RD Legal Fin., LLC v. White (In Re Nat'l Football League Players' Concussion Injury Litig. RD Legal Funding, LLC)

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
Nos. 18-1040, 18-1482
_____________
In Re: NATIONAL FOOTBALL LEAGUE PLAYERS’
CONCUSSION INJURY LITIGATION
*RD Legal Funding, LLC; RD Legal Finance, LLC;
RD Legal Funding Partners LP; Roni Dersovitz,
Appellants
*(Pursuant to Rule 12(a) Fed. R. App. P.)
_____________
No. 18-1639
_____________
In Re: NATIONAL FOOTBALL LEAGUE PLAYERS’
CONCUSSION INJURY LITIGATION
**Cash4Cases, Inc.; *Atlas Legal Funding, LLC; Atlas
Legal Funding I, LP;
Atlas Legal Funding II, LP; Atlas Legal Funding III,
LP,
Appellants
*(Pursuant to Rule 12(a) Fed. R. App. P.)
**(Dismissed pursuant to the Clerk’s Order dated 8/2/18.)
_____________
Nos. 18-2184, 18-2582
_____________
In Re: NATIONAL FOOTBALL LEAGUE PLAYERS’
CONCUSSION INJURY LITIGATION
*Thrivest Specialty Funding, LLC,
Appellant
*(Pursuant to Rule 12(a), Fed. R. App. P.)
_____________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
District Court No. 2-12-md-02323
District Judge: The Honorable Anita B. Brody
_____________
No. 18-3005
_____________
THRIVEST SPECIALTY FUNDING, LLC,
Appellant
v.
WILLIAM E. WHITE
2
_____________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
District Court No. 2-18-cv-01877
District Judge: The Honorable Anita B. Brody
Argued January 23, 2019
Before: SMITH, Chief Judge, CHAGARES, and BIBAS,
Circuit Judges
(Filed: April 26, 2019)
TerriAnne Benedetto
Seeger Weiss
1515 Market Street
Suite 1380
Philadelphia, PA 19102
Samuel Issacharoff [ARGUED]
New York University Law School
40 Washington Square South
New York, NY 10012
Diogenes P. Kekatos
Seeger Weiss
77 Water Street
8th Floor
New York, NY 10005
Christopher A. Seeger
3
Seeger Weiss
55 Challenger Road
6th Floor
Ridgefield Park, NJ 07660
Sol H. Weiss
Anapol Weiss
130 North 18th Street
One Logan Square, Suite 1600
Philadelphia, PA 19103
Counsel for Plaintiff Class
Lynn B. Bayard
Bruce A. Birenboim
Brad S. Karp
Paul Weiss Rifkind Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019
Counsel for National Football League
NFL Properties
Ellen C. Brotman
Suite 1500
One South Broad Street
Philadelphia, PA 19107
Jeffrey M. Hammer
Michael D. Roth [ARGUED]
David K. Willingham
Boies Schiller Flexner
725 South Figueroa Street
31st Floor
Los Angeles, CA 90017
4
Counsel for RD Legal Funding LLC,
RD Legal Finance LLC,
RD Legal Funding Partners LP,
Roni Dersovitz
Bridget C. Giroud
Marissa R. Parker
Stradley Ronon Stevens & Young
2005 Market Street
Suite 2600
Philadelphia, PA 19103
Raul J. Sloezen [ARGUED]
18 Hasbrouck Avenue
Emerson, NJ 07630
Counsel for Atlas Legal Funding LLC
Atlas Legal Funding I LP
Atlas Legal Funding II LP
Atlas Legal Funding III LP
Peter C. Buckley [ARGUED]
Eric E. Reed
Fox Rothschild
2000 Market Street
20th Floor
Philadelphia, PA 19103
Counsel for Thrivest Specialty Funding LLC
Michael H. Rosenthal
Rosenthal Lurie & Broudy
102 Pickering Way
Suite 310
Exton, PA 19341
5
Counsel for Andrew Stewart
Robert C. Wood
Law Offices of Robert C. Wood
68 North High Street
Building B, Suite 202
New Albany, OH 43054
Counsel for William E. White
________________
OPINION OF THE COURT
________________
SMITH, Chief Judge.
This consolidated appeal involves issues tangential to
the expansive National Football League (NFL) concussion
injury litigation. Following approval of the settlement
agreement in that class action in 2015, various class members
entered into cash advance arrangements with third party
litigation funders. Under the agreements relevant to the cases
on appeal, class members purported to assign their rights to a
portion of their settlement proceeds in exchange for receipt of
immediate cash.
In December 2017, Eastern District of Pennsylvania
Judge Anita Brody, who had presided over the NFL class
action and retained jurisdiction while the settlement was being
administered, issued an order purporting to void in their
6
entirety all of the assignment agreements. The District Court1
explained that its ruling was necessary to protect vulnerable
class members from predatory funding companies. Appellants
RD, Atlas, and Thrivest, three groups of litigation funding
entities,2 now appeal that order and other related orders entered
by the District Court.
We commend Judge Brody for her very able handling
throughout this extraordinarily complicated class action and
settlement, and we appreciate her steadfast commitment to
protecting class members’ rights. In this instance, though,
despite having the authority to void prohibited assignments, the
District Court went too far in voiding the cash advance
agreements in their entirety and voiding contractual provisions
that went only to a lender’s right to receive funds after the
player acquired them. Accordingly, we will affirm in part and
reverse in part in case 18-1040. We will dismiss cases 18-
1639, 18-2582, and 18-1482 for lack of jurisdiction. We will
vacate and remand in cases 18-2184 and 18-3005.
1
Unless otherwise indicated, the term “District Court” refers
to the United States District Court for the Eastern District of
Pennsylvania and, specifically, Judge Brody.
