Case Name: G. HEILEMAN BREWING CO., INC., Plaintiff-Appellee, v. JOSEPH OAT CORPORATION, Defendant-Appellant
Court: United States Court of Appeals for the Seventh Circuit
Jurisdiction: United States
Decision Date: 1989-03-27
Citations: 871 F.2d 648
Docket Number: No. 86-3118
Parties: G. HEILEMAN BREWING CO., INC., Plaintiff-Appellee, v. JOSEPH OAT CORPORATION, Defendant-Appellant.
Judges: Before BAUER, Chief Judge, CUMMINGS, WOOD, Jr., CUDAHY, POSNER, COFFEY, FLAUM, EASTERBROOK, RIPPLE, MANION and KANNE, Circuit Judges.
Reporter: Federal Reporter 2d Series
Volume: 871
Pages: 648–672

Head Matter:
G. HEILEMAN BREWING CO., INC., Plaintiff-Appellee, v. JOSEPH OAT CORPORATION, Defendant-Appellant.
No. 86-3118.
United States Court of Appeals, Seventh Circuit.
Argued May 20, 1987.
Rehearing En Banc Sept. 27, 1988.
Decided March 27, 1989.
Carroll Metzner, Bell, Metzner & Gier-hart, S.C., Madison, Wis., for defendant-appellant.
Richard S. Florsheim, Thomas L. Shriner, Jr., Foley & Lardner, Milwaukee, Wis., for plaintiff-appellee.
Before BAUER, Chief Judge, CUMMINGS, WOOD, Jr., CUDAHY, POSNER, COFFEY, FLAUM, EASTERBROOK, RIPPLE, MANION and KANNE, Circuit Judges.

Opinion:
KANNE, Circuit Judge.
May a federal district court order litigants — even those represented by counsel —to appear before it in person at a pretrial conference for the purpose of discussing the posture and settlement of the litigants' case? After reviewing the Federal Rules of Civil Procedure and federal district courts' inherent authority to manage and control the litigation before them, we answer this question in the affirmative and conclude that a district court may sanction a litigant for failing to comply with such an order.
I. BACKGROUND
A federal magistrate ordered Joseph Oat Corporation to send a "corporate representative with authority to settle" to a pretrial conference to discuss disputed factual and legal issues and the possibility of settlement. Although counsel for Oat Corporation appeared, accompanied by another attorney who was authorized to speak on behalf of the principals of the corporation, no principal or corporate representative personally attended the conference. The court determined that the failure of Oat Corporation to send a principal of the corporation to the pretrial conference violated its order. Consequently, the district court imposed a sanction of $5,860.01 upon Oat Corporation pursuant to Federal Rule of Civil Procedure 16(f). This amount represented the costs and attorneys' fees of the opposing parties attending the conference.
II. THE APPEAL
Oat Corporation appeals, claiming that the district court did not have the authority to order litigants represented by counsel to appear at the pretrial settlement conference. Specifically, Oat Corporation contends that, by negative implication, the language of Rule 16(a)(5) prohibits a district court from directing represented litigants to attend pretrial conferences. That is, because Rule 16 expressly refers to "attorneys for the parties and any unrepresented parties" in introductory paragraph (a), a district court may not go beyond that' language to devise procedures which direct the pretrial appearance of parties represented by counsel. Consequently, Oat Corporation concludes that the court lacked the authority to order the pretrial attendance of its corporate representatives and, even if the court possessed such authority, the court abused its discretion to exercise that power in this case. Finally, Oat Corporation argues that the court abused its discretion to enter sanctions.
A. Authority to Order Attendance
First, we must address Oat Corporation's contention that a federal district court lacks the authority to order litigants who are represented by counsel to appear at a pretrial conference. Our analysis requires us to review the Federal Rules of Civil Procedure and district courts' inherent authority to manage the progress of litigation.
