Zomber v. Christies, Inc.

42 F. App'x 511
CourtCourt of Appeals for the Second Circuit
DecidedJuly 30, 2002
DocketDocket Nos. 01-7626(L), 01-7708(XAP), 01-7712(XAP)
StatusPublished
Cited by11 cases

This text of 42 F. App'x 511 (Zomber v. Christies, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zomber v. Christies, Inc., 42 F. App'x 511 (2d Cir. 2002).

Opinion

SUMMARY ORDER

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the motions to dismiss the appeal are DENIED and the judgment of said District Court be and is AFFIRMED.

These appeals arise out of the settlement of consolidated class actions alleging that the defendant auction houses Sothe-by’s Inc. and Christie’s Inc., together with their affiliated companies and certain officers and employees (collectively, the “Auction Houses”), violated section 1 of the Sherman Act, 15 U.S.C. § 1, by fixing the prices of certain auction services. Defendants Sotheby’s and Christie’s and their related companies challenge the refusal by the United States District Court for the Southern District of New York (Lewis A. Kaplan, Judge) to approve an earlier version of the settlement that included a waiver of Class members’ rights to bring claims related to foreign auctions (which were not class claims) in United States courts. Intervenors Plaintiffs J & J Lu-brano, Angelo Guido Terruzzi and Giovan-na Terruzzi (collectively, “J & J Lubrano”) cross-appeal the approval of the settlement, contending that the District Court abused its discretion in approving it because (a) the settlement unfairly prejudiced the foreign auction claims of some Class members, and (b) Lead Counsel for the Class allegedly labored under a “structural conflict [of interest].” These plaintiffs have also moved to dismiss defendants’ appeal for lack of appellate jurisdiction, as have Intervenor Plaintiffs The Fataihi Company and Swicorp S.A. (collectively, “Fataihi”), Intervenor Plaintiffs Pamela J. Alper and Michael N. Alper (the “Al-pers”).2 The Class also argues that we lack jurisdiction over the defendants’ appeal, and defends the judgment of the District Court. We hold that (1) we have [514]*514subject-matter jurisdiction over defendants’ appeal, although we do not reach the issue of whether the Auction Houses waived their right to contest the District Court’s rejection of the earlier settlement or of whether the dispute over the rejection is moot in light of the approved settlement; (2) the District Court was precluded from approving the original settlement by our decision in National Super Spuds, Inc. v. New York Mercantile Exchange, 660 F.2d 9 (2d Cir.1981); and (3) the District Court did not abuse its discretion in approving the final settlement.

Accordingly, we deny the motions to dismiss the appeal, and affirm the judgment of the District Court.

I

This appeal centers on the District Court’s February 22, 2001 rejection of an earlier version of the final settlement which included a release provision (the “Original Release”) the District Court found objectionable. The Original Release stated that all Class members who did not timely opt out of the Class would release (1) their domestic auction claims under federal or state antitrust laws and (2) all claims “based on the allegedly collusive activity” of defendants, “wherever occurring or located,” but only if the Class members actually made a claim and received money from the settlement. Another portion of the Original Release, however, provided that, even if a Class Member fully participated in the settlement and took money from the settlement fund, the Original Release would not bar that Class Member from asserting foreign auction claims in a foreign country under foreign law. Thus, the Original Release would operate essentially as a choice of law (foreign law) and choice of forum (any appropriate foreign forum) provision with respect to Class members’ (non-class) foreign auction claims; Class members with foreign auction claims would be required to give up whatever rights they might have to bring those auctions in United States courts or pursuant to United States law, even though no part of the settlement fund was allocated to compensate those Class members for those claims or for giving up the aforementioned rights.

The District Court rejected the settlement on the grounds that the Original Release rendered the settlement unfair as a matter of law pursuant to our decision in National Super Spuds, Inc. v. New York Mercantile Exchange, 660 F.2d 9 (2d Cir.1981), because it impaired class members’ foreign auction claims without compensation. See In re Auction Houses Antitrust Litig., No. 00 Civ. 0648, 2001 WL 170792, at *12 (S.D.N.Y. Feb. 22, 2001) (quoting Super Spuds, 660 F.2d at 18-19).

The Class and the Auction Houses subsequently agreed that each Auction House would enter into a Revised Second Amendment to Original Settlement (collectively, the “Final Agreement”). Pursuant to the Final Agreement, the Original Release was replaced with one that did not impair Class members’ rights to bring foreign auction claims in United States courts or pursuant to United States law, with all other material aspects of the settlement — including the amount and type of compensation — remaining the same. The Final Agreement also provided, however, that in the event of a successful appeal to this Court of the District Court’s refusal to approve the settlement including the Original Release, the Original Release would be reinstated. Implicit in the Final Agreement, then, was a reservation of the Auction Houses’ right to appeal the issue of whether Super Spuds precluded the District Court from approving the settlement including the Original Release.

[515]*515On April 4, 2001, the Auction Houses moved for certification of the issue of whether Super Spuds precluded the District Court from approving the original settlement — including the Original Release — for Interlocutory Appeal pursuant to 28 U.S.C. § 1292(b), or, in the alternative, approval of the settlement as modified by the Final Agreement. On April 13, 2001, the District Court denied the motion for certification, but granted the motion for approval of the settlement as modified. See In re Auction Houses Antitrust Litig., 164 F.Supp.2d 345, 349-50 (S.D.N.Y.2001).

On May 15, 2001, the District Court approved the Agreed Form of Final Judgment, which provided, inter alia, that “[t]he [Auction Houses] have preserved their right to seek an appeal regarding [the issue of whether Super Spuds precluded the District Court from approving the settlement including the Original Release]; Lead Counsel consents that the [Auction Houses] may seek an appeal.” The judgment was entered on May 17, 2001. This appeal followed.

On appeal, the Auction Houses argue that the District Court erred in holding that it was precluded, as a matter of law, from approving the settlement under Super Spuds. Counsel for Fataihi, counsel for J & J Lubrano, and Lead Counsel (representing the Class) all argue that we lack jurisdiction over this appeal. The Class and Fataihi also argue that the District Court correctly interpreted and applied Super Spuds.

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Bluebook (online)
42 F. App'x 511, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zomber-v-christies-inc-ca2-2002.