Larry McCall Cross-Appellant v. Gayle Franzen, Cross-Appellees

SWYGERT, Senior Circuit Judge,

dissenting.

The court today limits the authority of the district courts of this circuit to enforce settlement agreements terminating litigation pending before them. Henceforth, a district court will retain jurisdiction to enforce such agreements only if the court succeeds in evidencing an intention to retain jurisdiction. Concluding that the district court did, “if barely,” retain jurisdiction over this case, the court proceeds to reach the merits and reverses the district court’s explicit finding that the defendants, and not the plaintiff, violated the settlement agreement. I dissent. Because it is impossible to discern from the majority’s opinion exactly what happened a review of the relevant facts follows.

I

Larry McCall-Bey is a prisoner incarcerated at the Pontiac Correctional Facility of the Illinois Department of Corrections (“DOC”). In May 1980 McCall-Bey filed a civil rights action, 42 U.S.C. § 1983 , in the United States District Court for the Northern District of Illinois alleging a violation of his right to due process of law. 1 On May 14, 1984 the district court granted McCall-Bey’s motion for partial summary judgment holding that the summary prepared by prison administrators setting out their reasons for finding McCall-Bey guilty of the charges filed against him was insufficient under the constitutional standards enunciated in Wolff v. McDonnell, 418 U.S. 539 , 94 S.Ct. 2963 , 41 L.Ed.2d 935 (1974). The district court left the issue of damages for trial. 2

*1192 Following the district court’s decision, the parties entered into settlement negotiations. The parties soon reached an agreement and advised the court. On September 4, 1984 the district court dismissed the case, without prejudice, “by agreement of the parties.” Pending completion of the details of the settlement the court retained jurisdiction for forty-five days. 3 On October 5, 1984, the court, by separate minute order, retained jurisdiction to December 3, 1984.

On October 29, 1984, while drafting of the final settlement documents continued, McCall-Bey received a Resident Disciplinary Report (“RDR”) charging him with violations of the following DOC Disciplinary Rules (“DR”): DR-102, assaulting any person; DR-105, dangerous disturbance; DR-203, drugs and drug paraphernalia; DR-206, intimidation or threat; and DR-403, disobeying a direct order. The district court’s description of the events leading up to the charge follows:

During a routine search of plaintiff at the Metro, plaintiff was told to “drop his pants below his knees.” Plaintiff was then told to “reach inside the crotch of his shorts and turn it inside out.” Plaintiff refused. After being informed that he would be subject to a complete search by Metro officials, the report states that plaintiff “reached inside of his underwear crotch and removed an object covered with paper.” Plaintiff then “put the item in the commode and flushed it.” While the officer attempted to retrieve the item, the officer states that plaintiff “started wrestling with me to keep me from retrieving the item.” Plaintiff then flushed some cigarette papers down the drain and a “scuffle” ensued between plaintiff and the officer. Plaintiff was then handcuffed.

On November 1, 1984 the prison Adjustment Committee found McCall-Bey guilty of the charges. The Committee’s statement of reasons, in its entirety, is as follows: “[Illegible] besides Disciplinary Report. Admission of Resident not taking off his shorts, when ordered by CRC Doby lead the Committee to believe that violation was committed as charged.” 4

On November 23, 1984 McCall-Bey submitted a motion to reinstate the case which was granted the same day. Preparation of settlement documents nevertheless continued and the General Release and Settlement of Claims was executed by the parties on December 8, 1984. 5 On December 13, 1984 the district court again dismissed the case “pursuant to stipulation of the parties.” The stipulation was not filed until December 18, 1984. The stipulation purported to dismiss the suit “pursuant to Rule 41(a),” “according to the terms and conditions” of the settlement, and “with prejudice.”

