Opinion ID: 3051154
Heading Depth: 2
Heading Rank: 2

Heading: Procedural History & Settlement

Text: On February 24, 2004, the Class filed its consolidated complaint, which alleged that Syncor and the Plan’s committee members breached their fiduciary duties to the Plan and its participants in violation of ERISA §§ 404(a)(1)(A)-(D) & 405. In its January 10, 2005 Order Re: Civil Jury Trial, the district court ordered the parties to comply with the local rules setting out mandatory settlement procedures. On October 19, 2005, the district court entered an order granting the parties additional time to participate in a settlement procedure. In November 2005, Defendants Syncor and Funari filed a joint Motion for Summary Judgment and Defendant Fu filed a separate Motion for Summary Judgment. The parties engaged in formal mediation on December 12, 2005, with settlement negotiations continuing after that date. During the time period following mediation, the parties continued to file documents regarding the summary judgment motions. On December 16, 2005, the district court took the motions “under submission.” On January 10, 2006, without notice that the district court had reached a decision regarding the summary judgment 1438 IN RE: SYNCOR ERISA LITIGATION motions, the parties signed a “Revised Term Sheet,” with a proposed settlement. The term sheet stated, “Court approval is a condition of this settlement.” Pursuant to Central District of California Local Rule 16-15.7, which instructs litigants on how to report a settlement, the parties left a message for the district court’s clerk regarding the parties’ term sheet. Counsel for the Class also delivered a letter to the district court stating, “The parties have signed a term sheet and have begun the process of formally documenting the settlement.” Neither party provided the term sheet to the district court. On the same day, the district court signed an order granting Syncor’s, Funari’s, and Fu’s motions for summary judgment, holding Plaintiffs failed to demonstrate genuine issues of material fact existed as to whether Defendants breached their duty of prudence. The following day, January 11, 2006, the parties submitted a signed stipulation and a proposed order asking the district court, among other things, to “not issue a ruling on the Motions for Summary Judgment.” Again neither party provided the term sheet to the district court. Even though the parties provided the required notice of settlement to the district court, the district court nevertheless entered its order granting the motions for summary judgment on January 11, 2006. The district court entered final judgments against the Class on January 12, 2006. Thereafter, the district court denied the parties’ proposed order regarding settlement as moot. On January 25, 2006, the Class filed a motion under Federal Rules of Civil Procedure 60(b) and 59(e) requesting that the district court set aside the final judgments. The Class also filed a motion for preliminary approval of the settlement pursuant to Rule 23(e) of the Federal Rules of Civil Procedure. On March 2, 2006, the district court denied the Class’s Rule 60(b) and Rule 59(e) motions and the Class’s motion for preliminary approval of the settlement holding that merely because “the parties reached a tentative settlement on the same day the Court issued its summary judgment rulings does IN RE: SYNCOR ERISA LITIGATION 1439 not, without more, mean that a manifest injustice will result if the Court allows its summary judgment rulings to stand.” The Class appeals from the district court’s rulings and raises two issues: (1) whether the district court abused its discretion by not considering the class action settlement and (2) whether the district court erred by concluding plaintiffs failed to demonstrate genuine issues of fact existed as to whether the fiduciaries breached their fiduciary duty to the Plan and participants. We have jurisdiction under 28 U.S.C. § 1291. We reverse and remand.