Consent Decree Dissolution Does Not Terminate Divestment Contracts: Alaska Supreme Court Clarifies Contract Survival and Permissive Intervention in ARTA Enforcement

Court: Supreme Court of the State of Alaska

Opinion No.: 7790

Date: October 3, 2025

Consolidated Case Nos.: S-18716/18775

Lower Court: Superior Court for the Second Judicial District, Nome (Consent Decree case), and Anchorage/Nome (Contract case)

Introduction

This decision addresses two recurring questions at the intersection of antitrust remedies and contract law: (1) whether dissolving a government antitrust consent decree automatically terminates private contracts entered into to implement that decree, and (2) whether a non-party competitor affected by the decree may participate in dissolution proceedings. The Alaska Supreme Court holds that dissolution of an antitrust consent decree does not, by itself, void or terminate divestment contracts executed under the decree; those contracts remain governed by their own terms. The Court also confirms that although affected competitors generally cannot intervene as of right in the State’s sovereign antitrust enforcement actions, permissive intervention may be appropriate to address the scope of relief and related legal questions.

The ruling arises from a long-running Western Alaska fuel distribution matter. In 2004, to resolve the State’s antitrust concerns over Crowley’s acquisition of its only regional rival, Yukon Fuel Company (YFC), the parties entered a consent decree under the Alaska Restraint of Trade Act (ARTA). A key remedy required Crowley to divest 4 million gallons of storage capacity in Bethel via a storage contract with Delta Western, a would-be entrant. Although the decree contained no third-party beneficiary rights and contemplated a 30-year term or earlier dissolution “for good cause,” neither the decree nor the divestment contracts stated what would happen to the storage contract if the decree were dissolved.

Sixteen years later, Crowley obtained an order dissolving the decree and attempted to terminate the 2015 storage contract with Delta Western. Delta Western sued for breach; the contract case was transferred to Nome alongside the consent decree matter. The superior court vacated its initial dissolution order (to hear from Delta Western), allowed Delta Western to intervene, and then again dissolved the decree while clarifying that dissolution did not automatically terminate the divestment contract. On appeal, the Alaska Supreme Court affirms those core rulings.

Summary of the Opinion

No automatic termination rule: Dissolution of an antitrust consent decree does not automatically void or terminate divestment contracts executed pursuant to that decree. Contract survival turns on the contracts’ own terms and general contract law principles.
Permissive, not mandatory, intervention: An affected competitor like Delta Western cannot intervene as of right in the State’s sovereign enforcement action under ARTA. However, permissive intervention to address related questions of law common to collateral disputes is within the trial court’s discretion and was appropriate here.
Vacatur within the trial court’s authority: The superior court did not abuse its discretion by sua sponte vacating its initial dissolution order to allow Delta Western to be heard and then reissuing a dissolution order clarifying that contracts do not terminate automatically.
Scope of the decision: The Supreme Court confines its ruling to the consent decree case. It does not decide the merits of the contract dispute (e.g., whether Crowley can otherwise terminate, reform, or obtain relief from the 2015 contract), leaving those issues for the separate contract action.

Factual and Procedural Background

2004-2005: Crowley sought to acquire Yukon Fuel Company, the only other Western Alaska fuel distributor with delivery capability. The State sued for anticompetitive conduct under ARTA and, alongside Crowley, proposed a consent decree requiring key divestments, including providing Delta Western four million gallons of fuel storage in Bethel “on fair and reasonable terms.” The decree disclaimed third-party rights and had a 30-year term, subject to dissolution for good cause. The Nome Superior Court approved the decree after statutory notice and public comment.
2004 contract; 2015 replacement: Crowley and Delta Western entered the required storage contract in 2004. After a dispute, they settled and replaced it with a 2015 contract (five-year term with three five-year extensions at Delta Western’s option). Delta Western extended the term through August 2025.
2021-2022 dissolution and attempted termination: Crowley moved under Civil Rule 60(b) to dissolve the consent decree and asked that related contracts be terminated or adjusted to market terms. The State was served; Delta Western was not. In January 2022 the court dissolved the decree without addressing contract impacts. Crowley then notified Delta Western it was terminating the 2015 contract and ceased performance.
Delta Western’s breach action and transfer: Delta Western sued in Anchorage for breach and injunctive/declaratory relief. Crowley counterclaimed, asserting the contract ended with the decree’s dissolution. The case was transferred to Nome for coordinated consideration given the decree’s centrality.
Vacatur and intervention in the decree case: Observing Delta Western had not been heard and that Crowley was using the dissolution order to escape the storage contract, the Nome court vacated its dissolution order and invited Delta Western’s limited opposition. Delta Western moved to intervene. The court granted intervention and, after briefing, again dissolved the decree but clarified that dissolution did not automatically terminate contracts entered under the decree. Crowley appealed. The Supreme Court stayed the contract case pending this appeal.

