The opinion of the court was delivered by: NEALON
WILLIAM J. NEALON, Chief Judge, Middle District of Pennsylvania.
This matter comes before the court as the result of the death of Gerald White on May 21, 1982. White was killed when the Pine Brook mine shaft collapsed during a shaft filling project. On September 21, 1983, plaintiffs commenced this action after their administrative claim for relief was denied. The case was scheduled for trial, but on January 10, 1985, a settlement conference was held with the court and a purported settlement agreement
was reached between the parties. Because the details of the agreement are important in the disposition of the present motions, they will be set out in detail. By Order dated January 30, 1985, the court approved the agreement reached on January 10, 1985. The case was marked settled and discontinued with prejudice on February 8, 1985. When payment as required under the agreement was not received, plaintiffs filed a Motion to Enforce Settlement Agreement and a brief in support thereof on July 30, 1985 and September 3, 1985 respectively. Defendant, United States of America, Department of Interior ("United States"), filed an answer to plaintiffs' motion on August 8, 1985. Subsequently, defendant filed a Motion to Vacate the court's Order of January 30, 1985 and a brief in support thereof on August 14, 1985 and August 21, 1985 respectively. Defendant also filed a reply brief on September 20, 1985. Pursuant to plaintiffs' request, oral argument was held in open court on November 15, 1985. Plaintiffs were granted an opportunity to file additional affidavits and other documentation in support of their motion by Order dated November 20, 1985. See Document 66 of the Record. Plaintiffs filed a Report of Keith R. Isleib of Ringler Associates, Inc., a Report of Anthony J. Turchetti, LL.B., M.D., an Affidavit of Lucille White and the Joint Affidavit of Joseph A. Quinn, Jr., Esquire and Neil L. Conway, Esquire on December 10, 1985. See Documents 67, 68, 69 and 70 of the Record. Defendant responded by filing a Supplemental Memorandum in Support of Defendant's Motion to Vacate and in Opposition to Plaintiffs' Motion to Enforce Settlement Agreement on December 26, 1985. Defendant also submitted the case of Bohlen v. United States, 623 F. Supp. 595 (1985), in support of its position. The matter is now ripe for disposition. For the reasons set forth below, plaintiffs' Motion to Enforce Settlement Agreement will be denied and defendant's Motion to Vacate the Court's Order will be granted.
The pertinent facts surrounding the present motions can be summarized as follows:
This case, assigned to the Honorable R. Dixon Herman, was scheduled for trial on January 22, 1985. Because the matter would be tried non-jury, at the request of counsel, a settlement conference was held before the undersigned on January 10, 1985. Plaintiff, Lucille White ("White"), plaintiffs' counsel, Joseph A. Quinn, Esq., and Neil L. Conway, Esq., and White's parents appeared before the court on plaintiffs' behalf. Assistant United States Attorney Bernard O'Hare ("O'Hare"), appeared on behalf of Defendant United States. At the request of those present, Keith Isleib of Ringler Associates, Inc. was available for consultation at the settlement conference. After extensive negotiations, an agreement was reached. This agreement was described in open court and approved by court Order dated January 30, 1985. The agreement detailed a settlement requiring the United States to pay approximately two million dollars to finance a structured settlement. Subsequent to the court's Order, the United States informed plaintiffs that it would not comply with the terms of the January 10, 1985 agreement. Basically, the United States alleges that the agreement is void because O'Hare lacked authority to enter into the agreement on defendant's behalf. Plaintiffs assert that the agreement is binding and, in the alternative, that defendant is estopped from asserting the agreement's invalidity. With this background in mind, the court now focuses on the merits of the instant motions.
The first matter that must be addressed is whether the court has subject matter jurisdiction over the present controversy. Clearly, the court had jurisdiction over the underlying claim based on the Federal Tort Claims Act ("FTCA") which forms the basis of the present matter. See 28 U.S.C. § 1346(b). The question is whether this jurisdiction extends to the attempted enforcement of the agreement entered into on January 10, 1985. Defendant contends that "this court lacks subject matter jurisdiction to enforce the January 10, 1985 'agreement.'"
See Answer to Plaintiffs' Motion to Enforce Settlement Agreement -- Fourth Defense.