The settlement provided, inter alia, that the plaintiff would be assigned to a work release program in order that he could attend college. In exchange, the plaintiff agreed to obey “all rules and regulations of the work release program, as well as all Illinois Department of Corrections rules.” The plaintiff further agreed that if he was disciplined for violating any of the terms or conditions of the agreement or any rule or regulation of the work release program his *1193 work release status would be terminated “according to applicable Department of Corrections Rules.” The settlement agreement also provided that the parties retained their rights “to petition the Court regarding any breach or violation of this agreement.” 6

On August 1, 1985 the district court denied the defendants’ motion to vacate, amend, or stay the judgment. The defendants’ emergency motion to stay the order of the district court and to expedite appeal to this court was granted on August 15, 1985. Oral argument was heard on September 20, 1985. On the same day this court issued an order, from which I dissented, vacating the district court’s order for reasons to be explained in an opinion to follow. The mandate of this court issued on October 16, 1985.

II

I turn first to the merits of the plaintiff’s case. The majority holds that even though the district court properly exercised jurisdiction over the plaintiff’s motion to enforce the settlement agreement it nevertheless erred in ruling that the defendants breached the agreement. The majority holds instead that the plaintiff breached the agreement by violating a prison disciplinary rule. This holding is based on an erroneous reading of the district court’s decision below. The majority contends that the district court found in its order of June 27, 1985, that McCall-Bey had violated DR-403, disobeying a direct order. The district court made no such finding. The district court concluded that the only violation “possibly supported ” by the record was a violation of DR-403. This qualified statement is not an explicit holding that a violation occurred. The court, however, permitted the violation of DR-403 to remain in McCall-Bey’s record and ordered the defendants to recalculate his punishment within DR-403’s limits. 7

It is no easy matter to harmonize the district court’s decision to permit the alteration of the plaintiff’s record and the recalculation of his punishment with its explicit holding that the defendants breached the settlement agreement. The district court noted that the punishment imposed on McCall-Bey exceeded the máximums for a violation of DR-403 established by DOC regulations, but it is not clear why this fact, standing alone, establishes that the defendants breached the settlement. The defendants’ argument nevertheless begs the question.

In executing the settlement agreement, McCall-Bey agreed to abide by all applicable DOC rules and regulations. DOC rules mandate that prisoners in DOC custody obey all orders given by prison corrections *1194 officers. McCall-Bey and the State also agreed, however, that termination of work release status would take place “according to applicable Department of Corrections Rules.” The defendants’ own regulations, which they agreed to follow in the event plaintiff violated any rule or regulation, required the Adjustment Committee to “specifically refer to the evidence which convinced them to decide the committed person did or did not commit the offense.” DOC regulations also provide that all evidence submitted “shall be summarized in the written record prepared by the Committee.” The district court was clearly correct in finding that the Committee’s actual report of the incident totally insufficient when measured against the procedural requirements of the DOC’s own regulations.

The Adjustment Committee report refers to the RDR, but the allegations set forth in that document are not discussed. There is no discussion of the charges and the evidence against McCall-Bey except that the report does mention McCall-Bey’s “admission” that he did not remove his shorts. The truth is that a reader of the Adjustment Committee report would know next to nothing about the substance of the charges against the prisoner. Even if the Due Process Clause of the Constitution does not require more, the DOC’s own regulations certainly demand more of the Adjustment Committee.

The district court cannot decide whether prison disciplinary procedures comport with constitutional, statutory and, in this case, contractual requirements unless the Adjustment Committee report provides “a record for a reviewing court to exercise its minimal review of that record to determine whether the actions of the disciplinary committee were arbitrary, capricious or an abuse of discretion.” Hanrahan v. Lane, 747 F.2d 1137, 1140 (7th Cir.1984). An Adjustment Committee report “helps to insure that prison administrators will act fairly” and “serves as the basis for federal court review.” 747 F.2d at 1141 . These concerns are embodied in the DOC regulations which provide that the Adjustment Committee “shall consider all material which is relevant to the issue of whether or not the committed person committed the offense.” Simply put, the Adjustment Committee report in this case evidences no such consideration.

McCall-Bey was thus denied a hearing that comported with the procedural requirements of the DOC. The next issue we must address is whether the district court’s finding that the disciplinary procedures utilized below against McCall-Bey were deficient should affect its determination of whether McCall-Bey or the defendants breached the settlement agreement. Even within the confines of a prison, allegations of wrongdoing must be proven in a proceeding that comports with some minimal sense of due process and fairness before they are taken as true.

