United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 20, 1998 Decided February 20, 1998
No. 97-5109
Securities and Exchange Commission,
Appellee
John H. Lomax, et al.,
Appellants
v.
Prudential Securities Incorporated,
Appellee
Appeal from the United States District Court
for the District of Columbia
(No. 93cv02164)
Graeme W. Bush argued the cause for appellants, with
whom Albert G. Lauber, Carl S. Kravitz and Peter Van
Lockwood were on the briefs.
Arthur F. Mathews argued the cause for appellee Pruden-
tial Securities Incorporated, with whom Stephen F. Black was
on the brief.
Jacob H. Stillman, Associate General Counsel, argued the
cause for appellee Security & Exchange Commission, with
whom Richard H. Walker, General Counsel, Susan S. Mc-
Donald, Senior Litigation Counsel, and Paul Gonson, Solici-
tor, were on the brief.
Before: Edwards, Chief Judge, Wald and Rogers, Circuit
Judges.
Opinion for the Court filed by Circuit Judge Rogers.
Rogers, Circuit Judge: Appellants John H. Lomax, Ann D.
Lomax, Emory C. Camp, and Robert A. Callewart appeal the
denial of their motion to intervene in the ongoing enforce-
ment of a consent decree negotiated by the Securities and
Exchange Commission and Prudential Securities Inc. Under
the decree, Prudential provided a "claims resolution process"
as an alternative to judicial relief for certain investors whom
Prudential had allegedly defrauded. Appellants, former in-
vestors, voluntarily submitted their claims to this process and
received damage awards, but they then sought to intervene as
representatives of a class in the enforcement of the consent
decree, claiming that Prudential had violated the consent
decree by making initial damage award offers that were
improperly low. In their "complaint in intervention," they
sought enforcement of their interpretation of the decree's
terms through common law claims based in contract, fraud,
and unjust enrichment. Under Blue Chip Stamps v. Manor
Drug Stores, 421 U.S. 723 (1975), and its progeny, the district
court denied intervention as of right under Federal Rule of
Civil Procedure 24(a)(2) and permissive intervention under
Rule 24(b). In light of the express language in the consent
decree indicating the parties' intention not to confer standing
on third parties to enforce the decree, we affirm.
I.
On October 20, 1993, the Securities and Exchange Commis-
sion ("SEC" or "the Commission") sought an order under
section 21(e) of the Securities Exchange Act of 1934, 15
U.S.C. s 78u(e) (1988), and other equitable relief against
Prudential Securities Inc. ("Prudential") on the ground that
Prudential had violated federal securities laws and an earlier
SEC order by "misrepresent[ing] speculative, illiquid limited
partnerships as safe, income-producing investments suitable
for safety-conscious and conservative investors." As a result,
the Commission asserted, Prudential "sold limited partner-
ships to a significant number of investors for whom the
investments were not suitable." Concurrently, the Commis-
sion and Prudential submitted a consent decree, which the
district court approved on October 21, 1993.
Under the terms of the consent decree, Prudential institut-
ed a process to resolve the claims of the approximately
340,000 investors whom Prudential had allegedly defrauded
over an eleven year period through offer and sale of interests
in over 760 limited partnerships. Under this claims resolu-
tion process, an investor could choose to submit claims to
Prudential for evaluation of their merit, after which Pruden-
tial would decide to make a settlement offer or to reject the
claim. Any investor who was dissatisfied with this initial
offer, or whose claim was rejected, could submit the claim to
binding arbitration, subject to appeal to the court-appointed
Claims Administrator. Alternatively, such an investor could
forgo arbitration and pursue judicial relief. Similarly, the
consent decree did not affect the rights of investors who did
not submit their claims to Prudential for evaluation; these
investors retained all rights to seek relief in the courts. Any
investor who chose to submit a claim to arbitration was
required, however, to sign a form acknowledging that the
arbitrator's decision was final, subject to appeal to the Claims
Administrator, and any investor who accepted the initial
settlement offer was similarly required to sign a release
preventing any future legal action against Prudential based
on the limited partnership interests.
