United States v. Miles et al

Filing 62

ORDER re 61 Letter filed by United States, granting request for telephonic appearance AS MODIFIED. Signed by Magistrate Judge Nandor J. Vadas on July 11, 2012. (njvlc2, COURT STAFF) (Filed on 7/11/2012)

United States Attorney
Northern District of California

11th Floor, Federal Building
450 Golden Gate Avenue, Box 36055
San Francisco, California 94102-3495

[phone]
FAX:[phone]

July 9, 2012
Honorable Nandor Vadas
United States Magistrate Judge

Re:

ORDER GRANTING REQUEST
TO APPEAR
TELEPHONICALLY, AS
MODIFIED

US v. Elizabeth Miles, et al., Case No. 10-2398-CW (N.D. Calif.)

Dear Judge Vadas:
We are currently scheduled for a second settlement conference with you on July 16, 2012.
Pursuant to your Standing Order Re: Settlement Conference Procedures, I am
requesting that the person with final settlement authority on behalf of the United States be
available for consultation by telephone in connection with the Settlement Conference.
As the AUSA assigned to this case, I have primary responsibility and will appear in person at the
Settlement Conference.
The following bases are offered in support of the relief requested.
1.
Before attending the settlement conference, the undersigned will have discussed
this matter with the delegate of the Section Chief, the person with full settlement authority, and
will be prepared to engage in good-faith negotiations based on those discussions. The
undersigned will be available to consult with him by cell phone during the conference. The Tax
Division has used this method for some time, and the Tax Division is not aware of any instance
in which a trial attorney was not able to engage in energetic and frank settlement negotiations.
2.
The authority to conduct and settle litigation involving the federal Government is
precisely delineated. Except as otherwise provided by law, authority to conduct all litigation in
the courts of the United States in which the United States, an agency, or officer is a party is
reserved to the Department of Justice under the direction and supervision of the Attorney
General. 28 U.S.C. §§ 516, 519. Because the Attorney General’s authority in such matters is
“plenary,” Marshall v. Gibson’s Products, Inc., 584 F.2d 668, 676 n.11 (5th Cir. 1978), the
Attorney General may make “such provisions as he considers appropriate” to authorize the
performance of his functions by “any other officer [or] employee” of the Department. 28 U.S.C.
§ 510. By the same token, 28 U.S.C. § 517 authorizes the Attorney General to send “the
Solicitor General or any officer of the Department of Justice … to attend to the interests of the
United States in a suit pending in the courts of the United States,” and 28 U.S.C. § 518 provides
that “[w]hen the Attorney General considers it in the interests of the United States, he may
personally conduct and argue any case in a court of the United States in which the United States

is interested, or he may direct the Solicitor General or any officer of the Department of Justice to
do so.”
3.
By statute, settlement authority is conferred solely upon the Attorney General “or
his delegate” in all cases arising under the Internal Revenue Code that have been referred to the
Department of Justice for prosecution or defense. 26 U.S.C. § 7122(a). By regulation, the
Attorney General has delegated the full extent of his settlement authority to the Deputy Attorney
General. 28 C.F.R. § 0.161(b). The Attorney General has further delegated to the Associate
Attorney General the authority to perform the functions of the Deputy Attorney General under 28
C.F.R. § 0.161, for all cases and matters arising out of the Antitrust, Civil, Civil Rights,
Environment and Natural Resources, and Tax Divisions. See Order of the Attorney General No.
1627-92, dated October 19, 1992.
4.
In addition to the foregoing delegations of authority, the Attorney General also has
delegated limited settlement authority to the Assistant Attorney General in charge of each
division. Under certain limited circumstances, the Assistant Attorney General of the Tax
Division can redelegate her settlement authority to subordinate officials within the Tax Division.
28 C.F.R. § 0.168(a). In the case of suits to reduce assessments to judgment, the Chiefs of the
Division’s several Civil Trial Sections are authorized to accept offers in compromise in which
the amount of the Government’s concession, exclusive of statutory interest, does not exceed
$300,000. See Tax Division Directive No. 105, 60 Fed. Reg. 31244-46 (June 14, 1995).1
5.
It would be prohibitively expensive and time-consuming for the Chief of the Civil
Trial Section, Western Region, routinely to appear for settlement conferences in each of the cases
he supervises while continuing to execute the other duties assigned to him by the Assistant
Attorney General. The Section Chief has responsibility for an office of over thirty-five persons,
including one Assistant Chief, twenty-four Trial Attorneys, and four Paralegal Assistants. The
Civil Trial Section, Western Region currently handles over 1,350 pending cases in courts located
in Washington, Oregon, California, Arizona, Nevada, Utah, Colorado, Idaho, Wyoming,
Montana, Alaska, and Hawaii. Accordingly, if the Court’s usual procedures for settlement
conferences were to be followed, the Department would be compelled to amend its settlement
authority regulations or alter the duties assigned to the Section Chief. The Supreme Court,
however, has made clear that district courts lack authority to compel the Department of Justice to
amend the regulations governing its procedures for handling litigation. See Touhy v. Ragen, 340
U.S. 462, 468 (1951) (district court cannot require subordinate Department of Justice employee
to produce official document under subpoena when, under Department regulations, the employee
lacked authority to do so; regulation centralizing authority to release document in high-level
1

It is not possible for the Attorney General to routinely delegate settlement authority to trial attorneys.
The authority of the Assistant Attorneys General to redelegate the settlement authority conferred upon them is
prescribed by 28 C.F.R. § 0.168. Assistant Attorneys General may not delegate the authority to accept a settlement
when the client agency disagrees with the proposed settlement, and any other redelegation requires the approval of
the Deputy Attorney General in writing before it is effective. In addition, Tax Division Directive No. 105
specifically provides that an attorney of record may not exercise settlement authority.

