United States v. New Jersey , 194 F.3d 426 ( 1999 )

Opinions of the United
1999 Decisions States Court of Appeals
for the Third Circuit
10-13-1999
United States v New Jersey
Precedential or Non-Precedential:
Docket 98-6447
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1999
Recommended Citation
"United States v New Jersey" (1999). 1999 Decisions. Paper 281.
http://digitalcommons.law.villanova.edu/thirdcircuit_1999/281
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 1999 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
Filed October 13, 1999
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 98-6447
UNITED STATES OF AMERICA
v.
STATE OF NEW JERSEY;
NEW JERSEY STATE DEPARTMENT OF PERSONNEL;
EUGENE MCCAFFREY; RONALD BURKHARDT
(Newark, New Jersey District Civil No. 88-5087)
DONNA ROMAN; MARY VASQUEZ;
CECILIA A. SHINN; CARRIE E. REED
v.
NEW JERSEY DEPT. OF PERSONNEL;
CITY OF NEWARK
(Newark, New Jersey District Civil No. 87-2331
ARMADINA TAHANEY
v.
NEW JERSEY DEPARTMENT OF PERSONNEL;
MERIT SYSTEM BOARD
(Newark, New Jersey District Civil No. 88-4080)
State of New Jersey; New Jersey State
Department of Personnel; and *Anthony J.
Cimino, Commissioner of Personnel, New
Jersey State Department of Personnel,
Appellants
*(Pursuant to Rule 12(a), F.R.A.P.)
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civ. Nos. 88-05087, 87-02331, and 88-4080)
District Judge: Honorable William G. Bassler
Argued September 13, 1999
BEFORE: GREENBERG, SCIRICA, and RENDELL,
Circuit Judges
(Filed: October 13, 1999)
John J. Farmer, Jr.
Attorney General of New Jersey
Joseph L. Yannotti
Assistant Attorney General
Don E. Catinello (argued)
Deputy Attorney General
Todd A. Widger
Deputy Attorney General
P.O. Box 112
Trenton, NJ 08625
Attorneys for Appellants,
State of New Jersey, New Jersey
State Department of Personnel and
Anthony J. Cimino, Commissioner
of Personnel, New Jersey State
Department of Personnel
Bill Lann Lee
Acting Assistant Attorney General
Dennis J. Dimsey
Timothy J. Moran (argued)
Attorneys, Department of Justice
P.O. Box 66078
Washington, DC 20035-6078
Attorneys for Appellee
United States of America
2
Peter W. Till
Wilf & Silverman
820 Morris Turnpike
Suite 201
Short Hills, NJ 07078
Attorneys for Appellee
Ronald Burkhardt
OPINION OF THE COURT
GREENBERG, Circuit Judge.
I. FACTUAL and PROCEDURAL HISTORY
A. Factual History
This matter comes on before this court on an appeal from
an order entered on September 30, 1998, enforcing a
settlement decree. The background of the case is as follows.
In 1988, the United States sued the State of New Jersey,
the New Jersey Department of Personnel and the New
Jersey Commissioner of Personnel under Title VII of the
Civil Rights Act of 1964, 42 U.S.C. S 2000e et seq., alleging
that the State had violated the federal civil rights of women
and minorities seeking state entry-level law enforcement
positions by using written and physical performance
examinations that had a discriminatory impact on these
groups and did not significantly serve legitimate business
goals. In an amendment to its complaint, the United States
extended the charges of discrimination to include the hiring
of county and municipal entry-level law enforcement
officers as well as state correction officer recruits. The
district court eventually consolidated the United States' suit
with discrimination cases brought by individual plaintiffs
Armadina Tahaney, Donna Roman, Mary Vasquez, Cecilia
Shinn and Carrie Reed against the State and the City of
Newark.
In March 1995, the United States and the State entered
into a consent decree, which the district court approved, to
settle the litigation. The State did not admit any
3
wrongdoing in the decree and instead expressly denied that
it had engaged in the discriminatory hiring practices the
United States asserted. The State did agree, however, to use
non-discriminatory criteria in selecting law enforcement
officers and to discontinue the use of certain employment
tests.
As significant here, the consent decree established
procedures for ascertaining the alleged victims of
discrimination entitled to relief. Eligible individuals received
back pay from a $6,500,000 fund, and a retroactive
pension benefit, subject to a $625,000 cap on the total
amount the State would pay. Additionally, the State was to
place eligible individuals on certification lists for
appointment to designated law enforcement positions as
those positions became available. Eligible women and
minorities appointed to state positions received a"remedial
seniority date" based on the date they would have been
hired but for the State's alleged discrimination. 1 Most
importantly for the purposes of this appeal, the decree
provided that those individuals who were hired were
entitled to "all the emoluments of the job title to which they
are appointed, including full retroactive seniority and the
extent of pension credit provided under P 29[of the
decree]." (Emphasis added.) The court retained jurisdiction
to implement the decree.