Analysis

Precedents and Authorities Cited

Alaska precedents on contract law and consent decrees:

Casey v. Semco Energy and Vezey v. Green supply the contract interpretation approach: questions of law are reviewed independently, adopting rules most persuasive in light of precedent, reason, and policy.
Pavone v. Pavone and McKnight v. Rice, Hoppner, Brown & Brunner provide the framework for public policy questions affecting contract enforceability.

Intervention and sovereign enforcement:

State v. Weidner sets the four-part test for intervention as of right (timeliness; interest in subject matter; impairment of interest; inadequate representation).
Alaskans for a Common Language, Inc. v. Kritz addresses intervention in government litigation and the heightened bar when the State acts in its sovereign capacity to enforce statutes.
Neese v. State holds that private parties generally lack a sufficient “interest” to intervene as of right in the Attorney General’s sovereign consumer protection enforcement; the Court analogizes that rule here to ARTA, Alaska’s antitrust regime.
Tara R. v. State and related cases distinguish standard of review for permissive intervention (abuse of discretion).

Trial court discretion and Rule 60(b):

Gallagher v. Gallagher recognizes the court’s inherent authority under Civil Rule 60(b) to vacate its own orders to correct error; the Nome court’s vacatur to allow input from Delta Western falls within this authority.
Shea v. State, Willoya v. State, and Dobrova inform the abuse-of-discretion standard: decisions must not be arbitrary, capricious, or driven by improper motive.

Comparative antitrust consent decree practice (federal analogs):

United States v. FMC Corp. (9th Cir.) addresses third-party standing to enforce an environmental consent decree; it does not support automatic invalidation of related contracts upon decree termination.
Commonwealth v. UPMC (Pa. Supreme Court) interprets decree terms but does not stand for automatic voiding of contracts upon decree dissolution.
FTC and DOJ merger remedies routinely include divestment or licensing obligations that expressly outlast the decree. For example, the FTC’s Cephalon consent decree required “irrevocable, perpetual” patent licenses with a decree that expired after 20 years; DOJ’s Ecolab judgment required “exclusive, perpetual” licenses though the decree itself had a 10-year life. These models contradict the proposed rule that contracts must terminate with the decree.
Court-tested merger-challenge cases such as FTC v. RAG-Stiftung, United States v. UnitedHealth Group, and United States v. Aetna emphasize the importance of a divestiture buyer’s independence—an antitrust policy concern that would be undermined if an incumbent could erase a divestment simply by dissolving a decree.

