Oral Mediation Settlements Are Enforceable When Material Terms Are Agreed—Later “Standard” Written Terms Are Immaterial Absent an Explicit Condition Precedent

I. Introduction

In United States v. MaCourt (5th Cir. June 15, 2026), the United States brought a civil enforcement action under the False Claims Act (FCA) against Dr. Dongxin Ma and Ma Acupuncture Center, P.C., alleging the submission of inflated reimbursement claims to the Department of Veterans Affairs. After the parties reached significant agreement at court-ordered mediation, the dispute shifted from FCA liability to a contract-formation question: did mediation produce a final, binding settlement, even though a later draft written agreement included additional “standard” provisions that were not expressly discussed at mediation?

The district court enforced the settlement, finding that the parties agreed to all material terms at mediation and that the later-added written terms were immaterial. On appeal, the Fifth Circuit affirmed under an abuse-of-discretion standard, and it also enforced strict issue-preservation rules as to late-raised challenges (authority-to-settle and anticipatory repudiation).

II. Summary of the Opinion

The Fifth Circuit affirmed the enforcement of a mediation settlement in an FCA case, holding that the district court did not abuse its discretion in concluding that:

  • The parties agreed orally at mediation to the settlement’s material terms, including payment amount ($2.3 million), payment timing (over 42 months), initial payment ($100,000), dismissal and civil release, a “reasonable efforts” mechanism tied to property sale, and lien rights.
  • Additional provisions included later in a written draft—described as “standard and customary” DOJ settlement terms—were immaterial and did not negate contract formation at mediation.
  • The parties’ oral agreement was final and binding absent an explicit condition that no contract would exist until a formal written document was executed.
  • Two key appellate arguments were forfeited: (1) any challenge to counsel’s settlement authority (raised only on reply), and (2) an anticipatory repudiation theory (raised first in a Rule 59(e) motion).

III. Analysis

A. Precedents Cited

1. Enforcement power and standard of review

The panel began with the proposition that district courts possess inherent authority to enforce settlements, citing Wise v. Wilkie, 955 F.3d 430 (5th Cir. 2020). That authority is reviewed for abuse of discretion, and the opinion adopted In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. 2008) (en banc), via Wise, for the familiar three-part test: clearly erroneous factfinding, erroneous legal conclusions, or misapplication of law to facts.

The abuse-of-discretion lens matters: the Fifth Circuit repeatedly framed the core question as whether the district court’s conclusion was reasonable in light of hearing testimony and objective indicia of assent, not whether a different factfinder could have reached a different result.

2. Governing law: federal contract law for settlements of federal claims

Because the underlying claims arose under federal law (the FCA), the panel reiterated that federal contract law governs settlement validity, citing Fisk Elec. Co. v. DQSI, L.L.C., 894 F.3d 645 (5th Cir. 2018), In re Deepwater Horizon, 786 F.3d 344 (5th Cir. 2015), and Mid- South Towing Co. v. Har-Win, Inc., 733 F.2d 386 (5th Cir. 1984). Consistent with In re Deepwater Horizon, the court emphasized that federal contract law is largely aligned with general common-law contract principles, allowing reliance on state cases and treatises as persuasive authority.

3. Attorney authority and the presumption of authority (and forfeiture)

The district court applied Fifth Circuit precedent recognizing a presumption that counsel of record has authority to settle, relying on Quesada v. Napolitano, 701 F.3d 1080 (5th Cir. 2012), and Mid- South Towing Co. v. Har-Win, Inc.. On appeal, however, the panel did not reach the merits because the defendants did not raise the authority issue in their opening brief.

For forfeiture doctrine, the opinion relied on Indigenous Peoples of Coastal Bend v. U.S. Army Corps of Eng'rs, 132 F.4th 872 (5th Cir. 2025), and Sanders v. Unum Life Ins. Co. of Am., 553 F.3d 922 (5th Cir. 2008). The court contrasted the case with the narrow “extraordinary circumstances” approach in United States v. Myers, 772 F.3d 213 (5th Cir. 2014), and held that no such circumstances justified considering an argument raised only on reply.

