United States District Court, W.D. Arkansas, Fayetteville Division
OPINION & ORDER
TIMOTHY L. BROOKS DISTRICT JUDGE.
before the Court are Nelson-Berna Funeral Home's
("Nelson-Berna") Motion for Attorney Fees (Doc. 26)
and Brief in Support (Doc. 27), Linda Saathsy's Motion to
Approve Settlement and Release Funds Held in Registry (Doc.
28), A.S.'s, a minor, and L.S.'s, a minor (the
"Minor Parties"), Motion to Approve Settlement
(Doc. 29), and Kanlaya Lo's, Litnirah Lo's, Simmon
Lo's, and Soudchai Lo's (the "Lo Parties")
Motion to Approve Settlement (Doc. 30). In resolving these
motions, the Court has also considered the Report of
A.S.'s and L.S.'s Guardian Ad Litem (Doc.
31) and the guardian's Billing Summary (Doc. 32). For the
reasons stated below, the Court DEFERS
RULING on the pending motions. (Docs. 26, 28, 29,
interpleader action was brought by The Prudential Insurance
Company of America, which has since been dismissed from the
case, to determine the proper beneficiary of a life insurance
policy it issued to Khamhoung Lo. Mr. Lo's alleged
domestic partner, Linda Saathsy, and his adult children, the
Lo Parties, both claimed to be the appropriate beneficiary.
Further, the Court has appointed a guardian ad litem
to represent the interests of the Minor Parties, who are the
children of Mr. Lo and Linda Saathsy. Nelson-Berna also
claims a right to a portion of the insurance proceeds per an
insurance assignment it entered into with Ms. Saathsy. (Doc.
insurance policy in question is governed by the Employee
Retirement Income Security Act ("ERISA"), giving
this Court federal question jurisdiction over the matter. 28
U.S.C. § 1331. The policy provides that when the insured
does not designate a beneficiary, its benefits are payable
first to a surviving spouse or domestic partner, and next to
surviving children. (Doc. 1-1, p. 47). The dispute between
Ms. Saathsy and the Lo Parties revolved around whether she
would qualify as a domestic partner, and also whether the
domestic partner clause was contrary to Arkansas public
policy. The Minor Parties did not take a definitive position
on the matter until their guardian ad litem issued
his Report, wherein he expressed the opinion that Ms. Saathsy
qualifies as a domestic partner, that Arkansas recognizes
domestic partners, and that she is therefore entitled to
recover the life insurance proceeds. (Doc. 31).
parties have now advised the Court that they reached an
agreement settling this case. They are accordingly seeking
the Court's approval of their settlement, and the
disbursement of the $139, 000.00 in interpleaded funds (plus
accumulated interest). The terms of the settlement agreement
are as follows:
• Nelson-Berna Funeral Home gets $9, 017.25,
plus attorney's fees. Counsel for Nelson-Berna, Bob
Estes, lists his fee as $2, 991.96.
• The Lo Parties get $25, 000.00 total, to be divided
equally among them.
• The Minor Parties' guardian ad litem gets
attorney's fees. The guardian ad litem, Curtis
Hogue, lists a fee of $3, 375.00 and costs of $18.46.
• The balance of the funds are to be paid to Linda
Saathsy and her attorney, Jeff. H. Watson.
parties to a civil dispute can reach a money settlement among
themselves, bringing a case to an end without a court's
approval or intervention." Eagan by Keith v.
Jackson, 855 F.Supp. 765, 774 (E.D. Pa. 1994). In this
instance, however, the Court's authority and
responsibility to review the settlement agreement comes from
its "special duty ... to safeguard the interests of
litigants who are minors." Robidoux v.
Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2011). Some
courts have opined that this duty emanates from Federal Rule
of Civil Procedure 17(c), which provides that a district
court must "appoint a guardian ad litem-or issue another
appropriate order-to protect a minor ... who is unrepresented
in an action." See Robidoux, 638 F.3d at 1181;
Oliva v. United States, 2016 WL 7665536, at *2 (W.D.
Mich. Dec. 22, 2016), R&R adopted, 2017 WL 76914
(W.D. Mich. Jan. 9, 2017); Buchannan for T.B. v.
Diversified Consultants, Inc., 2014 WL 3907834, at *2
(D. Colo. May 8, 2014). At least one court has disagreed with
this interpretation of Rule 17(c), and has instead relied on
state law and "the Court's inherent duty to protect
the interests of minors . .. that come before it."
Eagan by Keith, 855 F.Supp. at 775. Regardless of
whether the Court's authority derives from Rule 17(c) or
its inherent duty to protect minors who come before it, the
Court is confident that the authority exists, and that it has
a coordinate obligation to exercise it.
addition to the source of this authority, the reach of the
Court's authority in this arena is of some debate among
federal courts. In Robidoux, the Ninth Circuit
recognized that "[i]n the context of proposed
settlements in suits involving minor plaintiffs, " a
court has a special duty to "conduct its own inquiry to
determine whether the settlement serves the best interests of
the minor." 638 F.3d at 1181. However, the
Robidoux Court held that this duty only means
ensuring that "the net recovery of each minor plaintiff
under the proposed settlement is fair and reasonable, "
id. at 1182, "without regard to the proportion
of the total settlement value designated for adult
co-plaintiffs or plaintiffs' counsel-whose
interest the district court has no special duty to safeguard,
id. (emphasis added). Thus, the district court erred
"in rejecting the settlement on the basis that the
provision of 56% of the total settlement value for
attorney's fees was 'excessive, ' and thus the
settlement was not 'fair and reasonable' to the minor
plaintiffs." Id. The fairness determination,
per the Robidoux Court, "is an independent, not
a comparative, inquiry, " and district courts should
consider the fairness of minors' recovery "in
Fourth and Sixth Circuits, however, have expressed a broader
conception of courts' responsibilities in the context of
attorney's fees and settlements involving minors. In
Dean v. Holiday Inns, Inc., the Sixth Circuit
The interest of an attorney seeking to be awarded a fee from
the settlement proceeds effectuated for a minor must always,
by the nature of the relationship and the dependency of the
minor, be in tension. When a court is called upon to approve
the settlement as is in the best interest of the minor, it
must consider and then determine what constitutes fair and
reasonable compensation to the attorney regardless of any
agreement specifying an amount, whether contingent or
860 F.2d 670, 673 (6th Cir. 1988). And, relying on
Dean, the Fourth Circuit has described
"ascertaining whether attorney fee agreements involving
minors or incompetents are reasonable" as being
"[i]ntegral" to a court's duty "to protect
those who may be especially vulnerable to manipulation or who
may be unable to protect themselves." In re Abrams
&Abrams, P.A.,605 F.3d 238, 243 (4th Cir.
2010). Most importantly, the Eighth Circuit has expressed a
broad view on courts' powers to review attorneys'
fees, particularly when minors are involved. In Little