Court Opinion

ID: 185576
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:33:37+00
Date Added: 2024-06-11T09:42:53.979609
License: Public Domain

277 F.3d 544 (D.C. Cir. 2002)
Brenda Elaine Makins, Appellantv.District of Columbia and Francis J. Henderson, Acting Warden, D.C. Department of Corrections Central Facility, Appellees
No. 01-7029
United States Court of Appeals  FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 17, 2001Decided January 18, 2002

Appeal from the United States District Court  for the District of Columbia (98cv02693)
Gregory L. Lattimer argued the cause and filed the briefs  for appellant.
Carl J. Schifferle, Assistant Corporation Counsel, argued  the cause for appellees.  With him on the brief were Robert R. Rigsby, Corporation Counsel, and Charles L. Reischel,  Deputy Corporation Counsel.
Before:  Henderson, Randolph, and Rogers, Circuit  Judges.
Opinion for the Court filed by Circuit Judge Randolph.
Dissenting opinion filed by Circuit Judge Henderson.
Randolph, Circuit Judge:

1
This appeal from a district court  order enforcing a settlement agreement presents an issue  much litigated in the other circuits but not yet decided by this  court--namely, under what circumstances, if any, may an  attorney without actual authority from his client bind the  client to a settlement agreement.  We must also decide  whether to look to state or federal law in answering this  question.

I.

2
In November 1998, Brenda Makins brought an action  against the District of Columbia claiming sex discrimination  and retaliatory firing, in violation of Title VII (42 U.S.C.   2000e et seq.).  Makins had been employed in the District's  Department of Corrections from 1995 until her discharge in  1997.  Her complaint sought reinstatement, compensatory  damages, and attorney fees.

3
Makins' attorney, John Harrison, began representing her  in 1996, after she received a notice of termination from the  Department.  Harrison and Makins did not have a written  retainer agreement.  In the summer of 2000, at a pre-trial  conference, the district judge referred Makins' case to a  magistrate judge "for settlement purposes only" and ordered  the District to "have present at all settlement meetings ...  an individual with full settlement authority."  The judge set  the case for trial in December 2000.  Makins v. Dist. of  Columbia, No. CV-98-2693, mem. op. at 2 (D.D.C. Dec. 11,  2000).  A few days later, the magistrate ordered the "lead  attorney(s) for the parties" to appear before him for a settlement conference;  the order required that the "parties shall either attend the settlement conference or be available by  telephone for the duration of the settlement conference."

4
The conference, originally scheduled for August 22, took  place on September 12, 2000.  Makins did not attend.  After  two and a half hours of negotiations, Harrison and the  attorneys for the District reached an agreement to end the  case.  Makins would receive $99,000 and have her personnel  records amended from "discharged" to "resigned" (to preserve her retirement benefits if she were able to attain other  federal employment).  In return, Makins would dismiss her  claims against the District.  The attorneys "shook hands" on  the deal and later reduced it to writing.  A few days later,  when Harrison presented Makins with a copy for her signature, she refused to sign it.  The District then filed a Motion  to Enforce Settlement.  Makins retained another attorney  and the court held an evidentiary hearing in which Harrison,  Makins, and the lead attorney for the District testified.

5
The testimony of Makins and Harrison were at odds. According to Makins, she never agreed to settle her case  under the terms Harrison and the District negotiated because  "getting [her] job back had to be part of any agreement." She admitted wanting to settle the case and knowing that the  correctional facility in which she had worked was downsizing. She claimed that Harrison waited until the night before the  conference to alert her to it and specifically told her not to  attend.  She talked to Harrison several times during the  settlement negotiations on September 12.  But she insisted  that she never agreed to the negotiated terms because, as she  expressed to Harrison in one of their cell phone conversations  that day, getting her job back was a condition to settling the  case.  Although Makins swore in an affidavit, filed before the  hearing, that Harrison alerted her during the negotiations  that he was discussing the $99,000 figure, she testified that  she did not recall such a conversation.

6
Harrison disputed much of Makins' testimony.  He said  they had extensively discussed the possibility of settlement  the day before the conference, that he discouraged her from  insisting on getting her job back, that he thought it made sense strategically for his client to remain at home so that  "the Judge couldn't put pressure on her to settle," that she  gave him a number where he could reach her on September  12, and that she told him to do "what you think is right, I  trust you."  At the conference, each side presented its case  separately to the magistrate.  The attorneys and the magistrate then sat at a table and negotiations began.  On several  occasions, the magistrate sent one of the attorneys out of the  room and talked to the other about what he saw as strengths  and weaknesses in the case.  By cell phone Harrison called  Makins when he was out of the room.  He contends that she  agreed to settle for $99,000.  Harrison testified that when the  District agreed to this figure, he called Makins immediately  and "told her that the 99 was done," to which she replied  "good."  Harrison also stated that Makins did not express  any dissatisfaction with the settlement until several days later  when she refused to sign the papers in Harrison's office.

