Petersen-Dean Inc. v. Folk et al

Filing 144

ORDER ON POST-SETTLEMENT MOTIONS. Re: ECF 99 , 108 , 128 , 129 , 131 , 132 , 136 , 137 . Signed by Judge Nathanael Cousins. (lmh, COURT STAFF) (Filed on 11/15/2019)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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United States District Court
Northern District of California

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PETERSEN-DEAN INC.,
Plaintiff,

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ORDER ON POST-SETTLEMENT
MOTIONS

v.

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DIETER FOLK, et al.,
Defendants.

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Case No. 15-cv-05522-NC

Re: ECF 99, 108, 128, 129, 131, 132,
136, 137

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Before the Court are a tidal wave of motions filed after the 2016 settlement and

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dismissal of this copyright and trademark infringement case. Plaintiff Petersen-Dean

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seeks to vacate the dismissal, to enforce the settlement, and to enter judgment (ECF 99,

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137), while defendants oppose these requests and seek to compel enforcement of the

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settlement through arbitration (ECF 108). The central question for resolving all the

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motions is whether this Court possesses jurisdictional authority to enforce the settlement

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agreement. Because I conclude that the Court lacks jurisdiction, I decline to wade into the

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deeper waters of interpreting and enforcing the parties’ settlement agreement.

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I.

PROCEDURAL BACKGROUND

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Only the most relevant settlement-related events are summarized here. On March

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24, 2016, I referred the case to Magistrate Judge Sallie Kim in San Francisco for a

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settlement conference. Judge Kim diligently facilitated settlement communications among

the parties, as documented at ECF 57, 59, 79, and 88. A transcript of the settlement

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proceedings before Judge Kim on August 11, 2016, is filed under seal at ECF 108-5, and

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in part is publicly described in the declaration of Jim Petersen at ECF 101. On August 25,

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2016, Petersen-Dean filed a settlement status report. ECF 82. That report stated that this

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matter had mostly settled but awaited approval by defendants Jeffrey Maxfield and Bryce

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Robicheau. “Upon execution of said document by the remaining Defendants all of the

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actions will be dismissed in their entirety.” ECF 82 at p. 2. On September 14, 2016,

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counsel for all parties reported to me that the case settled and that a dismissal would be

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filed that same day. ECF 92. As promised, later that day the parties filed a “Stipulation of

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Dismissal With Prejudice” pursuant to Fed. R. Civ. P. 41(a)(1)(A)(ii). The Stipulation of

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United States District Court
Northern District of California

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Dismissal was accompanied by a proposed order. ECF 93-1. The proposed order

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requested that “the instant matter is dismissed with prejudice as to Defendants JAJ

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Roofing, Inc. dba Citadel Roofing and Solar; Dieter Folk; and Wendy Zubillaga.” Id. I

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granted the proposed order. ECF 94. The Stipulation of Dismissal did not recount the

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terms of settlement and did not ask the Court to retain jurisdiction to enforce the

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settlement. And the Order of Dismissal, ECF 94, did not retain jurisdiction.

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Yet after the settlement and dismissal, the parties returned to litigation in this Court.

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Now before the Court are ECF 99 (Petersen-Dean’s motion to vacate dismissal, motion for

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writ of attachment and right to attach order, and motion to enforce settlement agreement);

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ECF 108-3 (Defendant’s opposition to ECF 99 and counter-motion to compel arbitration of

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settlement); ECF 128 (Petersen-Dean’s motion for leave to file supplemental declaration of

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George Milionis); ECF 129 (Petersen-Dean’s motion to file under seal); ECF 131

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(Stipulation to file Milionis declaration); ECF 132 (motion for hearing); ECF 136 (motion

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to seal portions of Petersen-Dean’s motion for entry of judgment and enforcement of

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settlement agreement); and ECF 137 (Petersen-Dean’s motion to enforce settlement and

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entry of judgment per settlement agreement). On February 13, 2018, I issued an Order to

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Show Cause Re: Jurisdiction. ECF 118. I ordered the parties to show cause why the Court

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has jurisdiction to consider the motions at ECF 99 and 108 asking the Court to enforce the
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settlement agreement. This Order complements the Order to Show Cause at ECF 118.

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Petersen-Dean’s motion at ECF 137 (to enforce settlement and enter judgment) was

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noticed to Judge Kim. But under Civil Local Rule 7-1(b), motions must be directed to the

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Judge to whom the action is assigned, except as that Judge may otherwise order. As this

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action is assigned to me, not Judge Kim, I assess ECF 137 in this order.

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II.

ANALYSIS

Federal district courts are courts of limited jurisdiction; “[t]hey possess only that

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power authorized by Constitution and statute, which is not to be expanded by judicial

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decree.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citation
omitted). Accordingly, “[i]t is to be presumed that a cause lies outside this limited

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United States District Court
Northern District of California

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jurisdiction, and the burden of establishing the contrary rests upon the party asserting

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jurisdiction.” Id.; Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th

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Cir. 2010).

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In the post-settlement motions before this Court, the only assertion of jurisdiction is

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that the Court should continue or reopen the jurisdiction it exercised over the underlying

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federal copyright and trademark case. There is no claim that the motions to enforce the

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settlement agreement independently raise a federal question (they do not) or are between

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parties with diverse citizenship (they are not). The question presented is whether federal

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subject matter jurisdiction may be reestablished after settlement even when the parties did

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not ask, and the Court did not retain jurisdiction at the time of dismissal.

