Patrice Daniels v. LATOYA HUGHES, Acting Director of the Illinois Department of Corrections

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 23-3388 & 23-3110
PATRICE DANIELS, et al.,
Plaintiffs-Appellants, Cross-Appellees,
v.
LATOYA HUGHES, Acting Director of the Illinois
Department of Corrections, et al.,
Defendants-Appellees, Cross-Appellants.
____________________
Appeals from the United States District Court for the
Central District of Illinois.
No. 07-cv-1298 — Michael M. Mihm, Judge.
____________________
A RGUED J ANUARY 22, 2025 — DECIDED A UGUST 8, 2025
____________________
Before R OVNER , BRENNAN , and S T. EVE, Circuit Judges.
ST. EVE, Circuit Judge. This case began almost twenty years
ago with a pro se complaint asserting claims against officials
within the Illinois Department of Corrections (“IDOC”) re-
lated to mental healthcare. With the help of counsel, this case
evolved into a class action, which settled in 2016 with an
agreement requiring the defendants to meet certain

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2 Nos. 23-3388 & 23-3110
benchmarks for mental-health treatment. The agreement pro-
vided for judicial enforcement until July 2020, later extended
to July 2022 for a subset of the agreement’s terms.
This appeal raises a dispute about one provision of the set-
tlement agreement, which provided that $1.9 million in attor-
ney’s fees and costs would become immediately due to plain-
tiffs’ counsel if the district court issued an order granting re-
lief for violations of the agreement. In 2018, the district court
issued such an order: an injunction requiring the defendants
to address five areas of noncompliance.
While the defendants’ interlocutory appeal of this order
was pending, the parties reached two agreements regarding
the $1.9 million in deferred fees. As a result of these agree-
ments, IDOC paid $1.9 million into a trust account at Dentons
US LLP, and Dentons disbursed the payment to plaintiffs’
counsel. We conclude that under the terms of the parties’ set-
tlement agreement, as modified by their fee agreements, our
decision vacating the district court’s injunction does not re-
quire plaintiffs’ counsel to return the payment.
In addition, this appeal concerns what remained of the un-
derlying class-action claims after the district court’s enforce-
ment jurisdiction over the settlement agreement expired. The
court neither dismissed those claims when it approved the
settlement agreement nor when its enforcement jurisdiction
expired by the agreement’s own terms. Instead, after its en-
forcement jurisdiction expired, the court returned the case to
its “active docket” and entertained an amended complaint, a
motion to dismiss, and another amended complaint.
More than a year after the district court returned the case
to its “active docket,” the court sua sponte raised concerns

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Nos. 23-3388 & 23-3110 3
about its subject-matter jurisdiction over the underlying
claims related to mental healthcare. It ultimately concluded
that its jurisdiction over these claims ended when its jurisdic-
tion to enforce the settlement agreement ended. But jurisdic-
tion to enforce a settlement agreement and jurisdiction over
underlying claims are separate issues. In this case, the district
court’s jurisdiction over the underlying claims turns on
whether the settlement agreement moots those claims. We
therefore vacate the district court’s judgment and remand for
the court to resolve the mootness question.
I. Background
Ashoor Rasho filed a pro se complaint in the Central Dis-
trict of Illinois in November 2007, challenging the adequacy
of mental healthcare provided to persons in IDOC’s custody.
The litigation grew into a class action against IDOC officials
seeking declaratory and injunctive relief for failures to pro-
vide mental healthcare. In August 2015, the district court cer-
tified a class of persons in IDOC’s custody who are “identified
or should have been identified by IDOC’s mental health pro-
fessionals as in need of mental health treatment ….” Rasho,
Patrice Daniels, and other inmates served as class representa-
tives. (IDOC has since released Rasho from its custody.)
After class certification, the parties reached an agreement
regarding the plaintiffs’ claims. In its introduction section, the
parties’ Amended Settlement Agreement (the version the dis-
trict court approved) stated, “the parties … engaged in arms
length settlement negotiations to resolve the claims raised by
this action as set forth in Plaintiffs’ Third Amended Com-
plaint,” and “Plaintiffs and Defendants … reached an agree-
ment settling this litigation ….”

