Justice Scalia, delivered the opinion of the Court.
The question in this case is whether appellate courts in the federal system should vacate civil judgments of subordinate courts in cases that are settled after appeal is filed or certiorari sought.
In 1984 and 1985, Northtown Investments built the Bonner Mall in Bonner County, Idaho, with financing from a bank in that State. In 1986, respondent Bonner Mall Partnership (Bonner) acquired the mall, while petitioner U. S. Bancorp Mortgage Co. (Bancorp) acquired the loan and mortgage from the Idaho bank. In 1990, Bonner defaulted on its real estate taxes and Bancorp scheduled a foreclosure sale.
The day before the sale, Bonner filed a petition under Chapter 11 of the Bankruptcy Code, 11 U. S. C. § 1101 et seq.,
Bancorp then petitioned for a writ of certiorari. After we granted the petition, 510 U.S. 1039 (1994), and received briefing on the merits, Bancorp and Bonner stipulated to a consensual plan of reorganization, which received the approval of the Bankruptcy Court. The parties agreed that confirmation of the plan constituted a settlement that mooted the case. Bancorp, however, also requested that we exercise our power under 28 U. S. C. § 2106 to vacate the judgment of the Court of Appeals. Bonner opposed the motion. We set the vacatur question for briefing and argument. 511 U.S. 1002-1003 (1994).
Respondent questions our power to entertain petitioner's motion to vacate, suggesting that the limitations on the judicial
Of course, no statute could authorize a federal court to decide the merits of a legal question not posed in an Article III case or controversy. For that purpose, a case must exist at all the stages of appellate review. Preiser v. Newkirk, 422 U.S. 395, 401 (1975); Mills v. Green, 159 U.S. 651, 653 (1895). But reason and authority refute the quite different notion that a federal appellate court may not take any action with regard to a piece of litigation once it has been determined that the requirements of Article III no longer are (or indeed never were) met. That proposition is contradicted whenever an appellate court holds that a district court lacked Article III jurisdiction in the first instance, vacates the decision, and remands with directions to dismiss. In cases that become moot while awaiting review, respondent's logic would hold the Court powerless to award costs, e. g., Heitmuller v. Stokes, 256 U.S. 359, 362-363 (1921), or even to enter an order of dismissal.
Article III does not prescribe such paralysis. "If a judgment has become moot [while awaiting review], this Court may not consider its merits, but may make such disposition of the whole case as justice may require." Walling v. James
The leading case on vacatur is United States v. Munsingwear, Inc., 340 U.S. 36 (1950), in which the United States sought injunctive and monetary relief for violation of a price control regulation. The damages claim was held in abeyance pending a decision on the injunction. The District Court held that the respondent's prices complied with the regulations and dismissed the complaint. While the United States' appeal was pending, the commodity at issue was decontrolled; at the respondent's request, the case was dismissed as moot, a disposition in which the United States acquiesced. The respondent then obtained dismissal of the damages action on the ground of res judicata, and we took the case to review that ruling. The United States protested the unfairness of according preclusive effect to a decision that it had tried to appeal but could not. We saw no such unfairness, reasoning that the United States should have asked the Court of Appeals to vacate the District Court's decision before the appeal was dismissed. We stated that "[t]he established practice of the Court in dealing with a civil case from a court in the federal system which has become moot while on its way here or pending our decision on the merits is to reverse or vacate the judgment below and remand with a direction to dismiss." Id., at 39. We explained that vacatur "clears the path for future relitigation of the issues between the parties and eliminates a judgment, review
The parties in the present case agree that vacatur must be decreed for those judgments whose review is, in the words of Munsingwear, "`prevented through happenstance' "—that is to say, where a controversy presented for review has "become moot due to circumstances unattributable to any of the parties." Karcher v. May, 484 U.S. 72, 82, 83 (1987). They also agree that vacatur must be granted where mootness results from the unilateral action of the party who prevailed in the lower court. The contested question is whether courts should vacate where mootness results from a settlement. The centerpiece of petitioner's argument is that the Munsingwear procedure has already been held to apply in such cases. Munsingwear `s description of the "established practice" (the argument runs) drew no distinctions between categories of moot cases; opinions in later cases granting vacatur have reiterated the breadth of the rule, see, e. g., Great Western Sugar Co. v. Nelson, 442 U.S. 92, 93 (1979) (per curiam); and at least some of those cases specifically involved mootness by reason of settlement, see, e. g., Lake Coal Co. v. Roberts & Schaeffer Co., 474 U.S. 120 (1985) (per curiam).
But Munsingwear, and the post-Munsingwear practice, cannot bear the weight of the present case. To begin with, the portion of Justice Douglas' opinion in Munsingwear describing the "established practice" for vacatur was dictum; all that was needful for the decision was (at most) the proposition that vacatur should have been sought, not that it necessarily would have been granted. Moreover, as Munsingwear itself acknowledged, see 340 U. S., at 40, n. 2, the "established practice" (in addition to being unconsidered) was not entirely uniform, at least three cases having been dismissed for mootness without vacatur within the four Terms preceding Munsingwear. See, e. g., Schenley Distilling Corp. v. Anderson, 333 U.S. 878 (1948) (per curiam).