4. “Material terms” and the “agreement to agree” problem

The court invoked Coe v. Chesapeake Expl., L.L.C., 695 F.3d 311 (5th Cir. 2012), for the rule that leaving material matters open for future agreement can render a purported agreement non-binding (“agreement to agree”). It also cited APS Cap. Corp. v. Mesa Air Grp., Inc., 580 F.3d 265 (5th Cir. 2009), emphasizing a context-specific inquiry into whether essential terms are sufficiently settled—looking beyond writings to the parties’ relationship and course of dealing.

Critically, the court relied on In re Deepwater Horizon to support a comparatively “sparse” conception of material settlement terms—often satisfied by agreement on payment and release of specified claims. The panel analogized the case to Deepwater Horizon, where precise release language was not necessarily material once the parties agreed to release the pertinent claims in exchange for a specified payment.

5. Oral settlements and later writings

The panel reaffirmed that federal contract law generally does not require a settlement to be reduced to writing. It cited Fulgence v. J. Ray McDermott & Co., 662 F.2d 1207 (5th Cir. Dec. 1981) (per curiam), and EEOC v. Philip Servs. Corp., 635 F.3d 164 (5th Cir. 2011), for the enforceability of oral agreements. It then applied In re Deepwater Horizon for the specific rule: an oral settlement contemplating a later release is enforceable unless the parties explicitly provide that no contract forms until a formal document is executed.

6. Objective assent

To evaluate mutual assent, the court cited Penthol, L.L.C. v. Vertex Energy Operating, L.L.C., 149 F.4th 504 (5th Cir. 2025), for the principle that assent is assessed by objective evidence rather than undisclosed subjective intent.

7. Rule 59(e) limits and late-raised theories (anticipatory repudiation)

On anticipatory repudiation, the court held the argument forfeited because it was raised only in a Rule 59(e) motion, citing Kohler v. Englade, 470 F.3d 1104 (5th Cir. 2006), Tr. Co. Bank v. U.S. Gypsum Co., 950 F.2d 1144 (5th Cir. 1992), Marseilles Homeowners Condo. Ass'n v. Fid. Nat'l Ins. Co., 542 F.3d 1053 (5th Cir. 2008), and State Indus. Prods. Corp. v. Beta Tech., Inc., 575 F.3d 450 (5th Cir.2009).

The court also cited Louis Dreyfus Corp. v. Brown, 709 F.2d 898 (5th Cir. 1983), and treatise authority (Williston) to emphasize that anticipatory repudiation is typically factual. It noted a narrow exception where repudiation is in writing and unambiguous, referencing DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104 (2d Cir. 2010), and also referenced Am. Elec. Power Co. v. Affiliated FM Ins. Co., 556 F.3d 282 (5th Cir. 2009), as an example where merits might be addressed.

B. Legal Reasoning

1. Identifying the “material terms” actually agreed at mediation

The Fifth Circuit accepted the district court’s view that the mediation resolved the essential bargain: a defined payment obligation (amount, schedule, and initial installment) exchanged for dismissal of the FCA civil case and release of the relevant civil claims, with agreed enforcement mechanisms (reasonable efforts to sell property and lien rights). Applying Coe, APS Cap. Corp., and especially In re Deepwater Horizon, the panel treated these as sufficient to form a settlement contract even if later paperwork would add detail.

2. Why later “standard” DOJ terms did not defeat formation

The opinion’s core doctrinal move is separating two questions: (i) whether a contract formed at mediation (material terms agreed), and (ii) whether later drafted provisions were material such that their absence at mediation would negate formation. The panel agreed with the district court that the later provisions were immaterial because they did not alter the essential exchange (money for dismissal/release of the FCA civil claims) and because counsel understood “standard” terms would be added.

The court also placed weight on the DOJ’s institutional settlement constraints, citing U.S. Dep't of Just., Just. Manual § 4-3.400 (2018) to explain why civil settlements typically do not include general releases (e.g., they preserve possible criminal or tax matters). This served to rebut the defendants’ framing that such reservations were inconsistent with a “full and final” civil resolution; instead, the panel treated them as routine and not inconsistent with the agreed-upon civil release.

3. Finality and objective indicia of assent

The panel applied In re Deepwater Horizon and Fulgence to reject the notion that a settlement is non-binding merely because the parties expect later signatures. The controlling question was whether the parties explicitly conditioned formation on execution of a formal writing. The court found substantial evidence they did not.