Rule 16 addresses the use of pretrial conferences to formulate and narrow issues for trial as well as to discuss means for dispensing with the need for costly and unnecessary litigation. As we stated in Link v. Wabash R.R., 291 F.2d 542, 547 (7th Cir.1961), aff'd, 370 U.S. 626, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962):
Pre-trial procedure has become an integrated part of the judicial process on the trial level. Courts must be free to use it and to control and enforce its operation. Otherwise, the orderly administration of justice will be removed from control of the trial court and placed in the hands of counsel. We do not believe such a course is within the contemplation of the law.
The pretrial settlement of litigation has been advocated and used as a means to alleviate overcrowded dockets, and courts have practiced numerous and varied types of pretrial settlement techniques for many years. See, e.g., Manual for Complex Litigation 2d, § 21.1-21.4 (1985); Federal Judicial Center, Settlement Strategies for Federal District Judges (1988); Federal Judicial Center, The Judge's Role in the Settlement of Civil Suits (1977) (presented at a seminar for newly-appointed judges); Federal Judicial Center, The Role of the Judge in the Settlement Process (1977). Since 1983, Rule 16 has expressly provided that settlement of a case is one of several subjects which should be pursued and discussed vigorously during pretrial conferences.
The language of Rule 16 does not give any direction to the district court upon the issue of a court's authority to order litigants who are represented by counsel to appear for pretrial proceedings. Instead, Rule 16 merely refers to the participation of trial advocates — attorneys of record and pro se litigants. However, the Federal Rules of Civil Procedure do not completely describe and limit the power of the federal courts. HMG Property Investors, Inc. v. Parque Indus. Rio Canas, Inc., 847 F.2d 908, 915 (1st Cir.1988) (citations omitted).
The concept that district courts exercise procedural authority outside the explicit language of the rules of civil procedure is not frequently documented, but valid nevertheless. Brockton Sav. Bank v. Pete, Marwick, Mitchell & Co., 771 F.2d 5, 11 (1st Cir.1985), cert. denied, 475 U.S. 1018, 106 S.Ct. 1204, 89 L.Ed.2d 317 (1986). The Supreme Court has acknowledged that the provisions of the Federal Rules of Civil Procedure are not intended to be the exclusive authority for actions to be taken by district courts. Dink v. Wabash R.R., 370 U.S. 626, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962).
In Link, the Supreme Court noted that a district court's ability to take action in a procedural context may be grounded in " 'inherent power,' governed not by rule or statute but by the control necessarily vested in courts to manage their own affairs so as to achieve the orderly and expeditious disposition of cases." 370 U.S. at 630-31, 82 S.Ct. at 1389 (footnotes omitted). This authority likewise forms the basis for continued development of procedural techniques designed to make the operation of the court more efficient, to preserve the integrity of the judicial process, and to control courts' dockets. Because the rules form and shape certain aspects of a court's inherent powers, yet allow the continued exercise of that power where discretion should be available, the mere absence of language in the federal rules specifically authorizing or describing a particular judicial procedure should not, and does not, give rise to a negative implication of prohibition. See Link, 370 U.S. at 629-30, 82 S.Ct. at 1388; see also Fed.R.Civ.P. 83 ("In all cases not provided for by rule, the district judges and magistrates may regulate their practice in any manner not inconsistent with these rules or those of the district in which they act.").
Obviously, the district court, in devising means to control cases before it, may not exercise its inherent authority in a manner inconsistent with rule or statute. As we stated in Strandell v. Jackson County, 838 F.2d 884, 886 (7th Cir.1988), such power should "be exercised in a manner that is in harmony with the Federal Rules of Civil Procedure." This means that "where the rules directly mandate a specific procedure to the exclusion of others, inherent authority is proscribed." Landau & Cleary, Ltd. v. Hribar Trucking, Inc., 867 F.2d 996, 1002 (7th Cir.1989) (emphasis added).