2
Appellants in 18-1040 and 18-1482 are RD Legal Funding
Partners, L.P; RD Legal Finance, LLC; RD Legal Funding,
LLC; and Roni Dersovitz (RD, or RD entities). Appellants in
18-1639 are Atlas Legal Funding, LLC; Atlas Legal Funding
I, LP; Atlas Legal Funding II, LP; and Atlas Legal Funding III,
LP (Atlas, or Atlas entities). Appellant in 18-2184, 18-2582,
and 18-3005 is Thrivest Specialty Funding, LLC (Thrivest).
7
I.
In early 2012, MDL 2323 was formed to handle claims
that had been filed by former professional football players
against the NFL based on concussion-related injuries. On May
8, 2015, the District Court entered a final order certifying a
class of former NFL players and approving the parties’ final
settlement agreement. This Court affirmed the District Court’s
judgment and upheld both the settlement and the certification
of the class for settlement purposes. In re Nat’l Football
League Players Concussion Injury Litig., 821 F.3d 410 (3d Cir.
2016). The Supreme Court denied certiorari review, Gilchrist
v. Nat’l Football League, 137 S. Ct. 591 (2016); Armstrong v.
Nat’l Football League, 137 S. Ct. 607 (2016), and the
settlement went into effect on January 7, 2017.
Under the settlement agreement, approximately
200,000 class members gave up their claims in exchange for
potential proceeds from an uncapped settlement fund. In order
to receive an award, a class member must first submit a claim
package including medical records reflecting a qualifying
diagnosis, among other things. The Claims Administrator then
conducts a preliminary review for deficiencies, investigates the
claim as appropriate, and makes a determination as to whether
the class member qualifies for a monetary award. Either the
class member or the NFL can then appeal the monetary award
determination. Only after any appeals are completed does the
Claims Administrator pay out the individual’s award.
In March 2017, the claims submission process opened
for class members who had been diagnosed with a qualifying
illness prior to January 7, 2017. The first payouts for this group
of players took place in mid-2017. Individuals without a
diagnosis prior to January 7, 2017, were required to receive a
8
diagnosis from a practitioner approved through the settlement
Baseline Assessment Program (BAP). Class members could
begin registering for appointments through the BAP system in
June 2017. Thus, after entering into the settlement in May
2015, class members waited at least two years, and often
longer, before receiving their awards.
While waiting to receive their awards, hundreds of class
members entered into cash advance agreements with dozens of
litigation funding companies, including the three groups of
funding entities who are appellants here. Under the
agreements relevant to this appeal, class members purported to
“assign” their rights to a portion of their settlement proceeds in
exchange for immediate cash. The amount of proceeds
assigned and the cash received varied with each class
member’s contract. The effective interest rate, calculated by
comparing the amount of money assigned with the amount of
money received, also varied significantly among the contracts.
Under the agreements entered into by the Atlas entities
and Thrivest, the funding companies obtained no right to
submit a claim directly to the Claims Administrator and instead
acquired only the right to receive settlement funds after the
Claims Administrator had paid out the awards to the particular
class members with whom they contracted. Under the RD
entity agreements, the funding companies purported to obtain
both the right to collect directly from the Claims Administrator
and the right to collect after the award was paid out to the class
member.3 Under all of the agreements relevant to this appeal,
class members expressly did not assign their legal claims
against the NFL, nor did the funding companies acquire the
3
RD has since stated that it has made no attempt to collect
directly from the Claims Administrator.
9
right to assert legal claims. See, e.g., Atlas App. 890 (“[T]he
Purchaser is in no way acquiring the Seller’s right to sue.”).
Importantly, the May 2015 final settlement agreement
included a provision under which Judge Brody broadly
retained jurisdiction over administration of the settlement:
Section 27.1 Pursuant to the Final Order and
Judgment, the Court will retain continuing and
exclusive jurisdiction over the Parties and their
counsel, all Settlement Class Members, the
Special Master, BAP Administrator, Claims
Administrator, Liens Resolution Administrator,
Appeals Advisory Panel, Appeals Advisory
Panel Consultants, and Trustee with respect to
the terms of the Settlement Agreement. Any
disputes or controversies arising out of, or
related to, the interpretation, implementation,
administration, and enforcement of this
Settlement Agreement will be made by motion to
the Court. In addition, the Parties, including
each Settlement Class Member, are hereby
deemed to have submitted to the exclusive
jurisdiction of this Court for any suit, action,
proceeding, or dispute arising out of, or relating
to, this Settlement Agreement. The terms of the
Settlement Agreement will be incorporated into
the Final Order and Judgment of the Court,
which will allow that Final Order and Judgment
to serve as an enforceable injunction by the Court
for purposes of the Court’s continuing
jurisdiction related to the Settlement Agreement.
10
The settlement agreement also included an anti-assignment
provision:
Section 30.1 No Assignment of Claims. Neither
the Settlement Class nor any Class or Subclass
Representative or Settlement Class Member has
assigned, will assign, or will attempt to assign, to
any person or entity other than the NFL Parties
any rights or claims relating to the subject matter
of the Class Action Complaint. Any such
assignment, or attempt to assign, to any person
or entity other than the NFL Parties any rights or
claims relating to the subject matter of the Class
Action Complaint will be void, invalid, and of no
force and effect and the Claims Administrator
shall not recognize any such action.
The District Court incorporated all of the settlement terms into
its final order dismissing the case.
