Reed v. United Teachers Los Angeles

208 Cal. App. 4th 322, 145 Cal. Rptr. 3d 454, 2012 WL 3255043, 2012 Cal. App. LEXIS 868

Opinions

Opinion

ASHMANN-GERST, J.

United Teachers Los Angeles (UTLA) appeals a judgment entered upon a consent decree after the trial court conducted a fairness hearing and gave the consent decree final approval.¹ The consent decree was reached between the Los Angeles Unified School District (District), the Partnership for Los Angeles Schools (Partnership) and students (Students) from three of the District’s schools (Three Schools)² to resolve claims that teacher layoffs had disproportionately and adversely impacted the Students’ constitutional and statutory rights to equal educational opportunities, and that additional layoffs would exacerbate the harm. According to UTLA, the consent decree potentially abrogates the seniority rights of its members and it is entitled to a decision on the merits of the Students’ claims as a matter of federal due process. In the alternative, it contends that the trial court lacked the authority under Code of Civil Procedure section 664.6 to enter the judgment. We agree on both counts. The judgment is reversed and the matter is remanded for further proceedings.

FACTS

The Education Code and the collective bargaining agreement between the District and its teachers generally require that when the District reduces its teaching force for budgetary reasons, layoffs must be based on seniority.³ In the summer of 2009, the District faced a budget shortfall, implemented a reduction in force (RTF) and laid off temporary and probationary teachers. Because the Three Schools employed a high number of new teachers, the 2009 RIF caused the Three Schools to lose up to two-thirds of their teachers. Other schools in the District did not suffer the same fate. For the 2009-2010 school year, vacancies at the Three Schools were filled with substitute teachers. In the spring of 2010, the District again faced a budget shortfall. It proposed a second RIF that would include permanent as well as probationary teachers.

The Students sued the District and the State of California on the theory, inter alia, that RTF’s deny them the constitutional right to equal educational opportunities.⁴ UTLA and the Partnership were joined as indispensable parties and named as defendants. To prevent further layoffs at the Three Schools, the Students requested a preliminary injunction. After hearing evidence, the trial court found that “[h]igh teacher turnover devastates educational opportunity” and that RTF’s have a “real and appreciable impact on [the Students’] fundamental right to equal educational opportunity.” The District was preliminarily enjoined from laying off teachers at the Three Schools.

The Students, the District and the Partnership (settling parties) negotiated a consent decree entitled “Intervention Program For Targeted Schools” (consent decree). It contained the following salient terms: (1) targeted schools are defined as (a) 25 schools to be identified by the District using various statistics, (b) up to 20 schools that the District “determines are likely to be negatively or disproportionately affected by teacher turnover,” and (c) the Three Schools;⁵ (2) in the event of a RTF, the District will skip teachers at the targeted schools; and (3) to minimize negative consequences at other schools as a result of skipping teachers at the targeted schools, the District will ensure that no other school is impacted to a degree greater than the District average.

Over UTLA’s objection, the trial court approved the consent decree after conducting a fairness hearing and finding that the consent decree was fair, reasonable and adequate. Judgment was rendered pursuant to the terms of the written order of final approval.

This timely appeal followed.

DISCUSSION

UTLA and the settling parties agree that the trial court did not decide the merits of the Students’ claims and that, for purposes of this appeal, the consent decree potentially affected the seniority rights of UTLA’s members. While UTLA argues that it was entitled to a decision on the merits, the settling parties argue that due process was satisfied by the fairness hearing.

The law supports UTLA.

I. Due process requires a decision on the merits.

The United States Supreme Court has instructed that the contract, statutory or constitutional rights of a party who intervenes or is joined in a lawsuit are entitled to no less respect than the rights asserted by the persons who originated a lawsuit. (Flight Attendants v. Zipes (1989) 491 U.S. 754, 765 [105 L.Ed.2d 639, 109 S.Ct. 2732] (Zipes).) Thus, in W R. Grace & Co. v. Rubber Workers (1983) 461 U.S. 757, 771 [76 L.Ed.2d 298, 103 S.Ct. 2177] (W.R. Grace), the court held that “[a]bsent a judicial determination,” the Equal Employment Opportunity Commission and an employer could not “alter [a] collective-bargaining agreement without” an affected union’s consent. (W.R. Grace, supra, at p. 771.) The court noted that “[p]ermitting such a result would undermine the federal labor policy that parties to a collective-bargaining agreement must have reasonable assurance that their contract will be honored. [Citation.] Although the ability to abrogate unilaterally the provisions of a collective-bargaining agreement might encourage an employer to conciliate with the Commission,' the employer’s added incentive to conciliate would be paid for with the union’s contractual rights.” (Ibid.) Then, in Firefighters v. Cleveland (1986) 478 U.S. 501, 529 [92 L.Ed.2d 405, 106 S.Ct. 3063] (Local Number 93), the court held that a trial court’s “approval of a consent decree between some of the parties therefore cannot dispose of the valid claims of nonconsenting intervenors; if properly raised, these claims remain and may be litigated by the intervenor.”⁶ In our view, these cases ineluctably establish that neither a consent decree nor a trial court’s approval of a consent decree can abrogate a third party’s rights. The only permissible inference from these holdings is that a third party is entitled to a decision on the merits. There is no other way for the courts to provide equal respect to settling parties’ rights and the rights of nonsettling interveners as the Supreme Court has mandated by its decision in Zipes. Our understanding of Supreme Court precedent is bolstered by Martin v. Wilks (1989) 490 U.S. 755 [104 L.Ed.2d 835, 109 S.Ct. 2180] (Martin). In Martin, the court cited Local Number 93 as support for this statement: “A voluntary settlement in the form of a consent decree between one group of employees and their employer cannot possibly ‘settle,’ voluntarily or otherwise, the conflicting claims of another group of employees who do not join in the agreement. This is true even if the second group of employees is a party to the litigation.” (Martin, supra, 490 U.S. at p. 768.)

