United States Court of Appeals
for the Federal Circuit
__________________________
IN RE VIOLATION OF RULE 28(D)
__________________________
Miscellaneous Docket No. 976
__________________________
Appeal from the United States District Court for the
District of New Jersey in consolidated case no. 07-CV-
2762, Judge Joel A. Pisano.
__________________________
Decided: March 29, 2011
__________________________
Before DYK, PROST, and MOORE Circuit Judges.
DYK, Circuit Judge.
In this order we address whether counsel for Defen-
dants-Appellants Sun Pharmaceutical Industries, Ltd.
and Caraco Pharmaceutical Laboratories, Ltd. (collec-
tively “Sun”) should be sanctioned for the extensive use of
improper confidentiality markings in the briefs filed by
Sun contrary to Rule 28(d) of the Federal Circuit Rules.
We conclude that the use of such markings was improper,
and we impose sanctions on counsel in the amount of
$1,000.
I
2
Some background regarding the underlying litigation
is necessary to understand the context of the sanctions
order. In 2007, Sanofi-Aventis U.S. LLC (“Sanofi”) sued
Sun and other generic drug manufacturers alleging the
infringement of Sanofi’s patent, which claimed the colo-
rectal cancer drug oxaliplatin. By mid-2009, Sanofi and
Sun reached a settlement and entered into a license
agreement. The license agreement set forth a specific
“Launch Date” (the later of August 9, 2012, or the date on
which Sun received final FDA approval for its generic
version of oxaliplatin) on which Sun would be granted “a
non-exclusive license . . . to make, have made, import,
market, offer for sale, and sell the Licensed Products in
the Territory.” J.A. 235–36. The license agreement also
permitted Sun to market its generic drug prior to the
Launch Date, but only if other generic manufacturers
were also on the market. Section 3.5 of the license
agreement provided:
In the event that, during the term of the Licensed
Patents and without Sanofi’s permission, any de-
fendant in the Consolidated Eloxatin Patent Liti-
gation sells a generic version of a Sanofi NDA
Product in the Territory prior to a Final Court De-
cision (“At-Risk Launch”), [Sun] will have the op-
tion of selling its Generic Equivalent prior to the
Launch Date.
J.A. 237 (emphasis added). But the license agreement
also provided that Sun would stop selling under certain
circumstances:
Should Sun exercise such an option and a Court
subsequently enters a decision(s) enjoining each
such At-Risk Launch product(s), Sun agrees that
Sun will not sell its Generic Equivalent from the
3
time the Court enters an injunction(s) against each
such At-Risk Launch Product(s) until the Launch
Date.
J.A. 237–38 (emphases added).
Also part of the settlement agreement was a proposed
consent judgment which enjoined Sun from making,
using, or selling generic oxaliplatin except in the limited
circumstances provided for in the license agreement. J.A.
229.
In sum, if other defendants were on the market prior
to a “Final Court Decision” in the underlying infringe-
ment suit, Sun would also be permitted to market its
version of the generic drug before the Launch Date. But if
“a Court subsequently enter[ed] a decision(s) enjoining”
each of the other defendants from selling its version of the
generic drug, Sun would also be enjoined. J.A. 237–38.
Shortly after Sanofi and Sun reached an agreement
regarding settlement, the district court denied summary
judgment of invalidity but granted summary judgment of
non-infringement. Sanofi-Aventis U.S. LLC v. Sandoz,
Inc., No. 07-CV-2762, 2009 WL 1741571, at *1 (D.N.J.
June 18, 2009). Sanofi then refused to deliver a fully
executed version of the settlement documents to Sun. As
a result, the consent judgment was never entered by the
district court.
Following at-risk launches by other defendants, Sun
launched a licensed version of generic oxaliplatin pursu-
ant to Section 3.5 of the license agreement. Sanofi subse-
quently reached settlement agreements with the other
defendants, each of which included a proposed consent
order with a specific provision enjoining the defendants
from further sales of generic oxaliplatin from June 30,
4
2010 until August 9, 2012. These orders were entered by
the district court on April 14, 2010.
