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Ageitos v. North Shore Country Club

September 15, 2009

PEDRO AGEITOS, PLAINTIFF,
v.
NORTH SHORE COUNTRY CLUB, DEFENDANT.



The opinion of the court was delivered by: Pitman, United States Magistrate Judge

OPINION AND ORDER

I. Introduction

By an undated notice of motion filed on December 10, 2008 (Docket Item 16), plaintiff seeks an Order pursuant to Fed.R.Civ.P. 60(b) "permit[ting] this matter [to] be returned to the calendar in order to ensure that the Defendant meets its obligation under the stipulation of settlement [i]n the above entitled matter." The parties have consented to my exercising plenary jurisdiction pursuant to 28 U.S.C. § 636(c). For the reasons set forth below, plaintiff's motion is denied for lack of subject-matter jurisdiction.

II. Facts

The facts relevant to the disposition of plaintiff's motion can be briefly stated. Plaintiff was formerly employed by defendant as a sous chef, and was fired. He commenced this action on March 15, 2006, alleging that he was the victim of age discrimination. In June 2006, the parties consented to my exercising jurisdiction for all purposes.

In the first quarter of 2007, the parties engaged in settlement discussion, and it is undisputed that the parties reached an agreement in early April of that year to settle the matter for a payment of $12,000 from defendant to plaintiff. As a result of the parties' settlement, I issued an Order on April 11, 2007 (Docket Item 15), closing the matter. My Order pro- vided:

The parties having reported the resolution of this matter, it is hereby ORDERED that the complaint in this matter is dismissed with prejudice and without costs, subject to being reinstated within sixty (60) days of the date of this order for good cause shown.

There is no dispute that the $12,000 was never paid, but the parties do dispute why the settlement was never carried out. Plaintiff claims that he executed the releases and other documents defendant required to close the matter and that defen- dant, nevertheless, unreasonably delayed proceedings and refused to make payment. Defendant claims that it sent a release to plaintiff's counsel on April 17, 2007, but that plaintiff's counsel failed to execute it within sixty days. Defendant claims that plaintiff's failure to return the executed release within sixty days of my April 11, 2007 Conditional Order of Dismissal absolves it of all liability under both plaintiff's age discrimination claim and the settlement agreement.*fn1

III. Analysis

Plaintiff is not seeking to reopen this action to litigate the merits of his claim. Rather plaintiff is seeking to reopen this matter to enforce the parties' settlement agreement. Unambiguous precedent from the Supreme Court teaches that, under the circumstances of this case, the Court lacks subject-matter jurisdiction to provide this relief.*fn2

In Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375 (1994), plaintiff sued in state court for breach of contract; defendant removed the action to federal court on the basis of diversity. After the trial commenced, but before the jury reached a verdict, the parties entered into a settlement.

The parties read the terms of the settlement into the record in the presence of the assigned judge and a stipulation and order of dismissal was entered pursuant to Fed.R.Civ.P. 41(a)(1)(ii). 511 U.S. at 376-77. The stipulation and order of dismissal did not reserve the Court's jurisdiction to enforce the settlement. 511 U.S. at 377. The parties subsequently became involved in a dispute over whether the settlement required plaintiff to return certain materials to defendant, and defendant moved in the District Court to enforce the settlement. 511 U.S. at 377. Plaintiff opposed the motion, asserting that the District Court lacked subject-matter jurisdiction to grant the relief sought. 511 U.S. at 377. The District Court entered an Order enforcing the settlement, relying on its "inherent power" to do so. 511 U.S. at 377. The United States Court of Appeals for the Ninth Circuit affirmed, finding that a District Court had the power to enforce settlement agreements in matters before it pursuant to its "'inherent supervisory power.'" 511 U.S. at 377.

The Supreme Court reversed, finding that the District Court lacked subject-matter jurisdiction to enforce the settlement. After noting that federal courts are courts of limited jurisdiction and that the presumption in any case is that subject-matter jurisdiction does not exist, 511 U.S. at 377, the Court found that Rule 41(a)(1)(ii) did not provide a basis for subject-matter jurisdiction. 511 U.S. at 378. The Court then noted that defendant, like the plaintiff here, was not seeking to reopen the action to litigate the merits of the claims and counterclaims; rather, the plaintiff was seeking to enforce the settlement agreement. 511 U.S. at 378. "Enforcement of the settlement agreement, however, whether through award of damages or decree of specific performance, is more than just a continuation or renewal of the dismissed suit, and hence requires its own basis for jurisdiction." 511 U.S. at 378.

The Court then examined whether the doctrine of ancil- lary jurisdiction, which invests federal courts with power to decide matters that are "incidental to other matters properly before them," provided a basis for subject-matter jurisdiction, and answered the question with a qualified no. 511 U.S. at 378- 79. The Court found that federal courts were generally authorized to exercise ancillary jurisdiction when it was necessary to do so "(1) to permit disposition by a single court of claims that are, in varying respects and degrees, factually interdependent . . . and (2) to enable a court to function successfully, that is, to manage its proceedings, vindicate its authority, and effectuate its decrees . . . ." 511 U.S. ...


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