Quote of the Day - Hell, there are no rules here-- we're trying to accomplish something.
Entering into a Consent Decree and then trying to modify it later based on changed circumstances just got a bit dicier. Consent Decrees have been used for years between government agencies and private companies to accomplish a number of things, but in particular, they've been adopted wholeheartedly by the environmental industry. The USEPA and various state agencies that supervise environmental issues prefer to use Consent Decrees because they avoid expensive litigation, long delays and ensure that the agency gets what it wants to clean up contamination.
Private industry enters into Consent Decrees for the same first two reasons, but not for the third. Instead, we try to negotiate a more fair deal than we might have obtained in litigation. It's a bit of give and take, but the benefits from the first two reasons typically outweigh the detriment from the third.
Especially when we know that we can go back years later to the Judge that signed off on the original Consent Decree and seek to modify it. Now, however, the Ninth Circuit's opinion in U.S. v. Asarco yesterday gives two more hurdles to overcome before modification can occur. In fact, the Court likens a Consent Decree to a written contract and uses typical contract interpretation requirements to decide whether to allow the private party to modify the Consent Decree.
Previously, we had just two hurdles: (1) show a significant changes in the factual conditions or in the law warranting modification; and, (2) whether the proposed modification is suitably tailored to resolve the problems created by the changed factual or legal conditions. Those two hurdles are not news (that's been the law since the 1992 Supreme Court case of Rufo v. Inmates of Suffolk County).
The addition of a third and fourth hurdle, however, is the news from Asarco. Now, the party trying to modify the Consent Decree must also show that: (3) the changed conditions make compliance with the consent decree more onerous, unworkable or detrimental to the public interest; and, (4) the changed conditions were not anticipated at the time the Consent Decree was signed. To make matters worse, the Court described these last two hurdles as "heavy burdens." But there's hope: if the changed conditions were anticipated, then the private party can still obtain a modification of the Consent Decree if the party can show a reasonable effort to comply with the Decree.
That result didn't occur for Asarco, but the case does provide some solid guidance for entering into future Consent Decrees.