Sanofi then sought to stop further sales by Sun. San-
ofi requested that the court enter a revised version of the
original consent judgment enjoining Sun from continuing
to sell its generic version of oxaliplatin. See J.A. 467. Sun
opposed entry of the revised consent judgment, arguing
that it did not reflect the terms of the license agreement.
The district court entered the revised version of the
consent judgment proposed by Sanofi, which provided:
If all other defendants are enjoined as of
June 30, 2010, or on some later date, then Sun . . .
[is] hereby enjoined as of June 30, 2010, or that
later date, from manufacturing, using, offering to
sell, or selling within the United States, or im-
porting into the United States, the oxaliplatin for
injection defined by ANDA No. 78-818.
J.A. 473 (emphasis added). Sun appealed the revised
consent judgment to this court.
On appeal, Sun argued that the revised consent
judgment was inconsistent with the license agreement.
Sun argued that injunctions entered pursuant to a con-
sent decree “are not ‘decision(s)’ of the court”; therefore,
such injunctions did not trigger the provision of the
license agreement requiring Sun to stop marketing its
generic drug. Appellant’s Br. 24. After oral argument, we
issued a non-precedential opinion concluding that Section
3.5 of the license agreement was ambiguous because it
was unclear “whether a ‘decision’ includes a consent
judgment and injunction resulting from a settlement
between parties or whether it requires an injunction
issued by a court following a decision on the merits.”
5
Sanofi-Aventis U.S. LLC v. Sandoz, Inc., No. 2010-1338,
2010 WL 5393659, at *4 (Fed. Cir. Dec. 22, 2010). We
vacated the revised consent judgment and the resulting
injunction, and remanded to the district court to resolve
the ambiguity in the license agreement. Id. at *6.
II
In the briefing on the merits of the appeal, both par-
ties marked as confidential discussion of aspects of the
license and settlement agreements. At oral argument we
questioned whether such confidentiality markings were
appropriate under Rule 28(d) of the rules of this court and
Rule 26 of the Federal Rules of Civil Procedure. Follow-
ing argument, Sun submitted a motion to modify the
protective order to remove the confidentiality designa-
tions. We granted the motion. Sanofi-Aventis U.S. LLC
v. Sandoz, Inc., No. 2010-1338, slip op. at 3 (Fed. Cir. Dec.
21, 2010).
At oral argument we did not suggest that marking the
license and settlement agreements as confidential was
itself sanctionable. But we raised the question of whether
counsel for Sun had violated our rules by marking confi-
dential those parts of its briefs that set forth Sun’s legal
argument. Examples of the confidentiality markings
contained in the brief submitted by Sun are included in
an Addendum to this opinion. With few exceptions, the
legal argument in Sun’s brief was entirely marked confi-
dential. Following oral argument, we issued a show-cause
order, which provided in pertinent part:
The brief submitted by Defendants-Appellants
contains extensive confidentiality markings per-
taining to case citations, direct quotations from
published opinions of the cases cited, and legal ar-
gument, none of which appear to fall under the
protective order entered by the district court. It
6
thus appears that Defendants-Appellants marked
material as confidential in violation of the rules of
this court.
Accordingly,
IT IS ORDERED THAT:
Within 14 days of this order, Defendants-
Appellants are ordered to show cause why this
court should not impose sanctions for the violation
of Federal Circuit Rule 28(d) due to the improper
use of confidentiality markings.
Sanofi-Aventis v. Sandoz, Inc., No. 2010-1338, slip op. at
1–2 (Fed. Cir. Dec. 7, 2010). In response to the show-
cause order, Sun did not admit to any error, but at-
tempted to justify the use of such extensive confidentiality
markings by arguing:
Sun did not intend to be overzealous in
designating material as confidential, but was
concerned that citation to certain case law would
have revealed to a reader key terms contained
in, and facts about, the Settlement and License
Agreements. . . . Absent designation of this mate-
rial as confidential, Sun was concerned that the
discussion of the case law and other authority it-
self would effectively divulge the terms of the
agreements that had been filed under seal and
were, therefore, governed by the Protective Order.
