DAY-LEWIS v. U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
MEMORANDUM AND ORDER. SIGNED BY MAGISTRATE JUDGE ELIZABETH T. HEY ON 1/15/2015. 1/15/2015 ENTERED AND COPIES E-MAILED.(amas)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
U.S. EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION, et
MEMORANDUM AND ORDER
ELIZABETH T. HEY, U.S.M.J.
January 15, 2015
Plaintiff has filed a motion for costs and attorneys’ fees associated with a
settlement conference I conducted on January 16, 2014, arguing that Defendants failed to
participate in the settlement conference in good faith. Defendants oppose the motion,
arguing that they prepared for the conference and participated in good faith and that their
failure to settle the case does not give rise to sanctions. For the reasons that follow, I will
deny Plaintiff’s motion.
On May 15, 2012, Plaintiff filed this action against her employer for age, race, and
gender discrimination and retaliation. See Doc. 1. The Honorable L. Felipe Restrepo
referred the case to me to hold a settlement conference.1 Originally, based on the
scheduling order issued by Judge Restrepo, I scheduled the settlement conference for
The case was originally assigned to the Honorable Eduardo Robreno. However,
upon Judge Restrepo’s elevation to the District Court, the case was reassigned to him.
See Doc. 31.
November 19, 2013.2 Doc. 36. My conference order required each side to submit a
confidential memorandum and that counsel exchange settlement demand and offer prior
the conference. On October 25, 2013, Plaintiff’s counsel advised the court of a conflict
that occurred in her schedule. Defense counsel agreed to rescheduling the conference to
January 6, 2014. See Doc. 59.
On December 18, 2003, more than two weeks prior to the rescheduled conference,
defense counsel contacted the court, asking for a short postponement of the conference.3
I held a telephonic conference with counsel for both sides. The defense sought a short
postponement to further prepare for the conference to be able to meaningfully assess their
position and participate in the conference in good faith. At that point, Plaintiff had not
yet made a demand, nor the defense any offer. Plaintiff’s counsel objected to the
postponement because it would require altering travel plans that had already been made
(requiring the incursion of additional expenses). In light of the fact that Plaintiff and
Defendant had not yet exchanged demand and offer and in the hopes of a productive
settlement conference, I granted a short postponement. Because both sides requested a
full day’s conference, I rescheduled the case for January 16, 2014, the first full day I had
available. Doc. 60.
The settlement conference was scheduled to follow the briefing on summary
judgment motions, which were due on September 23, 2013, with responses due October
22, and replies on October 29, 2013. Doc. 35.
Prior to receiving defense counsel’s call, my chambers had reached out to counsel
on December 18, 2013, to alert them to a conflict in the court’s schedule requiring a new
Prior to the conference, both sides provided me with the required confidential
memorandum, and the parties exchanged a demand and offer. I convened the conference
on January 16 at 9:30 a.m. Plaintiff appeared and was represented at the conference by
Dawn Mistretta and Stanley Green. Assistant U.S. Attorneys Gerald Sullivan and
Richard Bernstein and Assistant General Counsel from the Equal Employment
Opportunity Commission John Sherlock III appeared for the defense. Ultimately, after
the day’s discussion, the case did not resolve. On January 28, 2014, Plaintiff filed this
motion for costs and attorneys’ fees attributable to the settlement conference.
Federal Rule of Civil Procedure 16 governs the pretrial management of cases in
the federal courts. Rule 16 also provides for sanctions when counsel, a party, or both, fail
to abide by the orders of the court or fail to appear at a scheduling or other pretrial
conference. The Third Circuit has discussed the purpose, scope, and breadth of the rule.
Rule 16 governs the scheduling and management of pretrial
conferences. The purpose of the rule is to provide for judicial
control over a case at an early stage in the proceedings. The
preparation and presentation of cases is thus streamlined,
making the trial process more efficient, less costly, as well as
improving and facilitating the opportunities for settlement.
Accordingly, Rule 16(a) provides that the court may, in its
discretion, direct the attorneys or parties to appear before it
for pre-trial conferences “for such purposes as . . . facilitating
the settlement of the case.” If a party fails to obey a
scheduling or pretrial order, or fails to participate in good
faith in a scheduling or pretrial conference, a judge “may
make such order with regard thereto as are just” and require
the offending party “to pay reasonable expenses incurred
because of noncompliance with this rule . . . unless the judge
finds that the noncompliance was substantially justified or
that other circumstances make an award of expenses unjust.”
Fed. R. Civ. P. 16(f). Thus, Rule 16 authorizes the courts to
require parties to attend conferences for the purpose of
discussing settlement and impose sanctions if they fail to
participate in good faith.
