PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 12

- 4623

PAUL BRYAN; BONNIE BRYAN, Husband and Wife, individually and as Parents and Natural Guardians on behalf of their minor child, KB , and KB, KENNETH BRYAN

v.

ERIE COUNTY OFFICE OF CHILDREN AND YOUTH; PAUL CANCILLA, individually and as an employee of Erie County Office of Children and Youth; CARMEN E. MERRITT, individually and as an employee of Erie County Office of Children and Youth; RENIE SKALKO, individually and as an employee o f Erie County Office of Children and Youth; CINDY BAXTER, individually and as an employee of Erie County Office of Children and Youth; CINDY LEWIS, individually and as an employee of Erie County Office of Children and Youth; BRIGETTE SULLIVAN, individually and as an employee of Erie County Office of Children and Youth; JOHN PETULLA, individually and as an employee of Erie Coun ty Office of
Children and Youth DPW Bureau of Cou nty Children and

Youth Programs
Cindy Baxter and Renie Skalko

,

Appellant s

.

________ _____ On Appeal from the United States District Court
for the Western District of Pennsyl v ania2 ( Case No. 1

- 03

- cv

- 00259 )

District Judge: Honorable Sean J. McLaughlin

_____________ Argued : January 22, 2014

Before: FUENTES and FISHER

, Circuit Judge s , and

STAR K, District Judg e 

(Opinion Filed : May 20 , 2014 )

Pamela V. Colli n s Walsh, Barnes Collins & Zumpella
707 Grant Street
Gulf Tower
Suite 1400 Pittsburgh, PA 15219

Barbara S. Magen Sheila A. Haren [Argued] Post & Schell, P.C. Four Penn Center, 14th Floor 1600 John F. Kennedy Boulevard Philadelphia, PA 19103 Attorneys for Appellants

Jay Paul Deratany [Argued] 221 North LaSalle, Suite 2200 Chicago, IL 60601

Jeffrey G. Mashni

 The Honorable Leonard P. Stark, U.S. District Judge for the District of Delaware, sitting by designation.3 9245 Maple Court Morton Grove, IL 60053

Timothy D. McNair
821 State Street Erie, PA 16501 Attorneys for Appell ees

OPINION

FUENTES

, Circuit Judge

In the midst of trial in the District Court , the parties agreed to a high

- low settlement. Regardless of the verdict, t he Bryan family w as to receive at least $900,000. And regardless
of the verdict, defendants Cin dy Baxter and Renie Skalko

w ere to pay no more than $2.7 million. So when t he jury
returned a n $8.6 million verdi ct for the Bryan s, Baxter and
Ska lko tendered $2.7 million and asked the Bryans to end the
action . T he Bryans refused . They asserted that Baxter and
Skalko had breached the settlement agreement’s confidentiality clause and thereby rendered the deal
unenforceable

. The parties brought their dispute to the
District Court. But the District Court refused to resolve it, reasoning that the Court lacked the subject matter jurisdiction
to decide whether to enforce the parties ’ terms or the jury’s
verdict.

The District Court erred. The parties pres ented their dispute to the D istrict C ourt in order to bring the action to a close. The case had not been dismissed, nor had the jury’s
verdict been marke d satisfied. Indeed, the action remained active and ongoing: the parties continued to litigate the effe ct of the jury ’s verdict up to and after taking this appeal. The4 case should have remained with the District Court . A ncillary jurisdiction exists , for example, for post

- judgment proceedings related to the enforcement of the judgment. Similarly , the Distric t Cou rt had jurisdiction to decide
wh ether or not to enforce the parties’ settlement agreement. A district court’s jurisdiction does not terminate at the moment the jury’s deliberations do.

The parties raise two other matters that we do not decide : (1) t he merits of the Bryan family’s allegation that Baxter and Skalko breached the settlement agreement and (2) Baxter and
Skalko ’s argument that the District Court ought to have granted summary judgment in their favor

. The District Court has not had an opportun ity to consider the first issue and
Baxter and Skalko have not ad d ressed the second issue in light of the trial record . Accordingly, we remand for further proceedings before the District Court.



### I. Background of the Case

A. After the Bryans adopted J.O., he assa ulted one of their children.
During the s ummer of 2001, violence seized the Bryan family household. T heir adopted son

, J.O., repeatedly raped
and molested his younger foster brother, K.B

. , in the room the
bo y s shared together

. After suffering through weeks of abuse,
K.B. eventually told his parents, Paul and Bonnie Bryan. The Bryans then contacted the Erie County Office of Children and
Youth (“ECOCY”)

— the agency that facilitated J.O.’s adoption

— and had J.O. removed from their home.

