## Facts

- Trade Arbed, Inc. and related plaintiffs asserted maritime cargo-related claims against multiple defendants, including Robert B. Miller & Associates, Inc. (Miller), David T. Hammond (Hammond), and Coastal Cargo Co., Inc. (Coastal).
- Around May 9, 1996, plaintiffs and these defendants allegedly agreed to settle, with plaintiffs claiming each of Miller, Hammond, and Coastal was to pay $2,000.
- The court entered a “60-day” dismissal order dismissing the action without prejudice, permitting reopening within sixty days upon good cause shown if the settlement was not consummated.
- Plaintiffs later received payment from Miller but alleged they did not receive payment from Hammond or Coastal.
- After the sixty-day period expired, plaintiffs moved to (1) enforce the settlement by compelling payment or (2) alternatively restore the case to the court’s docket.

## Issues

1. After a settlement-based dismissal, does a federal district court have subject-matter (ancillary) jurisdiction to enforce the settlement when the dismissal order neither retains enforcement jurisdiction nor incorporates settlement terms?
2. If enforcement jurisdiction is lacking, may the court reopen the underlying action under a 60-day dismissal order upon a showing that the settlement was not consummated?

## Decision

- The motion to enforce the settlement was denied for lack of subject-matter jurisdiction.
- The alternative request to reopen the case and place it back on the docket was granted based on good cause shown under the 60-day dismissal order.

## Legal Principles

- Federal courts are courts of limited jurisdiction; enforcement of a settlement agreement is a separate contract dispute requiring an independent jurisdictional basis unless the court’s dismissal order provides otherwise.
- Under *Kokkonen v. Guardian Life Ins. Co. of Am.*, a federal court lacks ancillary jurisdiction to enforce a settlement after dismissal unless the dismissal order (1) expressly retains jurisdiction to enforce the settlement or (2) incorporates the settlement terms into the order.
- A conditional “60-day” dismissal order permitting reopening for nonconsummation may authorize reopening of the original action, but does not, by itself, confer jurisdiction to enforce the settlement contract.

## Conclusion

The court refused to compel payment under the alleged settlement because the dismissal order did not retain enforcement jurisdiction or incorporate settlement terms, but it reopened the underlying case upon plaintiffs’ showing that the settlement was not consummated as to the nonpaying defendants.


Trade Arbed, Inc. v. African Express MV, 941 F. Supp. 68 (E.D. La. 1996)