RESPONDENT:Guardian Life Insurance Company of America
LOCATION:Pomona Police Department
DOCKET NO.: 93-263
DECIDED BY: Rehnquist Court (1993-1994)
LOWER COURT: United States Court of Appeals for the Ninth Circuit
CITATION: 511 US 375 (1994)
ARGUED: Mar 01, 1994
DECIDED: May 16, 1994
Frank C. Morris, Jr. – on behalf of the Respondents
Michael J. Jencks – on behalf of the Petitioner
Media for Kokkonen v. Guardian Life Insurance Company of America
Audio Transcription for Opinion Announcement – May 16, 1994 in Kokkonen v. Guardian Life Insurance Company of America
Harry A. Blackmun:
I have the opinion of the Court to announce in Kokkonen versus Guardian Life Insurance Company.
That case comes to us on writ of certiorari to the United States Court of Appeals for the Ninth Circuit.
Petitioner, Kokkonen, brought a suit against Guardian Life Insurance Company in State Court alleging state claims arising out of Guardian’s termination of him as one of its insurance agents.
Guardian removed the case to the Federal District Court on diversity grounds and filed state law counterclaims.
The parties settled their dispute and, pursuant to Federal Rule of Civil Procedure 4(a)(1)(ii), executed a stipulation and order of dismissal with prejudice signed by the district judge which did not refer to the settlement agreement nor did it reserve District Court jurisdiction to enforce the settlement agreement.
Afterward, a dispute arouse as to Kokkonen’s obligations under the settlement agreement and Guardian filed a motion in the Federal District Court to enforce it.
Kokkonen opposed the motion on the ground that the court lacks subject matter jurisdiction.
The District Court entered an enforcement order asserting that it had what it called inherent power to do so.
The Court of Appeals agreed and affirmed.
In the unanimous opinion announced today, we reverse the judgment of the Ninth Circuit.
Federal District Courts possess only that power authorized by Constitution and statute.
No federal statute provides jurisdiction to enforce a settlement agreement merely because that agreement is part of the consideration for dismissal of a federal suit.
The doctrine of ancillary jurisdiction also does not support jurisdiction in this settling.
Since the facts to be determined with regard to the alleged breach of contract are quite separate from the facts that were at issue in the principal suit.
An automatic jurisdiction over such settlement contracts is in no way essential to the conduct of Federal Court business.
If the parties wish to provide for the court’s jurisdiction to enforce a settlement agreement that results in dismissal, they can seek to do so.
In the event of dismissal pursuant to Federal Rule of Civil Procedure 41(a)(2), the Court may in its discretion make the parties compliance with the terms of the settlement agreement or retention of jurisdiction over the agreement part of its order.
When dismissal occurs pursuant to Rule 41(a)(1)(ii), as was the case here, the District Court is empowered with the consent of the parties to incorporate the settlement agreements in the order or to retain jurisdiction over the settlement contract itself.
Absent such action, however, enforcement of the settlement agreement is for State Courts unless there is some independent basis for federal jurisdiction.
Accordingly, the judgment of the Court of Appeals is reversed, as I indicated earlier.
The opinion is unanimous.