The Court of Appeals Decision (Second Part--Preliminary injunction):
III.
Microsoft argues that the district court failed to comply with [*18] Federal Rule of Civil Procedure 65(a)(1)'s command, "No preliminary injunction shall be issued without notice to the adverse party." We agree. Obviously the Department's request for a contempt citation provided no such notice, for the governing criteria are completely different. To defeat the contempt petition, all Microsoft had to do was to show that the Department failed to meet its burden of showing that the consent decree unambiguously barred its conduct. For a preliminary injunction, by contrast, traditional equitable standards would require the government to show substantial likelihood of success on the merits (here, that the decree, properly construed, barred the conduct), plus risk of irreparable injury, lack of substantial injury to the opposing party, and consistency with the public interest. See CityFed Financial Corp. v. Office of Thrift Supervision, 313 U.S. App. D.C. 178, 58 F.3d 738, 746 (D.C. Cir. 1995). The contempt petition did not alert Microsoft to contest these factors.
Nor could the Department's request for a permanent injunction serve as notice--even putting aside Microsoft's argument that the request was contingent on a situation that never arose [*19] (see section II). The request for a permanent injunction amounted to no more than a request for a clarification, and thus would require only a showing that the Department's reading of the consent decree was correct. It did not put into play the equitable factors of interim irreparable injury to the requester, harm to the party to be enjoined, and effects on the public interest. But resolution of these is essential in granting a preliminary injunction; the proponent must make a showing about the interim risks precisely in order to counterbalance the lack of any final ruling in its favor on the merits.
At oral argument the Department claimed that when the government seeks a preliminary injunction under a statute, its showing of a likelihood of success on the merits supplants the normal need for assessment of the interim risks. This is true under some circumstances. First, it is clear that if a statute confers a right to an injunction once a certain showing is made, no plaintiff--neither governmental agencies nor private parties--need show more than the statute specifies. See, e.g., Illinois Bell Telephone Co. v. Illinois Commerce Comm'n, 740 F.2d 566, 571 (7th Cir. 1984) [*20] (irreparable injury not required for preliminary injunction under 47 U.S.C. 401(b), which provides that court "shall enforce" FCC order upon showing of disobedience). The statutory specification displaces the traditional equitable standards, but this displacement is "not lightly assumed." Weinberger v. Romero-Barcelo, 456 U.S. 305, 312, 72 L. Ed. 2d 91, 102 S. Ct. 1798 (1982). Plaintiffs must show that Congress intended to "intervene and guide or control the exercise of the courts' discretion." Id. at 313. See also Amoco Production Co. v. Village of Gambell, 480 U.S. 531, 541-45, 94 L. Ed. 2d 542, 107 S. Ct. 1396 (1987).
Second, and not entirely distinct in the cases, lurks the proposition that when a governmental entity sues to enforce a statute, irreparable injury is presumed to flow from the violation itself. See, e.g., United States v. Diapulse, 457 F.2d 25, 27-28 (2d Cir. 1972) ("The passage of the statute is, in a sense, an implied finding that violations will harm the public and ought, if necessary, [to] be restrained."). It is unclear, however, whether such decisions actually turn on the identity of the plaintiff, or whether they are simply instances [*21] where the court read the statute as providing for injunction on a reduced showing and mentioned the enforcing agency because it happened to be the plaintiff before the court. As the cases did not purport to apply the doctrine to all statutes under which a government agency might seek relief, but limited it, for example, to "remedial" ones, n5 see, e.g., Commodity Futures Trading Comm'n v. Muller, 570 F.2d 1296, 1300 (5th Cir. 1978), the latter seems more probable.
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n5 We have noted recently, and more than once, that the concept of a "remedial" statute is unhelpful. All statutes, unless purely declaratory, seek to "remedy" something about the pre-existing state of affairs. The cases seem bereft of references to "destructive" statutes. See East Bay Municipal Utility Dist. v. United States Dep't of Commerce, 1998 WL 210612 * 5- * 6 (D.C. Cir. 1998); Ober United Travel Agency, Inc. v. United States Dep't of Labor, 135 F.3d 822, 825 (D.C. Cir. 1998).
