Pate v. Winn-Dixie Stores, Inc.
Filing
119
ORDER granting Plaintiff's 118 Amended MOTION schedule settlement conference. The Court hereby sets a settlement conference on Wednesday, 3/18/15, at 10:00 AM, in Courtroom 2 of the Federal Building, 801 Gloucester St., Brunswick, GA. The Cour t further orders that a representative of the Plan who can participate in the settlement discussions on behalf of the Plan be present at such settlement conference. The Clerk is directed to serve the Plan with a copy of this Order expeditiously. Signed by Magistrate Judge R. Stan Baker on 3/11/2015. (ca)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF GEORGIA
BRUNSWICK DIVISION
LINDA PATE,
Plaintiff,
v.
CIVIL ACTION NO.: CV213-166
WINN-DIXIE STORES, INC.,
Defendant.
ORDER
Presently before the Court is Plaintiff’s Amended Motion to Schedule Settlement
Conference. (Doc. 118.) Plaintiff, joined by Defendant, moves the Court to set a pretrial
settlement conference and to require that a representative of Plaintiff’s nonparty health insurer,
Plumbers & Steamfitters Local No. 177 Health and Welfare Plan (the “Plan”), appear at such
settlement conference. (Id. at p. 3.) For the reasons set forth below, Plaintiff’s Motion is
GRANTED .
BACKGROUND
Plaintiff filed this slip-and-fall action against Defendant on September 23, 2013. (Doc. 1,
Ex. A.) Plaintiff contends that her fall in Defendant’s grocery store was caused by a leaking cooler.
(Id. at Ex. A, pp. 2–3.) According to Plaintiff, her fall resulted in permanent physical and mental
injuries that require substantial medical treatment. (Id. at Ex. A, p. 3.) Plaintiff seeks
compensation for her injuries, medical expenses, and lost wages as well as punitive damages. (Id.
at Ex. A, pp. 3–4.)
The parties completed discovery on July 26, 2014. (Doc. 47, p. 1.) On August 20, 2014,
Defendant filed a Motion for Summary Judgment and a Motion for Partial Summary Judgment as
to Punitive Damages, which the parties fully briefed and which are currently pending before the
Court. (Docs. 91–92.) Plaintiff avers that the parties mediated this case, along with its companion
state-court case for loss of consortium, on December 3, 2014. (Doc. 118, p. 1.) Plaintiff represents
that the parties reached a “tentative settlement” that depended on the Plan compromising a
subrogation lien that it has asserted pursuant to the Employee Retirement Income Security Act
(ERISA) of 1974, 29 U.S.C. §§ 1001–1461 (2014). (Id.) As Plaintiff explains, the Plan has
claimed to hold a lien against any recovery that Plaintiff obtains from Defendant for the cost of a
shoulder surgery. (Id. at p. 2.)
Following the mediation, Plaintiff alleges that the parties began contacting the Plan on
December 4, 2014. (Id. at p. 1.) The parties informed the Plan of their positions on numerous
contested issues, explaining that they factored these issues into their tentative settlement and
requesting that the Plan do the same with respect to the amount of its lien. (Id. at pp. 1–2.) Plaintiff
contends that the Plan notified her on February 19, 2015, that its trustees voted to deny her request
for a reduction in the amount of its lien. (Id. at p. 2.)
On February 20, 2015, Plaintiff filed the instant Motion asking the Court to schedule a
pretrial settlement conference and to require that a representative of the Plan with full settlement
authority attend the settlement conference. (Id. at pp. 2–3.) Plaintiff further requests that, if
necessary, the Court join the Plan as a party to this action, pursuant to its jurisdiction over matters
involving federal ERISA law. (Id. at p. 2.) According to Plaintiff, “unless the Plan compromises
its claim, as the [p]arties hereto have attempted to do in good faith, the [p]arties will be unable to
settle and this matter will have to be tried to a jury at a great risk to the Plan and the [p]arties
hereto.” (Id.) Plaintiff further argues that the trustees of the Plan “have a fiduciary duty to act to
avoid taking unnecessary risks with the assets of the Plan” and that refusing to compromise its lien
would do just that. (Id. at pp. 2–3.)
