Minding Your Business

Proskauer’s perspective on developments and trends in commercial litigation.

Category Archives: Settlements

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Coupon Settlements: Discount or Discontent?

Congress passed the Class Action Fairness Act of 2005 (“CAFA”) with the hope of preventing abuse in class action lawsuits. CAFA assigns jurisdiction to federal courts over class actions where: (i) the aggregate amount in controversy exceeds five million dollars ($5,000,000); (ii) the class comprises at least 100 plaintiffs; and (iii) there is at least … Continue Reading

Consider Whether the Promise of a Bird in the Hand is Better Than Two in the Bush

When drafting settlement agreements, most lawyers give due attention to the scope of any release clause. And for good reason: for defendants, the extent to which the release protects against future litigation is critical, and for plaintiffs, the extent to which it preserves future claims may be equally critical. But lawyers – and particularly those … Continue Reading

The Inadvertent Settlement Agreement (and How to Avoid it)

The recent case of Jarvis v. BMW of North America, LLC is an important reminder to attorneys to avoid inadvertently reaching a settlement agreement that is unacceptable to the client, or equally problematic, one that is missing critical (but not legally “essential”) terms and conditions. In Jarvis, the District Court for the Middle District of Florida … Continue Reading

Too Late To Ask the Court to Retain Jurisdiction to Enforce a Settlement Agreement?

Imagine this scenario: after years of litigation in federal court, your client reaches a settlement agreement with the opposing party. The lawsuit is dismissed pursuant to the settlement agreement and Federal Rule of Civil Procedure 41(a)(1). When the opposing party breaches the settlement agreement, you promptly file a motion to compel enforcement – only to … Continue Reading

An Offer You Can’t Refuse: Are Deathtraps a Tool for Fostering Settlements, or a Method of Coercion?

Accept an unpalatable offer, or reject it and risk getting much less (or even nothing)? This is the choice stakeholders in chapter 11 bankruptcies increasingly face as a result of the proliferation of “deathtrap” provisions in plans of reorganization. For example, a class of bondholders may be forced to decide between accepting 60 cents on … Continue Reading

The Sixth Circuit’s Continued Scrutiny of Sealing Decisions

We wrote here previously regarding the Sixth Circuit’s decision in Shane Group v. Blue Cross Blue Shield of Michigan vacating a class action settlement because the district court improperly refused to unseal the parties’ substantive filings. In revisiting the district court’s sealing orders, the Court of Appeals found that the parties’ cursory justifications for their … Continue Reading

Taming the Bull Rider: Chancery Court Reining in Mootness Fee Awards in Merger Litigation

Last month, the Delaware Chancery Court drastically reduced – from $275,000 to $50,000 – a mootness fee award requested by plaintiffs’ counsel in a lawsuit challenging the merger between PayPal and Xoom Corporation, finding the supplemental disclosures that flowed from the lawsuit provided only minor benefits to stockholders. In re Xoom Corp. Stockholder Litigation. The steep … Continue Reading

Think Your Release is Ironclad? Consider California Civil Code Section 1542

Settlement agreements often include broad general releases covering claims existing from the “beginning of the world” to the settlement date – whether the claims are known or unknown to the releasing party. And in many states, such broad releases are valid and enforceable. Indeed, it is the peace provided by such releases that often makes … Continue Reading

Can Parties Use Settlement Agreements to Vacate a Prior Judgment?

In Hartford Accident and Indemnity v. Crum & Forster Specialty Insurance et al., the Eleventh Circuit recently reversed a District Court’s decision refusing to vacate its prior judgments even though vacatur was a condition of a settlement agreement negotiated between two litigating parties. The Eleventh Circuit found the District Court abused its discretion and misapplied … Continue Reading

Surviving Settlement Provisions in Joint Defense Agreements

Anyone who watches Survivor or Game of Thrones knows that alliances are critical. And while they may be necessary to endure from one day to the next, alliances are inevitably broken. Co-defendants in antitrust cases can draw lessons from these shows. Like alliances, joint defense agreements (“JDA” or “JDAs”) help facilitate defendants’ common interests. JDAs … Continue Reading

Florida Court Says it’s Not Fraud When Misrepresentations are Made During Settlement Negotiations

When settling a case, litigators are naturally focused on avoiding “Round 2” of the litigation for their clients. Toward this goal, lawyers avoid drafting settlement agreements that include any sort of representations or warranties that could form the basis of a future claim against their own client. But as the recent Florida case of Moriber … Continue Reading