Opinion ID: 608853
Heading Depth: 4
Heading Rank: 2

Heading: Application Of Total Amounts of All Settlements To Verdict on G-III

Text: 53 The amount of the total Mitsubishi Settlement when combined with the other five settlements exceeded the trebled amount of the jury verdict and thus seemingly dictated a judgment for defendant. However, plaintiff argues that the district court erred in refusing to allocate the proceeds received from the settlements among the three claims originally at issue in this lawsuit. It emphasizes that the settlements occurred prior to the date the district court granted summary judgment on two of the claims. 54 The allocation issue is important because, if meritorious, the so-called Falcon Jet settlement aside, 9 it would mean that the aggregate amounts of the setoffs would only partially cover the amount of the jury verdict and would thus require that the judgment for defendant be vacated. In refusing to make the allocations sought by plaintiff, the district court seems to have relied primarily on its conclusion that such an allocation would have been irreconcilable with the outcome of this case because [t]wo of the three claims did not survive summary judgment. (J.A. at 81). While the district court also relied on the equities, we need not reach that ground here. 55 We are not persuaded that hindsight evaluation of a general settlement of claims based on a subsequent determination of their relative merits as against a non-settling defendant should be dispositive of their settlement values. After all, the incentive to settle typically flows from uncertainty as to the outcome. But our disagreement with the hindsight approach here does not end the matter. 56 None of the six settlement instruments here purported to allocate the settlement proceeds among the three common claims asserted against all defendants on a joint-liability basis. Plaintiff, nevertheless, asserted in the district court as it does here that each settlement sum should be allocated for setoff purposes among the three claims, in certain percentages, based on the purchase prices of the three planes in question. Thus, in plaintiff's view, only 30 percent of each of the six settlements should be set off against the verdict, because of the relationship of the base price of the G-III to the total of the base prices of all three planes. Nevertheless, such an allocation, in and of itself, would have no inexorable relationship to the litigation value the settling parties attached to each claim when all were still viable. We therefore agree with the district court that such an approach is not acceptable here and that Baughman does not dictate otherwise. See Baughman, 530 F.2d 529. 57 Plaintiff next argues that the district court should have held an evidentiary hearing to determine a fair allocation of the claims for each of the six settlements. Determining after the fact how parties to a general settlement valued various claims in arriving at their settlement is inherently difficult. Consequently, such valuations would be unlikely to represent precisely what factors each party weighed and how it valued them in reaching the settlement. To add to the uncertainty, the settling defendants would ordinarily have no interest in how the proceeds were allocated among the various claims. On the other hand, the plaintiff would have a real interest in aggrandizing by hindsight the amounts attributable to the claims now known to have been decided in favor of the defendant. 58 Given the foregoing considerations, we conclude that where a plaintiff executes a general settlement instrument which settles multiple claims with a defendant, but a non-settling defendant is not a party to that agreement, the non-settling defendant need show only that the plaintiff settled a claim on which the non-settling defendant was found liable at trial. If the defendant makes this showing, the burden then shifts to the plaintiff to prove that, under the terms of its agreement with the settling defendant, the settlement or part thereof did not represent damages arising under the same theory of liability as those forming the basis for the jury award. The view we adopt is consistent with the rule that a settling plaintiff is entitled to only one full recovery while at the same time it protects the plaintiff from the application of amounts received in settlement of unrelated claims. 59 We note that our conclusion is in substantial agreement with the position of the Court of Appeals for the Tenth Circuit, albeit in a federal securities law context. See U.S. Indus., Inc. v. Touche Ross & Co., 854 F.2d 1223, 1262-63 (10th Cir.1988). Nor does the rule we adopt do a disservice to the antitrust enforcement scheme. This rule does not deter a plaintiff from incorporating a good-faith allocation of the settlement proceeds among multiple claims. What it does do is prevent a plaintiff from waiting for the jury's verdict to allocate the settlement in a way that reduces the remaining defendants' credit. McDermott, Inc. v. Clyde Iron, 979 F.2d 1068, 1080 (5th Cir.1992). To the extent other circuits can be said to have taken a different position, e.g., I.T.O. Corp. v. Sellman, 967 F.2d 971 (4th Cir.1992), we conclude that their rulings do not fully serve the purposes of meaningful predictability and certainty. Thus, we find no error in the refusal of the district court to allocate the amounts of the settlements of the six codefendants among all three claims for setoff purposes. 10 60