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4 Nos. 23-3388 & 23-3110
This agreement required the defendants to meet certain
benchmarks across more than a dozen areas of mental-health
treatment. These requirements were judicially enforceable.
The Amended Settlement Agreement provided that the par-
ties “may jointly or individually seek relief from the Court to
effect substantial compliance with the Settlement Agree-
ment,” and the court “may enter an order … that is designed
to achieve compliance ….” Under the terms of the agreement,
“[t]he Court’s jurisdiction” with respect to each provision
would “terminate” on July 7, 2020, or, if “the Court deter-
mine[d] that Defendants are not in substantial compliance”
with a given provision, a date no later than two years “from
the date of the Court’s finding that the Defendants are not in
substantial compliance.”
The Amended Settlement Agreement barred the plaintiffs
from seeking relief for noncompliance through a petition for
contempt and the district court from entering an order of con-
tempt to achieve compliance. To address persistent noncom-
pliance, the agreement instead provided for a return of the
case to the district court’s “active docket”: It provided that if
the parties were unable to resolve a dispute with respect to
certain “budget contingent” obligations, “Plaintiffs may re-
quest that the Court return this case to the active docket.” And
it provided that “[i]f Plaintiffs contend that Defendants have
not complied with an order” granting relief for violations of
the agreement, the district court may “return[] the case to the
active docket and set[] a trial date.”
Finally, as relevant here, the agreement partially condi-
tioned the plaintiffs’ entitlement to attorney’s fees on court-
ordered relief. The agreement provided that half the “fees and
costs due to Plaintiffs’ counsel”—$1.9 million of the $3.8

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Nos. 23-3388 & 23-3110 5
million total, as the parties later agreed— would only be “due
if the Court enters an order” granting relief for violations of
the agreement. If the district court entered such an order, the
$1.9 million would “become immediately due.”
In May 2016, the district court entered an order approving
the Amended Settlement Agreement. In its order, the district
court explained that it found the agreement to be “a fair, rea-
sonable, and adequate resolution of the claims,” and that “this
matter will remain on the Court’s docket until the terms of the
Settlement Agreement are met,” at which point “this matter
will be dismissed with prejudice.”
The next year, the plaintiffs returned to court, seeking re-
lief based on the defendants’ alleged failure to meet the terms
of the Amended Settlement Agreement in five areas: mental-
health evaluations, treatment planning, medication manage-
ment, crisis care, and segregation care. The district court held
that the defendants had breached the agreement, which itself
caused an Eighth Amendment violation. As relief, the court
entered an injunction requiring the defendants to address the
five areas at issue, to remain in effect for two years (until April
23, 2021). The defendants appealed the order, invoking our
jurisdiction under 28 U.S.C. § 1292(a)(1).
The parties disagreed about the implications of the district
court’s decision for the $1.9 million in deferred fees due under
the Amended Settlement Agreement “if the Court enters an
order [granting relief for violations of the agreement].” In Jan-
uary 2020, while the defendants’ appeal was pending, the par-
ties took a step towards resolving this fee dispute, executing
an agreement providing that the State of Illinois would issue
a check for $1.9 million to the law firm Dentons, and Dentons
would “not distribute any portion of the payment among