In this case, we are required to determine whether a court's power to order the pretrial appearance of litigants who are represented by counsel is inconsistent with, or in derogation of, Rule 16. We must remember that Rule 1 states, with unmistakable clarity, that the Federal Rules of Civil Procedure "shall be construed to secure the just, speedy, and inexpensive determination of every action." This language explicitly indicates that the federal rules are to be liberally construed. Cf. Hickman v. Taylor, 329 U.S. 495, 507, 67 S.Ct. 385, 392, 91 L.Ed. 451 (1947). There is no place in the federal civil procedural system for the proposition that rules having the force of statute, though in derogation of the common law, are to be strictly construed. C. Wright & A. Miller, Federal Practice and Procedure: Civil 2d § 1029 (1987).
"[The] spirit, intent, and purpose [of Rule 16] is . broadly remedial, allowing courts to actively manage the preparation of cases for trial." In re Baker, 744 F.2d 1438, 1440 (10th Cir.1984) (en banc), cert. denied, 471 U.S. 1014, 105 S.Ct. 2016, 85 L.Ed.2d 299 (1985). Rule 16 is not designed as a device to restrict or limit the authority of the district judge in the conduct of pretrial conferences. As the Tenth Circuit Court of Appeals sitting en banc stated in Baker, "the spirit and purpose of the amendments to Rule 16 always have been within the inherent power of the courts to manage their affairs as an independent constitutional branch of government." Id. at 1441 (citations omitted).
We agree with this interpretation of Rule 16. The wording of the rule and the accompanying commentary make plain that the entire thrust of the amendment to Rule 16 was to urge judges to make wider use of their powers and to manage actively their dockets from an early stage. We therefore conclude that our interpretation of Rule 16 to allow district courts to order represented parties to appear at pretrial settlement conferences merely represents another application of a district judge's inherent authority to preserve the efficiency, and more importantly the integrity, of the judicial process.
To summarize, we simply hold that the action taken by the district court in this case constituted the proper use of inherent authority to aid in accomplishing the pur pose and intent of Rule 16. We reaffirm the notion that the inherent power of a district judge — derived from the very nature and existence of his judicial office — is the broad field over which the Federal Rules of Civil Procedure are applied. Inherent authority remains the means by which district judges deal with circumstances not proscribed or specifically addressed by rule or statute, but which must be addressed to promote the just, speedy, and inexpensive determination of every action.
B. Exercise of Authority to Order Attendance
Having determined that the district court possessed the power and authority to order the represented litigants to appear at the pretrial settlement conference, we now must examine whether the court abused its discretion to issue such an order.
At the outset, it is important to note that a district court cannot coerce settlement. Kothe v. Smith, 771 F.2d 667, 669 (2d Cir.1985). In this case, considerable concern has been generated because the court ordered "corporate representatives with authority to settle" to attend the conference. In our view, "authority to settle," when used in the context of this case, means that the "corporate representative" attending the pretrial conference was required to hold a position within the corporate entity allowing him to speak definitively and to commit the corporation to a particular position in the litigation. We do not view "authority to settle" as a requirement that corporate representatives must come to court willing to settle on someone else's terms, but only that they come to court in order to consider the possibility of settlement.
As Chief Judge Crabb set forth in her decision which we now review:
There is no indication . that the magistrate's order contemplated requiring Joseph Oat . to agree to any particular form of settlement or even to agree to settlement at all. The only requirement imposed by the magistrate was that the representative [of Oat Corporation] be present with full authority to settle, should terms for settlement be proposed that were acceptable to [Oat Corporation].
G. Heileman Brewing Co., Inc. v. Joseph Oat Corporation, 107 F.R.D. 275, 276-77 (1985).
If this case represented a situation where Oat Corporation had sent a corporate representative and was sanctioned because that person refused to make an offer to pay money — that is, refused to submit to settlement coercion — we would be faced with a decidely different issue — a situation we would not countenance.
