Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-16178/USCOURTS-ca9-12-16178-0/pdf.json

Parties Involved:
A.A.
Appellant
American Diabetes Association
Appellant
K.C.
Appellant
K.F.
Appellant
M.C.
Appellant
Tom Torlakson
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

K.C., by and through Erica C., her

guardian; A.A., by and through

Stacey A., her guardian; M.C., by

and through Laurie C., her guardian;

K.F., by and through Sheree F., her

guardian; AMERICAN DIABETES

ASSOCIATION,

Plaintiffs-Appellants,

v.

TOM TORLAKSON, in his official

capacity as Superintendent of Public

Instruction for the State of

California,

Defendant-Appellee.

No. 12-16178

D.C. No.

3:05-cv-04077-

MMC

OPINION

Appeal from the United States District Court

for the Northern District of California

Maxine M. Chesney, Senior District Judge, Presiding

Argued and Submitted

April 10, 2014—San Francisco, California

Filed August 11, 2014

Before: John T. Noonan, Jacqueline H. Nguyen,

and Paul J. Watford, Circuit Judges.

Opinion by Judge Nguyen

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2 K.C. V. TORLAKSON

SUMMARY*

Ancillary Jurisdiction / Attorneys’ Fees

The panel reversed the district court’s denial, for lack of

jurisdiction, of plaintiffs’ motion for attorneys’ fees for

monitoring defendants’ compliance with a settlement

agreement in an action under the Americans with Disabilities

Act and other statutes concerning services for students with

diabetes in California public schools.

The district court retained limited jurisdiction to enforce

the settlement agreement. Plaintiffs sought attorneys’ fees

after the court’s jurisdiction to enforce the settlement

agreement had expired under the terms of that agreement. 

The panel held that the motion for attorneys’ fees did not seek

to enforce the settlement agreement; consequently, the

conclusion that the district court lacked ancillary jurisdiction

to enforce the settlement agreement was irrelevant. The panel

also held that the district court independently had ancillary

jurisdiction over the post-judgment attorneys’ fees dispute,

irrespective of the fact that the court’s jurisdiction to enforce

the settlement agreement had expired. The panel remanded

for the district court in its discretion to decide whether to

exercise ancillary jurisdiction over the motion for attorneys’

fees.

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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K.C. V. TORLAKSON 3

COUNSEL

Donna Brorby (argued), Law Office of Donna Brorby, San

Francisco, California; Arlene B. Mayerson, Larisa M.

Cummings and Charlotte L. Lanvers, Disability Rights

Education and Defense Fund, Inc., Berkeley, California, for

Plaintiffs-Appellants.

Paul E. Lacy (argued), Deputy General Counsel, Amy Bisson

Holloway, General Counsel, Edmundo Aguilar, Assistant

General Counsel, and Ava C. Yajima, Deputy General

Counsel, California Department of Education, Sacramento,

California, for Defendants-Appellees.

OPINION

NGUYEN, Circuit Judge:

The common-law doctrine of ancillary jurisdiction over

related claims, codified as part of a federal court’s

supplemental jurisdiction under 28 U.S.C. § 1367, is

generally well understood. Yet, as the Supreme Court

observed, the “doctrine of ancillary jurisdiction can hardly be

criticized for being overly rigid or precise,” because the more

obscure doctrine of ancillary jurisdiction over collateral

proceedings remains a matter of case law. Kokkonen v.

Guardian Life Ins. Co. of Am., 511 U.S. 375, 379 (1994); see

13 Charles Alan Wright et al., Federal Practice & Procedure

§ 3523 (3d ed.). The present appeal involves the

latter—ancillary jurisdiction over proceedings related to, but

technically separate from, a federal lawsuit. Under this

doctrine, a federal court may exercise ancillary jurisdiction

over collateral proceedings in two distinct contexts that are

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4 K.C. V. TORLAKSON

relevant here: to enforce a settlement agreement, and to

resolve an attorney’s fees dispute.

