Kanu et al v. Toyota Motor Sales, USA, Inc.
Filing
96
MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 7/11/2016. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
ISATU T. KANU, et al.
:
v.
:
Civil Action No. DKC 15-3445
:
TOYOTA MOTOR SALES, USA, INC.
:
MEMORANDUM OPINION
Presently pending and ready for resolution in this product
liability action are: (1) a consent motion to seal the motion to
approve settlement filed by Plaintiffs Isatu T. Kanu, Isha Kanu,
Patrick
Kanu,
Aminata
Kanu,
and
P.K.1
(collectively,
the
“Plaintiffs”) (ECF No. 89); and (2) a supplemental motion to
approve settlement filed under seal by Defendant Toyota Motor
Sales, USA, Inc. (“Defendant”) (ECF No. 92).
The issues have
been briefed, and the court now rules, no hearing being deemed
necessary.
Local Rule 105.6.
For the following reasons, both
motions will be denied.
I.
Background
Plaintiffs commenced this action after a defective power
window master switch on the driver’s door of Plaintiffs’ Toyota
Corolla allegedly caused a fire.
exiting
1
the
vehicle.
The
Plaintiffs were injured while
parties
entered
into
settlement
As P.K. is a minor, he will be referred to only by his
initials in accordance with Fed.R.Civ.P. 5.2(a).
discussions and eventually filed a status report with the court
indicating
that
they
reached
Agreement”).
(ECF No. 83).
“the
have
parties
settled
an
agreement
(the
“Settlement
According to the status report,
their
disputes,
working to finalize the settlement.
mediation
agreement
requires
the
agreeable
Settlement
Agreement,
and
and
are
currently
Among other things, the
execution
[c]ourt
of
a
mutually
approval
of
the
resolution as it concerns [Plaintiff P.K.], the minor child of
Plaintiff Isatu T. Kanu.”
Plaintiffs
filed
an
(Id.).
amended
complaint
to
include
claims
brought on behalf of Plaintiff P.K., who was not named in the
prior pleadings.
moved
to
seal
settlement.
(ECF No. 85).
the
parties’
(ECF No. 86).
Shortly thereafter, Plaintiffs
forthcoming
motion
to
approve
The court denied the motion, noting:
The
motion
to
approve
the
[Settlement
Agreement], however, has not yet been filed.
To the extent that Plaintiffs wish to file a
forthcoming
motion
to
approve
the
[Settlement Agreement] under seal, in whole
or in part, Plaintiffs should file a motion
to seal that comports with Local Rule 105.11
along with the motion to approve the
[Settlement Agreement].
(ECF No. 87, at 2-3).
Subsequently, Plaintiffs filed a second
motion to seal the forthcoming motion to approve settlement.
(ECF
No.
89,
at
1
(“Plaintiffs
intend
[m]otion to [a]pprove [s]ettlement.
to
file
a
[c]onsent
In order to protect the
confidential nature of the settlement, and the interests of all
2
parties involved, Plaintiffs move this [c]ourt to enter an order
directing that the [m]otion to [a]pprove [s]ettlement be filed
under seal.”)).
At the same time, Plaintiffs filed under seal
the parties’ confidential Settlement Agreement.
(ECF No. 88).2
The court then advised the parties to “file a motion to approve
settlement setting forth the court’s authority for doing so as
well
as
the
standard
to
be
applied.
Furthermore,
a
full
explanation of why the settlement meets the applicable standard
must be provided.”
(ECF No. 90).
Defendant filed under seal a motion to approve settlement.
(ECF No. 92).
“the
[c]ourt
Plaintiffs responded in opposition, arguing that
does
P.K.’s] settlement.”
not
have
authority
to
approve
[Plaintiff
(ECF No. 93, at 1).
Defendant has not
replied, and the time to do so has expired.
Instead, Defendant
requested a hearing regarding the court’s authority to approve
the Settlement Agreement as to the minor.
II.
(ECF No. 94).
Plaintiffs’ Consent Motion to Seal
A motion to seal must comply with Local Rule 105.11, which
provides that:
2
The parties appear to refer to ECF No. 88 as Plaintiffs’
motion to approve settlement.
