filed: August 14, 1992; As Corrected August 19, 1992.
On Appeal from and on a Petition for Mandamus to the United States District Court for the District of New Jersey. (D.C. Civil No. 88-4171)
Before: Greenberg, Alito, and Aldisert, Circuit Judges
GREENBERG, Circuit Judge.
Samuel F. Fortunato, the Commissioner of Insurance of the State of New Jersey, appeals from an order of the district court entered on June 26, 1991, granting summary judgment in favor of plaintiffs Oracare DPO, Inc. and Oracare Dental Health Center - Vineland, N.J., P.A. (together called "Oracare"). Oracare is a dental plan organization providing dental services on a group basis to employees of other entities. The opinion accompanying the order held that the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1144(a), preempted the New Jersey Dental Plan Organization Act, N.J. Stat. Ann. § 17:48D-1 et seq. (West 1985), and the accompanying regulations, N.J. Admin. Code tit. 11, § 10-1.1 et seq. (Supp. 1990). Thus, the court held that the commissioner and the New Jersey Department of Insurance would be enjoined from applying the Dental Plan Act and regulations to Oracare's proposed dental plans and rate manual. In addition to appealing, the commissioner seeks a writ of mandamus directed to the district court to compel it to enter a judgment, to which he and Oracare have consented, vacating the district court's order and accompanying opinion. By order of July 1, 1992, we consolidated the petition and the appeal. We will deny the petition and will dismiss the appeal, but we will implement the settlement by exercising our authority under 28 U.S.C. § 2106.
We need only summarize the long procedural history of these cases. The matter originated in the district court when Oracare filed suit against the commissioner alleging that his attempt to regulate Oracare was barred by ERISA.*fn1 The district court in a written opinion held in favor of Oracare and thus entered the order of June 26, 1991, from which the commissioner appeals.*fn2 Notwithstanding its success in the district court, Oracare declined to participate in the commissioner's appeal. Instead Oracare chose to comply with the state law and regulations, a decision which ordinarily would have terminated the controversy between the parties and opened the way for dismissal of the appeal.
There was, however, an impediment to settlement because the order of June 26, 1991, enjoined the commissioner from enforcing the law and regulations and for this reason the commissioner felt constrained to pursue his appeal. To circumvent this problem, the commissioner and Oracare filed a joint motion in this court for a limited remand of the case to the district court to consider and rule upon their proposed settlement. The motion, however, sought to preserve the commissioner's right to prosecute his appeal in the event that the district court did not approve the settlement. On December 4, 1991, we granted the motion and remanded the matter to the district court.
The parties then submitted a "stipulated order of settlement and dismissal" to the district court, which contemplated that the court's June 26, 1991, opinion and order would be vacated and the action would be dismissed. In addition, Oracare agreed not to contend in any state administrative proceeding that the New Jersey Dental Plan Organization Act was preempted by ERISA. But on April 10, 1992, the district court entered a letter order which held that our opinion in Clarendon Ltd. v. Nu-West Industries, Inc., 936 F.2d 127 (3d Cir. 1991), precluded it from signing the stipulated order of settlement, because the order included a provision vacating the order of summary judgment. The court further held that even if it had discretion to enter the settlement it would not exercise its discretion to do so. It reasoned that while the commissioner was understandably concerned with the precedential effect of the district court's opinion, "that concern is best dealt with by continuation with the appeal, rather than by vacating an order which was a public act of a public official accomplished at public cost." The court further held that the settlement had not rendered the matter moot.
In view of the district court's rejection of the settlement, the commissioner's appeal was activated. In addition, on June 16, 1992, the commissioner filed a petition for mandamus seeking to compel the district court to enter the settlement order.
The district court did not correctly apply Clarendon Ltd. v. Nu-West Industries, Inc. In that case, Clarendon sued Nu-West and obtained a summary judgment for breach of contract predicated on Nu-West's guarantee of a loan by its wholly owned subsidiary. Nu-West appealed and, after briefing was completed, the parties settled the case and filed a joint motion asking that we dismiss the appeal, vacate the district court judgment, and remand the case so that it could be dismissed with prejudice. In our opinion on the motion, we pointed out that, while parties are free to have an appeal dismissed by stipulation without action of the court, if they seek an order that will "vacate an order or opinion of this court or the trial court," they are asking for "a substantive ...