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official was valid and binding on the court). Similarly, the foregoing regulations centralizing the
approval authority for certain types of settlements are valid and binding on the Court in the
present case.
6.
Requiring the attendance of the Section Chief at the upcoming settlement
conference also would contravene the spirit of Federal Rule of Civil Procedure 16. Rule 16,
which took effect on December 1, 1993, reaffirmed that federal trial courts must consider the
special status of the Government when conducting pre-trial conferences, including settlement
conferences. The Rule states that, “[i]f appropriate, the court may require that a party or its
representative be present or reasonably available by telephone in order to consider possible
settlement of the dispute.” FED. R. CIV. P. 16(c). The drafting committee notes on this revision
further state as follows:
The sentence refers to participation by a party or its representative.
Whether this would be the individual party, an officer of a corporate
party, a representative from an insurance carrier, or someone else
would depend on the circumstances. Particularly in litigation in
which governmental agencies or large amounts of money are
involved, there may be no one with on-the-spot settlement authority,
and the most that should be expected is access to a person who would
have a major role in submitting a recommendation to the body or
board with ultimate decision-making responsibility. The selection of
the appropriate representative should ordinarily be left to the party
and its counsel.
FED. R. CIV. P. 16, advisory committee note (1993 amendments) (emphasis added). This
committee note makes clear that the committee and the Supreme Court are fully aware of the
unique role of the federal government in litigation and the constitutional and practical problems
that would ensue if the Government were subject to the same settlement authority requirements
as a private party.
7.
A routine requirement to have a Government representative with full settlement
authority attend settlement conferences would also be inconsistent with the Judicial
Improvements Act of 1990. That Act authorizes the district courts to adopt “civil justice expense
and delay reduction plans,” which may include a requirement that “representatives of the parties
with authority to bind them in settlement discussions” be “present or available by telephone”
during any settlement conference. 28 U.S.C. § 473(b)(5). However, the Act further provides that
“[n]othing in [such] plan relating to the settlement authority provisions of this section shall alter
or conflict with the authority of the Attorney General to conduct litigation on behalf of the United
States, or any delegation of the Attorney General.” 28 U.S.C. § 473(c) (emphasis added). The
Senate Report on the Act, moreover, amply demonstrates Congress’ belief that the federal
Government is in a different position than private parties or corporations with respect to
settlement authority. In this regard, the Committee stated that “those district courts that choose
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to adopt [the settlement authority requirement] should account for the unique situation of the
Department of Justice. The Department does not delegate broad settlement authority to all trial
counsel, but instead reserves that authority to senior officials in the United States Attorneys’
Offices or in the litigating divisions in Washington.” S. REP. NO. 416, 101st Cong., 2d Sess. 58,
reprinted in 1990 U.S. Code Cong. & Adm. News 6802, 6848.
8.
The present case evinces the difference between the federal Government and
private litigants. The Attorney General of the United States has the responsibility to represent the
United States in judicial proceedings. 28 U.S.C. § 519. He conducts this responsibility under
statutes which give him authority to make “such provisions as he considers appropriate” to
authorize performance of this function by other officers and employees of the Department of
Justice. 28 U.S.C. § 510. He has the responsibility to direct other officers of the Department in
their conduct of litigation on behalf of the United States. 28 U.S.C. §§ 516, 515(a), 517. It
would raise grave questions of separation of powers for the judiciary to tell the Attorney General
what types of authority he must delegate to whom and who must represent the Government at
any particular proceeding.
9.
The conclusion that requiring the Section Chief to attend the settlement
conference would be beyond the Court’s authority finds support in the decision of the Fifth
Circuit in In re M.P.W. Stone, 986 F.2d 898, 903 (5th Cir. 1993). In Stone, the Fifth Circuit
concluded that, subject to the abuse of discretion standard, district courts have the power to order
all parties, including the Government, to have a representative with full settlement authority
present, or at least reasonably and promptly accessible, at a pretrial conference. The United
States believes that this decision is incorrect because it would allow the district courts to require
the Attorney General to abandon or modify valid regulations. Even under the standard
established in Stone, however, in this case personal attendance of the Section Chief would not be
warranted.
10.
In Stone, the Fifth Circuit recognized that the power to require the United States
to appear at a settlement conference was not without limitation, and that Congress can restrict the
power, or restrict the discretion to exercise it, as long as the restriction does not “abrogate or
render the power inoperative.” Stone, 986 F.2d at 902 (citing Michaelson v. United States, 266
U.S. 42, 65-66 (1924)); cf. Van Bronkhorst v. Safeco Corp., 529 F.2d 943 (9th Cir. 1976).2 In
2

