. We state our reasons below.
1.
The district court concluded that, by inserting the phrase “final and complete resolution of all class issues” into the Preamble of the сonsent decree, the parties intended that “the decree should not be read as silent on the liability issue.” Such an intent does not logically follow from the quoted phrase. What the phrase obviously means is that the consent decree finally and completely resolved the plaintiffs’ claims for prospective class-wide injunctive relief abolishing the Department‘s allegedly discriminatory practices. The Department‘s acknowledgment that, upon the entry of the decree, it became unnecessary for the plaintiffs to offer further proof in support of their claims for class-wide relief—which the court treated as an admission by the Department that it had engaged in the discriminatory practices alleged in the complaint—was an obvious consequence of the parties’ settlement of
2.
In addition to concluding that the Preamble phrase “final and complete resolution of all class issues” constituted an admission by the Department that it had engaged in racially discriminatory employment practices (thus warranting the class-wide injunctive relief provided by the consent decree), the district court also held that the phrase meant that the Department had discriminated against the individual class members. Thus, all the members of the merit-employee class (the recipients of the money judgment now before us) had to show in order to recover was the difference between what they and similarly situated white employees were paid. This holding is flatly inconsistent with the parties’ agreement that, absent settlement, each class member (including the members of the merit-employee class) would have to establish entitlement to relief in post-decree proceedings before the court.
The Preamble phrase is repeated practically verbatim in Article 19, which states that the class-wide relief provided by the decree “constitutes full and complete relief on all claims.” Both the Preamble and Article 19 are “subject to the provisions of this Decree providing for further proceedings, including but not limited to Article[] 20.” Article 20 states that “[f]urther negotiations and proceedings are required to resolve the claims for monetary and non-monetary remedies for individual members of the class[es] . . ., provided however, that this Decree does not in and of itself entitled [sic] any such class member to such remedies” (emphasis added). At the fairness hearing held to consider Consent Decree I, the court emphasized this point in a colloquy with plaintiffs’ counsel regarding the claim of Wayne Leonard, a member of the merit-employee class:
THE COURT: [The consent decree] does not require any back pay?
[PLAINTIFF‘S COUNSEL]: No, it only requires that Mr. Leonard‘s back pay be calculated in stage two of this case, under article—
THE COURT: That assumes he prevails in Stage 2.
[PLAINTIFF‘S COUNSEL]: Yes, sir. No—yes, it assumes that the parties either agree on or that he‘s been a victim of some racially discriminatory practice or the Court finds that, yes sir.
. . . .
[PLAINTIFF‘S COUNSEL]: . . . [I]t is my belief that the decree affords [Mr. Leonard] all of the relief that he would be entitled to receive except the issue of back pay which would be reached in the next phase of the case.
THE COURT: What you‘re saying in effect is thаt the—any claim he may have to individual relief is still available to him?
[PLAINTIFF‘S COUNSEL]: Yes.
THE COURT: If he can prove his case.
[PLAINTIFF‘S COUNSEL]: Yes, completely.
THE COURT: Well, this decree in no way cuts off his right to come forward with evidence of racial discrimination. If he has it, he will prevail, if he doesn‘t, he‘ll lose. That option is still open.
[PLAINTIFF‘S COUNSEL]: Yes. In Stage 2, he will be given the opportu-
nity to show that he‘s been an individual victim.
Plaintiff‘s counsel thus represented to the court in these statements that, after entry of the consent decree, the individual class members had the burden of proving their respective claims. Given this representation, the district court‘s statements to counsel, and the provision of Article 20 cited above, we reject the notion that the Preamble phrase rendered the Department liable for the relief the individual class members are seeking.
3.
Notwithstanding these provisions of Articles 19 and 20, and its statement to counsel concerning what Wayne Leonard would have to prove to prevail on his claim, the district court held that several pieces of extrinsic evidence showed that the phrase “final and complete resolution of all class issues” indicated that the Department had conceded liability to the individual class members for the relief they were seeking. The court considered this extrinsic evidence because it viеwed the phrase as ambiguous. This evidence included (1) the statement in the class notice that the next stage of the case would be the “remedies” stage; (2) statements the Department‘s counsel made after the trial resumed; (3) the absence in Consent Decree I of the express disclaimer the parties had inserted in earlier settlement proposals; and (4) plaintiffs’ counsel‘s representation that the Department‘s attorneys had admitted liability during the parties’ negotiations over the terms of Consent Decree I.