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Some cases antedating Romero-Barcelo took the view [*22] that mere statutory authorization of injunctive relief displaced equitable standards, see, e.g., Atchison, Topeka & Santa Fe Railway Co. v. Lennen, 640 F.2d 255, 259 (10th Cir. 1981) (citing cases). Under this view 4 of the Sherman Act, 15 U.S.C. 4, authorizing such temporary injunctive relief "as shall be deemed just," but setting no standards for its award, would evidently be enough. But such cases seem outmoded by Romero-Barcelo's view that displacement of the usual equitable standards requires a "clear and valid legislative command." 456 U.S. at 313, quoting Porter v. Warner Holding Co., 328 U.S. 395, 398, 90 L. Ed. 1332, 66 S. Ct. 1086 (1946). In fact, even before Romero-Barcelo the Court construed 4's grant as controlled by the ordinary principles of equity courts. De Beers Consol. Mines v. United States, 325 U.S. 212, 218-19, 89 L. Ed. 1566, 65 S. Ct. 1130 (1945).
In any event, the Department's suggestion is irrelevant. The preliminary injunction was entered in a suit to enforce a consent decree, not a statute. As the settlement of a litigation, the decree may require less than the statute under which the suit was brought, or more, United States [*23] v. Armour & Co., 402 U.S. 673, 681-82, 29 L. Ed. 2d 256, 91 S. Ct. 1752 (1971); Ass'n for Retarded Citizens v. Thorne, 30 F.3d 367, 369 (2d Cir. 1994), so the violation of one is not necessarily a violation of the other. Thus a finding of probable violation of the consent decree could not support a presumption of irreparable harm even under the most extravagant version of the doctrine the government invokes.
So the district court did need to find irreparable injury before granting the preliminary injunction. The absence of notice had the effect of precluding the introduction of evidence and argument on this requirement, and the omission was far from trivial. At oral argument the Department conceded that it had offered no evidence on the subject, and Microsoft suggested that it could have forcefully contested anything the Department might have offered, alluding to information--obviously not in the record--that no OEM had, since entry of the preliminary injunction, sought to take advantage of its terms. Transcript at 10, 61. n6
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n6 The district court mentioned irreparable harm, but not in any terms suggesting focus on the relevant concern--whether denial of relief would result in harm to the competitive interests asserted by the government. It said that the Department is threatened with irreparable harm because "the cost of a compulsory unbundling of Windows 95 and IE in the future could be prohibitive," J.A. 1297, which seems rather more like a risk to Microsoft if it continues its current practice and ultimately loses in court.
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The purpose of Rule 65(a)(1)'s notice requirement is to allow the opposing party a fair opportunity to oppose the preliminary injunction, see Weitzman v. Stein, 897 F.2d 653, 657 (2d Cir. 1990), and compliance is mandatory, Parker v. Ryan, 960 F.2d 543, 544 (5th Cir. 1992). Preliminary injunctions entered without notice to the opposing party are generally dissolved. See, e.g., Williams v. McKeithen, 939 F.2d 1100, 1105-06 (5th Cir. 1991); Weitzman, 897 F.2d at 657-68; Phillips v. Chas. Schreiner Bank, 894 F.2d 127, 130-31 (5th Cir. 1990). Appellate courts have, however, on occasion allowed a procedurally flawed injunction to remain in place pending a proper hearing on remand if the equities support such a disposition. See, e.g., Rosen v. Siegel, 106 F.3d 28, 33 (2d Cir. 1997).