W.R. Grace, Local Number 93, and Zipes represent the trend regarding the dictates of procedural due process under the federal Constitution. (People v. Bradley (1969) 1 Cal.3d 80, 86 [81 Cal.Rptr. 457, 460 P.2d 129]; Moon v. Martin (1921) 185 Cal. 361, 366 [197 P. 77].) That trend is amplified by lower federal decisions.

In U.S. v. City of Hialeah (11th Cir. 1998) 140 F.3d 968, 983 (Hialeah), the United States negotiated a consent decree with a city to remedy alleged racial discrimination in the hiring of firefighters and police officers. (Hialeah, supra, at p. 971.) The parties to the settlement sought approval based on a prima facie showing of discrimination. The respective unions objected and the district court refused to approve the consent decree because it contained retroactive seniority provisions that conflicted with the employees’ contractual seniority rights. (Ibid.) The Eleventh Circuit affirmed. It held that case law does not allow “an objecting party’s rights to be dispensed with upon nothing more than a prima facie showing of discrimination. Proof at trial is required.” (Id. at p. 978.)

When deciding Hialeah, the Eleventh Circuit relied on the en banc decision of the former Fifth Circuit in U.S. v. City of Miami, Florida (5th Cir. 1981) 664 F.2d 435 (City of Miami). City of Miami held that “a decree disposing of some of the issues between some of the parties may be based on the consent of the parties who are affected by it but that, to the extent the decree affects other parties or other issues, its validity must be tested by the same standards that are applicable in any other adversary proceeding.” (Id. at p. 436.) It added that a “party potentially prejudiced by a decree has a right to a judicial determination of the merits of its objection” and that those “who seek affirmative remedial goals that would adversely affect other parties must demonstrate the propriety of such relief.” (Id. at p. 447.) The court reversed the portion of a consent decree that affected the rights of an objecting party and remanded “for trial of the complaint.” (Id. at p. 436.)⁷

The consent decree in City of Miami contained numerous provisions impacting a city’s employees. But the lead opinion left most of those provisions intact because there was no objection or they did not affect the employees represented by the appellant, the Fraternal Order of Police (FOP). Per the lead opinion, the FOP had limited standing to challenge a provision in the consent decree pertaining to promotions. (City of Miami, supra, 664 F.2d at p. 445.) Thus, the lead opinion stated; “The provisions of the court’s decree shall be modified to provide that it does not affect the promotion of members of the Police Department. As thus restricted, we affirm its reentry upon remand. The case is remanded, in addition, for further proceedings, consistent with this opinion, to determine whether the United States has the right to claim any relief concerning police promotion. If, at trial, the United States can prove that the City has discriminated against black, Spanish-sumamed, or female police officers, or that the City has so discriminated in its employment policy as to prejudice their opportunities for promotion, and that affirmative action in favor of the affected class is appropriate remedial action, the United States may seek such relief, including reimposition of the contents of paragraph 5(c) [of the consent decree]. The FOP shall, of course, be afforded the opportunity either to contend that discrimination, the necessary predicate for relief, has not been proved, or to show that the type of relief embodied in paragraph 5(c) is, in this instance, unnecessary, inadvisable, or unconstitutional.” (Id. at p. 448.)

Eleven judges concurred in the lead opinion. But they dissented insofar as the lead opinion did not grant the broader relief of reducing the consent decree to a preliminary injunction pending a trial on the merits. In other words, the concurring and dissenting opinion agreed that the FOP was entitled to a trial regarding the promotion provision but disagreed that the rest of the consent decree could be confirmed based on the FOP’s lack of standing or objection.⁸ (City of Miami, supra, 664 F.2d at pp. 448-453 (conc. & dis. opn. of Gee, J.).)

Both Hialeah and City of Miami require a decision on the merits.