(See ECF No. 92, at 1 (“[O]n
April 5, 2016, Plaintiffs filed a [m]otion to [a]pprove
[s]ettlement with the consent of Defendant.”)).
However, the
papers filed as ECF No. 88 include two copies of the Settlement
Agreement (ECF Nos. 88; 88-1) and a proposed order requesting
that the court grant the motion to approve settlement as fair
and reasonable (ECF No. 88-2).
At the time, however, the
parties had not filed a motion to approve settlement.
3
Any motion seeking the sealing of
pleadings, motions, exhibits or other papers
to be filed in the Court record shall
include (a) proposed reasons supported by
specific factual representations to justify
the sealing and (b) an explanation why
alternatives to sealing would not provide
sufficient protections.
The Court will not
rule upon the motion until at least 14 days
after it is entered on the public docket to
permit
the
filing
of
objections
by
interested parties.
Materials that are the
subject
of
the
motion
shall
remain
temporarily sealed pending a ruling by the
Court.
If the motion is denied, the party
making
the
filing
will
be
given
an
opportunity to withdraw the materials.
Local Rule 105.11 endeavors to protect the common-law right to
inspect and copy judicial records and documents, Nixon v. Warner
Commc’ns, Inc., 435 U.S. 589, 597 (1978), while recognizing that
competing
access.
1984).
must
interests
sometimes
outweigh
the
public’s
right
of
In re Knight Publ’g Co., 743 F.2d 231, 235 (4th Cir.
If the court determines that sealing is appropriate, it
issue
supporting
an
order
findings)
stating
for
its
“the
reasons
decision
and
rejecting alternatives to sealing.”
(and
the
specific
reasons
for
Va. Dep’t of State Police
v. Wash. Post, 386 F.3d 567, 576 (4th Cir. 2004); see In re
Knight, 743 F.2d at 235.
Here, Plaintiffs filed a consent motion to seal the motion
to approve settlement.
(ECF No. 89).
the parties:
4
According to Plaintiffs,
are pursuing the least drastic alternative
under the circumstances by requesting that
only the [m]otion to [a]pprove [s]ettlement
be sealed.
The public will have access to
all of the information contained in the
other documents filed in this case and,
therefore, will know that an action was
filed, the specific allegations raised in
the
action,
and
that
the
action
was
ultimately settled.
The only information
that Plaintiffs request be sealed is the
precise
terms
of
the
confidential
settlement.
(ECF
No.
89-1,
at
2).
In
support,
Plaintiffs
argued
that
sealing the motion to approve settlement and the terms of the
Settlement Agreement would:
protect the interests of [] Plaintiffs and
Defendant.
First, Defendant maintains that
[it]
has
no
liability
to
Plaintiffs.
Despite the absence of liability, Defendant
recognizes
the
risk
associated
with
litigation and [is] therefore willing to
settle in exchange for alleviating such
risk.
Defendant’s willingness to settle,
however, hinges on the confidentiality of
the settlement.
Without confidentiality,
Defendant’s
incentive
to
settle
is
diminished because the nature of the terms
of the settlement may generate additional
litigation.
(Id.).
Settlement
Plaintiffs
also
Agreement
(ECF
filed
Nos.
under
88;
seal
88-1),
copies
and,
of
the
subsequently,
Defendant moved under seal to approve settlement (ECF No. 92).
In a prior order, the court noted that “[t]o the extent
that Plaintiffs wish to file the forthcoming motion to approve
[] settlement under seal, in whole or in part, Plaintiffs should
5
file a motion to seal that comports with Local Rule 105.11 along
with the motion to approve [] settlement.”
3).
(ECF No. 87, at 2-
Here, once again, Plaintiffs prematurely moved to seal a
forthcoming filing – Defendant’s motion to approve settlement –
and provided no adequate basis for doing so.
When the parties
file motions or materials under seal or with redactions, they
are required to file an accompanying motion seeking the court’s
permission
for
sealing
or
representations as justification.
redactions
with
specific
Interstate Fire & Cas. Co. v.