7
The District's attorney generally confirmed Harrison's account of the conference (although he did not know what  Harrison and his client had discussed by cell phone, or even if  they had discussions).  In response to the District's offer of  approximately $80,000, Harrison said his client was still at  $120,000, or thereabouts.  The District's attorney replied that  he would not settle the case for more than $100,000.  Harrison left the room, cell phone in hand, and came back a few  minutes later.  He said $99,000 would be fine but his client  wanted her records changed to show that she had resigned. The District reluctantly agreed.  Neither the attorney for the  District nor the magistrate spoke to Makins to confirm her  assent to the terms of the agreement.

8
The district court, observing the "sharp conflict" in testimony between Makins and Harrison, declined to resolve it. Instead, the court assumed arguendo that Harrison did not  have actual authority to settle the case.  The court granted  the District's motion to enforce the settlement on the alternative ground that Harrison had apparent authority to bind  Makins to the agreement.  The court saw "no justification for  the District of Columbia not to reasonably believe that Mr. Harrison had the full confidence and authority of his client." Mem. op. at 7.

II.

9
Settlement agreements are in the nature of contracts.  See  Gaines v. Cont'l Mortgage & Inv. Corp., 865 F.2d 375, 378  (D.C. Cir. 1989).  As in other contract negotiations, one or  both of the parties may insist that the terms be reduced to  writing and that only a signed agreement will be effective. But not all contracts, and not all settlements, must be written  in order to be enforceable.  The parties may orally agree  upon the material terms and intend to be bound. See United  States v. Mahoney, 247 F.3d 279, 285 (D.C. Cir. 2001). "Lawsuits may, of course, be compromised by oral contract." Autera v. Robinson, 419 F.2d 1197, 1198 n.1 (D.C. Cir. 1969); see also Feltman v. Sarbov, 366 A.2d 137, 141 (D.C. 1976). The attorney for Makins and the District agreed upon essential terms.  That Makins refused to sign the settlement  papers is therefore not conclusive, a point she does not  debate.  The question is whether the oral understanding  between the attorneys may be enforced against Makins-whether, in other words, she was bound by the deal her  attorney negotiated.

10
The District urges us to adopt local law as the rule of  decision.  Makins thinks we should devise federal law:  the  case was brought in federal court;  the cause of action is  derived from federal legislation;  and the actions of attorneys  conducting federal litigation are of particular federal concern. Apparently for these reasons, some federal courts agree with  Makins.  See, e.g., Kinan v. Cohen, 268 F.3d 27, 32 (1st Cir.  2001);  Malave v. Carney Hosp., 170 F.3d 217, 221 (1st Cir.  1999);  Michaud v. Michaud, 932 F.2d 77, 79 n.3 (1st Cir.  1991);  Fennell v. TLB Kent Co., 865 F.2d 498, 501 (2d Cir.  1986);  Mid-South Towing Co. v. Har-Win, Inc., 733 F.2d 386, 386 (5th Cir. 1984).  Makins also cites Alexander v.  Gardner-Denver Co., 415 U.S. 36, 52 & n.15 (1974), for the  proposition that federal law governs settlement agreements in  Title VII cases.  The Supreme Court, after saying that an employee could enter into a voluntary settlement and waive  his cause of action under Title VII, added this:  "In determining the effectiveness of any such waiver, a court would have  to determine at the outset that the employee's consent to the  settlement was voluntary and knowing," 451 U.S. at 52 n.15,  thus invoking the familiar test of Johnson v. Zerbst, 304 U.S. 458, 464 (1938).  But this was dictum.  The employee in  Alexander had not entered into a settlement.  An arbitrator  had rejected his grievance charging racial discrimination. The Court was not concerned with settlement agreements in  general, or with the authority of attorneys to enter into them. The issue before the Court was whether the labormanagement arbitration, conducted pursuant to a collective  bargaining agreement, precluded the employee from bringing  a Title VII action alleging the same conduct.  The Court's  remarks about settlements, contained in a footnote not citing  any authority, can hardly be taken as representing its considered judgment that state law should not be adopted in Title  VII cases.  And we see no good reason why Title VII cases  should be singled out for different treatment in this respect  than other federal causes of action.  Cf. Reeves v. Sanderson  Plumbing Prods., Inc., 530 U.S. 133, 148 (2000).

