In the

United States Court of Appeals

For the Seventh Circuit ____________

Nos. 05-2394, 06-1481, 06-2456

MARSEILLES HYDRO POWER LLC,

Plaintiff-Appellee,

v.

MARSEILLES LAND & WATER CO.,

Defendant-Third-Party-Plaintiff-Appellant,

and

FIELD CONTAINER CO. et al.,

Third-Party-Defendants-Appellees.

____________

Appeals from the United States District Court

for the Northern District of Illinois, Eastern Division.

Nos. 00 C 1164, 04 C 1427—Harry D. Leinenweber, Judge.

____________

SUBMITTED NOVEMBER 15, 2006—DECIDED APRIL 9, 2007

____________

Before POSNER, RIPPLE, and WOOD, Circuit Judges.

POSNER, Circuit Judge. Marseilles Hydro, owner of a

hydroelectric plant, brought suit to compel Marseilles

Land & Water—the owner of a canal that supplies the

plant with the water it needs to generate electricity—to

repair the canal. (For the early stages of this protracted

litigation, see our previous opinion reported at 299 F.3d 643
2 Nos. 05-2394, 06-1481, 06-2456

(7th Cir. 2002).) The water company filed a third-party

complaint against three companies, one of which is Field

Container. The district judge granted summary judgment

in favor of the third-party defendants on the ground that

the water company’s claim was barred by the statute of

limitations. The judge certified his order dismissing the

third-party complaint for an immediate appeal, Fed. R.

Civ. P. 54(b), and the water company has appealed. But

the water company and Field have now settled their

dispute—conditional, however, not only on our dismissing

the appeal as to Field (which is unexceptionable), but also

on our vacating so much of the district court’s decision

concerning the third-party complaint as pertains to Field.

The Supreme Court held in U.S. Bancorp Mortgage Co. v.

Bonner Mall Partnership, 513 U.S. 18 (1994), that by agreeing to a settlement the parties to an appeal renounce the

right to challenge the decision that was appealed. The

Court suggested that this rule could be waived in “exceptional circumstances,” but was emphatic that the mere

fact that the settlement was conditional on vacating the

decision appealed from was not an exceptional circumstance. Id. at 29; see also In re Memorial Hospital of Iowa

County, Inc., 862 F.2d 1299, 1300 (7th Cir. 1988). The

water company and Field do not claim exceptional circumstances. But there is a complication: as an alternative to

our vacating the part of the district court’s decision that

pertains to Field, they ask us to remand the case to the

district court for it to consider whether to vacate that part

of its decision under Fed. R. Civ. P. 60(b).

We have the power to order such a remand. U.S. Bancorp

Mortgage Co. v. Bonner Mall Partnership, supra, 513 U.S. at 29;

Pressley Ridge Schools v. Shimer, 134 F.3d 1218, 1222 (4th

Cir. 1998); Nahrebeski v. Cincinnati Milacron Marketing Co.,
Nos. 05-2394, 06-1481, 06-2456 3

41 F.3d 1221 (8th Cir. 1994). And we agree with the court

in American Games, Inc. v. Trade Products, Inc., 142 F.3d 1164,

1168-69 (9th Cir. 1998), that on remand the district court

would not be cabined by the “exceptional circumstances”

test. The Court in Bancorp said that the court of appeals

can remand a case even in the absence of such circumstances, 513 U.S. at 29, which would make no sense if the

district court could not vacate its judgment in that absence.

But cf. Valero Terrestrial Corp. v. Paige, 211 F.3d 112, 116-21

(4th Cir. 2000).

Yet for us to remand in this case might seem to make

little sense because the district court’s action on remand

would pertain only to the dispute between the water

company and Field. The rest of the appeal would be

unaffected, so that the main effect of the remand would be

to delay the resolution of the appeal. Or would it? Remember that the settlement is conditional on the district court’s

dismissing so much of its decision as pertains to Field. If

the district court refuses to dismiss, the settlement may

fall through, and it would be awkward for the appeal to be

proceeding while the identity of the parties to the appeal

remained in doubt. That is a compelling reason not to

remand just the part of the appeal that pertains to the

dispute between the water company and Field, and

retain the rest. It would be better to remand the entire case

under Circuit Rule 57 and, to avoid unnecessary delay,

direct the water company and Field promptly to file in

the district court their motion (presumably under Fed. R.

Civ. P. 60(b)(6), the catch-all provision of Rule 60(b)) to

vacate the relevant part of the judgment. The district

judge would advise us whether it was inclined to grant a

Rule 60(b)(6) motion to vacate its decision regarding

Field, and if it so advised we would then remand the entire case so that the judge could grant the motion.
4 Nos. 05-2394, 06-1481, 06-2456

But—a huge but—it has become apparent, from the

parties’ response to our request for a fuller statement of

why they have conditioned settlement on the vacating of

the district court’s decision pertaining to Field, that their

reason for seeking this relief rests on a misunderstanding.

Remember that there are other third-party defendants

with which the water company—the third-party plaintiff—has not settled. The water company, in its own words

(with which Field concurs), “fears that if the [Field] judgment is not vacated, that judgment would become law of

the case which is no longer subject to appeal. That precedent could in turn preclude appeal of the same issue with

regard to the other third-party defendant . . . . [I]t could

preclude the Appellate Court [i.e., this court] from determining the statute of limitations issue.” (Remember that

the statute of limitations was the basis on which the district

judge dismissed the third-party complaint.) That is incorrect. The doctrine of the law of the case creates a presumption against a court’s reexaming its own rulings in the

course of a litigation. It has no application to the review of

rulings by a higher court. “The doctrine of law of the case

precludes reexamining a previous ruling (unless by a higher

court) in the same case unless it was manifestly erroneous.”

Starcon Int’l, Inc. v. International Brotherhood of Boilermakers,

450 F.3d 276, 278 (7th Cir. 2006) (emphasis added). The

water company cannot be prejudiced, in its litigation with

the other third-party defendants in this court, by a ruling

made by the district court.

The condition on the settlement is pointless, and with the

misunderstanding cleared up we can assume that the

settlement will go through. The relief sought is therefore

DENIED.
Nos. 05-2394, 06-1481, 06-2456 5

A true Copy:

Teste:

 _____________________________

Clerk of the United States Court of 

Appeals for the Seventh Circuit 

USCA-02-C-0072—4-9-07