CASTELINO v. ROSE-HULMAN INSTITUTE OF TECHNOLOGY

Filing 288

ENTRY ADDRESSING OBJECTION TO REPORT AND RECOMMENDATION - The Plaintiff's objection to Magistrate Judge Brookman's report and recommendation (Dkt. No. 243 ) is OVERRULED, with the exception of his objection to sanctions being imposed on the Plaintiff rather than on Plaintiff's counsel. With that exception, the Court adopts Magistrate Judge Brookman's report and recommendation. The Plaintiff's motion for sanctions (Dkt. No. 117 , as supplemented by Dkt. No. 140 ) is DENIED. The Defendant's motion for sanctions (Dkt. No 124 ) is GRANTED, and Plaintiff's counsel, John Thrasher, is ORDERED to pay the Defendant $3,875.54 within 28 days of the date of this Entry. Mr. Thrasher shall file a notice informing the Court when payment is made. (See Order.) Signed by Judge William T. Lawrence on 9/18/2018. (DMW)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
TERRE HAUTE DIVISION
JUSTIN CASTELINO,

)
)
)
)
) Cause No. 2:17-cv-139-WTL-MJD
)
)
)
)
)

Plaintiff,
vs.
ROSE-HULMAN INSTITUTE OF
TECHNOLOGY,
Defendant.

ENTRY ADDRESSING OBJECTION TO REPORT AND RECOMMENDATION
United States Magistrate Judge Matthew Brookman was designated pursuant to 28 U.S.C.
§ 636(b)(1)(B) to issue a report and recommendation regarding the appropriate disposition of the
parties’ motions for sanctions that arose out of a settlement conference held by Magistrate Judge
Brookman (Dkt. Nos. 117 and 124). The Plaintiff has filed timely objections to the Magistrate
Judge’s report and recommendation regarding both motions (Dkt. No. 243, objecting to Dkt. No.
234). The Court, being duly advised, now addresses the Plaintiff’s objections, having conducted
the de novo review required by 28 U.S.C. § 636(b).
Background
On August 29, 2017, Magistrate Judge Brookman issued an order scheduling a settlement
conference in this case on Monday, September 25, 2017. The order included the following:
Three business days before the scheduled conference, the parties shall submit
(not file) to the Magistrate Judge a confidential settlement statement setting
forth a brief statement of: (1) relevant facts, including any key facts that the party
believes are admitted or in dispute; (2) damages, including any applicable back
pay, mitigation, compensatory and/or punitive damages, or any other special
damages; and (3) any pending or anticipated dispositive or other substantive
motions. The confidential settlement statement should not exceed five, doublespaced pages, and submission of exhibits should be kept to a minimum.

No later than fourteen days prior to the settlement conference, Plaintiff(s)
shall serve an updated settlement demand on Defendant(s), who shall serve
an updated response no later than seven days before the settlement
conference. The parties shall submit (not file) to the Magistrate Judge
courtesy copies of their respective demand and response at the time of
service. Counsel may submit confidential settlement statements and copies of
their settlement demand/response to Chambers via mail or email
([e-mail]).
Dkt. No. 102 at 3 (emphasis in original).
As Magistrate Judge Brookman recites in his Report and Recommendation:
On September 18, 2017, the Court was courtesy copied on an email by defense
counsel to plaintiff’s counsel, advising Plaintiff that Defendant had not received
an updated settlement demand prior to the fourteen day deadline and that, to stay
in accordance with the Court’s deadlines, the Defendant “does not make any
monetary offer to settle the case.” (Docket No. 124-2). On September 24, 2017,
at 10:28 p.m., plaintiff’s counsel emailed defense counsel plaintiff’s updated
demand, which included a number of monetary and non-monetary factors
dependent upon whether or not reinstatement was part of any proposed
agreement. (Docket No. 124-3). The updated demand was substantially higher
than the previous demand Plaintiff provided.
On September 25, 2017, the Court held a settlement conference. During the joint
session, which was held in the courtroom and on the record, the Court addressed
Plaintiff’s failure to abide by the Settlement Conference Order. (September 25,
2017, 3:00). When asked by the Court, Plaintiff’s counsel, John Thrasher
admitted that he did not email a confidential settlement statement three (3)
business days prior to the settlement conference, instead submitting one on
Sunday, September 24, 2017, hours prior to the settlement conference. When
asked if he had good cause for his failure, Mr. Thrasher responded: “I didn’t read
it carefully, that’s the simple truth.” (September 25, 2017, 4:32). Similarly, Mr.
Thrasher admitted that he did not email an updated settlement demand fourteen
(14) business days prior to the settlement conference, instead submitting it on
Sunday, September 24, 2017, hours prior to the settlement conference. When
asked by the Court, again, if he had good cause for his failure, Mr. Thrasher
responded: “Again, I’m afraid not.” (September 25, 2017 7:00).
Subsequent to this questioning, Defendant requested the Court order sanctions
during the conference for Plaintiff’s non-compliance with the Court order.
(September 25, 2017, 8:30). Defendant asserted prejudice given the updated,
untimely settlement demand was substantially larger than Plaintiff’s previous
demands and that this fact, combined with the number of outstanding discovery
disputes at the time of the conference, substantially impaired the parties’ abilities
to effectively negotiate a resolution at the settlement conference. (September 25,
2

