Opinion ID: 767140
Heading Depth: 2
Heading Rank: 2

Heading: Refusal to Defer Consideration of Proposed Settlement

Text: 88 For the reasons explained, I fear that the district court, in its haste to conclude this matter, took a shortcut where Neilson's due process rights were concerned. The point is underscored by the district court's subsequent decision to approve the proposed settlement rather than, as Scott Neilson requested, to defer consideration of the agreement pending the state court's imminent appointment of a general guardian for Neilson. The majority offers two justifications for this decision, both of which are exaggerated and neither of which is sufficient.
89 The majority concludes that allowing Neilson's general guardian an opportunity to review the proposed settlement would have entailed considerable delay. Ante at 657. This concern finds no support in the record. Quite the contrary, Scott Neilson's attorney informed the district court, both in his affidavit and at oral argument, that the state court judge had decided to appoint a guardian, understood the need for prompt action and was likely to finalize the appointment within a matter of weeks. 5 Even the guardian ad litem expressed confidence that the state court judge would complete the process as soon as possible, observing that the state court judge had moved like the wind. New York law, moreover, gives guardianship proceedings a preference over all other causes and imposes deadlines for the appointment and commission of general guardians. See N.Y. Mental Hyg. Law 81.13. 90 The district court apparently viewed these facts as irrelevant, noting that Neilson's general guardian would be required effectively to duplicate the efforts of the guardian ad litem, who had by then spent more than four months working on the case, and anticipating a delay of many months before the general guardian could give [her] evaluation of the proposed settlement. Neilson, 993 F. Supp. at 227. Initially, I cannot agree that obtaining the views of Neilson's general guardian would have involved costly duplication of the guardian ad litem's efforts. See id. at 228. In contrast to a general guardian, who under New York law has broad powers and access to information about the incompetent party, see N.Y. Mental Hyg. Law 81.21, 81.22, the guardian ad litem had very little interaction with Neilson and thus had virtually no first-hand knowledge of her personal situation or financial means. Indeed, throughout his involvement in this case, the guardian ad litem repeatedly indicated that he expected his role would be taken over by a general guardian. At one point, the guardian ad litem even joined in Scott Neilson's request for an adjournment. Although the guardian ad litem subsequently changed his position and opposed the adjournment, the record does not suggest that he had any new information concerning Neilson's personal or financial circumstances that might have cast doubt on the wisdom of his earlier recommendation that the court give the general guardian time to consider the proposed settlement. 91 The record similarly offers no basis for the district court's conclusion, apparently credited by the majority, see ante at 657, that Neilson's general guardian would require many months to review the proposed settlement. See 993 F. Supp. at 227. Much of the four months that the guardian ad litem spent on this case was devoted to negotiating and finalizing the settlement. As early as October 27, 1997, six weeks after he was appointed, the guardian ad litem was sufficiently familiar with the details of the case to report that the prospects of settlement were real, especially since Colgate's counsel and [he] [had begun] exploring the possibility that Colgate's Disability Plan might provide an alternative to the relief sought in this lawsuit. The guardian ad litem later informed the court that only one-third of his time on this case was spent reviewing materials related to the merits of Neilson's claims. In any event, even without the benefit of this hindsight, see ante at 657, the district court easily could have taken steps to ensure against undue delay. The court could, for instance, have required the general guardian to submit an evaluation of the proposed settlement within a specific, limited period of time, e.g., within 30 or 45 days of her appointment and commission. The district court's failure even to explore such a possibility seriously undermines its conclusion that granting Scott Neilson's adjournment request would have led to extended delay. See 993 F. Supp. at 227. 92 The district court expressed concern that any delay in finalizing the settlement would be highly prejudicial to plaintiff's interests, depriving her of much-needed benefits that would flow to her immediately under the settlement agreement. 993 F. Supp. at 227. Neither Neilson nor her son, however, shared this concern about plaintiff's interests. Indeed, the court's trepidation should have been allayed at least somewhat by the fact that Neilson's son, who was taking appropriate legal steps to ensure his mother's long-term care, himself favored a brief adjournment. In any case, as Scott Neilson's attorney noted in his affidavit, the district court had before it virtually no information concerning Neilson's personal or financial resources, rendering its finding that Neilson needed immediate benefits wholly speculative. 6 What the majority characterizes as an entirely reasonable assessment of the circumstances, ante at 657, thus appears to have been a conclusion based merely on a set of unsupported assumptions about Neilson's needs, hardly a sound basis for a decision with potentially momentous implications for Neilson.
