NYLJ “No Breach of Settlement Agreement Where Conduct Not Prohibited by Non-Disparagement Clause”
By Thomas E.L. Dewey Parties frequently use settlement agreements to restrict or prohibit potentially harmful conduct, such as disparagement. While non-disparagement provisions in settlement agreements are commonplace, the specific language used in such provisions is critically important, because it is the text of those provisions that determines which specific conduct is restricted or prohibited. In SA Luxury Expeditions v. Schleien, a tour operator who had entered into a se
NYLJ “Form of Settlement Agreement Weighs in Favor of Enforceability Even Absent Executed Document”
By Thomas E.L. Dewey A recent case from the Southern District of New York, In re Elysium Health-ChromaDex Litigation, No. 17-cv7394(LJL), 2022 WL 1156181 (S.D.N.Y. April 19, 2022), highlights the risks facing parties that seize opportunities to settle when there is heightened uncertainty in litigation—for example, when a decision on summary judgment is forthcoming. A party that prematurely settles a dispute will not be able to renege on an otherwise valid settlement even abse
NYLJ “‘Final Version’ of Settlement Agreement Not Enforceable When Client Withholds Signature”
By Thomas E.L. Dewey A party can withhold his signature and remain unbound by a settlement agreement, even when his attorney had actual authority to approve material terms of the settlement and approved a “final version” of the settlement draft. That was the court’s conclusion in a recent case in the Southern District of New York. In Fernandez v. HR Parking, 16-cv-2762, the court denied a motion to enforce a written settlement agreement that attorneys on both sides had approv
NYLJ “Dispute Over Existence of Settlement Agreement Not Enough To Reopen Case”
By Thomas E.L. Dewey When the parties to a dispute inform the court that they have reached a settlement, and the court issues an order dismissing the case with prejudice—only permitting it to be reopened for “good cause”—that is ordinarily the end of the court’s involvement in the parties’ dispute. But what happens when the parties subsequently disagree about whether they reached a settlement and move to reopen the case? Does the parties’ dispute about the existence of the se
NYLJ “Valid Claim for Breach of Oral Settlement Agreement Even Where Party Stated Need...”
By Thomas E.L. Dewey Many counterparties have reached settlement terms and closed the conversation by stating the need to “paper” the agreement later. But does this caveat preclude enforcement of the oral agreement? A recent decision by the Judge Hurley in the Eastern District of New York, Westside Winery v. SMT Acquisitions, No. 2;19-cv-4371, 2021 WL 21668 (E.D.N.Y. Jan. 4, 2021), provides a good warning to counsel that such statements may be insufficient to preclude an acti
NYLJ “Unusual Settlement Structure Leads to Approval of Fee Award Nearly Double the Payout
Public policy generally prohibits class action settlements in which the attorney fee awards dwarf the amount awarded to the class.
NYLJ “District Court Enforces Settlement Agreed to by Email Despite Absence of Formal Agreement
Parties typically expect that a settlement does not become enforceable until there is ink to paper on a formal written settlement agreement. But as a recent case in the U.S. District Court for the Eastern District of New York reminds us, settlements can be reached by email correspondence, even when certain terms of the settlement are excluded. For instance, a settlement agreement may be enforced even without defining the scope of a release or when parties merely agree to “usu