Four juvenile plaintiffs, by and through their respective

guardians, and the American Diabetes Association

(collectively, “Plaintiffs”) filed a putative class action against

Jack O’Connell, in his official capacity as Superintendent of

Public Instruction for the State of California,1the State Board

of Education and the California Department of Education

(collectively, “Defendants”). The parties eventually settled,

and the district court retained limited jurisdiction to enforce

their settlement agreement. After the court’s jurisdiction to

enforce the settlement agreement had expired under the terms

of that agreement, Plaintiffs filed a motion seeking attorneys’

fees for monitoring Defendants’ compliance with the

agreement. The district court denied the motion for lack of

jurisdiction on the ground that its jurisdiction to enforce the

settlement agreement had expired.

On appeal, Plaintiffs’ argument is two-fold. First, they

argue that their motion for attorneys’ fees does not seek to

enforce the settlement agreement. Consequently, the

conclusion that the district court lacks ancillary jurisdiction

to enforce the settlement agreement is irrelevant. Second,

they argue that the district court independently has ancillary

jurisdiction over a post-judgment attorneys’ fees dispute,

irrespective of the fact that the court’s jurisdiction to enforce

the settlement agreement has expired. We agree. Therefore,

we reverse and remand.

1 Tom Torlakson subsequently replaced Jack O’Connell as

superintendent.

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K.C. V. TORLAKSON 5

BACKGROUND

In October 2005, Plaintiffs filed a putative class action

alleging that Defendants failed to provide necessary services

for students with diabetes in California public schools. 

Plaintiffs alleged violations of the Americans with

Disabilities Act (“ADA”), 42 U.S.C. § 12131 et seq., Section

504 of the Rehabilitation Act of 1973 (“Section 504”),

29 U.S.C. § 794, and the Individuals with Disabilities

Education Act (“IDEA”), 20 U.S.C. § 1400 et seq.

In July 2007, the parties entered into a settlement

agreement, resolving Plaintiffs’ claims (the “Settlement

Agreement”). On August 8, 2007, “pursuant to the settlement

agreement between the parties, the terms of which [we]re

expressly incorporated [t]herein,” the district court entered an

order of dismissal with prejudice. Under the Settlement

Agreement, Plaintiffs’ attorneys were awarded $400,000 in

fees.2

Under paragraph 14 of the Settlement Agreement, the

district court retained jurisdiction for two and one-half years

from the effective date of the Settlement Agreement, “solely

to rule on any motion filed pursuant either to Paragraph 1.b.

or to Paragraph 10, of [the Settlement Agreement].” The

district court found that the “effective date” of the Settlement

Agreement was July 24, 2007.

On November 18, 2011, almost two years after the district

court’s jurisdiction to enforce the Settlement Agreement had

 

2

 Separately, Plaintiffs’ pro bono co-counsel were awarded $30,000 in

costs, waiving a claim for potential attorneys’ fees in excess of

$1,800,000.

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expired, Plaintiffs filed a motion for an additional

$288,627.41 in attorneys’ fees, pursuant to the ADA,

42 U.S.C. § 12205, Section 504, 29 U.S.C. § 794a(b), and the

IDEA, 20 U.S.C. § 1415(i)(3)(B), “for their work monitoring

implementation of the settlement with the California

Department of Education in this matter.”

On April 20, 2012, the district court denied Plaintiffs’

motion for lack of jurisdiction. The court ruled that the

Settlement Agreement limited the “time within which the

Court may entertain a motion for such fees,” and that the time

had expired. On May 15, 2012, Plaintiffs timely appealed.

JURISDICTION

The district court had jurisdiction pursuant to 28 U.S.C.

§ 1331. We have jurisdiction pursuant to 28 U.S.C. § 1291. 

Cf. Balla v. Idaho, 677 F.3d 910, 915 (9th Cir. 2012)

(“Periodic fee awards for monitoring compliance with a final

judgment are appealable [under Section 1291] if the award

disposes of the attorneys’ fee issue for the work performed

during the time period covered by the award.”).

STANDARDS OF REVIEW

“A district court’s decision to deny attorney’s fees is

reviewed for an abuse of discretion.” United States v. One

1997 Toyota Land Cruiser, 248 F.3d 899, 903 (9th Cir. 2001). 

“An abuse of discretion occurs if the district court based its

decision on an erroneous legal conclusion or a clearly

erroneous finding of fact.” Andrew v. Bowen, 837 F.2d 875,

877 (9th Cir. 1988). “Any elements of legal analysis and

statutory interpretation that figure in the district court’s

attorneys’ fees decision are reviewed de novo.” Barrios v.