93 The majority also affirms the district court's decision to approve the proposed settlement, without waiting for the general guardian to review the agreement, because Neilson had limited prospects for recovery at trial. See ante at 654-55, 657. Neither the district court nor the majority has, however, undertaken any detailed analysis of the merits of Neilson's claims, particularly her claim of retaliatory discharge. Federal courts, in determining the fairness of a proposed settlement, should consider a variety of factors, including the range of reasonableness of the settlement fund in light of the best possible recovery. County of Suffolk v. Long Island Lighting Co., 907 F.2d 1295, 1323-24 (2d Cir. 1990) (citation and quotation marks omitted); see also Maywalt v. Parker & Parsley Petroleum Co., 67 F.3d 1072, 1079 (2d Cir. 1995) (In determining whether a proposed settlement is fair, reasonable, and adequate, the primary concern is with the substantive terms of the settlement: Basic to this is the need to compare the terms of the compromise with the likely rewards of litigation.) (citations, alterations and quotation marks omitted). 94 There is an extraordinary aspect of this case that the majority ignores altogether: it is undisputed that Colgate expressly conditioned Neilson's continued employment on the withdrawal of her EEOC complaint. When Neilson refused to withdraw the charge, Colgate fired her. In light of this potential smoking gun evidence, I believe a jury would have little difficulty finding that Neilson suffered a materially adverse change in the terms and conditions of her employment under circumstances giving rise to an inference of discrimination. See Torres v. Pisano, 116 F.3d 625, 640 (2d Cir. 1997) (It is conceivable that a demand to withdraw an EEOC charge could constitute retaliation, if it truly had so great an effect on the plaintiff as to alter the conditions of her employment in a material way.). 7 This evidence alone thus immediately places this case whether or not it can ultimately be defended successfully on sounder footing than many employment discrimination cases that are settled for significantly greater amounts. 8 It is undoubtedly this sort of consideration that might prompt an attorney to leap at the opportunity to represent a client in a retaliatory discharge case. Indeed, Neilson's former attorneys, the prominent employment law firm of Vladeck, Waldman, Elias & Engelhard, strenuously opposed the settlement negotiated by the guardian ad litem and even offered to reenter the case and vigorously pursue Ms. Neilson's claims on a pro bono basis. 9 95 While I agree that a district court has the authority to approve a settlement negotiated by a guardian ad litem notwithstanding the subsequent appointment of a general guardian in state court, see ante at 657, I cannot disregard the fact that a general guardian invariably has more information about the personal and financial circumstances of an incompetent party than a guardian ad litem appointed pursuant to Fed. R. Civ. P. 17(c). Where, as here, the appointment of a general guardian is imminent, this factor should weigh heavily on a district court's decision whether to approve a settlement on behalf of an incompetent party, particularly if the only negative consequence of an adjournment is a short delay with no appreciable prejudice to either the plaintiff or the defendant. In my view, the benefits of a brief adjournment to allow Neilson's general guardian to review the proposed settlement so far outweighed any speculative harm caused by a few months' delay in the case that the district court's refusal to defer consideration of the settlement amounted to an abuse of discretion. For this reason, and because the procedures employed by the district court in appointing the guardian ad litem failed to satisfy due process, I respectfully dissent. Notes: 1 I concur in Part A of the majority's discussion, which holds that Neilson's general guardian has standing to bring this appeal. See ante at 650-51. 2 Even Colgate does not attempt to defend the propriety of the district court's August 15 order. 