The U.S. Supreme Court case Matt T. Kokkonen v. Guardian Life Insurance Company of America in 1993 revolved around the issue of whether a federal district court had jurisdiction to enforce a settlement agreement that was not incorporated into its dismissal order nor provided any retained jurisdiction over it. The dispute began when Kokkonen, an insurance agent, sued Guardian Life for breach of contract and other claims after his agency contract was terminated by the company. A settlement agreement was reached between both parties which required certain actions from each party but did not specify what would happen if either party failed to comply with these terms. When Kokkonen alleged that Guardian Life failed to fulfill their part of the deal, he sought enforcement through the same District Court where his original lawsuit had been filed and dismissed due to said settlement agreement. However, this led to questions about whether or not such enforcement fell within ancillary jurisdiction - i.e., matters related but secondary to cases under consideration by courts exercising their normal legal authority. In a unanimous decision written by Justice Antonin Scalia, the Supreme Court ruled against Kokkonen stating that Federal Courts do not inherently possess power over all aspects relating directly or indirectly towards disputes brought before them; they only have powers explicitly granted by statute or Constitution.

In the dissenting opinion for Kokkonen v. Guardian Life Insurance Company of America, Justice Stevens argued that federal courts should have jurisdiction to enforce settlement agreements in cases that were originally within their purview. He contended that when a federal court approves a settlement agreement and dismisses the original lawsuit, it retains ancillary jurisdiction to enforce the terms of that agreement even after dismissal. This is because such enforcement is necessary to protect the integrity of its judgments and proceedings. The majority's decision not only contradicts precedent but also undermines judicial efficiency by forcing parties who had previously settled their disputes in federal court to initiate new state court proceedings just to enforce those settlements.