Judge's decision on summary judgment can't override settlement
It must be frustrating to a judge, when, after having taken the time to plod through the briefs and evidence presented on dispositive motions, and even drafting a decision that in favor of a party, the parties settle the case—especially if the decision would have resulted in judgment for the defendants. But frustrating as this may be, the judge can’t ignore the settlement and issue its ruling.
On February 19, 2008, in In re Syncor ERISA Litigation: Pilkington v. Cardinal Health, Inc., the Ninth Circuit held the district court abused its discretion in not holding the required hearing to review the binding class action settlement reached by the parties, even though the district court had already drafted – but not entered—an order granting the defendants’ dispositive motions. Instead of holding the hearing, the district court entered judgment against the class.
But Defendants needn’t feel too badly about their decision to settle the case. The Court also held the summary judgment itself was error, as a material issue of fact regarding whether the defendants breached their duty to conform to the prudent man standard of investment off the plan’s assets. The Court took care to note that it has not adopted the presumption that a ESOP plan administrator acts consistently with ERISA in investing assets in employer stock.
