Owens v. K&M Machine Works LLC, 4:14-cv-01052

Plaintiff Khalid Owens filed an FLSA overtime suit and later filed an unopposed motion to voluntarily dismiss all claims with prejudice, stating the parties had settled.
The court adopted Plaintiff’s proposed dismissal order and entered a final dismissal on December 18, 2014; the dismissal became final on January 17, 2015.
After the dismissal became final, Plaintiff filed a Notice of Breach and moved to enforce the alleged settlement agreement.
Defendants’ counsel moved to withdraw as counsel after dismissal.
The court raised sua sponte the issue of its subject-matter jurisdiction to enforce the settlement because the dismissal order did not retain jurisdiction or incorporate the settlement terms.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the district court has jurisdiction to enforce the settlement after the case was dismissed with prejudice without retaining jurisdiction or incorporating settlement terms	Owens: district courts have power to enforce settlements reached in cases pending before them; court awareness of settlement suffices	Defendants: did not contest jurisdiction in filings; implicitly rely on dismissal ending case	Court: No — ancillary jurisdiction to enforce a settlement exists only if the dismissal order incorporates the settlement or expressly retains jurisdiction; here it did neither, so court lacks jurisdiction
Whether movants’ requests (enforce settlement; withdraw counsel) should be granted	Owens: seeks enforcement of settlement for breach remedy	Defendants’ counsel: seeks leave to withdraw as counsel	Court: Denied enforcement for lack of jurisdiction; denied motion to withdraw as moot

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (ancillary jurisdiction to enforce settlement exists only if dismissal order retains jurisdiction or incorporates settlement)
Hospitality House, Inc. v. Gilbert, 298 F.3d 424 (5th Cir.) (explains Kokkonen’s rule on making settlement part of dismissal order)
SmallBizPros, Inc. v. MacDonald, 618 F.3d 458 (5th Cir.) (district court may retain or incorporate settlement terms in dismissal order to preserve enforcement jurisdiction)
Howery v. Allstate Ins. Co., 243 F.3d 912 (5th Cir.) (federal courts are courts of limited jurisdiction; party seeking federal forum bears burden)
Giles v. NYLCare Health Plans, Inc., 172 F.3d 332 (5th Cir.) (court may raise subject-matter jurisdiction sua sponte and must dismiss if lacking jurisdiction)