11
In any event, Makins has missed--as has the District--our  opinion in United States v. Mahoney, 247 F.3d at 285.  We  there held that whether the parties have reached a settlement  is a matter of local law.  For this conclusion we cited and  relied upon the decision in Quijano v. Eagle Maintenance  Service, Inc., 952 F. Supp. 1, 3 (D.D.C. 1998), that the  "enforcement of settlement agreements is governed by state  contract law."  There are good reasons behind this.

12
The power of the federal courts to formulate law in this  area, and the need for national uniformity, are doubtful at  best, as Judge Easterbrook forcefully demonstrated in Morgan v. South Bend Community School Corp., 797 F.2d 471,  474-78 (7th Cir. 1986).  In fact, our survey of the law  regarding settlements indicates that rather than national  uniformity in the federal courts, there is national disarray. See generally Grace M. Giesel, Enforcement of Settlement  Contracts:  The Problem of the Attorney Agent, 12 Geo. J. Legal Ethics 543, 563-80 (1999).  We agree that "neutral  state laws that do not undermine federal interests should be  applied unless some statute (or the Constitution) authorizes  the federal court to create a rule of decision."  Morgan, 797 F.2d at 475 (citing Miree v. DeKalb County, 433 U.S. 25, 2833 (1977)).  There is also an advantage for members of the  bar to know that in negotiating settlements, the law governing the validity of their agreements will be the same in  federal and state court.  Other federal courts of appeals  agree.  The Seventh, Eighth, Tenth, and Eleventh Circuits,  and perhaps the Third, Fourth, and Ninth, now look to state  law in determining if a valid and enforceable settlement  agreement exists.  See Pohl v. United Airlines, Inc., 213 F.3d 336, 338 (7th Cir. 2000);  In re Airline Ticket Comm'n Antitrust Litig., 268 F.3d 619, 623 (8th Cir. 2001);  United States  v. McCall, 235 F.3d 1211, 1213 (10th Cir. 2000);  Hayes v.  Nat'l Serv. Indus., 196 F.3d 1252, 1254 & n.2 (11th Cir. 1999); see also Tiernan v. Devoe, 923 F.2d 1024, 1032-33 (3d Cir.  1991);  Auvil v. Grafton Homes, Inc., 92 F.3d 226, 230 (4th  Cir. 1996);  Mallott & Peterson v. Director, Office of Workers'  Comp. Programs, 98 F.3d 1170, 1173 (9th Cir. 1996).  Aside  from cases in which a settlement agreement is sought to be  enforced against the United States, see United States v.  Beebe, 180 U.S. 343, 352 (1901), or in which there is a statute  conferring lawmaking power on federal courts, see Textile  Workers v. Lincoln Mills, 353 U.S. 448, 451 (1957), we adopt  local law in determining whether a settlement agreement  should be enforced.

13
The local law on this subject is, unfortunately, not much  developed.  The District of Columbia Court of Appeals treats  settlement agreements as contracts.  See Goozh v. Capitol  Souvenir Co., 462 A.2d 1140, 1142 (D.C. 1983).  In run-of-themill contract cases, the D.C. Court of Appeals relies on  27  of the Restatement (Second) of Agency to determine whether  an agent has the authority to enter into a binding agreement  on behalf of the principal.  See, e.g., Sigal Constr. Corp. v.  Stanbury, 586 A.2d 1204, 1218 (D.C. 1991) (citing Restatement (Second) of Agency  27 (1958)). The local court distinguishes--as did the district court--between an agent's "actual authority" and his "apparent authority."  Actual "authority,"  according to the Restatement's definition, means that the  agent has the power "to affect the legal relations of the  principal by acts done in accordance with the principal's  manifestations of consent to him."  Restatement (Second) of  Agency  7.  For settlement purposes, attorney Harrison  possessed actual authority in certain respects.  Makins manifested her consent to Harrison's attending the settlement  conference on September 12, to negotiating on her behalf and,  if her testimony is believed, to settling the case, but only on  the condition that she got her job back.