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6 Nos. 23-3388 & 23-3110
plaintiffs’ counsel until either (a) the parties enter a written
agreement that resolves their dispute about the $1.9 million
payment, or (b) the Seventh Circuit affirms the district court’s
injunction, or otherwise confirms plaintiffs’ right to the pay-
ment ….” Alternatively, “[i]n the event of an order that deter-
mines that plaintiffs are not presently entitled to the $1.9 mil-
lion,” the agreement provided that Dentons would “return
the $1.9 million to the State ….”
A month later, IDOC’s Chief Legal Counsel sent an email
to a Dentons attorney involved in this litigation “confirm[ing]
that the parties ha[d] reached an agreement that resolves their
dispute about the $1.9 million payment” and “that the $1.9
million may be released from the Dentons US LLP trust ac-
count and distributed among plaintiffs’ counsel.” Dentons
then released the payment.
Also while the defendants’ interlocutory appeal of the in-
junction order remained pending, the parties filed—and the
district court approved—a Corrected Second Amended Set-
tlement Agreement. This version of the parties’ agreement ex-
tended the district court’s jurisdiction to enforce terms not
subject to the injunction to April 23, 2021, the expiration date
for the injunction. The district court subsequently granted an
agreed motion for another extension of its jurisdiction to en-
force certain terms, this time to April 23, 2022.
In January 2022, in Rasho v. Jeffreys (“Rasho”), 22 F.4th 703
(7th Cir. 2022), we reversed the district court’s order granting
an injunction and vacated the injunction.
Given Rasho, the defendants sought to reopen plaintiffs’
counsel’s entitlement to the $1.9 million payment. They filed
a motion to recover the payment. The district court denied

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Nos. 23-3388 & 23-3110 7
this motion in September 2022, reasoning that the parties’
agreements did not provide for return of the $1.9 million pay-
ment, regardless of whether the defendants prevailed on their
interlocutory appeal of the injunction order. Rasho v. Walker,
No. 07-1298, 2022 WL 10220204 (C.D. Ill. Sep. 13, 2022).
Meanwhile, the parties attempted to negotiate further ex-
tensions of the district court’s jurisdiction over the Corrected
Second Amended Settlement Agreement. The day after we is-
sued Rasho, the parties filed a motion for the district court to
extend its jurisdiction to enforce certain terms of the agree-
ment by another three months, to July 22, 2022. The court
granted the motion, which would be the last extension.
In June 2022, the parties filed a proposed plan for negotia-
tions in the district court, explaining that they would attempt
to negotiate “an agreed path forward … and resolve ongoing
disputes regarding Plaintiffs’ allegations that Defendants
[were] not in substantial compliance with the [settlement
agreement] and/or federal law.” As part of these negotiations,
the parties agreed to “discuss which aspects of the Settlement
Agreement would continue past July 22, 2022, as part of a new
consent decree and/or private settlement agreement.” If they
failed to reach agreement to resolve their disputes by July 22,
they “agree[d] that this matter w[ould] be returned to the ac-
tive trial docket.”
The district court adopted and approved this plan in a mi-
nute entry. On July 20, 2022, in a telephone conference memo-
rialized in another minute entry, the parties informed the dis-
trict court that they were at an impasse in their negotiations.
The next day, and in accordance with the plan proposed by
the parties, the district court “returned the case to its active

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8 Nos. 23-3388 & 23-3110
docket for scheduling.” Rasho v. Walker, No. 07-1298, 2022 WL
2872224, at *6 (C.D. Ill. July 21, 2022).
For the next year, the parties litigated the case. With leave
of the district court, the plaintiffs filed a Fourth Amended
Complaint in September 2022. The defendants responded
with a motion to dismiss under Federal Rule of Civil Proce-
dure 12(b)(6), which the district court granted in part, while
also granting the plaintiffs leave to file an amended complaint
addressing deficiencies. The plaintiffs took up this oppor-
tunity in May 2023, filing a Fifth Amended Complaint. The
defendants again responded with a motion to dismiss.
In September 2023, the district court sua sponte raised con-
cerns about its subject-matter jurisdiction. The court entered
an order staying all proceedings and requesting briefing on
jurisdiction. The next month, after considering the briefs, the
court dismissed all claims, reasoning that it lost subject-matter
jurisdiction when its jurisdiction to enforce the parties’ settle-
ment agreement expired by the agreement’s own terms (i.e.,
in July 2022 at the latest, and perhaps earlier because of pos-
sible defects in its orders extending its jurisdiction). Daniels v.
Jeffreys, No. 07-CV-1298, 2023 WL 6978495 (C.D. Ill. Oct. 23,
2023), motion for relief from judgment denied, No. 07-CV-1298,
2023 WL 8881815 (C.D. Ill. Dec. 22, 2023).
Both parties filed appeals. The defendants challenge the
district court’s order denying their motion seeking repayment
of the $1.9 million in deferred attorney’s fees and costs. The
plaintiffs challenge the district court’s order dismissing this
case for lack of subject-matter jurisdiction.