Following approval of the settlement, the District Court
and class counsel took various steps to address cash advance
agreements. In July 2016, class counsel first sent a letter to the
class warning of predatory lending. The letter advised class
members to avoid encumbering their settlement proceeds
whenever possible. Atlas App. 1142 (“[I]f you are able to
resist borrowing against any payments you might be eligible
for under the Settlement, you should.”). In June 2017, class
counsel advised the Court that he was concerned with
solicitations being sent to the class, including by high interest
lenders, and received the Court’s permission to send another
letter to the class regarding the practice. In July 2017, Judge
Brody scheduled a hearing for September 19, 2017, to address
11
deceptive practices targeting the class, including solicitations
from litigation funders.
In an entirely separate proceeding in the Southern
District of New York before Judge Loretta Preska, the
Consumer Financial Protection Bureau (CFPB) and the New
York Attorney General challenged the business practices of the
RD funding entities. In that lawsuit, the Government claimed
that RD was engaging in fraudulent lending practices through
certain agreements related to settlement proceeds, including
agreements with NFL class members. A question arose in the
CFPB lawsuit as to whether the NFL settlement agreement’s
anti-assignment provision precluded class member
assignments of settlement proceeds. Judge Preska determined
that the most efficient way to resolve that issue would be to
“refer” the question to Judge Brody because she had presided
over the settlement negotiations and retained jurisdiction over
administration of the settlement. On September 8, 2017, Judge
Preska issued a referral letter alerting Judge Brody to the issue,
but was careful to note that she was not transferring any portion
of the case to Judge Brody.
On September 19, 2017, Judge Brody conducted the
scheduled hearing concerning deceptive practices. After
learning of Judge Preska’s referral letter, RD participated in the
hearing, but other funding companies, including Atlas and
Thrivest, were not involved. Following the hearing, class
counsel filed a motion requesting that any disputed portion of
a class member’s award be withheld pending the Court’s
determination of whether the cash advance agreements were
enforceable. The District Court granted Thrivest objector
status as to the motion to withhold, and Thrivest submitted an
opposition to class counsel’s motion, arguing in part that the
District Court lacked authority to adjudicate the enforceability
12
of the third-party agreements. The Atlas entities moved to
intervene and submitted opposition papers, but the Court did
not grant the motion at that time, instead denying it as moot in
June 2018.
On December 8, 2017, the District Court entered an
order requiring class members to inform the Claims
Administrator of all assignment agreements, and purporting to
void all such agreements: “To the extent that any Class
Member has entered into an agreement that assigned or
attempted to assign any monetary claims, that agreement is
void, invalid and of no force and effect.” RD App. 5. The
order further directed a procedure under which funding
companies could accept rescission and return of the principal
amount they had provided to class members by executing
waivers relinquishing all rights under the agreements. The
District Court noted that further instructions to the Claims
Administrator would follow.4
The December 8, 2017 order did not make factual
findings as to any specific agreement or the practices of any
specific funding company. Instead, the District Court relied on
the anti-assignment provision in the settlement agreement and
its own role as a fiduciary to the class as bases for entering the
expansive order. Although the December 8, 2017 order was
directed broadly to all class members and all purported
assignment agreements, and certainly affected the rights of all
litigation funding companies that had entered into such
4
The Court did not expressly rule on the class’s motion to
withhold funds, but it necessarily rejected opposition
arguments like those raised by Thrivest. By purporting to void
the agreements, the District Court exercised authority that
Thrivest argued the Court did not have.
13
contracts, many of the companies affected had not entered
appearances or submitted any filings. Nor was any hearing
conducted apart from the initial September 19, 2017 hearing.
The RD entities filed a timely notice of appeal as to the
December 8, 2017 order, No. 18-1040.
On February 20, 2018, the District Court ordered the
Claims Administrator to disburse settlement proceeds directly
to qualifying class members who had entered into assignment
agreements that the Court had voided under the December 8,
2017 order. The RD entities filed a second timely notice of
appeal as to the February 20 order, 18-1482. Atlas filed a
notice of appeal in March 2018 purporting to appeal both the
February 20, 2018 order and the December 8, 2017 order, 18-
1639.
On May 1, 2018, Thrivest filed a complaint to compel
arbitration against class member William E. White in the
Western District of Pennsylvania, pursuant to a cash advance
agreement between the company and White. Thrivest also
initiated arbitration with the American Arbitration Association
in Philadelphia. On May 2, 2018, class counsel filed on the
NFL class docket an emergency motion for a temporary
restraining order to prevent Thrivest from pursuing arbitration.
Judge Brody granted the motion. Following a hearing, Judge
Brody entered a permanent injunction on May 22, 2018,
enjoining Thrivest from arbitrating the enforcement of its
assignment agreement with White. On May 29, 2018, Thrivest
filed a timely notice of appeal, No. 18-2184.
On June 28, 2018, Judge Brody denied as moot the
class’s motion to withhold the disputed settlement funds.
Thrivest filed a second notice of appeal as to that order, No.
18-2582, arguing that by denying the motion to withhold as
14
moot, the District Court had effectively applied the December
8, 2017 and February 20, 2018 orders to Thrivest for the first
time.
The Western District of Pennsylvania later transferred
Thrivest’s case against class member White to the Eastern
District of Pennsylvania. In August 2018, Judge Brody
dismissed Thrivest’s separate lawsuit against White, citing her
May 22, 2018 order enjoining Thrivest from pursuing
arbitration. Thrivest filed a timely notice of appeal from the
dismissal, No. 18-3005.5
II.
Prior to reaching the merits of these appeals, we must
address whether they are properly before this Court.
Specifically, the consolidated appeals present jurisdictional
issues of timeliness and appealability, each of which we will
address in turn.
A.