Other terms of the consent decree further show the intent
of the Commission and Prudential that the claims resolution
process be final for those accepting settlement offers or
entering binding arbitration. Paragraph nine of the decree
provides that "nothing herein shall be deemed to confer
standing upon any persons other than plaintiff COMMIS-
SION, defendant [Prudential] and the CLAIMS ADMINIS-
TRATOR." Paragraph twelve of the decree adds that, "[e]x-
cept as explicitly provided in this FINAL ORDER and the
CONSENT, nothing herein is intended to or shall be con-
strued to have created, compromised, settled or adjudicated
any claims, causes of action, or rights of any person whomso-
ever, other than as between the COMMISSION and [Pruden-
tial], in accordance with the CONSENT."
Following district court approval of the consent decree,
Prudential notified its investors that it had established this
claims resolution process. In this notice, Prudential ex-
plained the origin of and reasons for the process and outlined
its basic terms. The explanation noted that Prudential had
"established court-supervised procedures pursuant to the
SEC settlement to resolve claims for compensatory dam-
ages." Prudential stressed that participation in the process
was voluntary: "If you decide not to resolve your claim
through the [process], your rights to pursue any legal reme-
dies will not be restricted or expanded in any way." Pruden-
tial also made clear that investors who accepted initial settle-
ment offers had to release Prudential from future liability
with respect to the limited partnership interests, and that
investors who submitted claims to binding arbitration had to
acknowledge that "[t]he arbitrator's awards shall be final and
binding on the parties with respect to all claims submitted,"
subject to appeal to the Claims Administrator.
Over the course of four years, Prudential paid more than
$938 million to over 110,000 investors pursuant to the consent
decree. The Claims Administrator filed quarterly reports in
the district court on the progress of the claims resolution
process, addressing various issues, including the net tax
benefit policy of concern to appellants,1 and describing the
__________
1 Appellants asserted in their memorandum in support of the
motion to intervene that the Claims Administrator had stated in his
Third Quarterly Report that Prudential was to account for claim-
ants' tax benefits on a net basis, so that tax benefits in early years
procedures taken to ensure the fairness and efficiency of the
process. The claims resolution process was nearly complete
when, on August 1, 1996, appellants filed a motion to inter-
vene and a "class complaint in intervention" on behalf of
themselves and a class of similarly situated claimants.2
Appellants had purchased limited partnership interests
through Prudential in 1980, 1983, and 1984.3 All submitted
their claims to Prudential under the consent decree, and,
after receiving initial settlement offers, consented to binding
arbitration. Two of the appellants, John H. Lomax and Ann
D. Lomax, settled before the arbitrator made an award, while
appellants Emory C. Camp and Robert A. Callewart received
arbitration awards that they appealed, unsuccessfully, to the
Claims Administrator. In a memorandum in support of their
motion to intervene, as well as in their class complaint in
intervention, appellants asserted that Prudential had inten-
tionally and systematically understated the damages due to
claimants under the consent decree. Specifically, appellants
claimed that in calculating settlement offers pursuant to the
terms of the consent decree, Prudential did not properly
account for the tax that investors would have to pay on their
__________
would be offset by tax costs incurred later. Appellants quoted the
following language from the Third Quarterly Report:
In general, purported tax benefits will not be allowed to reduce
offers or awards if they will be offset by recapture or offset in
later years. Suspended losses are not allowed unless they can
be used advantageously by claimants.
2 Originally, the claims resolution process was scheduled to be
completed around October 20, 1996. After the delay caused by the
motion to intervene, the fund was actually closed a year later, with
the final report filed by the Claims Administrator on October 21,
1997.
