Hunter v. Prisbe et al
MEMORANDUM OPINION denying 16 MOTION for Sanctions filed by Ryan T. Hunter. Signed by Magistrate Judge Martin C. Carlson on March 27, 2013. (kjn)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
STEVEN PRISBE, et al.,
Civil No. 1:12-CV-2013
(Magistrate Judge Carlson)
Now pending before the court is the plaintiff’s motion for sanctions against
defendants. (Doc. 16.) As grounds for the motion, Hunter argues that defendants,
through their counsel, failed to participate in good faith in court-ordered mediation
and settlement proceedings in January 2013, thereby causing plaintiff and counsel to
incur needless costs and expenses that could have been avoided had defendants
produced a principal with cash settlement authority at the mediation conference.
Because defendants did not do this, plaintiff argues that time spent preparing for the
separate settlement conferences, and participating in one, was wasted unnecessarily.
As a remedy, plaintiff asks that the court require defendants to pay a sanction of
$1,669.00, or that amount of attorney’s fees and costs that were incurred in
connection with the unsuccessful settlement conference.
Upon consideration, we do not find that sanctions are warranted at this time.1
Although sanctions are not appropriate, we strongly urge all parties in the future to
endeavor to communicate with greater clarity and candor the parties’ positions with
respect to court-ordered mandatary mediation, to avoid future misunderstandings.
It is well-settled that a district court has the inherent power to sanction parties
appearing before it for refusing to comply with its orders and to control litigation
before it. See, e.g., Tracinda Corp. v. DaimlerChrysler AG, 502 F.3d 212, 242 (3d
Cir. 2007); see also Chambers v. NASCO, Inc., 501 U.S. 32, 45-46 (1991) (stating
that a court has the inherent authority to impose sanctions when an attorney has acted
“in bad faith, vexatiously, wantonly, or for oppressive reasons.”). Sanctions decisions
rest in the sound discretion of the court and may only be reviewed for abuse of
discretion, which will be found only where “the court’s decision rests upon a clearly
erroneous finding of fact, an errant conclusion of law or an improper application of
law to fact.” In re Prudential Ins. Co. Am. Sales Practice Litig. Actions, 278 F.3d
175, 181 (3d Cir. 2002) (quoting In re Orthopedic Bone Screw Products Liability
Litig., 193 F.3d 781, 795 (3d Cir. 1999)).
However, we note that in the event plaintiff is the prevailing party in this
lawsuit, counsel may seek to recover the fees and costs incurred in connection
with this settlement conference.
In addition to the court’s inherent authority, Rule 16(f) of the Federal Rules of
Civil Procedure also provides that upon a motion, or on its own motion, a court may
issue sanctions if a party or its attorney:
fails to appear at a scheduling or other pretrial
is substantially unprepared to participate – or does
not participate in good faith – in the conference; or
fails to obey a scheduling or other pretrial order.
Fed. R. Civ. P. 16(f); see also Tracinda Corp., 502 F.3d at 242 (observing that
whereas sanctions imposed pursuant to court’s inherent authority generally require
finding of bad faith, Rule 16(f) contains no such requirement). Indeed,
Relying on this Rule, [courts] have imposed sanctions based upon an
attorney's failure to attend a settlement conference or abide by the order
scheduling the conference. See Univ. of Pittsburgh v. Varian Med. Sys.,
Inc., 07-491, 2008 WL 1774115 (W.D.Pa. Apr.17, 2008) (Schwab, J.)
(denying motion for reconsideration of sanctions imposed for failure to
participate in settlement conference in good faith); Karhuta v.
Boardwalk Regency Corp., 06-4902, 2007 WL 2825722, at *3 (E.D.Pa.
Sept.27, 2007) (Perkin, M.J.) (sanctions imposed for failing to
participate in settlement conference in good faith); Miller v. Unum Life
Ins. Co. of America, 05-177, 2006 WL 30000962, at *1 (E.D.Pa. Oct.
