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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

LARRY McIVER AND HOLLYNN DELIL, )

)

Plaintiffs, ) CIV. S-04-1616 GEB DAD

)

v. ) ORDER DISMISSING ACTION

)

NATIONAL SEATING AND MOBILITY; )

MARTIN D. AND JANET M. SOUZA )

FAMILY REVOCABLE TRUST; and )

DOES 1-25, Inclusive, )

)

Defendants. )

)

On April 30, 2005, the parties filed a “Stipulation and

Proposed Order for Dismissal” (“Proposed Order”). The Proposed Order

would have the Court “incorporating by reference” the parties’ “Mutual

Release And Settlement Agreement” (“Settlement Agreement”), even

though this Settlement Agreement has not been filed or otherwise shown

to the Judge. Further, the Proposed Order erroneously assumes that

the Court will exercise jurisdiction over a settlement agreement which

the Court has not seen. Regarding this, the parties state that they

“stipulate to the Court retaining jurisdiction to enforce the Mutual

Release And Settlement Agreement.” The parties also evince their

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intention to have this action dismissed with prejudice, since

Plaintiffs “move to dismiss with prejudice the lawsuit against

Defendants,” and “Defendants . . . agree to the dismissal with

prejudice”; and the parties state as their conclusion they “so

stipulate.” 

The parties’ stipulation to dismiss the action with

prejudice presents the issue whether the federal court would have

jurisdiction to enforce the parties’ Settlement Agreement after this

dismissal is effectuated. The Seventh Circuit addressed this issue in

Jessup v. Luther, 277 F.3d 926, 929 (7th Cir. 2002) as follows: “once

a suit is dismissed with prejudice the judge loses all power to

enforce the terms of the settlement that may lie behind that

dismissal. The settlement is just another contract to be enforced in

the usual way, that is, by a fresh suit.” 

While it is recognized that federal jurisdiction can be

exercised over certain settlements, exercising jurisdiction is not

automatic; settlement contracts must be analyzed for determination

whether the exercise of jurisdiction over them is “essential to the

conduct of federal-court business.” Kokkonen v. Guardian Life Ins.

Co. of Am., 511 U.S. 375, 382 (1994). This determination cannot be

made when the Judge has not seen the Settlement Agreement. Of course,

“the mere fact that the parties agree that the court should exercise

. . . jurisdiction [over their Settlement Agreement] is not binding on

the court.” Arata v. Nu Skin Int’l, Inc., 96 F.3d 1265, 1269 (9th

Cir. 1996). Therefore, jurisdiction will not be exercised over the

parties’ Settlement Agreement. 

Because the parties stipulate that they have settled this

action and it is to be dismissed with prejudice, and since nothing in

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their Proposed Order indicates their settlement is contingent upon the

Court retaining jurisdiction, this action is dismissed with prejudice

under Federal Rule of Civil Procedure 41(a)(1). See Oswalt v.

Scripto, Inc., 616 F.2d 191, 194 (5th Cir. 1980) (revealing that when

the parties’ representations of settlement are tantamount to a

stipulated dismissal, a dismissal order should issue). The Clerk of

the Court is directed to close this action.

IT IS SO ORDERED.

Dated: May 9, 2005

/s/ Garland E. Burrell, Jr.

GARLAND E. BURRELL, JR.

United States District Judge

Dated: May 9, 2005

/s/ Garland E. Burrell, Jr.

GARLAND E. BURRELL, JR.

United States District Judge

Case 2:04-cv-01616-GEB-DAD Document 28 Filed 05/09/05 Page 3 of 3