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Nos. 23-3388 & 23-3110 9
II. Discussion
Lawsuits can end by an adjudication or by an agreement
between the parties. A binding settlement agreement gener-
ally moots the underlying claims in the suit. Selcke v. New Eng-
land Ins. Co., 2 F.3d 790, 791–92 (7th Cir. 1993); see also Camp-
bell-Ewald Co. v. Gomez, 577 U.S. 153, 160–62 (2016), as revised
(Feb. 9, 2016). A federal court can nonetheless retain ancillary
jurisdiction to enforce the agreement so long as the court has
not “dismissed [the] suit with prejudice, thus terminating fed-
eral jurisdiction.” Shapo v. Engle, 463 F.3d 641, 643 (7th Cir.
2006); see Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375,
380–82 (1994). Alternatively, if the court embodies the parties’
agreement in an injunction, the court has “inherent power …
to enforce [the injunction and therefore the agreement], as by
contempt proceedings.” Shapo, 463 F.3d at 643.
The parties put much stock in our prior characterization of
the settlement agreement in this case as a “consent decree”
under the Prison Litigation Reform Act, 18 U.S.C. § 3626.
Rasho, 22 F.4th at 707 n.2. The Prison Litigation Reform Act
imposes remedial limitations on “consent decrees” in civil ac-
tions challenging prison conditions but exempts certain “pri-
vate settlement agreements.” 18 U.S.C. § 3626(c). For our pur-
poses, however, the distinction between a consent decree and
private settlement agreement (under the Prison Litigation Re-
form Act or otherwise) is largely irrelevant.
Even if a settlement agreement is enforceable as a judicial
decree, rather than as a private agreement, the agreement “is
to be construed for enforcement purposes basically as a con-
tract ….” United States v. ITT Cont’l Baking Co., 420 U.S. 223,
238 (1975). This appeal involves two disputes, both of which
turn at least primarily on questions about the proper

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10 Nos. 23-3388 & 23-3110
construction of the parties’ settlement agreement for enforce-
ment purposes. Where the distinction matters, we assume
that the district court’s order approving the settlement agree-
ment amounts to a judicial decree embodying the agreement.
A. Attorney’s Fees
The May 2016 Amended Settlement Agreement made the
defendants’ obligation to pay $1.9 million in attorney’s fees
and costs to plaintiffs’ counsel subject to a condition prece-
dent: the district court entering an order granting relief for vi-
olations of the settlement agreement. The defendants argue
that the district court’s injunction order did not satisfy this
condition precedent because Rasho vacated the injunction—
and they seek repayment of the $1.9 million on this basis.
Their argument is beside the point, however, if the January
2020 fee agreement modified the May 2016 Amended Settle-
ment Agreement by changing the conditions triggering the
$1.9 million payment to plaintiffs’ counsel.
The parties’ agreements are contracts, so state law governs
our interpretation. See United States v. City of Northlake, 942
F.2d 1164, 1167 (7th Cir. 1991) (recognizing that “fundamental
principles of contract interpretation under relevant state law
apply when a court is presented with the task of interpreting”
a settlement agreement or consent decree). Under Illinois law,
which applies here, the interpretation of a contract presents a
question of law. Bowers Mfg. Co. v. Chi. Mach. Tool Co., 453
N.E.2d 61, 66 (Ill. App. Ct. 1983). We thus review the district
court’s interpretation of the parties’ agreements de novo. See
Elusta v. City of Chicago, 696 F.3d 690, 693 (7th Cir. 2012).
A “well-worn principle of contract law” provides that “the
terms in a modification agreement will supersede conflicting

