United States District Court, D. New Jersey
WILLIAM J. MARTINI, U.S.D.J.
Colleen Kennedy and David Foster (“Kennedy”) and
Mitchell Orenstein (“Orenstein”), represented by
the same attorney (Mr. Bruce Nagel) in these putative class
actions, filed suit against Samsung Electronics America, Inc.
(“SEA”), alleging certain top-load washing
machine models contained a drain pump design defect that
could cause personal injury and property damage. Plaintiffs
assert causes of action under state consumer fraud law as
well as federal and state warranty and breach of contract
claims. These matters come before the Court on
Plaintiffs' motion to enforce settlement. There was no
oral argument. Fed.R.Civ.P. 78(b). For the reasons below,
Plaintiffs' motion should be GRANTED.
August 7, 2014, Mr. Nagel filed the Kennedy class
action complaint, alleging certain SEA top-load washers
contained a defective flimsy plastic housing covering the
drain pump which would break and cause flooding in homes.
Kennedy Compl. ¶ 25, ECF No. 1.On June 15, 2015,
Mr. Nagel filed the Orenstein class action
complaint, which, like in Kennedy, alleged the same
drain dump design defects. Orenstein Compl. ¶
25, ECF No. 1. In both cases, Mr. Philip Oliss, admitted
pro hac vice, represents SEA.
and apart from the Kennedy/Orenstein actions, and in
what became part of a Multidistrict Litigation matter in the
Western District of Oklahoma, multiple plaintiffs filed
class-action Complaints in separate federal districts as to
SEA's top-load washing machine models. Involving
overlapping putative nationwide classes and/or multiple state
classes, those Complaints alleged certain SEA top-load
washers contained defects that arose during the spin cycle
and posed a risk of harm to consumers and their property.
Among the claimed defects was that during the washers'
spin cycle, components such as the drain pump detach, break
apart, or explode. See In re: Samsung Top-Load Washing
Machine Marketing, Sales Practices and Products Liability
Litigation, Case 5:17-ml-2792-D, ECF No. 1 (“MDL
Transfer Order”) [hereinafter “the MDL
20, 2017, before the Judicial Panel on Multidistrict
Litigation (the “Panel”), SEA and other retail
defendants filed a motion to centralize 24 putative class
actions over its top-load washing machines in the Western
District of Oklahoma (“the MDL”). Although not
listed on the motion papers, Mr. Oliss was and remains
SEA's counsel of record in the MDL. On June 13, the
Mediator, Judge Stephen Orlofsky (ret.)
(“Mediator” or “Judge Orlofsky”),
advised this Court that the Kennedy and
Orenstein matters had finally settled.
August 15, 2017, while the MDL consolidation motion remained
pending, this Court held a hearing to inquire as to the
absence of settlement documents. ECF No. 44. Plaintiffs'
counsel (Mr. Nagel) and SEA's counsel (Mr. Mark Dosker,
also from the same firm as Mr. Oliss) reiterated to this
Court that two months earlier (June 13, 2017) the parties had
reached a settlement on the last material term, namely
Plaintiffs' attorneys' fees. See Cert. of
Bruce H. Nagel, Ex. 1, Aug. 15, 2017, Hr'g Tr. 3:9-4:5,
ECF No. 65-3 (“Nagel Cert.”). Mr. Dosker
attributed the delay to SEA's business requirement to
obtain the go-ahead from multiple people within the company
but expected final approval by week's end. Id.
at 4:6-5:15. Having yet to receive draft settlement papers
more than two months after agreeing on material terms, the
Court ordered SEA to provide Plaintiffs' counsel the
settlement documents by September 1, 2017. See Id.
August 28, 2017, Mr. Oliss emailed Mr. Nagel draft settlement
documents. See Cert. of Philip M. Oliss, Esq., Exs.
1(a)-(g), ECF No. 66-1 (“Oliss Cert.”). While
Messrs. Oliss and Nagel hashed out the written settlement
agreement, the Panel acted on SEA's motion by directing
the consolidation and transfer of 24 cases, including a drain
pump case, to the Western District of Oklahoma (“MDL
Court”). See MDL Transfer Order. In its
October 4, 2017, Transfer Order, the Panel noted the
substantial overlap in putative nationwide and statewide
classes and common complex factual questions presented.
days later, on October 10, 2017, Ms. Randee Matloff
(Nagel's co-counsel), emailed SEA attorneys, Messrs.
Oliss and Dosker, to inquire of them about the recently
issued MDL Transfer Order in the “exploding washer
case” and that an action included therein appeared to
be a drain pump case. She recommended they “reach out
to the plaintiffs [sic] counsel in that case and
advise them that we already have a settlement.” Oliss
Cert., Ex. 4. Upon receiving no response, on October 20,
2017, Ms. Matloff emailed Mr. Oliss and the Court-appointed
Mediator, seeking an update on proposed settlement document
changes and again asked for a status on “the MDL in the
exploding washer case which appears to have swept up a drain
pump case.” Id., Ex. 5. The same day, Mr.
Oliss responded via email and indicated he could speak with
Ms. Matloff the following Monday. Id., Exs. 6-7. The
parties generally discussed issues of fact common to the MDL
cases, Oliss Cert. ¶ 14, which SEA now argues are all
distinguishable from the allegations in Kennedy and
two weeks later, on November 6, 2017, the Court held another
hearing to again inquire as to the parties' failure to
produce settlement documents. ECF No. 49. Mr. Oliss told the
Court that Kennedy/Orenstein were close to
finalization, pending Mr. Nagel's submission of a revised
claim form, which he agreed to send within 48 hours.