Dimensions Assur. Ltd., No. GJH-13-3908, 2014 WL 6388334, at *1
(D.Md. Nov. 13, 2014) (noting that the dictates of Local Rule
105.11 “are strict requirements and not simply formalities”);
see Bureau of Nat. Affairs v. Chase, No. ELH-11-1641, 2012 WL
3065352, at *3 (D.Md. July 25, 2012) (“Aside from the bare fact
that defendants and FMH agreed to the confidentiality of the
settlement
and
the
obvious
interest
of
almost
any
party
in
keeping close the amount it is willing to pay (or receive) to
settle a claim, the parties have articulated no basis to seal
the settlement agreement.”).
Plaintiffs’ motion will be denied.
Pursuant to Local Rule 105.11, the parties will be given 15 days
to withdraw the materials.
If the materials are not withdrawn,
they will be unsealed.
6
III. Defendant’s Supplemental Motion to Approve Settlement
In
the
Settlement
Agreement,
the
parties
agreed
that
Plaintiffs would file all documentation necessary to have the
settlement approved by the court.
Agreement
was
drafted,
the
At the time the Settlement
parties
apparently
believed
that
court approval was required due to Plaintiff P.K.’s status as a
minor.
(See ECF No. 88 ¶ 4).
The court issued a paperless
notice to the parties requiring that they “file a motion to
approve settlement setting forth the court’s authority for doing
so as well as the standard to be applied.”
its
motion
court
to
approve
possesses
settlement,
inherent
Defendant
authority
protect the interests of minors.
to
(ECF No. 90).
argues
approve
In
that
the
settlement
(ECF No. 92).
to
According to
Defendant, the court must decide whether “settlement is in the
best interest of the child.”
Cts.
&
Jud.
opposition
Proc.
noting
§
(Id. at 3 (quoting Md. Code Ann.,
6-405(c))).
that
“[u]pon
Plaintiffs
further
research,
responded
[they]
in
have
determined that the [c]ourt does not have authority to approve
[Plaintiff P.K.’s] settlement.”
(ECF No. 93, at 1).
“Federal courts are not vested with a general power to
review
and
approve
settlements
of
suits
between
private
parties,” although a number of exceptions exist by both statute
and rule.
Estate of Sa’adoon v. Prince, 660 F.Supp.2d 723, 724–
25 (E.D.Va. 2009) (identifying class action suits, False Claims
7
Act
cases,
claims
shareholder
involving
derivative
parties
who
suits,
are
bankruptcy
incompetent
or
claims,
otherwise
lacking capacity to waive rights knowing and intelligently, and
wrongful
death
claims
as
exceptions
to
the
general
rule).
According to the United States Court of Appeals for the Fourth
Circuit,
“a
private
settlement,
although
it
may
resolve
a
dispute before a court, ordinarily does not receive the approval
of the court.”
Smyth ex rel. Smyth v. Rivero, 282 F.3d 268, 280
(4th Cir. 2002) (citing Caplan v. Fellheimer Eichen Braverman &
Kaskey, 68 F.3d 828, 835 (3d Cir. 1995) (“Our federal courts have
neither the authority nor the resources to review and approve
the
settlement
system.”)).
provide
the
settlement.”
of
every
case
brought
in
the
federal
court
Here, Plaintiffs argue that the Local Rules “do not
[c]ourt
with
authority
(ECF No. 93, at 2).
to
approve
a
Local Rule 111 addresses
settlement orders:
When the Court has been notified by
counsel that a case has been settled, the
Court may enter an order dismissing the case
and providing for the payment of costs.
Such an order of dismissal shall be without
prejudice to the right of a party to move
for good cause to reopen the case within a
time set by the Court if the settlement is
not consummated.
Alternatively, the Court,
upon being notified by counsel that a case
has been settled, may require counsel to
submit within sixty (60) days a proposed
order providing for settlement, in default
of which the Court may enter such judgment
or other order as may be deemed appropriate.
8
minor’s
An order entered pursuant to this Rule means
that the entire case, including all claims,
counter-claims,
cross-claims,
third-party
claims, and claims for attorneys’ fees and
costs has been settled, unless otherwise
stated in the order.
Local Rule 111 creates no special obligation for district courts
to approve settlements involving minors.
Furthermore,
under
the
Maryland
statute
regarding
settlements involving minors:
(a) Any action, including one in the name of
the State, brought by a next friend for the
benefit of a minor may be settled by the
next friend.
(b) If the next friend is not a parent or
person in loco parentis of the child, the
settlement is not effective unless approved
by the parent or other person responsible
for the child.