The majority dismisses this concern. “The truth is that there isn’t the slightest doubt that the plaintiff disobeyed a direct order and thereby violated a rule of the work-release center; and once such a conclusion is made, it follows as the night the day that the plaintiff is not entitled to participate in the work-release program.” It is astonishing that the majority can assert that there is not the “slightest doubt” of the plaintiff’s guilt when there has never been a hearing of his guilt or innocence that satisfied the most minimal notions of due process and, more importantly, the requirements of the DOC itself. The charges against McCall-Bey have not been proved even under the less-than-stringent procedural requirements of the DOC. For purposes of determining who initially breached the agreement, the alleged events of October 29, 1984 simply did not occur, they are non-events. Without a proper adjudication of the charges against McCall-Bey the RDR is merely a series of unproven allegations. Therefore, the district court was clearly correct in ignoring the only “possible” rule violation in determining that the defendants breached the agreement.

The majority also suggests that the procedural errors it concedes occurred in the prison administrative hearing below can be *1195 separated from the assertedly error-free processing of DR-403, disobeying a direct order. We must make this separation, the majority asserts, in order to insure that prison officials do not “stub one of their procedural toes.” It is categorically not our task to protect prison officials from the legally significant errors they may commit while operating state prisons. If prison officials find they are stubbing too many of their procedural toes they ought only to charge inmates with those violations the evidence supports. In the present case prison officials should not have charged McCall-Bey with five violations — only one of which had any arguable merit.

In addition the majority’s contention that the violation of DR-403 must stand, even though the four other rule violations fall, strains credibility. All five charges arose out of the same incident, all five were made in the same RDR. All five charges were processed together, all five formed the basis of the defendants’ disciplinary actions. The entire disciplinary process was invalidated by the Adjustment Committee’s violation of DOC regulations.

The district court’s opinion is not a model of clarity. Fortunately, our limited task as an appellate court is to determine whether the district court’s actions constituted an abuse of discretion. The district court had this case on its docket for more than five years and was intimately familiar with its facts and circumstances. Its precise holding may be somewhat obscure, but it is clear that the district court believed that the defendants, and not the plaintiff, were in breach of the agreement. I am unable to say that the district court’s holding that the defendants breached the settlement agreement was an abuse of discretion. To reverse under these circumstances would be to convert this court into a trier of fact. We owe the district court as much deference when it rules for a prisoner as when it rules against. I would affirm the district court’s decision that the defendants breached the settlement agreement. 8

111

I turn to the jurisdictional issues raised by this case. Judge Posner, writing for the majority, has conceded that the district court “if barely” retained jurisdiction to enforce the settlement agreement. Inexplicably, however, he launches into an analysis obviously designed to support a holding that the court lacked jurisdiction. This is disturbing for several reasons. First, given this court’s actual holding, the bulk of his analysis is dicta. Second, by employing an analysis calculated to justify a reversal rather than an admonishment of the district judge, this court ensures that the district judges of the circuit as well as the Bar will be confused rather than enlightened. A district judge reading today’s decision will not be certain of what is required of him or her in the future because the majority opinion criticizes the conduct of the district judge while simultaneously permitting it. The majority gives back with the left hand what it has taken away with the right. Finally, the majority’s jurisdictional analysis with its grudging concession places me in the awkward position of having to decide whether to retain or discard my own jurisdictional analysis. Despite the concession, I have chosen to discuss the jurisdictional issue in order to clarify the settled authority of district courts to enforce settlement agreement.