3 Notably, in the consent decree, Prudential agreed not to
assert a statute-of-limitations defense against any claimants who
entered the claims resolution process. The Commission hypothe-
sizes that this provision of the consent decree was the only reason
appellants were able to receive any compensation for their claims at
all, and appellants do not contest this.
damage awards or for the tax that investors would have to
pay when realizing the "residual value" of their investments.
Appellants alleged that Prudential had breached its agree-
ment to resolve their claims fairly, intentionally defrauded
them through misrepresentations and omissions, and was
unjustly enriched as a result of its miscalculation of tax
benefits. Asserting that the Commission and the Claims
Administrator refused to rectify the problem, appellants
sought judicial orders directing Prudential to enforce the
terms of the consent decree as they interpreted it and to
make the additional claims payments.
The district court denied the motion to intervene. Assum-
ing the truth of the facts alleged in appellants' complaint,4 the
district court ruled that they could not show a legally protect-
ed interest in the proceedings between the Commission and
Prudential because, under Blue Chip Stamps v. Manor Drug
Stores, 421 U.S. 723 (1975), and this court's interpretations of
it, third party beneficiaries of a government consent decree
may not enforce it when the consent decree contains unam-
biguous language establishing that the government did not
intend them to have enforcement rights. The district court
concluded that their common law claims were in reality claims
for enforcement of the consent decree. Consequently, the
district court concluded that appellants had no right to inter-
vene under Federal Rule of Civil Procedure 24(a)(2), or, for
the same reason, Rule 24(b).5
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4 "An application to intervene should be viewed on the tendered
pleadings--that is, whether those pleadings allege a legally suffi-
cient claim or defense and not whether the applicant is likely to
prevail on the merits." Williams & Humbert, Ltd. v. W. & H.
Trade Marks (Jersey), Ltd., 840 F.2d 72, 75 (D.C. Cir. 1988).
5 The district court rejected the Commission's argument that
section 21(g) of the Securities Exchange Act of 1934, 15 U.S.C.
s 78u(g) (1988), bars intervention in enforcement actions brought
by the Commission. The Commission does not press this argument
on appeal. The Commission does contend on appeal that any order
reviewing the arbitration awards would violate section 10 of the
Federal Arbitration Act, 9 U.S.C. s 10 (1988), but given our analy-
sis, we have no need to address this argument.
II.
Parties have the right under Rule 24(a)(2) to intervene in
an action if they meet four requirements: (1) the application
to intervene must be timely; (2) the applicant must demon-
strate a legally protected interest in the action; (3) the action
must threaten to impair that interest; and (4) no party to the
action can be an adequate representative of the applicant's
interests. See Williams & Humbert, Ltd. v. W. & H. Trade
Marks (Jersey), Ltd., 840 F.2d 72, 74 (D.C. Cir. 1988). Con-
sideration of the second requirement alone is sufficient to
dispense of the instant appeal.6 We review the district
court's resolution of a legal question in the context of a denial
of a motion to intervene de novo, see Massachusetts Sch. of
Law v. United States, 118 F.3d 776, 779 (D.C. Cir. 1997), and
we affirm.7
Our inquiry into the enforcement rights of third party
beneficiaries to consent decrees begins with Blue Chip
Stamps, in which the Supreme Court decided that the protec-
tions against insider trading codified in the Commission's
Rule 10b-5 apply only to actual purchasers and sellers of
securities and not those who are merely offered a stock. See
Blue Chip Stamps, 421 U.S. at 725. The case involved an
antitrust consent decree and, in the course of ruling that
those not involved in an actual sale of stock had no legitimate
claim, the Court held that "a well-settled line of authority
__________
6 Prudential also disputes whether appellants have shown the
Commission to be an inadequate representative of their interests.
7 Our review of the district court's denial of permissive inter-
vention under Rule 24(b)(2) is for abuse of discretion, see Twelve
John Does v. District of Columbia, 117 F.3d 571, 575 (D.C. Cir.