2
DISCUSSION
Federal Rule of Civil Procedure 16 (“Rule 16”) provides a district court with the “power
to facilitate settlement discussions.” In re Novak, 932 F.2d 1397, 1403 (11th Cir. 1991); see also
Fed. R. Civ. P. 16(c)(1). Pursuant to Rule 16, the Court “may require that a party or its
representative be present or reasonably available by other means to consider possible settlement”
at a pretrial conference. Fed. R. Civ. P. 16(c)(1); see also L.R. 16.5. The Court may sanction a
party or attorney who “fails to appear” at the pretrial settlement conference or who comes
“substantially unprepared to participate.” Fed. R. Civ. P. 16(f)(1)(A)–(B).
In addition, a district court has “inherent power” beyond that which is explicitly stated in
a statute or regulation. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 379–81
(1994). “Inherent power” refers to “the control necessarily vested in courts to manage their own
affairs so as to achieve the orderly and expeditious disposition of cases.” In re Novak, 932 F.2d
at 1405–06 (quoting Link v. Wabash R.R., 370 U.S. 626, 630–31 (1962)). Grounded upon
necessity, the Court “may only invoke its inherent power when necessary to protect its ability to
function.” Id. at 1406; see also Kokkonen, 511 U.S. at 380 (asking whether a lower court’s
exercise of inherent power was “require[d] in order to perform [its] functions”). Inherent power
thus encompasses “the power to issue orders necessary to facilitate activity authorized by statute
or rule” and “the power to issue any order necessary to preserve [the Court’s] ability to manage
and adjudicate a case . . . properly before it.” In re Novak, 932 F.2d at 1403, 1406. However, this
Court “may not take action under the guise of its inherent power when that action either
contravenes a statute or rule or unnecessarily enlarges the court’s authority.” Id. at 1406 n.17.
In In re Novak, the Court of Appeals for the Eleventh Circuit considered whether a district
court’s authority to facilitate settlement under Rule 16 gives rise to an inherent power to overcome
3
certain impediments to a productive pretrial settlement conference. Id. at 1406. Specifically, the
Eleventh Circuit addressed the impediment posed by a nonparty insurer of a named party, the
defendant in that case, that controlled the litigation but refused to give full settlement authority to
the party or its attorney. Id. at 1398–99, 1407. Such a situation, the Eleventh Circuit remarked,
“may prevent the individuals participating in the pretrial conference from fully discussing
settlement options; this, in turn, frustrates Rule 16’s goals.” Id. at 1407. Even so, the Eleventh
Circuit held that the district court had no authority to issue an order directing an employee of the
nonparty insurer with full settlement authority to appear at the pretrial settlement conference. Id.
at 1408.1 The Eleventh Circuit observed that Rule 16 “makes no mention of nonparties or insurers”
and, accordingly, provides no explicit authority to issue an order directed at a nonparty insurer.
Id. at 1407–08. The Eleventh Circuit further determined that a court has no inherent power to
issue such an order, because, under those circumstances, “it is not necessary for a trial judge to
issue such an order to guarantee that settlement discussions are fruitful.” Id. at 1408. It is not
necessary, according to the Eleventh Circuit, because a court can rely on its power, under Rule 16,
“to order named parties to produce individuals with full settlement authority at pretrial
conferences” or else face sanctions for unpreparedness, to effectively coerce the participation of a
nonparty insurer that retains settlement authority. Id. 2
Although Rule 16 was amended following In re Novak, the Eleventh Circuit’s
interpretation of Rule 16 nevertheless remains consistent with the amended language. 3 Notably,
1
The Eleventh Circuit nevertheless upheld the district court’s decision finding the employee in criminal contempt
once he chose not to attend the settlement conference. In re Novak, 932 F.2d at 1408–09. The Court reasoned that
“there existed a colorable argument to support the issuance of the order” and that the law, therefore, required the
employee to obey that order and to follow defined procedures if he wished to challenge it. Id.