The parties agree that the RD entities timely appealed
both the December 8, 2017 and February 20, 2018 orders. We
agree. The class argues, however, that both the Atlas entities
5
Thrivest expressly limited its appeals to its agreement with
class member White. See, e.g., Thrivest Reply Br. at 1 n.1
(“Thrivest refers to its dispute as with White (and not the Class
or Class Counsel) because its Agreement is with White and it
sought to arbitrate only with White.”). Thrivest subsequently
moved for a stay related to an agreement it entered into with
another class member. We denied that motion in part because
Thrivest had appealed only as to its agreement with White.
15
and Thrivest failed to timely appeal some of the orders they are
challenging. We agree and will dismiss the relevant appeals.
Atlas filed its notice of appeal on March 22, 2018,
purporting to challenge both the District Court’s December 8,
2017 order and its February 20, 2018 order. The class contends
that Atlas’s March 22, 2018 notice of appeal was not timely as
to the December 8, 2017 order. As discussed infra, we
conclude that the December 8, 2017 order was a final,
appealable order. The order was clear and definite in its ruling
that the anti-assignment provision forbade assignment of
settlement proceeds and that any agreement was “void, invalid
and of no force and effect.” RD App. 5. The order also
specified that if the funding companies opted for rescission,
they could receive “the amount already paid to the Class
Member,” RD App. 5; we conclude that statement was
sufficient for Atlas to calculate damages with reasonable
certainty. See DeJohn v. Temple Univ., 537 F.3d 301, 307 (3d
Cir. 2008) (noting that a judgment is not final until it
reasonably resolves the extent of damages). Accordingly, the
Atlas entities forfeited their right to appeal the December 8,
2017 order when they failed to file a notice of appeal within
thirty days of that order. See Fed. R. App. P. 4(a)(1)(A).
Further, although Atlas timely filed its appeal from the
February 20, 2018 order, Atlas makes no argument in its brief
regarding that order and has therefore forfeited any challenge
to it.6 We will dismiss Atlas’s appeal at 18-1639 in its entirety
for lack of jurisdiction.
6
As explained infra, even if Atlas had not forfeited its
arguments as to the February 20, 2018 order, we conclude that
it is not an appealable order.
16
As to Thrivest, there is no question that the company
timely appealed Judge Brody’s order enjoining it from
pursuing arbitration (18-2184) and Judge Brody’s order
dismissing the Thrivest v. White case (18-3005). Thrivest also
filed a notice of appeal on July 16, 2018, appealing from Judge
Brody’s order denying as moot the motion to withhold the
disputed settlement funds. But in its briefing, Thrivest
attempts to challenge not the order denying the motion to
withhold, but rather the December 8, 2017 and February 20,
2018 orders. Thrivest argues that it was not until the Court’s
June order denying the motion to withhold that Thrivest
understood the Court’s previous orders to have decided the
objections Thrivest raised in its November 2017 opposition.
Thrivest argues that it therefore had no reason to believe, at the
time those orders were entered in December 2017 and February
2018, that they affected its rights such that appeal would be
necessary.
By their clear terms, the December 8, 2017 and
February 20, 2018 orders applied to all assignment agreements
entered into by class members, so the District Court necessarily
rejected the arguments raised by Thrivest in its opposition
when the Court purported to void the agreements. To the
extent Thrivest attempts to appeal the denial of the motion to
withhold, it failed to brief that issue and instead addressed only
the December 8, 2017 and February 20, 2018 orders. Any
argument as to the order denying the motion to withhold is
therefore forfeited. Further, we conclude that Thrivest cannot
bootstrap its arguments regarding the December 8, 2017 and
February 20, 2018 final orders to its July 16, 2018 notice of
appeal. Accordingly, we will dismiss as untimely Thrivest’s
appeal in case number 18-2582.
17
B.
In the remaining cases that were timely appealed, 18-
1040, 18-1482, 18-2184, and 18-3005, the appellants–
litigation funders appeal four orders: (1) the December 8, 2017
order voiding the assignment agreements; (2) the February 20,
2018 order directing the Claims Administrator to disburse
funds; (3) the May 22, 2018 order enjoining Thrivest from
arbitrating the enforceability of its assignment agreement; and
(4) the order dismissing Thrivest v. White, respectively. We
conclude that we have appellate jurisdiction to consider
appeals of the first, third, and fourth orders under 28 U.S.C.
§§ 1291 and 1292,7 but that we do not have jurisdiction over
the appeal of the February 20, 2018 order.
7
We also conclude that we have jurisdiction despite the fact
that RD and Thrivest were non-parties to the District Court
litigation. In the usual course, only parties of record have
standing to appeal. IPSCO Steel (Ala.), Inc. v. Blaine Constr.
Corp., 371 F.3d 150, 153 (3d Cir. 2004). “[A] nonparty may
bring an appeal when three conditions are met: (1) the nonparty
had a stake in the outcome of the proceedings that is discernible
from the record; (2) the nonparty has participated in the
proceedings before the district court; and (3) the equities favor
the appeal.” Id. The RD entities entered appearances and
participated in briefing in the District Court, and Thrivest was
granted objector status. To the extent these litigation funding
entities were not parties below, see, e.g., Devlin v. Scardelletti,
536 U.S. 1, 8 (2002) (“Because they were not named in the
action, the appellants in these cases were parties only in the
sense that they were bound by the order from which they were
seeking to appeal.”), they nonetheless qualify for nonparty
18
The December 8, 2017 and February 20, 2018 orders
are not traditional “final” orders under 28 U.S.C. § 1291
because they did not terminate the litigation in the District
Court. Yet there are circumstances where finality should be
given a “practical rather than a technical construction.” Isidor
Paiewonsky Assocs., Inc. v. Sharp Props., Inc., 998 F.2d 145,
150 (3d Cir. 1993). “[T]his is especially so when
supplementary post-judgment orders are involved because the
policy against and the probability of avoiding piecemeal
review are less likely to be decisive after judgment than
before.” Id. (internal quotation marks omitted). Under the
collateral order doctrine, we also have jurisdiction under 28
U.S.C. § 1291 to review “certain decisions that do not
terminate the litigation . . . as final decisions of the district
courts if they are (1) conclusive, (2) resolve important
questions completely separate from the merits, and (3) would
render such important questions effectively unreviewable on
appeal from final judgment in the underlying action.” Russell
v. Richardson, 905 F.3d 239, 253 (3d Cir. 2018) (internal
quotation marks omitted).