IV

Settlement agreements are highly favored and will be enforced whenever possible. Williams v. First National Bank, 216 U.S. 582, 595 , 30 S.Ct. 441, 445 , 54 L.Ed. 625 (1910); Metropolitan Housing Development v. Village of Arlington Heights, 616 F.2d 1006, 1013 (7th Cir.1980); Pearson v. Ecological Science, 522 F.2d 171, 176 (5th Cir.1975), cert. denied sub nom. Skydell v. Ecological Science, 425 U.S. 912 , 96 S.Ct. 1508 , 47 L.Ed.2d 762 (1976); Kohr v. Allegheny Airlines, 504 *1196 F.2d 400, 405 (7th Cir.1974). 9 There is no requirement that settlement agreements be in writing. Kukla v. National Distillers Products, 483 F.2d 619 , 621 (6th Cir.1973). Federal courts have consistently approved the enforcement of oral settlement agreements. Cooper-Jarrett v. Central Transport, 726 F.2d 93, 96 (3d Cir.1984); Odomes v. Nucare, 653 F.2d 246, 252 (6th Cir.1981); Wiltgen v. Hartford Accident & Indemnity, 634 F.2d 398, 400 (8th Cir.1980); Harrop v. Western Airlines, 550 F.2d 1143, 1145 (9th Cir.1977); Warner v. Rossignol, 513 F.2d 678, 682 (1st Cir.1975); Massachusetts Casualty v. Forman, 469 F.2d 259, 260 (5th Cir.1972); Autera v. Robinson, 419 F.2d 1197, 1198 (D.C.Cir. 1969). By their very nature oral arguments cannot be incorporated, except by reference, into an order of a court, nor can oral arguments be read, in the conventional sense, by a court. The basis for the enforcement of these agreements is the inherent authority of district courts to enforce agreements terminating litigation pending before them. Today’s decision suggests that such agreements are an inadequate basis for federal jurisdiction and rejects the inherent authority of district courts to specifically enforce them.

In Lyles v. Commercial Lovelace Motor Freight, 684 F.2d 501 (7th Cir.1982) (Eschbach, J.), the plaintiff had orally agreed to settle his claim against the defendant four days before the scheduled trial date. The district court was informed of the parties’ intention to settle the lawsuit two days later. The defendant submitted written settlement documents to the plaintiff, but not to the court. These documents were never executed. “[N]o further communication was received by the court from any of the litigants.” 684 F.2d at 503. Nearly eight months later, on the basis of this information, the district court dismissed the case without prejudice to the right of either party to reopen the action within thirty days if the settlement was not consummated. More than thirty days after the district court’s dismissal order, the plaintiff moved to reopen the case stating that the settlement agreement tendered by the defendant was unacceptable. The district court ruled that the parties were bound by the oral settlement agreement and refused to reopen the case holding that the nine-month delay between the time of the settlement and the motion to reopen had prejudiced the defendant. 10

This court affirmed the district court’s finding that the parties were bound by the settlement agreement. “An oral agreement to settle the claims asserted by [the defendant] is enforceable under federal law.” 684 F.2d at 504. At no time was a written settlement agreement presented to the district court for none was ever executed by the plaintiff. There is no indication that the district court was even aware of the terms of the agreement. The court dismissed on the basis of the parties’ mere intention to settle. The agreement at issue in the instant case, though never submitted to the district court, was properly executed in written form. The parties do not contest the validity of the agreement, nor do they disagree over the meaning of the agreement’s basic terms.

In Cummins Diesel Michigan v. Falcon, 305 F.2d 721 , 723 (7th Cir.1962), the parties orally agreed at a pretrial conference held before the district court to settle their dispute. Three weeks later the court was informed that one of the parties had repudiated the settlement agreement. The court entered summary judgment in accordance with the agreement. The court stated that “... a settlement agreement or stipulation voluntarily entered into cannot be repudiated by either party and will be summarily enforced by the court.”

*1197 In United States v. Orr Construction, 560 F.2d 765 , 768-69 (7th Cir.1977), this court held that district courts retain jurisdiction to enforce settlement agreement when they enjoy original jurisdiction over the underlying cause of action. There is no indication that the agreement in Orr was submitted to the district court. Indeed, the facts of that case suggest the contrary. 11

In Debase v. Mueller, 552 F.Supp. 307, 308 (N.D.Ill.1982), the parties reached an oral settlement agreement in the presence of the court. The case was dismissed pursuant to the agreement. The defendant refused to honor the agreement and the plaintiffs moved to enforce the settlement. The court granted the motion. Until today, the inherent authority of district courts to enforce settlement agreements had never been seriously questioned in this circuit.