The Advisory Committee Notes to Rule 16 state that "[although it is not the purpose of Rule 16(b)(7) to impose settlement negotiations on unwilling litigants, it is believed that providing a neutral forum for discussing [settlement] might foster it." Fed.R.Civ.P. 16 advisory committee's note, subdivision (c) (1983). These Notes clearly draw a distinction between being required to attend a settlement conference and being required to participate in settlement negotiations. Thus, under the scheme of pretrial settlement conferences, the corporate representative remains free, on behalf of the corporate entity, to propose terms of settlement independently — but he may be required to state those terms in a pretrial conference before a judge or magistrate.
As an alternative position, Oat Corporation argues that the court abused its discretion to order corporate representatives of the litigants to attend the pretrial settlement conference. Oat Corporation determined that because its business was a "going concern":
It would be unreasonable for the magistrate to require the president of that corporation to leave his business [in Camden, New Jersey] to travel to Madison, Wisconsin, to participate in a settlement conference. The expense and burden on the part of Joseph Oat to comply with this order was clearly unreasonable.
Consequently, Oat Corporation believes that the district court abused its authority.
We recognize, as did the district court, that circumstances could arise in which requiring a corporate representative (or any litigant) to appear at a pretrial settlement conference would be so onerous, so clearly unproductive, or so expensive in relation to the size, value, and complexity of the case that it might be an abuse of discretion. Moreover, "[b]eeause inherent powers are shielded from direct democratic controls, they must be exercised with restraint and discretion." Roadway Express, Inc. v. Piper, 447 U.S. 752, 764, 100 S.Ct. 2455, 2463, 65 L.Ed.2d 488 (1980) (citation omitted). However, the facts and circumstances of this case clearly support the court's actions to require the corporate representatives of the litigants to attend the pretrial conference personally.
This litigation involved a claim for $4 million — a claim which turned upon the resolution of complex factual and legal issues. The litigants expected the trial to last from one to three months and all parties stood to incur substantial legal fees and trial expenses. This trial also would have preempted a large segment of judicial time — not an insignificant factor. Thus, because the stakes were high, we do not believe that the burden of requiring a corporate representative to attend a pretrial settlement conference was out of proportion to the benefits to be gained, not only by the litigants but also by the court.
Additionally, the corporation did send an attorney, Mr. Fitzpatrick, from Philadelphia, Pennsylvania to Madison, Wisconsin to "speak for" the principals of the corporation. It is difficult to see how the expenses involved in sending Mr. Fitzpatrick from Philadelphia to Madison would have greatly exceeded the expenses involved in sending a corporate representative from Camden to Madison. Consequently, we do not think the expenses and distance to be traveled are unreasonable in this case.
Furthermore, no objection to the magistrate's order was made prior to the date the pretrial conference resumed. Oat Corporation contacted the magistrate's office concerning the order's requirements and was advised of the requirements now at issue. However, Oat Corporation never objected to its terms, either when it was issued or when Oat Corporation sought clarification. Consequently, Oat Corporation was left with only one course of action: it had to comply fully with the letter and intent of the order and argue about its reasonableness later.
We thus conclude that the court did not abuse its authority and discretion to order a representative of the Oat Corporation to appear for the pretrial settlement conference on December 19.
C. Sanctions
Finally, we must determine whether the court abused its discretion by sanctioning Oat Corporation for failing to comply with the order to appear at the pretrial settlement conference. Oat Corporation argues that the instructions directing the appearance of corporate representatives were unclear and ambiguous. Consequently, it concludes that the sanctions were improper.
Absent an abuse of discretion, we may not disturb a district court's imposition of sanctions for failure of a party to comply with a pretrial order. The issue on review is not whether we would have imposed these costs upon Oat Corporation, but whether the district court abused its discretion in doing so. National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 642, 96 S.Ct. 2778, 2780, 49 L.Ed.2d 747 (1976) (citations omitted).
