The South Carolina Supreme Court recently clarified how to get trial-court approval of a settlement while the case is on appeal. It may have also created a Catch-22.
In Lancaster v. Georgia-Pacific Corp., Op. No. 2013-000175 (S.C. Sup.Ct. May 20, 2013)(Shearouse Ad.Sh. No. 23), a case filed as a class action was before the South Carolina Supreme Court on a petition for a writ of certiorari and another party’s request for additional time to seek certiorari. While the petition and request were pending, the parties reached a tentative settlement. They then moved the Supreme Court to stay the appellate deadlines so that they could seek the trial court’s approval of the class-action settlement.
The Supreme Court issued a stay but ruled that the trial court was powerless to approve the settlement before the case’s remand. The Court explained that Rule 205, SCACR, grants the appellate court exclusive jurisdiction over the appeal except for matters not affected by the appeal. This exclusive jurisdiction lasts until the appellate court remits the case to the lower court.
Applying this rule, the Lancaster order states, “[W]e remind the bench and bar that action on a settlement may not be taken by the lower court, except with regard to matters not affected by the appeal, while the matter is pending before this Court. The parties must first seek to have the matter remanded to the lower court.”
This is a potential problem. For a remand, the appellate court normally issues a remittitur. But that does not happen under Rule 221(b), SCACR, until the appellate court finally disposes of the appeal. So what happens if you get the appellate court to remit and remand for trial-court approval of the settlement and, on remand, the trial court refuses to approve the settlement? The earlier appeal is gone — having been finally disposed of by agreement.
I guess the parties could try to resurrect the earlier appeal, or take a new appeal of the order refusing the settlement. The Supreme Court did not say.
Rule 261(b), SCACR, may offer an answer. It envisions that the parties may agree to modify the Appellate Courts Rules if the appellate court approves the modification. Parties who need trial-court approval to settle may thus want to consider seeking a conditional remand, for the trial court to approve the settlement, with the understanding that the appeal will be reinstated if the settlement is not approved.
Anyone else see a way around this possible Catch-22? Please leave me a reply or reach me at www.attorneyroberthill.com.