                                                                 NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 _____________

                                 Nos. 12-3893 & 12-4419
                                      ____________

           A. P., A MINOR, BY AND THROUGH RASHEENA PHINISEE,
                      PARENT AND NATURAL GUARDIAN;
                    RASHEENA PHINISEE, IN HER OWN RIGHT,
                                 Appellants

                                            v.

                           UNITED STATES OF AMERICA
                                   ___________

                     On Appeal from the United States District Court
                        for the Eastern District of Pennsylvania
                                  (No. 2-10-cv-01253)
                      Magistrate Judge: Honorable Jacob P. Hart*

                   Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
                                  February 13, 2014
                                   ____________

            Before: CHAGARES, SHWARTZ, and GARTH, Circuit Judges.

                                (Filed: February 21, 2014)

                                      ____________

                                        OPINION
                                      ____________




*
  All parties consented to the exercise of jurisdiction by Magistrate Judge Hart pursuant
to 28 U.S.C. § 636(c) and Fed. R. Civ. P. 73.
                                             1
CHAGARES, Circuit Judge.

       Rasheena Phinisee, on her own and on behalf of her minor daughter A. P.

(together, the “plaintiffs”), appeal the Magistrate Judge‟s orders granting the

Government‟s motion to enforce settlement and approving a petition to compromise

minor‟s action and allocate settlement funds, as well as the Magistrate Judge‟s orders

denying reconsideration of those orders. For the reasons that follow, we will affirm.

                                               I.

       Because we write solely for the benefit of the parties, we will only briefly

summarize the essential facts. The plaintiffs filed a medical malpractice suit against the

United States under the Federal Tort Claims Act (“FTCA”) on March 22, 2010. The

plaintiffs allege that A. P. developed biliary atresia, a disorder that causes liver failure, as

a result of A. P.‟s ingestion through breast milk of Macrobid, a medication prescribed for

Phinisee at a federally-funded health care clinic on May 15, 2008. With the parties‟

consent, the case was referred to United States Magistrate Judge Jacob P. Hart (the

“Magistrate Judge”) and scheduled for an April 30, 2012 bench trial. On April 11, 2012,

the Magistrate Judge granted the Government‟s motion to bifurcate the trial as to liability

and damages. The Government also moved for summary judgment, on the grounds that

the plaintiffs could not establish the causal element of their negligence claim.

       While the Government‟s summary judgment motion was pending, on April 19,

2012, the parties1 attended a settlement conference conducted by Magistrate Judge


1
 Phinisee attended the conference with her attorneys Derek Layser and Gilbert Spencer.
The Government was represented by Assistant United States Attorneys.
                                               2
Thomas J. Rueter. After almost a day of negotiations, Magistrate Judge Rueter informed

the plaintiffs‟ counsel that the Government had offered to settle the case for $1.2 million.

With Phinisee‟s authorization, her counsel accepted the offer. All parties were aware that

the settlement was subject to final approval by the Assistant Attorney General for the

Civil Division. See 28 U.S.C. § 2677; 28 C.F.R. §§ 0.160(a)(2), 0.168.

       The day after the conference, Phinisee informed Spencer by telephone that she had

decided to retract her acceptance because she had discovered that the settlement

proceeds, which were to be placed in a special needs trust for the benefit of A. P., were

subject to a lien held by the Pennsylvania Department of Public Welfare (“DPW”) for

past medical expenses paid through Medicaid in the gross amount of $703,491.25.

Appendix (“App.”) 480, 488.2 Phinisee reiterated her opposition to the settlement in

follow-up emails to Spencer on April 23, 24, and 25, 2012. On April 26, 2012, one week

after the settlement conference, the Government emailed the written settlement

agreement to Layser and Spencer. Also on April 26, Phinisee faxed to Judge Rueter a pro

se “Motion to Reopen Civil Action.” Phinisee discharged her counsel the next day.

