## Facts

- George Neary, a cattle rancher, sued the Regents of the University of California and three UC Davis veterinarians for libel based on a University report attributing cattle illness and deaths to Neary’s deficient ranch management.
- Neary contended the cattle were harmed by pesticide spraying by governmental agencies rather than by his management practices.
- A jury returned a verdict for Neary and awarded $7 million in damages.
- The University appealed and Neary filed a cross-appeal.
- While the appeals were pending, the parties settled: the University agreed to pay $3 million, and the parties stipulated to dismiss the appeals with prejudice, vacate (or reverse) the trial court judgment, and dismiss the action in the trial court.
- The Court of Appeal refused to set aside the trial court judgment merely to implement the settlement.
- The California Supreme Court granted review to determine whether appellate courts should grant stipulated requests to set aside judgments to implement settlements.

## Issues

1. Whether a California Court of Appeal should generally grant a joint, settlement-conditioned request to reverse or vacate a civil trial court judgment pending appeal.
2. What showing, if any, permits an appellate court to deny stipulated reversal or vacatur in the face of a settlement agreement.

## Decision

- The California Supreme Court reversed the Court of Appeal.
- It held that, as a general rule, parties are entitled to stipulated reversal absent extraordinary circumstances warranting an exception.
- It concluded no extraordinary circumstances were shown in this case and directed the Court of Appeal to grant the stipulated relief needed to implement the settlement.

## Legal Principles

- California policy strongly favors settlement; appellate procedure should ordinarily permit parties to terminate litigation on mutually agreed terms, including eliminating a judgment as a settlement condition.
- When all parties to a civil case on appeal jointly seek reversal or vacatur of the trial court judgment to effectuate settlement, the appellate court should ordinarily grant the request.
- An appellate court may deny stipulated reversal only upon a particularized showing of extraordinary circumstances, such as concrete harm to public interests or impairment of rights of nonparties; generalized interests in preserving trial court judgments typically do not suffice.
- Trial court judgments have limited precedential force relative to appellate opinions, reducing the usual systemic justification for refusing stipulated vacatur after settlement.

## Conclusion

The court adopted a presumption favoring stipulated reversal or vacatur to implement civil settlements on appeal, allowing denial only when extraordinary, specifically identified public or nonparty harms would result.


Neary v. Regents of Univ. of Cal., 834 P.2d 119 (Cal. 1992)