19, 2006) (Hart, M.J.) (sanctions imposed for failure to attend court
ordered settlement conference).
Stewart v. Moll, No. 07-1085, 2008 WL 2954737, *3 (E.D.Pa. July 31, 2008).
Thus, in certain instances, Rule 16 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 3151322 (D.N.J. Sept. 24, 2009); 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); or 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., 06-4902, 2007 WL 2825722 (E.D.Pa. Sept.27, 2007). In
such instances courts typically have only sanctioned defendants when the “Defendant
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 Plaintiff [at the settlement conference], ” Karahuta v. Boardwalk
Regency Corp. 2007 WL 2825722 at *4 (citations omitted) and have held that
“Defendants, 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 an initial mediation session, and that fixed
position is timely communicated to others, sanctions often 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. March 21, 2006).
Yet while this court doubtless has the discretion to order imposition of
sanctions in appropriate cases, the exercise of this discretion is guided by certain
basic principles. Foremost among these principles is the tenet that sanctions should
always be narrowly tailored to meet the misconduct, and should entail no greater
punishment than is reasonably necessary to address the specific wrongdoing that
confronts the court. See, Klein v. Stahl, GMBH & Co., Maschinefabrik, 185 F.3d 98
(3d. Cir. 1999). This basic, but pivotal, aspect of the exercise of discretion in this
area, has been voiced in many ways. Thus, it is well established that, “[b]ecause of
their very potency, inherent powers must be exercised with restraint and discretion.
A primary aspect of that discretion is the ability to fashion an appropriate sanction for
conduct which abuses the judicial process.” Chambers v. NASCO, Inc. 501 U.S. at
44-45 (citation omitted). Therefore, in exercising this authority we are cautioned that:
[A] district court must ensure that there is an adequate factual predicate
for flexing its substantial muscle under its inherent powers, and must
also ensure that the sanction is tailored to address the harm identified.
In exercising its discretion under its inherent powers, the court should
be guided by the same considerations that guide it in the imposition of
sanctions under the Federal Rules. First, the court must consider the
conduct at issue and explain why the conduct warrants sanction.
Republic of Philippines v. Westinghouse Elec. Corp. 43 F.3d at 74.
[H]aving evaluated the conduct at issue, the district court must
specifically consider the range of permissible sanctions and explain why
less severe alternatives to the sanction imposed are inadequate or
inappropriate. Although the court need not “exhaust all other
sanctioning mechanisms prior to resorting to its inherent power”
(Landon v. Hunt, 938 F.2d at 450, 454 (3d Cir.1991)), the court must
explain why it has chosen any particular sanction from the range of
alternatives it has identified. See Poulis, 747 F.2d at 868 (sanctions
under Fed.R.Civ.P. 16 and 37).
Judged against these standards, in the exercise of our discretion we will deny
this motion for sanctions. In reaching this result we note that the mediation directed
by the court in this case was part of the district’s mandatary mediation program.
Thus, this is not an instance in which the defendants affirmatively sought out
mediation and then failed to comply with the court’s order. Moreover, with respect
to this mandatory mediation session, while the parties could have doubtless
communicated their respective positions to one another with greater clarity in
advance of the mediation and thus avoided the misunderstandings and disappointment
that led to this sanctions motion, at bottom the plaintiff invites us to sanction
defendants for adopting a fixed, inflexible position in a mediation conference.
Although we will instruct counsel in the future to clearly communicate to opposing
parties prior to mediation if they have no cash settlement authority, we decline to
impose cash sanctions here in the exercise of our discretion. Instead, we find that
sanctions are not appropriate here since such sanctions should not 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. March 21, 2006).
Accordingly, for the forgoing reasons, the plaintiff’s motion for sanctions
(Doc. 16.), is DENIED.
So ordered this 27th day of March 2013.
S/Martin C. Carlson
Martin C. Carlson
United States Magistrate Judge
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?