New CA Settlement Case

Can a derivative action be settled without
express trial court approval?

Last month, the California Court of Appeal decided this important issue:

Norman v. Strateman et al. (2025) __ Cal.App.5th __, 2025 WL 1718303: The Court of Appeal reversed the trial court’s order granting defendants’ motion to enforce a settlement agreement and its order denying plaintiff’s motion to set aside a settlement agreement. After defendants closed Intersango, a start-up cryptocurrency exchange, plaintiff filed a derivative action alleging numerous causes of action against defendants. Defendants later filed a derivative cross-complaint against plaintiff. Before trial the parties entered into a settlement agreement and put it on the record before a settlement judge, not the trial judge. Neither the settlement judge nor the trial judge expressly approved the settlement of the case. When the parties later filed their motions to set aside and enforce the settlement, the trial judge gran...