The Ninth Circuit is in accord. In U.S. v. City of Los Angeles, California (9th Cir. 2002) 288 F.3d 391, 400 (City of Los Angeles), the Ninth Circuit cited W.R. Grace, Local Number 93, City of Miami, and Hialeah and stated: “Except as part of court-ordered relief after a judicial determination of liability, an employer cannot unilaterally change a collective bargaining agreement as a means of settling a dispute over whether the employer has engaged in constitutional violations.” (See U.S. v. State of Oregon (9th Cir. 1990) 913 F.2d 576, 582, fn. 4 (Oregon) [“If a remedy is sought against a nonconsenting party, the matter must be remanded for trial.”].)⁹ The Tenth Circuit has followed suit, as demonstrated by Johnson v. Lodge # 93 of Fraternal Order of Police (10th Cir. 2004) 393 F.3d 1096, 1109 (Johnson). The Johnson court cited Hialeah and City of Miami with approval and stated: “[A] nonconsenting intervenor may block approval of a consent decree only if the decree adversely affects its legal rights or interests. [Citations.]” (Johnson, supra, 393 F.3d at p. 1107.) Previously, in Sanguine, Ltd. v. U.S. Dept. of Interior (10th Cir. 1986) 798 F.2d 389, 391, the Tenth Circuit held that if an objecting union’s rights are “resolved by consent decree and not adversary litigation, [the] case presents a unique situation in which prejudice to the [union] can be avoided only by setting aside the prior judgment and allowing the opportunity to litigate the merits of the case.”

In Kirkland v. New York State Dept. of Correctional Services (2d Cir. 1983) 711 F.2d 1117, 1126-1127 (Kirkland), the Second Circuit cited City of Miami with approval. And in Wilder v. Bernstein (S.D.N.Y. 1986) 645 F.Supp. 1292 (Wilder), the district court cited Local Number 93 and stated that parties who choose to resolve litigation through settlement may not dispose of the claims of a third party without its consent. (Wilder, supra, at p. 1318.) Recently, citing Martin and Local Number 93, the Second Circuit stated: “[I]t is well settled that no voluntary settlement—whether entered as a consent decree, approved under [Federal Rules of Civil Procedure] Rule 23(e), or agreed to in private—can dispose of the claims of a non-consenting third party.” (U.S. v. Brennan (2d Cir. 2011) 650 F.3d 65, 118 (Brennan).) Thus, based on Kirkland, Wilder and Brennan, it is fair to say that the Second Circuit also interprets that law as requiring a decision on the merits.

Prior to W.R. Grace and Local Number 93, the rule in the Seventh Circuit was that a consent decree could abridge the preexisting rights of third parties. (Metropolitan Housing v. Village of Arlington Heights (N.D.Ill. 1979) 469 F.Supp. 836, 851-852; Equal Employment Opportunity Com. v. American Telephone & Telegraph Co. (3d Cir. 1977) 556 F.2d 167 [a consent decree can affect third party rights]; Airline Stewards, Etc. v. American Airlines (7th Cir. 1978) 573 F.2d 960, 964 [the district court did not have a duty to litigate the merits of the plaintiffs’ claims prior to approving a settlement that impacted the rights of other individuals].) Then, in 1992, the Seventh Circuit cited W.R. Grace, Local Number 93 and other cases and stated that “ ‘parties who choose to resolve litigation through settlement may not dispose of the claims of a third party, and a fortiori may not impose duties or obligations on a third party, without that party’s agreement.’ [Citation.] [Citations.] In particular, they may not alter collective bargaining agreements without the union’s assent. [Citation.] Neither may litigants agree to disregard valid state laws. [Citations.]” (People Who Care v. Rockford Bd. of Education (7th Cir. 1992) 961 F.2d 1335, 1337 (People Who Care).) Ultimately, the Seventh Circuit held that “before altering the contractual (or state-law) entitlements of third parties, the court must find the change necessary to an appropriate remedy for a legal wrong. Even if this finding may come on abbreviated proceedings (a subject we have not decided), there must be such a finding.” (Id. at p. 1339.) In People Who Care, the Seventh Circuit did not specify the nature of the proceeding required for abrogating a third party’s rights. Nonetheless, it is in line with W.R. Grace and Local Number 93 insofar as it requires a finding of a legal wrong and therefore necessarily requires a decision on the merits of the plaintiff’s claims.

The settling parties argue that multiple lower federal cases have interpreted the due process clause as requiring much less than Hialeah and City of Miami. Based on our reading, we cannot concur.

In Dennison v. Los Angeles Dept. of Water & Power (9th Cir. 1981) 658 F.2d 694 (Dennison), an employee sued an employer for race discrimination on behalf of himself and other minority employees. The parties negotiated a consent decree that required the employer to implement an affirmative action program. After a fairness hearing, and after the district court heard the views of an objecting union, the consent decree was approved. Subsequently, the union sued the employer to recover compensation for nonminority employees who were denied promotions because of the consent decree. The district court granted summary judgment for the employer. The Ninth Circuit affirmed the summary judgment and upheld “the district court’s decision on the ground that the present action is an impermissible collateral attack.” (Id. at p. 695.) In addition, the court noted that “the [f]airness [h]earing held before the consent decree was formally adopted adequately afforded the union an opportunity to present to the court its view of the adverse impact of the decree on non-minority employees.” (Id. at p. 696.)