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Nos. 23-3388 & 23-3110 11
terms in the original agreement.” Large v. Mobile Tool Int'l,
Inc., 724 F.3d 766, 772 (7th Cir. 2013) (collecting cases, includ-
ing from Illinois). In this case, the May 2016 Amended Settle-
ment Agreement specified one condition triggering an obliga-
tion to pay $1.9 million to plaintiffs’ counsel: “the Court enters
an order [granting relief for violations of the agreement].” The
January 2020 fee agreement, however, specified two different
conditions, connected by a disjunctive: “either (a) the parties
enter a written agreement that resolves their dispute about the
$1.9 million payment, or (b) the Seventh Circuit affirms the
district court’s injunction, or otherwise confirms plaintiffs’
right to the payment ….” Given the conflict between the
agreements, the January 2020 fee agreement supersedes the
May 2016 Amended Settlement Agreement.
The February 2020 agreement, as reflected in the email
from IDOC’s Chief Legal Counsel, satisfied the first condition
in the January 2020 fee agreement and therefore properly trig-
gered the $1.9 million payment.
The last question is whether the January 2020 fee agree-
ment requires plaintiffs’ counsel to return the $1.9 million
payment given Rasho. The defendants point to the provision
stating, “[i]n the event of an order that determines that plain-
tiffs are not presently entitled to the $1.9 million, Dentons will
return the $1.9 million to the State ….” This provision refers
to Dentons, not plaintiffs’ counsel. We therefore agree with
the district court that this provision does not require plain-
tiffs’ counsel to return the payment disbursed to them.
B. Subject-Matter Jurisdiction
Subject-matter jurisdiction is a court’s “authority to adju-
dicate [a] claim in suit.” Arbaugh v. Y&H Corp., 546 U.S. 500,

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12 Nos. 23-3388 & 23-3110
511 (2006). Article III of the Constitution limits the jurisdiction
of federal courts to “Cases” and “Controversies.” U.S. Const.
Art. III, § 2. This requirement “demand[s] that ‘an actual con-
troversy ... be extant’” through all stages of federal judicial
proceedings. Campbell-Ewald, 577 U.S. at 160 (quoting Arizo-
nans for Off. Eng. v. Arizona, 520 U.S. 43, 67 (1997)). To invoke
federal-court jurisdiction, a plaintiff must “demonstrate a
‘personal stake’ in the suit.” Camreta v. Greene, 563 U.S. 692,
701 (2011) (quoting Summers v. Earth Island Inst., 555 U.S. 488,
493 (2009)). If an intervening circumstance deprives the plain-
tiff of a legally cognizable interest at any point during the lit-
igation, the action becomes moot—and no longer a “Case” or
“Controversy.” Already, LLC v. Nike, Inc., 568 U.S. 85, 726–27
(2013); Campbell-Ewald, 577 U.S. at 160–61.
At the inception of this case, Rasho invoked the district
court’s jurisdiction by asserting in his November 2007 pro se
complaint claims under 42 U.S.C. § 1983; Title II of the Amer-
icans with Disabilities Act, 42 U.S.C. §§ 12131–34; and Section
504 of the Rehabilitation Act, 29 U.S.C. § 794. In the Third
Amended Complaint, with counsel’s help, the plaintiffs as-
serted claims under the same federal laws. Neither the parties
nor the district court entered a voluntary dismissal order re-
linquishing the court’s jurisdiction over these claims. See Fed.
R. Civ. P. 41(a) (providing for voluntary dismissal). So the
question is whether intervening circumstances—namely, the
parties’ settlement agreement—moots those claims.
A binding settlement agreement generally moots a case.
See Selcke, 2 F.3d at 791–92; Green Valley Special Util. Dist. v.
City of Schertz, 969 F.3d 460, 469–70 (5th Cir. 2020) (en banc);
Serta Simmons Bedding, LLC v. Casper Sleep Inc., 950 F.3d 849,
852–53 (Fed. Cir. 2020) (collecting cases); 13B Wright &