Van Bronkhorst did not involve the Attorney General’s statutory authority to control representation of the
United States in litigation under 28 U.S.C. §§ 510, 515-519, but did involve a situation in which the requirement that
senior officials appear at settlement conferences was upheld in light of extraordinary circumstances where efforts to
settle a case had been thwarted by government inaction. Specifically, Van Bronkhorst involved a nationwide class
action against a major employer, in which a proposed consent decree already had been negotiated by all the private
parties and agreed to by EEOC staff lawyers who had sought, but been unable to obtain, upper-level approval. The
District Court had cleared three months of its calendar for the trial, which would be unnecessary if the consent decree
were adopted. As the time for trial approached, the District Court required a final decision by the EEOC. In that
situation, the District Court’s order requiring the EEOC’s general counsel to appear personally did not potentially
subject the general counsel to the physically impossible task of personally appearing at or participating in
conferences in thousands of other cases, thus forcing a general delegation to subordinates in violation of a valid

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this situation, special consideration must be given to the Department of Justice’s settlement
regulations, as they have been devised to execute duties imposed by statute on the Attorney
General. Stone, 986 F.2d at 903-04. The Fifth Circuit concluded that the settlement regulations,
which confine settlement authority to a few officials with many other duties, were justified by
reasonable policies, and further concluded that these regulations imposed “insignificant
interference with the operation of the courts ….” Id. at 904. Accordingly, the Fifth Circuit held
that the district court had abused its discretion by issuing routine orders that the Government be
represented by an individual with full settlement authority at pretrial conferences. Id. at 905.
11.
The United States also emphasizes that, in the present case, there is no suggestion
that the Department has in any way thwarted negotiations aimed at settlement. The United States
anticipates that good-faith settlement negotiations under the Department’s normal procedures
will be had. There is no basis at this stage of the proceedings to require that a Department of
Justice official with full settlement authority appear at a settlement conference. See id. (a district
court may compel the attendance of an official with full settlement authority only as a “last
resort,” after the failure of the Government to engage in settlement negotiations has become a
“serious, persistent problem, substantially hampering the operations of the docket” and after
other less drastic measures have been taken). As stated by the Senate Report in the legislative
history of the Judicial Improvements Act of 1990, “[c]learly, the Department cannot realistically
send officials with full settlement authority to each settlement conference.” S. REP. No. 416,
101st Cong., 2d Sess. 58, reprinted in 1990 U.S. Code Cong. & Adm. News 6802, 6848
(emphasis added). Accordingly, even if the Court rejects the United States’ argument that the
Court lacks authority to compel the attendance or participation of the government official with
“full settlement authority” in the present case, the United States respectfully suggests that such
compelled attendance or participation is inappropriate at this time.
For the reasons set forth above, the government is respectfully requesting your permission
to allow the undersigned AUSA to represent the United States at the upcoming settlement
conference. The undersigned has primary responsibility for handling this case and is,
accordingly, the Department official most familiar with the factual and legal issues relevant to
the settlement conference. Pursuant to 28 U.S.C. §§ 515 through 519, the trial attorney is
authorized to represent the United States in this lawsuit, and may negotiate settlement offers that
the trial attorney is willing to recommend to the Department of Justice official with final
settlement authority. As stated above, the undersigned will discuss this case with his Section
Chief prior to the conference and will be prepared to engage in good-faith negotiations.
Moreover, the Section Chief will be available by telephone throughout the conference. If the
Court determines that the undersigned’s Section Chief must attend the settlement conference, the
United States respectfully requests that the Court notify the parties of that decision as soon as

statute and regulations. Van Bronkhorst thus involved a situation of “last resort” that the Fifth Circuit in Stone, 898
F.2d at 905, held could justify the compelled appearance of persons with “full settlement authority.” The present
case is not, in any manner, factually analogous to the “last resort” scenario presented in Van Bronkhorst.

5

possible, so that the United States may timely consider what action may be appropriate prior to
the settlement conference.
Respectfully submitted,

/s/
Cynthia Stier
Assistant United States Attorney
Telephone: [phone]
Attorney for the United States of America
Based on the foregoing, the Government's request is GRANTED. The Section Chief, the person with full
settlement authority, may appear by telephone on the following conditions: (1) The Section Chief shall be
reachable immediately and at all times for the duration of the settlement conference; and (2) The Assistant
United States Attorney shall have discussed the maximum settlement allowed by the Section Chief in this
instance such that she need not interrupt the settlement conference to confirm with the Section Chief whether
an offer is within the realm of acceptance. In future filings, the Government shall follow the local rules.
Any filings requesting relief from the Court shall be filed as motions (or discovery letter briefs where
appropriate), and shall include a proposed order. See N.D. L.R. 7-1, 7-2(c).

andor J.

R NIA

NO

Judge N

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ORDER

Vadas

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UNIT
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Dated: July 11, 2012

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IT IS SO ORDERED.

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NANDOR J. VADAS
U.S. E R
MAGISTRATE JUDGE
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