       On May 15, 2012, the Government filed a motion to enforce settlement. The court

held an evidentiary hearing on the motion to enforce on June 6, 2012.3 Phinisee, who

was represented by new counsel, testified that she had never been informed of the DPW


2
  DPW administers Medicaid in Pennsylvania and is accordingly authorized to recover
the reasonable value of benefits provided under the program from liable third parties.
E.D.B. ex rel. D.B. v. Clair, 987 A.2d 681, 684 (Pa. 2009) (citing 62 Pa. Cons. Stat. Ann.
§§ 201, 1409(b)(1)).
3
  In advance of the hearing, the Government filed a Notice that the Acting Assistant
General for the Civil Division had approved the settlement. App. 255-56.
                                             3
Medicaid lien and, upon learning of its existence, no longer believed that the

Government‟s offer adequately protected A. P. The plaintiffs additionally argued that the

April 19 conference could not have resulted in a binding settlement because the

Government‟s offer was contingent upon its ability to obtain approval from the Assistant

Attorney General, and because her counsel had misled her into dropping claims brought

in her own name. Layser and Spencer — each of whom possesses decades of experience

in the field of medical malpractice — testified that liens are involved in “virtually every”

case, and that they “definitely” discussed the Medicaid lien with Phinisee on the day of

the conference. App. 285, 294, 328-29, 335, 338. Layser and Spencer further testified

that Phinisee was “happy” to “get it done,” and, after discussing the pros and cons of the

$1.2 million offer, she “enthusiastically” authorized them to accept it. App. 294, 335-36.

         The Magistrate Judge granted the Government‟s motion to enforce settlement on

August 6, 2012. The plaintiffs‟ former counsel filed a petition for minor‟s compromise4

on August 8, 2012. The plaintiffs did not respond to the petition, and the Magistrate

Judge approved it on September 4, 2012. The plaintiffs moved for reconsideration of

both rulings. The Magistrate Judge denied the plaintiffs‟ motions for reconsideration.

The plaintiffs timely appealed the Magistrate Judge‟s orders: (1) granting the

Government‟s motion to enforce settlement; (2) denying reconsideration of its

enforcement ruling; (3) approving the petition for minor‟s compromise and distributing

settlement proceeds; and (4) denying reconsideration of the distribution order.

                                             II.

4
    See Local Rule 41.2 (E.D. Pa. rev. Dec. 2013).
                                              4
         The District Court had subject matter jurisdiction pursuant to the Federal Tort

Claims Act (“FTCA”), 28 U.S.C. §§ 1346(b), 2679, and 28 U.S.C. § 1331. We have

jurisdiction under 28 U.S.C. § 1291. Ordinarily, we review the denial of a motion for

reconsideration for an abuse of discretion. N. River Ins. Co. v. CIGNA Reinsurance Co.,

52 F.3d 1194, 1203 (3d Cir. 1995). However, “[b]ecause an appeal from a denial of a

[m]otion for [r]econsideration brings up the underlying judgment for review, the standard

of review varies with the nature of the underlying judgment.” McAlister v. Sentry Ins.

Co., 958 F.2d 550, 552-53 (3d Cir. 1992). Where the underlying judgment was “based in

part upon the interpretation and application of a legal precept,” our review is plenary.

United States v. Herrold, 962 F.2d 1131, 1136 (3d Cir. 1992). To the extent that the

Magistrate Judge‟s order was based on its factual conclusions, we review under a “clearly

erroneous” standard. Id.; see also Tiernan v. Devoe, 923 F.2d 1024, 1031 n.5 (3d Cir.

1991).

                                              III.

         The plaintiffs first argue that “no evidence” supports the Magistrate Judge‟s

finding that an oral settlement agreement was reached on April 19, 2012. Pls.‟ Br. 9-12.

We apply Pennsylvania law to the enforceability of the parties‟ settlement agreement.

See Tiernan, 923 F.2d at 1033 & n.6. The enforceability of settlement agreements is

determined by general principles of contract law. Storms ex rel. Storms v. O‟Malley, 779

A.2d 548, 557 (Pa. Super. Ct. 2001). “As with any contract, it is essential . . . that the

minds of the parties should meet upon all the terms, as well as the subject-matter, of the



                                               5
[settlement agreement].” Mazzella v. Koken, 739 A.2d 531, 536 (Pa. 1999) (quotation

marks omitted).

       The record in this case is replete with evidence, which the Magistrate Judge

credited, that: the Assistant United States Attorneys offered to settle the case for $1.2

million;5 Judge Rueter conveyed that offer to the plaintiffs‟ then-counsel; Phinisee

instructed her counsel to accept the offer; and counsel did so. See App. 9 (citing App.

