How to settle

A not-unusual series of events involving a settlement agreement led to a practice tip in Defense Distributed v. U.S. Dep’t of State, No.18-05911 (Jan. 21, 2020):

• Plaintiffs sued several government entities about their right to publish online plans for the “Liberator” (right) a firearm that could be made with a 3-D printer;
• That lawsuit settled, favorably for the publisher;
• The settling parties filed a Rule 41(a)(1)(A)(ii) stipulation of dismissal;
• A few days later, the district court (purported to) enter a final judgment;
• Various states brought a new lawsuit in another federal court to enjoin the settlement; leading the original plaintiffs to try and reopen the case under Fed. R. Civ. P. 59(e).

The Fifth Circuit found that the stipulation divested the district court of jurisdiction, dooming the request to reopen. The Court suggested: “If the parties had wanted to, they could have asked the district court to retain jurisdiction–for example, to oversee enforcement of a settlement agreement.” (citations omitted).