14
We must assume arguendo--because the district court did  so--that Makins never gave Harrison actual authority to  settle the case without the condition she specified.  Still, it  does not necessarily follow that because the settlement agreement lacked that condition it cannot be enforced. As agents  for their clients, attorneys without actual authority may have  "apparent authority" to bind their clients to agreements. The local court has not, however, addressed the precise  question presented here:  may an attorney negotiating in the  client's absence bind the client to a settlement agreement if  the attorney has led opposing counsel to believe he had actual  authority from the client to settle the case?

15
On the other hand, an opinion of the local court--not cited  by the District and the only one we have found dealing with  an attorney's authority to settle a case--holds that "regardless of the good faith of the attorney, absent specific authority, an attorney cannot accept a settlement offer on behalf of a  client."  Bronson v. Borst, 404 A.2d 960, 963 (D.C. 1979).  On  the face of it, the statement leaves no room for apparent  authority.  If this is the meaning of Bronson, the case is at  odds with the same court's later pronouncement in Goozh that  the enforcement of settlement agreements is governed by the  law applicable to the making of contracts generally, and with  its adoption of the Restatement position that an agent lacking  actual authority may nevertheless bind the principal to an  agreement with a third party if the agent has apparent  authority.  Bronson may be explained on the basis that the  suit was brought by the attorney against the client to enforce the settlement in order to recover his contingent fee, and that  at least as between an attorney and client, the court would  not allow recovery if the attorney entered into the settlement  against the client's wishes.  This is consistent with  383 of  the Restatement (Second) of Agency, although the court did  not mention it.  Bronson, unlike this case, did not deal with  the interests of a third party who entered into the settlement  with the attorney.  The third party in Bronson, an insurer,  was not named in the lawsuit.  There was thus no occasion  for the court to consider whether an opposing party could  enforce a settlement agreement when the other party's attorney possessed only apparent authority.

16
Given the vintage of Bronson, the fact that the local court  has never again relied upon the portion of the opinion quoted,  the distinctions we have just mentioned, and the absence of  any recent cases on point, the content of local law is so much  in doubt that we are reluctant to take the statement in  Bronson at face value.  Makins herself concedes that if  Harrison had apparent authority--as she views it--the agreement he negotiated could be enforced.  Brief for Appellant at  14.  We have therefore undertaken an analysis of whether  Harrison had apparent authority, which puts us in the position of deciding--to borrow from Judge Friendly--what the  local court would think on a question about which it has never  thought.  Nolan v. Transocean Air Lines, 276 F.2d 280, 281  (2d Cir. 1960).

17
Apparent authority may be defined as the "power to affect  the legal relations of another person by transactions with  third persons, professedly as agent for the other, arising  from, and in accordance with the other's manifestations to  such third persons."  Restatement (Second) of Agency  8; see Am. Soc. of Mech. Eng'rs, Inc. v. Hydrolevel Corp., 456 U.S. 556, 566-68 (1982).  Apparent authority, according to the  widely-accepted rule in the Restatement, can arise from "written or spoken words or any other conduct of the principal  which, reasonably interpreted, causes the third person to  believe that the principal consents to have the act done on  [her] behalf by the person purporting to act for [her]."  Id.   27.  While actual authority depends on communications

18
between the client and the attorney--the principal and the  agent--apparent authority under the Restatement turns on  the client's communication to the third party, here the District of Columbia.  As the D.C. Court of Appeals put it,  "apparent authority is derived from the principal's representations to the third-party rather than to the agent."  Sigal  Constr. Corp., 586 A.2d at 1218.

19
Given the local court's adoption of the Restatement, and its  willingness to look at treatises to establish the general rules  of law pertaining to agency issues, see Insurance Management of Wash., Inc. v. Eno & Howard Plumbing Corp., 348 A.2d 310, 312 (D.C. 1975) (citing 3 G. Couch, Insurance   26:75 (2d ed. 1960) to establish the general rule for the  apparent authority of an insurance agent), the local court  faced with this issue might turn to the recently-issued Restatement (Third) of the Law Governing Lawyers to aid  analysis.  The Restatement of the Law Governing Lawyers  parallels the Restatement of Agency's approach to authority: "A lawyer's act is considered to be that of the client in  proceedings before a tribunal or in dealings with a third  person if the tribunal or third person reasonably assumes  that the lawyer is authorized to do the act on the basis of the  client's (and not the lawyer's) manifestations of authorization."  Restatement (Third) of the Law Governing Lawyers   27 (1998).  To this the Restatement adds:  "Apparent authority exists when and to the extent a client causes a third  person to form a reasonable belief that a lawyer is authorized  to act for the client";  and "Generally a client is not bound by  a settlement that the client has not authorized the lawyer to  make by express, implied, or apparent authority...."  Id.  cmts. b & d.  It then offers the following illustration:

20
Lawyer represents Client in a civil action in which the court orders counsel to appear at a pretrial conference with authority to settle the case or to arrange for the presence of a person so authorized.  Client has not been informed of the order and has not authorized Lawyer to approve a settlement.  Lawyer, without disclosing that  lack of authority, attends the conference and agrees to a settlement.  Client is not bound by the settlement.

