Pricewaterhousecoopers, L.L.P. et al. v. Jitendra Bhatia, et al. In the 1

13‐1642‐cv
Pricewaterhousecoopers, L.L.P. et al. v. Jitendra Bhatia, et al.
In the 1
United States Court of Appeals 2
For the Second Circuit 3
________ 4
5
AUGUST TERM 2013 6
No. 13‐1642‐cv 7
8
J ITENDRA B HATIA , K ISHANCHAND B HATIA , J AYSHREE B HATIA , 9
MANDAKINI G AJARIA , ABN AMRO LIFE S.A., B AHIA DEL RIO S.A., 10
B EVINGTON MANAGEMENT, L TD., CALWELL I NVESTMENT S.A., 11
DIAMOND H ILLS I NC ., H EDGE STRATEGY FUND LLC, K IVORY 12
CORPORATION , MIGUEL L OMELI , N ORTH CLUB, I NC ., MORNING MIST 13
H OLDINGS L IMITED, PFA PENSION A/S, TAURUS THE FOURTH L TD., 14
ZENN ASSETS H OLDING, L TD., CARLOS MATTOS, CHANDRASHEKAR 15
G UPTA , DEEPA G UPTA , ULRICH B LASS, ROBERTO CIOCI, SANDRA 16
MARCHI CIOCI, J OHN PAUL DOUGHERTY , E. THOMAS DOUGHERTY 17
N OVELLA , MUNIANDY N ALAIAH, L ILA N EEMBERRY , PETER A. & 18
RITA M. CARFAGNA I RREVOCABLE CHARITABLE REMAINDER UNI TRUST, 19
MOSHE PODHORZER , R. W ICKNESWARI V. RATNAM , E NRIQUE SANTOS, 20
E NRIQUE SANTOS CALDERON , J ACQUELINE URZOLA , J OSEFINA SANTOS 21
URZOLA , FELIPE J. B ENAVIDES, FUNDACION V IRGILIO B ARCO, DAVID 22
H OPKINS, CATALINA MEJIA , CESAR MEJIA MEJIA, R.M. RADEMAKER , 23
THE ALPHA AND O MEGA PARTNERSHIP, LP, RICHMON COMPANY L TD., 24
POSITANO I NVESTMENT L TD., PACIFIC WEST H EALTH MEDICAL CENTER 25
I NC . E MPLOYEES RETIREMENT TRUST, ON BEHALF OF ITSELF , PACIFIC 26
WEST H EALTH MEDICAL CENTER I NC . E MPLOYEES RETIREMENT TRUST, 27
ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, SHIMON L AOR , DAVID 28
I. FERBER , FRANK E. PIERCE, FRANK E. PIERCE I RA , N ADAV ZOHAR, 29
ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, 30
RONIT ZOHGR , FAIRFIELD SENTRY L TD., H EADWAY I NVESTMENT CORP ., 31
BPV FINANCE (I NTERNATIONAL) L TD., J OSE ANTONIO PUJALS, 32
INDIVIDUALLY AND IN THEIR REPRESENTATIVE CAPACITIES FOR ALL 33