Legal Reasoning

No doctrinal basis for automatic contract termination.
The Court finds no authority—Alaska or otherwise—establishing that dissolving a consent decree automatically voids contracts made to effect its divestment obligations. Consent decrees are partly contractual and partly judicial, but the rights and duties of non-parties arise from their own contracts, not from the decree, especially where the decree expressly disclaims third-party beneficiaries (as here). Alaska’s default contract law controls: absent a contractual condition expressly tying survival to the decree, private contracts are not extinguished by the decree’s termination.
Contract doctrine: conditions, mutual assent, and termination.
Under the Restatement (Second) of Contracts § 230 (condition subsequent), a duty may be discharged if the parties agree that a future event will terminate it. But that requires a bargained-for term reflecting mutual assent. Neither the consent decree nor the 2015 storage contract contains such a clause. The Court underscores that parties could have drafted the decree and the divestment contract to make storage rights coterminous with the decree—yet they did not. Without such a term, “automatic” termination is inconsistent with basic contract principles.
Antitrust policy: preserving competitor independence.
Requiring automatic contract termination would undermine the very competition that divestment remedies aim to foster. A new entrant’s viability should not be contingent on the continuing existence of a decree to which it is not a party. Allowing incumbents to erase divestments through decree dissolution would destabilize remedial effectiveness, erode reliance interests, and deter future entrants from investing in markets contiguous to regulated remedies.
Federal practice supports survivability of divestment rights.
FTC/DOJ consent decrees frequently mandate divestitures or licenses with durations independent of, and often longer than, the decrees themselves. “Perpetual” or “irrevocable” divestment obligations cannot sensibly be read as expiring when a decree ends. Those models validate the Court’s conclusion that the decree’s dissolution does not control the private contract’s survival unless the contract says so.
Procedural rulings: vacatur and intervention.
- Vacatur: The Nome court properly vacated its initial dissolution order under Civil Rule 60(b) to consider the position of an obviously affected non-party and to avoid unintended consequences (Crowley using dissolution to nullify an independent contract). Any error would be harmless; the court again dissolved the decree after hearing from Delta Western and clarifying the order’s scope.
- Intervention: Delta Western could not intervene as of right (Rule 24(a)) in the ARTA enforcement case, consistent with Neese and Kritz, which recognize a heightened barrier to mandatory intervention where the State proceeds in its sovereign enforcement capacity. But permissive intervention (Rule 24(b)) was appropriate because Delta Western’s defenses overlapped with common questions of law (the legal effect of dissolution on collateral contracts), and Crowley identified no prejudice from that participation. The court acted within its discretion.

Impact and Implications

For antitrust enforcement and merger remedies in Alaska:

Stability of divestment remedies: The decision ensures that divestment agreements used to structure post-merger competition cannot be unilaterally displaced by later decree dissolution, thereby enhancing the reliability of negotiated remedies.
Drafting discipline: Agencies and merging parties should expressly state in both decrees and associated divestment contracts whether obligations are coterminous with the decree or survive and for how long. Silence will default to contractual survival.
Market entrants’ reliance: New entrants can invest with greater confidence that their contract rights will not evaporate if the State and incumbent later agree—or a court later finds—“good cause” to dissolve the decree.

For contract litigation:

Forum and issues: Disputes about contract termination, reformation, or adjustment based on changed circumstances belong in the contract case, not the decree action. Parties should plead traditional contract doctrines (e.g., express termination clauses, conditions subsequent, frustration of purpose, impossibility, unconscionability, implied covenant) and develop the factual record accordingly.
Notice and coordination: Where dissolution of a decree is sought and collateral contracts are implicated, courts may solicit limited participation from affected non-parties and, where appropriate, allow permissive intervention to clarify the scope of relief and minimize collateral mischief.

For civil procedure in sovereign enforcement cases:

Intervention standards reaffirmed: The sovereign enforcement doctrine remains a significant barrier to intervention as of right in ARTA/UTPA cases. Affected businesses should consider seeking permissive intervention or filing amicus briefs rather than relying on mandatory intervention.
Trial court tools: Courts retain robust discretion to manage proceedings, including vacating orders under Rule 60(b) to address fairness or unintended consequences and to ensure the record reflects all material considerations.