The Department urges us to do so here. Evaluating such a request requires the court to consider the traditional equitable factors as apparent on the existing record. See, e.g., Inverness Corp. v. Whitehall Laboratories, 819 F.2d 48, 51 (2d Cir. 1987). We do not believe that a reviewing court must entertain such a request; if the record were so deficient as to make effective [*25] evaluation of the equities impossible, a court might do better simply to vacate the injunction as a matter of course--especially where, as here, the injunction was sought only rather obliquely. As later sections will show, however, the record here is enough for us at least to make a reasonable appraisal of the Department's eventual likelihood of success on the merits, and this factor proves dispositive. Silence at this stage would risk considerable waste of litigative resources. "When the district court's estimate of the probability of success depends on an incorrect or mistakenly applied legal premise, 'the appellate court furthers the interest of justice by providing a ruling on the merits to the extent that the matter is ripe, though technically the case is only at the stage of application for preliminary injunction.' " Air Line Pilots Ass'n Int'l v. Eastern Air Lines, Inc., 274 U.S. App. D.C. 202, 863 F.2d 891, 895 (D.C. Cir. 1988) (quoting Natural Resources Defense Council, Inc. v. Morton, 148 U.S. App. D.C. 5, 458 F.2d 827, 832 (D.C. Cir. 1972). When reviewing preliminary injunctions we have generally not been hesitant to offer interpretation and guidance on the substantive [*26] legal issues. See, e.g., Defenders of Wildlife v. Andrus, 201 U.S. App. D.C. 252, 627 F.2d 1238, 1243 (D.C. Cir. 1980); Energy Action Educational Found'n v. Andrus, 203 U.S. App. D.C. 169, 631 F.2d 751, 761 (D.C. Cir. 1979); Maryland-National Capital Park & Planning Comm'n v. U.S. Postal Service, 159 U.S. App. D.C. 158, 487 F.2d 1029, 1041 (D.C. Cir. 1973). We thus turn to the interpretation of IV(E)(i), on which the merits of the Department's case depend. Our review of a district court's interpretation of a consent decree is de novo. n7 See, e.g., Richardson v. Edwards, 326 U.S. App. D.C. 429, 127 F.3d 97, 101 (D.C. Cir. 1997); United States v. Western Elec. Co., 304 U.S. App. D.C. 199, 12 F.3d 225, 229 (D.C. Cir. 1993); United States v. Western Elec. Co., 283 U.S. App. D.C. 299, 900 F.2d 283, 293 (D.C. Cir. 1990) ("Triennial Review ").
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n7 We agree with Judge Wald's suggestion, see Sep. Op. at 13-14, that there is something unusual about de novo review of a district court interpretation of an ambiguous provision of a consent decree. Consent decrees are generally interpreted as contracts. See United States v. ITT Continental Baking Co., 420 U.S. 223, 236-37, 43 L. Ed. 2d 148, 95 S. Ct. 926 (1975). Interpretation of an ambiguous contract term on the basis of extrinsic evidence is generally treated as a question of fact, and the district court's findings as to the parties' intent are reviewed deferentially, i.e., reversed only for clear error. See, e.g., NRM Corp. v. Hercules, 244 U.S. App. D.C. 356, 758 F.2d 676, 682 (D.C. Cir. 1985). This court, however, has regularly engaged in de novo review of district court interpretations of concededly ambiguous provisions which the parties sought to clarify with evidence from outside the decree itself. See, e.g., United States v. Western Electric Co., 304 U.S. App. D.C. 199, 12 F.3d 225, 229, 231 (D.C. Cir. 1993) (announcing de novo review despite admitted ambiguity); United States v. Western Electric Co., 283 U.S. App. D.C. 299, 900 F.2d 283, 293, 296 (D.C. Cir. 1990) ("Triennial Review") (same); see also id. at 294 (characterizing issue as "pure question of law"). Nor does the Supreme Court's opinion in ITT, which relies on the presence of ambiguity to distinguish Armour, see ITT, 420 U.S. at 238 & n.11, give any indication of deference. Of course, de novo review of legal analysis is in principle compatible with deference to factual findings. See Triennial Review, 900 F.2d at 293-94 (explaining that "aside from fact-finding, we owe no deference to the district court's decisions"); North Shore Laboratories Corp. v. Cohen, 721 F.2d 514, 518-19 (5th Cir. 1983) (reviewing de novo while also noting deference to factual findings of parties' intent). This mixed approach may be the correct one, although the centrality of intent would often make the deference swallow the de novo review, a result our cases do not seem to contemplate. But here it would amount to de novo review anyway, as the district court made no findings of fact as to intent to which we could defer.
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