Defendants-Appellants Sun Pharm. Indus., Ltd. and
Caraco Pharm. Labs., Ltd.’s Response to December 7,
2010, Order at 3-4, Sanofi-Aventis v. Sandoz, Inc., No.
2010-1338 (Fed. Cir. Dec. 20, 2010). In granting the
7
motion to remove the confidentiality markings, we made
clear that “[t]he granting of Sun’s unopposed motion does
not resolve the pending Show Cause Order concerning
possible sanctions.” Id. at 3 n.1.
III
In determining whether our rules were violated, some
background is helpful. There is a strong presumption in
favor of a common law right of public access to court
proceedings. See Nixon v. Warner Commc’ns, Inc., 435
U.S. 589, 597–99 (1978). In Nixon, the Supreme Court
specifically recognized the existence of “a general right to
inspect and copy public records and documents, including
judicial records and documents.” Id. at 597 (citations
omitted). Similarly, in United States v. Corbitt, 879 F.2d
224, 228 (7th Cir. 1989), the Seventh Circuit recognized
that “[t]his [common law] right of access establishes, as a
general matter, that court files should be open to the
public for inspection and copying.” In Richmond Newspa-
pers, Inc. v. Virginia, 448 U.S. 555, 579 (1980), the Su-
preme Court also recognized a First Amendment right of
public access to court proceedings.
Though the presumption of public access to judicial
proceedings and records is strong, it “is not absolute.”
Nixon, 435 U.S. at 598. For example, in Nixon, the Su-
preme Court noted that the public right of access is lim-
ited by the court’s “supervisory power over its own records
and files, and access has been denied where court files
might have become a vehicle for improper purposes,” for
example, “as sources of business information that might
harm a litigant’s competitive standing.” Id. at 598. In
determining whether to restrict the public’s access to
court documents, the court must “weigh[ ] the interests
advanced by the parties in light of the public interest and
the duty of the courts.” Id. at 602. In Corbitt, the court
8
noted that while “the common law right of access creates
a ‘strong presumption’ in favor of public access . . . , this
presumption should not apply to materials properly
submitted to the court under seal.” 879 F.2d at 228
(citation omitted).
IV
Federal Rule of Civil Procedure 26(c)(1), though added
in 1970 before the Supreme Court decisions in Nixon and
Richmond Newspapers, appears to be consistent with
these decisions. It is well settled that Rule 26(c)(1) does
not furnish an absolute privilege against disclosure of
material that a party might wish to mark confidential.
See Fed. Open Mkt. Comm. of the Fed. Reserve Sys. v.
Merrill, 443 U.S. 340, 362, 362 n.24 (1979); see also 8A
Charles Alan Wright et al., Federal Practice and Proce-
dure § 2043 (3d ed. 2010). Instead, Rule 26(c)(1) permits
the court to issue limited protective orders to prevent the
discovery or disclosure of certain information, or to specify
the use that may be made of discovered information. Fed.
R. Civ. P. 26(c)(1).
Subsection G, which permits the court to issue a pro-
tective order covering certain classes of commercial in-
formation, states:
A party or any person from whom discovery is
sought may move for a protective order in the
court where the action is pending . . . . The court
may, for good cause, issue an order to protect a
party or person from annoyance, embarrassment,
oppression, or undue burden or expense, including
one or more of the following:
....
(G) requiring that a trade secret or other
confidential research, development, or
9
commercial information not be revealed or
be revealed only in a specified way . . . .
Fed. R. Civ. P. 26(c)(1)(G) (emphases added). When what
is now subsection G was added in 1970, the Advisory
Committee Notes characterized the addition of “[t]he new
reference to trade secrets and other confidential commer-
cial information” as an addition that “reflects existing
law.” Fed. R. Civ. P. 26(c) advisory committee’s note to
1970 amendment. The Committee also observed that
“[t]he courts have not given trade secrets automatic and
complete immunity against disclosure, but have in each
case weighed their claim to privacy against the need for
disclosure,” frequently affording only “limited protection.”
Id.
