The Inherent Jurisdiction of Federal Courts to Enforce Settlement Agreements in Dismissed Cases

Abstract

This article previws the issues and arguments in Kokkonen v. Guardian Life Insurance Co., on the Supreme Court’s appellate docket for the 1993-94 Term. The primary question before the Court addresses whether a federal district court have inherent or ancillary jurisdiction, after dismissal of a case, to enforce a settlement agreement entered on the record, when the action is no longer pending before the court and there are no independent jurisdictional grounds for federal assertion of enforcement authority?

Federal courts are courts of limited jurisdiction, which means that the jurisdictional reach of federal courts is circumscribed by Article III of the United States Constitution and federal statutes. Broadly speaking, federal courts have the authority to hear cases and controversies arising under their federal question jurisdiction or under diversity jurisdiction. In addition to these constitutional and statutory bases for federal court jurisdiction, the federal courts have developed doctrines of supplemental and ancillary jurisdiction over parties and claims that are related to the case-in-chief.

The Supreme Court has validated these jurisdictional doctrines and, within the last two years, Congress has enacted a supplemental jurisdictional statute. Kokkonen's appeal to the Supreme Court requires the Court to examine whether the doctrine of inherent court power supplies an additional source of federal court jurisdiction.

Kokkonen is a significant case to the extent that the Supreme Court chooses to elaborate on the theory of inherent jurisdiction of the federal courts. In a sense, the adversarial briefs in this case talk past each other: one side (Kokkonen) has framed the central issue in terms of the inherent power of the federal courts, while the other side (Guardian Life) has characterized the central issue as one of ancillary jurisdiction.

The Supreme Court's challenge is to elucidate whether these are separate concepts and, perhaps, more important, whether either theory supports court supervision of a settlement agreement under the particular facts in this case. The broadest question presented by this case relates to the fundamental meaning of the concept of limited jurisdiction. Kokkonen also raises a host of policy questions about the role of federal courts in supervising the enforcement of their own orders and decrees. The Court here is faced with possibly determining whether ordinary settlement agreements are different in kind than consent decrees in institutional litigation. The Court may have to construe whether private-party settlements are more matters of private contract law than public interest law, cases in which federal courts traditionally have engaged in continuing court supervision and implementation.

Keywords: Federal court jurisdiction, ancillary jurisdiction, inherent power of the courts, settlement agreements, enforcement of settlement agreements, Kokkonen v. Guardian Life Ins. Co.