The majority attempts to distinguish Lyles by asserting that in that case “there was no question of federal jurisdiction” “just as there is no issue of enforceability of the settlement agreement in this case.” The court in Lyles, however, held that the agreement at issue was enforceable under federal law. The majority implies that the critical distinction between Lyles and the present case is that in Lyles the motion before the district court was a motion to reopen the case, whereas here, the motion at issue is a motion to enforce the settlement agreement. I suggest that the majority has missed the point entirely.

In Lyles the moving party was the plaintiff. Because the plaintiff sought to repudiate the agreement he moved to reopen the case. This sequence of events, however, is merely fortuitous. Under the majority’s analysis, if the defendant in Lyles had filed a motion to enforce the settlement before the plaintiff had filed his motion to reopen, the district court’s jurisdiction would have been problematic.

I can thus only assume that had the district court construed McCall-Bey’s letter of February 18, 1985 as a motion to reopen the case rather than as a motion to enforce the settlement, the court’s retention of jurisdiction would not have troubled this court. There is, of course, no fundamental difference between reopening a case because a contract has been broken, and enforcing the contract. In both cases the contract dispute is a direct consequence of the amicable resolution of a dispute properly before the district court. In both cases the resolution of the contract dispute is “logically dependent” on the underlying federal claim. See Owen Equipment & Erection v. Kroger. 437 U.S. 365, 376 , 98 S.Ct. 2396, 2403 , 57 L.Ed.2d 274 (1978).

This circuit does not stand alone in rejecting the position advanced by the majority today. In Green v. Lewis, 436 F.2d 389 , 390 (3d Cir.1970), the parties orally agreed to settle the pending claim. The parties announced their agreement to the court. It approved the settlement. The plaintiff later rescinded the agreement and moved to reopen the proceedings. The district court entered judgment for the defendant in accordance with the terms of the settlement agreement. The court of appeals affirmed stating that: “An agreement to settle a lawsuit, voluntarily entered into, is binding upon the parties, whether or not made in the presence of the court and even in the absence of a writing.” See also Good v. Pennsylvania RR, 384 F.2d 989, 990 (3d Cir.1967); Main Line Theatres v. Paramount Film Distributors, 298 F.2d 801 , 802 n. 1 (2d Cir.), cert. denied, 370 U.S. 939 , 82 S.Ct. 1585 , 8 L.Ed.2d 807 (1962).

In Fulgence v. McDermott, 662 F.2d 1207, 1209 (5th Cir.1981), the parties had orally settled their dispute. Upon reading the written settlement documents prepared alter the oral agreement the plaintiff refused to execute the agreement. The district court granted the defendant’s motion to enforce the settlement agreement. The *1198 court of appeals affirmed holding that oral agreements to settle are enforceable against plaintiffs who “knowingly and voluntarily” agree to the terms of the settlement. See also Mid-South Towing v. Har-Win, 733 F.2d 386, 390 (5th Cir.1984); Glazer v. Bradford, 616 F.2d 167, 169 (5th Cir.1980).

Today’s decision calls into question the well-established practice of federal trial courts as well. District courts have long assumed that they have the inherent authority to enforce settlement agreements. See Allen v. Alabama State Board, 612 F.Supp. 1046 (M.D.Ala.1985); Echols v. Nimmo, 586 F.Supp. 467, 469 (W.D.Mich.1984); Bergstrom v. Sears, Roebuck & Co., 532 F.Supp. 923, 932 (D.Minn.1982); Morris v. Gaspero, 522 F.Supp. 121, 124 (E.D.Pa.1981); United States for Use of Harter Concrete Products v. Buckner & Moore, 505 F.Supp. 409, 410 (W.D.Okla.1979); Dependahl v. Falstaff Brewing, 448 F.Supp. 813, 815 (E.D.Mo.1978); Gliniecki v. Borden, 444 F.Supp. 619, 622 (E.D.Wisc.1978); Read v. Baker, 438 F.Supp. 737, 741 (D.Del.1977), aff’d, 577 F.2d 728 (3d Cir.), cert. denied, 439 U.S. 869 , 99 S.Ct. 197 , 58 L.Ed.2d 180 (1978); Reid v. Graybeal, 437 F.Supp. 24, 27 (W.D.Okla.1977). 12