1997), and we find none. Rule 24(b) permits the district court to
allow intervention "(1) when a statute of the United States confers a
conditional right to intervene; or (2) when the applicant's claim or
defense and the main action have a question of law or fact in
common." Fed. R. Civ. P. 24(b). While appellants do fall within the
ambit of the second criterion, their intervention would have no
effect because they have no standing to enforce the consent decree,
as we explain herein.
from this Court establishes that a consent decree is not
enforceable directly or in collateral proceedings by those who
are not parties to it even though they were intended to be
benefited by it." Id. at 750.
Subsequent decisions in this court have narrowed the effect
of the broad language in Blue Chip, but not enough to allow
these appellants to enforce the terms of this consent decree.
In Beckett v. Air Line Pilots Ass'n, 995 F.2d 280 (D.C. Cir.
1993), the court held that nonunion pilots who were not
parties to a consent decree between a union and another
group of pilots could sue the union to enforce the terms of the
consent decree. See id. at 286-89. The court emphasized,
however, that its holding did not imply that all third parties
could seek judicial enforcement of the terms of consent
decrees; this case was special because the consent decree
established a trust and named the plaintiff nonunion pilots as
beneficiaries. See id. at 285. The court interpreted Blue
Chip only to prohibit enforcement by incidental third party
beneficiaries, see id. at 288, whereas "intended third party
beneficiaries of a consent decree have standing to enforce the
decree," id. at 286 (quoting Hook v. Department of Ariz.
Corrections, 972 F.2d 1012, 1014 (9th Cir. 1992)) (emphasis
added) (internal quotation marks omitted). In so holding, the
court reasoned that "consent decrees are generally construed
according to the basic principles of contract law, and it is a
fundamental principle of contract law that parties to a con-
tract may create enforceable contract rights in a third party
beneficiary." Id. (citations omitted). Because the nonunion
pilots were not incidental beneficiaries but instead "direct
beneficiaries," as the trust provisions made clear, they could
sue to enforce the consent decree. Id.
Although this result might have conflicted with a broad
reading of the language in Blue Chip, the Beckett court
distinguished Blue Chip based on five considerations to nar-
row the scope of the restriction on third party enforcement of
consent decrees. Among its five considerations, the court
observed that Blue Chip involved a consent decree resulting
from a government enforcement action: "Only the Govern-
ment can seek enforcement of its consent decrees; therefore,
even if the Government intended its consent decree to benefit
a third party, that party could not enforce it unless the decree
so provided." Id. at 288 (citation omitted). Because applica-
tion of this rule alone would have barred a third party from
attempting to enforce the government consent decree in Blue
Chip, the Beckett court concluded that Blue Chip should not
be read so expansively that it would bar all third party
enforcement of consent decrees. See id.; see also Hook, 972
F.2d at 1015.
In Rafferty v. NYNEX Corp., 60 F.3d 844 (D.C. Cir. 1995),
the court again addressed the enforcement rights of third
party beneficiaries of government consent decrees. In that
case, the district court had granted summary judgment
against a terminated employee who claimed he was fired
because he knew his employer had violated a government
consent decree and who alleged violations of antitrust laws
and the consent decree, misrepresentation, wrongful dis-
charge, and breach of contract. See id. at 846-47. In
affirming the judgment, the court held that the plaintiff could
not enforce the terms of a consent decree that was the result
of an antitrust enforcement action brought by the govern-
ment: "Unless a government consent decree stipulates that it
may be enforced by a third party beneficiary, only the parties
to the decree can seek enforcement of it." Id. at 849 (citing
Beckett, 995 F.2d at 288). The court further emphasized that
the plaintiff was not an intended third party beneficiary of the
consent decree. See id.