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No. 13‐1642‐cv
THOSE SIMILARLY SITUATED, ROSA J ULIETA A DE PUJALS, INDIVIDUALLY 1
AND IN THEIR REPRESENTATIVE CAPACITIES FOR ALL THOSE SIMILARLY 2
SITUATED, MARIDOM L IMITED, A FOREIGN CORPORATION , RICARDO 3
L OPEZ , STANDARD CHARTERED B ANK I NTERNATIONAL (AMERICAS) 4
L IMITED, STANCHART SECURITIES I NTERNATIONAL, I NC ., MARIA AKRIBY 5
V ALLADOLID, RICARDO RODRIGUEZ CASO, W ONG YUK H ING DE L OU , 6
MOISES L OU MARTINEZ , J OAQUINA TERESA B ARBACHA H ERRERO, SAND 7
O VERSEAS L IMITEDSAND O VERSEAS L IMITED, B LOCKBEND L TD, 8
E ASTFORK ASSETS L TD, G ERICO I NVESTMENTS, I NC ., ALICIA G AVIRIA 9
RIVERA , E DUARDO CHILD E SCOBAR, MAILAND I NEVSTMENT I NC ., 10
ARJAN MOHANDAS B HATIA , TRADWAVES, L TD., PARASRAM DARYANI , 11
N EELAM P. DARYANI , V IKAS P. DARYANI , N IKESH P. DARYANI , 12
ASHOKKUMAR DAMODARDAS RAIPANCHOLIA , PRERNA V INOD 13
UTTAMCHANDANI, K ISHIN MOHANDAS B HATIA , SURESH M. B HATIA , 14
B HARAT MOHANDAS, AARVEE L TD., K ISHU N ATHURMAL 15
UTTAMCHANDANI, V ANDNA PATEL, RAJESHKUMAR DAMODARDAS 16
RAIPANCHOLIA , DILIP DAMODARDAS RAIPANCHOLIA ,RAJENDRAKUMAR 17
PATEL, SECURITIES & I NVESTMENT COMPANY B AHRAIN , H AREL 18
I NSURANCE COMPANY , L TD., AXA PRIVATE MANAGEMENT, 19
ST. STEPHEN’S SCHOOL , PACIFIC WEST H EALTH MEDICAL CENTER , I NC . 20
E MPLOYEE’S RETIREMENT TRUST, PASHA S. ANWAR, ON BEHALF OF 21
THEMSELVES AND ALL OTHERS SIMILARLY SITUATED INVESTORS IN THE 22
G REENWICH SENTRY , L.P. PRIVATE INVESTMENT LIMITED PARTNERSHIP, 23
J ULIA ANWAR, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY 24
SITUATED INVESTORS IN THE G REENWICH SENTRY , L.P. PRIVATE 25
INVESTMENT LIMITED PARTNERSHIP, I NTER AMERICAN TRUST, 26
E LVIRA 1950 TRUST, B ONAIRE L IMITED, CARLOS G AUCH, WALL STREET 27
SECURITIES, S.A., B ANCO G ENERAL, S.A., H ARVEST DAWN 28
I NTERNATIONAL I NC ., E L PRADO TRADING, O MAWA I NVESTMENT 29
CORPORATION , CARMEL V ENTURES L TD., TRACONCORP , B LYTHEL 30
ASSOCIATED CORP ., MARREKESH RESOURCES, CENTRO I NSPECTION 31
AGENCY , K ALANDAR I NTERNATIONAL, L ANDVILLE CAPITAL 32
2

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No. 13‐1642‐cv
MANAGEMENT S.A., 20/20 I NVESTMENTS, AXA PRIVATE MANAGEMENT 1
DIVERSIFIED I NVESTMENTS ASSOCIATES CLASS A UNITS, ABR CAPITAL 2
FIXED O PTION /I NCOME STRATEGIC FUND LP, H AREL I NVESTMENT AND 3
FINANCIAL SERVICES L TD ., G OPAL B HATIA , THE K NIGHT SERVICES 4
H OLDINGS L IMITED, ON BEHALF OF ITSELF AND ALL OTHERS SIMILARLY 5
SITUATED, 6
7
Plaintiffs‐Appellees, 8
9
v. 10
11
CORINA N OEL PIEDRAHITA , WALTER M. N OEL, J R ., ANDRES 12
PIEDRAHITA , J EFFREY TUCKER , AMIT V IGAYVERGIA , FAIRFIELD 13
H EATHCLIFF CAPITAL LLC, YANKO DELLAW SCHIAVA , PHILIP TOUB, 14
L OURDES B ARRENECHE, CORNELIS B OELE, V IANNEY DʹHENDECOURT, 15
H AROLD G REISMAN, J ACQUELINE H ARARY , DAVID H ORN , RICHARD 16
L ANDSBERGER, DAVID L IPTON , J ULIA L UONGO, MARK MCKEEFRY , 17
MARIA TERESA PULIDO MENDOZO, CHARLES MURPHY , SANTIAGO 18
REYES, ANDREW SMITH , FAIRFIELD G REENWICH (B ERMUDA ) L IMITED, 19
FAIRFIELD G REENWICH ADVISORS, L.L.C., DANIEL L IPTON , ROBERT 20
B LUM , G REGORY B OWES, FAIRFIELD RISK SERVICES L TD., FAIRFIELD 21
G REENWICH L IMITED, A CAYMAN I SLAND COMPANY , FAIRFIELD 22
G REENWICH G ROUP, FAIRFIELD G REENWICH (B ERMUDA ) L TD., 23
24
Defendants‐Appellees, 25
26
v. 27
28
CITCO FUND SERVICES (E UROPE) B.V., PRICEWATERHOUSECOOPERS 29
L.L.P., CITCO FUND SERVICES (B ERMUDA ) L IMITED, THE CITCO G ROUP 30
L IMITED, CITCO B ANK N EDERLAND N.V. DUBLIN B RANCH, CITCO 31
3