21
Id.  27, cmt. d, illus. 3.  The reasoning behind this begins  with the principle that certain decisions in litigation are the  client's, and the client's alone to make.  Like the decision to  enter a plea of guilty or to pursue an appeal in a civil or  criminal case, the decision whether to settle a case and on  what terms is reserved to the client.  Id.  22(1);  see also  D.C. Rules of Prof'l Conduct R. 1.2(a) ("A lawyer shall  accept a client's decision whether to accept an offer of settlement of a matter.").  As to settlements, the client therefore  must manifest to the third party that his lawyer has the  authority to compromise the case.  If the matter is in doubt,  third parties can protect themselves by "obtaining clarification of the lawyer's authority."  Restatement (Third) of the  Law Governing Lawyers  27 cmt. d.  Settlements are thereby facilitated while the client's prerogatives are preserved.

22
The key here is that the client, not the lawyer, must  indicate to the third party that the lawyer is authorized to  act.  We have applied this rule to attorney-client transactions  in a context other than settlement, see Williams v. WMATA,  721 F.2d 1412, 1416-17 (D.C. Cir. 1983).  But not all courts  agree.  The Sixth Circuit, interpreting Michigan law, held  that "when a client hires an attorney and holds him out as  counsel representing in a matter, the client clothes the attorney with apparent authority to settle claims connected with  the matter."  Capital Dredge & Dock Corp. v. City of Detroit,  800 F.2d 525, 529 (6th Cir. 1986).  The Restatement (Third)  of the Law Governing Lawyers treats this as a minority approach.  The general rule, embodied in the decisions of  other federal courts relying on both federal and state law, and  a much-quoted passage from a Supreme Court opinion are  against the notion that merely retaining a lawyer is enough  for this purpose.  See, e.g., Michaud, 932 F.2d at 80;  Fennell, 865 F.2d at 502;  Edwards v. Born, Inc., 792 F.2d 387, 390 (3d  Cir. 1986);  Auvil, 92 F.3d at 230-31;  see also Autera, 419 F.2d at 1201 n.18;  accord Woodson v. UPS, No. 91-C6452,  1993 WL 280759, at *2 (N.D. Ill. July 26, 2001);  Evans v.  Skinner, 742 F. Supp. 30, 31 (D.D.C. 1990);  Ashley v. Atlas Mfg. Co., 7 F.R.D. 77, 77 (D.D.C. 1946), aff'd, 166 F.2d 209  (D.C. Cir. 1948).  As the Supreme Court put it a century ago: "the utter want of power of an attorney, by virtue of his  general retainer only, to compromise his client's claim, cannot, we think, be successfully disputed."  United States v.  Beebe, 180 U.S. at 352.  The Restatement makes the same  point:  although "simply retaining a lawyer confers broad  apparent authority on the lawyer" regarding some matters, it  "does not extend to matters, such as approving a settlement,  reserved for client decision...."  Restatement (Third) of the  Law Governing Lawyers  27 cmt. a;  see also id.  27 cmt. d.

23
The District thinks Makins did more than just retain  Harrison.  It contends that she "participated in the settlement proceeding through her phone conversations with her  attorney."  Brief for Appellees at 23.  Neither the District  nor the magistrate ever heard from Makins, in person or by  telephone.  What the District derives from the telephone calls  between Makins and Harrison amounts to nothing more than  Harrison's representations of--and the District's educated  guesses about--what was said in private between them, a  disputed factual question the district court did not resolve.

The district court found that:

24
[Harrison] had represented Makins against the District of Columbia since 1996 when he was retained before the adverse action.  He then represented Ms. Makins at the time she filed her EEO complaint.  Finally, he was retained to represent her in the present lawsuit which was filed in 1998.

25
Mem. op. at 6 (emphasis added).  As we have stated, many  courts hold that retaining a lawyer is not enough to confer  apparent authority to settle the case.  The district court also  emphasized that Harrison fulfilled his duties as an attorney  by filing pleadings, answering motions, and so forth.  Id. at  6-7.  But if we followed the majority rule, this would not be  enough.  The client's manifestations to the third party must  be with respect to settlement, not the general conduct of the  litigation.  See Auvil, 92 F.3d at 230.  If it were otherwise, an attorney would nearly always have apparent authority to end  the case despite the wishes of his client.