Struggling under the weight of this precedent, appellants
contend nonetheless that they have a legally protected inter-
est in enforcing the terms of a consent decree resulting from
an SEC enforcement action. Appellants maintain that this
court has never held squarely that intended third party
beneficiaries, as distinct from incidental third party beneficia-
ries, cannot enforce a government consent decree when the
decree establishes a process to resolve private damage claims
including the prospective intervenors' claims. Beckett, appel-
lants insist, only stated that Blue Chip might "perhaps" bar
suits by third party beneficiaries of government consent
decrees,8 see Beckett, 995 F.2d at 289, while Rafferty only
pronounced this in dictum.9 Appellants suggest that the
court should look for guidance to the Second Circuit's decision
in Berger v. Heckler, 771 F.2d 1556 (2d Cir. 1985), in which
that court concluded that, in granting benefits to third parties
in a consent decree, the government necessarily "agreed to
the enforcement of the decree in favor of nonparties." Id. at
1567.
Appellants focus, to their detriment, on showing that there
is no categorical bar against third party enforcement of
consent decrees involving the government. This much is
true; the fact that the government is involved is not in itself
fatal to a third party enforcement effort. Rather, the key
determination is whether the particular third party beneficia-
ry who seeks to bring a claim based on alleged noncompliance
with the consent decree is an intended beneficiary of the
decree or only an incidental beneficiary. As the Beckett court
indicated, the reason that courts are more loath to allow third
parties to enforce consent decrees when the government is
involved is that, because the government usually acts in the
general public interest, third parties are presumed to be
incidental beneficiaries. See Beckett, 995 F.2d at 288 (citing
Restatement (Second) of Contracts s 313(2) & cmt. a (1979)).
Indeed, there could well be merit to appellants' argument
that the lack of an express stipulation authorizing third party
enforcement should not automatically preclude enforcement
even of government consent decrees. The argument might
be that the presence of the government should raise the
presumption that third parties are incidental beneficiaries,
but that presumption could be overcome by contrary evidence
__________
8 Although the court did use the word "perhaps" once, the court
elsewhere stated unequivocally (albeit without elaboration or fur-
ther analysis) that "[o]nly the Government can seek enforcement of
its consent decrees." Beckett, 995 F.2d at 228.
9 In fact, the court's conclusion that third party beneficiaries of
government consent decrees cannot enforce those decrees was an
integral step in the analysis in Rafferty. See Rafferty, 60 F.3d at
849.
other than an express stipulation. When the court can
determine the parties' intent from the consent decree, the
fact that one of the parties is the government arguably should
make little difference, and an express stipulation is not nor-
mally necessary to find that a third party is an intended
beneficiary. See Fed. R. Civ. P. 71; Beckett, 995 F.2d at 287-
88; Berger, 771 F.2d at 1565. Yet this circuit has opted for a
bright line rule, effectively acknowledging both the sophistica-
tion of government agencies entering into consent decrees
and the broad social significance of such decrees. See Raffer-
ty, 60 F.3d at 849. In any event, contrary to appellants'
position, the instant case presents no occasion for the court to
reexamine its declarations in Beckett and Rafferty that third
parties to government consent decrees cannot enforce those
decrees absent an explicit stipulation by the government to
that effect. Compare id. ("Unless a government consent
decree stipulates that it may be enforced by a third party
beneficiary, only the parties to the decree can seek enforce-
ment of it."); Beckett, 995 F.2d at 288 (same); and Hook, 972
F.2d at 1015 (same), with Berger, 771 F.2d at 1567 (allowing
third party enforcement of consent decrees pursuant to Rule
71, without regard to the involvement of a government party).
No matter the evidence we may require to show that third
parties to government consent decrees are intended beneficia-
ries, appellants cannot make this showing, and thus we leave
for another day consideration of whether government authori-
zation of third party enforcement must invariably be explicit.