370, 382). The Magistrate Judge also found — and the plaintiffs do not challenge on

appeal — that the plaintiffs‟ counsel informed Phinisee about the existence and

significance of the Medicaid lien on the settlement proceeds. Because there was a

meeting of the minds upon all the terms and subject matter of the settlement, the

Magistrate Judge correctly held that a contract was formed on the day of the settlement

conference. Cf. Taylor v. Stanley Co. of Am., 158 A. 157, 159 (Pa. 1932).

       The plaintiffs next argue that, even if there were a settlement agreement, it was

tentative because it was conditioned upon the approval of the Assistant Attorney General,

and “[a] conditional offer has no legal or binding effect.” Pls.‟ Br. 12. The enforceability

of the parties‟ settlement agreement may be “obfuscated to some extent” by the

5
 The plaintiffs contend that the Government‟s offer was invalid because the Assistant
United States Attorneys lacked “actual authority” to bind the Government. See Pls.‟ Br.
9-12. The “actual authority” requirement is an additional prerequisite for the effective
formation of federal government contracts — not settlement agreements to which the
Government happens to be a party. See, e.g., Hanlin v. United States, 316 F.3d 1325,
1328 (Fed. Cir. 2003). As previously discussed, state law governs the effect of a
purported release from liability under the FTCA. Tiernan, 923 F.2d at 1033 & n.6; see
also Reo v. U.S. Postal Serv., 98 F.3d 73, 77 (3d Cir. 1996) (“[T]he rules governing
settlement of minor‟s claims are embedded in the traditional state-law domain of
contract, agency, and family law.”). Therefore, the plaintiffs‟ reference to federal
government contracts law is inapt.
                                              6
ratification requirement. Ostman v. St. John‟s Episcopal Hosp., 918 F. Supp. 635, 644

(E.D.N.Y. 1996); see 28 U.S.C. §§ 516-519, 2677; 28 C.F.R. §§ 0.160(a)(2), 0.168(d).

Contrary to the plaintiffs‟ position, however, a valid bilateral contract may arise “even

though the promise of one party to perform is qualified by a condition other than the

performance of the other party,” provided that “the condition [does] not make the

promise illusory or enable the promis[o]r to avoid performance at will.” Main Line

Theatres, Inc. v. Paramount Film Distrib. Corp., 298 F.2d 801, 804 (3d Cir. 1962); see

also Restatement (Second) of Contracts §§ 76, 224. “An implied obligation to use good

faith is enough to avoid the finding of an illusory promise.” In re Cendant Corp. Litig.,

264 F.3d 286, 300 (3d Cir. 2001) (quotation marks omitted).

       By agreeing to the settlement of the plaintiffs‟ action, the parties also implicitly

agreed that both the plaintiffs‟ and the Government‟s interests would be served by

awarding the plaintiffs $1.2 million in exchange for the plaintiffs releasing the

Government from liability under the FTCA. That the Government did, in fact, exercise

good faith is illustrated by the Assistant Attorney General‟s approval of the settlement

one month later. Because the condition of approval did not render the Government‟s

offer of settlement illusory, the Magistrate Judge correctly found that the April 19, 2012

settlement agreement was enforceable. See Ostman, 918 F. Supp. at 644 (an enforceable

contract was reached during the settlement conference despite the need for ratification,

which the court construed as “an implied condition precedent to the maturation of the

remaining duties under the settlement agreement”).



                                              7
       “[T]he federal government, though not independent of the court‟s authority, is also

not like any other litigant.” United States v. U.S. Dist. Court for N. Mariana Islands, 694

F.3d 1051, 1059 (9th Cir. 2012). Indeed, it would be “highly impractical, if not

physically impossible,” for the Assistant Attorney General to prepare for and appear at all

settlement conferences for all cases that he possesses the authority to settle. Id.; see also

In re Stone, 986 F.2d 898, 905 (5th Cir. 1993) (district court abused its discretion by

routinely requiring a Government representative with “ultimate settlement authority” to

be present at all pretrial or settlement conferences).

       “Settlement[s] of matters in dispute are favored by the law and must, in the

absence of fraud and mistake, be sustained. Otherwise any settlement agreement will

serve no useful purpose.” Greentree Cinemas, Inc. v. Hakim, 432 A.2d 1039, 1041 (Pa.

Super. Ct. 1981). There being no evidence of either fraud or mistake, we hold that the

Magistrate Judge did not erroneously grant the Government‟s motion to enforce.6

                                             IV.




