After the parties to a federal court action enter into a settlement agreement resolving their dispute, the next step is typically to file a stipulation of dismissal with the court. Ordinarily, that marks the end of the court’s involvement with the action, but occasionally the parties will include a “retention of jurisdiction” term in their stipulation of dismissal stating that the court shall retain jurisdiction for purposes of enforcing the settlement agreement. Unlike the typical stipulation of dismissal, which does not require court approval, a stipulation containing this type of provision must be “so ordered.” While such provisions can be advantageous, they can also give rise to further litigation, including with non-parties seeking to challenge the underlying settlement agreements.
In Patton Boggs v. Chevron, 12-cv-9176 (LAK), 2016 WL 7156593, at *4 (S.D.N.Y. Dec. 7, 2016) (Patton Boggs), a case arising from the decades-long litigation between residents of Ecuador’s Amazon rain forest (plaintiffs or the Lago Agrio plaintiffs) and Chevron, Steven Donziger and two other representatives of the plaintiffs filed a motion to intervene in the Southern District of New York, requesting reconsideration of the court’s “so ordering” of a stipulation of dismissal providing the court with residual jurisdiction to enforce the parties’ settlement agreement. The movants argued that they were entitled to intervention, though they were neither named parties to the action nor parties to the settlement agreement, because the court’s “so ordering” of the stipulation tacitly endorsed “flagrantly unethical” terms in the settlement agreement that required Patton Boggs to express regret for its representation of the Lago Agrio plaintiffs and to cooperate with Chevron.