Third parties to a consent decree, involving the government
or not, must demonstrate that they are intended beneficiaries
in order to have enforcement rights, and appellants fail to do
so. Instead, they rely on the mistaken belief that a third
party is an intended beneficiary if the parties to the consent
decree had any intent to benefit that third party and that the
clear intent in the consent decree to benefit defrauded inves-
tors thus necessarily gives them enforcement rights. To the
contrary: a third party to a consent decree is not an "intend-
ed beneficiary" unless the parties "intended that a third party
should receive a benefit which might be enforced in the
courts." Corrugated Paper Prods. v. Longview Fibre Co.,
868 F.2d 908, 911 (7th Cir. 1989) (quoting Brooklawn v.
Brooklawn Housing Corp., 11 A.2d 83 (N.J. 1940)) (emphasis
added); see also Restatement (Second) of Contracts
s 302(1). The test is not, as appellants appear to suggest,
only whether the contracting parties intended to confer a
benefit directly on the third parties, but also whether the
parties intended the third party to be able to sue to protect
that benefit.
The consent decree could hardly make clearer that the
parties did not intend others to be able to enforce its terms in
court. The Commission and Prudential stated in paragraph
nine of the consent decree that "nothing herein shall be
deemed to confer standing upon any persons other than
plaintiff COMMISSION, defendant [Prudential] and the
CLAIMS ADMINISTRATOR." Furthermore, in paragraph
twelve of the decree, they added that, "[e]xcept as explicitly
provided in this FINAL ORDER and the CONSENT, noth-
ing herein is intended to or shall be construed to have
created, compromised, settled or adjudicated any claims,
causes of action, or rights of any person whomsoever, other
than as between the COMMISSION and [Prudential], in
accordance with the CONSENT." It is difficult to imagine
how the Commission and Prudential could have stated more
explicitly that they did not want third parties enforcing the
terms of the consent decree.10 As the district court conclud-
ed, "the unambiguous language of the consent decree clearly
establishes that the government did not intend for third
parties to enforce the consent decree." When a consent
__________
10 Appellants' attempt to limit the meaning of these provisions
is unconvincing. Appellants contend that paragraph nine is irrele-
vant because they do not rely on the consent decree for constitu-
tional standing to bring their complaint. Paragraph twelve, appel-
lants add, does not concern those in appellants' position, for their
rights are among those "[e]xplicitly provided" in this consent de-
cree. Yet, paragraph nine clearly intends to use "standing" in the
sense of enforceable rights under the consent decree, not in the
constitutional sense, and paragraph twelve preempts any enforce-
ment rights in third parties because none were "[e]xplicitly provid-
ed" elsewhere in the consent decree.
decree or contract explicitly provides that a third party is not
to have enforcement rights, that third party is considered an
incidental beneficiary even if the parties to the decree or
contract intended to confer a direct benefit upon that party.
See Morse/Diesel Inc. v. Trinity Indus., Inc., 859 F.2d 242,
249 (2d Cir. 1988).
Despite appellants' protestations, their assertions of unfair-
ness in this result are unpersuasive. The consent decree was
the result of an agreement between the Commission and
Prudential, and appellants' participation in the claims resolu-
tion process was voluntary. Appellants' right to bring their
claims against Prudential to the courts was not affected by
the consent decree; indeed, without the consent decree, ap-
pellants might have received no relief at all. See supra note
3. Furthermore, appellants did not have to settle or submit
their initial settlement offers to binding arbitration if these
offers were too low. They did or should have known at the
time of the initial offers that Prudential was applying a
method of calculation different from the one they now advo-
cate was intended to be applied, and they could have exited
the claims resolution process at that point, resorting to the
courts for relief.11 Instead, appellants now hope to bind the
Commission and Prudential to their own interpretation of one
portion of the consent decree's requirements while ignoring
the consent decree's limitation of third party enforcement
rights.
Because the parties to the consent decree clearly indicated
that third parties such as appellants are not intended third
party beneficiaries, appellants have no legally protected inter-
est in enforcing the terms of the consent decree. Hence, they
__________
11 Even accepting their assertion in support of the motion to
intervene that Prudential's refusal to disclose its working papers
prevented immediate discovery of its methodology, appellants do
not explain why knowledge of this methodology was necessary for
them to know what their settlement offers should have been under
the terms of the consent decree; in particular, because their claims
were for fairly large amounts of money, it is reasonable to assume
some vigilance on their part.
have no right to intervene in the proceedings between the
Commission and Prudential to enforce the decree.