6
  Because the parties entered a binding contract on April 19, 2012, we need not address
the plaintiffs‟ argument that the Assistant Attorney General‟s ratification was “a nullity”
due to the plaintiffs‟ having “retracted” their acceptance in the days following the
settlement conference. Pls.‟ Br. 12-13. The plaintiffs‟ final argument — that the
Magistrate Judge “has not ruled on” Phinisee‟s individual, “parental claim” for damages,
Pls.‟ Br. 14-15 — also fails. Even assuming that such a claim is cognizable, it was
extinguished by the settlement agreement. See App. 321, 323, 349-50.
        The plaintiffs also appeal the Magistrate Judge‟s order denying their motion for
reconsideration. We will affirm the order because, as the Magistrate Judge concluded,
their reconsideration motion merely “attempt[ed] to convince the court to rethink its
decision,” App. 22, and we have concluded that the Magistrate Judge‟s decision was
correct.
                                              8
       The plaintiffs also challenge the Magistrate Judge‟s grant of the petition for

minor‟s compromise. The plaintiffs specifically argue that the court‟s approval of the

petition denied them procedural due process because it was filed by attorneys whom they

had previously discharged. The plaintiffs also argue that the petition was legally

“deficient.” Pls.‟ Br. 9. Rule 41.2(a) of the Local Rules of the United States District

Court for the Eastern District of Pennsylvania provides that, “[n]o claim of a minor . . .

shall be compromised, settled, or dismissed unless approved by the court.” Rule 41.2(b)

and (c) further prohibit the distribution of proceeds, counsel fees, costs, or expenses out

of any fund obtained for a minor without court approval. To assure that the child‟s

interests are protected, a petition for minor‟s compromise “should include all relevant

facts and the reasons why the guardian of the minor believes that a settlement is desirable

and in the minor‟s best interest to discontinue, compromise, or settle the action.” Klein v.

Cissone, 443 A.2d 799, 802 (Pa. Super. Ct. 1982); see also Reo, 98 F.3d at 76 (courts

“uniformly” look to state law to determine the validity of settlements entered between the

Government and an FTCA claimant). The court, by contrast, “must concern itself with

the concrete issues of „causation‟ and „proof.‟” Klein, 443 A.2d at 803.

       We summarily reject the plaintiffs‟ argument that they were deprived of due

process. As the Magistrate Judge observed, although the petition was filed by the

plaintiffs‟ former counsel, the filing was appropriate because the same attorneys had

obtained the settlement. App. 28. Moreover, the petition was filed on August 8, 2012

and served upon new counsel. Thus, to the extent that a court‟s approval of minor‟s

compromise could constitute a deprivation of life, liberty, or property, the plaintiffs in

                                              9
this case were given ample notice of the petition and an opportunity to be heard. The

plaintiffs neither responded to the petition nor requested an extension of time for filing a

response, but rather moved for reconsideration two weeks after the petition was

approved. App. 27. Under Pennsylvania law, “[a] client ratifies [her] attorney‟s act if

[s]he does not repudiate it promptly upon receiving knowledge that the attorney has

exceeded his authority.” Yarnall v. Yorkshire Worsted Mills, 87 A.2d 192, 193 (Pa.

1952) (emphasis added).

       We also reject the plaintiffs‟ contention that the petition was substantively

inadequate. While not expansive, the petition set forth reasons why settlement was

appropriate, such as the complexity of the medical issues involved and “numerous

causation defenses” raised by the Government. App. 480. At the evidentiary hearing on

the motion to enforce, the Magistrate Judge similarly opined that, if the case were to

proceed to the scheduled bench trial, it would not be a “slam dunk” for the plaintiffs in

light of the “mountains of dueling experts,” “not the least of which are dueling experts on

whether the medicine that the child was given was the reason for the liver failure.” App.

279-80. The Magistrate Judge emphasized these concerns in denying the plaintiffs‟

motion for reconsideration — observing that, in light of the Government‟s medical expert

testimony, the plaintiffs “ran a very meaningful risk of obtaining no recovery at all.”

App. 27-28. As the ultimate fact finder, the Magistrate Judge was in the best position to

assess whether the settlement protected A. P.‟s best interests. The Magistrate Judge

found that it did. We cannot conclude that this finding was erroneous.

                                             V.

                                             10
For the foregoing reasons, the Magistrate Judge‟s orders will be affirmed.




                                    11