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No. 13‐1642‐cv
CANADA I NC ., PRICEWATERHOUSECOOPERS ACCOUNTANTS N.V., CITGO 1
G LOBAL CUSTODY N.V., 2
3
Defendants‐Appellants, 4
5
v. 6
7
1‐20 J OHN DOES, B RIAN FRANCOUER , PRICEWATERHOUSECOOPERS 8
B ERMUDA , I AN PILGRIM , PRICEWATERHOUSECOOPERS ACCOUNTANTS 9
N ETHERLANDS N.V., L ION FAIRFIELD CAPITAL MANAGEMENT L IMITED, 10
CARLOS G ADALA‐MARIA , RAUL MAS, ROBERT FRIEDMAN, RODOLFO 11
PAGES, J OHN G. DUTKOWSKI, L UISA SERENA , MIGUEL CALVO,SAMUEL 12
PERRUCHOUD, EFG CAPITAL I NTERNATIONAL CORP ., MATTHEW C. 13
B ROWN , G LOBEO P FINANCIAL SERVICES LLC., G REENWICH SENTRY , 14
L.P., FAIRFIELD SENTRY L IMITED, PRICEWATERHOUSECOOPERS 15
I NTERNATIONAL L IMITED, PRICEWATERHOUSECOOPERS LLP (US), 16
PRICEWATERHOUSECOOPERS LLP CHARTERED ACCOUNTANTS, 17
FAIRFIELD I NTERNATIONAL MANAGERS, I NC ., STANDARD CHARTERED 18
PLC, AMERICAN E XPRESS B ANK L TD, STANDARD CHARTERED PRIVATE 19
B ANK , STANDARD CHARTERED B ANK I NTERNATIONAL (AMERICAS) 20
L IMITED, STANDARD CHARTERED B ANK , STANDARD CHARTERED B ANK 21
I NTERNATIONAL (AMERICAS) L IMITED, FAIRFIELD G REENWICH CORP ., 22
23
Defendants. 1
24
25
________ 26
27
1 The Clerk of Court is respectfully directed to amend the official caption in this case to
conform with the caption above
.
4

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No. 13‐1642‐cv
Appeal from the United States District Court 1
for the Southern District of New York. 2
No. 9‐CV‐118 ― Victor Marrero, Judge. 3
________ 4
5
ARGUED: N OVEMBER 22, 2013 6
DECIDED: J UNE 26, 2014 7
________ 8
9
Before: J ACOBS, PARKER , AND CHIN , Circuit Judges. 10
________ 11
An appeal from a judgment of the United States District Court 12
for the Southern District of New York (Marrero, J.) approving the 13
settlement of putative class action securities claims against certain 14
defendants over the objections of non‐settling defendants. 15
Dismissed. 16
________ 17
DAVID A. B ARRETT (H OWARD L. V ICKERY , II, 18
STUART H. SINGER , CARLOS SIRES, SASHI B ACH 19
B ORUCHOW , Boies, Schiller & Flexner LLP; ROBERT 20
C. FINKEL, J AMES A. H ARROD, Wolf Popper LLP; 21
CHRISTOPHER L OVELL, V ICTOR E. STEWART, Lovell 22
Stewart Halebian Jacobson LLP, on the brief), 23
Boies, Schiller & Flexner LLP, New York, NY, for 24
Plaintiffs‐Appellees. 25
MARK G. CUNHA , Simpson Thacher & Bartlett 26
LLP, New York, NY, for Defendants‐Appellees. 27
5