III.
In the alternative, appellants contend that, even if they
cannot sue to enforce the consent decree directly, they have a
legally protected interest in the proceedings between the
Commission and Prudential, and thus a right under Rule
24(a)(2) to intervene in the proceedings, based on their com-
mon law claims against Prudential on theories of contract,
fraud, and unjust enrichment. A glance at the nature of
these claims shows, however, that as the district court indicat-
ed, these claims are "inextricably intertwined with [appel-
lants'] claim of noncompliance with the consent decree" and
do not constitute a valid independent basis for intervention.
Appellants' common law claims turn on their allegation that
Prudential violated the consent decree. In the contract claim,
appellants allege that in representing to the investors that it
would comply with the consent decree, Prudential made a
separate offer to investors, which investors accepted for
consideration, thereby forming a contract separate from the
consent decree itself but based on the same terms, and that
Prudential violated this contract when it violated the consent
decree. Similarly, in the fraud and unjust enrichment claims,
appellants allege that by misrepresenting that it would con-
form to the terms of the consent decree, Prudential defrauded
investors and was unjustly enriched. Fairly read, the com-
plaint in intervention only seeks enforcement on the basis of
the common law claims; there is no request for declaratory
or similar relief.
These common law claims represent transparent attempts
to avoid the effect of Blue Chip and its progeny. As the
district court stated, "the actions [appellants] complain of
arise out of alleged noncompliance with the consent decree."
If third parties in appellants' position could bring such claims,
then the Blue Chip line of cases would be eviscerated: any
time a party to a consent decree indicated to a third party
that it would abide by the consent decree, such third party
could bring a claim in contract (as appellants attempt here) to
enforce the terms of the consent decree. If the court will not
permit consent decree enforcement claims, it cannot permit
the same invalid claims dressed in new formalist attire.
Hence, it follows that appellants' common law claims must
fail.12 Cf. Lyle v. Food Lion, Inc., 954 F.2d 984, 987 (4th Cir.
1992).
Appellants contend that to disallow such claims would
unfairly immunize parties to consent decrees against all ordi-
nary claims by nonparties relating to performance under such
decrees, but this is not true as a broad proposition. If
appellants asserted genuinely independent common law
claims, they could press them. As counsel for the Commis-
sion conceded at oral argument, there are still instances when
third parties may bring independent claims based on malfea-
sance by the parties to a consent decree: for instance, when a
third party can substantiate allegations of fraud. By con-
trast, a disagreement over the proper interpretation of a
decree's terms, as is present here, does not present a circum-
stance in which third parties can avoid the force of Blue Chip
and its progeny.
Much as appellants have no valid interest in enforcing the
terms of the consent decree directly, they have no valid
interest in doing so by repackaging a noncompliance claim in
the shells of common law contract, fraud, and unjust enrich-
ment. Accordingly, because appellants have no legally pro-
tected interest in the proceeding between the Commission
and Prudential, we affirm the district court's order denying
their motion to intervene under Rule 24(a)(2) or 24(b).
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12 Appellants maintain, unpersuasively, that Beckett and Raffer-
ty establish that such common law claims are independently viable.
In Beckett, the court did consider claims raised by the plaintiffs
other than their claim for noncompliance with the consent decree,
but this is unenlightening, for the court in that case decided that the
plaintiffs could enforce the decree as intended third party beneficia-
ries. See Beckett, 995 F.2d at 284-89. In Rafferty, the court
refused to allow the plaintiff to enforce the terms of a consent
decree yet did address the merits of other claims, but these other
claims were substantively different from and not simply restate-
ments of the noncompliance claim. See Rafferty, 60 F.3d at 849-51.