Cascade Settlement Services LLC v. ADT LLC

Background

Cascade Settlement Services LLC and Carmel VI Claim, LLC brought this action against ADT LLC. Cascade alleged that it bought ADT’s right to recover money from the Visa and Mastercard antitrust litigation settlement under a December 20, 2013 Asset Purchase and Sale Agreement. The parties disputed what asset the agreement transferred and whether it also covered Protection One Alarm Monitoring, Inc.’s potential settlement claim. ADT merged with Protection One in 2017, after the agreement was signed. In June 2024, Cascade and ADT filed conflicting claims concerning Protection One’s settlement claim with the settlement’s Class Administrator.

The Visa Antitrust Litigation was pending in the Eastern District of New York. That court’s order approving the Superseding Settlement Agreement stated that it retained continuing jurisdiction over settlement-class members and disputes relating to or arising from claims for payment from the settlement fund. The settlement’s procedures required claim disputes to be raised first with the Class Administrator, with possible review by a Special Master and then the Eastern District of New York.

Cascade and Carmel filed this action in California state court, and ADT removed it to the Northern District of California. ADT moved to transfer the case under 28 U.S.C. § 1404(a), which permits transfer to another federal district for convenience and the interests of justice.

Court’s Analysis

The court relied on the reasoning of Omnicell, Inc. v. Medacist Solutions Group, LLC and Flanagan v. Arnaiz, which treated a court’s retention of jurisdiction over settlement enforcement as generally exclusive unless specific language or context showed otherwise. The court stated that the plaintiffs did not respond to Omnicell in their opposition and therefore conceded that it was relevant authority.

The plaintiffs argued that the jurisdiction provision did not apply because they were not members of the settlement class or defendants in the antitrust litigation. The court rejected that argument, explaining that ADT and Protection One were settlement-class members and that the plaintiffs cited no authority requiring every party in a related dispute to be a settlement-class member.

The court also rejected the plaintiffs’ reliance on an earlier dispute involving Cascade and Optium. It found that proceeding different because the parties there were not settlement-class members, Cascade had withdrawn its conflicting claim, and the earlier court had not addressed the settlement order’s jurisdiction-retention provision. The court further held that the phrase “relating to, or arising out of” was broad enough to cover this dispute because the action affected the distribution of conflicting claims from the settlement fund. The court noted that ADT could seek an injunction from the Eastern District of New York but found no requirement that ADT do so before seeking transfer.

Ruling

The court granted ADT’s motion to transfer and transferred the case to the Eastern District of New York. Because the ruling concerned the proper forum, the court did not decide the parties’ underlying contract dispute or determine entitlement to the settlement payment. Judge Jon S. Tigar issued the order.