standing under our non-party appeal precedent. See IPSCO
Steel (Ala.), Inc., 371 F.3d at 153. Both groups of litigation
funding entities have a stake in the outcome of the proceedings
because the District Court purported to void their agreements
with class members, eliminating their contractual rights. The
companies also participated in the proceedings before the
District Court and submitted related filings. The equities favor
allowing the appeal because the funding companies have no
way to challenge the District Court’s orders, which affected
their rights, apart from appealing here.
19
Here, the NFL concussion litigation final judgment has
already been appealed to, and approved by, this Court. As a
result, the District Court’s post-judgment orders of December
8, 2017 and February 20, 2018 could not be appealed along
with any future “final order,” and there is not the usual concern
of piecemeal litigation. At this point, however, our analysis of
the December and February orders must diverge due to the
fundamental differences between the two orders. The
December 8, 2017 order bears indicia of finality—it purported
to void any assignment agreement in its entirety, leaving no
additional steps for the District Court to take. As revealed by
the subsequent order enjoining Thrivest from pursuing
arbitration to determine the enforceability of its agreement, the
District Court believes that its December order fully and finally
determined that substantive issue. The issues presented by the
December 8, 2017 order are also important because they
involve freedom of contract and the authority of the District
Court, and those questions are collateral to, and completely
separate from, the NFL class action merits issues. We
therefore conclude that we have jurisdiction under 28 U.S.C.
§ 1291 to consider RD’s timely appeal of the December 8,
2017 order.
As to the February 20, 2018 order, we conclude that the
requisites for appeal under the collateral order doctrine are not
satisfied. First, as a purely administrative order, the order did
not conclusively resolve any dispute or determine any legal
issue, as required under the collateral order test. See Coopers
& Lybrand v. Livesay, 437 U.S. 463, 468 (1978) (“To come
within the ‘small class’ of decisions excepted from the final-
judgment rule by Cohen, the order must conclusively
determine the disputed question.”). Instead, the District
Court’s December 8, 2017 order resolved the substantive
20
issues related to assignment agreements, and the February 20,
2018 order was merely a ministerial order designed to
effectuate the Court’s prior order. See 15B C. Wright & A.
Miller, Fed. Prac. and Proc. § 3916 (2d ed.) (“[M]any
postjudgment orders will involve ministerial or discretionary
matters that are effectively unreviewable.”); see also IIT v.
Vencap, Ltd., 519 F.2d 1001, 1020 (2d Cir. 1975) (holding that
while the order at issue “finally dispose[d]” of the award, the
collateral order doctrine was not “intended to apply to the
scores of discretionary administrative orders a district court
must make in supervising its receiver”), abrogated on other
grounds by Morrison v. Nat’l Austl. Bank Ltd., 561 U.S. 247
(2010).
Further, the February 20, 2018 order does not raise
important issues, as required to satisfy the second collateral
order element. There can be no question that the February 20,
2018 order is precisely the type of administrative order that the
District Court plainly retained the authority to enter, as
explained infra. And the order did not affect the substantive
rights of the parties, which had already been ruled upon in the
December 8, 2017 order. Instead, the order merely directed the
Claims Administrator to distribute funds in a particular way.
Such a discretionary, non-substantive decision by the District
Court presents little for an appellate court to review, and is
inappropriate for review under the narrow collateral order
doctrine. We therefore conclude that we do not have appellate
jurisdiction to review the February 20, 2018 order, and we will
dismiss case number 18-1482.
The third order, enjoining Thrivest from arbitrating the
enforceability of its assignment agreement is reviewable under
28 U.S.C. § 1292 as an order of the District Court granting an
injunction. The fourth order, dismissing Thrivest v. White, is
21
subject to appellate jurisdiction under 28 U.S.C. § 1291 as a
traditional final order. Accordingly, we have jurisdiction to
address the merits in three of the four timely appeals.
III. 8
On appeal, the fundamental question is whether the
District Court had the authority to void the cash advance
agreements. We conclude that the District Court retained
broad authority to administer the settlement, but that the Court
ultimately exceeded its authority in voiding the agreements in
their entirety.
8
“This court applies plenary review to a district court’s
construction of settlement agreements, but should review a
district court’s interpretation of settlement agreements, as well
as any underlying factual findings, for clear error, as it would
in reviewing a district court’s treatment of any other contract.”
Coltec Indus., Inc. v. Hobgood, 280 F.3d 262, 269 (3d Cir.
2002) (citing In re Cendant Corp. Prides Litig., 233 F.3d 188,
193 (3d Cir. 2000) (“[B]asic contract principles . . . apply to
settlement agreements [and] . . . contract interpretation is a
question of fact, [thus] . . . review is according to the clearly
erroneous standard. In contrast, contract construction, that is,
the legal operation of the contract, is a question of law
mandating plenary review.” (alterations in Coltec))). In this
case, the District Court’s interpretation of the settlement
agreement terms is properly reviewed for clear error. The
District Court’s conclusion as to how the settlement agreement
applies to the assignment agreements is an issue of
construction that is properly reviewed de novo.
22
A.
