Santiago Rocael Perez Ramirez v. A Spice Route, Inc.

Background

The parties resolved the case through a judgment entered on July 24, 2020, based on defendants’ offer of judgment under Federal Rule of Civil Procedure 68. The offer followed a settlement agreement signed on July 23, 2020. The parties later documented the settlement in a September 3, 2020 agreement under which defendants paid plaintiff money in exchange for a release. They also agreed to keep the settlement confidential.

The settlement agreement provided that disputes arising from it would be brought in the Southern District of New York or, if that court lacked or declined jurisdiction, in New York state courts with jurisdiction over New York County. The parties’ method of resolving the case avoided court approval and public filing of the settlement that otherwise may have been required for a lawsuit under the Fair Labor Standards Act.

Defendants’ Motion

Defendants argued that plaintiff or his lawyer breached the confidentiality provision by disclosing information to a lawyer representing a different employee in another Fair Labor Standards Act lawsuit. In that other case, the employer argued that the effect of the COVID-19 pandemic meant it did not meet the revenue requirement for coverage under that statute. Defendants inferred that the information used in the other case came from plaintiff or his lawyer. Plaintiff responded that the information was also readily available on this case’s public docket.

Defendants moved under Rule 60(b) to vacate the judgment, sought to require plaintiff to return the settlement payment, sought disclosure of information they said was shared in violation of the agreement, and asked the court to dismiss the case under Rule 41.

Ruling

The court denied the motion. It first treated the request as one asking the court to enforce the settlement agreement. The court held that it lacked jurisdiction—legal authority—to do so because defendants had not asked the court to incorporate the settlement agreement into the judgment or to retain jurisdiction over the agreement. Without one of those steps, the court could not enforce the settlement through ancillary jurisdiction, meaning authority connected to an already-resolved case.

The court also considered the request as a motion under Rule 60(b) to vacate the judgment, and assumed for purposes of analysis that such a motion could be directed at a satisfied Rule 68 judgment. It held that defendants had not shown fraud in entering the judgment or another reason justifying relief. The court found insufficient evidence of a breach and stated that Rule 60(b) could not be used to address an alleged post-judgment breach of the settlement agreement in a way that would avoid the jurisdictional rule described above.

The Clerk of Court was directed to close the motion at Docket No. 86.