Complex Concepts Simplified

Consent decree: A hybrid legal instrument—part court order, part contract—used to settle enforcement actions. It binds the parties to its terms and is enforceable by the court. But non-parties derive rights from their own contracts, not the decree, absent third-party beneficiary language.
Divestment contract: A private agreement (here, a storage lease) designed to implement a decree’s competition-restoring remedy. It stands on its own terms once executed.
Automatic termination: Contracts end automatically only if the contract includes a condition expressly stating that a specified event (like decree dissolution) terminates obligations. Without such a clause, obligations continue until the contract ends by its own terms or applicable doctrine.
Condition subsequent (Restatement § 230): A contract term stating that a future event will extinguish an existing duty. It must be explicitly bargained for and agreed upon.
Permissive vs. mandatory intervention: Intervention as of right (Rule 24(a)) is rare in sovereign enforcement; permissive intervention (Rule 24(b)) may be allowed where there are common legal or factual questions and no undue prejudice to existing parties.
Sovereign enforcement doctrine: When the State sues to enforce consumer protection/antitrust laws, it represents the public interest; private parties typically lack the requisite “interest” to intervene as of right.
Rule 60(b) vacatur: Courts may relieve parties from orders or judgments and can sua sponte correct their own orders to prevent unfair or unintended outcomes.
Competitor independence: A core antitrust goal is that the divestiture buyer be a genuinely independent competitor; making its viability hinge on the continued life of a decree undermines this objective.

What the Court Did Not Decide

Whether Crowley may otherwise terminate, reform, or obtain relief from the 2015 storage contract based on its language, market changes, or equitable doctrines. Those issues remain for the contract case.
Whether Delta Western is a third-party beneficiary of the consent decree (the decree says no); the decision turns instead on Delta Western’s independent contract rights.
Whether the original dissolution order required additional notice under ARTA; the Court resolved the matter via the trial court’s inherent power and permissive intervention.

Practice Pointers

For agencies and merging parties: Align decree and divestment instruments on duration and termination. If obligations must be coterminous, say so explicitly in both documents.
For divestiture buyers: Bargain for survival clauses and independence assurances; avoid cross-defaults tied to decree dissolution.
For incumbents: If market conditions change, pursue relief in the contract forum, supported by tailored contract defenses and evidence; do not assume decree dissolution alone ends collateral obligations.
For counsel managing parallel proceedings: Seek coordinated case management or transfer to avoid inconsistent rulings; consider permissive intervention or amicus participation to clarify the scope of orders affecting collateral contracts.

Key Citations

ARTA consent decree process: AS 45.50.584; enforcement: AS 45.50.580
UTPA analog: AS 45.50.471–.561
Intervention: Alaska R. Civ. P. 24(a), (b); Joinder: Rule 19; Relief from Orders: Rule 60(b)
Neese v. State, 218 P.3d 983 (Alaska 2009); Alaskans for a Common Language v. Kritz, 3 P.3d 906 (Alaska 2000); State v. Weidner, 684 P.2d 103 (Alaska 1984)
Gallagher v. Gallagher, 866 P.2d 123 (Alaska 1994)
Federal analogs: FTC v. RAG-Stiftung, 436 F. Supp. 3d 278 (D.D.C. 2020); United States v. UnitedHealth Group, 630 F. Supp. 3d 118 (D.D.C. 2022); United States v. Aetna, 240 F. Supp. 3d 1 (D.D.C. 2017); FTC Cephalon consent decree (2004); DOJ Ecolab consent judgment (2013)

Conclusion

The Alaska Supreme Court establishes a clear rule: Ending an antitrust consent decree does not, by itself, end divestment contracts made to carry out the decree. The survival and enforceability of those contracts depend on the contracts’ own terms and standard contract doctrines. This preserves the stability of antitrust remedies, protects competitor independence, and ensures that parties cannot circumvent private obligations by dissolving public agreements to which third parties are not signatories.

Procedurally, the Court affirms trial court discretion to vacate orders to avert unintended results and to permit limited participation by affected non-parties—while maintaining the sovereign enforcement barrier to intervention as of right. The consent decree case is affirmed, and the stay on the separate contract case is lifted for adjudication of the parties’ contractual rights and defenses.

Bottom line: In Alaska, a consent decree’s dissolution is not a trapdoor beneath divestment agreements. If parties want those contracts to end with the decree, they must say so in the contract. Otherwise, the contract stands or falls on its own terms.