Don’t Be An Unhappy “CAMP”er: Ignoring Second Circuit Mediation May Result In Grievance Panel Referral

 Three people talking - 3d renderThe Second Circuit advises litigants on its website that its mediation and settlement program (known as “CAMP”) is a long-standing and integral part of the court’s appellate process.  The Second Circuit assigns “experienced and skilled circuit mediators” to work with counsel and their clients to resolve disputes on the court’s civil docket at no cost to the parties. Although the mediation process is considered “voluntary,” failing to appear at a CAMP may result in sanctions and, possibly, a referral to the Court’s Grievance Panel.

In late 2015, parties to a Second Circuit appeal were directed to appear at the offices of a prominent mid-town New York law firm for a CAMP mediation.  The mediator appointed by the Court was a well-regarded litigation partner at the law firm.  Appellant’s counsel failed to appear at the mediator’s office at the appointed time.  By order, dated January 26, 2016, Circuit Judge Danny Chin ordered the parties “to show cause why disciplinary or other corrective measures should not be imposed on them” for failing to appear for the mediation.

In response to Judge Chin’s order to show cause, counsel advised the Court that that the appellant had “replaced” him as counsel and revoked his authority to speak on appellant’s behalf.  Counsel anticipated that appellant’s new counsel would make a formal substitution of counsel, but apparently never did so.  Judge Chin observed in his Order, dated March 14, 2016, that a party’s decision to replace counsel did not relieve counsel of their obligation to comply with Court orders until such time as the Court granted counsel’s party to be relieved.  “As counsel of record, they were obligated to respond to the Court’s order that they appear at a mediation conference, at the very least to notify the appointed mediator that their representation was in question and to request an adjournment.” However, Judge Chin found it more troubling that appellant’s counsel viewed the court’s mediation program as optional. Judge Chin found it remarkable that counsel did not even show the court appointed mediator the professional courtesy of a telephone call to advise her that they were not intending to appear.

Judge Chin determined that he would not refer the matter to the Court’s Grievance Panel based upon his determination that: (1) counsel’s conduct was limited to one case and not likely to be repeated; (2) counsel accepted responsibility and conceded error; and (3) counsel did not act in bad faith.

Practice Tips 

First, merely because a client has relieved a lawyer as his counsel, in both the trial court and on appeal, counsel should not assume that his judicial obligations have ended.  Until such time as a motion for substitution of counsel is filed and granted by the court, counsel’s failure to respond to court orders may result in the imposition of sanctions.  At a minimum, counsel should alert the court (or, in this case, the court-appointed mediator) that a substitution of counsel is in the offing.  As a practical matter, this communication may provide the client additional time to effectuate a substitution of counsel.  It also apprises the court and the adversary that conducting a mediation before the change of counsel has been effectuated would not be efficacious in resolving the dispute.

Second, a party’s failure to appear at a court-directed “voluntary” mediation, during either a trial court or appellate proceeding, also may result in the imposition of sanctions.  In the SDNY, an increasing number of civil cases are being referred to mediation.  Although the mediation process is confidential and the parties’ stated positions during mediation are never disclosed to the judge or magistrate handling the matter, it may be brought to the court’s attention if a party fails to appear for the mediation or, in the judgment of the mediator, fails to participate in the mediation in good faith.  Although court-annexed mediation proceeds on a separate track from the court’s discovery scheduling order, the mediation program is an integral part of the judicial resolution process and must be treated as such by the litigants.

Forty Million Reasons to Read Attachments, Not Just Court Email Notices

ECF NoticeThe failure of a single lawyer to read a court order on the ECF docket can result in tragedy. However, when eighteen lawyers are emailed an ECF notification from the court and no one reads the attached documents, it becomes a tragicomedy.

In a recent high-profile case in the Western District of Texas, Two-Way Media won a $40 million infringement suit against AT&T. However, things went from bad to worse for the telecom giant when its attorneys — all 18 of them across two different firms — failed to timely file an appeal. It is a rough lesson for AT&T’s counsel but a valuable refresher for all attorneys: read every document received from the court; do not simply rely on the ECF clerk’s summary appended to the email.

Prior to the entry of final judgment in the infringement case, AT&T submitted four motions for renewed judgment as a matter of law (“JMOL”) or a new trial and moved to file three of the JMOL motions under seal. The district court granted the three sealing motions but, critically, denied all four JMOL motions, starting the clock on AT&T’s time to appeal. The court’s orders denying the lone non-sealed JMOL motion and granting the plaintiff’s request for costs were correctly docketed and included in the electronic case file notices (“ECF notices”) sent to both parties. However, the ECF notices referred only to the sealing motions, not the orders denying the sealed JMOL motions. Upon receipt of the mislabeled notices, AT&T’s counsel neglected to read the underlying orders — even though assistants at both firms downloaded and filed copies to internal networks. AT&T and its counsel remained unaware of the closing appeals window, only discovering their mistake long after the deadline had passed.

AT&T’s motion to extend or reopen the appeal period pursuant to Federal Rules of Appellate Procedure 4(a)(5) and (6) was denied by the district court, a decision affirmed last month by the U.S. Court of Appeals for the Federal Circuit. The appeals court agreed with the trial court’s conclusion “that it is the responsibility of every attorney to read the substance of each order received from the court and that it is not sufficient to rely on the email notifications received from the electronic filing system.” The court cited In re Morrow, 502 F.2d 520, 522 (5th Cir. 1974) (“Notification by the clerk is merely for the convenience of the litigants.”); Latham v. Wells Fargo Bank, N.A., 987 F.2d 1199, 1201 (5th Cir. 1993) (“[P]arties have a duty to inquire periodically into the status of their litigation.”); and Khor Chin Lim v. Courtcall Inc., 683 F.3d 378, 381 (7th Cir. 2012) (“The judiciary is not entitled to add time just because a litigant fails to open or read his mail”). Looking past the fact that AT&T hadn’t even “bothered to check the docket, as it should have done,” the properly docketed order granting costs “was a clear indication that all matters relevant to the question of whether [Two-Way Media] was a prevailing party had been resolved” and that the appeals clock had started.

Even the dissenting opinion failed to offer much in the way of comfort for AT&T’s mistake. Most of Circuit Judge Dyk’s dissent focused on his contention that the appeal clock began upon docketing of the correct entries, which occurred a mere three days after the incomplete ECF notices were sent out. As the majority pointed out, “AT&T’s appeal was untimely by a large margin,” and a quibble over three days is inconsequential.

The shift to electronic court notices has streamlined the process of providing litigants timely access to important documents and judicial notifications. But this case is a reminder that courts’ email notifications may not be accurate. Counsel should periodically check the docket for cases, and should ensure that someone in their office reads attachments to court emails. Unless counsel makes every effort to monitor the status of an active litigation, clients will suffer the consequences.