The Bryans blamed EC OCY f or K.B.’s ordeal

. Among
others employed at EC OCY , the Bryans focused on Renie Skalko and Cindy Baxter. Skalko served as one of J.O.’s5 caseworkers. Baxter helped coordinate the Supportive Host Program , which aimed to transition institutionalized children

,
s uch as J.O., into foster homes

. Through that program, Skalko and Baxter introduced J.O. to the Bryans and, eventually, helped facilitate the adoption. According to the Bryans, however, EC OCY and its employees concealed J.O.’s history during this process

. E C OCY staff had reports of J.O.’s history
of violent behavior and sexual misconduc t , but did not disclose them to the Bryans.

B. Proceedings in the District Court
The Bryans sued ECOCY and seven of its employees pursuant to 42 U.S.C. § 1983 for a violation of their Fourteenth Amendment right to substantive due process

. After an appeal to this Cou rt for permission to amend the complaint, s ee Bryan v. Erie C nty. Office of Children & Youth
Servs. , 293 F. App’x 143 (3d Cir. 2008) , the case proceeded

o n a state

- crea ted danger theory

. That theory of liability permits a plaintiff to recover from state actors when “the state’s own actions create the very danger that causes the plaintiff’s injury.” See Morrow v. Balaski , 719 F.3d 160, 167 (3d Cir. 2013). The Bryans alleg ed that ECOCY employees had placed KB into harm’s way.

The District Court granted summary judgm ent in favor of many defendants. But the Court did not grant summary judgment for Baxter and Skalko on the merits of the Bryans’

state

- created danger claim or on Baxter and Skalko’s qualified immunity defense

. T he Court identified contested questions of fact that deserved the jury’s attention. In particular, t he Court described the conflicting evidence about how much of J.O.’s history Skalko and Baxter knew, how

m uch they told the Bryans, and whether, in light of that6 knowledge, it was prudent to place J.O. into a foster home at all. (App’x 39

- 54, 69.)

C. During trial, the parties agree d to a high

- low
settlement.

The parties tried their case to a jury . During the tria l, the parties reached a “Stipulated to High/Low Agreement.” This agreement constrained the parties’ financial risks by stipulating a recovery range between the low of $900,000 and the high of $2.7 million. If the jury returned a verdict of $900,000 or les s , the Bryans would receive $900,000. If the jury returned a verdict of $2.7 million or more , Skalko and Baxter would pay $2.7 million. If the jury returned a verdict between the high and the low, the parties had to accept that
result. The agreement contem plated that payment would
terminate the action: “Upon payment of any of the aforementioned amount by the Defendants, the verdict is deemed satisfied and any and all of Plaintiffs [sic] claims which are the subject of this lawsuit are dismissed forever and

any and all appellate rights are hereby waived by all the
Plaintiffs ; and d efendants.” (App’x 188.)
In addition to the high

- low terms, the agreement also contained confidentiality provisions. Paragraph 11 required the Bryans to “limit their public comments about ECOCY and the individual ECOCY Defendants” and to “say that the
ECOCY and Defendants di d the right thing by [the Bryan s’ son] and the parties are satisfied with the outcome.” (App’x 188.) Paragraph 15 forb ade the agreement from being
disclosed to th e jury. Paragraph 16 stipulated that “[t] his Agreement shall be CONFIDENTIAL subject to the duties, if any, of the ECOCY and/or its employees under the
Penns ylvania Right to Know Act.” (App’x 189.) And Paragraph 18 required the parties to “put [the] Agreem ent on7 the record with the court to memorialize the same following entry of the verdict or court order disposing of the case.” (App’x 1 8 9.)
The jury returned a verdict of $8,654,769 in favor of the Bryan family. After the jury announced its verdict

, the C ourt and the parties conferenced about what to do next. Skalko and
Baxter stated their intention “to make an oral motion to mold the verdict consistent with our agreement to $2.7 million.” (App’x 742.) After discussing the matter, however, the parties ’ att orneys and the Court agreed to enter a stipulation
of dismissal instead :
[ECOCY ’s Attorney ] : Why don’t we do this. We have an agreement for a high/low that we previously signed, we’re going to issue checks for $2.7 million to you. If you accept that, once we’ve issued the checks, we will file a stipulation of dismissal.