(c) If both parents are dead, and there is
no person responsible for the care and
custody of the child, the settlement is not
effective unless approved by the court in
which the suit was brought. Approval may be
granted only on the written application by
the next friend, under oath, stating the
facts of the case, and why the settlement is
in the best interest of the child.
Md. Code Ann., Cts. & Jud. Proc. § 6-405.3
“With specific
reference to a child’s cause of action and parental authority,
3
A federal court sitting in diversity must apply state
substantive law and federal procedural law. Anand v. Ocwen Loan
Servicing, LLC, 754 F.3d 195, 198 (4th Cir. 2014). The approval
of a settlement agreement is an action that is substantive. See
Nice v. Centennial Area Sch. Dist., 98 F.Supp.2d 665, 667
(E.D.Pa. 2000) (“The determination of the fairness of a
9
[§ 6-405] . . . unequivocally affords parents the authority to
settle
or
children.”
release
.
.
.
claims
on
behalf
of
their
minor
BJ’s Wholesale Club, Inc. v. Rosen, 435 Md. 714, 732
(2013) (citations omitted).
Here, “the mother of [Plaintiff
P.K.] is the ‘next friend,’ and brought the suit for the benefit
of the minor.
The mother is still alive and she has approved
the settlement and signed a release on behalf of [Plaintiff
P.K.]”
(ECF No. 93, at 3).
Thus, § 6-405(b) and (c) do not
apply, as the statute requires court approval only when the next
friend is not a parent or a person in loco parentis, or when
both parents of the minor are deceased.
Otherwise, according to
§ 6-405(a), “[a]ny action . . . brought by a next friend for the
benefit of a minor may be settled by the next friend.”
In its motion to approve settlement, Defendant identifies
case law from other circuits to support its contention that the
“[c]ourt’s authority to approve a settlement arises from the
fact that it has an ‘inherent duty to protect the interests of
minors and incompetents that come before it.’”
1
(quoting
Eagan
(E.D.Pa. 1994)).
Defendant’s
by
Keith
v.
Jackson,
855
(ECF No. 92, at
F.Supp.
765,
775
Applicable Maryland law, however, contradicts
argument.
“The
language
of
[§
6-405(a)],
which
permits a parent to settle a child’s existing claims without
settlement agreement involving a minor . . . implicates the
parties’ substantive rights.”). The parties agree that Maryland
law controls.
10
judicial interference, notably, is in stark contrast to other
states’ statutes and rules that require judicial oversight to
settle a child’s claim.”
omitted).
Rosen, 435 Md. at 732-33 (citations
Furthermore, the cases upon which Defendant relies to
demonstrate that Maryland courts “regularly approve” settlements
involving minors are inapposite.
(ECF No. 92, at 3).4
Instead,
“parents in Maryland, rather than the courts, are authorized to
make
decisions
to
terminate
tort
children pursuant to [§] 6-405.”
IV.
claims
on
behalf
of
their
Rosen, 435 Md. at 734.
Conclusion
For the foregoing reasons, Plaintiffs’ consent motion to
seal
will
be
denied,
settlement will be denied.
and
Defendant’s
motion
to
approve
A separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
4
The three Maryland cases that Defendant cites lend limited
support to its position. The first case, Earp v. Gancayco, No.
211164, 2001 WL 35826132 (Md.Cir.Ct. Nov. 9, 2001), is merely an
order approving settlement involving a minor child, but neither
the order nor Defendant provides any explanation regarding the
status of the minor plaintiff’s parents or next friends. In the
second case, Williams v. Work, 192 Md.App. 438, 446 (2010),
aff’d sub nom. Ace Am. Ins. Co. v. Williams, 418 Md. 400 (2011),
the court references approval of a prior settlement involving
minor children regarding the apportionment of funds to potential
beneficiaries under Md. Code Ann., Cts. & Jud. Proc. § 3-904(c).
In Ashraft & Gerel v. Shaw, 126 Md.App. 325 (1999), the severely
disabled minor child was declared a child in need of assistance
pursuant to Md. Code Ann., Cts. & Jud. Proc. § 3-801.
Again,
Defendant fails to explain how the factual circumstances in Shaw
are on all fours with the instant case.
11
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