“Indicative Rulings”: For Settling Non-Bankruptcy Disputes On Appeal (Vroom v. Sidekick) (Part 2)

Here’s an opinion illustrating how the indicative ruling process works under Rule 62.1 (when there is no bankruptcy case involved): Vroom, Inc. v. Sidekick Tech., LLC, Case No. 21-cv-6737 (U.S. District Court for New Jersey; decided January 6, 2026).

What follows is an attempt at summarizing the Vroom opinion, which applies Fed.R.Civ.P. 62.1.

–Facts

Plaintiff and Defendant are in an intellectual property dispute over patents: Plaintiff sues, seeking a declaratory judgment against Defendant’s allegations of patent infringement, and Defendant counterclaims.

The U.S. District Court grants Plaintiff’s motion for summary judgment, and Defendant appeals to the Federal Circuit Court of Appeals, which appeal remains pending at the material times.

During the appeal, Plaintiff and Defendant agree to settle their dispute, stipulating that, “absent vacatur” of the District Court’s judgment and supporting opinion, “the parties are unable to settle and the appeal (and potential remand) must go forward.”

Two legal standards govern this situation: Fed.R.Civ. P. 62.1 & 60(b)

–Rule 62.1, Indicative Rulings

Fed.R.Civ.P 62.1 is a procedural device that permits the District Court to issue an “indicative” decision on a motion for relief, notwithstanding its lack of jurisdiction due to a pending appeal.

A district court should deny a Rule 62.1 motion if, upon remand, it would not grant the relief being sought or if the underlying motion is untimely.

Courts in the Third Circuit have granted Rule 62.1 motions where modification or vacatur of a judgment was necessary for parties to effectuate a settlement agreement. Other courts have granted vacatur in similar postures.

–Rule 60(b), Vacatur of Judgments

Rule 60 grants courts broad discretion to vacate a final judgment, including a catch-all in subpart (b)(6) for “any other reason that justifies relief.”

The Third Circuit has ruled that a party seeking relief under Rule 60(b)(6) must “demonstrate the existence of extraordinary circumstances that justify reopening the judgment,” which is described as “a heavy burden.”

–Rules Applied

In the Vroom v. Sidekick opinion, the District Court finds that vacatur is warranted under Rule 60(b)(6).

While a settlement agreement alone is insufficient to justify vacatur, this case presents extraordinary circumstances that favor Rule 60(b) relief because:

the parties represent that the appealed judgment and opinion are “the only remaining obstacles to a concluded settlement,” and courts have found that when vacatur is a necessary condition of settlement, exceptional circumstances are present;
vacating the appealed judgment and opinion would preserve both judicial resources (the Federal Circuit case would not need to proceed) and the resources of the parties (they would not need to litigate a dispute they want to settle); and
given that Plaintiff has exited the market and no longer competes with Defendant, it makes little business sense for Defendant to continue pursuing its claims against Plaintiff—which, absent vacatur, Defendant must continue to do.

The District Court adds that it is mindful of effects that nullifying a rulings on intellectual property rights may have on the public interest (i.e., a ruling on the scope, validity, or enforceability of patents is important for the development of patent law). Such a drawback, the District Court declares, is outweighed by:

the Third Circuit’s strong preference for settlements;
the avoidance of expense to the parties—and the judicial system—associated with prosecuting the Appeal; and
the benefits to the parties that vacatur of the appealed judgment and opinion will bring.

Thus, the District Court sees no reason to squelch a settlement agreement reached by the parties while the dispute is pending on appeal.

On January 6, 2026, the District Court:

finds that vacatur of the appealed judgment and opinion is appropriate under Rule 60(b)(6); and
“indicates that, under Rule 62.1(a)(3), if the Federal Circuit were to remand this matter, this Court would enter an order vacating” the prior judgment and opinion.

–Back in Federal Circuit Court

After entry of the District Court’s January 6, 2026, indicative ruling, the parties promptly file in the Federal Circuit Court of Appeals their Joint Motion for Remand, containing joint representations, request and supporting argument.

The joint representations are:

“The parties have reached a settlement contingent on the vacatur of the district court’s relevant opinions, orders, and judgment”; so,
“the parties jointly filed a motion for an indicative ruling pursuant to Federal Rule of Civil Procedure 62.1 on whether, if this Court remands, the district court would grant a motion to vacate and thereby effectuate the parties’ settlement”; and
“On January 6, 2026, the district court issued an opinion . . . stating that it would grant a motion to vacate if this Court remands for that purpose.”

The joint request and argument to the Federal Circuit Court of Appeals are:

request—that the Circuit Court “remand this action . . . for the limited purpose of allowing the district court to vacate the opinions, orders, and judgment underlying these appeals”; and
argument—that the Circuit Court “has frequently granted motions for a remand under similar circumstances, leaving the case-specific determination of the appropriateness of vacatur to the sound discretion of the originating tribunal.”

In response, the Federal Circuit Court of Appeals issues an Order on January 28, 2026, that says:

“The parties filed a motion to stay these appeals while they worked to effectuate settlement and asked the district court for an indicative ruling that it would vacate its prior patent-ineligibility decisions if this court remanded”;
“Now that the district court has so indicated, the parties jointly move to remand these appeals for it to do so”;
“We remand for the limited purpose of the district court’s consideration of the parties’ request for vacatur”; and
“In granting the motion, this court takes no position on the propriety or necessity of any vacatur, leaving it to the district court to consider” the governing principles.

–Then, Back in District Court

That same day, the District Court, (i) receives notice of the Circuit Court’s remand order, and (ii) issues its own order vacating its prior judgment.

Conclusion

The “indicative ruling” procedure is a real thing, with an important role to play in any settlement between the parties of an appealed ruling.

Perhaps there is a way to accomplish the same result through an easier and simpler process? But the “indicative ruling” procedure appears to be the official and formal way to proceed.

NOTE: This is the second in a series of four articles on how “indicative rulings” processes work for settlements entered while a ruling is on appeal: under Fed.R.Civ.P. 62.1, Fed.R.Bankr.P. 8008 and Fed.R.App.P. 12.1.

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