In Fairfax Countywide Citizens Ass’n v. County of Fairfax, 571 F.2d 1299 (4th Cir.1978), the plaintiffs sought to reopen their case more than three years after the order of dismissal. In the instant case the motion to enforce the settlement agreement was filed less than three months after the order of dismissal. Moreover, in Fairfax the parties’ stipulation of dismissal did not refer at all to the settlement.

More importantly, Fairfax is an isolated case. No other circuit has adopted the Fourth Circuit’s approach to this issue. In In re Corrugated Container Antitrust Litigation, 752 F.2d 137, 142 (5th Cir.1985), for example, the Fifth Circuit observed that the Fairfax decision “may be contrary to the Fifth Circuit opinions concerning the inherent power of a district court to enforce an agreement settling litigation pending before the court.” Indeed, the status of the Fairfax case even within the Fourth Circuit is questionable. In United States v. Newport News Shipbuilding & Drydock, 571 F.2d 1283, 1286 (4th Cir.), cert. denied, 439 U.S. 875 , 99 S.Ct. 212 , 58 L.Ed.2d 189 (1978), a case decided one week prior to Fairfax, the court stated that parties to contractual negotiations may enter into an enforceable oral contract to settle where the parties intend that their agreement should later be reduced to writing. The circuit has continued to cite the general principle of Aro approvingly. Ozyagcilar v. Davis, 701 F.2d 306, 308 (4th Cir.1983); Millner v. Norfolk & Western RR, 643 F.2d 1005, 1009 (4th Cir.1981).

Even if Fairfax were controlling, the district court here successfully retained jurisdiction by indirectly incorporating the settlement agreement into the order of dismissal. The dismissal order was issued pursuant to stipulation; the stipulation was executed pursuant to the settlement. This chain of incorporation, as the majority concedes, satisfies the procedural requirements of Fairfax.

The majority has given us an extensive discussion of the applicability of Rule 41 of the Federal Rules of Civil Procedure to this case. This issue was not raised below, and not briefed or argued to this court. The parties’ stipulation of dismissal does state that dismissal is to be made pursuant to Rule 41, but neither the September 4, 1984 dismissal order nor the December 13, 1984 dismissal order mentions the rule. The majority states that dismissal must have been made pursuant to Rule 41 because it is the only provision in the Federal Rules of *1199 Civil Procedure for voluntary dismissal by order of the court. The majority thus seems to suggest that a district court may not dismiss litigation pending before it unless explicitly authorized by the federal rules. The Federal Rules of Civil Procedure were not intended to exhaust the authority of the district courts of the United States. Courts retain the power to dismiss apart from legislative fiat. The rules clarify and define the power of federal courts in certain specific, enumerated situations. They were not intended to supplant the existing authority of Article III courts.

In support of its position the majority cites Rule 82 for the proposition that the rules are not to be construed as extending the jurisdiction of the district courts. In fact, Rule 82 provides that the rules “shall not be construed to extend or limit the jurisdiction of the United States district courts” (emphasis added). A fair reading of Rule 82 is that it is intended to preserve the pre-existing jurisdiction of the district court. Prior to the adoption of the Federal Rules of Civil Procedure, district courts, of course, regularly dismissed suits pending before them.

In any event I agree with the Fifth Circuit in Oswalt v. Scripto, 616 F.2d 191, 195 (5th Cir.1980), that Rule 41 is satisfied even if no formal, written stipulation of dismissal is entered into the record: “To require the filing of a formal document would countenance a mechanistic view of the Federal Rules of Civil Procedure and exalt form over substance.” In the present case, the district court dismissed the case five days before the actual filing of the stipulation of dismissal. The majority implies, without so holding, that this action in and of itself was somehow improper under Rule 41. This truly is the exaltation of form over substance.

