Chalmers v. City of New York

Background

Class counsel Mehri & Skalet ("M&S") asked for an expedited briefing schedule for an anticipated motion requiring the court-appointed settlement administrator, Settlement Services, Inc. ("SSI"), to perform its obligations under the court-approved class-action settlement agreement. M&S understood those obligations to include paying M&S’s attorneys’ fees and expenses under Paragraph V.4 of the agreement.

SSI argued that the court lacked jurisdiction, or legal authority, to consider M&S’s proposed motion. SSI characterized the request as a disguised claim for damages based on alleged wire fraud and argued that SSI was not a party to the action. SSI also argued that its obligation was limited to paying funds from the qualified settlement fund and that it could not be ordered to pay from its own funds.

Court’s analysis

The court was skeptical of SSI’s characterization of the proposed motion. It understood the motion as seeking enforcement of SSI’s payment obligations under the settlement agreement. The court noted that Paragraph IX.4 retained jurisdiction over the action to enter orders and judgments needed to implement or enforce the settlement’s rights and obligations until those obligations were satisfied.

The court also stated that SSI had been appointed to administer the settlement and the qualified settlement fund and had undertaken obligations in the settlement agreement. On that basis, the court assumed that it had jurisdiction to require SSI to perform those obligations. The court found SSI’s argument about using only settlement-fund money unpersuasive because M&S alleged that SSI had wrongfully diverted the funds to a third party.

The court did not finally decide jurisdiction. It recognized that SSI had raised a subject-matter-jurisdiction issue, that the issue had not been fully briefed, and that SSI was not a party to the action. The court therefore reserved judgment on whether it had jurisdiction to hear M&S’s proposed motion.

Order and effect

The court also concluded that M&S’s proposed expedited schedule was too compressed in light of the legal and factual complexities. It ordered M&S to file a letter brief of no more than five single-spaced pages on jurisdiction by August 13, 2025, and ordered SSI to respond with a similarly limited letter brief by August 20, 2025.

The court scheduled a video conference for August 28, 2025, at 10:00 a.m. The parties were directed to be prepared to discuss what discovery, if any, would be appropriate if the court determined that it had jurisdiction to consider M&S’s motion. The order did not resolve the jurisdictional question or decide whether SSI owed the requested payment.