Shron v. LendingClub Corporation
- Analisa Torres
- 1:19-cv-06718
- U.S. District Court · Southern District of New York
- 2
In Shron v. LendingClub, Judge Analisa Torres conditionally vacated the prior arbitration order to facilitate settlement.
Marina Shron and LendingClub Corporation were affected. The July order denying LendingClub’s motion to compel arbitration was vacated conditionally to facilitate their settlement, subject to the stated settlement-related requirements.
What happened
In Shron v. LendingClub Corporation, the court had previously denied LendingClub’s request to force Marina Shron’s claims into arbitration because LendingClub had not shown that a valid arbitration agreement existed. The parties later reported reaching a settlement in principle and jointly asked the court to vacate that earlier order.
The court reviewed the settlement agreement privately and found that vacating the earlier order would benefit both parties and would not harm the public interest. It therefore vacated the July order, but only if the parties fulfill the settlement terms, file a settlement agreement, Shron files a dismissal notice, and another court does not vacate the settlement agreement.
Judge Analisa Torres emphasized that vacating the order did not guarantee that the settlement would occur. The parties were directed to report the status of settlement discussions by December 11, 2020, and the court terminated the joint motion to vacate.
The detailed version
- Shron v. LendingClub Corporation · No. 1:19-cv-06718
- Analisa Torres
- Nov. 30, 2020
Background
The court’s July 13, 2020 order denied LendingClub Corporation’s motion to compel arbitration of Marina Shron’s claims under the Federal Arbitration Act. The court found that LendingClub had not proven by a preponderance of the evidence that a valid agreement to arbitrate existed between the parties. LendingClub appealed that order.
The parties later informed the court that, through the U.S. Court of Appeals for the Second Circuit’s Mediation Program, they had reached a settlement in principle covering this case and the related appeal. They jointly moved to vacate the July order because vacatur was a contemplated term of their settlement.
Legal standard
Federal Rule of Civil Procedure 54(b) allows a district court to revise a non-final order before entry of judgment. The court determined that the July order was non-final because it adjudicated fewer than all claims at issue. The court explained that the standard for vacating a non-final order under Rule 54(b) is less strict than the standard for vacating a final judgment under Rule 60(b).
The court stated that vacatur—setting aside an earlier decision—is appropriate when it benefits the parties and does not conflict with the public interest. It found that vacatur could benefit both sides by facilitating settlement. The court also found that settlement would conserve judicial resources and that vacating the order would not impede the development of binding legal precedent because district court decisions are not binding precedent in other cases.
Ruling
Judge Analisa Torres granted the parties’ request to vacate the July order, but only to the extent that specified conditions are satisfied: the parties must fulfill their settlement obligations and submit a settlement stipulation; Shron must submit a notice of dismissal; and another court with authority must not vacate the settlement agreement.
The court cautioned that vacating the July order was necessary to facilitate the settlement but did not guarantee that a settlement would occur. LendingClub was required to take certain steps after vacatur and before Shron’s dismissal of the action; failure to take those steps would nullify the agreement. The parties were directed to file a joint letter by December 11, 2020, reporting the status of settlement discussions. The Clerk was directed to vacate the order at ECF No. 23 and terminate the motion at ECF No. 35.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.