Oat Corporation contends that the presence of Mr. Fitzpatrick, as an attorney authorized to speak on behalf of the principals of Oat Corporation, satisfied the requirement that its "corporate representative" attend the December 19 settlement conference. Oat Corporation argues that nothing in either the November 19, 1984 order or the December 14, 1984 order would lead a reasonable person to conclude that a representative or principal from the Joseph Oat Corporation was required to attend the conference personally — in effect arguing that sanctions cannot be imposed because the order failed to require a particular person to attend the conference.
We believe that Oat Corporation was well aware of what the court expected. While the November order may have been somewhat ambiguous, any ambiguity was eliminated by the magistrate's remarks from the bench on December 14, the written order of December 18, and the direction obtained by counsel from the magistrate's clerk.
On December 14, in the presence of Oat Corporation's attorney of record and all those in the courtroom, the magistrate announced that the pretrial conference had been impaired because Oat Corporation had not complied with Paragraph 5(c) of the November order requiring it to send to the conference a corporate representative. The magistrate clearly stated that the order's purpose was to insure the presence of the parties personally at the conference. From that moment on, Oat Corporation had notice that it was ordered to send a corporate representative to the resumed conference. Moreover, prior to the December 19 conference, Oat Corporation's counsel contacted the magistrate's office to determine if the magistrate really intended for corporate representatives to be in Madison, Wisconsin, for the settlement conference. Counsel was assured that such was the case.
When the conference resumed on December 19, Mr. Possi was present acting in his capacity as Oat Corporation's attorney of record. Mr. Fitzpatrick, who was not an attorney of record in the case, asserted that he was directed to attend the conference and speak on behalf of Oat Corporation's principals. Mr. Fitzpatrick also stated that he interpreted the November order not as requiring the presence of a principal of Oat Corporation at the conference scheduled for December 14, but as requiring the presence of the insurance carriers with authority to discuss settlement.
The distinction is clearly drawn between an attorney representing a corporation and a corporate representative. As we define in this opinion — consistent with the meaning given by the magistrate — a corporate representative is a person holding "a position with the corporate entity." Although Mr. Fitzpatrick was representing the corporate principals and Mr. Possi the corporation, no corporate representative attended as required by the magistrate's order. We therefore conclude that the court properly sanctioned Oat Corporation pursuant to Rule 16(f) for failing to send a corporate representative to the settlement conference.
III. CONCLUSION
We hold that Rule 16 does not limit, but rather is enhanced by, the inherent authority of federal courts to order litigants represented by counsel to attend pretrial conferences for the purpose of discussing settlement. Oat Corporation violated the district court's order requiring it to have a corporate representative attend the pretrial set tlement conference on December 19, 1984. Under these circumstances, the district court did not abuse its discretion by imposing sanctions for Oat Corporation's failure to comply with the pretrial order. The judgment of the district court is hereby AFFIRMED.
. Rule 16(a)(5) provides:
(a) Pretrial Conferences; Objectives. In any action, the court may in its discretion direct the attorneys for the parties and any unrepresented parties to appear before it for a conference or conferences before trial for such purposes as
(5) facilitating the settlement of the case. Fed.R.Civ.P. 16(a)(5).
. Rule 16(c)(7) states:
(c) Subjects to be Discussed at Pretrial Conferences. The participants at any conference under this rule may consider and take action with respect to
(7) the possibility of settlement or the use of extrajudicial procedures to resolve the dispute; .
Fed.R.Civ.P. 16(c)(7).
. The Supreme Court has long held that "the inherent powers of federal courts are those which 'are necessary to the exercise of all others.' " Roadway Express, Inc. v. Piper, 447 U.S. 752, 764, 100 S.Ct. 2455, 2463, 65 L.Ed.2d 488 (1980) (quoting United States v. Hudson & Goodwin, 7 Cranch 32, 34, 11 U.S. 32, 3 L.Ed. 259 (1812)).