B. Procedural History
The United States moved to enforce the decree in the
district court in February 1998, claiming that the State was
violating its terms by failing to provide retroactive salary
"step-increases" to the alleged victims of discrimination it
had hired. In New Jersey, state agencies determine a state
law enforcement officer's salary on a nine-step
compensation schedule. Normally, officers are promoted to
the next step for every year of satisfactory service, and, as
a result, an officer's salary increases with seniority until the
_________________________________________________________________
1. The decree did not provide retroactive seniority relief to applicants
for
county and municipal positions because providing such relief would have
required joining as parties approximately 280 county and municipal civil
service jurisdictions that would have been obligated to bear the costs
associated with such seniority.
4
highest step is reached. The United States claimed that the
salary of individuals hired under the decree should reflect
the number of step increases that they would have received
based on their determined date of hire, the "remedial
seniority date."
The State disagreed. It argued that it was inappropriate
to award salary increases for years of satisfactory service
when the beneficiaries of the increases had not performed
satisfactory service or, indeed, any service at all during the
years. The State further argued that the term "seniority" in
the consent decree referred only to seniority for purposes of
promotions, benefits and layoffs but not for purposes of
salary. In support of its position, the State submitted an
affidavit from Douglass L. Derry, a senior deputy attorney
general who had negotiated the decree on the State's
behalf. The affidavit stated in relevant part:"It was the
State's understanding that retroactive seniority would be
given to priority hires in terms of their rights under New
Jersey civil service law, that is for use in promotions,
benefits and layoffs. I did not agree on behalf of the State
to provide salary increases as part of retroactive seniority."
The United States did not submit an affidavit contradicting
Derry's statements.
In an opinion dated September 29, 1998, the district
court granted the United States' motion to enforce the
consent decree and ordered the State to award retroactive
step increases to individuals hired under the decree.
Treating the decree as a contract, the court indicated that
its terms were not ambiguous, and thus its plain language
controlled. The court stated that the only limitation on the
terms "full seniority" and "emolument" in the decree was
the phrase "and the extent of retroactive pension credit
provided under P 29 [of the decree]." Applying the
interpretative maxim of expressio unis est exclusio alterius
(the expression of one thing is the exclusion of the other),
the court concluded that the only limitation in the decree
on seniority benefits was the capping of pension payments.
Thus, the court reasoned that the decree's terms covered
salary raises associated with seniority. Inasmuch as step
increases in New Jersey are essentially automatic, the court
found little reason to conclude that the decree's
5
beneficiaries should not receive such increases
retroactively, particularly as those awarded permanent law
enforcement positions under the decree were required to
complete a "working test period" that allowed the State to
evaluate their job performance. The court therefore held
that the decree's plain language, when considered in light
of New Jersey practices, provided for retroactive salary
increases.
The district court made two additional points in its
opinion that supported its result. First, it noted that in case
law the term "retroactive seniority" traditionally connotes
seniority for purposes of determining salary, and thus the
parties must have intended to include salary increases
when they used that term in the decree. Second, it stated
that, all other interpretative factors aside, it had explained
in its opinion approving the decree that merit increases
were included in the remedial seniority to which the hired
individuals were entitled. Thus, the court ruled that the
State had to live up to the promises made in the decree and
ordered it to award the salary increases to the eligible
individuals. Accordingly, it entered the order of September
30, 1998, from which the State has appealed.
II. JURISDICTION and STANDARD OF REVIEW
We are exercising plenary review of this appeal. See
Harris v. City of Philadelphia, 137 F.3d 209, 212 (3d Cir.
1998). The district court had original jurisdiction under 42
U.S.C. S 2000e-6(b), 28 U.S.C. S 1343(a), and 28 U.S.C.
S 1345, and we have jurisdiction under either 28 U.S.C.
S 1291 or 28 U.S.C. S 1292(a)(1) to review the district
court's interlocutory order granting the United States'
motion to enforce a previously entered consent decree. See
Bogard v. Wright, 159 F.3d 1060, 1062 (7th Cir. 1998).
III. DISCUSSION
Initially we set forth a court's function in interpretating a
consent decree. As we indicated in Harris,"[w]e discern the
scope of a consent decree by examining the language within
its four corners." Harris, 137 F.3d at 212 (citing United
States v. Armour & Co., 402 U.S. 673, 681-82, 91 S.Ct.
