Illinois Dt. Ct. Settlement enforcement case

The federal district court for the Northern District of Illinois refused to relieve a defendant from the obligations in a settlement agreement, when the United States Supreme Court ruled that his former co-defendants were entitled to an entry of judgment in their favor. The court held that the ruling for the former co-defendants did not constitute changed circumstances and that the continued enforcement of the settlement is not unjust or inequitable. National Organization For Women v. Scheidler, 2007 WL 1280654, No. 86 C 7888 (N.D. Ill. April 30, 2007).

This case emanated from a case filed by NOW and health care clinics in 1986 against several pro-life individuals and organizations, including Randall Terry, for damages and an injunction under the Racketeer Influenced and Corrupt Organizations Act (“RICO”).  The district court dismissed the complaint in 1991, and the Seventh Circuit affirmed in 1992.  In 1994, the Supreme Court, in a unanimous decision written by Chief Justice Rehnquist, reversed.  In November 1997, a trial date was set for March 1998.  In January 1998, Mr. Terry entered into a settlement agreement, in which he agreed to refrain from interfering with the right of plaintiff clinics to conduct their business, from blockading the entrances to clinics, from using violence or the threat of violence against the clinics or women who use it, and from inciting others to do so.  After a fairness hearing, the court entered an Order of Final Approval of Partial Settlement between Plaintiffs and Randall A. Terry (“Order”).  After plaintiffs won at trial against the other defendants, the Supreme Court issued two more decisions in the case, both in favor of the defendants.  The final Supreme Court decision in 2006 ruled that the remaining defendants were entitled to an entry of judgment.  The decision was written by Justice Breyer, and it was unanimous.

 

Mr. Terry subsequently moved the court under Federal Rule of Civil Procedure 60(b)(5) for relief from a final order when “a prior judgment upon which it is based has been reversed or otherwise vacated or if it is no longer equitable that the judgement should have prospective application.”  The district court was unsympathetic and before analyzing the legal issues stated: “Terry seeks to benefit from the risks taken and costs paid by the other Defendants and escape the consequences of his own decision to forgo those same risks and costs.”

 

The court held that the Supreme Court’s ruling that there was no liability under RICO “does not affect the viability of the Order.”  The court stated that the settlement was based not on the possibility of RICO liability, but rather “was simply based on the parties’ willingness to end their dispute.”  The court stated that the plaintiffs also had “other viable federal claims” that were “part of the consideration of Terry’s release.”

 

The court then addressed the equities.  The court ruled that vacating the order “would undermine the integrity of the settlement agreement.”  The court further concluded that the “injunction embodied in the Order is necessary to ensure that Terry keeps his end of the bargain.”