MDL No. 2357 - IN RE: Zappos.com, Inc., Customer Data Security Breach Litigation, 3:12-cv-00325

Data breach class action against Zappos by customers alleging compromise of sensitive information.
Parties engaged in mediation in July and November 2014 and repeatedly represented to the court they were close to settlement; the court stayed proceedings several times pending settlement efforts.
Parties reduced class-wide relief terms to a written Memorandum of Understanding (MOU); drafts exchanged but the MOU left attorneys’ fees, costs, and incentive awards blank or marked "TBD" pending fee negotiation at the November 12, 2014 mediation. Plaintiffs’ counsel signed a version of the MOU; Zappos’s counsel did not sign.
Zappos repeatedly requested Plaintiffs’ fee demand; the mediator conveyed Plaintiffs’ fee demand to Zappos, which characterized it as "extravagant" and declined to attend the in-person mediation; no fee agreement was reached.
Plaintiffs moved to enforce the alleged settlement; Zappos renewed a motion to dismiss. Court considered whether the MOU constituted an enforceable contract under Nevada law.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the MOU is an enforceable settlement contract	The signed MOU reflects agreement on material terms and thus a binding settlement	No binding contract: essential term (attorneys’ fees cap) was unresolved and Zappos never signed	Denied: MOU not enforceable because parties lacked meeting of the minds on fees
Whether attorneys’ fees amount was a material/essential term	The parties had agreed class relief; fees could be determined later at mediation	Fees cap was material; parties repeatedly negotiated it and Zappos conditioned settlement on a cap	Held: fees were an essential term and unresolved, so no contract
Whether court may compel specific performance/enforcement	Plaintiffs sought enforcement of the MOU	Zappos argued material terms were uncertain and no final agreement existed	Denied: court will not enforce where material terms are left uncertain
Whether unsigned draft bearing Plaintiffs’ signature binds Zappos	Plaintiffs argued their signed MOU evidenced agreement	Zappos argued unsigned, blank fee lines show draft status and lack of mutual assent	Held for Zappos: unsigned, incomplete MOU insufficient to bind defendant

Mack v. Estate of Mack, 206 P.3d 98 (Nev. 2009) (settlement agreements are contracts governed by contract law)
May v. Anderson, 119 P.3d 1254 (Nev. 2005) (enforceable contract requires agreement on material terms; contract may be formed before final language is drafted if parties agree on essential terms)
Certified Fire Prot., Inc. v. Precision Constr., 283 P.3d 250 (Nev. 2012) (meeting of the minds exists only when parties agree on the contract’s essential terms; materiality depends on context and parties’ conduct)