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K.C. V. TORLAKSON 7

Cal. Interscholastic Fed’n, 277 F.3d 1128, 1133 (9th Cir.

2002). Here, “[t]he existence of subject matter jurisdiction is

a question of law that we review de novo.” Marin Gen. Hosp.

v. Modesto & Empire Traction Co., 581 F.3d 941, 944 (9th

Cir. 2009).

DISCUSSION

I

The “doctrine of ancillary jurisdiction . . . recognizes

federal courts’ jurisdiction over some matters (otherwise

beyond their competence) that are incidental to other matters

properly before them.” Kokkonen, 511 U.S. at 378. Broadly

speaking, federal courts exercise ancillary jurisdiction “for

two separate, though sometimes related, purposes: (1) to

permit disposition by a single court of claims that are, in

varying respects and degrees, factually interdependent; and

(2) to enable a court to function successfully, that is, to

manage its proceedings, vindicate its authority, and effectuate

its decrees.” Id. at 379–80 (emphases added).

The first and well-known purpose—ancillary jurisdiction

over factually interdependent claims—is codified as part of

28 U.S.C. § 1367. See Peacock v. Thomas, 516 U.S. 349, 354

n.5 (1996) (“Congress codified much of the common-law

doctrine of ancillary jurisdiction as part of ‘supplemental

jurisdiction’ in 28 U.S.C. § 1367.”). That purpose, however,

is not relevant here.

This case instead involves the second, less common

purpose—ancillary jurisdiction over collateral proceedings. 

Nat’l City Mortgage Co. v. Stephen, 647 F.3d 78, 85 (3d Cir.

2011) (“Ancillary jurisdiction is a common law doctrine that

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8 K.C. V. TORLAKSON

survived the codification of supplemental jurisdiction in

28 U.S.C. § 1367.”); see 13 Charles Alan Wright et al.,

Federal Practice & Procedure § 3523.2 (3d ed.)

(differentiating “supplemental jurisdiction over claims

asserted in federal court” from “jurisdiction over related

proceedings that are technically separate from the initial case

that invoked federal subject matter jurisdiction” (emphasis in

original)).

As the Tenth Circuit has explained, this less common

exercise of non-statutory ancillary jurisdiction “rests on the

premise that a federal court acquires jurisdiction of a case or

controversy in its entirety. Incident to the disposition of the

principal issues before it, a court may decide collateral

matters necessary to render complete justice.” Jenkins v.

Weinshienk, 670 F.2d 915, 918 (10th Cir. 1982).

In particular, this appeal turns on the distinction between

a court’s ancillary jurisdiction to enforce a settlement

agreement and its ancillaryjurisdiction over collateral matters

such as an attorney’s fees dispute.

II

A

We first address a court’s authority to enforce settlement

agreements. Federal courts “have no inherent power to

enforce settlement agreements entered into by parties

litigating before them.” Arata v. Nu Skin Int’l, Inc., 96 F.3d

1265, 1268 (9th Cir. 1996) (citing Kokkonen, 511 U.S. at

378). Rather, courts have ancillary jurisdiction to enforce a

settlement agreement only “if the parties’ obligation to

comply with the terms of the settlement agreement ha[s] been

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K.C. V. TORLAKSON 9

made part of the order of dismissal—either by separate

provision (such as a provision ‘retaining jurisdiction’ over the

settlement agreement) or by incorporating the terms of the

settlement agreement in the order.” Kokkonen, 511 U.S. at

381.

In the event the settlement agreement is breached, the

court would have ancillary jurisdiction that arises from

breach of the court’s dismissal order. Id.; see also Alvarado

v. Table Mountain Rancheria, 509 F.3d 1008, 1017 (9th Cir.

