A Non-Settling Party Challenging a Partial Settlement In a Class Action Lawsuit Is Easier Said Than Done.

Plain legal Non-settling parties in Indiana class action lawsuits may have a tall hill to climb when attempting to challenge partial settlements to which they are not parties. The Court of Appeals recently decided that a non-settling party must prove plain legal prejudice in order to have standing to challenge a partial settlement.

In Angela K. Farno v. Ansure Mortuaries of Indiana, LLC, et al. , No. 41A01-1007-MF-348, Angela Farno filed a class action lawsuit against Goldberg and others regarding the alleged looting of cemetery trust funds. On June 22, 2010, the trial court issued an order granting preliminary approval of the class action settlement agreement. Goldberg, a non-settling defendant, appealed. During the appeal, Farno quoted a federal court decision in a class action lawsuit that states “[t]he general rule, of course, is that a non-settling party does not have standing to object to a settlement between other parties.” Agretti v. ANR Freight Sys., Inc., 982 F.2d 242, 246 (7th Cir. 1992). The Indiana Court of Appeals held that in order to prove plain legal prejudice, a non-settling party must show that the settlement interfered with its contract rights or its “ability to seek contribution or indemnification” or that the settlement stripped “the party of a legal claim or cause of action, such as a cross-claim or the right to present relevant evidence at trial.” Agretti, 982 F.2d at 247. Goldberg failed to establish prejudice.

About Bose McKinney & Evans LLP

Bose McKinney & Evans LLP is a business law firm, headquartered in Indianapolis, Indiana, serving both publicly held and privately held businesses, governmental entities and high-growth industries. Our clients include Fortune 100 companies, international manufacturers, national and regional financial institutions, agribusinesses, sports teams, university-incubated start-ups, media, utilities, cities and schools, to name a few. We strive to build strong relationships with our clients as key business advisors, to exceed expectations in the quality of our work, to be knowledgeable about our clients’ businesses and sectors, to be responsive to service needs and to continually seek to improve the delivery of client services. Our ultimate focus is on our clients.
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