District courts are entitled to rely on the representations of counsel that a stipulation of dismissal will soon be filed. They need not delay their disposition of cases pending before them until physically presented with a written stipulation comporting with the requirements of Rule 41. 13

The majority illustrates the consequences it fears may result if we were to hold that the district court had the inherent authority to enforce the settlement agreement with a hypothetical. In the majority’s hypothetical a defendant is forced into federal court on an action to recover a $500 unpaid tuition balance on a college education he agreed to provide as part of a ten-year-old settlement agreement. The majority’s hypothetical is not this case. Moreover, nothing compels district courts to enforce absurd or grossly inequitable agreements. Trial judges rarely exercise jurisdiction in cases that are inappropriate for federal jurisdiction. Should an errant district court exercise jurisdiction in a particularly inappropriate situation, this court, as always, retains the power to reverse its actions under an abuse of discretion standard. Under the majority’s rationale, the plaintiff in its hypothetical need only persuade the district court to attach a copy of the settlement agreement to its dismissal order in order to cause the district court to evidence an intention to retain jurisdiction. 14

V

There has been much concern expressed in recent years over the “crisis” in the federal court system caused by the apparent “explosion” in federal litigation. This court has been at the forefront of efforts to alleviate the “burden” on the federal courts. Today’s decision, while effectively removing this case from the appellate dock *1200 et, may in the long ran increase the workload of the district courts.

It will now be more difficult for litigants to avail themselves of a proven means of avoiding “the expense and delay incidental to litigation.” Autera, 419 F.2d at 1199 . The ability of district courts to enforce settlement agreements is often a crucial factor in litigants’ decisions to settle and dismiss pending lawsuits. No longer, however, will trial courts be able to dismiss cases the moment they are informed that the parties have agreed to settle. District courts must now make certain they take steps to evidence an intention to retain jurisdiction before dismissing. Henceforth, district courts may insist that the parties first prepare a written settlement document. Conceivably, courts may decide to hold a hearing to determine whether its understanding of the proposed agreement corresponds to that of the parties.

Experience has shown that it may be months before an agreement in principle to settle is translated into an executed settlement document. Because an agreement not incorporated into a dismissal order may not be enforceable, the period between agreement in principle and final execution will tend to decrease the chances of amicable settlement of disputes.

In addition, there are many instances in which litigants desire that the terms of settlement agreements not be disclosed. The agreement in this case, for example, contains a non-disclosure provision. By requiring the district court to clearly indicate its intention to retain jurisdiction over settlement agreements, today’s decision creates an incentive to make all such agreements part of the public record and frustrates litigants’ desire for confidentiality.

VI

One of the stated goals of the criminal justice system is to rehabilitate offenders and facilitate their integration into the mainstream of our society. The Administrative Regulations of the Illinois Department of Corrections, for example, declare that the “goals and purposes” of the regulations “involve programming residents to their greatest potential of self-development.” McCall-Bey, nearing the end of his sentence, has evidenced a desire to educate and improve himself. McCall-Bey waived a claim for damages against the State and asked only that he be permitted to attend school. Today, this court slams the door in his face.

I would affirm the district court.

. The constitutional violation was alleged to have occurred in connection with disciplinary proceedings brought against McCall-Bey in 1977 on charges of deviant sexual assault.

. The district court’s opinion is reported at McCall-Bey v. Franzen, 585 F.Supp. 1295 (N.D.Ill.1984).

. Although settlement documents had not yet been prepared, the DOC assigned plaintiff to the work release program at the Metropolitan Correctional Center on September 12, 1984. Under the auspices of that institution's work release program, plaintiff matriculated at Roosevelt University in the City of Chicago.

. On November 28, 1984 McCall-Bey’s grievance was heard by the Administrative Review Board which recommended that it be denied. He was transferred to the state prison at Joliet, Illinois on November 12, 1984. Sometime later he was transferred to Pontiac.

