A party that has lost may wish the adverse decision vacated as part of a settlement, so that it has no precedential or preclusive effect. Courts are generally unwilling.
The federal approach. Vacatur of a judgment because settlement has made the appeal moot is granted only in exceptional circumstances. Mootness by voluntary settlement is the result of the losing party’s own choice, and judicial precedents are treated as public assets not to be disposed of by the parties.
Exceptional circumstances might include mootness caused by happenstance or by the unilateral action of the prevailing party.
State practice varies, with some courts more receptive to stipulated vacatur, particularly of trial court judgments.
Alternatives. Settlement conditioned on withdrawal of the appeal, with the judgment satisfied and the parties agreeing that neither will cite it. That does not bind non-parties, and the decision remains published.
Depublication is available in a few systems and is a distinct request.
Practical planning. Where a published adverse decision would cause serious collateral harm, the time to resolve is before judgment, not after. This is a recurring and under-appreciated argument for settling cases that present recurring legal questions the party cannot afford to lose on the record.