06-2456 Marseilles Hydro Power LLC v. Marseilles Land & Water C O .

In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 05-2394, 06-1481, 06-2456
M ARSEILLES H YDRO P OWER LLC,
Plaintiff-Appellee,
v.
M ARSEILLES L AND & W ATER C O .,
Defendant-Third-Party-Plaintiff-Appellant,
and
F IELD C ONTAINER C O . et al.,
Third-Party-Defendants-Appellees.
____________
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
Nos. 00 C 1164, 04 C 1427—Harry D. Leinenweber, Judge.
____________
S UBMITTED N OVEMBER 15, 2006—D ECIDED A PRIL 9, 2007
____________
Before P OSNER , R IPPLE , and W OOD , Circuit Judges.
P OSNER , Circuit Judge. Marseilles Hydro, owner of a
hydroelectric plant, brought suit to compel Marseilles
Land & Water—the owner of a canal that supplies the
plant with the water it needs to generate electricity—to
repair the canal. (For the early stages of this protracted
litigation, see our previous opinion reported at 299 F.3d 643

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2 Nos. 05-2394, 06-1481, 06-2456
(7th Cir. 2002).) The water company filed a third-party
complaint against three companies, one of which is Field
Container. The district judge granted summary judgment
in favor of the third-party defendants on the ground that
the water company’s claim was barred by the statute of
limitations. The judge certified his order dismissing the
third-party complaint for an immediate appeal, Fed. R.
Civ. P. 54(b), and the water company has appealed. But
the water company and Field have now settled their
dispute—conditional, however, not only on our dismissing
the appeal as to Field (which is unexceptionable), but also
on our vacating so much of the district court’s decision
concerning the third-party complaint as pertains to Field.
The Supreme Court held in U.S. Bancorp Mortgage Co. v.
Bonner Mall Partnership, 513 U.S. 18 (1994), that by agree-
ing to a settlement the parties to an appeal renounce the
right to challenge the decision that was appealed. The
Court suggested that this rule could be waived in “excep-
tional circumstances,” but was emphatic that the mere
fact that the settlement was conditional on vacating the
decision appealed from was not an exceptional circum-
stance. Id. at 29; see also In re Memorial Hospital of Iowa
County, Inc., 862 F.2d 1299, 1300 (7th Cir. 1988). The
water company and Field do not claim exceptional circum-
stances. But there is a complication: as an alternative to
our vacating the part of the district court’s decision that
pertains to Field, they ask us to remand the case to the
district court for it to consider whether to vacate that part
of its decision under Fed. R. Civ. P. 60(b).
We have the power to order such a remand. U.S. Bancorp
Mortgage Co. v. Bonner Mall Partnership, supra, 513 U.S. at 29;
Pressley Ridge Schools v. Shimer, 134 F.3d 1218, 1222 (4th
Cir. 1998); Nahrebeski v. Cincinnati Milacron Marketing Co.,

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Nos. 05-2394, 06-1481, 06-2456 3
41 F.3d 1221 (8th Cir. 1994). And we agree with the court
in American Games, Inc. v. Trade Products, Inc., 142 F.3d 1164,
1168-69 (9th Cir. 1998), that on remand the district court
would not be cabined by the “exceptional circumstances”
test. The Court in Bancorp said that the court of appeals
can remand a case even in the absence of such circum-
stances, 513 U.S. at 29, which would make no sense if the
district court could not vacate its judgment in that absence.
But cf. Valero Terrestrial Corp. v. Paige, 211 F.3d 112, 116-21
(4th Cir. 2000).
Yet for us to remand in this case might seem to make
little sense because the district court’s action on remand
would pertain only to the dispute between the water
company and Field. The rest of the appeal would be
unaffected, so that the main effect of the remand would be
to delay the resolution of the appeal. Or would it? Remem-
ber that the settlement is conditional on the district court’s
dismissing so much of its decision as pertains to Field. If
the district court refuses to dismiss, the settlement may
fall through, and it would be awkward for the appeal to be
proceeding while the identity of the parties to the appeal
remained in doubt. That is a compelling reason not to
remand just the part of the appeal that pertains to the
dispute between the water company and Field, and
retain the rest. It would be better to remand the entire case
under Circuit Rule 57 and, to avoid unnecessary delay,
direct the water company and Field promptly to file in
the district court their motion (presumably under Fed. R.
Civ. P. 60(b)(6), the catch-all provision of Rule 60(b)) to
vacate the relevant part of the judgment. The district
judge would advise us whether it was inclined to grant a
Rule 60(b)(6) motion to vacate its decision regarding
Field, and if it so advised we would then remand the en-
tire case so that the judge could grant the motion.

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4 Nos. 05-2394, 06-1481, 06-2456
But—a huge but—it has become apparent, from the
parties’ response to our request for a fuller statement of
why they have conditioned settlement on the vacating of
the district court’s decision pertaining to Field, that their
reason for seeking this relief rests on a misunderstanding.
Remember that there are other third-party defendants
with which the water company—the third-party plain-
tiff—has not settled. The water company, in its own words
(with which Field concurs), “fears that if the [Field] judg-
ment is not vacated, that judgment would become law of
the case which is no longer subject to appeal. That prece-
dent could in turn preclude appeal of the same issue with
regard to the other third-party defendant . . . . [I]t could
preclude the Appellate Court [i.e., this court] from deter-
mining the statute of limitations issue.” (Remember that
the statute of limitations was the basis on which the district
judge dismissed the third-party complaint.) That is incor-
rect. The doctrine of the law of the case creates a presump-
tion against a court’s reexaming its own rulings in the
course of a litigation. It has no application to the review of
rulings by a higher court. “The doctrine of law of the case
precludes reexamining a previous ruling (unless by a higher
court) in the same case unless it was manifestly erroneous.”
Starcon Int’l, Inc. v. International Brotherhood of Boilermakers,
450 F.3d 276, 278 (7th Cir. 2006) (emphasis added). The
water company cannot be prejudiced, in its litigation with
the other third-party defendants in this court, by a ruling
made by the district court.
The condition on the settlement is pointless, and with the
misunderstanding cleared up we can assume that the
settlement will go through. The relief sought is therefore
D ENIED .

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Nos. 05-2394, 06-1481, 06-2456 5
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—4-9-07

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