See Nagel Cert., Ex. 3, Nov. 6, 2017, Hr'g Tr.
17:2-18:3. Noting the delay in drafting the settlement
documents, the Court emphasized how the parties and Mediator
had both informed the Court that the matters were settled in
mediation. Id. at 16:11-16. At no time did the
parties indicate a breakdown of the essential terms agreed
upon in June.
Court's understanding, at the same time Messrs. Nagel and
Oliss were hashing out the settlement papers and months after
informing this Court they reached a settlement, the MDL
parties-which included SEA's counsel, Mr. Oliss-entered
mediation. On March 30, 2018, the MDL parties informed the
MDL Court “they have agreed to the material terms of a
global settlement and release of all relevant claims on a
nationwide class basis as to all Defendants, subject to final
review and approval of a written settlement by all the
parties and their counsel.” MDL Docket, ECF No. 75. A
month later the MDL parties provided the MDL Court a joint
notice as to finalizing the formal proposed settlement
agreement. Id., ECF No. 79.
the MDL parties negotiated and reached a global settlement,
Messrs. Nagel and Oliss advised this Court for the first time
of their inability to settle Kennedy and
Orenstein. ECF Nos. 52, 53. Counsels stated this
despite the Court having previously received such assurances
from the Mediator and counsel in its August and November 2017
hearings that the matters had been settled. See
Nagel Cert., Ex.1, Aug. 15, 2017, Hr'g Tr. 3:20-5:1,
5:20- 25, 7:6-10; Ex. 3, Nov. 6, 2017, Hr'g Tr. 26:15-16,
28:24-29:3, 30:10-16. Of concern to this Court and while the
MDL progressed towards settlement, in an April 10, 2018,
letter, Mr. Oliss told Mr. Nagel that “Samsung's
incentives to continue attempting to engage with you
regarding class settlement have changed.” Oliss Cert.,
Ex. 22. Conspicuously, during the same time the MDL parties
appeared closer to reaching a negotiated settlement, the
talks between Plaintiffs' and SEA's counsels broke
down. Counting on the MDL to sweep up Kennedy and
Orenstein, SEA would have had little motivation to
agree on written terms. Understandably so and considering the
information given, Mr. Nagel informed the Court of the
parties' failed mediation efforts and requested a status
conference to move ahead in litigating Kennedy and
Orenstein. See ECF No. 52.
response, on April 23, 2018, Mr. Oliss filed a letter,
informing the Court for the first time that SEA had
“entered an agreement to settle other class-action
litigation encompassing the same washers and providing
relief to all putative class members in the instant
cases.” ECF No. 53 (emphasis added). In a status
hearing the next day, the Court informed Messrs. Nagel and
Oliss that it intended to issue an Order to Show Cause as to
why the Court should not sanction the parties for
misrepresentations made to this Court and for why SEA's
counsel did not include Kennedy and
Orenstein as potential MDL tag-along cases. Two days
later, the Court issued an Order to Show Cause as to why
Kennedy and Orenstein were not referred to
the Panel months ago as potential tag-along cases. ECF No.
the May 2, 2018, Order to Show Cause (“Show
Cause”) hearing, Mr. Oliss told the Court he was aware
of his obligation under the MDL Rules and offered two
justifications for declining to refer Kennedy and
Orenstein as potential tag-along cases.
First, he asserted “the reason why these cases
weren't included is [that] they did not involve the same
allegations.” See Nagel Cert., Ex. 7, May 2,
2018, Hr'g Tr. 33:8-10. Second, he noted the
Mediator and the parties advised the Court back on June 13th
that both cases had settled and explained that “you
don't consolidate settled cases with unsettled cases for
purposes of discovery and pretrial rulings.”
Id. at 33:13-23. Yet, as referenced in his April
23rd letter and during the Show Cause hearing, Mr. Oliss
indicated the global MDL settlement releases may cover and
bar the Kennedy and Orenstein alleged drain
pump defect claims. In his April 30, 2018, letter and before
the Court in the Show Cause hearing, Mr. Oliss admitted that
in late March 2018, as part of the MDL Action, SEA agreed to
include relief for washer drain pump failure allegations to
include the same washing machine models at issue in
Kennedy and Orenstein. See ECF No.
60; Oliss Cert. ¶ 38.
MDL settlement nears its conclusion and to avoid its
potentially conflicting terms, Plaintiffs now ask this Court
to enforce the settlement terms the parties agreed to as of
June 13, 2017. See Pls.' Mot. for Settlement
Enforcement 1-19, ECF No. 65-1. SEA opposes, arguing first
the absence of a written agreement precludes enforcement
because: (1) Third Circuit and New Jersey law bars Plaintiffs
from enforcing an unmemorialized, alleged oral settlement
reached during the parties' mediation; (2) the
parties' post-mediation conduct shows no meeting of the
minds on material terms; and (3) Plaintiffs' counsel
cannot now accept terms from an email. Second, even if the
parties had a valid, written settlement agreement, such
agreement would be unenforceable because (1) Plaintiffs'
counsel committed anticipatory breach and, in any case, both
parties mutually abandoned the written agreement and (2)
Plaintiffs' counsel cannot obtain Rule 23 class
certification without injuring the rights of absent
Kennedy and Orenstein putative class
members. See SEA's Opp'n Br. 15-30, ECF No.