Under Rule 26(c)(1), protective orders restricting the
disclosure of information may only be issued for “good
cause.” Fed. R. Civ. P. 26(c)(1). The party seeking protec-
tion bears the burden of demonstrating that there is good
cause for restricting the disclosure of the information at
issue. In re Deutsche Bank Trust Co. Ams., 605 F.3d 1373,
1378 (Fed. Cir. 2010); see also Phillips v. Gen. Motors
Corp., 307 F.3d 1206, 1210–11 (9th Cir. 2002); In re
Wilson, 149 F.3d 249, 252 (4th Cir. 1998); Smith v. BIC
Corp., 869 F.2d 194, 199 (3d Cir. 1989); Am. Standard
Inc. v. Pfizer Inc., 828 F.2d 734, 740 (Fed. Cir. 1987);
Anderson v. Cryovac, Inc., 805 F.2d 1, 7–8 (1st Cir. 1986);
Harris v. Amoco Prod. Co., 768 F.2d 669, 684 (5th Cir.
1985); Centurion Indus., Inc. v. Warren Steurer & Assocs.,
665 F.2d 323, 325 (10th Cir. 1981). Where good cause is
shown, the presumption of public access “dissipates, and
the district court can exercise its sound discretion” to
limit disclosure. Harris, 768 F.2d at 684.
10
For good cause to exist, the party seeking to limit the
disclosure of discovery materials must show that “specific
prejudice or harm will result if no protective order is
granted.” Phillips, 307 F.3d at 1210–11 (vacating and
remanding based on the district court’s failure to evaluate
the harm that would result from disclosure). If the party
seeking protection meets this burden, the court must then
“balance[ ] the public and private interests” to determine
whether a protective order is warranted. Id. at 1211. The
district court’s decision to seal a portion of the record is
reversible for abuse of discretion. See In re Knoxville
News-Sentinel Co., 723 F.2d 470, 474 (6th Cir. 1983).
Where the party seeks to limit the disclosure of in-
formation actually introduced at trial, an even stronger
showing of prejudice or harm may be required to warrant
limitations on disclosure. For example, where the district
court’s protective order extended to materials that were
admitted into evidence, the First Circuit noted that “the
ordinary showing of good cause which is adequate to
protect discovery materials from disclosure cannot alone
justify protecting such material after it has been intro-
duced at trial.” Poliquin v. Garden Way, Inc., 989 F.2d
527, 533 (1st Cir. 1993) (emphasis omitted). The court
concluded that “only the most compelling showing can
justify” limitations on the disclosure of “testimony or
documents actually introduced at trial.” Id. Garden
Way’s generic “claim that the company’s image among
customers will be damaged” was outweighed by the pub-
lic’s interest in access to trial records. Id.
Parties frequently abuse Rule 26(c) by seeking protec-
tive orders for material not covered by the rule. Our
sister circuits have repeatedly condemned the improper
use of confidentiality designations. For example, in
Jepson, Inc. v. Makita Electric Works, Ltd., 30 F.3d 854,
858 (7th Cir. 1994), the court noted the growing trend in
11
commercial cases of litigants agreeing to seal discovery
documents as well as pleadings and exhibits filed with the
court. The court noted that “[e]ven if the parties agree
that a protective order should be entered, they still have
‘the burden of showing that good cause exists for issuance
of that order.’” Id. (citation omitted).
Similarly, in Procter & Gamble Co. v. Bankers Trust
Co., 78 F.3d 219, 222 (6th Cir. 1996), the parties agreed to
“a broad stipulated protective order” that permitted the
parties to designate material as confidential and file such
material under seal “without court approval for ‘good
cause’ as required by Rule 26.” The Sixth Circuit ob-
served that an agreement of this type permitted “[t]he
parties and not the court [to] determine whether particu-
lar documents met the requirements of Rule 26,” id., and
effectively allowed the parties “to adjudicate their own
case based upon their own self-interest” in violation of
Rule 26(c), id. at 227. The court reversed the district
court’s order, noting that the district court “cannot abdi-
cate its responsibility to oversee the discovery process and
to determine whether filings should be made available to
the public” simply because the parties agree to the protec-
tive order. Id.
