What You Can and Can’t Do by Stipulation

Opposing counsel just called to propose that the parties stipulate to certain facts or evidence in the case. A stipulation seems like a good idea to avoid motion practice. But before agreeing to stipulate, make sure you understand the consequences of the proposed agreement. Stipulations are valuable tools for litigants but should be used skillfully.

An Effective Way to Satisfy Rule 1

Rule 1 of the Federal Rules of Civil Procedure requires that the court and the parties construe, administer, and employ the rules of civil procedure “to secure the just, speedy, and inexpensive determination of every action and proceeding.” Consistent with Rule 1, judges are usually happy when the parties agree on something without needing to have full briefing or a hearing on the issue.

What You Can Do by Stipulation

A stipulation is simply an agreement between the parties. To be effective, the stipulation must be in writing and signed by the judge or made on the record in open court. One of the most common uses is a stipulated protective order that governs the procedures for handling confidential information disclosed during discovery. Before the court can approve the stipulation, the proposed order must include a statement of good cause as to why the information requires confidential treatment. Further, confidential designation for purposes of discovery will not necessarily govern the treatment of such documents at trial.

Parties can also stipulate to admitted facts. In a contract dispute, for example, the parties may stipulate as to the existence of the contract, the parties to that contract, and the date of its execution. Parties may also stipulate that a key witness served in a particular role or held a certain title during a specified time period if these facts are relevant and undisputed. Admitted facts do not need to be proven at trial, making trial shorter and less costly.

Before stipulating to admitted facts, make sure you have thoroughly reviewed the underlying evidence, including relevant documents and deposition testimony, to be sure that the facts in question should be deemed admitted without challenge. Once the parties have stipulated to admitted facts, a party will not later be permitted to disprove a stipulated fact.

Parties may stipulate to the authentication and admissibility of trial exhibits. These stipulations make it unnecessary to use time at trial to authenticate documents or to establish the admissibility of exhibits where admissibility is not disputed. They can be particularly helpful in trials where each side gets a limited amount of time. In addition, parties sometimes begin settlement discussion while motions are pending, and the litigants may stipulate to withdraw pending motions while they pursue settlement.

Finally, under Rule 39(a), even when a jury trial has been demanded, the parties may waive the right to jury trial by filing a stipulation to a nonjury trial or by so stipulating on the record.

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.