[Bryans ’ Attorney ] : That’s fine.
The Court: All right, we’re done.
(App’x 743

- 4 4.) Shortly after the post

- verdict conference, the District Court entered judgment in favor of the Bryan s in t he
amount of $ 8

, 654

, 769.00.

Defendants’ counsel then tendered $2.7 million to satisfy the agreement. The Bryans accepted the money “ as only partial payment on the judgment.” (Ap p’x 190.) In a letter to Skalko and Baxter, t he Bryans questioned whether Baxt er and Skalko had “violated the terms of the high/low agreement which would render the agreement void or voidable.” ( App’x
190 .) In particular, t he Bryans alleged that Skalko and Baxter,8 or their agents, had disclosed the terms of the agreement to county c ouncilmen.

In response, Skalko and Baxter filed a “Motion to Satisfy
Pursuant to F.R.C.P. 60 ” and a “Motion for Leave to File Rule 59 Motions Under Seal.” (Doc. No s . 361

- 62 .) T he Court directed the parties to brief the settlement dispute, and it
denied Ba xter and Skalko’s motion to file the briefs under
seal . The Court remarked: “I can’t imagine for the life of me why it’s appropriate to file anything under seal.” (App’x 750.) While briefing the Rule 60 motion, Skalko and Baxter also filed a “Motion to Alt er or Amend Judgment Under Rule 59(e), or in the Alternative, Motion for New Trial Under Rule 59(a)(1)(A). ” (Doc. No. 363.) This motion identified numerous trial errors. It also purported to renew Skalko and
Baxter’s argument that they were immune from lia bility.

D. The District Court denied Skalko and Baxter’s motion to enforce the high

- low agreement.

The District Court denied Skalko and Baxter’s post

- trial
motions

. The Court concluded that it lacked “jurisdiction to resolve the dispute relative to the enfor ceability of the agreement.” (App’x 7.) The D istrict C ourt observed that the high

- low agreement “was solely the product of counsels’ efforts with no involvement of the court,” that “[i]t was not made part of the record prior to the case being closed,” and
that the C ourt “did not retain jurisdiction to resolve any dispute arising under it.” (App’x 12.) The District C ourt noted that it denied the motions “ without prejudice to reassert them, as may be appropriate, after a ruling by the state court on the
issue s germane to the alleged breach of the Agreement.” (App’x 12.)9 Skalko and Baxter filed a notice of appe al identifying two specific issues: the District C ourt’s decision regarding jurisdiction and its denial of summary judgment. They did not appeal from th e judgment in favor of the Bryans , or brief the
merits of their Rule 59 motion to amend the judgment or to
receive a new trial

.



### II. Jurisdiction

Defendants Skalko and Baxter’s “Motion to Satisfy
Pursuant to F.R.C.P. 60 ” seeks relief on the grounds that the ju dgment has been “satisfied, released or discharged.” See
Fed. R. Civ. P. 60(b)(5)

. The denial of a Rule 60(b) motion

may or may not constitute a final order. See Penn W

. Assocs.,
Inc. v. Cohen , 371 F.3d 118, 12 3 (3d Cir. 2004). Th e one in
this case does: T he District Court’s de cision , which followed the entry of judgment, ended the litigation on the m erits

. T he
District C ourt had nothing left to do but to execute the judgment it had entered on the record

. See Catlin v. United
States , 324 U.S. 229, 233 (1945 ). We therefore take jurisdiction under 28 U.S.C. § 1291

.10 

### III. Analysis

A. The District Court ’s jurisdiction over the high

- low agreement 1

The District Court properly exercised jurisdiction over the Bryans’ lawsuit because it presented a federal question. See
28 U.S.C. § 1331. The presence of a federal question confer s jurisdiction to a district c ourt for an entire “civil action

. ” Id. As part of its original jurisdiction over an action , a district

court must consider the parties’ post

- trial motions concerning
the trial, the verdict, and the judgment. See Fed. R. Civ. P. 50, 54, 59 , 62

. A district court’s jurisdiction d oes not terminate at the moment the ju ry’s deliberations do

. In certain circumstances, a federal court has jurisdiction to consider claims or to con duct proceedings beyond those raised by the original action i tself

. For example, w hen the parties present “other claims that are so related to claims in the action . . . that they form part of the same case or controversy,” a federal court may exercise sup plemental jurisdiction over them. 28 U.S.C. § 1367. Additionally