Two reasons dissuade us from reading Dennison as permitting a trial court to abrogate a nonsettling party’s contractual or statutory rights based upon a mere finding that a consent decree is fair. To begin with, it predates W.R. Grace and Local Number 93 and those cases are controlling. Additionally, the consent decree in Dennison did not abrogate specific and affirmative contractual or statutory promises of promotion that had been given to the nonminority employees through a collective bargaining agreement or by a legislative body. In other words, they did not possess a legally enforceable right to receive promotions. At most, the nonminority employees had an expectation of receiving promotions under a discriminatory practice. (See Vanguards of Cleveland v. City of Cleveland (6th Cir. 1985) 753 F.2d 479, 484-485 [“Since non-minorities do not have a legally protected interest in promotions which could only be made pursuant to discriminatory employment practices, it follows that the legal rights of non-minorities will not be adversely affected by reasonable and lawful race-conscious hiring or promotional remedies.”].) Here, subject to exception, UTLA’s members were granted seniority rights by contract and statute. Those rights are not on par with the expectation of the nonminorities in Dennison.

Johnson held that a union lodging an objection to a consent decree was entitled to nothing more than a fairness hearing. (Johnson, supra, 393 F.3d at p. 1096.) The consent decree in that case, however, did not alter the union’s contractual rights, and the court therefore held that W.R. Grace did not require a judicial determination. (Johnson, supra, at pp. 1105, 1109.) The court recognized two distinct rules. Number one, an objecting party without any rights at stake “ ‘is entitled to present evidence and have its objections heard at the hearings on whether to approve a consent decree, [but] it does not have power to block the decree merely by withholding its consent.’ [Citation.]” (Id. at p. 1107.) Number two, “a consent decree may not impose duties or obligations on an intervener that does not consent to settlement, nor dispose of valid claims the party has under the Constitution, a statute, or contract. [Citation.]” (Ibid.) While the facts of Johnson invoked the former rule, the facts of this case invoke the latter. Subsequently decided cases can be similarly parsed.

The Oregon court held that the district court did not have to conduct a Ml evidentiary hearing before approving a conservation plan akin to a consent decree. But Oregon, like Johnson, involved a settlement that did not abrogate the contractual rights of third parties. (Oregon, supra, 913 F.2d at pp. 582-583 & fn. 6 [the objecting parties asserted an interest in preserving natural resources].) U.S. v. Comunidades Unidas Contra la Contaminacion (1st Cir. 2000) 204 F.3d 275, 279 (Comunidades) falls into the same camp. The trial court did not have to hold an evidentiary hearing because the objecting party only claimed that an environmental consent decree did not sufficiently protect the environment. (Ibid.) Oregon and Comunidades do not apply when contractual or statutory rights are at stake.

An intervener objected to a class action settlement in Lelsz v. Kavanagh (N.D.Tex. 1991) 783 F.Supp. 286 (Lelsz) and appealed when the settlement was approved. Lelsz acknowledged that pursuant to Local Number 93, parties who settle litigation “ ‘may not dispose of the claims of a third party . . . without that party’s agreement.’ [Citation.]” (Lelsz, supra, at pp. 291-292.) Despite that rule, the intervener lost on appeal. The intervener was permissive and it was “not at all clear” what contractual interests or rights the intervener was asserting. (Id. at p. 293.) The court held that the intervener was not entitled to block the settlement because it did not have a sufficiently strong interest under Local Number 93 and Zipes. (Lelsz, supra, at p. 294 [“[the intervener’s] interest in the Implementation Agreement alone, though it entitles [the intervener] to be heard on the reasonableness and legality of the settlement, is not so strong as to require its consent to the settlement”].) Thus, the district court recognized that a sufficiently strong interest required a different procedure than a fairness hearing. It bears pointing out, as well, that the Lelsz court is in the Fifth Circuit. As a district court, it was bound by the Fifth Circuit’s decision in City of Miami. There is no suggestion in Lelsz that it was purporting to depart from precedent.

When the First Circuit decided Durrett v. Housing Authority of City of Providence (1st Cir. 1990) 896 F.2d 600 (Durrett), it cited City of Miami and stated that “if third parties will be affected” by a settlement, the court must ensure “that it will not be unreasonable or legally impermissible as to them. [Citation.]” (Durrett, supra, at p. 604.) Nonetheless, Durrett reversed an order denying approval of a proposed consent decree because, in part, “[n]o protesting third parties have appeared” and there was “no suggestion, or basis for one, that the proposed [consent] decree would violate any law.” (Ibid.) Durrett cannot be read as disagreeing with the holdings of the Supreme Court or other circuits.

