Rilley v. MoneyMutual, LLC
- Donovan Frank
- 0:16-cv-04001
- U.S. District Court · District of Minnesota
- 6
In Rilley v. MoneyMutual, Judge Frank denied defendants’ motion to modify the class settlement, requiring approval under its existing terms.
The ruling affected MoneyMutual, LLC, Selling Source, LLC, and PartnerWeekly, LLC by rejecting their proposed payment extension, and affected the plaintiff class by leaving the $2 million settlement’s agreed payment timing unchanged.
What happened
Rilley v. MoneyMutual involved a class-action settlement requiring the defendants to pay $2 million and provide injunctive relief. The settlement said payment was due within seven days after the settlement’s effective date, and the court had found the agreement fair, reasonable, and adequate.
The defendants asked to change the payment schedule because they said the COVID-19 pandemic and financial-market and business declines affected their ability to pay. They proposed paying $100,000 first, followed by $900,000 60 days later and $1 million 120 days after the initial payment. The plaintiffs opposed the change.
Judge Frank denied the motion. He ruled that the court could not change a material settlement term without the parties’ agreement, and directed that final approval proceed under the settlement’s existing terms.
The detailed version
- Rilley v. MoneyMutual, LLC · No. 0:16-cv-04001
- Donovan Frank
- Apr. 14, 2020
Background
The plaintiffs and MoneyMutual, LLC, Selling Source, LLC, and PartnerWeekly, LLC finalized a class-action Settlement Agreement on November 11, 2019. The agreement provided for a $2,000,000 payment plus injunctive relief. It required payment within seven days after the settlement’s Effective Date and stated that each substantive term was material unless the agreement said otherwise.
The court preliminarily approved the settlement, notice was sent to the class, and no objections were filed. At an April 2, 2020 fairness hearing, the court found the settlement fair, reasonable, and adequate. The court delayed entering the Final Order approving the settlement while the parties tried to reach an agreement on a longer payment schedule.
The Requested Modification
The defendants asked the court to modify the settlement by allowing a staggered payment schedule: $100,000 within five days after notice of the Final Approval Order, $900,000 60 days after that initial payment, and $1 million 120 days after the initial payment. They attributed the request to concerns about their financial condition, including the effects of the COVID-19 pandemic, declining financial markets, and declines in their business. They argued that the change would extend the funding period rather than alter a material settlement term and would help them avoid bankruptcy while fully funding the settlement.
The plaintiffs opposed the request. They argued that the payment timing was a material term of the agreement and that the court lacked authority to change it without their consent.
Court’s Analysis and Ruling
The court explained that Federal Rule of Civil Procedure 23(e) requires judicial review of a class-action settlement to determine whether it is fair, reasonable, and adequate. But the court also stated that this authority does not allow it to rewrite a settlement or require parties to accept terms to which they did not agree. Because the plaintiffs did not agree to the proposed payment schedule, and because the court had already found the settlement fair, reasonable, and adequate, the court concluded that it could not impose the requested condition.
The court did not need to decide whether the defendants’ financial evidence showed that the settlement was no longer fair or adequate. It denied the defendants’ Motion to Modify Settlement. The court stated that it would issue a Final Order approving the settlement as written, and the opinion also notes that a separate order granted the plaintiffs’ unopposed request for attorney fees, costs, and class-representative service awards.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.