Chavez

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

SHREVEPORT DIVISION

ANDREW CHAVEZ ET AL CIVIL ACTION NO. 23-cv-181

VERSUS MAGISTRATE JUDGE HORNSBY

LENCHO OILFIELD SERVICES INC ET AL

MEMORANDUM ORDER

Introduction

Plaintiffs Andrew Chavez and Edgard Moneyhun (“Plaintiffs”) filed this action

against Lencho Oilfield Services, Inc. and Lawrence Deculit III (“Defendants”). Plaintiffs

allege that the Defendants violated the Fair Labor Standards Act by failing to pay overtime

wages to them and other similarly situated employees. The parties entered into a settlement

agreement and dismissed this case. Plaintiffs now return with a Motion to Enforce

Settlement (Doc. 27). The motion is unopposed, but it must be denied without prejudice

because the court lacks subject matter jurisdiction.

Relevant Facts

The parties reached an agreement and entered into a written settlement agreement

in March 2024. The parties advised the court of their settlement, and the court entered an

Order of Dismissal (Doc. 24) that stated that the case was dismissed, without prejudice to

the right to reopen the action if settlement was not consummated within 90 days. The

parties were directed to submit a joint motion to dismiss or Rule 41 stipulation of dismissal

within the 90-day period.

Under the terms of the settlement agreement, the Defendants were required to pay

$40,000 in payment plan installments. Plaintiffs report that the Defendants were

delinquent numerous times. The final payment was received on June 30, 2025, and there

is a remaining balance due under the settlement agreement of $13,850. Efforts to collect

that final amount have been unsuccessful.

Paragraphs 18-20 of the settlement agreement provide that any party may institute

an action to enforce the terms of the agreement and seek damages, including attorneys’

fees and costs, in the event of a breach of any provision of the agreement. Paragraph 20

states that Chavez and Moneyhun, in the event Defendants breach the agreement by

nonpayment, shall be entitled to recover the balance due plus attorneys’ fees, expenses,

and liquidated damages in the amount of $20,000 to be apportioned on a pro rata basis.

Paragraph 19 provides: “The Parties agree that the Western District of Louisiana shall

retain jurisdiction in this matter for enforcement of the agreement, including the award of

damages, attorneys’ fees and costs related to any breach thereof.”

As will be discussed below, it is critical to the court’s jurisdiction that the court’s

order of dismissal contain language that expressly retains jurisdiction over the enforcement

of the settlement agreement. The parties filed a “Stipulation of Dismissal with Prejudice”

(Doc. 25) that stated it was stipulated and agreed among the parties that all claims asserted

by the plaintiffs were dismissed, with prejudice with respect to Mr. Chavez and Mr.

Moneyhun, and without prejudice as to other similarly situated individuals. The stipulation

made no reference to the settlement agreement or retention of jurisdiction to enforce it.

The court signed the proposed order that the parties submitted along with the

stipulation. It provides that, considering the stipulation of dismissal filed by the parties, it

is ordered that all claims by Mr. Chavez and Mr. Moneyhun be dismissed with prejudice

as to the named plaintiffs and without prejudice as to other similarly situated individuals,

with each party to bear its own attorney fees and costs. The order includes no reference to

the settlement agreement and does not state that the court retains jurisdiction to enforce it.

The settlement agreement was also not attached to the stipulation or order, and it does not

appear anywhere in the record other than as an exhibit to the motion to enforce it.

Analysis

Federal courts are courts of limited jurisdiction and have an obligation to assess

whether jurisdiction exists, even if no party raises the issue. A similar stipulation and order,

lacking in reference to the settlement agreement, was entered in Kokkonen v. Guardian

Life Ins. Co. of Am., 114 S. Ct. 1673 (1994), and the Supreme Court held that the district

court lacked ancillary jurisdiction to address a motion to enforce the settlement agreement.

Kokkonen stated that the situation would be different if the parties’ obligation to

comply with the terms of the agreement had been made part of the order of dismissal, either

by a provision “retaining jurisdiction” over the settlement agreement or by incorporating

the terms of the agreement in the order. In that event, a breach of the agreement would be

a violation of the order, and ancillary jurisdiction would exist to enforce the agreement.