We assume for sake of discussion that the phrase “final and complete resolution of all class issues” is ambiguous, and that the court was justified in attempting to resolve that ambiguity. To resolve the ambiguity, the court was required to employ the principles governing the interpretation of contracts.
As in the case of an ambiguous contract provision, if a provision of a consent decree is ambiguous, the court looks to extrinsic evidence to determine the parties’ intent. Cf. United States v. Ins. Co. of N. Am., 131 F.3d 1037, 1042 (D.C.Cir.1997) (ambiguous contract). The best evidence of the parties’ intent is not what the parties or their lawyers may have said to one another—as to the meaning of the phrase—long after the consеnt decree is entered. First and foremost, the court should look to what the parties or their lawyers said to one another in fashioning the decree. See Lanier Prof‘l Servs., Inc. v. Ricci, 192 F.3d 1, 4 (1st Cir.1999) (noting that contract negotiations between the parties is at the top of the “descending order of importance” of admissible extrinsic evidence). Next, to determine the meaning of a provision, the court might look to a prior course of performance, a prior course of dealing, or usage of trade.20 See Restatement (Second) of Contracts § 202(5) (1981). If none of these tools resolve the ambiguity, and the meaning of the provision is in equipoise, the court may utilize accepted presumptions, including resolving the ambiguity against the party that drafted the instrument, cf. Anderson v. Auto-Owners Ins. Co., 172 F.3d 767, 769 (11th Cir.1999) (applying Florida law), or, in the case of a contract of adhesion, resolving the ambiguity in favor of the adhering party, cf. Wheelock v. Sport Kites, Inc., 839 F.Supp. 730, 736 n. 6 (D.Haw.1993) (applying Hawaii law), or in favor of a party without sophisticated legal assistance, cf. Edwin K. Williams & Co. v. Edwin K. Williams & Co.-East, 377 F.Supp. 418, 423 (C.D.Cal.1974) (applying California law), rev‘d in part on other grounds, 542 F.2d 1053 (9th Cir.1976). See generally 17A Am.Jur.2d Contracts §§ 346-47 (1991). If none of these means of discerning the parties’ intent resolves the ambiguity, the court has no choice “but to leave the parties where it found them.”
Each of these methods of discerning intent involves an examination of circumstances antecedent to the formation of the contract or consent decree. Self-serving statements made after the contract is formed—or the consent decree is entered—as to what a given provision means are verboten. Accordingly, the district court should not have considered item (2), the statements the Department‘s attorneys made after the trial resumed (and several months after the consent decree was entered).21 We turn, then, to items (1), (3), and (4).
The district court found significant, in item (1), that the class notice mentioned “remedies” as the next stage of the litigation once the court entered the decree. In other words, the court concluded that the Department, by agreeing to the class notice, was telling each class member that, once the court entered the decree, the member would be entitled to an individual remedy (instatement, promotion and/or back pay) without having to prove that he or she was a victim of racial discrimination. The reference to “remedies,” however, when read in conjunction with the Article 20 provision quoted above, shows only that the parties contemplated “further proceedings.” In fact, the class notice, paraphrasing Article 20, stated that Consent Decree I, by itself, “does not guarantee that any particular member of the class will be entitled to back pay.”22 Item (1) thus did nothing to resolve the ambiguity the district court found.
Item (3) is similarly unavailing. That earlier settlement proposals contained an express disclaimer of liability while Consent Decree I is silent on the point does not yield permissible inferences that the Department admitted that its employment and promotion practices were discriminatory and that it had actually discriminated against every member of the plaintiff classes because of race.23 The latter inference is impermissible because Article 20 explicitly informed the class members that no individual relief would be forthcoming absent proof that racial discrimination motivated the Department‘s employment or promotion decision. The former inference is impermissible because an admission of liability concerning the Department‘s employment and promotion practices was unnecessary given the Department‘s agreement to Consent Decree I‘s class-wide relief.
This brings us to item (4), plaintiffs’ counsel‘s representation that, while negotiating the terms of Consent Decree I, the Department‘s attorneys admitted that the Department had discriminated against the members of the plaintiff classes on account of their race and thus were liable for the relief being sought.
Typically, as we have noted, what the parties or their lawyers say while negotiating the terms of a contract may be highly probative of the meaning of an ambiguous provision in their agreement.
Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or
offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible.24
Absent this exception, the district court acted properly when it considered the statements the Department‘s attorneys made to plaintiffs’ counsel as to the meaning of the phrase “final and complete resolution of all of the class issues.” But because of the
In sum, even if the phrase at issue is considered ambiguous, the district court had no admissible evidence before it with which to resolve the ambiguity. Accordingly, the court should have left the parties where it found them, with the issue of the Department‘s liability—as to the classes or the individual class members—unresolved. This having been said, we return to our earlier holding; that is, that the phrase “final and complete resolution of all class issues” is unambiguous.
4.
Putting aside the question whether the “final and complete resolution” phrase is ambiguous, the district court concluded that the members of the merit-employee class were entitled to back pay because the Department effectively admitted liability for such pay by agreeing, in the August 28 Report, to a formula for determining back pay. In essence, the court found that, by jointly filing the August 28 Report with the court, the Department and the plaintiffs settled the back pay issue for the merit-employee class.
The court‘s conclusion is erroneous, and we accordingly disregard it, for two reasons. First, nothing in the report could reasonably be construed as the Department‘s admission of liability for the back pay the court subsequently awarded. Second, in submitting the report, the Department was simply following the court‘s command—that the parties negotiate a “formula” for determining back pay. As it turned out, the parties were able to agree on a framework for a formula; they disagreed, though, as to precisely what the formula should be. Because the court had nothing before it on which to base its holding of liability on the back pay issue, we need not decide whether the Department‘s concession in the August 28 Report if, indeed, that is what it was—is inadmissible under
III.
For the reasons we have given, we vacate the district court‘s determination that Consent Decree I operated as an admission, and therefore an adjudication, of the Department‘s liability as to both the class claims for prospective injunctive relief and the class member‘s claims for individual relief. We also vacate the judgment for back pay the court awarded the members
With the exception of the prospective injunctive relief Consent Decree I has provided, the paths the parties have followed in litigating this case have led to nothing but the expenditure of time and considerable resources. For the most part, counsel have simply engaged in shadow boxing—all at the expense of the taxpayers of the State of Alabama and other litigants whose cases are awaiting the district court‘s attention. We therefore consider it necessary to explain the present posture of this case and what remains to be litigated.
First, the prospective injunctive relief provided by Consent Decree I remains undisturbed. Second, that decree did not adjudicate the Department guilty of anything.26 Third, as Article 20 of the decree states, in order to obtain individual relief, the members of the three plaintiff classes must prove that the Department discriminated against them on account of their racе when it failed to hire or promote them (to a higher position, in the case of the merit employees, or to merit status, in the case of the non-merit employees). A member will establish a prima facie case of racial discrimination if he or she satisfies the McDonnell Douglas test. If it appears that, as a matter of policy or practice, the Department‘s hiring or promotion decisions were based on race, a class member may rely on such fact in countering the Department‘s lawful excuse for not hiring or promoting the member.27
SO ORDERED.
UNITED STATES of America, Plaintiff-Appellant, v. Wiley Block TAIT, Defendant-Appellee.
No. 99-11825
United States Court of Appeals, Eleventh Circuit.
Feb. 4, 2000.
In the instant case, it is undisputed that the Department hired thousands of blacks; these black employees, in fact, make up the merit and non-merit classes of employees. It is also clear that the Department promoted some members of the merit-employee class and gave some members of the non-merit employee class merit status. In light of this, there can be no inference that the Department‘s policies and practices injured every member of the plaintiff classes by discriminating against him or her on account of race. It is for this reason that, in litigating an individual class member‘s case, the estаblishment of the facts that give rise to a McDonnell Douglas presumption of discrimination is important.
Richard H. Loftin, Mobile, AL, Thomas M. Gannon, Dept. of Justice, Appellate Sec., Criminal Div., Washington, DC, for Plaintiff-Appellant.
Before TJOFLAT, BARKETT and WILSON, Circuit Judges.
WILSON, Circuit Judge:
A federal grand jury returned a two-count indictment against Wiley Block Tait in January, 1999. The indictment arose from a 1997 incident wherein Tait possessed a pistol. Count One charged Tait with being a felon in possession of a firearm in violation of
Tait filed a motion to dismiss both counts, claiming that exceptions to both
Notes
The proposed Consent Decree, by itself, does not guarantee that any particular member of the class will be entitled to back pay or front pay, but it also does not limit the amount of such relief to which any class member may be entitled in the future proceedings to be held on that phase of the case.