Simply put, the settling parties have not cited any lower federal decisions that change our perception of the trend as stated in W.R. Grace and Local Number 93. Even if case law did not establish a trend, we would adopt the reasoning of Hialeah and City of Miami as the law of California because those cases properly recognized that the rights of a nonsettling party should be given no less respect than the rights of parties who negotiate a consent decree. In other words, all parties should have the right to either voluntarily compromise a claim or litigate.

II. The trial court did not decide the merits at the fairness hearing.

Though the parties agree that a fairness hearing is not a decision on the merits, it is important to contextualize the nature of the fairness hearing that transpired below. As noted by Justice Rehnquist in his dissent in Ashley v. City of Jackson, Miss. (1983) 464 U.S. 900, 902 [78 L.Ed.2d 241, 104 S.Ct. 255] (dissenting from the denial of certiorari), “The central feature of any consent decree is that it is not an adjudication on the merits. The decree may be scrutinized by the judge for fairness prior to his approval, but there is no contest or decision on the merits of the issues underlying the lawsuit.” The Ninth Circuit, in Oregon, explained that at a fairness hearing, the court “should not determine [the] contested issues of fact that underlie the dispute.” (Oregon, supra, 913 F.2d at p. 582.)¹⁰ A review of the California Rules of Court and relevant case law prove that this is the rule in our state.

Parties who settle a class action may move the trial court for preliminary approval of the settlement. (Cal. Rules of Court, rule 3.769(c).) If preliminary approval is granted, the trial court must order that notice of the final approval hearing be given to members of the class. (Cal. Rules of Court, rule 3.769(e).) Before final approval can be granted, the trial court must first conduct an inquiry into the fairness of the proposed settlement. (Cal. Rules of Court, rule 3.769(g).)

The trial court has broad discretion to determine whether a class action settlement is fair. It should consider factors such as the strength of the plaintiffs’ case; the risk, expense, complexity and likely duration of further litigation; the risk of maintaining class action status through trial; the amount offered in settlement; the extent of discovery completed and the stage of the proceedings; the experience and views of counsel; the presence of a governmental participant; and the reaction of the class members to the proposed settlement. (Nordstrom Com. Cases (2010) 186 Cal.App.4th 576, 581 [112 ] (Nordstrom); Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801 [56 Cal.Rptr.2d 483].) But the “list of factors is not exclusive and the court is free to engage in a balancing and weighing of factors depending on the circumstances of each case. [Citation.]” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 245 [110 Cal.Rptr.2d 145] (Wershba).) In sum, the trial court must determine that the settlement was not the product of fraud, overreaching or collusion, and that the settlement is fair, reasonable and adequate to all concerned. (Nordstrom, supra, at p. 581.)

The burden is on the proponent of the settlement to show that it is fair and reasonable. (Wershba, supra, 91 Cal.App.4th at p. 245.) However, there is a presumption of fairness when (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the trial court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small. (Ibid.)

Consistent with these rules,, the lengthy written order (order) after the fairness hearing confirms that the trial court issued a discretionary ruling on the fairness of the consent decree and did not decide the merits.

The order explained that the fairness hearing took place over a four-day period. The parties presented live testimony from eight witnesses; submitted 30 declarations and 15 depositions from District administrators, UTLA members, UTLA officers and expert witnesses; and entered numerous documents into evidence. Based on the record, the trial court determined that the consent decree was fair, reasonable and adequate, and it granted final approval. In support, the trial court made the following factual and legal findings: (1) the California Constitution guarantees to all public school students a fundamental right to basic equality of educational opportunity; (2) in a budget-based RIF, permanent teachers must be laid off in reverse order of seniority, but deviation is allowed pursuant to section 44955, subdivision (d)(2) for the purpose of maintaining or achieving compliance with equal protection; (3) the layoff of probationary teachers is governed by the collective bargaining agreement, and the collective bargaining agreement implicitly incorporates the principle of equal protection; (4) to approve a consent decree, a trial court need not make findings on the underlying claims, and its determination at a fairness hearing is nothing more than an amalgam of delicate balancing, gross approximation and rough justice; (5) if a consent decree is presumptively valid, an objecting party has the burden of proving that its legal rights are adversely affected and the settlement is unreasonable; (6) the consent decree negotiated by the settling parties meets the criteria for being presumptively fair; and (7) viewed in the limited posture of a fairness hearing in which the consent decree is presumed fair, the evidence shows that the District violated the California Constitution by failing to provide an adequate basic public education at the Three Schools, and also that constitutional violations are likely to occur at other schools within the District.