Where parties have entered into a settlement agreement
and a district court has dismissed the case, the court retains
jurisdiction over issues related to the case only to the extent it
has expressly retained jurisdiction or incorporated the
settlement agreement into its dismissal order. Shaffer v. GTE
N., Inc., 284 F.3d 500, 503 (3d Cir. 2002). Here, the District
Court broadly retained jurisdiction over administration of the
NFL class settlement and the class action parties. The Court
expressly incorporated the settlement agreement into the order
approving the settlement, including the jurisdiction retention
provision. See supra Section I. The District Court also
included a second jurisdiction retention provision in the final
order:
The Court retains continuing and exclusive
jurisdiction over this action including
jurisdiction over the Parties and their counsel, all
Settlement Class Members, the Special Master,
BAP Administrator, Claims Administrator, Lien
Resolution Administrator, Appeals Advisory
Panel, Appeals Advisory Panel Consultants, and
Trustee. In accordance with the terms of the
Settlement Agreement, the Court retains
continuing and exclusive jurisdiction to
interpret, implement, administer and enforce the
Settlement Agreement, and to implement and
complete the claims administration and
distribution process. The Court also retains
continuing jurisdiction over any “qualified
settlement funds,” that are established under the
Settlement Agreement . . . .
23
RD App. 285. As a result, the District Court retained broad
jurisdiction to administer the settlement and resolve issues
relating to it.9
Although the District Court’s retention of jurisdiction
applied only to the parties and other related entities expressly
set out in the retention provision—and there can be no dispute
that the settlement agreement was not binding on nonparties—
the Court also had authority to enforce its orders under the All
Writs Act, 28 U.S.C. § 1651, as well as authority to protect the
class as a fiduciary under Federal Rule of Civil Procedure 23.
Neither of these sources of authority independently create
jurisdiction, see Clinton v. Goldsmith, 526 U.S. 529, 534–35
9
The litigation funding companies argue that the District
Court’s December 8, 2017 order was an advisory opinion
because it answered a question “referred” to the Court by the
Southern District of New York. This argument is meritless.
As an initial matter, the District Court was already aware of the
problem of the cash advance agreements and had scheduled a
hearing prior to the referral letter from the Southern District of
New York. Further, regardless of how the question of
interpretation of the anti-assignment clause reached the District
Court, it had retained the authority to adjudicate any issue
related to interpretation of the settlement agreement. This
retained authority originated from the underlying NFL
concussion case that was the subject of the settlement
agreement before the District Court, so the District Court’s
order simply could not have been an advisory opinion. We
have no reason to express a view as to whether it would be
appropriate for the Southern District of New York to rely on
Judge Brody’s order or adopt her rulings in the separate lawsuit
before that Court.
24
(1999); Fed. R. Civ. P. 82, but they both allow a court to
exercise some degree of control over third parties in specific
circumstances. See In re Grand Jury Proceedings, 654 F.2d
268, 277 & n.14 (3d Cir. 1981) (The All Writs Act “extends to
all persons who are in a position to frustrate the
implementation of a court order or the proper administration of
justice.” (internal quotation marks omitted)); Communications
Among Parties, Counsel, and Class Members, Ann. Manual
Complex Lit. § 21.33 (4th ed.) (“The judge has ultimate control
over communications among the parties, third parties, or their
agents and class members on the subject matter of the litigation
to ensure the integrity of the proceedings and the protection of
the class.”).
Specifically, under the All Writs Act, action is
authorized to the extent it is “necessary or appropriate” to
enforce a Court’s prior orders. See 28 U.S.C. § 1651; see also
United States v. N.Y. Tel. Co., 434 U.S. 159, 172 (1977) (“This
Court has repeatedly recognized the power of a federal court to
issue such commands under the All Writs Act as may be
necessary or appropriate to effectuate and prevent the
frustration of orders it has previously issued in its exercise of
jurisdiction otherwise obtained.”). Or, as this Court has
explained it, there is authority under the Act to issue an
injunction where such relief is “necessary, or perhaps merely
helpful.” Pittsburgh-Des Moines Steel Co. v. United
Steelworkers of Am., AFL-CIO, 633 F.2d 302, 307 (3d Cir.
1980). This Court has similarly clarified that any remedy
under Rule 23(d) “should be restricted to the minimum
necessary to correct the effects of improper conduct under Rule
23.” In re Cmty. Bank of N. Va., 418 F.3d 277, 310 (3d Cir.
2005); see also Coles v. Marsh, 560 F.2d 186, 189 (3d Cir.
1977) (“[T]he district court must find that the showing
25
provides a satisfactory basis for relief and that the relief sought
would be consistent with the policies of Rule 23 giving explicit
consideration to the narrowest possible relief which would
protect the respective parties.”).
B.
Pursuant to the settlement agreement and the District
Court order approving and adopting the agreement, the District
Court retained the authority to enforce the terms of, and
administer, the settlement. As noted supra, we have no doubt
that the District Court had the authority to enter purely
administrative orders such as the February 20, 2018 order
directing the disbursement of funds to class members. Our
analysis of the December 8, 2017 order is a bit more
complicated. That order went beyond pure issues of settlement
administration to adjudicate the third-party contract rights of
litigation funding companies. Under the All Writs Act and
Rule 23, the District Court had authority to enjoin behavior by
third parties to the extent necessary to effectuate and preserve
the integrity of its prior orders. The question becomes whether,
to accomplish those goals, it was necessary for the District
Court to void the cash advance agreements in their entirety in
the December 8, 2017 order.
