Opinion ID: 608853
Heading Depth: 4
Heading Rank: 1

Heading: Mitsubishi Settlement

Text: 44 We address plaintiff's settlement with the defendant Mitsubishi, keeping in mind that the following facts are undisputed. Plaintiff ultimately executed two separate settlement documents with Mitsubishi. Pursuant to the First Mitsubishi Settlement, plaintiff was to receive: 1) $300,000 in cash; 2) one Mitsubishi Diamond II airplane for $2,600,000; and 3) options to purchase two additional Diamond II airplanes for $2,600,000 each. Mitsubishi represented to plaintiff that the market price for a Diamond II was approximately $3,200,000. The First Mitsubishi Settlement also obligated plaintiff to forfeit $75,000 of the $300,000 in cash if plaintiff did not purchase at least one Diamond II. 45 The First Mitsubishi Settlement contained a most favored nation clause under which plaintiff promised Mitsubishi that it would not settle its claims against any other defendant for less than a specified dollar amount. Despite the apparent value of the First Mitsubishi Settlement, the most favored nation clause stated in pertinent part: The parties hereto stipulate that for purposes of this paragraph of this agreement only, and for no other purposes, this settlement has a present value of $400,000.00 for the benefit of the plaintiff[ ] and as a cost to Mitsubishi. (J.A. at 823). 46 Subsequently, when plaintiff tried to sell its options on the Diamond II's, it became aware that the market price for a Diamond II was actually $600,000 less than Mitsubishi had represented. Thus, plaintiff's right/options to purchase Diamond II's were worthless and the value of the Mitsubishi Settlement to plaintiff was reduced by approximately $1,800,000. Plaintiff contacted Mitsubishi and threatened, inter alia, to rescind the First Mitsubishi Settlement and/or to sue Mitsubishi under Texas law for damages for misrepresentation. Although plaintiff never formally revoked the First Mitsubishi Settlement, ultimately Mitsubishi paid plaintiff $1,800,000 in cash and plaintiff and Mitsubishi signed the Second Mitsubishi Settlement covering all claims between the parties (including the earlier antitrust claims). 47 The basic issue presented is whether, under the undisputed facts above, the district court was entitled to include the $1,800,000 in calculating the Mitsubishi setoff. 6 Plaintiff, relying largely on the most favored nation clause, says that the amount of the setoff should be no more than $400,000. It notes that it never formally revoked the first settlement and argues that the $1,800,000 in cash was received in settlement of a potential state law fraud claim and not in partial settlement of plaintiff's antitrust claim. 48 Momentarily passing over the fact that a most favored nation clause is generally included for the benefit of a settling defendant (rather than a plaintiff), by its express terms the most favored nation clause in this case is inapplicable to the valuation of the settlement for purposes of calculating setoff. Even if we were to indulge in the unlikely assumption that plaintiff intended that the most favored nation clause be somehow applicable for setoff purposes, the $400,000 amount improperly fails to include the represented value of the options that plaintiff received. See Merola v. Atlantic Richfield Co., 515 F.2d 165, 172 (3d Cir.1975) (discussing valuation of antitrust settlement for purposes of attorneys' fees; [W]here the benefit [from a settlement] is in non-monetary form, the district court must bring an informed economic judgment to bear in assessing its value. If probative evidence of the monetary value of such a benefit is available, it should of course be used.). As other courts have recognized, the value of options received in an antitrust settlement must be considered when valuing that settlement, at least where the plaintiff intends to exercise those options. See Basile v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 640 F.Supp. 697 (S.D.Ohio 1986); see also Bal Theatre Corp. v. Paramount Film Distrib. Corp., 206 F.Supp. 708, 714 (N.D.Cal.1962) (recognizing that in antitrust context, [t]he rule ... seems to be that anything of value received should be set off in addition to the cash settlement). 49 It is true that courts have adopted the parties' valuation of their settlement, provided the record supported that valuation. In this case, however, we think the record supports the district court's finding that the $1,800,000 received in the second settlement was properly set off. The fact that plaintiff threatened to sue Mitsubishi for fraud does not alter the reality that the second settlement proceeds were part of the true value of the original settlement. 7 Any other approach to the second settlement would do violence to the equitable principle that one who has recovered from one coconspirator may not recover the same item of damage from another conspirator. Baughman, 530 F.2d at 533. 50 Finally, we do not consider that the affidavit of Mitsubishi's in-house counsel, Yukihisa Hotta, creates a disputed issue of material fact. Mr. Hotta stated that the $1,800,000 represented threatened single damages under the Texas [fraud] statute.... (J.A. at 913). 8 Plaintiff says this representation is unchallenged. Nevertheless, it amounts to no more than a mathematical truism. The pertinent question is not what the $1,800,000 may have represented, but rather, what claim or claims it was in fact paid to settle. By the terms of the Second Mitsubishi Settlement, the $1,800,000 was paid to settle all claims between the parties--including the antitrust claims. In addition, we note that Mr. Hotta's affidavit refers to threatened single damages of $1,800,000. The amount of these threatened damages was simply the amount plaintiff believed it was defrauded in the First Mitsubishi Settlement. 51 The district court ruled that the total amount of this settlement set off from the jury award should be $2,025,000 rather than the $400,000 specified in the most favored nation clause of the first settlement agreement. Thus, whether presenting an issue of law or ultimate fact, we conclude that the district court committed no error in including the amount of the second settlement in the setoff calculation. In so concluding, we reiterate that neither in the district court nor on appeal does plaintiff challenge the district court's right to resolve the merits of this issue on the record before it. 52