Consent Decree

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The term “consent decree” is used to describe a formal agreement that resolves a dispute between parties without attributing blame to the parties. For example, a consent decree is signed without either party admitting to guilt in a criminal matter, or liability in a civil matter. The majority of settlement agreements in civil cases in the U. S. are consent decrees. To explore this concept, consider the following consent decree definition.

Definition of Consent Decree

Noun

  1. A formal agreement or settlement that resolves a dispute without either party having to admit guilt (in a criminal matter) or liability (in a civil matter).

Origin

1920–1925

What is a Consent Decree?

A consent decree is a formal agreement made on the record that ends a dispute without any of the parties having to admit guilt or liability. For example, a consent decree may be created in the event that an employee sues an employer for discrimination. Upon the employee agreeing to receive compensation for damages, the consent decree is drafted to end the matter without the employer having to admit guilt.

A consent decree can result from any of the following three situations:

  • A lawsuit is filed, and the parties agree to settle the matter before it has the chance to be put before a judge.
  • A lawsuit is filed, the parties go before the judge, and a settlement is reached after the judge has ruled on some of the issues within the case.
  • The parties settle the matter before the even file a lawsuit. Then they file the lawsuit just so the judge can enter the settlement on the record as a way of binding the parties to its terms. The settlement then becomes an official order of the court.

With civil cases, the judge will typically review and sign the decree right on the spot. However, in criminal cases, the judge may prefer to analyze the case a little more in depth before signing off on the decree.

If one party does not hold up his end of the bargain as he agreed to do in the decree, then the other party can bring him into court on the charge of contempt. If a consent decree is created as the product of a fraud, or if it contains factual or procedural errors, then the court may choose to “set it aside,” or reject it as a legitimate settlement agreement.

Divorce Consent Decree

A divorce consent decree is a settlement agreement issued at the end of a matrimonial case wherein the parties reach an agreement on all of the outstanding issues, from alimony to child support. The divorce consent decree also establishes how the parties should handle splitting up their property, including the marital home, and who is responsible for paying which bills.

The divorce consent decree also establishes all of the rules the parties should follow with regard to the children. This includes a visitation schedule for both parties, as well as the expenses each parent is to be responsible for with respect to the child’s education and welfare.

FDA Consent Decree

An FDA consent decree is an agreement made between an entity and the U. S. Food & Drug Administration (FDA) to enforce rules and regulations set by the FDA. Typically, an FDA consent decree is used in situations where a company is noncompliant with these rules and regulations. If the company is found to be selling products that have not been approved by the FDA, the company is knowingly breaking the law and may even be putting consumers’ lives at risk.

In the event the FDA gets wind of a company selling products not approved, the FDA can take that company to court. In some cases, a consent decree is then issued, the terms of which being in line with the FDA’s wishes insofar as how the company should proceed from that point.

For instance, in March 2018, the FDA took MyNicNaxs, LLC – a Florida-based company – to court, along with the company’s owner and one of its officers. The FDA’s claim was that MyNicNaxs, LLC was selling weight loss and sexual enhancement supplements under the guise of “dietary supplements” to its customers via online stores. Some of the products being sold by MyNicNaxs, LLC tested positive for “undeclared active pharmaceutical ingredients.”

Ultimately, a FDA consent decree was created wherein MyNicNaxs, LLC agreed to stop selling any and all drugs and dietary supplements until their products were in compliance with the Federal Food, Drug, and Cosmetic Act (FD&C Act), among other requirements.

EPA Consent Decree

An EPA consent decree is similar to a FDA consent decree in that both agreements seek to enforce the rules and regulations established by that agency. In this case, the difference is that these rules and regulations have been set by the Environmental Protection Agency (EPA). The organization uses consent decrees to enforce policies like the Clean Air Act and Clean Water Act.

For example, back in 2017, the EPA reached a consent decree with three producers of carbon black in the U. S. The three companies – Orion Engineered Carbons L.L.C., Sid Richardson Carbon and Energy Co., and Columbian Chemicals – agreed to spend, collectively, $300 million to install and being using technology that would reduce the amount of harmful air pollutants emitted by their companies, like sulfur dioxide and nitrogen oxide.

In addition to this hefty sum, the companies also agreed to pay additional fines and penalties, as well as perform projects that worked to benefit the environment. This was a huge win for the EPA, which estimated that the settlement would result in the decrease of sulfur dioxide emissions by about 10,000 tons per year, along with over 1,600 tons of nitrogen oxide.

Consent Decree Example Involving the Movie Business

Perhaps one of the most famous examples of a consent decree being reached after a judicial decision is that which involved the movie studio Paramount Pictures back in 1948. It was around this time that the Federal Trade Commission began investigating film companies for potential violations of the law. Paramount Pictures was ultimately sued by the federal government as the main party in a lawsuit against film companies – including Warner Bros., 20th Century Fox, and MGM – who were suspected of participating in an oligopoly with total control over how films were being distributed and shown.

A consent decree was established in 1940, which allowed the case to be temporarily dismissed. However, the federal government was permitted, as part of the consent decree, to re-open the case if it found that the studios had not made efforts to be complaint with the decree by November 1943.

The studios did not, in fact, make efforts to be compliant, and by 1942, they had come up with their own “Unity Plan.” This plan proposed letting the film companies book larger block of theaters, as long as those theaters were given the right to reject whatever films they did not want to show. The government rejected this proposal and, in accordance with the consent decree, reinstated the lawsuit in 1943.

The case went to trial in October 1945. The trial court found in favor of the movie studios, and the government immediately appealed the trial court’s decision. The case eventually made its way all the way up to the U. S. Supreme Court in 1948. The Court then issued a decision which would become a landmark decision in both antitrust law and film history.

The Court found the District Court’s decision to be “deficient” and, as such, should be set aside. The Court ruled in favor of the government, finding that the film companies were not fostering free trade, and ordered all of the named studios to drop their theater chains. This decision came about during the rise of television and the related drop in movie ticket sales. These things added up to cause such a slump in the film industry that it was not until 1972, when The Godfather was released, that a film could be considered a “blockbuster” again.

Related Legal Terms and Issues

  • Alimony – Court-ordered payments made by one spouse to the other after their separation or divorce has been finalized.
  • Antitrust Laws – A collection of federal and state government laws that regulates how corporations should behave in the spirit of fostering fair competition for the consumer’s benefit.
  • Contempt – A deliberate act of disobedience, or disregard for public authority, such as a court.
  • Fraud – A false representation of fact, whether by words, conduct, or concealment, intended to deceive another.
  • Judicial Decision – A decision made by a judge regarding the matter or case at hand.
  • Liable – Responsible by law; to be held legally answerable for an act or omission.
  • Oligopoly – A limited competition market wherein that market is shared by only a small number of businesses.
  • Trial – A formal presentation of evidence before a judge and jury for the purpose of determining guilt or innocence in a criminal case, or to make a determination in a civil matter.