III. The trial court must determine the merits of the Students’ claims.

When a RTF occurs, permanent teachers must be terminated in “the inverse of the order in which they were employed.” (§ 44955, subd. (c).) The collective bargaining agreement provides the same for probationary teachers. A trial court may alter those seniority rights, but only if there is a proper legal basis. (§ 44955, subd. (d)(2) [the seniority system for permanent teachers can be altered “[f]or purposes of maintaining or achieving compliance with constitutional requirements related to equal protection of the laws”]; W.R. Grace, supra, 461 U.S. at p. 766 [“[a]s with any contract . . . , a court may not enforce a collective-bargaining agreement that is contrary to public policy”].) UTLA’s members are prejudiced by the consent decree because it would alter the system for RTF’s by requiring the District to skip certain less senior teachers and lay off more senior teachers. Because the trial court never decided the merits of the Students’ claims, it erred when it approved the consent decree and entered judgment against UTLA. The matter must be remanded. (City of Miami, supra, 664 F.2d at p. 447 [“[a] party potentially prejudiced by a [consent] decree has a right to a judicial determination of the merits of its objection”].)

IV. Code of Civil Procedure section 664.6.

Even if federal due process allowed the trial court to abrogate the rights of teachers with no more than a fairness hearing, state law does not.

At base, the Students’ motion for approval of the consent decree was a motion to enforce it, i.e., to render the consent decree binding on all of the parties to the litigation. In Levy v. Superior Court (1995) 10 Cal.4th 578 [41 Cal.Rptr.2d 878, 896 P.2d 171] (Levy), our Supreme Court explained that the methods for enforcing a settlement are a motion for summary judgment, a separate suit in equity, an amendment to the pleadings in the settled action or a motion under Code of Civil Procedure section 664.6. (Levy, supra, 10 Cal.4th at p. 586, fn. 5.) The Students did not obtain judgment through summary judgment. Nor did they obtain a judgment in connection with a separate suit in equity or through an amendment to the pleading (which, of course, would later be subject to proof). Thus, the only possible authority for the judgment entered was Code of Civil Procedure section 664.6.

Code of Civil Procedure section 664.6 provides: “If parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.” The “term ‘parties’ as used in section 664.6 . . . means the litigants themselves.” (Levy, supra, 10 Cal.4th at p. 586.) An agreement cannot be enforced pursuant to section 664.6 against a litigant who did not sign it or stipulate orally before the court. (Ibid.; Harris v. Rudin, Rickman & Appel (1999) 74 Cal.App.4th 299, 306 [87 Cal.Rptr.2d 822] [“We simply hold the section’s requirement of a ‘writing signed by the parties’ must be read to apply to all parties bringing the section 664.6 motion and against whom the motion is directed.”].)

When interpreting a statute, we must ascertain the Legislature’s intent. (California Ins. Guarantee Assn. v. Workers’ Comp. Appeals Bd. (2012) 203 Cal.App.4th 1328, 1338 [138 Cal.Rptr.3d 24].) “In ascertaining that intent, a court must ‘ “first tum[] to the words used. [Citation.] [][] When statutory language is clear and unambiguous, there is no need for construction and courts should not indulge in it. [Citations.]” [Citation.]’ [Citation.]” (Ibid) Code of Civil Procedure section 664.6 applies to “pending litigation.” (§ 664.6.) There is no qualification in the language. It applies to class actions.

The Students and District read Code of Civil Procedure section 664.6 differently. They argue that under its plain language, section 664.6 “defines when parties may opt to have the trial court reserve jurisdiction over performance of a settlement agreement.” Thus, they contend that the statute only pertains to the retention of jurisdiction. But, undeniably, the statute also defines when a trial court “may enter judgment pursuant to the terms of the settlement.” (Code Civ. Proc., § 664.6.) We have no power to ignore the Legislature’s plain and direct statutory language.

In addition to the foregoing, we conclude that parties to pending litigation in a class action refers to the class representatives and the opposing parties but does not include the unnamed class members. Our interpretation hews to the rule that we must “avoid a construction that would produce absurd consequences, which we presume the Legislature did not intend. [Citations.]” (People v. Mendoza (2000) 23 Cal.4th 896, 908 [98 Cal.Rptr.2d 431, 4 P.3d 265].) If we interpreted Code of Civil Procedure section 664.6 as requiring all class members to consent in writing or before the trial court, the requirement would be so daunting that class actions would probably not settle.

Here, UTLA did not sign the consent decree. Therefore, the consent decree cannot be enforced against UTLA or any of the teachers and the judgment was improper.

According to the Students and the District, UTLA’s contention that the judgment is not proper under Code of Civil Procedure section 664.6 has no merit because the trial court properly entered judgment pursuant to the process contemplated by California Rules of Court, rule 3.769. Specifically, they argue that the “process is distinguishable from the procedures required by [Code of Civil Procedure] section 664.6. A judgment entered pursuant to [Code of Civil Procedure] section 664.6 is a ministerial act done according to the terms of the agreement. The [jjudgment entered here was accomplished upon the court’s approval after a four-day evidentiary hearing. This [[judgment was pursuant to judicial action and involved more than simply entering the terms of the settlement.”

We disagree.

