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Legal Memorandum: Retention of Jurisdiction

Issue: Whether a trial court that either incorporates a settlement agreement into the dismissal order or explicitly retains jurisdiction over a settlement agreement after, has jurisdiction over dismissal.

Area of Law: Litigation & Procedure
Keywords: Jurisdiction; Dismissal order; Settlement agreement
Jurisdiction: Federal, Virgin Islands
Cited Cases: 36 F.3d 447; 185 F. Supp. 2d 1340; 271 F.3d 633; 511 U.S. 375; 314 F.3d 99; 213 F. Supp. 2d 439; 921 A.2d 427; 547 A.2d 1247
Cited Statutes: Rule 41(a)(1)(ii)
Date: 07/01/2007

Over a decade ago, the United States Supreme Court addressed the very issue of whether a trial court that either incorporates a settlement agreement into the dismissal order or explicitly retains jurisdiction over a settlement agreement after, has jurisdiction over dismissal.  In Kokkonen v. Guardian Life Insurance Co. of America, 511 U.S. 375 (1994), the Court answered this question positively, holding that when an order governing and dismissing a settlement agreement meets one of two criteria, the trial court’s jurisdiction continues.

[W]hen, as occurred here, the dismissal is pursuant to Rule 41(a)(1)(ii) (which does not by its terms empower a district court to attach conditions to the parties’ stipulation of dismissal) we think the court is authorized to embody the settlement contract in its dismissal order or, what has the same effect, retain jurisdiction over the settlement contract) if the parties agree.

Id. at 381-82 (emphasis added).

After Kokkonen, the federal courts of appeals have held that the trial court “retain[s] jurisdiction by including language in its dismissal order that gave the parties the right to reopen the judgment if a settlement was not consummated within sixty days.”  Re/Max Int’l, Inc. v. Realty One, Inc., 271 F.3d 633, 643 (6th Cir. 2001) (citing Bell v. Schexnayder, 36 F.3d 447 (5th Cir. 1994)).  In Re/Max, the court of appeals held that the district court’s order satisfied the second Kokkonen exception:  There was language indicating that the court contemplated a continued […]

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