2007) (stating that where “the dismissal order incorporates

the settlement terms, or the court has retained jurisdiction

over the settlement contract . . . . the party seeking

enforcement of the settlement agreement must allege a

violation of the settlement agreement in order to establish

ancillary jurisdiction” (citing Kokkonen, 511 U.S. at 381–82,

and O’Connor v. Colvin, 70 F.3d 530, 532 (9th Cir. 1995)).

B

In this case, there is no dispute that the terms of the

parties’ Settlement Agreement “had been made part of the

order of dismissal . . . by incorporating the terms of the

settlement agreement in the order.” Kokkonen, 511 U.S. at

381. Further, the district court specifically retained

jurisdiction over the Settlement Agreement. Consequently,

any breach of the Settlement Agreement “would be a

violation of the order, and ancillary jurisdiction to enforce the

agreement would therefore exist.” Id.

As the district court noted, the Settlement Agreement, and

the court’s order incorporating its terms, “limit[ed] the

Court’s exercise of that jurisdiction in both time and

manner.” The district court retained jurisdiction for two and

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one-half years from the effective date of the Settlement

Agreement—that is, until January 24, 2010—“solely to rule

on any motion filed pursuant either to Paragraph 1.b. or to

Paragraph 10, of [the Settlement Agreement].” Because

Plaintiffs’ motion for attorneys’ fees was filed well after that

date, and was not filed pursuant to either Paragraph 1.b. or

Paragraph 10, the district court correctly concluded that it has

no ancillary jurisdiction to enforce the parties’ Settlement

Agreement.

III

That conclusion, however, does not end the matter. The

dispositive question is whether the court nevertheless has

ancillary jurisdiction over Plaintiffs’ motion for attorneys’

fees, even though it no longer has jurisdiction to enforce the

Settlement Agreement. To answer that question, we turn to

the case law regarding ancillary jurisdiction over a postjudgment attorney’s fees dispute.

A

1

There is no debate that a federal court properly may

exercise ancillary jurisdiction “over attorney fee disputes

collateral to the underlying litigation.” Fed. Sav. &Loan Ins.

Corp. v. Ferrante, 364 F.3d 1037, 1041 (9th Cir. 2004)

(citing cases); White v. N.H. Dep’t of Employment Sec.,

455 U.S. 445, 454 (1982) (discussing postjudgment motion in

which the plaintiff sought attorney’s fees, as the prevailing

party under 42 U.S.C. § 1988, four and one-half months after

the parties had signed a settlement agreement and the district

court had approved a consent decree); Sprague v. Ticonic

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K.C. V. TORLAKSON 11

Nat’l Bank, 307 U.S. 161, 164 (1939) (“Allowance of such

costs in appropriate situations is part of the historic equity

jurisdiction of the federal courts.”); Schmidt v. Zazzara,

544 F.2d 412, 414 (9th Cir. 1976) (quoting Sprague, 307 U.S.

at 164); Wright et al., supra, §3523.2 (“One of the bestestablished uses of ancillary jurisdiction is over proceedings

concerning costs and attorney’s fees.”).

Moreover, such ancillary jurisdiction exists even after the

underlying litigation has concluded. Cooter & Gell v.

Hartmarx Corp., 496 U.S. 384, 395 (1990). As the Supreme

Court explained, “motions for costs or attorney’s fees are

‘independent proceeding[s] supplemental to the original

proceeding and not a request for a modification of the original

decree.’” Id. (quoting Sprague, 307 U.S. at 170). “Thus,

even ‘years after the entry of a judgment on the merits’ a

federal court could consider an award of counsel fees.” Id. at

395–96 (quoting White, 455 U.S. 451 n.13); see also Zucker

v. Occidental Petroleum Corp., 192 F.3d 1323, 1329 (9th Cir.

1999) (“No Article III case or controversy is needed with

regard to attorneys’ fees . . . because they are but an ancillary

matter over which the district court retains equitable

jurisdiction even when the underlying case is moot.”); Reiser

v. Del Monte Props. Co., 605 F.2d 1135, 1140 (9th Cir. 1979)

(“[A]n attorneys’ fees question ancillary to the case survives

independently under the court’s equitable jurisdiction.”

(citing Schmidt, 544 F.2d at 414)); United States v. Ford,

650 F.2d 1141, 1143–44 (9th Cir. 1981) (same); Carter v.

Veterans Admin., 780 F.2d 1479, 1481 (9th Cir. 1986) (same

(citing Ford, 650 F.2d at 1143–44)).