"It is well settled that a federal court has the inherent power to enforce and to consider challenges to settlements entered into in cases originally filed therein." Fox v. Consolidated Rail Corp., 739 F.2d 929, 932 (3d Cir. 1984), cert. denied, 469 U.S. 1190, 105 S. Ct. 962, 83 L. Ed. 2d 968 (1985). The court normally exercises this power without inquiring into or requiring an independent basis of subject matter jurisdiction. Id; cf. Fairfax Countywide Citizens Ass'n v. County of Fairfax, 571 F.2d 1299 (4th Cir. 1978), cert. denied, 439 U.S. 1047, 58 L. Ed. 2d 706, 99 S. Ct. 722 (1978) (independent jurisdictional basis required when settlement is not contained in court's Order dismissing original action). In the present case, the court entered an Order approving the agreement on January 30, 1985. Therefore, this court appears to have subject matter jurisdiction.
The United States, however, has raised the issue of the applicability of 28 U.S.C. § 1346(a)(2). In pertinent part, this section provides, "the district courts shall not have jurisdiction of any civil action or claim against the United States founded upon any express or implied contract with the United States . . ." Id. The United States Claims Court has jurisdiction over claims founded upon express or implied contract with the United States. See 28 U.S.C. § 1491(a)(1). Thus, this court must resolve the apparent conflict between a court's power to enforce its settlement agreement and the language of § 1346(a)(2).
The United States, however, has raised the issue of the applicability of 28 U.S.C. § 1346(a)(2). In pertinent part, this section provides, "the district courts shall not have jurisdiction of any civil action or claim against the United States founded upon any express or implied contract with the United States. . . ." Id. The United States Claims Court has jurisdiction over claims founded upon express or implied contract with the United States. See 28 U.S.C. § 1491(a)(1). Thus, this court must resolve the apparent conflict between a court's power to enforce its settlement agreement and the language of § 1346(a)(2).
The authority of a court to enforce a settlement agreement has as its foundation a policy favoring amicable adjustment of disputes and avoidance of costly and time consuming litigation. See Rosso v. Foodsales, Inc., 500 F. Supp. 274 (E.D.Pa. 1980). It would be anomalous for this court to relinquish jurisdiction at this stage of litigation. While the Court of Claims has exclusive jurisdiction over express or implied contract actions involving greater than $10,000.00, see Amalgamated Sugar Co. v. Bergland, supra, plaintiffs are correct in pointing out that Fed. R. Civ. P. 60(b) is intended to provide relief from a judgment by motion in the court which rendered the judgment. The court deems that the instant dispute is ancillary to the original action and is properly within this court's subject matter jurisdiction. See United States v. Newport News Shipbuilding and Dry Dock Co., 571 F.2d 1283 (4th Cir. 1978), cert. denied, 439 U.S. 875, 58 L. Ed. 2d 189, 99 S. Ct. 212 (1978) (district court enforced oral settlement purportedly reached between shipyard and the Navy; court of appeals found that a binding settlement was not reached).
In reaching this decision, the court recognizes that "the Court of Claims' jurisdiction to review Federal Tort Claims Act decisions by consent of the parties has not been extended to the Claims Court." 17 C. Wright & A. Miller & E. Cooper, Federal Practice and Procedure § 4101 at 49 (Supp. 1985). Aside from the question of whether this action is based on implied or express contract, the parties are really seeking to enforce or vacate an agreement reflected in a court Order that arose from a case instituted pursuant to the FTCA. Cf. Tennessee ex rel. Leech v. Dole, 749 F.2d 331 (6th Cir. 1985), cert. denied, 472 U.S. 1018, 105 S. Ct. 3480, 87 L. Ed. 2d 615 (1985) (Court of Claims does not have exclusive jurisdiction over a suit merely because it raises contract related issues; suit clearly not grounded in contract not subject to exclusive Court of Claims jurisdiction). Accordingly, jurisdiction over this proceeding is proper. See Aro Corp. v. Allied Witan Co., 531 F.2d 1368 (6th Cir. 1976), cert. denied, 429 U.S. 862, 50 L. Ed. 2d 140, 97 S. Ct. 165 (1976) (even if court's original jurisdiction was questionable, court has jurisdiction over settlement agreement).
The next inquiry is whether federal or state law is to be applied in analyzing the validity and effect of the settlement agreement. It is established that the law of the state where the act or omission occurred governs the substantive rights of the parties under the FTCA. 28 U.S.C. § 1346(b). Plaintiffs contend that Pennsylvania law governs the validity of the settlement agreement entered into in this case.