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No. 13‐1642‐cv
CHRISTOPHER L ANDAU (TIMOTHY A. DUFFY , E MILY 1
P. H UGHES, Kirkland & Ellis LLP; WILLIAM R. 2
MAGUIRE, SARAH L. CAVE, Hughes Hubbard & 3
Reed LLP; WALTER RIEMAN, Paul, Weiss, Rifkind, 4
Wharton & Garrison LLP, on the brief) Kirkland & 5
Ellis LLP, Washington, DC, for Defendants‐ 6
Appellants. 7
________ 8
B ARRINGTON D. PARKER , Circuit Judge: 9
This appeal requires us once again to grapple with the 10
aftermath of the Ponzi scheme run by Bernard L. Madoff. 11
Defendants‐Appellants PricewaterhouseCoopers and Citco 2
12
(collectively, the “Non‐Settling Defendants”) seek to overturn a 13
partial final judgment entered in the United States District Court for 14
the Southern District of New York (Marrero, J.) approving the 15
settlement of certain putative class action claims. The settled claims 16
were brought by Plaintiffs‐Appellees (the “Investor Plaintiffs”) who 17
were individual and institutional investors in so‐called Madoff 18
feeder funds managed by the Fairfield Greenwich Group.3 The 19
claims were brought against the Group as well as its directors and 20
2 “PricewaterhouseCoopers” consists of defendants PricewaterhouseCoopers LLP
[Canada] and PricewaterhouseCoopers Accountants Netherlands N.V. “Citco” consists of
defendants Citco Fund Services (Europe) B.V., Citco (Canada) Inc., Citco Bank Nederland
N.V. Dublin Branch, Citco Global Custody N.V., Citco Fund Services (Bermuda) Ltd., and
The Citco Group Limited.
3 The Fairfield Greenwich Group includes funds managed by Fairfield Greenwich
(Bermuda) Limited, Fairfield Greenwich Advisors, L.L.C., Fairfield Risk Services LTD.,
Fairfield Greenwich Limited, Fairfield Greenwich Group, Fairfield Greenwich (Bermuda)
LTD.
6

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No. 13‐1642‐cv
officers (collectively, the “Fairfield Greenwich Defendants” or the 1
“Settling Defendants”). 2
The Non‐Settling Defendants challenge one particular 3
provision in the settlement agreement that provides that investors 4
who file claims under the settlement submit to the district court’s 5
jurisdiction for the sole purpose of participating in the settlement 6
and not for any other purpose. The Non‐Settling Defendants 7
contend that the district court erred in approving this provision 8
because district courts cannot permit litigants to agree to insulate 9
themselves from personal jurisdiction if it would otherwise be 10
created as a result of the settlement. 11
In response, the Investor Plaintiffs contend, among other 12
things, that the Non‐Settling Defendants lack standing to lodge this 13
objection. The Non‐Settling Defendants counter that they have 14
standing because the provision in question prejudices their rights to 15
assert that participation in the settlement should bar or limit investor 16
claims against them in other litigation. Because we conclude that the 17
Non‐Settling Defendants do not have standing to challenge the 18
settlement, we dismiss the appeal. 19
I. 20
Plaintiffs‐Appellees invested money in funds sponsored and 21
managed by the Fairfield Greenwich Group, which in turn invested 22
substantially all of its assets with Bernard L. Madoff Investment 23
Securities LLC. After discovering that their investments were lost as 24
a result of Madoff’s fraudulent scheme, Investor Plaintiffs brought a 25
putative class action asserting federal securities and state common 26
law claims against the Fairfield Greenwich Defendants, their outside 27
public accountants, PricewaterhouseCoopers, and Citco and 28
7

