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Ahlborn Structural Steel, Inc., A California Corporation v. T.B. Penick & Sons

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA


October 18, 2012

AHLBORN STRUCTURAL STEEL, INC., A CALIFORNIA CORPORATION, PLAINTIFF,
v.
T.B. PENICK & SONS, INC., A CALIFORNIA CORPORATION; SAFECO INSURANCE COMPANY OF AMERICA, A WASHINGTON CORPORATION,
DEFENDANTS.

The opinion of the court was delivered by: Garland E. Burrell, Jr. Senior United States District Judge

DISMISSAL ORDER

On October 17, 2012, the parties filed a "Motion for Leave to Enter Final Order by Agreement," in which they request leave to file an attached proposed judgment dismissing the action by reason of settlement. (ECF No. 21.) The proposed judgment states in its entirety as follows:

The Court has been advised by counsel that this action has been settled, or is in the process of being settled. Therefore, it is not necessary that the action remain upon the calendar of the Court.

It is therefore ordered that the action is dismissed without prejudice. The Court retains complete jurisdiction to vacate this order and to reopen the action upon cause shown that settlement has not been completed and further litigation is necessary[.]

(ECF No. 21-1.)

The parties have not shown justification for the federal court to exercise jurisdiction over a confidential settlement agreement that the Court has not seen and "have [not] alleged . . . facts that would justify [exercising ancillary] federal jurisdiction over [any potential] settlement dispute." O'Connor v. Colvin, 70 F.3d 530, 532 (9th Cir. 1995). "[T]he mere fact that the parties agree that the court [shall] exercise continuing jurisdiction is not binding on the court." Arata v. Nu Skin Intern., Inc., 96 F.3d 1265, 1269 (9th Cir. 1996) (citing Cal. v. La Rue, 409 U.S. 109, 112 n.3 (1972)); Collins v. Thompson, 8 F.3d 657, 659 (9th Cir. 1993)("A federal court may refuse to exercise continuing jurisdiction [over a settlement agreement] even though the parties have agreed to it. Parties cannot confer jurisdiction by stipulation or consent.")(citations omitted); O'Connor, 70 F.3d at 532 ("In Kokkonen[], the Supreme Court held that federal courts do not have inherent or ancillary jurisdiction to enforce a settlement agreement simply because the subject of that settlement was a federal lawsuit.")(citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 381 (1994)). Therefore, the parties' conclusory request that the federal court exercise ancillary jurisdiction over their settlement is denied.

Further, in light of the parties' settlement of this action, and since they evince their intent to have this action dismissed without prejudice, this action is dismissed without prejudice. See Eitel v. McCool, 782 F.2d 1470, 1472-73 (9th Cir. 1986) ("[T]he parties' . . . representations to the court agreeing to a dismissal . . . constituted a voluntary stipulated dismissal under Rule 41(a)(1)(ii). The district court did not err in ordering the dismissal."); see also Oswalt v. Scripto, Inc., 616 F.2d 191, 195 (5th Cir. 1980)(stating "[n]or are we deterred from finding a stipulated dismissal by the fact that there is no formal stipulation of dismissal entered in the record by [the parties]," if it is obvious that is what the parties intended).

20121018

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