Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_10-cv-00785/USCOURTS-azd-2_10-cv-00785-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

JP Morgan Chase Bank, N.A.,

Plaintiff, 

v.

Home Loan Network Corporation,

Defendant. _________________________________

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No. CV-10-785-PHX-MHM

ORDER

This case comes before the undersigned United States Magistrate Judge on

Plaintiff’s request for a telephonic hearing regarding its desire to vacate the October 6,

2010 settlement conference. Plaintiff JP Morgan Chase Bank is represented telephonically by counsel, Jeffrey R. Simmons. Defendant Home Loan Network is represented

telephonically by counsel, Renee B Gerstman. Court reporter is not present.

On June 24, 2010, the assigned District Judge, the Honorable Mary H.

Murguia, referred this case to the undersigned for purposes of conducting a Settlement

Conference. (Doc. 23) As directed by Judge Murguia, a settlement conference was

scheduled before the undersigned on October 6, 2010 at 2:00 p.m. (Doc. 24)

After reviewing several issues with both counsel, it is clear to the Court and

Plaintiff that conducting a settlement conference at this time would be a futile act resulting in an economic waste of time, limited resources and inconsistent with Rule 1,

Fed.R.Civ.P. 

Case 2:10-cv-00785-SMM Document 29 Filed 09/28/10 Page 1 of 4
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1

 The Civil Justice Reform Act of 1990 provides that each United States district court

must develop a civil justice expense and delay reduction plan which facilitates the deliberate

adjudication of civil cases on the merits, monitors discovery, improves litigation

management, and ensures the just, speedy, and inexpensive resolutions of civil disputes. See,

28 U.S.C. § 471 et seq.

Section 473(b) provides, in part: 

b) In formulating the provisions of its civil justice expense and delay reduction

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Federal Rule of Civil Procedure 1 provides that the federal civil procedural

“rules . . . shall be construed and administered to secure the just, speedy, and inexpensive

determination of every action.” Rule 1, Fed.R.Civ.P. Although the law favors the voluntary settlement of civil suits, ABKCO Music, Inc. v. Harrisongs Music, Ltd., 722 F.2d

988, 997 (2d Cir. 1983), it does not sanction efforts by trial judges to effectuate settlements through coercion. Del Rio v. Northern Blower Co., 574 F.2d 23, 26 (1st Cir. 1978)

(citing Wolff v. Laverne, Inc., 17 A.D.2d 213, 233 N.Y.S.2d 555 (1962)). In Wolff, cited

with approval in Del Rio, supra, the Court said:

We view with disfavor all pressure tactics whether directly or

obliquely, to coerce settlement by litigants and their counsel. Failure

to concur in what the Justice presiding may consider an adequate

settlement should not result in an imposition upon a litigant or his

counsel, who reject it, of any retributive sanctions not specifically

authorized by law.

233 N.Y.S.2d at 557. In short, pressure tactics to coerce settlement for an amount less

than a party is willing to receive or for more than a party is willing or able to pay is

simply not permissible. Schunk v. Schunk, 84 A.D.2d 904, 905, 446 N.Y.S.2d 672 (1981);

Chomski v. Alston Cab Co., 32 A.D.2d 627, 299 N.Y.S.2d 896 (1969). “The judge must

not compel agreement by arbitrary use of his power and the attorney must not meekly

submit to a judge’s suggestion, though it be strongly urged.” Brooks v. Great Atlantic &

Pacific Tea Co., 92 F.2d 794, 796 (9th Cir. 1937).

District courts are specifically empowered to conduct settlement conferences under the Rules of Civil Procedure and 28 U.S.C. § 473(b)(5).1

 Rule 16(c)(2)(I)

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plan, each United States district court, in consultation with an advisory group

appointed under section 478 of this title, shall consider and may include the

following litigation management and cost and delay reduction techniques: 

* * * * * *

(5) a requirement that, upon notice by the court, representatives of the parties

with authority to bind them in settlement discussions be present or available

by telephone during any settlement conference[.] 

Title 28 U.S.C. § 473(b)(5) (emphasis added). 

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expressly authorizes a district or magistrate judge to “take appropriate action on . . .

settling the case and using special procedures to assist in resolving the dispute when

authorized by statute or local rule.” Rule 16(c)(2)(I). A settlement conference “was not

designed as a means for clubbing the parties - or one of them - into an involuntary

compromise.” Kothe v. Smith, 771 F.2d 667, 669 (2nd Cir. 1985). The purpose of Rule

16, Fed.R.Civ.P., is not “to impose settlement negotiations on unwilling litigants.”

Fed.R.Civ.P. 16, Advisory Committee Notes; In re Novak, 932 F.2d 1397, 1405 n. 15

(11th Cir. 1991). 

In this Judge’s opinion, it is unreasonable to force a party to incur unnecessary attorneys’ fees and travel expenses to participate in a settlement conference in

Phoenix knowing in advance that the adverse party is adamant that it will not, or can not,

pay a certain monetary amount to settle this case. The Court concludes that conducting a

settlement conference at this time in this case would be a futile act resulting in an

economic waste of time and limited resources. When and if the parties stipulate and agree

that conducting a settlement conference may be helpful to voluntarily resolve all or some

of the issues in dispute, both counsel need only file a stipulation setting forth the parties’

agreement, timely provide the undersigned’s chambers with a copy of the stipulation per

LRCiv 40.2(d), and a settlement conference will be reset before the undersigned.

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IT IS ORDERED that the October 6, 2010 settlement conference is hereby

VACATED. 

DATED this 27th day of September, 2010.

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