California Rules of Court, rule 3.769 provides in part: “If the court approves the settlement agreement after the final approval hearing, the court must make and enter judgment.” (Cal. Rules of Court, rule 3.769(h).) The problem for the Students and District is that this rule does not contemplate approval of a class action that abrogates the rights of nonsettling parties. This conclusion is easily drawn from the fact that the rule requires notice of the final approval hearing to class members but not any other person whose rights might be compromised. (Cal. Rules of Court, rule 3.769(f).)'The reason is easy to surmise. This rule was designed to protect absent class members against class attorneys and class representatives failing to adequately represent the class. Moreover, it is the rare class action settlement that abrogates a nonsettling party’s contractual or statutory rights. Based on these two facts, we conclude that when the Judicial Council promulgated California Rules of Court, rule 3.769, it did not contemplate that the rights of nonsettling parties would be implicated.

Despite the foregoing, the Students and District suggest that California Rules of Court, rule 3.769 either trumps Code of Civil Procedure section 664.6 or that the statute simply does not apply to class action settlements. To support this view, they neither engage in statutory interpretation nor cite to any legislative history with respect to Code of Civil Procedure section 664.6. Rather, they contend that the last word on the topic is set forth in the August 12, 2008, report of the Civil and Small Claims Advisory Committee (August 12, 2008, Report) to the Judicial Council. In that report, the committee proposed amendments to California Rules of Court, rules 3.769 and 3.770 “to provide that on the approval of a class settlement and entry of judgment, a court may not also enter dismissal of the action.” (Aug. 12, 2008, Rep., p. 1.) As we elucidate below, the August 12, 2008, Report does not impact our interpretation of the law.

In the rationale for the proposed amendments, the report stated that the “[rjetention of jurisdiction to enforce a settlement in a non-class action case is governed by Code of Civil Procedure section 664.6” and noted that Wackeen v. Mails (2002) 97 Cal.App.4th 429, 439 [118 Cal.Rptr.2d 502] (Wackeen) held that a trial court could retain jurisdiction to enforce the terms of an approved settlement even after dismissal. (Aug. 12, 2008, Rep., p. 2.) “The court’s holding in Wackeen . . . has not been applied to a class settlement in a published opinion. Unlike a nonrepresentative action, in a class action, because of the need to protect the absent class members who did not participate in settlement negotiations, the settlement terms are reflected in the judgment when the court approves the class settlement, and it is not necessary in a class settlement for the parties to ask the court to retain jurisdiction to enforce the court-approved settlement terms” because that is already required by California Rules of Court, rule 3.769(h). (Aug. 12, 2008, Rep., p. 2.) “Moreover, a typical nonrepresentative action does not require court approval of a settlement because all the parties to the settlement are before the court and their settlement may be enforced as any other private contractual agreement may be enforced, [f] The purpose of requiring court approval of a class settlement and court approval of the dismissal of a class action is to protect the interests of the class and its members. [Citations.] Rules prohibiting the concurrent entry of judgment following settlement with retention of jurisdiction and entry of dismissal will advance this purpose.” (Aug. 12, 2008, Rep., p. 3.)

The August 12, 2008, Report does not interpret Code of Civil Procedure section 664.6, nor does it conclude that California Rules of Court, rule 3.769 controls in a class action. Even if it had expressed the view that the rale controls over the statute, it would not matter. First, the text of California Rules of Court, rale 3.769 does not contain language providing that section 664.6 is inapplicable to class actions. Second, as our Supreme Court held in Hess v. Ford Motor Co. (2002) 27 Cal.4th 516, 532 [117 Cal.Rptr.2d 220, 41 P.3d 46], “[r]ules promulgated by the Judicial Council may not conflict with governing statutes. [Citation.] If a rale is inconsistent with a statute, the statute controls. [Citation.]” (See People v. Hall (1994) 8 Cal.4th 950, 963 [35 Cal.Rptr.2d 432, 883 P.2d 974].) Thus, if California Rules of Court, rale 3.769 expressly or impliedly allows entry of judgment against a nonsettling party pursuant to a settlement agreement, then that portion of it conflicts with Code of Civil Procedure section 664.6 and is invalid.

In any event, we do not read California Rules of Court, rale 3.769 in a manner that is incompatible with Code of Civil Procedure section 664.6. The rale simply provides a procedure for protecting absent class members and therefore controls the approval of a class action settlement, but the trial court’s power to enter judgment after approval of a class action settlement derives from the statute. It is true that California Rules of Court, rale 3.769(h) calls for entry of judgment after approval. That rale, however, did not create the trial court’s power to enter judgment. Rather, the rule reflects the Judicial Council’s instruction on employing that power.

All other issues raised by the parties are moot.

DISPOSITION

The judgment is reversed and remanded.

UTLA shall recover its costs on appeal.

Chavez, J., concurred.