Newton v. A.C. & S., 918 F.2d 1121, 1126 (3d Cir. 1990).
When faced with a motion for sanctions based on unsuccessful settlement
discussions similar to the one now before this court, my colleague, the Honorable Martin
C. Carlson of the Middle District of Pennsylvania, reviewed a plethora of contingencies
giving rise to sanctions related to settlement discussions under Rule 16.
Rule 16 expressly authorizes imposition of sanctions where
parties fail to comply with scheduling orders setting
settlement conferences by failing to timely and properly file
settlement memoranda, Grant v. Omni Health Care Systems
of NJ, Inc., No. 08-306, 2009 WL 315322 (D.N.J. Sept. 24,
2009), or by failing to adequately prepare for such
conferences. Univ. of Pittsburgh v. Varian Med. Sys., Inc.,,
07-491, 2008 WL 1774115 (W.D. Pa. Apr. 17, 2008).
Furthermore, Rule 16 also permits the imposition of sanctions
where a party’s failure to disclose its true settlement posture
to the court in a timely fashion leads to the unnecessary
scheduling of settlement conferences and proceedings.
Karhuta v. Boardwalk Regency Corp., No. 06-4902, 2007
WL 2825722 (E.D. Pa. Sept. 27, 2007). In such instances
courts typically have only sanctioned parties when the parties
“did not notify the court beforehand that a settlement
conference at this time would be a futile act, thereby wasting
the limited time, financial resources and energies of the court
and [other parties at the settlement conference],” [Id.,] 2007
WL 2825722, at *4 (citations omitted) and have held that
parties “knowing that they did not possess any additional
authority following the initial conference, should have
notified the court before the second conference of their
position.” Id. at *6. In contrast, where a party’s conduct
consists of simply adopting a fixed, inflexible position in
settlement talks, and that fixed position is timely
communicated to others, sanctions are not appropriate since
sanctions cannot be used as a vehicle for pressing parties to
surrender honestly held convictions on the merits of litigation.
See Avance v. Kerr-McGee Chemical, LLC., No. 04-206,
2006 WL 4402359 (W.D. Tex. Mar. 21, 2006) (no sanction
imposed where defense counsel timely notified plaintiff’s
attorney of limited settlement authority). Thus, while the
court has no authority to require a party to settle his or her
case, Rule 16 demands candor of parties in this setting. It
requires timely, fulsome and candid communications from
parties, communications and candor which are essential to
avoid unnecessary scheduling and pointless preparation for
the parties and the court.
Adams v. Corrections Corp. of Am., No. 10-259, 2011 WL 4974198, at *5-6 (M.D. Pa.
Oct. 18, 2011).
Plaintiff argues that Defendants’ failure to increase their offer during the January
16 settlement conference amounts to bad faith negotiating. Doc. 65 at 3. Plaintiff
concedes that Defendants conveyed their offer prior to the conference. Id. As
Defendants note, much of the day was spent in private/ex parte sessions, wherein I took
turns speaking with each side. In my judgment, both sides were candid in their
evaluation of the strengths and weaknesses of their cases that led them to their respective
settlement positions.4 Mssrs. Bernstein and Sullivan attended the conference together
with Mr. Sherlock, who had settlement authority from the EEOC. Although it was
anticipated at the December 18 teleconference that the extra preparation time Defendants
requested would allow the defense to engage in further negotiation, each party is entitled
to its settlement position and it is inappropriate for the court to utilize sanctions to coerce
a defendant to surrender its honest valuation of the case.
In deference to the confidentiality of settlement discussions, I will not disclose
the content of the discussions.
At this point, Judge Restrepo has denied Plaintiff’s motion for partial summary
judgment and granted a substantial portion of Defendants’ motion for summary
judgment, allowing Plaintiff to proceed with only her gender discrimination claim on a
limited basis, and her retaliation claim on a limited basis. See Docs. 76 & 77. In the
settlement discussions that have taken place since Judge Restrepo’s summary judgment
decision, Plaintiff and her counsel have participated via phone or video-teleconference,
limiting additional expenses devoted to settlement discussions. Both sides have
continued good faith negotiations in an attempt to resolve the case.
In short, defense counsel complied with the court’s orders regarding settlement,
advised the court more than two weeks prior to the conference that additional time was
needed to assess the case, attended the conference with settlement authority, and despite
the parties’ inability to reach agreement, Defendants have acted in good faith in their
negotiations during the initial conference and in our subsequent discussions. Therefore, I
will deny the motion for costs and fees. An appropriate order follows.
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