. The majority notes the remarkable fact that plaintiff signed the settlement agreement even though he had already been transferred out of the work release program and was in the midst of disciplinary proceedings. By way of explanation McCall-Bey contends that in the interim between the Adjustment Committee’s meeting and the Review Board’s meeting he was induced to sign the agreement because of an alleged oral promise that Director Lane would personally review his case.

. The extent of the district court’s knowledge of the terms of the agreement is unclear. The agreement had been executed several days before the order of dismissal. The district court was certainly aware of the fact that settlement negotiations were taking place. It may also have been apprised of the essentials of the emerging agreement. The record is simply unclear. I believe the district court would not have dismissed without some notion of the agreement’s basic elements.

. In Lee v. Hunt, 631 F.2d 1171, 1173-74 (5th Cir.1980), the Fifth Circuit, after first noting that the district court had properly exercised jurisdiction over a motion to enforce a settlement agreement because federal courts possess the inherent power to enforce such agreements, stated that "the construction and enforcement of settlement agreements is governed by principles of state law applicable to contracts generally.” Having original jurisdiction over McCall-Bey’s federal civil rights action, the district court enjoyed ancillary jurisdiction over the motion to enforce the agreement terminating that action. See generally Wright, Federal Courts 28-32 (4th ed. 1983).

The following language from a recent Fourth Circuit decision is instructive:

Settlements and releases assertedly entered into in respect of federal litigation already in progress implicate federal procedural interests distinct from the underlying substantive interests of the parties. Once a claim — whatever its jurisdictional basis — is initiated in the federal courts, we believe that the standards by which that litigation may be settled, and hence resolved short of adjudication on the merits, are preeminently a matter for resolution by federal common law principles, independently derived.

Gamewell Mfg. v. HVAC Supply, 715 F.2d 112, 115 (4th Cir.1983).

. Because I would affirm the district court’s decision that defendants breached the settlement agreement, I do not reach McCall-Bey’s due process claims.

. In some circumstances it may be beyond the district court’s discretion to refuse to enforce a valid settlement agreement. In re Air Crash Disaster, 687 F.2d 626, 629 (2d Cir.1982); Kohr, 504 F.2d at 405 ; Meetings and Expositions v. Tandy, 490 F.2d 714, 717 (2d Cir.1974); E.L. "Bunch" Hullet v. Universal C.I.T. Credit, 259 F.2d 685, 688 (10th Cir. 1958).

. Several of the defendant’s potential witnesses had become unavailable.

. Prior court approval of settlements is required only in bankruptcies, class actions, and shareholder derivative suits. United States v. Miami, 614 F.2d 1322 , 1330 (5th Cir.1980). Cf. Collins v. Thompson, 679 F.2d 168, 172 (9th Cir.1982) (consent decrees binding even without judicial approval).

. Some district courts have asserted that a settlement agreement is enforceable only if physically incorporated into an order of dismissal. Musifilm v. Spector, 568 F.Supp. 578, 581 (S.D.N.Y.1983); Backers v. Bit-She, 549 F.Supp. 388, 389 (N.D.Ca.1982); Denali Seafoods v. Western Pioneer, 92 F.R.D. 763, 764 (W.D.Wash.1981). But compare Pedersen v. M/V Ocean Leader, 578 F.Supp. 1534 (W.D.Wash.1984); Fustok v. Conticommodity Services, 577 F.Supp. 852, 858 (S.D.N.Y.1984); Sidewinder Marine v. Nescher, 440 F.Supp. 680 (N.D.Ca.1976). The caselaw makes no distinction between prejudgment and post-judgment motions for enforcement.

. The minute order forms employed by the judges of the Northern District of Illinois provide for dismissal pursuant to Rules 4, 21, 41, and "by agreement."

. This would be a different case if the language of the settlement agreement was so indefinite that what constituted compliance could not be ascertained. See Orr, 560 F.2d at 769; United Mine Workers v. Consolidation Coal, 666 F.2d 806, 810 (3d Cir.1981). In such a case, while jurisdiction over a motion to enforce the settlement agreement would properly lie with the district court, the court, in the sound exercise of its discretion, should decline enforcement.