, w hen
matters “ incident to the d isposition of the primary matter”
arise before a court , the doctrine of ancillary jurisdiction permits district courts to decide them. United States v. Dunegan , 251 F.3d 477, 478 (3d Cir. 2001). Thus, the limits

1 This Court usually reviews denials of Rule 60 motions for
abuse of discretion. See Budget Blinds, Inc. v. White , 536 F.3d 244, 251 (3d Cir. 2008) . But we review de novo whether the District Court possessed s ubject matter jurisdiction

. See Emerald Investors Trust v. Gaunt Parsippany Partners , 492 F.3d 192, 197 (3d Cir. 2007).11 of a court’s original jurisdiction do not define the limits of the court’s subject matter jurisdiction. W hen a federal court has original jurisdiction over an entire action, it has limited authority to d ecide certain related claim s or conduct incidental proceedings. See generally 13 Charles Alan Wright
& Arthur R. Miller, Fed eral Practice & Proc edure § 3523 (3d ed. 2013 ) (discussing supplemental, ancillary, and pendent jurisdiction

, as well as their limit s ).
A federal court has jurisdiction to decide a Rule 60(b) (5) motion made by a party to a pending action . A Rule 60 motion does not “affect the judgment’s fi nality or suspend its operation, ” s ee Rule 60(c)(2) , so it does not form part of the original act ion

. Indeed, Rule 60(b)(5) motions are used by a judgment

- debtor to relieve itself of a n already

- final judgment that has been satisfied, released, or discharged. See, e.g.

, Sunderland v. City of Philadelphia , 575 F.2d 1089, 1090 (3d Cir. 1978); see also Za mani v. Carnes , 491 F.3d 990, 995

- 96 (9th Cir. 2007); Newhouse v. McCormick & Co., Inc. , 157 F.3d 582, 584 (8th Cir. 1998 ). But that does not mean that a federal court lacks the jurisdiction to decide a Rule 60 (b)(5) motion. To the contrary, a federal cour t may entertain garnishment

, attachment , or other proceedings that “assist in the protection and enforcement of federal judgments.”
Peacock v. Thomas , 516 U.S. 349, 356 (1996) ; see also Fed. R. Civ. P. 64, 69, 70 (providing various post

- judgment
enforcemen t and execution procedures). We conclude that the same ancillary jurisdiction that supports post

- judgment enforcement proceedings supports proceedings to seek relief from the judgment. The jurisdiction to enforce a judgment necessarily includes the jurisdi ction to declare the judgment
satisfied.12 Accordingly, w hen Skalko and Baxter moved pursuant to
Rule 6 0 (b) to relieve themselves from the judgment, the District Court had jurisdiction to decide the motion

. The nature of the defendants’ argument did not coun sel otherwise

. T o show why the Court should grant Rule 60(b) relief, Skalko and Baxter po inted to a high

- low settlement agreement

. And to show why the Court should deny Rule 60(b) relief, the Bryans argued that the agreement had been materially
breached. T rue, these arguments formed a contract dispute
distinct from the federal action . But this contract dispute
stood between the Court and the resolution of the Rule 60 motion, and, by extension, the enforcement of the jury’s verdict on the underlying claim. T he C ourt, t herefore, had ancillary jurisdiction to decide the dispute

. See Dunegan , 251
F.3d at 478

- 79

. The District Court ’s contrary conclusion

— that it lacked the subject matter jurisdiction to consider the enforceability of the high

- low agreement

— r ested o n Kokkonen v. Guardian Life Insurance Co. of America , 511 U.S. 375 (1994)

. There, the U.S. Supreme Court held that a district court does not inherently have subject m atter jurisdiction over disputes concerning “the breach of an agreement that produced th e dismissal of an earlier federal suit.” Id. at 379

. In so doing

,

“ Kokkonen rejected any . . . resort to notion s of ‘inherent power’ as surviving a dismissal order.” Shaffer v. GTE North,
Inc. , 284 F.3d 500, 504 (3d Cir. 2002) (citation omitted)

. Kokkonen did , however, chart a procedure by which the parties could maintain a federal court’s jurisdiction after
dismissal. To do so, the parties had to incorporate the terms of
the settlement into the court’s dismissal order. Thus, “a breach of the agreement woul d be a violation of the order, and ancillary jurisdiction to enforce the agreement would therefore exist.” Kokkonen , 511 U.S. at 381; see In re Phar