V
There is no rule in the Federal Rules of Appellate Pro-
cedure that deals directly with confidentiality markings
in appellate briefs. However, Federal Circuit Rule 28(d)
permits parties to mark information in briefs as confiden-
tial, but only if the material is “subject to confidentiality
mandated by statute or to a judicial or administrative
protective order.” Fed. Cir. R. 28(d)(1). Implicit in our
rule is a requirement that the district court protective
order comply with Rule 26 of the Federal Rules of Civil
Procedure. The protective order entered by the district
12
court in this case permitted the parties to designate as
confidential “any form of trade secret or other confidential
research, development, or commercial information within
the meaning of Fed. R. Civ. P. [26(c)(1)(G)].” 1 Sanofi-
Aventis U.S. LLC v. Sun Pharm. Indus., Ltd., No. 07-CV-
03411, at 7 (D.N.J. Dec. 14, 2007), ECF No. 35. The
protective order further provided:
If any party files [information designated as
confidential] . . . in connection with any motion,
other written submission, hearing or trial in this
action, the filing party shall make such filing un-
der seal and shall simultaneously file a motion to
seal such information . . . ; provided, however,
that the burden of proving that such information
should be sealed . . . shall at all times remain on
the party which designated the information [as
confidential].
Id. at 19. Thus, the order properly required the parties to
establish good cause and required the court to rule on the
parties’ motions to seal.
The license agreement and proposed consent judg-
ment were designated as confidential and filed under seal
by Sun pursuant to the protective order. See Sanofi-
Aventis U.S. LLC v. Sandoz, Inc., No. 07-CV-2762, at 1
1 The protective order references Rule 26(c)(7), but
we assume that the order intended to refer to Rule
26(c)(1)(G), which mirrors the language used in the order
and permits the court to issue a protective order “requir-
ing that a trade secret or other confidential research,
development, or commercial information not be revealed
or be revealed only in a specified way.” Fed. R. Civ. P.
26(c)(1)(G).
13
(D.N.J. Sept. 24, 2009), ECF No. 492 (granting Sun’s
motion to seal its Brief in Support of Motion for Miscella-
neous Relief and the settlement documents attached as
exhibits). In its motion to seal, Sun argued that the
settlement documents should be sealed in order to main-
tain the confidentiality of private settlement discussions.
In the order granting Sun’s motion, the district court
noted that, although “there is ‘a presumptive right of
public access,’” the parties “have legitimate, competitive
and business interests in preventing public disclosure.”
Id. at 2.
We need not decide whether the district court protec-
tive order properly granted confidentiality to the items in
question. For purposes of this order we assume that the
license and settlement agreements at issue in this case
were properly the subject of a protective order (although
we note that at oral argument the parties agreed to lift
the confidentiality designation). But even if the agree-
ments were properly designated as confidential in the
district court, the confidentiality markings employed by
Sun concerning case citations, direct quotations from the
published opinions of the cases cited, and legal argument,
were improper.
On appeal, the dispute centered around what event
would trigger the requirement that Sun cease marketing
its generic version of oxaliplatin. The existence and
nature of this triggering event could not properly be
designated as confidential. The injunctive order entered
by the district court was not designated as confidential,
and it could not properly have been so designated. It
stated that “[u]nder the license agreement,” Sun’s obliga-
tion to cease marketing its generic product had been
triggered by “an injunction . . . preventing the other
defendants from selling their [generic] product[s] at risk.”
J.A. 3. Because the existence and nature of the trigger-
14
ing event was publicly disclosed in the consent judgment,
legal argument pertaining to the triggering event was not
and could not be properly marked as confidential regard-
less of the confidential designation of the license agree-
ment.
The marking as confidential of legal argument con-
cerning the propriety of a decision by the court is gener-
ally inappropriate given the strong presumption of public
access to court proceedings and records. Rule 26(c)(1)(G)
is limited to commercial information that has competitive
significance. The marking of legal argument as confiden-
tial under Rule 26(c)(1)(G) cannot be justified unless the
argument discloses facts or figures of genuine competitive
or commercial significance. That is certainly not the case
here, and there is no claim that it is.