6
1752, 1757 (1971)); see also Farley v. Philadelphia Hous.
Auth., 102 F.3d 697, 700-01 (3d Cir. 1996) (emphasizing
importance of focusing on decree's language rather than on
court's notion of its purpose). "In so doing, we must not
strain the decree's precise terms or impose other terms in
an attempt to reconcile the decree with our own conception
of its purpose." Harris, 137 F.3d at 212. Further, as
consent decrees have many of the attributes of contracts,
we interpret them with reference to traditional principles of
contract interpretation. See Fox v. United States Dep't of
Hous. and Urban Dev., 680 F.2d 315, 319 (3d Cir. 1982)
(citing United States v. ITT Continental Baking Co., 420 U.S.
223, 236-38, 95 S.Ct. 926, 932-35 (1975)). Thus, resort to
extrinsic evidence is permissible, but only when the decree
itself is ambiguous, although circumstances surrounding
its formation are always relevant to its meaning. See Fox,
680 F.2d at 319-20. Whether extrinsic evidence is required
to interpret a consent decree is itself a question of law
subject to plenary review. See id. at 320. Our first task in
interpreting a consent decree, therefore, is to determine
whether its terms unambiguously cover the dispute in
question. See id.In addressing the question of ambiguity, our focus
remains on the contractual language itself, rather than on
the parties' subjective understanding of the language. See
In re Unisys Corp., 97 F.3d 710, 715 (3d Cir. 1996) (citing
Mellon Bank, N.A. v. Aetna Bus. Credit, Inc., 619 F.2d 1001,
1009 (3d Cir. 1980)). The parties are bound by the
"objective definition of the words they use to express their
intent," including the specialized meaning of any legal
terms of art. See Unisys, 97 F.3d at 715. Thus, a provision
in a decree is ambiguous only when, from an objective
standpoint, it is reasonably susceptible to at least two
different interpretations. See Hullet v. Towers, Perrin,
Forster & Crosby, Inc., 38 F.3d 107, 111 (3d Cir. 1994).
The contractual phrase at issue in this case provides that
candidates who are appointed to state jobs under the
decree will receive "all the emoluments of the job title to
which they are appointed, including full retroactive
seniority and the extent of pension credit provided under
P 29 [of the decree]." Applying the case law described above,
7
our first step is to determine whether this phrase is
ambiguous in light of the context in which the decree was
signed and the specialized meaning of any words used. We
conclude that regardless of the perspective from which we
consider the decree's language, its terms unambiguously
guarantee to its beneficiaries a salary that includes
retroactive step increases.
As the United States points out, the word "emolument" is
defined to include salary received from employment. See
Webster's Third New International Dictionary 742 (1986).
Thus, the plain language of the decree provides to
beneficiaries the salary associated with their job title,
including "full retroactive seniority." The State does not
dispute that seniority is a factor in determining the salary
of state employees in the positions involved here, for it
recognizes that the State awards salary step increases
based on each year of satisfactory service and thus the
increases are essentially automatic. See Supp. App. 86
(statement by New Jersey's counsel at oral argument that
as "a practical matter," there are "very few" individuals who
do not receive the step increase). Given this factual context,
the decree's guarantee of a salary that includes full
retroactive seniority is reasonably susceptible to only one
meaning: that beneficiaries will receive the same salary as
other employees with the same seniority date.2
_________________________________________________________________
2. Our result here is not inconsistent with our recent opinion in Fultz v.
Dunn, 165 F.3d 215 (3d Cir. 1998), cert. denied, 119 S.Ct. 2342 (1999),
which involved the calculation of seniority in the implementation of a
settlement agreement of earlier litigation providing for reemployment of
a terminated employee. There we held that the terminated employee
could not be successful in a First Amendment retaliation action
challenging the seniority calculation because the applicable state
regulations required the challenged calculations. We also indicated that
the reemployed employee "did not bargain for recognition of seniority
based on his terminated employment in the settlement agreement." Id. at
219. Thus, if the defendant in Fultz had invented a term to recapture the
plaintiff 's seniority, "he would have been giving [him] more than he
bargained for when he came to an agreement" settling the underlying
action. Id. at 221. Here the situation is different, as the order of
September 30, 1998, merely gave the beneficiaries of the consent decree
the benefits agreed upon.