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In general, ‘[e]nforcement of [a] settlement agreement . . . whether through award

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of damages or decree of specific performance, is more than just a continuation or renewal

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of the dismissed suit, and hence requires its own basis for jurisdiction.’” Alvarado v. Table

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Mountain Rancheria, 509 F.3d 1008, 1017 (9th Cir. 2007) (quoting Kokkonen, 511 U.S. at

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378). But “a federal court has jurisdiction to enforce a settlement agreement in a dismissed

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case when the dismissal order incorporates the settlement terms, or the court has retained

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jurisdiction over the settlement contract” and a party alleges a violation of the settlement.

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Id. Under those circumstances, a breach of the agreement is a violation of the court’s

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order, and the court has jurisdiction to enforce the agreement. Kokkonen, 511 U.S. at 381;

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e.g., Nordstrom v. Ryan, 2019 WL 2304039, at *2 (D. Ariz. May 15, 2019),

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reconsideration denied, 2019 WL 2303321 (D. Ariz. May 30, 2019).

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None of the exceptions in Kokkonen applies here. The parties in their Stipulation of

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Dismissal did not ask the Court to retain jurisdiction and did not expressly incorporate the

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terms of the settlement agreement. ECF 93. The Court’s dismissal order accordingly did

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not retain jurisdiction. ECF 94.

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The Court finds that the post-settlement disputes presented here are of the same
type that were dismissed in Kokkonen, O’Connor v. Colvin, 70 F.3d 530 (9th Cir. 1995),

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United States District Court
Northern District of California

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and Warner v. Cate, Case No. 11-cv-05039 YGR, 2017 WL 5560651 (N.D. Cal. Nov. 20,

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2017). Here, as in those cases, the Court lacks jurisdiction to enforce the settlement

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agreement.

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One of the arguments made by Petersen-Dean in favor of jurisdiction is that Judge

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Kim retained jurisdiction as part of the settlement agreement. I am not persuaded that this

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is sufficient for this Court to exert jurisdiction now. First, as a legal question the

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settlement judge “retaining jurisdiction” is not one of the exceptions to limited jurisdiction

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identified by the Supreme Court in Kokkonen. 511 U.S. at 381. There, the Supreme Court

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identified two ways that the presiding judge could maintain jurisdiction: (1) retaining

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jurisdiction as part of the order of dismissal, or (2) incorporating the terms of the

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settlement into the dismissal order. I am not persuaded that I should expand Kokkonen to

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apply to terms in a settlement agreement that are not incorporated into the order of

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dismissal. Second, as a factual matter, Judge Kim did not retain jurisdiction to enforce the

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settlement agreement here. What Judge Kim said was: “And the Federal Court will retain

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jurisdiction over the stipulated judgment.” ECF 108-5 at 5:16-17. This is something less

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than retaining jurisdiction to interpret and enforce the entire settlement agreement, which

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is what both parties ask the Court to do now.

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In addition, the Court is not persuaded that plaintiff’s motion to set aside the
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dismissal under Federal Rule of Civil Procedure 60(b)(6) (for “any other reason that

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justifies relief”) is timely or is needed to accomplish justice. A motion under Rule 60(b)

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must be made within a “reasonable time.” Fed. R. Civ. P. 60(c)(1). Here, the dismissal

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was entered September 14, 2016, and plaintiff’s motion to set aside the dismissal was filed

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January 17, 2018, which is more than 16 months later. Rule 60(b)(6) is a “grand reservoir

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of equitable power,” Harrell v. DCS Equip. Leasing Corp., 951 F.2d 1453, 1458 (5th Cir.

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1992), and it affords the Court the discretion and power “to vacate judgments whenever

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such action is appropriate to accomplish justice.” Gonzalez v. Crosby, 545 U.S. 524, 542

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(2005). The decision to grant Rule 60(b)(6) relief is a “case-by-case inquiry that requires

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the trial court to intensively balance numerous factors, including the competing policies of

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United States District Court
Northern District of California

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finality of judgments and the incessant command of the court’s conscience that justice be

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done in light of all the facts.” Phelps v. Alameida, 569 F.3d 1120, 1133 (9th Cir. 2009)

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(citations omitted). Balancing these factors here, the Court finds that setting aside

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dismissal in this forum is not needed to accomplish justice. The parties have available

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alternatives to litigating a breach of settlement dispute in this Court: arbitration and state

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court.

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Accordingly, I DENY the motions at ECF 99, 108-3 and 137 for lack of
jurisdiction.
Finally, I GRANT unopposed motions ECF 128 (motion for leave to file George

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Milionis declaration and for leave to file certain materials under seal), ECF 129 (motion to

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file certain materials under seal), ECF 131 (stipulation for leave to file supplemental

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declaration of Milionos), and ECF 136 (motion to file under seal) for good cause shown.

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And I DENY ECF 132 (motion for hearing) pursuant to Civil Local Rule 7-1(b) because in

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my discretion no oral argument was needed to resolve the motions.

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IT IS SO ORDERED.
Dated: November 15, 2019

_____________________________________
NATHANAEL M. COUSINS
United States Magistrate Judge

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