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Settlement Dismissal Orders

Before submitting a proposed order of dismissal, counsel should review the following Seventh Circuit cases which discuss the retention of federal jurisdiction to enforce the terms of a settlement agreement: Blue Cross and Blue Shield Ass’n v. American Express Co., 467 F.3d 634, 636 (7th Cir. 2006) and Shapo v. Engle, 463 F.3d 641, 646 (7th Cir. 2006). The parties also may wish to review the article, “What’s an Attorney to Do? Ensuring Federal Jurisdiction Over Settlement Agreements in Light of Recent Seventh Circuit Cases,” by Judge Denlow, which may be accessed at: _assets/_documents/_forms/_judges/DENLOW/FederalJurisdiction.pdf. Generally speaking, Seventh Circuit decisions hold that dismissals “with prejudice” leave the Court without jurisdiction to enforce a settlement agreement. Accordingly, in most cases, the parties would be well advised to submit a proposed order that either (a) provides for dismissal with prejudice if the settlement terms have already been fulfilled (e.g., payment has been made), but make no reference to retention of jurisdiction; or (b) provides for the case to be “dismissed without prejudice with leave to reinstate on or before [date far enough in the future to fulfill all settlement terms]” and that “in the event a motion to reinstate is not filed on or before [date far enough in the future to fulfill all settlement terms], the case shall be deemed, without further order of the Court, to be dismissed with prejudice.”



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