2017, 9:28). Plaintiff was given an opportunity to respond and, while he
attempted to provide justification for the increase in demand, he provided no
reasoning for his noncompliance with the Court order other than “I have no—it
was my own neglect.” (September 25, 2017, 10:47). The Court reserved ruling
on Defendant’s request for sanctions and granted Defendant leave to file a written
motion. (Docket No. 122).
Dkt. No. 234 at 3-5. Following the settlement conference, both parties filed motions for
sanctions, which the Court referred to Magistrate Judge Brookman for a report and
recommendation. Magistrate Judge Brookman recommended that the Defendant’s motion be
granted and the Plaintiff’s motion be denied. The Plaintiff filed a timely objection to the report
and recommendation.
Plaintiff’s Motion for Sanctions (Dkt. No. 117)1
The Plaintiff objects to Magistrate Judge Brookman’s recommendation that the Plaintiff’s
motion for sanctions be denied, arguing that the Defendant also failed to comply with Magistrate
Judge Brookman’s order and that the Defendant’s negotiations at the settlement conference were
in bad faith. The Court disagrees on both counts.
First, the Plaintiff argues that because the Defendant has asserted a counterclaim in this
case, all of the instructions in Magistrate Judge Brookman’s order that were directed to the
Plaintiff applied equally to the Defendant. That is simply incorrect; the order is unambiguous on
its face and obligated the Plaintiff to serve an updated settlement demand and the Defendant to

1

The Plaintiff filed a Motion for Sanctions Against Defendant and/or Counsel on
September 26, 2017 (Dkt. No. 117). This case was stayed from September 27, 2017, through
December 21, 2017, while the parties briefed and the Court considered a motion to disqualify
counsel. The Plaintiff filed another document entitled Motion for Sanctions Regarding
Settlement Conference on December 22, 2017 (Dkt. No. 140). That document is confusing;
while it is entitled a motion, it states that it is “Plaintiff’s reply” to the Defendant’s motion for
sanctions, and it was entered on the docket (by Plaintiff’s counsel) as a response to the
Defendant’s motion for sanctions. The Court has considered the document as a supplement to
the Plaintiff’s motion for sanctions.
3

serve a response. There is one Plaintiff and one Defendant in this case. If, prior to the settlement
conference, the Plaintiff had raised the issue of whether the Defendant should have been ordered
to make a demand with regard to its counterclaim, perhaps Magistrate Judge Brookman would
have supplemented his order to require the Defendant to do so. But the Defendant cannot be
sanctioned for failing to do something that it was never ordered to do.
Next, the Plaintiff argues that the Defendant should be sanctioned because it negotiated in
bad faith. This argument hinges on the Plaintiff’s argument that the Defendant has improperly
retained a designation on the Plaintiff’s transcript regarding his suspension, which the Plaintiff
argues violates provisions of the Defendant’s own handbook. Because this designation should
not still be on the Plaintiff’s transcript, the Plaintiff argues, the Defendant’s settlement position
that “if Plaintiff were to drop his complaint and walk away, Defendant would ‘remove the
blemish from his record’” constituted extortion, because it was an “effort to induce [the Plaintiff]
to part with a thing of monetary value by offering to then refrain from an act it had no right to
commit.” Dkt. No. 140 at 2. As Magistrate Judge Brookman pointed out, however, whether the
Defendant’s treatment of the Plaintiff’s transcript is, in fact, improper is a contested issue in this
case. It was not extortion, or otherwise improper, for the Defendant to offer the Plaintiff some of
the relief he seeks in this case as part of a settlement. The Court agrees with the Magistrate
Judge’s conclusion that the Plaintiff has pointed to no basis for sanctioning the Defendant.
Defendant’s Motion for Sanctions (Dkt. No. 124)
With regard to the Defendant’s motion for sanctions, Magistrate Judge Brookman
recommended that it be granted and that the Plaintiff be ordered to pay the Defendant $3,745.00
in attorney’s fees and $130.54 in costs. In his objection, the Plaintiff does not argue that a
sanction of that amount would be improper; rather, Plaintiff’s counsel argues that it should be

4

leveled against him, not his client. Federal Rule of Civil Procedure 16(f)(2) requires the
imposition of sanctions against “the party, its attorney, or both”; in this case, Plaintiff’s counsel
states unequivocally that the failure to follow Magistrate Judge Brookman’s order was his own,
not that of his client. Accordingly, the Court will grant the Defendant’s motion for sanctions for
the reasons set forth in the report and recommendation, but will impose them on Plaintiff’s
counsel, John Thrasher, not the Plaintiff.
Conclusion
For the reasons set forth above, the Plaintiff’s objection to Magistrate Judge Brookman’s
report and recommendation (Dkt. No. 243) is OVERRULED, with the exception of his
objection to sanctions being imposed on the Plaintiff rather than on Plaintiff’s counsel. With that
exception, the Court adopts Magistrate Judge Brookman’s report and recommendation. The
Plaintiff’s motion for sanctions (Dkt. No. 117, as supplemented by Dkt. No. 140) is DENIED.
The Defendant’s motion for sanctions (Dkt. No 124) is GRANTED, and Plaintiff’s counsel,
John Thrasher, is ORDERED to pay the Defendant $3,875.54 within 28 days of the date of
this Entry. Mr. Thrasher shall file a notice informing the Court when payment is made.
SO ORDERED: 9/18/18

_______________________________
Hon. William T. Lawrence, Judge
United States District Court
Southern District of Indiana

Copies to all counsel of record via electronic notification

5