The Eleventh Circuit has upheld a district court's decision to restrict the parties in Trump v. IRS from calling the case's resolution a "settlement." The underlying lawsuit, filed by President Trump and his family against the IRS and Treasury, was voluntarily dismissed shortly after filing. A group of former federal judges then moved to reopen the case, alleging that the dismissal masked a collusive deal between the plaintiffs and the government.
The district court agreed with that assessment, finding that the parties were not truly adverse. It pointed to President Trump's control over the executive branch, the absence of any defense attorney appearing, and the unusual structure of the alleged settlement—which involved a $1.776 billion fund for non-parties and a broad release of claims. The court concluded the lawsuit was filed to legitimize a deal that had no basis in law or fact, and imposed non-monetary sanctions, including barring the use of the word "settlement."
The Eleventh Circuit's decision affirms that restriction. The appellate court's ruling underscores the judiciary's authority to police litigation conduct, even when both sides appear to agree on the outcome. It also highlights the limits of using courts to formalize agreements that lack genuine adversarial contest, a principle that may have broader implications for how similar cases are scrutinized in the future.