On January 20, 2014, the US Court of Appeals for the Fifth Circuit in Energy Management Services, LLC v. City of Alexandria held that the district court's jurisdiction over the litigation and post-settlement matters of a prior related case does not vest the district court with jurisdiction in a subsequent action (No. 12-31184 (5th Cir. Jan. 20, 2014)).

In a prior case, the City of Alexandria, Louisiana (the City) filed suit in state court against its electricity provider, CLECO Corporation alleging that CLECO had overcharged the City for electricity. CLECO removed the case to the US District Court for the Western District of Louisiana. The parties reached a settlement and the case was dismissed with prejudice in February 2010. However, the district court retained jurisdiction over any post-settlement issues.

In August 2010, Energy Management Services, LLC (EMS) filed a separate action against the City in Louisiana state court alleging breach of contract. The City had hired EMS to conduct an audit of the City's electricity expenses and overpayments to CLECO in anticipation of its suit against CLECO. The City removed the case to the US District Court for the Western District of Louisiana. EMS filed a motion to remand the case to state court. The district court denied this motion on the basis that it possessed supplemental jurisdiction because EMS's suit was "factually interdependent" with the previous case.

On appeal, the Fifth Circuit reversed. The court found that the district court erred in denying EMS's motion to remand because:

Practitioners should be aware that regardless of how factually intertwined two separate actions may be, the district court's continuing jurisdiction over post-settlement matters may not serve as an anchor claim for supplemental jurisdiction (28 U.S.C. § 1367) or provide the basis for removal (28 U.S.C. § 1441).