July 19, 2016 Practice Points

D.C. Circuit Sharpens the Edges of Post–Class Action Settlement Ancillary Jurisdiction

Eighty years after Mellon v. Goodyear, a lot has changed, but the preference for settlement has not.

By Joshua S. Levy

In 1928, the U.S. Supreme Court quoted a jury charge given by a Kansas trial judge: “You are instructed that the law favors a compromise and settlement of disputes, and, when parties in good faith enter into an agreement based on good consideration, neither is afterwards permitted to deny it.” Mellon v. Goodyear, 277 U.S. 335, 338 (1928). Eighty years later, a lot has changed, but the preference for settlement has not.

In particular, as Senior District Judge Jack Weinstein explained, “[c]lass action suits readily lend themselves to compromise because of the difficulties of proof, the uncertainties of the outcome, and the typical length of the litigation.” In re Luxottica Grp. S.p.A. Sec. Litig., 233 F.R.D. 306, 310 (E.D.N.Y. 2006). “There is,” Judge Weinstein wrote, “a strong public interest in quieting any litigation.”

It’s common sense: Adversaries get together, trade dueling briefs for drafting pencils, and hammer out a deal that’s good enough to convince all sides to descend the courthouse steps. Settlements provide a good night’s sleep through finality that avoids the mess of further litigation. No more motions. No more appeals.

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