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2

Importantly, a district court’s ancillary jurisdiction over

an attorney’s fees dispute is inherent and broader than its

ancillary jurisdiction to enforce a settlement agreement. The

Second Circuit’s decision in In re Austrian & German Bank

Holocaust Litigation, 317 F.3d 91 (2d Cir. 2003), is

illustrative. There, the parties had settled a complicated class

action lawsuit and agreed that attorneys’ fees would be

awarded pursuant to the decision of two arbitrators. Id. at

92–97. Certain class members objected to the arbitrators’

eventual fee award. Id. at 96–97. The district court found

that it lacked jurisdiction and denied the petition for fee

forfeiture. Id. at 97. The Second Circuit affirmed on

different grounds, but disagreed on the jurisdictional

question. Id. at 92.

In its discussion, the Second Circuit differentiated

between ancillary jurisdiction to enforce the agreement and

ancillary jurisdiction over the collateral fee dispute, stating:

Appellees contend that the District Court

lacked jurisdiction . . . because the

Consolidated Complaint had been dismissed

without any reservation of continuing court

authority. They rely on [Kokkonen], which

held that a district court lacks ancillary

jurisdiction to enforce a settlement agreement

after the underlying lawsuit has been

dismissed unless the parties agree to such

continuing authority or the court retains

jurisdiction for such purpose. In Appellees’

view, because the fees were provided pursuant

to the German Compact, any review of fees

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K.C. V. TORLAKSON 13

would constitute a review of the Compact,

which would amount to an attempt to enforce

a settlement in violation of Kokkonen.

. . . .

We disagree. [The objectors are] not

seeking to implement any aspect of the

German Compact or any of its constituent

parts. [They are] not contending, as did the

claimants in Kokkonen, that some provision of

a settlement (here, the Compact or its

components) obligates the Appellees to take

the action [the objectors seek]. Rather, [the

objectors] merely seek[] to adjudicate a

lawyer’s entitlement to retain fees earned, at

least in part, for services rendered in

connection with a case within a district court’s

jurisdiction.

Id. at 97–99 (citations omitted).

B

Likewise, here, Plaintiffs are “not seeking to implement

any aspect” of the Settlement Agreement or “any of its

constituent parts.” Id. at 99. Nor are they “contending . . .

that some provision” of the Settlement Agreement or “its

components[] obligates” Defendants to payattorneys’ fees for

the monitoring of post-settlement compliance. Id. Instead,

they argue that they are the “prevailing party” under the

relevant federal statutes—e.g., the ADA, Section 504, and the

IDEA—and seek to collect attorneys’ fees on this basis. As

such, the fact that the district court lacks ancillary jurisdiction

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14 K.C. V. TORLAKSON

to enforce the Settlement Agreement under Kokkonen is

irrelevant.

The district court’s error was in failing to recognize the

distinction between ancillary jurisdiction to enforce a

settlement agreement and ancillary jurisdiction over an

attorney’s fees dispute. As discussed above, the district court

has broad, inherent authority over collateral matters such as

attorney’s fees, and such ancillary jurisdiction extends

beyond dismissal of the underlying lawsuit. See, e.g.,

Ferrante, 364 F.3d at 1041 (citing cases); Zucker, 192 F.3d

at 1329; see also In re Austrian & German Bank Holocaust

Litig., 317 F.3d at 98 (“Whenever a district court has federal

jurisdiction over a case, it retains ancillary jurisdiction after

dismissal to adjudicate collateral matters such as attorney’s

fees.” (discussing Cooter & Gell, 496 U.S. 384)).

Consequently, while the Settlement Agreement (as

incorporated into the district court’s dismissal order) limited

the district court’s ancillary jurisdiction to enforce the terms

of the parties’ settlement, it did not affect the court’s ancillary

jurisdiction over an attorney’s fees dispute. Unlike its

ancillary jurisdiction to enforce the Settlement Agreement,

the court’s ancillary jurisdiction over Plaintiffs’ motion for

attorneys’ fees need not have been explicitly “retained.”

