In re: Samsung Top-Load, No. 20-6097 (10th Cir. 2021)Annotate this Case
In 2015, consumers owning Samsung top-load washing machines experienced issues with the door detaching mid-cycle. Litigation ensued across the country, with the cases consolidated into the multidistrict litigation underlying this appeal. Class counsel and the defendants negotiated a Settlement Agreement that provided class members five forms of relief. The district court, over objector-appellant John Morgan’s objection, granted final class certification and final approval to the settlement. Essential to Morgan’s objections was the Settlement Agreement’s inclusion of a “kicker” agreement and a “clear-sailing” agreement relative to the award of attorneys’ fees and costs. Morgan argued that under the “clear-sailing” agreement, Samsung agreed not to contest any request by class counsel for attorneys’ fees and costs of up to $6.55 million. Attempting to resolve his objections, Morgan and Samsung sought to negotiate a side agreement providing for the possible distribution to the class of a portion of the difference between the $6.55 million maximum permissible attorneys’ fees and costs, and the actual amount awarded by the district court. Ratification of this side agreement, however, never occurred, with Morgan walking away based on a purported fear that class counsel might sue him and his counsel if he and Samsung finalized the side agreement. On appeal, Morgan argued: (1) the district court made clear errors of fact regarding settlement negotiations and the side agreement; (2) the district court abused its discretion by granting final approval to the Settlement Agreement where it included both a “kicker” and a “clear-sailing” agreement; and (3) the district court abused its discretion by granting final class certification and allowing class counsel to continue in its role after class counsel placed its interests ahead of the class’s interests. The Tenth Circuit held a district court must apply heightened scrutiny before approving a settlement that includes both a “kicker” agreement and a “clear-sailing” agreement. But its review of the record gave the Court confidence the district court did just that. And although the district court made one clear error in its fact-finding process, the Tenth Circuit concluded the error was harmless to its ultimate decisions regarding final class certification, final approval of the Settlement Agreement, and its award of attorneys’ fees and costs.