In assessing finality, the court emphasized objective, post-mediation conduct: a filed notice of settlement; an ADR form signed by the mediator stating the case settled; lack of timely objection; and communications suggesting defense counsel had no edits. Relying on Penthol, the court discounted private, undisclosed beliefs (and credited the district court’s credibility assessments made after live testimony).

4. Procedural rigor: forfeiture as a settlement-enforcement accelerant

Two forfeiture holdings materially shaped the appeal’s scope. First, the authority-to-settle issue was not considered because it was not raised in the opening brief, per Indigenous Peoples of Coastal Bend and Sanders. Second, anticipatory repudiation was not considered because it was first raised in a Rule 59(e) motion, per Kohler, Tr. Co. Bank, and Marseilles Homeowners Condo. Ass'n. These holdings underscore that settlement disputes, though equitable in flavor, remain tightly governed by appellate presentation rules.

C. Impact

1. Mediation practice: clarity on “we have a deal” moments

The decision strengthens a practical rule in the Fifth Circuit: once parties agree at mediation on payment and the scope of civil release/dismissal—and do not explicitly condition enforceability on a signed writing—courts are likely to treat the settlement as binding, even if later drafts add customary provisions.

2. Government settlements: “standard terms” as default, not deal-breakers

In disputes involving DOJ settlements, MaCourt suggests courts may be receptive to characterizing reservations of criminal/tax claims, bankruptcy-related provisions, and other boilerplate as non-material where the parties already agreed to the essential civil compromise. This reduces leverage for a party attempting to unwind a mediation deal by pointing to later boilerplate—particularly when counsel acknowledges those terms are customary.

3. Litigation conduct: prompt objection or risk enforcement

The court’s reliance on post-mediation silence and lack of objection to a filed settlement notice signals a practical warning: if a party believes mediation did not produce a binding agreement, it should promptly object on the record. Delay can function as powerful objective evidence supporting finality.

4. Appellate strategy: issue preservation is outcome-determinative

The forfeiture rulings highlight that settlement-enforcement appeals are especially vulnerable to procedural missteps. Authority-to-settle arguments must be presented in the opening brief, and repudiation/avoidance theories should be raised before judgment rather than first in post-judgment motions, absent extraordinary circumstances.

IV. Complex Concepts Simplified

  • False Claims Act (FCA): A federal statute imposing civil liability for knowingly submitting false or fraudulent claims for government payment. The government may seek treble damages (triple the loss) and civil penalties per false claim.
  • Scienter: The required mental state (e.g., knowledge, deliberate ignorance, or reckless disregard) for FCA liability. Defendants argued they lacked the required scienter.
  • Material (or essential) terms: The deal points a court needs to identify to say a contract exists. In settlement contexts, Fifth Circuit precedent often treats the payment amount and a release/dismissal of specified claims as the key material terms.
  • “Agreement to agree”: A non-binding arrangement where the parties leave essential terms open for later negotiation. If essential terms remain unresolved, there may be no contract.
  • Oral settlement: A binding agreement made verbally; under federal contract principles, it can be enforceable even if the parties plan to sign paperwork later—unless they explicitly make signatures a condition to contract formation.
  • Objective assent: Courts look at outward actions and communications (what was said/done) rather than hidden thoughts or later regrets.
  • Forfeiture (appellate): Losing the ability to argue an issue because it was not timely raised (e.g., not in the opening brief, or raised only after judgment).
  • Anticipatory repudiation: When one party clearly indicates it will not perform the contract in the future. Whether that occurred is usually a fact question, often requiring more than a dispute over later-drafted language.

V. Conclusion

United States v. MaCourt reinforces a settlement-enforcement principle with concrete mediation application: in federal-question cases, an oral mediation settlement will be enforced when the parties agree to the essential bargain—particularly payment and civil dismissal/release—unless they explicitly condition enforceability on executing a formal written agreement. Later-added “standard and customary” provisions (including DOJ boilerplate) generally will not be treated as material enough to undo formation.

Equally significant is the opinion’s procedural lesson: settlement challenges are constrained by strict preservation rules. Parties must object promptly and present arguments at the proper time, or risk having both the settlement and the judgment enforced with limited appellate review.