Kokkonen, 114 S.Ct. at 1677. “Absent such action, however, enforcement of the settlement

agreement is for state courts, unless there is some independent basis for federal

jurisdiction.” Id.

The Fifth Circuit and district courts within the circuit have found jurisdiction

lacking in multiple similar cases. For example, the parties settled federal law claims in

Hospitality House, Inc. v. Gilbert, 298 F.3d 424 (5th Cir. 2002). Pursuant to the terms of

the settlement agreement, the parties filed an agreed motion to dismiss the case. The

motion incorporated by reference the settlement agreement, which was attached as an

exhibit. However, the district court’s order that granted the motion merely stated that the

motion was granted; it made no reference to the settlement agreement or a retention of

jurisdiction to enforce it.

Parties to the agreement later filed suit in the same district court to enforce the

agreement. The Fifth Circuit applied Kokkonen and its specification of two ways that a

court may make a settlement agreement part of its dismissal order: (1) by separate provision

(such as a provision “retaining jurisdiction” over the settlement agreement) or (2) by

incorporating the terms of the settlement agreement in the order. Even though the motion

incorporated by reference the agreement, the Fifth Circuit stated that “there is no question

that the district court did not make the Agreement part of its dismissal order by including

a separate provision retaining jurisdiction to enforce the Agreement.” Hospitality House,

298 F.3d at 430. The Court emphasized that “Kokkonen requires a district court to clearly

indicate its intention within the dismissal order itself by expressly incorporating the

agreement’s terms.” Id. at 431. Subject matter jurisdiction was found to be lacking.

Another example is SmallBizPros, Inc. v. MacDonald, 618 F.3d 458 (5th Cir. 2010),

where the parties read the terms of their settlement agreement into the record. The court

asked that the parties reduce the terms to a writing to be signed by the judge, but they filed

a stipulation that merely stated that they had settled and compromised and asked the court

to sign an attached “Stipulated Settlement Order” that contained the terms and conditions

of the settlement. The parties signed the stipulation, which had the settlement agreement

attached. The terms of the order that the court signed did not expressly provide for the

court to retain jurisdiction to enforce the agreement. When a dispute broke out, the district

court asserted that it retained jurisdiction to enforce the order, and it issued a contempt

order against the party that breached the settlement agreement.

The Fifth Circuit applied Kokkonen and determined that the district court lacked

jurisdiction to issue the contempt order. First, the stipulation filed by the parties was

effective immediately so that any dismissal order later entered by the court was

superfluous. The effectiveness of the stipulation was not expressly contingent on the

district court’s entry of the order that was part of it. The Court stated that the parties and

district court likely intended for the court to retain ancillary jurisdiction to enforce the

settlement agreement, “but jurisdiction is a strict master and inexact compliance is no

compliance.” SmallBizPros, 618 F.3d at 464. The district court’s contempt order was

vacated, and the matter was remanded with instructions to dismiss for lack of jurisdiction.

A more recent example is Whittier v. Ocwen Loan Servicing, L.L.C., 128 F.4th 724

(5th Cir. 2025), where the parties settled and notified the district court, which entered an

interim order of dismissal pending final documentation of the parties’ settlement. Much as

in this case, once settlement was confected, the parties returned to court with a joint

stipulation to dismiss and a proposed order of dismissal. The joint stipulation did provide

that the court “shall retain jurisdiction for the purposed of enforcing or interpreting the

terms of the separate settlement agreement entered into between the Parties.” Despite that

language, the accompanying order did not expressly retain jurisdiction over the settlement

agreement or incorporate the agreement’s terms. The court signed the order as submitted.

Three months later, the plaintiffs filed a motion to enforce the settlement agreement

and award fees. The district court initially granted some relief, but it ultimately declined

jurisdiction over the settlement agreement. The plaintiffs appealed, and the Fifth Circuit

affirmed because the stipulation of dismissal was effective immediately and, furthermore,

the order of dismissal submitted by the parties and signed by the court failed to expressly

retain jurisdiction over the settlement agreement or to incorporate the terms of the

agreement itself. Its mere reference to the stipulation of dismissal was insufficient.