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No. 13‐1642‐cv
GlobeOp Financial Services, LLC,4 which provided various 1
professional services to the funds. In addition to restitution of the $5 2
billion Investor Plaintiffs alleged that they, as a class lost, as a result 3
of Madoff’s fraudulent scheme, the complaint sought consequential 4
and punitive damages as well as disgorgement of profits 5
purportedly obtained by the defendants. 6
Following protracted motion practice, 5 the Investor Plaintiffs 7
and the Fairfield Greenwich Defendants engaged in settlement 8
negotiations and in November 2012 moved for the preliminary 9
approval of a settlement they had reached. The settlement 10
purported to resolve all claims between the Investor Plaintiffs and 11
the Fairfield Greenwich Defendants. 12
As Plaintiffs’ motion for class certification had not been 13
adjudicated,6 the proposed preliminary approval order defined a 14
settlement class (the “Settlement Class”) 7 and provided that its 15
members had the right to request exclusion from the class. The 16
4 Defendant GlobeOp Financial Services, LLC has entered into its own settlement with
Plaintiffs. See Dist Ct. No. 09‐118, Dkt. 1232.
5 See, e.g., Anwar v. Fairfield Greenwich Ltd., 728 F. Supp. 2d 354 (S.D.N.Y. 2010); Anwar v.
Fairfield Greenwich Ltd., 728 F. Supp. 2d 372 (S.D.N.Y. 2010).
6 In February 2013, the district court granted in part and denied in part Plaintiffs’ motion
for class certification, excluding from the class investors in 25 countries, which it found had
not been shown likely to give preclusive effect to an opt‐out class judgment. Anwar v.
Fairfield Greenwich Ltd., 289 F.R.D. 105, 121 (S.D.N.Y. 2013). This court recently vacated the
class certification order as to claims against the Non‐Settling Defendants and remanded for
further findings on the Rule 23 requirements as they pertain to the claims asserted against
each of the Non‐Settling Defendants. See Anwar v. Fairfield Greenwich Ltd., Nos. 13‐2340, 13‐
2345, 2014 U.S. App. LEXIS 11515 (June 19, 2014).
7 The Settlement Class was defined principally as “all Persons who were Beneficial
Owners of shares or limited partnership interests in the Funds as of December 10, 2008
(whether as holders of record or traceable to a shareholder or limited partner account of
record) and who suffered a Net Loss of principal invested in the Funds.” See Joint App’x
273.
8

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No. 13‐1642‐cv
proposed order also provided that those investors who wished to 1
remain in the class could file proofs of claim in order to share in the 2
distribution of the settlement proceeds. 3
Paragraph 17 of the proposed order further provided that 4
Settlement Class members who filed proofs of claim would submit 5
to the district court’s jurisdiction as follows: 6
Any Settlement Class Member who submits a Request for 7
Exclusion or a Proof of Claim thereby submits to the 8
jurisdiction of the Court with respect to the subject matter 9
thereof and all determinations made by the Court thereon. 10
Joint App’x 311 ¶ 17. 11
Following the filing of the motion for preliminary approval of 12
the settlement, the putative class representatives were approached 13
by several putative Settlement Class members who expressed 14
concern that, as foreign individuals and entities, participation in the 15
Settlement Class could subject them to clawback actions in United 16
States courts by Irving Picard, the SIPC Trustee for Bernard L. 17
Madoff Investment Securities, LLC, and Kenneth Krys, the court‐ 18
appointed Liquidator of Fairfield Sentry Ltd., seeking to recover 19
monies they may have directly or indirectly received through the 20
Fairfield Greenwich Group from Madoff. In response to these 21
concerns, on the eve of the preliminary approval hearing, the 22
settling parties submitted an amended proposed order purporting to 23
limit the district court’s jurisdiction over Settlement Class members. 24
Paragraph 17 of the preliminary approval order was amended to 25
state in relevant part: 26
[A]ny Settlement Class Member who submits a Proof of 27
Claim thereby submits to the jurisdiction of this Court with 28
9

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No. 13‐1642‐cv
respect only to the subject matter of such Proof of Claim and 1
all determinations made by this Court thereon and shall not 2
be deemed to have submitted to the jurisdiction of this Court 3
or of any court in the United States for any other matter on 4
account of such submission. 5
Joint App’x 415 ¶ 17 (emphasis added). 6
At the hearing, the Non‐Settling Defendants objected to the 7
amended language on the ground that class members who 8
submitted to the court’s jurisdiction in order to accept the terms of 9
the settlement could not, at the same time, be permitted to limit the 10
legal consequences of doing so. The Non‐Settling Defendants 11
contended that they were currently facing claims in litigation in the 12
Netherlands and were entitled to argue that any entity that 13
participated in the New York settlement could not pursue claims in 14
any other jurisdiction. The district court overruled the objections 15
and approved the amended preliminary settlement order. 16
Following the end of the notice period, the Investor Plaintiffs 17
moved for final approval of the settlement. Over the objections of 18
the Non‐Settling Defendants, the district court entered the final 19
order approving the settlement and entering partial final judgment 20
with respect to Investor Plaintiffs’ claims against the Fairfield 21
Greenwich Defendants (the “Final Order”). Paragraph 28 of the 22
Final Order contained language identical to paragraph 17 of the 23
amended preliminary order providing that Settlement Class 24
members who submit proofs of claim only submit to the jurisdiction 25
of the district court with respect to the subject matter of the proof of 26
claim. Special App’x 13. This appeal followed. 27
10

