NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

COVVES, LLC, 

Plaintiff-Appellant, 

 v. 

TARGET BRANDS, INC., a Minnesota 

Corporation; et al., 

Defendants-Appellees, 

and 

BIGMOUTH INC., an Indiana Corporation;

et al., 

Defendants.

No. 21-55077 

D.C. No. 

2:18-cv-08518-RGK-AFM 

MEMORANDUM*

Appeal from the United States District Court

for the Central District of California

R. Gary Klausner, District Judge, Presiding

Submitted January 14, 2022**

Pasadena, California

Before: M. SMITH and OWENS, Circuit Judges, and S. MURPHY, III,*** District 

* This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

** The panel unanimously concludes this case is suitable for decision 

without oral argument. See Fed. R. App. P. 34(a)(2).

FILED

JAN 21 2022

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
2 

Judge.

Appellant Covves, LLC sued Appellee Target and other retailers for patent 

infringement; two manufacturers indemnified and defended the retailers. Shortly 

before trial, all the parties settled the case.

In their settlement agreement, the manufacturers agreed to fully indemnify 

the retailers and pay Covves an undisclosed sum to be made in seven payments. 

Covves agreed to dismissal of the action without prejudice and to a dismissal with 

prejudice after the manufacturers’ final payment. The parties then filed a “Joint 

Stipulation of Voluntary Dismissal Without Prejudice” under Federal Rule of Civil 

Procedure 41(a)(1)(A)(ii); in it, the parties requested that the district court retain 

jurisdiction to enforce the settlement agreement. The district court did not issue 

any order subsequent to the filing of stipulation.

Ten months later, Covves moved for relief from the joint stipulation. 

Covves wanted to reopen the case under the parties’ settlement agreement and 

under Civil Rule 60. Covves believed the manufacturers breached the agreement

by failing to make a timely settlement payment, but the district court denied the 

motion. And the district court also denied Covves’s motion for reconsideration.

We review both orders for abuse of discretion. See Keeling v. Sheet Metal 

*** The Honorable Stephen Joseph Murphy III, United States District 

Judge for the Eastern District of Michigan, sitting by designation.
3 

Workers Int’l Ass’n, Loc. Union 162, 937 F.2d 408, 410 (9th Cir. 1991) (decision 

to vacate a dismissal); Bateman v. U.S. Postal Serv., 231 F.3d 1220, 1223 (9th Cir. 

2000) (Rule 60(b) motion denial); Bliesner v. Commc’n Workers of Am., 464 F.3d 

910, 915 (9th Cir. 2006) (motion for reconsideration denial). “A district court 

abuses its discretion if it does not apply the correct law or if it rests its decision on 

a clearly erroneous finding of material fact.” Bateman, 231 F.3d at 1223 (citation 

omitted).

The district court did not abuse its discretion when it denied the motion to 

reopen. A district court lacks jurisdiction to enforce a settlement agreement that is 

the basis for a dismissal unless the court expressly incorporates the terms of the

settlement agreement in an order to dismiss the case. See Kokkonen v. Guardian 

Life Ins. Co. of Am., 511 U.S. 375, 378–81 (1994). A district court will therefore 

have jurisdiction only if it expressly retains jurisdiction over a case after 

settlement, or if a violation of the court’s order arises. “The settlement terms must 

be part of the dismissal . . . for violation of the settlement agreement to amount to a 

violation of the court’s order.” O’Connor v. Colvin, 70 F.3d 530, 532 (9th Cir. 

1995) (citing Kokkonen, 511 U.S. at 381). Because the district court did not issue 

an order that reserved jurisdiction over the case or incorporated the settlement 

terms, it did not retain jurisdiction after the dismissal. Without a dismissal order 

incorporating the settlement terms, “enforcement of the settlement agreement is for 
4 

state courts, unless there is some independent basis for federal jurisdiction.”

Kokkenon, 511 U.S. at 376, 381–82 (holding that even though the parties to the 

principal breach of contract suit were diverse, the district court did not have 

“automatic jurisdiction” over the alleged breach of the settlement agreement).

The district court did not abuse its discretion when it refused to vacate the 

dismissal under Civil Rule 60(b)(6). “Generally, only ‘extraordinary 

circumstances’ justify relief under the rule.” Keeling, 937 F.2d at 410 (citation

omitted). A district court must find that events leading to a settlement agreement’s 

repudiation were “sufficiently extraordinary” to reopen a case. Id. (finding that 

based on “specific acts,” the repudiation was “perceived as bad faith 

noncompliance”). Repudiation alone is not an extraordinary circumstance 

warranting Rule 60(b)(6) relief. See id. at 410. Indeed, “[i]n the usual course upon 

repudiation of a settlement agreement, the frustrated party may sue anew for 

breach of the agreement and may not . . . reopen the underlying litigation after 

dismissal.” Id.

The district court did not find that the manufacturers acted in bad faith or 

that any other extraordinary circumstances warranted reopening the case. Because

Covves argued only that repudiation triggered Rule 60(b)(6) relief, the district 

court did not abuse its discretion when it rejected the argument. 

As for the motion for reconsideration, Covves appealed only the district 
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court’s finding that no extraordinary circumstances existed to support Rule 

60(b)(6) relief. The district court found that it properly denied Rule 60(b)(6) relief 

given that Covves was not prevented from enforcing the settlement in a new 

lawsuit. That finding was not an abuse of discretion because no circumstances 

were beyond Covves’s control that “prevented or rendered [Covves] unable to 

prosecute[ its] case[].” Cmty. Dental Servs. v. Tani, 282 F.3d 1164, 1168 (9th Cir. 

2002) (citation omitted).

Last, the district court did not err in finding that Target’s opposition to the 

motion to reopen the case was not evidence of bad faith. Target raised meritorious 

defenses in a lawsuit against it, and so the district court's finding that Target did 

not act in bad faith was not clearly erroneous. 

The district court’s orders on appeal are AFFIRMED.