The anti-assignment provision in the NFL concussion
settlement agreement is as follows:
Section 30.1 No Assignment of Claims. Neither
the Settlement Class nor any Class or Subclass
Representative or Settlement Class Member has
assigned, will assign, or will attempt to assign, to
any person or entity other than the NFL Parties
any rights or claims relating to the subject matter
26
of the Class Action Complaint. Any such
assignment, or attempt to assign, to any person
or entity other than the NFL Parties any rights or
claims relating to the subject matter of the Class
Action Complaint will be void, invalid, and of no
force and effect and the Claims Administrator
shall not recognize any such action.
This provision includes express language that any assignment
“will be void, invalid, and of no force and effect.” That is
precisely the type of “clear, definite and appropriate language”
that is required to void a subsequent assignment under New
York law, which is the law governing the settlement
agreement.10 See Allhusen v. Caristo Constr. Corp., 103
N.E.2d 891, 893 (N.Y. 1952). “An assignment purports to
transfer ownership of a claim to the assignee, giving it standing
to assert those rights and to sue on its own behalf.” Am.
Orthopedic & Sports Med. v. Indep. Blue Cross Blue Shield,
890 F.3d 445, 454 (3d Cir. 2018); see also In re Stralem, 303
A.D.2d 120, 123 (N.Y. App. Div. 2003) (“In order for an
assignment to be valid, the assignor must be divested of all
control over the thing assigned. When a valid assignment is
made, the assignee steps into the assignor’s shoes and acquires
whatever rights the latter had.” (internal citations and quotation
marks omitted)). As a matter of New York law, we conclude
that any true “assignment, or attempt to assign, . . . rights or
claims relating to the subject matter of the Class Action
10
The settlement agreement contains a choice of law provision
specifying that the agreement “will be interpreted and enforced
in accordance with the laws of the State of New York.”
Settlement Agreement Section 27.1(a).
27
Complaint” was void ab initio under the anti-assignment
clause.
The question then becomes whether true assignments of
settlement proceeds, like those reportedly in the cash advance
agreements, qualify as assignments of “rights or claims relating
to the subject matter of the Class Action Complaint.” The
District Court found that the anti-assignment provision
language applied to assignments of proceeds. This is a pure
question of interpretation reviewed for clear error, see In re
Cendant Corp. Prides Litig., 233 F.3d 188, 193 (3d Cir. 2000),
and we identify no clear error here.11 Accordingly, we adopt
the District Court’s interpretation and conclude that any true
assignments contained within the cash advance agreements—
that is, contractual provisions that allowed the lender to step
into the shoes of the player and seek funds directly from the
settlement fund—were void ab initio.12
11
Even if we had concluded that the District Court’s ruling
regarding the settlement language was a question of
construction, subject to plenary review, see In re Cendant
Corp. Prides Litig., 233 F.3d at 193, we would hold that the
quoted language includes assignments of settlement proceeds.
12
The litigation funding companies argue that Article 9 of the
New York Uniform Commercial Code bars enforcement of the
anti-assignment provision. Even assuming Article 9 of the
New York U.C.C. applies to a class action settlement
agreement, we are not relying on that agreement here. Instead,
through incorporation into the District Court’s final order, the
settlement agreement has itself become an order, and that order
is therefore the document we must analyze. The funding
28
Based on these conclusions, we also must rule that it
was necessary to the District Court’s enforcement of the
settlement agreement, and the enforcement of its own order
approving and adopting the agreement, for the Court to be able
to void any true assignments. Otherwise, class members and
the litigation funding companies could have undermined the
District Court’s order by entering into prohibited assignments
in contravention of the clear terms of the settlement agreement.
We will therefore affirm the District Court’s December 8, 2017
order to the extent it voided any true assignments set forth in
the cash advance agreements.13
In the end, however, we must conclude that the District
Court went beyond its authority when it purported to void the
cash advance agreements in their entirety. The District Court
explained that it was the Court’s obligation as fiduciary of the
class “to enforce [the anti-assignment] provision of the
Settlement Agreement.” RD App. 2. That is true, as far as it
goes. But to accomplish that goal, the Court had the option of
invalidating only the assignment portions of the agreements
companies provide no basis for invalidating a court order based
on a U.C.C. provision.
13
Of course, deciding whether any specific contractual
provision is a “true” assignment or a false one requires
examining the language of the specific contract. In this
instance, such an analysis is unnecessary in the District Court
because the effect of a void true assignment and a false
assignment, where the funding company has not obtained a
right to submit a claim through the settlement process, is the
same: the Special Master will not enforce any purported
assignment.
29
containing true assignments and directing the Claims
Administrator not to recognize any true assignments, without
voiding the agreements in their entirety. Some of the
agreements contained severance clauses or alternative loan
agreements, and there is a dispute as to whether the purported
assignments in the funding agreements were true assignments
at all.14 Accordingly, there are portions of the cash advance
agreements that may be enforceable even after any true
assignments are voided. Of course, once the funds are
disbursed to the players, the District Court’s power over the
funds—and any contracts affecting the funds—is at an end.
Further, although true assignments, which allow a
litigation funding company to step into the shoes of a class
member and pursue the class member’s rights through the
claims process, would clearly violate the anti-assignment
provision and would affect the administration of the settlement,
something less than a true assignment may not. For example,
there is no dispute that a loan transaction between a class
member and a third party is not prohibited under the terms of
the settlement. And where a class member enters into a non-
14
See, e.g., RD App. 338 (CFPB complaint in S.D.N.Y.
pleading that “Although RD mischaracterizes these
transactions as ‘assignments,’ they are in fact offers to extend
credit or extensions of credit for purposes of the Consumer
Financial Protection Act of 2010”); RD App. 347 (CFPB
complaint in S.D.N.Y. pleading that “Although RD
characterizes its contracts as ‘sales and assignments,’ the
transactions are loans under New York law”); RD App. 566
(Class counsel noting at 9/19/17 hearing, “Although they have
been disguised in some ways as an assignment of a property
right . . . they’re really loans”).