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Nos. 23-3388 & 23-3110 13
Miller’s Federal Practice & Procedure § 3533.2 (3d ed. May
2025 update). “No matter how vehemently the parties con-
tinue to dispute the lawfulness of the conduct that precipi-
tated the lawsuit, [a] case is moot if the dispute ‘is no longer
embedded in any actual controversy about the plaintiffs’ par-
ticular legal rights.’” Already, 568 U.S. at 91 (quoting Alvarez v.
Smith, 558 U.S. 87, 93 (2009)). When a settlement agreement
resolves all claims against all parties, there is no longer a con-
troversy between the parties about the plaintiffs’ legal rights.
A complication is that parties can unilaterally or mutually
rescind a settlement agreement. “If non-performance of a con-
tract term constitutes a material breach, the non-breaching
party … may have a right to rescind the settlement agreement
and recommence litigation.” Serta, 950 F.3d at 853 n.4; see Hor-
witz v. Sonnenschein Nath & Rosenthal LLP, 926 N.E.2d 934,
942–43 (Ill. App. Ct. 2010) (describing the elements of a claim
for recission). Alternatively, “[p]arties are free to abrogate,
change, modify, or substitute a primary contract with their
mutual assent ….” Large, 724 F.3d at 772; see also Wells Fargo
Bus. Credit v. Hindman, 734 F.3d 657, 670 (7th Cir. 2013) (dis-
tinguishing unilateral and mutual rescission).
When a court has embodied the settlement agreement in a
judicial decree, Federal Rule of Civil Procedure 60(b) governs
modifications. See Rufo v. Inmates of Suffolk Cnty. Jail, 502 U.S.
367, 378 (1992); Balark v. City of Chicago, 81 F.3d 658, 662 (7th
Cir. 1996). That Rule provides that “[o]n motion and just
terms, the court may relieve a party … from a final judgment,
order, or proceeding for” five enumerated reasons or “any
other reason that justifies relief.” Fed. R. Civ. P. 60(b). Relief
under the Rule 60(b)(6) catchall “requires extraordinary

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14 Nos. 23-3388 & 23-3110
circumstances.” BLOM Bank SAL v. Honickman, 145 S. Ct. 1612,
1619 (2025).
Some courts have held that the breach or repudiation of a
settlement agreement can justify Rule 60(b)(6) relief from a fi-
nal judgment premised on that agreement. See Keeling v. Sheet
Metal Workers Int'l Ass’n, 937 F.2d 408, 410 (9th Cir. 1991);
United States v. Baus, 834 F.2d 1114, 1124 (1st Cir. 1987); Fairfax
Countywide Citizens Ass’n v. Fairfax County, 571 F.2d 1299,
1302–03 (4th Cir. 1978); see also Kokkonen, 511 U.S. at 378 (ac-
knowledging these cases without expressing a view on the is-
sue). This court “has suggested in dicta that it would follow
the same rule.” Neuberg v. Michael Reese Hosp. Found., 123 F.3d
951, 954 (7th Cir. 1997) (first citing McCall–Bey v. Franzen, 777
F.2d 1178, 1183–84, 1186 (7th Cir. 1985); and then citing United
States v. Mt. Vernon Memorial Ests., Inc., 734 F.2d 1230, 1235
(7th Cir. 1984)).
The settlement agreement executed by the parties and ap-
proved by the district court in May 2016 purported to “resolve
the claims raised by this action as set forth in Plaintiffs’ Third
Amended Complaint.” Subsequently, however, the parties
also agreed to return this case to the district court’s “active
trial docket,” the court indeed returned the case to its active
docket, and the parties litigated this case for more than a year
(from July 2022 to September 2023) without the parties or the
court raising the settlement agreement as a barrier.
In this context, we are unsure whether the parties’ settle-
ment agreement moots some or all of the plaintiffs’ claims re-
lated to the adequacy of mental healthcare provided to per-
sons in IDOC’s custody. As part of the settlement agreement,
did the parties waive their right to litigate these claims? If not,
what did they intend with respect to these claims?