8
Considering the phrase "full retroactive seniority" in
isolation leads to the same result. This phrase is a term of
art that the Supreme Court discussed in Franks v. Bowman
Transportation Co., 424 U.S. 747, 96 S.Ct. 1251 (1976). In
Franks, the Court ruled that Title VII permits an award of
retroactive seniority to individuals who had not been hired
because of discrimination. See id. at 779-80, 96 S.Ct. at
1271-72. In its opinion, the Court used the term
"retroactive seniority" to describe both "competitive"
seniority, which is used to allocate scarce resources such
as promotions and retentions, and "benefit" seniority, which
assigns non-competitive benefits that are tied to years of
service, such as pensions, vacations and salary. See id. at
766-67, 96 S.Ct. at 1265; see also United States v. City of
Hialeah, 140 F.3d 968, 972 (11th Cir. 1998) (including
compensation based on employee's "longevity" in definition
of benefit seniority). When the Supreme Court wished to
distinguish between the two types of seniority, it did so
specifically. See Franks, 424 U.S. at 773 n.33, 96 S.Ct. at1268 n.33. Based on the established meaning of
"retroactive seniority," the only reasonable interpretation of
the decree's provision for "full retroactive seniority" is that
it encompasses both types of seniority, competitive and
benefit. See ITT Continental, 420 U.S. at 238, 95 S.Ct. at
935 (stating that in interpreting a decree's language, it is
appropriate to consider "any technical meaning words used
may have had to the parties"). Because in New Jersey an
employee's seniority does determine the salary benefit, we
interpret the decree to include the salary step increases.3
The context in which the district court entered the decree
provides additional support for interpreting it to guarantee
beneficiaries retroactive step increases in their salaries. In
its comprehensive opinion approving the consent decree
after a fairness hearing, the district court stated:
_________________________________________________________________
3. At oral argument before us, the State argued that we must ascertain
the parties' intent in coming to the settlement and agreeing upon the
disputed provision. We agree with that contention and thus we do not
doubt that if it could be demonstrated that the parties did not intend a
term of art to have the meaning that it had in another context, their
intent should be honored. The State's problem is that it did not make
that showing.
9
"Retroactive seniority was not provided for persons who
applied for county and municipal jobs, in part, because
providing such relief would have required joining as parties
and reaching settlement with approximately 280 county
and municipal civil service jurisdictions that would have
borne the costs associated with retroactive seniority, e.g.,
salary increases and benefits based on years of service."
(Emphasis added.) This statement clearly demonstrates the
court's understanding that the retroactive seniority
provided in the decree extended to salary increases.
Further, in discussing the objections made by individuals
at the fairness hearing to the seniority granted in the
decree, the court noted that most objections did not relate
to "benefit" seniority, such as "merit increases," but to
"competitive" seniority, such as the order of promotions or
layoffs. Thus, the court again highlighted its understanding
that merit increases were part of the retroactive seniority
awarded to individuals hired under the decree. Neither of
the parties objected to the court's comments. Given these
statements in the district court's opinion, the
circumstances surrounding the formal entry of the decree
also point to interpreting the phrase "full retroactive
seniority" to include retroactive step increases.
The State's attempts to inject ambiguity into the decree's
language are unconvincing. The State first claims that step
increases cannot be imposed retroactively because the
decree does not provide specifically for such increases. This
argument, however, is not persuasive. The decree also does
not provide specifically for vacation time based on the
retroactive seniority date, but New Jersey does not dispute
that appointees hired under the decree are entitled to such
benefits. The State's claim that the decree provides for
some types of seniority benefits but not others is not
supported by the decree's language. The decree states that
beneficiaries will receive "full retroactive seniority;" the only
exception to "full" seniority benefits in the decree is the cap
on pension benefits in paragraph 29 of the decree. Thus,
there is no basis in the decree's terms for distinguishing
between types of seniority benefits other than pension
benefits.
The State next contends that salary increases are not
part of seniority because they are not an entitlement;
10
instead, it claims that the State awards increases only after
successful completion of years of service. As we explained
above, however, the State conceded at oral argument in the
district court that as a practical matter it rarely denies step
increases to state employees. It did not retreat from that
position on this appeal. See also County of Bergen, 23 N.J.
Pub. Employee Rep. P 28017 (1996) (describing step
increases that are "based only upon the satisfactory
completion of another year of service" as "automatic"),
recommendation of dismissal adopted, 23 N.J. Pub.
Employee Rep. P 28136 (1997). Clearly, then, the district
court correctly determined that in New Jersey, a step
increase is an entitlement that automatically accrues with
seniority. See Galloway Township Bd. of Ed. v. Galloway
Township Ed. Ass'n, 393 A.2d 218, 230-32 (N.J. 1978).