Though it is impossible to define the exact contours of
what may and may not be marked as confidential pursu-
ant to Rule 28(d), it is clear that the parties must confine
their confidentiality markings to information covered by a
protective order. Here, the confidentiality markings in
the brief of Defendants-Appellants went well beyond the
scope of the protective order, which extended only to the
agreements themselves, not to the nature of the dispute.
Further, much of the material marked as confidential
does not even disclose the nature of the triggering event.
For example, legal argument regarding the preclusive
effect of consent judgments was marked as confidential in
the briefs submitted by Sun. See Addendum at i–ii. One
of the most blatant examples of improper confidentiality
markings involves case citations and parentheticals
describing the cited cases which are used to support the
proposition that “parol evidence should have been exam-
ined to resolve the ambiguity and determine the intent of
the parties.” See id. at iii–iv.
15
The confidentiality markings in this case were so ex-
tensive that the non-confidential version of the brief is
virtually incomprehensible. For example, on nineteen of
the thirty-four pages in Sun’s opening brief all material
information is marked as confidential and thus omitted
from the public version of the brief. See Non-Confidential
Brief of Defendants-Appellants, Sanofi-Aventis U.S. LLC
v. Sandoz, Inc., No. 2010-1338, 2010 WL 5393659 (Fed.
Cir. Dec. 22, 2010). No good faith reading of our rule
could support Sun’s marking of its legal arguments as
confidential. The action of Sun’s counsel bespeaks an
improper casual approach to confidentiality markings
that ignores the requirements of public access, deprives
the public of necessary information, and hampers this
court’s consideration and opinion writing.
By designating material as confidential that falls out-
side the scope of the protective order, counsel for Defen-
dants-Appellants violated Federal Circuit Rule 28(d).
VI
Federal Rule of Appellate Procedure 46(c) permits this
court to “discipline an attorney who practices before it . . .
for failure to comply with any court rule.” Fed. R. App. P.
46(c). This court has explicitly recognized that, under
Rule 46, it “has authority to impose sanctions for viola-
tions of the Federal Rules of Appellate Procedure or of its
own rules.” In re Violation of Rule 28(c), 388 F.3d 1383,
1385 (Fed. Cir. 2004). In In re Violation of Rule 28(c), the
court chose not to impose sanctions for an inadvertent
violation of the court’s rules, but cautioned that “it is the
duty of counsel to familiarize themselves with the appli-
cable rules, and that, in future cases, serious violations of
applicable rules, whether or not ‘inadvertent,’ will poten-
tially subject counsel to sanctions.” Id. The court further
explained that “this court, in order to get its work done,
16
must insist on strict compliance with its rules.” Id. Here
the violation of Rule 28(d) was severe. Permissible sanc-
tions under Rule 46(c) include the imposition of monetary
sanctions. United States v. Bush, 797 F.2d 536, 538 (7th
Cir. 1986); 16AA Charles Alan Wright et al., Federal
Practice and Procedure § 3992.2 (4th ed. 2010). A
$1,000.00 sanction is appropriate in this case.
Accordingly,
IT IS ORDERED THAT:
Monetary sanctions in the amount of $1,000.00 are
imposed on Daniel P. Shapiro, counsel for Sun Pharma-
ceutical Industries, Ltd. and Caraco Pharmaceutical
Laboratories, Ltd., payable within thirty days to the clerk
of this court for the violation of Federal Circuit Rule 28(d).
ADDENDUM
Examples of Improper Confidentiality Markings In Sun’s
Briefs
All of the following material was marked as confiden-
tial in Sun’s briefs except for the one italicized sentence
on page ii.
“The Settlement Agreement Does Not Support an In-
junction.”
Brief of Defendants-Appellants at 24, Sanofi-Aventis v.
Sandoz, Inc., No. 2010-1338, 2010 WL 5393659 (Fed. Cir.
Dec. 22, 2010).