Courts have exercised jurisdiction over the enforcement of settlement agreements

when one of the Kokkonen exceptions was applicable. For example, in Hotard v. Aegis

Sec. Ins. Co., 2025 WL 50034 (E.D. La. 2025), the court’s order retained jurisdiction for

all purposes, including enforcing the settlement agreement. The court determined that it

had jurisdiction under Kokkonen to entertain a motion to enforce the settlement agreement.

Other examples where courts have found Kokkonen compliance and exercised jurisdiction

over motions to enforce the settlement terms include Cook v. Costco Wholesale Corp.,

2025 WL 2181703, *3 (N.D. Tex. 2025) and Express Corp. v. Robrad, L.L.C., 2016 WL

3660670, *2 (N.D. Tex. 2016).

The cases cited above make clear that this court lacks subject matter jurisdiction to

grant the motion to enforce the settlement agreement. The parties stipulated that all claims

were dismissed. The order that followed ordered the same relief. Neither filing,

particularly the order, expressly retained jurisdiction over or incorporated the terms of the

settlement agreement. There was also no provision in the stipulation that its effectiveness

was contingent upon the district court issuing such an order. Neither the stipulation nor

order of dismissal entered in this case meet any of the exceptions to Kokkonen.

There is also a lack of an independent basis for jurisdiction. Plaintiffs’ motion asks

for the remaining balance of $13,850, liquidated damages of $20,000, and attorneys’ fees

of $2,500, for a total of $36,350. Even if there were diversity of citizenship, the amount in

controversy would not be sufficient to provide an independent basis for diversity

jurisdiction under 28 U.S.C. § 1332.

The parties did state in their settlement agreement: “The Parties agree that the

Western District of Louisiana shall retain jurisdiction in this matter for enforcement of the

agreement, including the award of damages, attorneys’ fees and costs related to any breach

thereof.” But subject matter jurisdiction is the court’s statutory or constitutional power to

adjudicate a case. “No action of the parties can confer subject-matter jurisdiction.” U.S.

v. Riojas, 139 F.4th 465, 472 (5th Cir. 2025), quoting Ins. Corp. of Ireland v. Compagnie

des Bauxites de Guinee, 102 S.Ct. 2099, 2104 (1982).

For example, retiree airline pilots argued that a collective bargaining agreement

provided for federal judicial review of a Retirement Board determination. The Fifth Circuit

said, “This contention is untenable” because parties to an agreement may not create federal

subject matter jurisdiction by consent. Ballew v. Cont’l Airlines, Inc., 668 F.3d 777, 786

(5th Cir. 2012). Another settlement agreement stated that “any action arising out of this

Agreement shall be subject to the jurisdiction and venue of the federal and state courts.” A

court rejected an argument that it had jurisdiction to enforce the agreement because the

order of dismissal did not expressly retain jurisdiction or incorporate the terms of the

settlement agreement that stipulated to retained jurisdiction. Young v. Jewish Bd. of Fam.

& Child. Servs., Inc., 2005 WL 8179126, *1 (S.D. N.Y. 2005).

In this case, the dismissal process did not include the necessary provisions to comply

with Kokkonen and give the federal court jurisdiction to enforce the settlement agreement.

There is also no independent basis for jurisdiction over claim for breach of the agreement.

“TQ]uarrels about legal settlements—even settlements of federal claims—typically involve

only state law, like disagreements about other contracts.” Badgerow v. Walters, 142 S. Ct.

1310, 1317 (2022). This is such a quarrel. Plaintiffs’ Motion to Enforce Settlement (Doc.

27) is denied without prejudice for lack of subject matter jurisdiction. Plaintiffs remain

free to assert their claims for breach of the settlement agreement in an appropriate state

court.

THUS DONE AND SIGNED in Shreveport, Louisiana, this 28th day of October,

2025.

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Mark L. Hornsby

U.S. Magistrate Judge

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