-13 Mor, Inc. Secs. Litig. , 172 F.3d 270, 274 (3d Cir. 1999) (applying Kokkonen to conclude that district court lacked subject matter jurisdiction over motion to enforce settlement agreement because it did not incorporate the terms of the
settlement into its dismissal order or otherwise indicate that it retained jurisdiction)

. Kokkonen does not yet have any bearin g on this dispute.
In Kokkonen

, the parties had dismissed their suit; in this case, the parties had not. As the U.S. Court of Appeals for the
District of Columbia Circuit observed, “this distinction is critical.” T Street Dev

. , LLC v. Dereje & Dereje , 586 F.3d 6, 10 (D.C. Cir. 2009). The absence of an ongoing matter within the district court’s original jurisdiction left the district court in
Kokkonen without any basis on which to predicate ancillary jurisdiction

. But here, of course, the Bryans never dismis sed the case, notwithstanding the high

- low agreement. Having frustrated dismissal, and thus maintained the action, the Bryans cannot contend that the District Court lacked jurisdiction to decide whether to enforce the parties’ agreement or the jury’s verdi ct

. Finally, t he procedural consequences of the Distric t Court’s decision underscore its error

. By holding that it lacked jurisdiction over the parties’ settlement agreement, the District Court made the outcome of a federal case contingent on a state proc eeding. W ere we to accept the Bryans ’ argument on appeal, the enforceable worth of the federal judgment would be determined in a state proceeding. That outcome poses an obstacle to efficiency as well as to federalism, and we think it must be undone.14 B. The Di strict Court must decide the other issues in the first instance.
We do not reach the additional issues the parties call to
our attention. Those two issues

— whether Skalko and Baxter breached the settlement agreement and whether Skalko and
Baxter are entitle d to qualified immunity

— ought to be addressed first by the District Court.

As to the breach of contract issue, the District Court has yet to evaluate the merits of the dispute. T his Court “ordinarily decline[s] to consider issues not decided by a
district court, choosing instead to allow that court to consider them in the first instance.” Fores tal Guarani S.A. v. Daros Int’l , Inc. , 613 F.3d 395, 401 (3d Cir. 2010). That policy suits this circumstance. The parties argue about whether Skalko
and Baxter breach ed the agreement by disclosing its terms to third parties . Our record of th o se issues is incomplete and we are, therefore, unable to decide them

. As to qualified immunity, Skalko and Baxter purport to raise that issue before us by taking appeal from the D istrict Court’s denial of their summary judgment motion. But Skalko and Baxter concede that they raised the same immunity argument , in light of the trial record, in their Rule 59 motion
for a new trial

. As a general matter, “[o]nce the case proceeds
to tri al, the full record developed in court supersedes the record existing at the time of the summary judgment motion.” Ortiz v. Jordan , 131 S. Ct. 884, 889 (2011). Skalko and
Baxter have not briefed or argued the merits of the Rule 59 motion, however, so we ne ed not decide it

. Moreover

, Skalko
and Baxter only seek to challenge the District Court’s qualifi ed immunity ruling if the high

- low agreement cannot be enforced . Otherwise, according to the agreement, “any and15 all appellate rights [have been] waived by all the Plaintiffs ; and d efendants.” (App’x 188.)

B ecause Baxter and Skalko have not briefed and argued the Rule 59 dispute, and because Skalko and Baxter may have waived any appeal o f the issue at all, we will not review the qualified immunity defense now

. Rather, we remand with instructions to consider the Rule 59 issues, if appropriate, following the Rule 60 decision.



### IV. Conclusion
When the parties presented the District Court with a dispute about whether or not the judgment had been satisfied,
the District C ourt had the subject matter jurisdiction to decide
it. The District Court’s decision to the contrary rested,
incorrectl y, on the theor y that no settlement agreement fell within a district court’s supplemental jurisdiction unless the court incorporated the terms of the agreement into an order. In ongoing litigation, district courts have the jurisdiction to
decide whether the parties have settled the action or have satisfied the judgment

. Accordingly, w e reverse the District Court’s ruling with respect to it s jurisdiction to consider the high

- low agreement
in the context of the Rule 60 motion. Because the District Court’s evaluation of that motion and the other post

- trial
motions rested on its erroneous conclusion that it lacked jurisdiction to consider the e xistence and meaning of the high

- low agreement, we vacate its order of dismissal. Finally,
we remand to the District Court to consider the remaining post

- trial motions in light of this opinion.