Footnotes

1

A consent decree is no more than a settlement that contains an injunction. (In re Masters Mates & Pilots Pension Plan (2d Cir. 1992) 957 F.2d 1020, 1025.)

2

Two of the Three Schools are operated by the Partnership.

All further statutory references are to the Education Code unless otherwise indicated.

3

Except as provided by statute, section 44955, subdivision (b) establishes that the services of permanent employees may not be terminated “while any probationary employee, or any other employee with less seniority, is retained to render a service which said permanent employee is certificated and competent to render.” Article XIII, paragraph 3.0(b) of the collective bargaining agreement states that the “order of termination [of probationary teachers] . . . shall be based on seniority within status.”

4

The complaint alleged that the District denied the Students equal educational opportunities and other rights guaranteed by Government Code section 11135 as well as article I, section 7, subdivisions (a) and (b), article IV, section 16, subdivision (a), and article IX, sections 1 and 5 of the California Constitution. They requested declaratory and injunctive relief.

5

The Three Schools were slated to become targeted schools after the preliminary injunction expired on June 30, 2011.

6

The dissent points out that the court determined that an objecting union received sufficient due process because it was permitted to air its objections to the reasonableness of a consent decree and introduce relevant evidence. (Local Number 93, supra, 478 U.S. at p. 529.) In our view, the point is moot as indicated by the following quote from the opinion. “Of course, parties who choose to resolve litigation through settlement may not dispose of the claims of a third party, and a fortiori may not impose duties or obligations on a third party, without that party’s agreement. A court’s approval of a consent decree between some of the parties therefore cannot dispose of the valid claims of nonconsenting intervenors; if properly raised, these claims remain and may be litigated by the intervenor. [Citations.] And, of course, a court may not enter a consent decree that imposes obligations on a party that did not consent to the decree. [Citations.] However, the consent decree entered here does not bind Local 93 to do or not to do anything. It imposes no legal duties or obligations on the Union at all; only the parties to the decree can be held in contempt of court for failure to comply with its terms. [Citation.] Moreover, the consent decree does not purport to resolve any claims the Union might have under the Fourteenth Amendment ... or as a matter of contract .... Indeed, despite the efforts of the District ludge to persuade it to do so, the Union failed to raise any substantive claims.” (Id. at pp. 529-530.) Because the union did not raise substantive claims, it had no right to a decision on the merits.

7

The settling parties suggest that the rule in the Fifth Circuit was announced by the court in Cotton v. Hinton (5th Cir. 1977) 559 F.2d 1326 (Cotton). The suggestion lacks merit. Cotton merely held that objecting members of a settling class are entitled to a fairness hearing. (Id. at p. 1331.) There was no discussion regarding the abrogation of a nonsettling party’s rights. Plus, Cotton predated City of Miami as well as W.R. Grace and Local Number 93. We easily conclude that Cotton, decided in 1977, fails to shed light on the law in 2012.

8

The concurring and dissenting opinion eloquently stated: “An appellant is before us complaining that it has had no day in court—has never been set for trial or had notice of a setting—but has been judged away. This error is so large and palpable that, like an elephant standing three inches from the viewer’s eye, it is at first hard to recognize. The major dissent is reduced to arguing that it is all right to enter a permanent injunction without a trial against one who is unable, in advance of such a trial, to show the court how his rights will be infringed by the order. Here is new law indeed, law that we cannot accept. [$] And while it is well and very well to extoll the virtues of concluding Title VII litigation by consent, as do our brethren—a sentiment in which we concur—we think it quite another to approve ramming a settlement between two consenting parties down the throat of a third and protesting one, leaving it bound without trial to an agreement to which it did not subscribe. If this be permitted, gone is the protester’s right to appear in court at a trial on the merits, present evidence, and contend that the decree proposed is generally infirm—as imposing unconstitutional or illegal exactions—so that it should not be entered at all or so as to bind any party or affected third party. Who can know what the protester might have been able to show at such a hearing, one to which first-reader principles of procedural due process entitle it? Surely, whether or not it had the power to persuade the trial court, it had the right to try.” (City of Miami, supra, 664 F.2d at pp. 451-452 (conc. & dis. opn. of Gee, J.), fn. omitted.)

9

Alaniz v. California Processors, Inc. (N.D.Cal. 1976) 73 F.R.D. 289, 293, cited by the settling parties, held that the seniority rights of nonsettling employees could be compromised based on a prima facie showing of discrimination against the plaintiffs in a title VH action. That holding was nullified by W.R. Grace, Local Number 93, and Ninth Circuit opinions such as City of Los Angeles.

10

City of Miami succinctly explained that “the agreement of the parties is not equivalent to a judicial decision on the merits. It is not the result of a judicial determination after the annealment of the adversary process and a judge’s reflection about the ultimate merits of conflicting claims. It does not determine right and wrong in the initial dispute. Forged by the parties as a compromise between their views, it embodies primarily the results of negotiation rather than adjudication.” (City of Miami, supra, 664 F.2d at p. 440.)