. See Newman-Green, Inc. v. Alfonzo-Larrain R., 854 F.2d 916, 921-22 (7th Cir.1988) (en banc) (court discussing examples of specific procedures, such as the power to punish for contempt, power to sanction persons who file frivolous pleadings, power to determine whether there is jurisdiction), cert. granted, — U.S. -, 109 S.Ct. 781, 102 L.Ed.2d 773; Stranded v. Jackson County, 838 F.2d 884, 886 (7th Cir.1988); Thompson v. Housing Auth. of Los Angeles, 782 F.2d 829, 831 (9th Cir.), cert. denied, 479 U.S. 829, 107 S.Ct. 112, 93 L.Ed.2d 60 (1986); Halaco Eng'g Co. v. Costle, 843 F.2d 376, 380 (9th Cir.1988) (court stating that the Supreme Court has recognized that a district court has inherent authority to impose sanctions for discovery abuses which may not be a technical violation of discovery rules).
The practice of some district judges requiring represented parties to appear in person (or by corporate representative) has been part and parcel of such settlement conferences for many years. See In re LaMarre, 494 F.2d 753, 756 (6th Cir.1974) (court stating that it is well within the scope of a district court's authority to compel the appearance of a party's insurer at a pretrial conference and to enforce the order).
. In Link, plaintiffs counsel, who was aware of a pretrial conference, deliberately failed to attend the conference. The district court dismissed the suit even though the Federal Rules of Civil Procedure did not expressly provide for it. Our court recognized the district court's inherent authority to do so and found that it was not an abuse of discretion to dismiss the lawsuit. "Courts may exercise their inherent powers and invoke dismissal as a sanction in situations involving disregard by parties of orders, rules, or settings." Link, 291 F.2d at 546 (citations omitted). The Supreme Court affirmed this rationale. Link, 370 U.S. at 627, 82 S.Ct. at 1387, 8 L.Ed.2d 734 (1962).
. The Federal Rules of Civil Procedure are not the only set of rules grounded in the district courts' inherent authority. Circumstances not explicitly authorized in the Federal Rules of Evidence such as in limine rulings are derived from the district court's inherent authority to manage the course of trials. See Luce v. United States, 469 U.S. 38, 41 n. 4, 105 S.Ct. 460, 463 n. 4, 83 L.Ed.2d 443 (1984) (citations omitted).
. The district court had authorized the magistrate to resolve all pretrial matters pursuant to 28 U.S.C. § 636(b)(1)(A).
.Likewise, a court cannot compel parties to stipulate to facts. J.F. Edwards Constr. Co. v. Anderson Safeway Guard Rail Corp., 542 F.2d 1318 (7th Cir.1976) (per curiam). Nor can a court compel litigants to participate in a nonbinding summary jury trial. Strandell, 838 F.2d at 887. In the same vein, a court cannot force a party to engage in discovery. Identiseal Corp. v. Positive Identification Sys., Inc., 560 F.2d 298 (7th Cir.1977).
. G. Heileman Brewing Company hired RME Associates, Inc., a consulting firm, to build a waste water treatment plant at Heileman's brewery in LaCrosse, Wisconsin. Subsequently, RME entered into a contract with Joseph Oat Corporation whereby Oat Corporation agreed to design, engineer, construct and test the system. Oat Corporation was the exclusive licensee in the United States for the system's developer, N.V. Céntrale Suicker Maatschappij (CSM), a Dutch corporation.
A contract dispute arose between Oat Corporation, Heileman, and RME involving the malfunctioning of the waste water treatment system. In December, 1982, Oat Corporation initiated federal diversity litigation against Heile-man and RME in New Jersey. RME counterclaimed. The case was transferred to the court below- RME then joined CSM as a third-party defendant. On the same day, Heileman filed an action in Wisconsin state court against Oat Corporation and RME. RME cross-claimed against Oat Corporation and counter-claimed against Heileman.
