Opinion ID: 691389
Heading Depth: 3
Heading Rank: 2

Heading: District Court Jurisdiction to Enforce the Settlement

Text: The district court had jurisdiction over the underlying action between Hagestad and Tragesser based on diversity of citizenship. 28 U.S.C. Sec. 1332(a)(1). That basis for jurisdiction, however, does not necessarily extend to the order now on appeal. In Kokkonen v. Guardian Life Ins. Co., --- U.S. ----, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994), the Court held that a proceeding to enforce a settlement requires its own basis for jurisdiction, i.e., a district court does not retain inherent or ancillary subject matter jurisdiction to enforce a settlement simply because the dismissal of a federal action served as part of the consideration for the settlement agreement. Id. at ---- - ----, 114 S.Ct. at 1676-77. 3 When the parties' compliance with the terms of the settlement or the court's retention of jurisdiction over the settlement are included in the terms of the dismissal order, however, a breach of the agreement violates that order and the court has ancillary jurisdiction to enforce the agreement. Id. at ----, 114 S.Ct. at 1677. At the time the civil case was settled, it is clear that the district court intended to retain jurisdiction. It stated at the settlement conference: I will act as a czar with regard to the drafting of the settlement papers and the construction of this settlement and the execution of this settlement. And that means that if there is any dispute that is brought to me by counsel, I will decide the matter according to proceedings which I designate in the manner that I designate, and that decision will be final without any opportunity to appeal. That it believed it had continuing jurisdiction to enforce the agreement is also clear from its order of January 28, 1993: As part of the settlement agreement, plaintiff agreed not to provide evidence to prosecute the Oregon State Bar complaint filed against defendant and to take any and all reasonable actions to prevent that matter from proceeding. The parties also agreed that the terms and conditions of the settlement agreement were to remain confidential and not disclosed to anyone. The parties further agreed that all questions relating to their rights and duties under the agreement would be determined exclusively by the undersigned. It is equally clear, however, that the district court did not retain jurisdiction over the settlement. 4 As noted, the Dismissal neither expressly reserves jurisdiction nor incorporates the terms of the settlement agreement. As the Court stated in Kokkonen: The situation would be quite different if the parties' obligation to comply with the terms of the settlement agreement had been made part of the order of dismissal--either by separate provision (such as a provision retaining jurisdiction over the settlement agreement) or by incorporating the terms of the settlement agreement in the order. In that event, a breach of the agreement would be a violation of the order, and ancillary jurisdiction to enforce the agreement would therefore exist. That, however, was not the case here. The judge's mere awareness and approval of the terms of the settlement agreement do not suffice to make them part of his order. Id. Because the district court did not have jurisdiction to enforce the settlement, the order of January 28, 1993, must be vacated and all proceedings to enforce the settlement must be dismissed.