Opinion ID: 201473
Heading Depth: 2
Heading Rank: 4

Heading: Fafel's Motion for Relief

Text: 8 Fafel did not appeal from the issuance of the injunction. On October 30, 2003, approximately one month after the 30-day time limit for filing a notice of appeal had passed, Fafel, represented by new counsel, filed a Motion to Vacate the Judgment and Reopen the Case Due to an Unauthorized Acceptance of an Offer of Judgment. He claimed that his former attorney had acted contrary to [Fafel's] specific instruction that [his attorney] not accept an offer of judgment to the extent that it would dispose of [Fafel's] claims in Massachusetts Court. In his motion, Fafel estimated that he would be owed $457,000 in back pay as of June 30, 2003, under the state court's judgment and stated that [i]t simply would not have made sense to accept a $150,000 offer of judgment in Federal Court, to the extent that it would have [led] to a waiver of the lucrative judgment in State Court worth $457,000 plus reinstatement. Fafel then alleged that his former attorney had been instructed not to accept the offer to the extent that it called for a release of the state law claims. In his prayer for relief, Fafel requested that the court [w]ithdraw the injunction that prevents Plaintiff from pursuing remedies in State Court for the April 2000 termination. 9 The magistrate judge considering this motion held an evidentiary hearing on February 24, 2004, and issued a report and recommendation on April 14, 2004. The magistrate judge construed the motion as one for relief from judgment under the catch-all provision of Federal Rule of Civil Procedure 60(b)(6), which permits a district court to grant relief for any other reason [not set forth in Rule 60(b)(1)-(5)] justifying relief from the operation of the judgment. 10 The magistrate judge first addressed Fafel's failure to appeal the issuance of the injunction. Reciting the bedrock rule that Rule 60(b)(6) cannot, and should not, be used to [circumvent] time limits available to take an appeal, the magistrate judge stated: To the extent that plaintiff was of the view that the district judge ... improperly or improvidently granted the defendant the injunctive relief sought, he could have filed an appeal ... within thirty (30) days after the injunctive relief was ordered. The magistrate judge concluded, quoting Cotto v. United States, 993 F.2d 274, 278 (1st Cir.1993), that [P]laintiff's current Motion to Reopen ... is nothing more than an attempt to `... escape the consequences of failure to take a timely appeal.' 11 Nevertheless, the magistrate judge went on to address Fafel's motion on the merits. Based on the evidence presented during the hearing, he determined that Fafel  did give [his attorney] actual authority to accept the offer of judgment, knowing full well that ... there was a downside risk in acceptance of the offer. Accordingly, the magistrate judge recommended denial of Fafel's motion to vacate the Rule 68 judgment on the merits. 12 Then, after noting that [n]either side ... ha[d] addressed [Fafel's] prayer for relief requesting withdrawal of the injunction enforcing the Rule 68 judgment (as distinct from Fafel's request for relief from the Rule 68 judgment itself), the magistrate judge recommended sua sponte that the district court vacate the injunction because this court always must be vigilant about subject-matter jurisdiction. 5 The magistrate judge explained that DiPaola's motion to enforce the Rule 68 judgment must be [t]reated as a breach of contract suit between non-diverse parties governed solely by state law, over which the district court lacked jurisdiction once the court had disposed of Fafel's § 1983 suit. The magistrate judge then quoted extensively from the Supreme Court's opinion in Kokkonen v. Guardian Life Insurance Co. of America, 511 U.S. 375, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). There, the Court held that a federal district court lacked subject-matter jurisdiction to enforce a settlement agreement for which part of the consideration was the filing of a stipulation of voluntary dismissal pursuant to Fed.R.Civ.P. 41(a)(1)(ii). 6 The Court held that the settlement agreement at issue in Kokkonen, which provided no independent basis for federal jurisdiction, could only be enforced in federal court pursuant to the court's ancillary jurisdiction if the dismissal order either (1) incorporated the terms of the settlement agreement or (2) contained a provision, with the parties' consent, expressly reserving jurisdiction to enforce the agreement. Id. at 381-82, 114 S.Ct. 1673. 13 In the instant case, the magistrate judge reasoned, the district court had employed neither of the measures set forth in Kokkonen. Instead, [t]he Order of Dismissal previously entered [on May 15, 2003], and the formal judgment later entered [on June 11, 2003], did not purport to condition the dismissal on compliance with the terms of the offer of judgment. Nor did [they] purport to retain jurisdiction over the case to enforce the settlement. 7 As a result, the magistrate judge concluded, the district court lacked subject-matter jurisdiction to enforce the terms of the Rule 68 offer purporting to satisfy all claims made and relief sought by the plaintiff against the defendant arising from or related to [his] April 2000 termination. 14 DiPaola filed a limited objection to the magistrate judge's report and recommendation relating to subject-matter jurisdiction. The district court then issued the following margin order on April 30, 2004: 15 I adopt the Report and Recommendation except with respect to the recommendation that I lack subject matter jurisdiction to enforce the offer of judgment by an injunction. I believe I have jurisdiction to issue the injunction. See Utility Automation 2000 Inc. v. Choctawhatchee Electric Cooperative, 298 F.3d 1238, 1248-49 (11th Cir.2002). 16 The district court denied Fafel's motion for reconsideration of its jurisdictional ruling on May 24, 2004. Fafel now appeals only from that portion of the court's decision rejecting the magistrate judge's recommendation to vacate the injunction for lack of subject-matter jurisdiction.