Stipulations Strictly Construed
A stipulation can be used for entry of judgment to dismiss claims after summary judgment. Be especially careful in such circumstances. The court will strictly construe the stipulation. Is the stipulation for dismissal with or without prejudice? Does the stipulation preserve the right to appeal? In Davidson v. O’Reilly Auto Enterprises, LLC, the Ninth Circuit recently held that a party relinquished her right to appeal the dismissal of a wage statement claim by stipulating that judgment be entered “in accordance” with an adverse ruling but without reserving the right to appeal her wage statement claim. The circuit court found that the right to appeal the claim “was not a term of the agreement.”
What You Cannot Do by Stipulation
Some things the parties cannot do by mere agreement. Parties cannot by agreement confer federal subject matter jurisdiction upon a federal court. In Insurance Corp. of Ireland, Ltd. v. Compagnie de Bauxites de Guinee, the U.S. Supreme Court emphasized that because federal subject matter jurisdiction derives solely from Article III of the Constitution, “the consent of the parties is irrelevant.”
Similarly, parties cannot define the law for the court by agreement or stipulation. Litigants cannot stipulate to give jury instructions that incorrectly state the law. A stipulation cannot extend the statute of limitations. Parties may, however, enter into a tolling agreement to extend the time for a plaintiff to file suit. Private tolling agreements do not need court approval.
Nor can parties amend a scheduling order simply by stipulation. If the parties agree on how much additional time is needed, the parties may present a joint request to the court that shows good cause for the extension of deadlines.
Do not assume that an agreement between counsel on a continuance is sufficient for the court to grant the request. It is not. Courts want to keep cases moving forward. Although jury trials have largely been suspended due to the coronavirus pandemic, in most federal courts motion hearings and other civil proceedings are occurring by Zoom or telephonically. Even depositions and settlement conferences are being conducted via Zoom. Courts were congested before the pandemic and the pandemic has only exacerbated delays. This does not mean the court will necessarily reject the parties’ request to extend dates. It just means you will have to make a proper showing based on the specific facts and circumstances in your case.
You will still need to convince the judge that the need for more time was not caused by dilatory or delaying tactics on either side. The stipulation should explain that the parties have been diligent in moving the case along and should include facts that support that assertion. This is especially true when seeking to extend discovery cutoff or deadlines for bringing dispositive motions, or to move the trial date.
Can You Withdraw a Stipulation?
After the court enters a stipulation in a civil case, can you withdraw it? Maybe. It will depend on the nature of the stipulation, the importance of the issues to resolution on the merits, and the stage of the proceedings. To correct a minor error, you can simply submit an amended stipulation that, when signed by the court, will supersede the previous one.
If the need to withdraw the stipulation is the result of a more substantive error, promptly notify opposing counsel and bring it to the court’s attention. An aggrieved party can move to withdraw the stipulation. The court will want to know why the stipulation was erroneous or if an opposing party has been somehow misled. Has it caused delay? Was there a mutual mistake? Will prejudice result if the stipulation is not withdrawn? All the relevant evidence should be presented to the court in sworn affidavits or declarations with supporting legal memoranda. If the issue is disputed, the court may require full briefing and hold a hearing.
Stipulations can seem routine in complex litigation, but because the implications can be far reaching, never approach them casually. Take great care to consider how the agreement will impact your case going forward. This does not require that you be reflexively disagreeable. It simply means you must be strategic—even when it seems that a straightforward stipulation is all that is needed to change a deadline. Failing to do so could risk annoying the court and jeopardizing your client’s case.