The Sixth Circuit’s recent decision in Benalcazar v. Genoa Township, — F.3d — (6th Cir. June 10, 2021), provides a nugget in the law of Federal Courts regarding consent decrees. It’s also interesting from an appellate-practice perspective.

The case concerned a zoning dispute. Landowners in an Ohio township sought to rezone their rural acreage for development. The township agreed, but individual residents of the township did not. They utilized state law to pass a referendum that prevented the rezoning. Then landowners responded by suing the township in federal court, alleging that they were being deprived of their rights under the Due Process and Equal Protection Clauses. When the township and the landowners agreed to settle the federal case through a consent decree, the district court permitted the individual residents to intervene. They did, and moved to dismiss the suit. The district court granted their motion only in part and then approved the consent decree, and the residents appealed.

On appeal, the principal question presented was whether a legitimate federal court dispute existed, since that’s a necessary predicate for a consent decree. And how should the court go about answering that question? Chief Judge Sutton’s opinion for the court noted that “[a]s the parties have litigated this case, they have assumed that a court may not oversee a settlement unless it first establishes that the underlying complaint survives a motion to dismiss under Civil Rule 12(b)(6).” That was the wrong frame, however, because “[s]ubject matter jurisdiction over a dispute is one thing; the merits of the underlying dispute are another…. What matters here is a threshold question, one distinct from the plausibility inquiry of Civil Rule 12(b)(6): Namely, do the federal questions raised by this complaint legitimately create federal court jurisdiction because they are not so frivolous as to be a contrived effort to create such jurisdiction?” Because the answer to that question – whether the landowners’ claims were entirely frivolous – was no, “the district court had authority to approve a settlement…. Parties do not have to litigate the merits of a case, whether under Civil Rule 12(b)(6) or Civil Rule 56, to settle it.”

The Sixth Circuit’s resolution of the appeal is interesting not only for that federal-jurisdiction holding, but also because it illustrates that every so often, briefing and argument on appeal can reveal that litigants (or the district court) have framed an aspect of the legal analysis incorrectly—even with respect to the principal issue. Appellate counsel is wise to keep that possibility front of mind, rather than accepting uncritically how a legal issue was conceptualized at the trial level or by opposing counsel. That possibility also highlights the value in oral argument. In this argument, Chief Judge Sutton asked counsel for the intervenor-appellants right out of the gate about this central question, and when counsel for the landowners took his turn at the podium, he was able to agree completely with the premise of the question—which made it that much easier for his clients to prevail. With that fundamental question addressed, the court was able to issue its opinion just eight days after hearing argument.