Flanagan

The issue in this case is whether a federal district judge could properly enjoin state proceedings, where settlement of a lawsuit in federal court had included express retention of jurisdiction to resolve disputes arising under the settlement agreement.

FACTS

The facts in this case are exceedingly complicated. But the law is clear, and application of the law to the facts is equally clear. The district judge was rightfully exasperated by the Flanagans’ use of the factual complexity as an excuse to dance back and forth between federal and state courts.

The Flanagans were founders and substantial shareholders in Pacific Coast Savings and Loan Association. The regulatory agency directed the bank to get Mr. Flanagan out of its affairs. Mr. Flanagan challenged the regulatory action, and the actions by the bank’s board of directors to oust him. The bank and several of its directors counterclaimed. This lawsuit was settled. The parties entered into a complex settlement agreement (43 pages plus signature pages) of the claims and counterclaims, subject to court approval.

Complexity could not be avoided, because disentangling the Flanagans from the bank would necessarily take time, and…