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Padberg v. McGrath-McKechnie

March 27, 2007

JOHN PADBERG, ET AL., PLAINTIFFS,
v.
DIANE MCGRATH-MCKECHNIE, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Gold, S., United States Magistrate Judge

MEMORANDUM AND ORDER

Introduction

A stipulation of settlement was entered in this class action lawsuit on August 1, 2006. Docket Entry 311. The settlement was approved by United States District Judge Raymond J. Dearie after a fairness hearing held on August 1, 2006. Docket Entry 313. The settlement does not call upon defendants to pay a specified sum of money. Instead, the agreement provides that class members may participate in a claims procedure by seeking payment in an amount calculated pursuant to a formula set out in the agreement. Stipulation of Settlement ¶¶ 26-33, 46-58.

Apparently frustrated by the pace of defendants' review and payment of their claims, plaintiffs moved for an award of post-judgment interest pursuant to 28 U.S.C. § 1961(a). The parties consented to have the motion decided by me by stipulation dated November 16, 2006. Docket Entry 340.

I heard argument on the motion on December 21, 2006, and denied the motion for reasons I stated orally from the bench at the conclusion of the hearing. Plaintiffs have now moved for reconsideration of my ruling. Docket Entry 351. For the reasons stated below, the motion for reconsideration is denied. reconsideration is denied.

Discussion

Standard for Motion for Reconsideration

A party may seek reconsideration of a court order determining a motion by serving "a memorandum setting forth controlling decisions which counsel believes the court has overlooked." Local Civil Rule 6.3. Plaintiffs have cited authorities that were not presented to me and which I did not consider before I ruled on December 21, 2006. I therefore turn to the merits of plaintiffs' motion and, in particular, whether the new authorities they cite prompt me to change my decision.

Merits of Plaintiffs' Motion

My original ruling rested on two alternative bases: first, that the settlement agreement entered by Judge Dearie was not a "judgment" for purposes of Section 1961(a), and second, that even if it were, an award of post-judgment interest would not be warranted because the agreement does not require payment of a specific sum but instead provides a formula for determing the amount of a particular plaintiff's claim. None of the cases cited by plaintiffs in support of their motion warrant reconsideration of either proposition.

a. Section 1961(a) Does Not Apply to Settlement Agreements

In reaching my original decision, I relied on cases declining to apply Section 1961(a) to settlement agreements. See, e.g., Isaiah v. City of New York, 1999 WL 38846 at *1 (S.D.N.Y. Jan. 29, 1999); In re Ivan F. Boesky Securities Litigation, 913 F. Supp. 256, 260 (S.D.N.Y. 1996); Kincade v. General Tire and Rubber Co., 540 F. Supp. 115, 120-21 (W.D. Tex. 1982). Plaintiffs have not cited a single case in support of their motion for reconsideration that applies Section 1961(a) to a settlement agreement, even when the agreement is entered by a court.

Plaintiffs rely on United States v. F. & M. Schaefer Brewing Co., 356 U.S. 227, 78 S.Ct. 674 (1958), which did not involve a settlement agreement at all, and in which the Supreme Court merely stated in dicta that "[n]o formal words and no peculiar formal act" are necessary to render a judgment. 356 U.S. at 233, 78 S.Ct. at 678. The cases cited by plaintiffs that do involve settlement agreements hold only that such agreements may provide a basis for determining that a party has prevailed and is therefore entitled to an award of attorney's fees, see, e.g., Maher v. Gagne, 448 U.S. 122, 129, 100 S.Ct. 2570, 2575 (1980), or that a court's order approving a class action settlement may be appealed by an objecting unnamed class member. See, e.g., Devlin v Scardelletti, 536 U.S. 1, 14, 122 S.Ct. 2005, 2013 (2002). These authorities arguably suggest that settlement agreements may, under certain circumstances, share some ...


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