Courts have repeatedly held that consent or-
ders are not “decision(s)” of the courts. For exam-
ple, numerous courts, including the United States
Supreme Court, have held that a consent judg-
ment will not have issue preclusion effect with re-
spect to any subsequent action because none of
the issues have actually been litigated and the
judgment reflects no adjudication on the merits.
See, e.g., Arizona v. California, 530 U.S. 392, 414
(2000) (“It is the general rule that issue preclusion
attaches only ‘[w]hen an issue of fact or law is ac-
tually litigated and determined by a valid and fi-
nal judgment, and the determination is essential
to the judgment. In the case of a judgment en-
tered by . . . consent . . . none of the issues is actu-
ally litigated[ ]’” and thus such judgments
ii
ordinarily have no issue preclusive effect. (empha-
sis added) (internal citations omitted)); U.S. v.
Int’l Bldg. Co., 345 U.S. 502, 506 (1953) (Where
there is no adjudication on the merits, “the doc-
trine of estoppel by [consent] judgment would
serve an unjust cause: it would become a device
by which a [“pro forma”] decision not shown to be
on the merits would forever foreclose inquiry into
the merits.”).
Id. at 24–25.
These holdings represent sound judicial
logic. On the one hand, the collateral estoppel
rule is meant to promote judicial efficiency and
consistency by precluding re-litigation of issues
already decided by a court. However, in the case
of consent judgments, there has been no “deci-
sion,” and thus there is no risk of duplication or
judicial inconsistency. See In re Carrero, 94 B.R.
306, 310 (Bankr. S.D.N.Y. 1988) (“[R]efusing to
construe consent judgments as adjudicating the
issues joined therein will not threaten any legiti-
mate expectations of repose, since none of the par-
ties to the consent judgment ever bargained for
such protection. Nor will a rule giving collateral
estoppel effect to consent judgments promote judi-
cial consistency, since the judges are not deciding
anything.”) (quoting Am. Mut. Liab. Ins. Co. v.
Michigan Mut. Liab. Co., 64 Mich. App. 315
(Mich. Ct. App. 1975) (emphasis added).
Id. at 25.
iii
Likewise, the fact that parties have set-
tled a dispute does not, in the absence of express
language to the contrary, indicate resolution or
determination on the merits of any of the underly-
ing issues that escaped formal litigation. See, e.g.,
Dunning v. Pacerelli, 818 P.2d 34, 39 (Wash. Ct.
App. 1991) (“Consent judgments ‘are not . . . ordi-
narily given issue preclusion effect.’ The reason is
that ‘the parties could settle for myriad reasons
not related to the resolution of the issues they are
litigating.’”) (quoting Marquardt v. Fed. Old Line
Ins. Co., 658 P.2d 20 (1983)) (internal citations
omitted).
Id. at 26.
In addition to this body of law arising under the col-
lateral estoppel rule, case law makes clear that the im-
plementation of agreed injunctions, with no independent
review or analysis, are not “decision(s)” by a court. See,
e.g., Dennis v. County of Fairfax, 55 F.3d 151, 154 (4th
Cir. 1995) (quoting 18 Wright, Miller & Cooper, Federal
Practice and Procedure § 4443 (1981)) (“‘[T]he central
characteristic’ of a consent decree is ‘that it does not
involve consent or decision on the merits[.]’”) (emphasis
added); Walker v. U.S. Dept. of Housing & Urban Dev.,
912 F.2d 819, 831 (5th Cir. 1990) (“The court’s approval of
the consent decree in this case is not equivalent to a
‘decision’ on the merits of the action.” Such a resolution
“evade[s] decision completely.”) (emphasis added); U.S. v.
Oregon, 913 F.2d 576, 580 (9th Cir. 1990) (“A consent
decree is ‘essentially a settlement agreement subject to
iv
continued judicial policing.’ It is not a decision on the
merits or the achievement of the optimal outcome for all
parties, but is the product of negotiation and compro-
mise.”) (emphasis added) (internal citations omitted);
Beatrice Foods Co. v. F.T.C., 540 F.2d 303, 312 (7th Cir.