30
assignment cash advance agreement, such an agreement could
be structured like a loan, which would not seem to affect
administration of the settlement or violate the anti-assignment
provision. The District Court’s authority certainly does not
extend to how class members choose to use their settlement
proceeds after they are disbursed. The District Court made no
findings indicating that any aspects of the cash advance
agreements, other than assignments, impaired the integrity of
the settlement process. As such, to the extent the District
Court’s December 8, 2017 order voided the cash advance
agreements in their entirety, the order was not narrowly
tailored to the Court’s findings regarding the impact of the
agreements on the settlement.15
15
It is unclear whether the District Court believes it voided the
agreements in their entirety and made them completely
unenforceable. The express terms of the December 8, 2017
order indicate that was the Court’s intent. Subsequent orders,
such as the May 22, 2018 order enjoining Thrivest from
pursuing arbitration, also indicate that the Court believed it had
voided the agreements in their entirety. At another time,
however, the District Court noted: “No judgment as to whether
RD Legal is or is not ultimately entitled to money has been
made by the Court.” RD App. 863 n.1. Similarly, in its
opposition to Thrivest’s Motion for Stay Pending Appeal, the
class stated that Thrivest can pursue enforcement of its funding
agreement after the funds are paid to the class member: “Once
Mr. Andrews is actually paid on his claim, only then will the
district court’s authority end and Thrivest be able to assert all
its legal claims against Mr. Andrews.” February 26, 2019
Thrivest Opp. at 7–8.
31
In sum, although the District Court had the authority to
enforce the clear terms of the settlement agreement by ordering
that any true assignments are void and unenforceable, the
Court did not have the authority to void other obligations under
the cash advance agreements, particularly without affording
the lenders notice and a hearing, or making specific findings
that those obligations violated the Court’s prior orders or
would impair the Court’s administration of the settlement. We
will therefore reverse in part the District Court’s December 8,
2017 order. As a result, the cash advance agreements remain
enforceable—outside of the NFL claims administration
context—to the extent the litigation companies retain rights
under the agreements after any true assignments are voided.
C.
We express no opinion as to the ultimate enforceability
of any of the cash advance agreements. We do note, though,
that a court or arbitrator subsequently adjudicating these issues
will need to address whether any individual agreement
contains a true assignment and whether there remain
enforceable rights under the agreement after any true
assignment is voided. We presume that the full array of
standard contract defenses will also apply in any subsequent
litigation regarding these agreements. As noted by Judge
Brody in her December 8, 2017 order, some of the class
members are cognitively impaired, and it is possible that some
of them lacked the capacity to contract at the time they entered
into the agreements.16 Judge Brody’s concern is well-taken.
16
Counsel for the class conceded at oral argument that the class
was not making an argument on appeal that class members
lacked contractual capacity. Jan. 23, 2019 Oral Arg. Tr. 49:7–
32
There may also be issues of unconscionability, fraud, or usury
based on the high effective interest rates in the agreements and
arguments by both class counsel and the CFPB that the
agreements are disguised predatory loans, rather than true
assignments. Because many of the agreements contain
arbitration provisions, some of these issues may ultimately be
subject to arbitration. Of course, these are all questions beyond
the scope of the appeal before us, and they should be litigated
(or perhaps arbitrated) on a case-by-case basis in an
appropriate forum.
D.
Finally, it necessarily follows from our rulings limiting
the reach of the December 8, 2017 order that the District Court
exceeded its authority when it (1) enjoined Thrivest from
pursuing arbitration of its rights under the cash advance
agreement with class member White, and (2) dismissed
Thrivest’s lawsuit attempting to enforce that agreement. In
entering those orders, the District Court relied on the fact that
it had already invalidated the Thrivest agreement. But as we
explained above, Thrivest’s contract gave it only the right to
receive settlement funds after the funds are disbursed to a class
member, and the District Court’s power over the funds and
class ends at that point. Supra Parts I & III.B. Even if the
parties had attempted to create a true assignment, we have held
that the District Court did not have the authority to void
Thrivest’s agreement with White in its entirety. Thus it also
did not have the authority to preclude Thrivest from litigating
any of its remaining rights under the agreement. We therefore
20. Of course, this concession for purposes of this appeal will
not be binding against class members in subsequent litigation
regarding the enforceability of the agreements.
33
vacate the District Court’s May 22, 2018 order enjoining
Thrivest from pursuing arbitration and the Court’s order
dismissing Thrivest’s complaint in Thrivest v. White, and
remand for further proceedings, as appropriate.
IV.
For the reasons given, we will reverse in part and affirm
in part the District Court’s December 8, 2017 order. We will
reverse to the extent the District Court purported to void the
cash advance agreements in their entirety and void contractual
provisions that went only to a lender’s right to receive funds
after the player acquired them. We will affirm as to the District
Court’s ruling that any true assignments—contractual
provisions that permit the lender to seek funds directly from
the Claims Administrator—are void. We will vacate the
District Court’s May 22, 2018 order enjoining Thrivest from
pursuing arbitration and the District Court’s order dismissing
Thrivest’s complaint in Thrivest v. White, and remand for
further proceedings. We will dismiss the appeals at 18-1639,
18-2582, and 18-1482 for lack of jurisdiction.
Going forward, the litigation funding companies will be
able to pursue, outside of the claims administration process,
whatever rights they may continue to have under their cash
advance agreements with class members. We offer no opinion
as to the companies’ prospects for success in enforcing the
funding agreements. Indeed, our opinion today should in no
way suggest that an individual agreement is enforceable. Any
questions going to the enforceability of the funding agreements
will have to be litigated or arbitrated in the appropriate fora.
34