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Nos. 23-3388 & 23-3110 15
The district court reasoned that the parties waived their
right to litigate these claims because of our prior characteriza-
tion of their settlement agreement as a “consent decree” un-
der the Prison Litigation Reform Act, Rasho, 22 F.4th at 707
n.2; and the Supreme Court’s description of consent decrees
as agreements under which parties “waive their right to liti-
gate the issues involved in the case and thus save themselves
the time, expense, and inevitable risk of litigation,” United
States v. Armour & Co., 402 U.S. 673, 681 (1971).
The question in Armour, however, was whether a consent
decree between a meat packer and the government in an an-
titrust case, which prohibited the meat packer from dealing in
certain commodities, prohibited a corporation that dealt in
some of those commodities from acquiring the meat packer.
Id. at 673–74. The government argued that allowing the acqui-
sition would thwart the purpose of the consent decree. Id. at
680–81. The Supreme Court rejected the premise that consent
decrees have a purpose, holding that because a consent decree
“normally embodies a compromise”—“the parties each give
up something they might have won had they proceeded with
the litigation”—“the decree itself cannot be said to have a pur-
pose” and “the scope of a consent decree must be discerned
within its four corners ….” Id. at 681–82.
In this context, Armour stands for the proposition that be-
cause consent decrees embody contracts, they “[are] to be con-
strued for enforcement purposes basically as a contract[s] ….”
ITT Cont’l Baking, 420 U.S. at 238. Accordingly, our prior char-
acterization of the settlement agreement as a “consent decree”
is not dispositive of whether the parties in this case waived
their right to litigate the underlying claims, such that the set-
tlement agreement deprives the plaintiffs of a legally

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16 Nos. 23-3388 & 23-3110
cognizable interest in the outcome of those claims. Rather,
that question turns on principles of contract interpretation.
We think the interpretation of the settlement agreement,
and ultimately the mootness issue, needs to be resolved in the
district court in the first instance, with the benefit of adversar-
ial presentation. The district court is free to order discovery
on remand and hold a hearing, if it deems it appropriate. We
leave the procedures to the district court’s sound discretion.
Its thorough understanding of the record will help guide the
resolution of the mootness issue.
Even if the district court determines on remand that the
settlement agreement contains a waiver of the parties’ right to
litigate the underlying claims (or otherwise moots the claims),
this will not necessarily resolve the mootness issue. If the par-
ties agreed to modify or rescind the settlement agreement
when they agreed to return this case to the district court’s “ac-
tive trial docket,” this could justify Rule 60(b)(6) relief from a
judicial decree embodying the settlement agreement. Neither
party moved for Rule 60(b)(6) relief below, and the district
court did not construe their request to return the case to its
active docket as a request for Rule 60(b)(6) relief. On remand,
however, the parties and the district court may consider this
avenue for litigating the underlying claims.
* * *
We therefore VACATE the judgment of the district court and
REMAND for the court to determine whether the parties’ settle-
ment agreement moots the underlying claims and any further
proceedings consistent with this opinion. We AFFIRM the
court’s denial of the defendants’ motion to reopen plaintiffs’
counsel’s entitlement to the $1.9 million payment.

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