2
On this point, the Eleventh Circuit found that a court has the inherent power “to direct parties to produce individuals
with full settlement authority at pretrial settlement conferences,” as necessary to facilitate settlement discussions under
Rule 16. Id. at 1407.
3
When the Eleventh Circuit decided In re Novak in 1991, the version of Rule 16 then in place referred to “attorneys
for the parties and any unrepresented parties” as the only “participants” of pretrial conferences. Id. at 1404 & n.11.
4
however, the Advisory Committee to the amendment deliberately omitted a proposed provision
that “would have authorized the court to require that parties, or their insurers, attend a settlement
conference and participate in special [alternative dispute resolution] procedures.” Amendments to
Federal Rules of Civil Procedure, 146 F.R.D. 401, 526 (Aug. 1991). The Advisory Committee
recognized “the strong feelings of many that this authority is needed and, indeed, already within
the court’s inherent powers” but resolved to remove the provision to allow for “local
experimentation.” Id.
Similar to In re Novak, the Plan is a nonparty insurer of a named party in this case. That
the named party here is the Plaintiff, rather than the defendant, does not change the Plan’s nonparty
status. See In re Novak, 932 F.2d at 1408 (applying the same reasoning with regard to a nonparty
insurer that “must indemnify its insured (the defendant)” and one that “has subrogation rights to
any judgment secured by its insured (the plaintiff)”). Furthermore, while nothing suggests that
Plaintiff’s insurance agreement gives the Plan any direct control over the litigation or settlement
of third-party tort claims, it appears that the Plan’s refusal to negotiate its rights against Plaintiff’s
recovery has created an impasse in the parties’ settlement discussions nonetheless.
However, unlike in In re Novak, the only means to overcome this particular impediment is
to issue an order directing a representative of the Plan to attend a pretrial settlement conference.
Indeed, because the Plan seemingly has no express settlement authority, the alternative envisioned
in In re Novak—an order directing the named party to produce an individual with full settlement
authority at a pretrial settlement conference—would not be effective in this case. On these facts,
Rule 16 was amended in 1993 to clarify that a court could “require that a party or its representative be present or
reasonably available by other means.” Fed. R. Civ. P. 16(c)(1); see also Fed. R. Civ. P. 16(c)(1) advisory committee’s
note to 1993 amendment (explaining that under the amended language, a court could even include “a requirement that
representatives ‘with authority to bind [parties] in settlement discussions’ be available during settlement conferences”
(alteration in original) (citations omitted)). These changes did not disrupt the Eleventh Circuit’s analysis of a court’s
settlement authority, discussed supra.
5
the Court finds that an order directed at the Plan is necessary for the Court to perform its function
of facilitating productive settlement discussions under Rule 16. It is the presence of necessity that
distinguishes this case from In re Novak and leads the undersigned to conclude that the Court has
the inherent power to issue such an order here. 4
CONCLUSION
Based on the foregoing, Plaintiff’s Motion is GRANTED . The Court hereby sets a
settlement conference on Wednesday, March 18, 2015, at 10:00 AM, in Courtroom 2 of the Federal
Building, 801 Gloucester Street, Brunswick, Georgia. The Court further orders that a
representative of the Plan who can participate in settlement discussions on behalf of the Plan be
present at such settlement conference. The Clerk of Court is directed to serve the Plan with a copy
of this Order expeditiously.
SO ORDERED , this 11th day of March, 2015.
Lc
R. STAN BAKER
UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF GEORGIA
4
The Court’s finding as to inherent power obviates ancillary concerns, such as personal jurisdiction. See In re Novak,
932 F.3d at 1403 (“If the court’s power to issue this order was truly inherent—i.e., necessary for the administration of
justice, then its personal jurisdiction, or lack thereof, over [the nonparty insurer] is irrelevant.” (citations omitted)).
The Court also need not consider Plaintiff’s remaining arguments—as to the Plan’s joinder as a party and the trustees’
fiduciary duty (Doc. 118, pp. 2–3)—and makes no representation as to the merits of these arguments.
6
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