Collins v. Thompson - 679 F.2d 168 (9th Cir. 1982)

Rule:

General contract principles apply to questions of interpretation of consent decrees. Questions regarding formation of consent decrees likewise are to be resolved by general contract principles. A consent decree is essentially an agreement of the parties to resolve their dispute, and the facets of agreement are analyzed by applying contract principles. The law of the situs state should be applied. Under Washington law, the objective test is applied in determining issues of contract formation.

Facts:

The original complaint was filed in early 1978 by prisoners at the Washington State Reformatory ("the Reformatory"), as a class action on behalf of all present and future Reformatory inmates, alleging that the conditions of their confinement were unconstitutional. After discovery had been completed, a trial date was set for January 15, 1981. On January 13, 1981 the parties gave notice of a proposed settlement, and the trial date was stricken. On January 19, 1981 a proposed consent decree was submitted by the state for provisional approval, and an order providing for notice of the settlement to the class and allowing objections was issued. The proposed consent decree provided for eventual reduction of the Reformatory's population to the single cell capacity of 656. On February 6, 1981 the state discovered an error in the consent decree. On February 13, 1981 the state submitted a revised consent decree listing April 1, 1981 as the date for reduction to 865. On February 26, 1981 the prisoners moved for approval of the consent decree with the March 1, 1981 date intact, or in the alternative for issuance of an amended notice to class reflecting the modification to the April 1 date. The state moved for modification of the decree to incorporate the April 1 date. The magistrate denied both the state's and the prisoners' motions, finding there had been no meeting of the minds with respect to a key term of the agreement and that therefore no contract had been formed. The prisoners appealed the magistrate's decision to the district court, which upheld the magistrate's order. The prisoners' motion for permission to take an interlocutory appeal pursuant to 28 U.S.C. § 1292(b) was also denied. On May 15, 1981 the prisoners filed a Notice of Acceptance of Offer of Settlement stating that they accepted the offer of settlement embodied in the proposed decree submitted by the state on February 13, 1981. This form of the decree changed the March 1st date to April 1st. The prisoners also filed a motion for preliminary approval of the consent decree. On June 12, 1981 the magistrate issued an order granting preliminary approval of the consent decree. The magistrate held that the state's submission of the proposed consent decree on February 13, 1981 (which utilized the April 1 target date) was a valid offer, that the prisoners' attempt to settle the date as March 1 was not a rejection of this offer, and that the state did not revoke the offer prior to acceptance. On August 17, 1981 the district court approved and adopted the magistrate's recommendation. The state filed a timely notice of appeal. 

Issue:

Was the district court's order approving a consent decree regarding the reduction of inmate population at Washington State Reformatory proper?

Answer:

Yes.

Conclusion:

The court affirmed the lower court's order holding, against appellant's contentions, that appellees had not rejected appellant's settlement offer by making a counterclaim. The court further held that the fact that appellees indicated their intent to consider the original offer did not constitute a rejection of the offer. The court also held that there was no evidence to support appellant's contentions that it had expressly revoked its offer prior to the lower court's approval of the consent decree. Finally, the court held that the parties had entered into a binding contract and that the lower court's approval or disapproval of the settlement did not affect the enforceability of that contract.