Opinion ID: 203380
Heading Depth: 3
Heading Rank: 1

Heading: Failure To Conduct Rigorous Scrutiny of the Settlement Agreement

Text: The third and fourth parties argue that the district court should have conducted a more searching inquiry of the terms of the private Settlement Agreement before it approved the Decree. They are particularly concerned with the assignment of the City's third-party claims to Citizens and the arrangement through which Citizens can keep two-thirds of any recovery from third parties net of litigation costs. The appellants' argument that the district court did not consider the terms of the Settlement Agreement is manifestly untrue. The court expressly stated that it was considering certain settlement terms from the Agreement, in particular the $7.625 million figure and the fact that Citizens might end up paying less than that amount because of its potential to recover from third parties through assignment and by contribution or benefit from federal payments. Bangor II, 2007 WL 1557426, at  nn. 5-6. The argument is made that the court was required to go farther than it did. The court quite properly considered the private Settlement Agreement to the extent it was germane to the scrutiny required of the Consent Decree. No more was needed. Private settlements usually do not entail the judicial approval and oversight involved in consent decrees. Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598, 604 n. 7, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001). Appellants' argument then shifts in character to an argument that the court should have ruled, in the course of considering the Consent Decree, that any assignment of claims by the City in the private Settlement Agreement to Citizens was invalid. [12] The court very carefully said it was not then deciding the question of the enforceability of either these provisions or of the likelihood that Citizens would ultimately pay less than $7.625 million. Bangor II, 2007 WL 1557426, at  n. 5. The decision by the district court not to resolve every issue that could arise from the later enforcement of the Consent Decree was correct. See Charter Int'l Oil, 83 F.3d at 515-16. The district court did not abuse its discretion by not scrutinizing the purported assignment to test its validity.