The opinion of the court was delivered by: Byron G. Cudmore, U.S. Magistrate Judge
This matter is before the Court on Plaintiff Hope School, Inc.'s Motion to Determine Jurisdiction to Enforce Settlement Agreement and for Enforcement of Settlement Agreement (d/e 31) (Hope School Motion). Hope School asks the Court to determine its jurisdiction to enforce the Settlement Agreement reached in this matter, and, if jurisdiction exists, to enforce the Settlement Agreement by entering declaratory and injunctive relief. See Stipulation to Dismiss with Prejudice (d/e 29), Ex. 1, Settlement Agreement. For the reasons set forth below, the Motion is dismissed for lack of jurisdiction.
The instant lawsuit was removed to this Court in June 2005. Notice of Removal (d/e 1). Prior to trial, the parties agreed to mediate the dispute before the undersigned. See Notice of Hearing, dated January 25, 2006. A full agreement was reached, and on March 27, 2006, the parties consented to proceed before the undersigned pursuant to 28 U.S.C. § 636(c) See Order: Consent (d/e 28). The parties filed a Stipulation to Dismiss with Prejudice, which included the Settlement Agreement as an exhibit. The parties asked that the "case be dismissed with prejudice pursuant to a settlement of all issues and disputes." Stipulation to Dismiss with Prejudice, p. 1. The Stipulation further provided as follows: "Pursuant to the decision in Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375 (1994), the parties incorporate the Settlement Agreement and request the Court to retain jurisdiction over this matter for the purpose of enforcing the Settlement Agreement." Id., p. 2. The Court then issued the following Text Order, dated March 27, 2006: "Stipulation to Dismiss with Prejudice 29 ALLOWED. The Court retains jurisdiction of this case to enforce compliance with the settlement contract. See Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375 (1994)."
On November 17, 2008, Hope School filed a complaint in the Circuit Court for Sangamon County, Illinois, seeking declaratory relief under the Settlement Agreement and a permanent injunction prohibiting Defendants from placing any obstruction on Hazel Lane for the purpose of impeding traffic to Hope's campus absent a judicial finding that Hope School materially breached the Settlement Agreement. Hope School Motion, Ex. B, Verified Complaint for Declaratory and Injunctive Relief (State Court Complaint). Hope School acknowledged that, in the Settlement Agreement, the parties agreed that the United States District Court would "retain exclusive jurisdiction to enforce this Agreement and/or to resolve any issues arising from this Agreement or the performance of the Parties' obligations under this Agreement." State Court Complaint, p. 3, ¶ 8; see also Settlement Agreement, p. 7, ¶ 13. However, Hope School cited a 2007 Seventh Circuit opinion for the proposition that once a suit is dismissed with prejudice, the District Court cannot retain jurisdiction merely by stating an intent to do so. State Court Complaint, p. 3-4, ¶ 11 (citing Dupuy v. McEwen, 495 F.3d 807, 809 (7th Cir. 2007), cert. denied, 128 S.Ct. 2932 (2008)). Hope School also cited Kay v. Board of Educ. of the City of Chicago, 547 F.3d 736 (7th Cir. 2008), for the proposition that a suit to enforce a settlement agreement arising out of federal litigation is a contract claim, which arises under state law and must proceed in state court.
Defendants moved to dismiss the State Court Complaint, arguing that the United States District Court had exclusive jurisdiction under the Settlement Agreement. Hope School Motion, Ex. C. Sangamon County Circuit Court Judge Leo J. Zappa stayed the state court case and directed the parties to seek a decision on the issue of federal versus state jurisdiction from this Court. Courtesy Copy of Order from State Court Circuit Judge Leo J. Zappa, Jr. (d/e 30). The pending Hope School Motion followed. The matter is now fully briefed and ripe for determination.
At the time the instant matter was dismissed pursuant to stipulation, the parties and the Court expressly relied upon the Supreme Court decision in Kokkonen. In Kokkonen, the parties arrived at an oral settlement agreement, the substance of which was recited, on the record, before the District Judge in chambers. 511 U.S. at 376. The parties subsequently executed a Stipulation and Order of Dismissal with Prejudice, dismissing the complaint and cross-complaint, pursuant to Fed. R. Civ. P. 41(a)(1)(ii). The District Judge signed the Stipulation and Order under a notation "It is so ordered." Id. at 377. The Stipulation and Order did not reserve jurisdiction to enforce the settlement agreement and did not refer to the settlement agreement. The parties later disagreed as to certain obligations under the settlement agreement, and Guardian moved the District Court to enforce the agreement. Kokkonen opposed the motion, arguing that the court lacked subject matter jurisdiction.
The District Court entered an enforcement order, citing its "inherent power" to do so. Kokkonen, 511 U.S. at 377. The Ninth Circuit affirmed. The Supreme Court granted certiorari and reversed. In doing so, the Kokkonen Court cautioned that the limited jurisdiction of federal courts must not be expanded by judicial decree, noting that "[i]t is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction." Id. at 377 (internal citations omitted).
Guardian attempted to meet this burden by asserting that ancillary jurisdiction allowed the Court to enforce the settlement agreement. The Court recognized that, in a broad sense, ancillary jurisdiction existed "for two separate, though sometimes related, purposes: (1) to permit disposition by a single court of claims that are, in varying respects and degrees, factually interdependent; and (2) to enable a court to function successfully, that is, to manage its proceedings, vindicate its authority, and effectuate its decrees." Kokkonen, 511 U.S. at 379-80 (internal citations omitted). The Court determined that the first purpose did not apply, noting that the facts underlying the dismissed claims and those underlying the claim for breach of settlement agreement had "nothing to do with each other," and thus, "it would neither be necessary nor even particularly efficient that they be adjudicated together." Id. at 380. Turning to the second purpose, the Court held that the power at issue was "quite remote from what courts require in order to perform their functions." Id. The Court determined that the second purpose did not apply, noting that the only order "was that the suit be dismissed, a disposition that [was] in no way flouted or imperiled by the alleged breach of the settlement agreement." Id. Thus, the Court found no jurisdictional basis that would allow the District Court to enter an order enforcing the settlement agreement.
In making its ruling, the Kokkonen Court expressly stated as follows: The situation would be quite different if the parties' obligation to comply with the terms of the settlement agreement had been made part of the order of dismissal-either by separate provision (such as a provision "retaining jurisdiction" over the settlement agreement) or by incorporating the terms of the settlement agreement in the order. In that event, a breach of the agreement would be a violation of the order, and ancillary jurisdiction to enforce the agreement would therefore exist.
That, however, was not the case here. The judge's mere awareness and approval of the terms of the settlement agreement do not suffice to make them part of his order. Kokkonen, 511 U.S. at 381. The Court further instructed:
If the parties wish to provide for the court's enforcement of a dismissal-producing settlement agreement, they can seek to do so. When the dismissal is pursuant to Federal Rule of Civil Procedure 41(a)(2), . . . the parties' compliance with the terms of the settlement contract (or the court's "retention of jurisdiction" over the settlement contract) may, in the court's discretion, be one of the terms set forth in the order. Even when, as occurred here, the dismissal is pursuant to Rule 41(a)(1)(ii) . . . we think the court is authorized to embody the settlement contract in its dismissal order (or, what has the same effect, retain jurisdiction over the settlement contract) if ...