New England Health Care Employees Pension Fund v. Woodruff
New England Health Care Employees Pension Fund v. Woodruff
Opinion of the Court
ORDER
Appellee Qwest Communications International Inc.’s petition
The suggestion for en banc rehearing was transmitted to all judges of the court who are in regular active service. No poll on the suggestion was requested and the suggestion is therefore denied.
. Lead Plaintiffs-Appellees New England Health Care Employees Pension Fund, et al. have joined in the petition for panel rehearing and the petition for rehearing en banc.
Dissenting Opinion
dissenting from the denial for panel rehearing.
In their Response to Appellees’ Petition for Rehearing and Petition for Rehearing En Banc, Appellants argue that they are not required to demonstrate standing as to each provision of the partial settlement agreement in challenging the district court’s Fed.R.Civ.P. 23(e) ruling. The Court’s opinion correctly concludes Appellants have standing to challenge the district court’s approval of the partial settlement agreement. In so doing, however, the Court considers whether Appellants made this showing with respect to each provision of the settlement Appellants object to on the merits (ie., the Complete Bar Order, the Reform Act Bar Order, and the so-called Contractual Provisions). See New England Health Care Employees Pension Fund v. Woodruff, 512 F.3d 1283, 1288-89 (10th Cir. 2008). Because that portion of the opinion is susceptible to misinterpretation, and because of standing’s fundamental importance, we should grant the petition to clarify this portion of the Court’s opinion. The denial of the Petition is otherwise well-taken.
As Appellants aptly note in their Response to the Petition, once they demonstrate “plain legal prejudice” under any provision of the partial settlement agreement, they have standing to challenge the district court’s approval of that settlement on any ground. By addressing whether the Contractual Provisions prejudice Appellants, after concluding Appellants made the requisite showing of plain legal prejudice as to the Complete Bar Order and the Reform Act Bar Order provisions, I fear the Court’s decision — as presently written — risks muddying our standing jurisprudence.
While no court of appeals has expressly addressed this precise issue — indeed, few courts have addressed non-settling defendants’ standing to contest partial settlement agreements at all — core tenets of our standing jurisprudence demonstrate that Appellants need only demonstrate “plain legal prejudice” under one provision of the partial settlement agreement to have standing to challenge the district court’s approval of the agreement.
Admittedly, 4 Newberg on Class Action § 11:55 (4th ed. 2002) counsels otherwise:
[N]onsettling defendants in a multiple defendant litigation context have no standing to object to the fairness or adequacy of the settlement by other defendants, but they may object to any terms that preclude them from seeking indemnification from the settling defendants. Nonsettling defendants also have standing to object if they can show some formal legal prejudice to them, apart from loss of contribution or indemnity rights. -
(emphasis added), cited with approval in In re Integra Realty Res., Inc., 262 F.3d at 1103. The scant case law that exists on this subject cites this language frequently. See, e.g., In re Integra Realty Res., Inc., 262 F.3d at 1103; In re Viatron Computer Sys. Corp. Litig., 614 F.2d 11, 14 (1st Cir. 1979); In re Beef Indus. Antitrust Litig., 607 F.2d 167, 172 (5th Cir. 1979). Notwithstanding courts’ reliance on Newberg’s language, whether it deserves great weight is entirely another matter.
Tellingly, any substantive analysis demonstrating the merits of this position is, at best, elusive. See, e.g., In re Rite Aid
Additionally, whether Appellants must demonstrate standing as to each provision of the partial settlement agreement is also the point at which the majority and dissent diverge. Clearly, the dissent to the Court’s opinion is correct that “[t]o have standing under Article III, Non-Settling Defendants ‘must demonstrate standing for each claim that [they] seek[ ] to press.’” See New England Health Care Employees Pension Fund, 512 F.3d at 1292 (Briscoe, J., dissenting) (quoting DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 126 S.Ct. 1854, 1867, 164 L.Ed.2d 589 (2006)). But applying that general principle here requires careful consideration of this matter’s procedural posture. Again, the Appellants’ appeal is not to any particular portion of the partial settlement. Quite clearly, Appellants appeal from the district court’s Fed.R.Civ.P. 23(e) approval of the parties’ partial settlement agreement as a whole. As such, Appellants’ objections to the settlement agreement’s Complete Bar Order, Reform Act Bar Order, and Contractual Provisions are not separate “claims,” which Appellants “seek[ ] to press.” See DaimlerChrysler, 126 S.Ct. at 1867; see Black’s Law Dictionary 240 (7th. ed. 1999) (defining a “claim” as, inter alia, “[a]n interest or remedy recognized at law; the means by which a person can obtain a privilege, possession, or enjoyment of a right or thing; CAUSE OF ACTION”). Rather, the ultimate issue presented by Appellants on appeal is whether the district court abused its discretion in concluding the settlement agreement, as a whole, “is fair, reasonable, and adequate.” See Fed.R.Civ.P. 23(e); see also Rutter & Wilbanks Corp. v. Shell Oil Co., 314 F.3d 1180, 1186 (10th Cir. 2002).
In my view, by demonstrating that the partial settlement agreement causes them plain legal prejudice in any regard, Appellants satisfy the requirements of standing to challenge the approval of the agreement. See Eichenholtz, 52 F.3d at 482 (“Where the rights of third parties are affected, it is not enough to evaluate the fairness of the settlement to the settling parties; the interests of such third parties must be considered.”). The Court’s opinion perpetuates ambiguity in an area of the law that desperately needs clarification. As such, I respectfully dissent from the denial of panel rehearing.
. The portion of the majority opinion that concerns me is as follows:
As to the Complete Bar and the Reform Act Bar, clearly, Mr. Nacchio and Mr.*1257 Woodruff have standing to challenge these provisions.... Further, in this case, the Contractual Provisions clearly impact Mr. Nacchio and Mr. Woodruff’s contribution and indemnification rights.... They have therefore suffered the requisite plain legal prejudice sufficient to confer standing -with respect to both the Contractual Provisions and the Bar Orders.
New England Health Care Employees Pension Fund, 512 F.3d at 1288-89 (emphasis added).
. See, e.g., Eichenholtz v. Brennan, 52 F.3d 478, 487 (3d Cir. 1995) (holding that non-settling defendants had standing to challenge the district court's approval of the underlying partial settlement agreement after concluding that non-settling defendants made the requisite “plain legal prejudice” showing as to one provision of the agreement); see also, e.g., Alumax Mill Prods., Inc. v. Congress Fin. Corp., 912 F.2d 996, 1001-02 (8th Cir. 1990) (holding that a non-settling defendant has standing "to object where it can demonstrate that it will sustain some formal legal prejudice as a result of the settlement," but declining to expressly consider whether each objection to the partial settlement agreement raised by the non-settling defendant met this standard (emphasis added)); Waller v. Fin. Corp. of Am., 828 F.2d 579, 582 (9th Cir. 1987) (recognizing that "a non-settling defendant [has standing] to object where it can demonstrate that it will sustain some formal legal prejudice as a result of the settlement" (emphasis added)).
. Further, given that Appellants demonstrated "plain legal prejudice” by the Bar Order or the Complete Bar Order, the dissent’s understanding of the Contractual Provisions’ ef-feet — however correct for Rule 23(e) purposes — goes to the merits, not standing. See New England Health Care Employees Pension Fund, No. 06-1482, Dissenting Op. at 1-8.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.