The principles that have always been implicit in our treatment of moot cases counsel against extending Munsingwear to settlement. From the beginning we have disposed of moot cases in the manner "`most consonant to justice' . . . in view of the nature and character of the conditions which have caused the case to become moot." United States v. Hamburg-Amerikanische Packetfahrt-Actien Gesellschaft, 239 U.S. 466, 477-478 (1916) (quoting South Spring Hill Gold Mining Co. v. Amador Medean Gold Mining Co., 145 U.S. 300, 302 (1892)). The principal condition to which we have looked is whether the party seeking relief from the judgment below caused the mootness by voluntary action. See Hamburg-Amerikanische, supra, at 478 (remanding a moot case for dismissal because "the ends of justice exact
The reference to "happenstance" in Munsingwear must be understood as an allusion to this equitable tradition of vacatur. A party who seeks review of the merits of an adverse ruling, but is frustrated by the vagaries of circumstance, ought not in fairness be forced to acquiesce in the judgment.
In these respects the case stands no differently than it would if jurisdiction were lacking because the losing party failed to appeal at all. In Karcher v. May, supra, two state
It is true, of course, that respondent agreed to the settlement that caused the mootness. Petitioner argues that vacatur is therefore fair to respondent, and seeks to distinguish our prior cases on that ground. But that misconceives the emphasis on fault in our decisions. That the parties are jointly responsible for settling may in some sense put them on even footing, but petitioner's case needs more than that. Respondent won below. It is petitioner's burden, as the party seeking relief from the status quo of the appellate judgment, to demonstrate not merely equivalent responsibility for the mootness, but equitable entitlement to the extraordinary remedy of vacatur. Petitioner's voluntary forfeiture of review constitutes a failure of equity that makes the burden decisive, whatever respondent's share in the mooting of the case might have been.
As always when federal courts contemplate equitable relief, our holding must also take account of the public interest. "Judicial precedents are presumptively correct and valuable to the legal community as a whole. They are not merely the property of private litigants and should stand unless a court concludes that the public interest would be served by a vacatur." Izumi Seimitsu Kogyo Kabushiki Kaisha v. U. S.
Petitioner advances two arguments meant to justify vacatur on systemic grounds. The first is that appellate judgments in cases that we have consented to review by writ of certiorari are reversed more often than they are affirmed, are therefore suspect, and should be vacated as a sort of prophylactic against legal error. It seems to us inappropriate, however, to vacate mooted cases, in which we have no constitutional power to decide the merits, on the basis of assumptions about the merits. Second, petitioner suggests that "[v]acating a moot decision, and thereby leaving an issue. . . temporarily unresolved in a Circuit, can facilitate the ultimate resolution of the issue by encouraging its continued examination and debate." Brief for Petitioner 33. We have found, however, that debate among the courts of appeals sufficiently illuminates the questions that come before us for review. The value of additional intracircuit debate seems to us far outweighed by the benefits that flow to litigants and the public from the resolution of legal questions.
A final policy justification urged by petitioner is the facilitation of settlement, with the resulting economies for the federal courts. But while the availability of vacatur may facilitate settlement after the judgment under review has
Although the case before us involves only a motion to vacate, by reason of settlement, the judgment of a court of appeals (with, of course, the consequential vacation of the underlying judgment of the district court), it is appropriate to discuss the relevance of our holding to motions at the court-of-appeals level for vacatur of district-court judgments. Some opinions have suggested that vacatur motions at that level should be more freely granted, since district-court judgments are subject to review as of right. See, e. g., Manufacturers Hanover Trust Co. v. Yanakas, 11 F.3d 381, 384 (CA2 1993). Obviously, this factor does not affect the primary basis for our denying vacatur. Whether the appellate court's seizure of the case is the consequence of an appellant's right or of a petitioner's good luck has no bearing upon the lack of equity of a litigant who has voluntarily abandoned review. If the point of the proposed distinction is that district-court judgments, being subject to review as of right, are more likely to be overturned and hence presumptively less valid: We again assert the inappropriateness of disposing of cases, whose merits are beyond judicial power to consider, on the basis of judicial estimates regarding their merits. Moreover, as petitioner's own argument described two paragraphs above points out, the reversal rate for cases in which this Court grants certiorari (a precondition for our vacatur) is over 50%—more than double the reversal rate for appeals
We hold that mootness by reason of settlement does not justify vacatur of a judgment under review. This is not to say that vacatur can never be granted when mootness is produced in that fashion. As we have described, the determination is an equitable one, and exceptional circumstances may conceivably counsel in favor of such a course. It should be clear from our discussion, however, that those exceptional circumstances do not include the mere fact that the settlement agreement provides for vacatur—which neither diminishes the voluntariness of the abandonment of review nor alters any of the policy considerations we have discussed. Of course even in the absence of, or before considering the existence of, extraordinary circumstances, a court of appeals presented with a request for vacatur of a district-court judgment may remand the case with instructions that the district court consider the request, which it may do pursuant to Federal Rule of Civil Procedure 60(b).
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Petitioner's motion to vacate the judgment of the Court of Appeals for the Ninth Circuit is denied. The case is dismissed as moot. See this Court's Rule 46.
It is so ordered.