In Schmidt, we rejected the defendant’s argument that the

district court had erred in “retaining jurisdiction over the

question of attorney’s fees after the consent judgment had

been entered.” 544 F.2d at 414. We reasoned that

“[a]llowance of attorney’s fees ‘is part of the historic equity

jurisdiction of the federal courts,’ and the district court could

properly retain jurisdiction to determine appropriate

attorney’s fees ancillary to the case.” Id. (citing Sprague,

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K.C. V. TORLAKSON 15

307 U.S. at 164). But neither Schmidt nor any other case

requires that a district court explicitly “retain” ancillary

jurisdiction to adjudicate a post-judgment motion for

attorney’s fees. See In re Austrian & German Bank

Holocaust Litig., 317 F.3d at 97–99 (concluding that the

district court had ancillary jurisdiction over the fee dispute

even though the complaint “had been dismissed without any

reservation of continuing court authority”); cf. Peacock, 516

U.S. at 356 (“We have reserved the use of ancillary

jurisdiction in subsequent proceedings for the exercise of a

federal court’s inherent power to enforce its judgments.”). 

Similarly, Defendants have identified no authority for the

proposition that a district court’s dismissal order can divest

(or otherwise impose a time limit upon) the court’s inherent

jurisdiction over a collateral attorney’s fees dispute. See

Cooter & Gell, 496 U.S. at 396 (“Like the imposition of

costs, attorney’s fees, and contempt sanctions, the imposition

of a Rule 11 sanction is not a judgment on the merits of an

action. Rather, it requires the determination of a collateral

issue . . . . Such a determination may be made after the

principal suit has been terminated.”).

It bears repeating that Plaintiffs are seeking attorneys’

fees pursuant to federal law. This is not an attorney-client fee

dispute that could be resolved in state court as a breach of

contract claim. As the Seventh Circuit has said, “[t]he

purpose of the ancillary jurisdiction of the federal courts . . .

is to enable a federal court to render a judgment that resolves

the entire case before it and to effectuate its judgment once it

has been rendered.” Shapo v. Engle, 463 F.3d 641, 644–45

(7th Cir. 2006). “It is not to enable a federal court to

encroach on the jurisdiction reserved to the states merely

because the parties would prefer to have a federal court

resolve their future disputes . . . .” Id. at 645.

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Moreover, even assuming that Plaintiffs could recast their

motion as a claim for attorneys’ fees in a separate federal

lawsuit, it is not “necessary” for them to do so. Schmidt,

544 F.2d at 414 (citation and internal quotation marks

omitted). Requiring a separate lawsuit – that hypothetically

would invoke federal question jurisdiction – not only would

interfere with the district court’s powers to render a judgment

that resolves the entire case and to effectuate its judgment,

but also would harm judicial economy and efficiency. 

Practically speaking, any such separate “attorneys’ fees only”

lawsuit likely would be referred to the district judge who

presided over the underlying lawsuit anyway.

Thus, we hold that the district court has ancillary

jurisdiction over Plaintiffs’ motion for attorneys’ fees.

IV

Our holding is limited to the jurisdictional question. 

Whether Plaintiffs are entitled to attorneys’ fees is a question

for the district court on remand. See Reiser, 605 F.2d at 1140

(“We . . . express no opinion concerning the propriety of an

award in this case, a matter within the discretion of the trial

judge.”).

Further, the exercise of ancillary jurisdiction over an

attorney’s fees dispute is discretionary. See In re Austrian &

German Bank Holocaust Litig., 317 F.3d at 101 (“We have

previously recognized that the existence of ancillary

jurisdiction to adjudicate a fee dispute after the dismissal of

a lawsuit calls for the sound exercise of a district court’s

discretion whether to entertain the merits of the dispute

. . . .”); cf. Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991)

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K.C. V. TORLAKSON 17

(“Because of their very potency, inherent powers must be

exercised with restraint and discretion.”).

CONCLUSION

On remand, the district court in its discretion will decide

whether to exercise ancillary jurisdiction over Plaintiffs’

motion for attorneys’ fees.

We need not address any other arguments raised on

appeal.

REVERSED and REMANDED.

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