(dissenting):
I respectfully dissent from the majority’s holding that the district court had jurisdiction to order a deposit of the amount of attorneys’ fees in excess of the New Jersey fee schedule.
This case was dismissed by an order on March 18, 1975, “without prejudice to the right, for good cause shown within 60 days, to reopen the action if settlement is not consummated.” One thirty-day extension *520of the time to reopen was granted but no one moved to reopen the case within the extended time, and no further extensions were sought.
Two weeks after the right to reopen the case expired, the parties requested the district court’s signature approving their settlement and the New York Surrogate Court’s decree.1 The court was aware of its post-dismissal lack of jurisdiction2 but proceeded to assert jurisdiction based on its ability to enforce the local court rules among attorneys admitted to practice before it.3
According to the majority opinion there are two theories of jurisdiction: the power to reopen the case under Rule 60 of the Federal Rules of Civil Procedure, and the court’s authority to regulate professional conduct of members of its bar. As for the first theory, whatever ability the court may have had to reopen the case was not exercised. Neither the parties nor the court acted under Rule 60 to amend the prior order. That the court could have had jurisdiction does not mean that it did have jurisdiction.
The second theory of jurisdiction is more disturbing. The district court claimed an ability to regulate the contingent fee agreement of a New York attorney and his New York client because that fee resulted from the settlement of a case that had once been before the court. The majority declares that this is not erroneous, but I am not persuaded. In Garrett v. McRee, 201 F.2d 250 (10th Cir. 1953), relied upon by the majority, the court had jurisdiction of the underlying suit.4 In Schlesinger v. Teitelbaum, 475 F.2d 137 (3d Cir.), cert denied, 414 U.S. 1111, 94 S.Ct. 840, 38 L.Ed.2d 738 (1973), it was during the course of the trial that the settlement was finalized and approved by the district court, before any dismissal of the case. Id. at 138. Here, on the other hand, the underlying wrongful death suit had been dismissed before the settlement was finalized and the issue of attorneys’ fees arose, yet the court asserts an ability to “retain” jurisdiction of this issue, even though the substantive suit has been dismissed.
If the parties had not requested the district court’s imprimatur on their settlement and on the New York Surrogate’s decree, I doubt that the district court would have notified the New York attorneys that their contingent fee agreement made in New York with their New York client violated New Jersey’s fee schedule. To say that the attorneys’ act of coming before the court after the case had been dismissed enabled the court to “retain” jurisdiction of the case to the extent necessary to regulate their resulting contingent fees is to misconstrue the requirement of subject matter jurisdiction.
*521Assuming that the district court would be correct in applying New Jersey’s fee schedule to a contingent fee agreement between non-residents, in a diversity case,5 that authority would derive from the court’s jurisdiction of the case. Here the district court claims, and the majority agrees, that it has jurisdiction to regulate fees in this case because when it does have jurisdiction it can regulate fees. This circular reasoning does not produce subject matter jurisdiction in a federal court.
In my opinion the district court was without jurisdiction to order a deposit of the amount by which the attorneys’ fees exceeded New Jersey’s fee schedule. Accordingly, I would vacate the order of the district court.
. There is some uncertainty in the record as to whether the district court’s approval was necessary at this point. “It may be immaterial to you whether I sign this order or not. If so, you are free to walk out of here so far as this litigation is concerned.” Record at 18.
. When the parties requested the court to act on the Surrogate’s decree, the court hesitated, saying, “I may be wrong. I think — if the matter is dismissed, it is dismissed, I am not asserting more jurisdiction than I have.” Record at 18.
. The court thought it lacked jurisdiction of the case but could still decide attorneys’ fees:
While it is true that this order probably worked to divest this Court of jurisdiction over the substantive aspect of this litigation, . nonetheless, the present matter of attorneys’ fees does not address itself to the merits of the [wrongful death] dispute . . . which are concededly foreclosed by the order of the Court. Rather, this proceeding goes to the ability of this Court to maintain and enforce its own Rules among members of the Bar admitted to practice before it. Thus, clearly, the Court retains jurisdiction to this extent in order to prevent a breach of its own rules by officers of its own Court.
Record at 140.
. After the verdict was affirmed on appeal, the judgment proceeds were accordingly deposited with the district court, subject to an attorney’s lien for the disputed amount. Garrett v. McRee, 201 F.2d 250, 252 (10th Cir. 1953).
. Under Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) and its progeny, a federal court sitting in diversity applies its own procedures and the forum state’s substantive law. Thus the threshold inquiry is whether a limit on contingent fees is substantive or procedural in terms of Erie. The regulation of attorneys’ fees is generally held to be substantive. See 1A Moore’s Federal Practice ¶ 0.310, n. 25t (1975 Supp.).
This case is complicated by conflict of laws implications. Under Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), the federal court is to apply the forum state’s conflicts rules. Although New Jersey might apply New York law in the wrongful death action, it is not clear what law New Jersey would apply to the fee agreement. As a contract, the fee agreement might be governed by the place of making (New York), unless the agreement contravenes a strong substantive policy of the forum.
The fee schedule was promulgated by the New Jersey Supreme Court under its authority to regulate practice in state courts and the professional behavior of state attorneys. American Trial Lawyers Ass'n v. New Jersey Supreme Court, 66 N.J. 258, 330 A.2d 350 (1974). Here we have neither a state court not a state attorney, leading me to ask first if a New Jersey state court would choose to apply its fee schedule to such a case and second, if it did so choose, whether it would have the authority to do so. The federal court attempting to follow Klaxon is left with the problem of predicting what law a state court would apply here if the case were not in a state court. The question is not an easy one.