1976) (“The entering of a consent decree, however, is not a
decision on the merits and therefore does not adjudicate
the legality of any action by a party thereto.”) (emphasis
added).
Id. at 26–27.
Finally, even without reference to the deci-
sions cited above, the “plain meaning” of the term
“decision[ ]” may be determined by reference to
any number of legal dictionaries. See CBS Corp.
v. Eaton Corp., No. 07 Civ. 11344, 2009 WL
4756436, at *4 (S.D.N.Y. Dec. 7, 2009) (“A sound
method for determining the plain meaning of
words is to look at their dictionary definitions.”
(quoting In re Delta Airlines, Inc., 381 B.R. 57,
64–65 (S.D.N.Y. 2008))); In re Delta Fin. Corp.,
No. 09-3557, 2010 WL 1784054, at *3 (3d Cir. May
5, 2010) (unpublished decision) (holding that in
applying controlling New York law concerning the
interpretation of insurance contracts, “the Bank-
ruptcy Court’s reliance on dictionary definitions to
identify the plain meaning of the terms . . . was
proper.”). For example, Black’s Law Dictionary
(8th ed. 2004) defines decision as “[a] judicial . . .
determination after consideration of the facts and
the law.” See also Ballentine’s Law Dictionary (3d
ed.) (defining decisions as “[t]he application, by a
court of competent jurisdiction, of the law to a
v
state of facts proved, or admitted to be true, and a
declaration of the consequences which follow.” (cit-
ing Le Blanc v. Ill. Cent. R. Co., 19 So.2d 212–13
(Miss. 1896))); Lawyers.com (available at
http://research.lawyers.com/glossary/decision.html
) (defining decision as “an authoritative determi-
nation (as a decree or judgment) made after con-
sideration of facts or law” (emphasis added)).
Under any of these definitions, the term “decision”
requires more than what happened in this case.
Id. at 27–28.
[P]arol evidence should have been examined to re-
solve the ambiguity and determine the intent of the
parties. . . . See Whitebox Convertible Arbitrage
Parnters, L.P. v. Fairfax Fin. Holdings, Ltd., 900
N.Y.S.2d 56, 59 (N.Y. App. Div. 1st Dept. 2010)
(“Because the sentence is ambiguous, extrinsic
evidence is admissible to resolve it.”); Scherer v.
North Shore Car Wash Corp., 72 A.D.3d 927, 929,
901 N.Y.S.2d 281 (N.Y. App. Div. 2d Dept. 2010)
(“[W]hen language of a stipulation is ambiguous,
that is, ‘reasonably susceptible of more than one
interpretation,’ extrinsic or parol evidence may be
permitted to determine the parties’ intent as to
the meaning of that language.”). The merger
clause does not change this basic, well-established
rule of law. See Chocolas Assocs. Ltd. P’Ship v.
Handelsman, 691 N.Y.S.2d 519, 519 (N.Y. App.
Div. 1st Dept. 1999) (affirming trial court’s deci-
sion “that the terms of a settlement agreement . . .
were sufficiently ambiguous [so as] to warrant the
introduction of extrinsic evidence, despite the ex-
vi
istence of a merger clause”); World Mgmt. Corp. v.
AT&T Info. Sys., Inc., 1525 N.Y.S.2d 433, 434–435
(N.Y. App. Div. 3d Dept. 1988) (“[N]either the con-
tract’s merger clause nor the parol evidence rule
would prohibit collateral evidence . . . since such
evidence would not modify or contradict the terms
of the contract, but would explain ambiguities in
the contract.”).
Id. at 29–30 (italicized information not marked confiden-
tial, but provided for context).
See Town of Wawarsing v. Camp, Dresser &
McKee, Inc., 855 N.Y.S.2d 691, 693 (N.Y. App. Div.
3d Dept. 2008) (holding that to determine the in-
tent of contracting parties, “[w]e are guided by ba-
sic principles of contract construction which
instruct that the provisions of a contract should be
construed as a whole with all parts given effect”).
Id. at 32.