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No. 13‐1642‐cv
II. 1
Plaintiffs contend that the Non‐Settling Defendants do not 2
have standing to appeal the Final Order. The question of standing is 3
a “threshold determinant[ ] of the propriety of judicial intervention.” 4
Warth v. Seldin, 422 U.S. 490, 518 (1975). Although we generally 5
review a district court’s approval of a settlement for abuse of 6
discretion, McReynolds v. Richards‐Cantave, 588 F.3d 790, 800 (2d Cir. 7
2009), we review de novo the issue of whether the Non‐Settling 8
Defendants have standing to bring this appeal, see Denney v. 9
Deutsche Bank AG, 443 F.3d 253, 262 (2d Cir. 2006); Shain v. Ellison, 10
356 F.3d 211, 214 (2d Cir. 2004). 11
Over the years, the Supreme Court has articulated the 12
standard by which the “irreducible constitutional minimum of 13
standing” is established. Lexmark Intʹl, Inc. v. Static Control 14
Components, Inc., 572 U. S. ___, 134 S. Ct. 1377, 1386 (2014) (quoting 15
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)). A party must 16
have suffered an injury‐in‐fact, that is, the invasion of a “legally 17
protected interest” in a manner that is “concrete and particularized” 18
and “actual or imminent, not conjectural or hypothetical.” Lujan, 504 19
U. S. at 560 (internal quotation marks omitted). Moreover, the injury 20
must be “fairly traceable” to the alleged conduct and it must be 21
likely that the injury will be redressed by a favorable decision. Id. at 22
560‐61. 23
The standing requirements ensure that judicial resources are 24
“devoted to those disputes in which the parties have a concrete 25
stake.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 26
167, 191 (2000). Consequently, we have observed that a non‐settling 27
defendant generally lacks standing to object to a court order 28
approving a partial settlement because a non‐settling defendant is 29
11

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No. 13‐1642‐cv
ordinarily not affected by such a settlement. Zupnick v. Fogel, 989 1
F.2d 93, 98 (2d Cir. 1993). This rule advances the policy of 2
encouraging the voluntary settlement of lawsuits. See id.; Waller v. 3
Fin. Corp. of Am., 828 F.2d 579, 583 (9th Cir. 1987). 4
However, there is a recognized exception to this general rule 5
which permits a non‐settling defendant to object where it can 6
demonstrate that it will sustain some formal legal prejudice as a 7
result of the settlement. Zupnik, 989 F.2d at 98; see also Smith v. 8
Arthur Andersen LLP, 421 F.3d 989, 998 (9th Cir. 2005); Weinman v. 9
Fid. Capital Appreciation Fund (In re Integra Realty Res., Inc.), 262 F.3d 10
1089, 1102 (10th Cir. 2001); In re Vitamins Antitrust Class Actions, 215 11
F.3d 26, 31 (D.C. Cir. 2000); Eichenholtz v. Brennan, 52 F.3d 478, 482 12
(3d Cir. 1995); Agretti v. ANR Freight Sys., Inc., 982 F.2d 242, 247‐48 13
(7th Cir. 1992). 14
The Non‐Settling Defendants contend that paragraph 28 of the 15
Final Order causes them such prejudice because it “effectively strips 16
them of defenses against the settling plaintiffs in other fora, 17
including defenses based on duplicative litigation and preclusion.” 18
Brief of Defendants‐Appellants (“App. Br”) at 11 (emphasis added). 19
This allegation, however, does not rise to the required level of formal 20
legal prejudice necessary for standing. That level exists only in those 21
rare circumstances when, for example, the settlement agreement 22
formally strips a non‐settling party of a legal claim or cause of action, 23
such as a cross‐claim for contribution or indemnification, invalidates 24
a non‐settling party’s contract rights, or the right to present relevant 25
evidence at a trial. See Denney, 443 F.3d at 273 (reviewing challenge 26
where settlement included a bar order prohibiting claims against 27
settling defendants); Gerber v. MTC Elec. Techs. Co., Ltd., 329 F.3d 297, 28
305 (2d. Cir. 2003); see also Alumax Mill Prods., Inc. v. Congress Fin. 29
Corp., 912 F.2d 996, 1002 (8th Cir. 1990) (finding standing where 30
12

