Harrison v. United States of America

Filing 40

MEMORANDUM DECISION AND ORDER RE: MOTION FOR RELIEF FROM REQUIREMENT THAT PERSON WITH FULL SETTLEMENT AUTHORITY ATTEND MEDIATION (DKT. 37) granting 37 Motion for Relief. Signed by Judge Candy W. Dale. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjs)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

C1 DESIGN GROUP, LLC,

Case No. 1:15-cv-00146-CWD
Plaintiff,
MEMORANDUM DECISION AND
ORDER RE: MOTION FOR RELIEF
FROM REQUIREMENT THAT
PERSON WITH FULL SETTLEMENT
AUTHORITY ATTEND MEDIATION
(DKT. 37)

v.
UNITED STATES OF AMERICA,

Defendant.

INTRODUCTION
Pending before the Court is Defendant United States of America’s Motion for
Relief from Requirement that Person with Full Settlement Authority Attend Mediation.
(Dkt. 37.) All parties have consented to the jurisdiction of the undersigned United States
Magistrate Judge. (Dkt. 28) See 28 U.S.C. § 636(c)(1); see also Dist. Idaho L. Rule 73.
In the interest of avoiding delay, and because the Court conclusively finds the decisional
process would not be significantly aided by oral argument, Defendant’s motion will be
decided without oral argument. Dist. Idaho L. Rule 7.1(d). For the reasons that follow,
the Court will grant Defendant’s motion.
MEMORANDUM DECISION AND ORDER RE: MOTION FOR RELIEF FROM
REQUIREMENT THAT PERSON WITH FULL SETTLEMENT AUTHORITY
ATTEND MEDIATION - 1

DISCUSSION
This matter arises from the disallowance by the Internal Revenue Service of a tax
refund to Plaintiff C1 Design Group LLC in the amount of $28,755. 39. The parties are
set to attend mediation on June 13, 2016. Defendant, the United States of America
contends it should be excused from the requirement that a person with full settlement
authority be physically present at the mediation, and instead requests the person with full
settlement authority be available by telephone. Plaintiff, without citing any legal
authority, disagrees.
Pursuant to the Court’s Order, “parties who have settlement authority shall
participate in mediation….” (Dkt. 26 at 2.) see also Fed. R. Civ. P. 16(c)(1) (“If
appropriate, the court may require that a party or its representative be present or
reasonably available by other means to consider possible settlement.”). However, The
United States Court of Appeals for the Ninth Circuit in United States v. U.S. Dist. Court
for N. Mariana Islands, 694 F.3d 1051, 1055 (9th Cir. 2012), as amended (Oct. 16,
2012), found district courts should “take a ‘practical approach’ in determining whether to
require the government to send a representative with full settlement authority to a pretrial
conference and should consider less drastic steps before doing so.” Id. (internal citations
omitted).
In its application of this “practical approach,” the Ninth Circuit in Mariana Islands
found the district court abused its discretion by ordering a United States Tax Division
representative with full settlement authority to be present at a settlement conference
MEMORANDUM DECISION AND ORDER RE: MOTION FOR RELIEF FROM
REQUIREMENT THAT PERSON WITH FULL SETTLEMENT AUTHORITY
ATTEND MEDIATION - 2

involving a tax refund, because the lowest level official who could attend the settlement
conference, the Assistant Attorney General of the Tax Division, could not practically
“prepare and appear at all settlement conferences,” given the size of her caseload. Id.
Here, the Court is presented with a similar issue: the only persons with full
settlement authority in this case are the Attorney General of the United States, the Chief
of the Tax Division’s Civil Trial Section for the Western Region, and his two Assistant
Section Chiefs. 1 Richard Ward, the Chief of the Tax Division’s Civil Trial Section for the
Western Region is responsible for more than 600 active cases assigned to trial attorneys
in his office (this case being one of them), 700 additional cases pending in the Tax
Divisions of the United States Attorneys’ Office in Los Angeles and San Francisco
California, and many more tax cases that are handled by Assistant United States
Attorneys and Special Assistant United States Attorneys throughout the Western Region.
Ward’s two Assistant Section Chiefs each supervise half of the trial attorneys and support
staff, handling more than 300 cases apiece. Like in Mariana Islands, it would be
impractical, if not impossible, to expect Ward or his Assistant Section Chiefs to prepare
and appear for all settlement conferences given their caseload.
1

Pursuant to 26 U.S.C. §7122, settlement authority for this case rests with the Attorney General of the
United States or his delegates. The case may be settled only by delegates of the Attorney General in
accordance with the regulations published in 28 C.F.R. § § 0.70, 0.160, 0.162, 0.164, 0.166, and 0.168,
and Tax Division Directive No. 105, published in 28 C.F.R. Part O, Subpart Y, Appendix, as effective on
June 14, 1995. Justice Department regulations confirming settlement authority are valid and binding. See
Mariana Islands, 694 F.3d at 1054-55& nn. 3-4. The Chief of the Tax Division’s Civil Trial Section for
the Western Region, Richard Ward is authorized to accept settlement offers in which the amount of the
Government’s tax liability does not exceed $500,000. In cases where the Government’s concession of tax
liability does not exceed $250,000, Ward may delegate authority to one of the two Assistant Section
Chiefs.

MEMORANDUM DECISION AND ORDER RE: MOTION FOR RELIEF FROM
REQUIREMENT THAT PERSON WITH FULL SETTLEMENT AUTHORITY
ATTEND MEDIATION - 3

Plaintiff has set forth no reasons as to why the Assistant Section Chiefs should not
be excused from the requirement to attend the mediation set for June 13, 2016. A less
drastic step is to require the attorney handling the case to attend the mediation, with the
Assistant Section Chief available by telephone. 2 Accordingly, the Court will grant the
motion.
ORDER
1. Defendant’s Motion for Relief from Requirement that Person with Full Settlement
Authority Attend Mediation (Dkt. 37) is GRANTED.

May 24, 2016

2

Availability by telephone does not mean the Assistant Section Chief must be conferenced in and listen
to the entirety of the mediation as this too would defeat the purpose of excusing his or her attendance of
the mediation—it would be impractical for the Assistant Section Chiefs to prepare and be telephonically
present for all settlement conferences and mediations for the entirety of their cases. However, the
Assistant Section Chief must be available by telephone throughout the day so the attorney handling the
case can easily reach him or her to discuss potential settlement.

MEMORANDUM DECISION AND ORDER RE: MOTION FOR RELIEF FROM
REQUIREMENT THAT PERSON WITH FULL SETTLEMENT AUTHORITY
ATTEND MEDIATION - 4