Moreover, as the district court pointed out, the State has
no reason to conclude that individuals hired under the
decree would be those unusual employees who performed
their jobs unsatisfactorily. All individuals who received
permanent employment offers under the decree first had to
complete a "working test period." Under New Jersey law,
this period is "a part of the examination process. . . during
which time the work performance and conduct of the
employee is evaluated to determine if permanent status is
merited." N.J. Admin. Code tit. 4A, S 1-1.3 (1999). Thus, the
individuals employed demonstrated an ability to perform
their jobs adequately. There is therefore no reason based on
the record to conclude that the beneficiaries of the decree
should be denied the step increases that they would have
received if they had been hired on their retroactive seniority
dates.
Next, the State argues that awarding the step increases
would violate the parties' agreement in the decree limiting
the State's monetary liability to $6.5 million in back pay
and $625,000 in pension benefits. According to the State,
this $7.125 million sum was the only monetary
compensation that it agreed to pay; therefore, it claims that
awarding retroactive step increases would violate the
decree. In fact, however, the State did agree to pay
additional funds to the decree's beneficiaries in the form of
salaries to those hired, and it is not claiming that salaries
11
without the step increases are "extra" compensation.
Because the United States merely is protesting the amount
of salary paid rather than requesting additional funds for
purposes other than salary, interpreting the decree to
require a salary that reflects the retroactive seniority date
would not violate the consent decree's terms.
The State also contends that the district court
erroneously ignored its undisputed evidence in Derry's
affidavit that the State never intended to provide retroactive
step increases to individuals hired under the consent
decree. But as the United States correctly points out, the
district court could not consider such evidence once it
determined that the decree's language was clear. Our case
law plainly establishes that a court can consult extrinsic
evidence in interpreting a consent decree only when the
language of the decree is ambiguous. See Fox, 680 F.2d at
319. When the decree's language is not reasonably
susceptible to two different meanings, the court must
determine the parties' intent from the language itself, not
by the subjective impressions of the parties. See Hullett, 38
F.3d at 111. Thus, the district court correctly refused to
consider the affidavit given the lack of ambiguity in the
decree's terms.
The same analysis befalls the State's claim that the
district court should have interpreted the language of the
decree against its drafter, the United States. Like extrinsic
evidence, courts turn to this interpretative aid only after
concluding that a document's terms are ambiguous. See In
re Nelson Co., 959 F.2d 1260, 1263-64 (3d Cir. 1992).
Thus, the court did not err by failing to invoke this
principle of contract interpretation. In this regard, we point
out that the State is a sophisticated litigant that at the time
of the settlement was dealing with its own procedures and
regulations. In these circumstances, we question whether a
court should place much weight on a contention that it
should interpret the document at issue against its drafter.
Finally, we reject the State's argument that the decree
cannot be interpreted to provide for retroactive step
increases as such increases would violate a state
administrative regulation. The New Jersey Administrative
Code provides that a new employee may be placed at no
12
higher than the fourth step of the salary range for his or
her title. See N.J. Admin. Code tit. 4A,S 3-4.4 (a) (1999).
Because some of the individuals hired under the decree had
retroactive seniority dates more than four years in the past,
providing them with retroactive step increases would have
required New Jersey to place them at higher than the
fourth step of the relevant salary range. The State argues
that it would not have agreed to violate its own regulation
in this manner without declaring its intent to do so
explicitly in the decree.
As the United States points out, however, individuals
hired under the decree were not "new employees" in the
sense intended by the regulation. The regulation states that
a new employee "is one who has had no immediate prior
State service with that appointing authority." Id. But the
beneficiaries of the decree were deemed, for most intents
and purposes, to have been hired in the past. The United
States therefore contends that individuals hired under the
decree should receive the salary that correlates to the years
of service assumed by their retroactive seniority date. Thus,
to rule in favor of the United States' position requires only
paying the appointees under the decree the same salary as
other individuals with an equal number of "years" on the
job. We do not regard this interpretation as violating the
administrative regulation highlighted by the State. 4
IV. CONCLUSION
In sum we therefore reject all of the State's arguments for
finding ambiguity in the consent decree. Instead, we
conclude that the district court correctly held that the
consent decree, by guaranteeing "full retroactive seniority"
to those hired, unambiguously guaranteed to them
retroactive salary increases that accompany seniority under
_________________________________________________________________
4. Even though we conclude that the decree is unambiguous, and thus
no hearing to consider extrinsic evidence was necessary, we note that
the State may have waived the right to request such a hearing in any
case. At oral argument before the district court, the State's attorney
passed on the court's offer to hold a hearing if counsel felt that the
decree was ambiguous. The State's attorney instead replied: "I'm not
sure that I'm arguing that it's an ambiguous contract."
13
New Jersey procedures. Accordingly, the order of September
30, 1999, will be affirmed.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
14