Consumer Direct Media LLC v. Leads Capture LLC
1:22-cv-10459
| D. Mass. | Jun 14, 2024Background
- Consumer Direct Media LLC sued Leads Capture LLC and Timothy Lee Petty for breach of contract and fraud, alleging failure to pay under a Master Service Agreement.
- The parties entered a Settlement Agreement in May 2022, requiring Defendants to pay $180,000 in monthly installments, with an increase in the amount owed if they defaulted.
- The Settlement Agreement permitted Consumer Direct to dismiss the case, but also allowed for reinstatement and entry of a consent judgment if Defendants defaulted on payment.
- After case dismissal, Defendants failed to make payments as agreed, triggering Plaintiff’s motion to reinstate the case and seek entry of the consent judgment per the Settlement Agreement.
- Defendants did not oppose Plaintiff’s motion to reinstate or the consent judgment.
- The Court reviewed its jurisdiction (ancillary and diversity) and the fairness of entering a consent judgment under the agreement’s terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can the court reinstate a dismissed case to enforce a settlement? | Reinstatement is proper due to Settlement Agreement provisions and breach by Defendants. | None offered | Yes; jurisdiction retained due to specific consent provision. |
| Does ancillary or diversity jurisdiction exist to enforce the agreement? | Ancillary jurisdiction exists via retention language; diversity jurisdiction alleged. | None offered | Yes; both ancillary (via explicit retention) and diversity. |
| Is a consent judgment appropriate under these circumstances? | Consent judgment is fair, adequate, and reasonable under the parties' agreement. | None offered | Yes; consent judgment approved as fair and justified. |
| Did Defendants have sufficient notice/opportunity to object? | Defendants had opportunity under Agreement and post-motion; made no objection. | None offered | Yes; no opposition or objections filed by Defendants. |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (ancillary jurisdiction over settlement requires explicit retention of jurisdiction in dismissal order)
- F.A.C., Inc. v. Cooperativa de Seguros de Vida de Puerto Rico, 449 F.3d 185 (federal court needs explicit basis to enforce a settlement after dismissal)
- United States v. Cannons Eng’g Corp., 899 F.2d 79 (trial courts have discretion in approving settlement or consent decrees)
- Durrett v. Hous. Auth. of Providence, 896 F.2d 600 (court must ensure consent judgments are fair, reasonable, and adequate)
- Local No. 93, Int’l Ass’n of Firefighters, AFL-CIO C.L.C. v. City of Cleveland, 478 U.S. 501 (outlines standards for consent decree approval)