In the early phase of trial preparation, Heile-man and Oat Corporation agreed to withdraw all claims between them. In addition, Oat Corporation dismissed its complaint against RME. After these events, the lawsuit consisted of RME's claims against Oat Corporation and CSM.
. In Malone v. United States Postal Serv., 833 F.2d 128 (9th Cir.1987), cert. denied, — U.S. -, 109 S.Ct. 59, 102 L.Ed.2d 37 (1988), the Ninth Circuit addressed the same general issue we confront here. Malone appealed the imposition of the sanction of dismissal. Malone argued that the pretrial order was invalid and thus her noncompliance was justified. Id. at 133. Specifically, Malone claimed that the order of dismissal was erroneous since the court lacked the authority to require Malone to supply a list of questions and answers for all potential witnesses. The Ninth Circuit Court of Appeals disagreed with Malone's argument and held that counsel who believes a court order to be erroneous is not relieved of the duty to obey it. Malone's refusal to abide with the pretrial order was not justified. Id.; see also Maness v. Meyers, 419 U.S. 449, 458, 95 S.Ct. 584, 591, 42 L.Ed.2d 574 (1975).
. On December 18, 1984, the oral order was reduced to writing.
It stated:
The progress of the conference was impaired by the fact that neither plaintiff Joseph Oat Corporation, or its carrier National Union, was represented, in addition to counsel, by a representative having full authority to settle the case....
It appearing that a substantial possibility exists that a number of the claims and issues in these cases may be susceptible of settlement, and that other related matters might be considered (including the avoidance of unnecessary proof, cumulative evidence, and redundant litigation; the possibility of adopting amendments to the pleadings, the restructuring of the parties; and the adoption of special procedures for managing this complex and protracted litigation) so as to secure the just and speedy determination of this litigation as the least expense to the parties,
IT IS HEREBY ORDERED:
2. In addition to counsel, each party and the insurance carriers of plaintiff Oat and defendant RME, shall be represented at the conference in person by a representative having full authority to settle the case or to make decisions and grant authority to counsel with respect to all matters that may be reasonably anticipated to come before the conference; .
(Order of Dec. 18, 1984) (emphasis supplied).
. Except for the Oat Corporation, all the parties complied, sending their counsel and corporate representatives to the pretrial conference (a principal of CSM was standing by a telephone in the Netherlands). The Oat Corporation was represented by his attorney of record, John Pos-si. In addition, the Oat Corporation's liability insurance carrier, National Union Fire Insurance Company, was represented by an adjuster.
. In pertinent part, the order stated:
5. A settlement conference, which shall include the Heileman Brewing Company, shall be held herein on December 14, 1984 at 2:00 p.m.
In addition to counsel, each party shall be represented at the conference by a representative having full authority to settle the case....
(Order of Nov. 19, 1984).
. On December 19, the following dialogue took place between the magistrate and Mr. Fitzpatrick:
THE COURT: I made it clear on December 14th, that for purposes of this conference . that each party in addition to be represented by counsel would have present the party itself for purposes of authorizing or discussing settlement in this case, speaking specifically about the order which is dated December 18th but was entered I think clearly enough on the 14th. That in addition to counsel, each party . shall be represented at the conference in person by a representative having full authority to settle the case or make decisions relevant to all matters reasonably anticipated to come before the conference....
As a matter of fact, Mr. Possi called yesterday to find out from my secretary if that is what I really meant . he was informed that it is what I really meant; and I would like to have your explanation as to why no one from Joseph Oat is here from [sic] that authority. MR. FITZPATRICK: I am here as a representative of Joseph Oat which I understood your order to be. I have discussed this thing thoroughly with the principals of Joseph Oat. They directed me to come to the conference. They directed me that I could speak for them, with authority to speak for them. Their direction was I should make no offer to settle the case. That is their position. That is the position they choose to take and they designated me as the representative to communicate that to the Court.
(Transcript of Dec. 19, 1984).