United States District Court, E.D. Michigan, Southern Division
ORDER RESOLVING PENDING MOTIONS AND SETTING
SUPPLEMENTAL BRIEFING SCHEDULE WITH RESPECT TO
DEFENDANT’S MOTION TO ENFORCE SETTLEMENT AGREEMENT (ECF
MATTHEW F. LEITMAN, UNITED STATES DISTRICT JUDGE
3, 2016, Plaintiff Stuart Sandweiss (“Sandweiss”)
and his wife Valerie (collectively, the
“Sandweisses”) filed a putative class action
against Defendant Spirit Airlines, Inc.
(“Spirit”) in the Wayne County Circuit Court.
(See Complaint, ECF #1-1.) In their Complaint, the
Sandweisses alleged that Spirit engaged in false advertising
and breached agreements related to the sale and purchase of
airline tickets in 2010 and 2016. (See id.)
Sandweiss, a licensed attorney, appeared as co-counsel for
himself and his wife; Brian Herschfus
(“Herschfus”) appeared as co-counsel. (See
removed the action to this Court on June 9, 2016 pursuant to
the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2)(A)
(“CAFA”). (See ECF #1.) Under CAFA, the
Court has subject-matter jurisdiction over a putative class
action where there is diversity of citizenship and the amount
in controversy exceeds $5,000,000. See Id. One week
later, Spirit filed a motion to dismiss the action on the
merits (the “First Dismissal Motion”).
(See ECF #3.)
12, 2016, the Sandweisses filed a motion to remand this
action to the Wayne County Circuit Court (the “Motion
to Remand”). (See ECF #5.) In the Motion to
Remand, the Sandweisses argued that the Court lacked
subject-matter jurisdiction under CAFA because they were
willing to stipulate that the total damages for the proposed
class would not exceed $5,000,000. (See Id. at Pg.
Court scheduled a hearing on the Motion to Remand for
September 29, 2016. When the parties appeared, they reached a
settlement and placed the terms of the settlement on the
record. (See 9/29/16 Hearing Tr., ECF #10.) The
parties subsequently memorialized the terms of the settlement
and signed a settlement agreement (See ECF #13-3.).
Among other things, the settlement agreement required the
Sandweisses to execute a stipulation for dismissal of this
action with prejudice.
in his capacity as counsel for the Sandweisses, declined to
execute the stipulation. Sandweiss refused to do so because
he believed that Spirit had not complied with other aspects
of the parties’ settlement. Spirit thereafter filed a
“Motion to Dismiss Plaintiffs’ Complaint or
Alternatively Motion to Enforce Settlement Agreement”
(the “Spirit Enforcement Motion”). (See
ECF #13.) In the Spirit Enforcement Motion, Spirit sought
dismissal of this action with prejudice and sanctions against
both the Sandweisses personally and Sandweiss and Herschfus
in their capacity as counsel. (See id.) The
Sandweisses filed a counter-motion to enforce the settlement
agreement on December 19, 2016, based on their understanding
of the terms of the agreement (the “Sandweiss
Enforcement Motion”) (collectively with the Spirit
Enforcement Motion, the “Enforcement Motions”).
(See ECF #17.)
Court held an on-the-record status conference with respect to
the Enforcement Motions on February 27, 2017, and a hearing
on the Enforcement Motions on March 8, 2017.
parties agree that this action should be dismissed with
prejudice. The only issue outstanding is whether the Court
should sanction the Sandweisses and/or their counsel.
the Court can rule on that issue, it must first address the
Motion to Remand and determine whether it has subject-matter
jurisdiction over this action. The Court concludes that it
does. The only ground upon which the Sandweisses claimed that
the Court lacked subject-matter jurisdiction was their
willingness to stipulate that they would not seek more than
$5,000,000 in class damages. However, the Supreme Court held
in Standard Fire Ins. Co. v. Knowles, 133 S.Ct. 1345
(2013), that such a stipulation cannot defeat subject-matter
jurisdiction under CAFA. The Court further agrees with
Spirit’s explanation as to how the amount in
controversy exceeds $5,000,000. (See ECF #8 at
23-31, Pg. ID 210-218.) Thus, the Court is satisfied that it
has subject-matter jurisdiction over this action. It
therefore DENIES the Motion to Remand.
respect to the Enforcement Motions, for the reasons stated on
the record during the March 8, 2017, hearing, the Court
currently believes that sanctions pursuant to 28 U.S.C.
§ 1927 are warranted against Sandweiss in his capacity
as counsel for the Sandweisses. The Court provisionally concludes
that sanctions are appropriate due to Sandweiss’
refusal to execute a signed stipulation dismissing this
action with prejudice – a refusal that
“unreasonably and vexatiously” multiplied these
proceedings. 28 U.S.C. § 1927. However, as set forth
below, the Court will provide Sandweiss the opportunity to
explain why sanctions are not appropriate under 28 U.S.C.
for the reasons stated above, and the reasons stated on the
record at the March 8, 2017, hearing, IT IS HEREBY ORDERED AS
• The Motion to Remand (ECF #5) is DENIED;
• The Sandweiss Enforcement Motion (ECF #17) is DENIED;
• The Spirit Enforcement Motion (ECF #13) is GRANTED to
the extent it seeks dismissal of this action with prejudice,
is DENIED to the extent it seeks sanctions against Mr.
Herschfus, Valarie Sandweiss, and Stuart Sandweiss in his
personal capacity, and IS CONTINUED FOR FURTHER PROCEEDINGS
with respect to Spirit’s request for sanctions against
Stuart Sandweiss in his capacity as counsel for the
Sandweisses. Any such award of sanctions shall be limited to