Consent Decree

A settlement of a lawsuit or criminal case in which a person or company agrees to take specific actions without admitting fault or guilt for the situation that led to the lawsuit.

A consent decree is a settlement that is contained in a court order. The court orders injunctive relief against the defendant and agrees to maintain jurisdiction over the case to ensure that the settlement is followed. (Injunctive relief is a remedy imposed by a court in which a party is instructed to do or not do something. Failure to obey the order may lead the court to find the party in CONTEMPT and to impose other penalties.) Plaintiffs in lawsuits generally prefer consent decrees because they have the power of the court behind the agreements; defendants who wish to avoid publicity also tend to prefer such agreements because they limit the exposure of damaging details. Critics of consent decrees argue that federal district courts assert too much power over the defendant. They also contend that federal courts have imposed conditions on state and local governments in CIVIL RIGHTS CASES that usurp the power of the states.

Most civil lawsuits are settled before going to trial and most settlements are private agreements between the parties. Typically, the plaintiff will file a motion to dismiss the case once the settlement agreement has been signed. The court then issues a dismissal order and the case is closed. However, if the defendant does not live up to the terms of the settlement agreement the plaintiff cannot reactivate the old lawsuit. This means filing a new lawsuit with the court and going to the end of the line in order to process the case.

In more complex civil lawsuits that involve the conduct of business or industry, and in actions by the government against businesses that have allegedly violated regulatory laws, consent decrees are regularly part of the settlement agreement. A court will maintain jurisdiction and oversight to make sure the terms of the agreement are executed. The threat of a contempt order may keep defendants from dragging their feet or seeking to evade the intent of the agreement. In addition, the terms of the settlement are public.

Certain types of lawsuits require a court to issue a consent decree. In CLASS ACTION settlements, Rule 23 of the Federal Rules of Procedure mandates that a federal district court must determine whether a proposed settlement is fair, adequate, and reasonable before approving it. Under the Antitrust Procedures and Penalties Act (the Tunney Act), 15 U.S.C.A. § 16(b)-(h), the court must review proposed consent decrees in antitrust suits filed by the JUSTICE DEPARTMENT. The statute directs the court to review certain items, including whether the decree advances the public interest.

The U.S. Supreme Court, in Local No.93, Int'l Ass'n of Firefighters v. City of Cleveland, 478 U.S. 501, 106 S.Ct. 3063, 92 L.Ed.2d 405 (1986), ruled that consent decrees "have attributes both of contracts and of judicial decrees." The division between contracts and judicial decrees suggests that consent decrees are contracts that resolve some issues through the consent of the parties. However, for some issues, the decree contains judicial acts rendered by the judge, not the parties. Commentators have noted that these dual attributes require a court to determine when it is appropriate to "rubber-stamp" a proposed settlement and when it is more appropriate for the court to treat the proposal as it would any judicial order.

The federal courts have been criticized for using consent decrees to reform prison systems, school systems, and other government agencies. Some courts have maintained oversight of agencies for many years and have imposed conditions that have cost state and local governments substantial amounts of money. Congress intervened in one litigation area when it passed the Prison Litigation Reform Act of 1995 (Pub.L. 104-134, 110 Stat. 1321). The law imposed strict limits on what federal courts could do in the future to improve prison conditions through the use of consent decrees. In addition, it gave government agencies the right to seek the termination of consent decrees, many of which had lasted for decades.