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NLRB's Unopposed Petition to Enforce Consent Judgment Against Employer Lacks Adverseness Necessary to Confer Article III Jurisdiction: Fourth Circuit
Practical Law Legal Update w-036-5426 (Approx. 4 pages)
NLRB's Unopposed Petition to Enforce Consent Judgment Against Employer Lacks Adverseness Necessary to Confer Article III Jurisdiction: Fourth Circuit
by Practical Law Labor & Employment
| Published on 09 Aug 2022 • USA (National/Federal) |
In NLRB v. Constellium Rolled Products Ravenswood, LLC, the Fourth Circuit dismissed the National Labor Relations Board (NLRB) petition to enforce a consent judgment reflecting the terms of the parties' underlying settlement before the NLRB, holding that the petition did not present a justiciable case or controversy under Article III of the US Constitution because the parties lacked the adverseness necessary to support the exercise of federal jurisdiction.
On August 5, 2022, in NLRB v. Constellium Rolled Products Ravenswood, LLC, the Fourth Circuit dismissed the NLRB's petition to enforce a consent judgment reflecting the terms of the parties' underlying settlement before the NLRB, holding by a 2-1 majority that the petition did not present a justiciable case or controversy under Article III of the US Constitution because the parties lacked the adverseness necessary to support the exercise of federal jurisdiction. Specifically, in the parties' formal settlement stipulation in an unfair labor practice case, the employer agreed to:
- Stipulate facts reflecting various violations of the NLRA, as well as terms for a proposed NLRB order.
- Comply with the order immediately upon its entry by the NLRB.
- Waive all defenses and consent to the entry of the judgment sought by the NLRB in federal court enforcing the order under Section 160(e) of the NLRA (29 U.S.C. § 160(e)).
In finding that the court lacked Article III jurisdiction to enter the consent judgment, the majority:
- Noted that Article III adverseness requires, at a minimum, that the parties maintain adverse interests in the outcome of the litigation, which exist only when judicial action would have "real-world consequences"—that is, when it would cause real and immediate action or inaction by one of the parties that otherwise would not occur (US v. Windsor, 570 U.S. 744, 758 (2013); INS v. Chadha, 462 U.S. 919, 939 (1983)). Here, the majority reasoned that entry of the consent judgment would have no tangible real-world effect because:
- it would merely restate the employer's existing obligations under the NLRB's order; and
- the employer was in full compliance with its obligations under the settlement and the NLRB had not alleged any threatened breach.
- Concluded that although adverseness between the parties to the instant action existed in the underlying proceeding before the NLRB, it had been extinguished before the case arrived in federal court on the NLRB's petition for enforcement based on the terms of the parties' settlement.
- Rejected the argument advanced by the dissent that entry of the judgment itself has sufficient "real-world meaning" to confer federal jurisdiction because the judgment creates a basis for enforcement through a contempt proceeding—particularly as the underlying NLRB order is not self-executing. The majority reasoned that the potential for judicial enforcement of a hypothetical future violation through a hypothetical future contempt proceeding was insufficient to create the necessary "real-world consequences" in the instant case.
- Distinguished the long-standing practice of federal courts approving consent decrees, observing that the parties in those cases:
- have an ongoing controversy before the court's adoption of the consent decree; and
- continue to litigate the case if the court rejects the consent decree.
- Noted that although the US Supreme Court has reviewed and approved similar NLRB consent orders without raising concerns about adverseness, it has never clearly and definitively ruled on the question of Article III jurisdiction (see NLRB v. Ochoa Fertilizer Corp., 368 U.S. 318, 322 (1961)).
Judge Harris dissented, noting that the NLRB has used and federal courts have routinely enforced consent judgments like the one in this case for decades.
As the dissent noted, the majority's determination that the jurisdictional requirements of Article III of the US Constitution preclude the court's entry of the consent judgment in this case is a novel result that casts doubt on the NLRB's long-standing settlement practice. However, it is not clear whether the NLRB would consider amending its standard settlement terms to address some of the jurisdictional concerns raised by the majority and preserve a justiciable dispute post-settlement (for example, by expressly conditioning the settlement on judicial enforcement or not requiring the employer to waive its defenses preemptively) until other Circuits adopt the Fourth Circuit's analysis.