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No. 13‐1642‐cv
settlement dismissed cross‐claims with prejudice); Dunn v. Sears, 1
Roebuck & Co., 639 F.2d 1171, 1173–74 (5th Cir. 1981) (reviewing 2
challenge where settlement made potential witnesses unavailable to 3
remaining defendants). 4
Nothing in the Final Order precludes the Non‐Settling 5
Defendants from asserting in the district court or in other litigation 6
any claims or defenses that may be available to them. Similarly, 7
nothing in that order requires that they forbear from asserting in the 8
Dutch proceedings, or in any future proceedings in other courts, that 9
participation in the settlement approved by the district court bars 10
subsequent or parallel proceedings. See Zupnick, 989 F.2d at 98‐99 11
(expressing skepticism that non‐settling defendants claims were 12
foreclosed where the stipulations of settlement purported to 13
extinguish “any and all claims . . . that have been, could have been, 14
or in the future might be asserted” by non–settling defendants, 15
because the agreements were not binding on them). The Non‐ 16
Settling Defendants implicitly concede as much stating: “Paragraph 17
28 undercuts that argument, as well as appellants’ ability to invoke 18
preclusion defenses in the Dutch actions (or any other actions) based 19
on the outcome of this case.” App. Br. at 13 (emphasis added). It is 20
not, however, sufficient for the Non‐Settling Defendants to show 21
that they were somehow “undercut” through the loss of some 22
practical or strategic advantage. As we have stated, to succeed they 23
must show formal legal prejudice. They have not done so. 24
Finally, we note that the Non‐Settling Defendants have 25
already invoked the “preclusion defenses” in the Dutch proceedings. 26
To us, that is a significant demonstration that nothing in the Final 27
Order prevents or limits them from continuing to assert that 28
Settlement Class members’ participation in the settlement bars, 29
limits, or otherwise impacts claims against them in other 30
13

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No. 13‐1642‐cv
jurisdictions. Moreover, in any proceedings to which they are 1
proper parties, the Non‐Settling Defendants are free to argue that 2
paragraph 28 of the Final Order is invalid and lacks preclusive effect 3
against them. 4
In reaching this result, we join our sister courts in holding that 5
a settlement which does not prevent the later assertion of a non‐ 6
settling party’s claims (although it may spawn additional litigation 7
to vindicate such claims), does not cause the non‐settling party 8
“formal” legal prejudice. See, e.g., Agretti, 982 F.2d at 247‐48 9
(concluding that a party did not have standing to challenge a 10
settlement agreement in which a co‐defendant agreed to declare the 11
contract void because the non‐settling party retained the right to 12
assert that the contract was valid and enforceable, despite the 13
obvious practical burden of having its contractual partner disavow 14
the contract); New Mexico ex rel. Energy & Minerals Dep’t v. U.S. Dep’t 15
of Interior, 820 F.2d 441, 444‐45 (D.C. Cir. 1987) (holding that the 16
Navajo Tribe’s challenge to a provision of a settlement which 17
purported to clarify the Secretary’s position on whether allotments 18
to individual Indians of lands which lie outside the undisputed 19
boundaries of the Navajo Reservation were “Indian lands” was 20
properly dismissed because the Tribe was not bound by the 21
settlement and the Tribe could raise their legal objections in 22
subsequent litigation). 23
For these reasons, we conclude that the Non‐Settling 24
Defendants do not have standing to object to the settlement. In view 25
of this conclusion, we decline to address the remaining issues 26
argued on appeal. 27
CONCLUSION 28
We dismiss the appeal for lack of standing. 29
14

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