3 Some of Neilson's initial comments to the court referred to a guardian ad litem and an attorney conjunctively. See, e.g., Letter from Francine Neilson to Court dated September 15, 1997 (I again consent to the appointment of a guardian ad litem in addition to an attorney . . . .). Viewed in its entirety, however, the record demonstrates that Neilson perceived no distinction between a guardian ad litem and a lawyer who would litigate her case. See, e.g., Transcript of October 27, 1997 Proceeding (He's not acting as a guardian ad litem. I do not need a guardian for day-to-day affairs. I need someone to litigate the case.); Transcript of November 25, 1997 Proceeding (I still have to go back to the issue that we initially asked for an ad litem, a guardian ad litem, for powers of litigating this case. That's why I consented to it. No other reason. For litigating this case.). 4 I note that under New York law, copies of an application for a general guardian must, if possible, be served on the allegedly incompetent person's spouse, parents and adult children, among others. See N.Y. Mental Hyg. Law 81.07(d)(ii). Although the precise procedure for appointing a guardian ad litem is left to the district court's discretion under Fed. R. Civ. P. 17(c), see Thomas, 916 F.2d at 1035 (holding that district court may apply any procedure [for determining competency] that meets the requirements of due process), there is no reason why a district court should not attempt to follow the state procedures, where possible, for notifying the individual's family. The state procedures for notice to families have a sound basis in logic and experience, and district courts should use them as a guideline for competency proceedings in federal court. Asking an allegedly incompetent party about his or her family, and attempting to obtain their names and addresses, are simple steps that courts can and should take before proceeding with the appointment of a guardian ad litem. Had the court below taken these measures, this case might not have progressed to its current unfortunate state. Neilson's son, who commenced a state court proceeding to appoint a general guardian soon after the district court appointed the guardian ad litem, appears to have been both willing and able to help her oversee her affairs until a general guardian was appointed. Had Scott Neilson been apprised of the proceedings in federal court regarding his mother's competency, he might have been able to explain more fully the import of the competency proceedings to his mother and to assist her in deciding whether to consent to a psychiatric examination or to a guardianship ad litem. 5 These representations proved accurate. Neilson's general guardian was appointed on February 27, 1998, just nine days after the district court issued its order approving the settlement and dismissing this action with prejudice. The state court's order appointing the general guardian was entered in the New York County Clerk's Office on March 18, 1998, and her commission was issued on March 31, 1998. 6 Although the majority points to Dr. Pulver's report indicating that Neilson was apparently living on financial handouts from friends and relatives and not eating regularly, ante at 657, the district court had no reason to believe that Neilson's basic subsistence needs were not being met, or were not likely to be met during the few months required for the general guardian to review the matter, particularly given the imminent appointment of a general guardian and Scott Neilson's demonstrated concern for his mother's welfare. 7 Given the documentation and testimony by Colgate employees evidencing the company's quid pro quo offer, moreover, I question the district court's view that Neilson's testimony would have been crucial to her retaliation claim. See 993 F. Supp. at 228. Even if her testimony would have been vital, Dr. Pulver suggested that a general guardian could have helped Neilson obtain psychiatric treatment, which might have improved her ability to communicate to a jury. Neilson, whose obvious intelligence and articulateness the district court repeatedly noted, see, e.g., id. at 226, might well have been capable, with appropriate medical care, of testifying credibly. 8 The majority speculates that even if Neilson were to prevail at trial, her damages would be limited in light of the jury's awareness of Neilson's mental disorder and of its early onset. Ante at 654-55. Because Neilson disputes the guardian ad litem's conclusion that her illness began while she was working at Colgate, however, the majority's assessment of this factual question entirely fails to support its conclusion that the settlement was reasonable. 9 In light of Judith Vladeck's expressed willingness to forego fees for the remainder of the case, I am puzzled by the district court's suggestion, echoed by the majority, see ante at 657, that counsel was motivated only by a desire to recoup her fees. See 993 F. Supp. at 228 n.4.