26
It may not be crucial that the settlement conference took  place before the magistrate.  The District suggests that it  had more reason for believing Harrison in that setting.  But  Harrison had a duty of truthful representation, not only to  the magistrate in court, but also to the District outside the  courtroom.  See D.C. Rules of Prof'l Conduct R. 4.1(a).  We  have seen nothing in the record to prove that Harrison told  the magistrate he had authority to settle the case on the  terms ultimately agreed upon.  Neither Harrison nor counsel  for the District testified to that effect.

27
The district court thought the opinion of the D.C. Court of  Appeals in Feltman v. Sarbov, 366 A.2d at 138-39, strongly  supported the District's position.  The suit was for damages  arising from a lessor's breach of his attorney's oral promise to  the lessee of a parking lot.  The parties had entered into a  written lease, with the lessee dealing exclusively with the  attorney.  When the lease was about to expire, the attorney  convinced the lessee to renew, promising that the right of  first refusal and the provision regarding the garage concession contained in the initial lease would remain in effect. Later, the attorney approached the lessee and asked him to  vacate the premises, this time promising that he would get  the garage concession in a new building about to be constructed.  The lessor had already entered into an agreement  to develop the property, thereby abrogating the lessee's right  of first refusal;  and when the new building was constructed,  the lessee did not receive the garage concession the attorney  promised.  See id.

28
The D.C. Court of Appeals, holding that the attorney had  apparent authority, sustained the award of damages to the  lessee.  "Apparent authority arises," the court wrote, "when a  principal places an agent in a position which causes a third  person to reasonably believe the principal had consented to  the exercise of authority the agent purports to hold.  This  falls short of an overt, affirmative representation by a principal," 366 A.2d at 139 (internal quotations omitted).  To this the court added:  "The apparent authority of an agent arises  when the principal places the agent in such a position as to  mislead third persons into believing that the agent is clothed  with authority which in fact he does not possess."  Id. at 140  (internal quotations omitted).  There is nothing particularly  remarkable about these statements of law.  They merely  remind that apparent authority can arise from something  other than statements of the principal, a proposition the  Restatement (Second) of Agency embraces (see  27 cmt. a  and  49 cmt. c).  The "something other" usually consists of  "the ordinary habits of persons in the locality, trade or  profession"--in other words, custom and usage.  See Restatement (Second) of Agency  49 cmt. c;  Restatement (Third)  of the Law Governing Lawyers  21 cmt. e (referring to  matters ordinarily in the discretion of the lawyer).  In Feltman, the court therefore relied upon the facts that the  "attorney not only had drafted the lease but also handled all  the negotiations with regard to its initial execution, its renewal, and its premature termination." 366 A.2d at 140.  This  long course of dealing, in which the lessor held out "the  attorney as the person with whom the lessee should deal," id.,  conferred apparent authority on the attorney.

29
For several reasons we are reluctant to treat Feltman as  dispositive. For one thing, the case did not deal with a  settlement agreement, which at least under the Restatement  of the Law Governing Lawyers is in the special category of  matters reserved exclusively for the client's decision. (Whether the local courts would treat settlements in this  manner remains to be seen.)  The Feltman court, though,  placed no special emphasis on the attorney-client relationship. For another thing, Feltman rests on the several transactions  between the attorney and the lessee, in the attorney's negotiating and reaching contractual agreements on behalf of the  lessor.  The settlement of a lawsuit, however, is typically the  only contractual agreement the parties reach in litigation and  one would therefore not expect to see a course of dealing of  the sort present in Feltman.

30
Still, it may be that it is customary for lawyers in the  District to enter into binding, oral settlement agreements without the opposing side receiving some manifestation of  assent--orally or in writing (as in a signature on an agreement)--from the client.  But the District put on no evidence to this effect and there is nothing to indicate that the District  had reason to believe, from previous interactions with Makins,  that certain conduct on the part of Harrison was authorized. It may also be that the D.C. Court of Appeals would decide  that a client's authorizing his attorney to attend a settlement  conference and negotiate on the client's behalf is, in itself,  enough to confer apparent authority.  See Capital Dredge &  Dock Corp. v. City of Detroit, 800 F.2d at 529.  But see Auvil  v. Grafton Homes, Inc., 92 F.3d at 230-31;  Giesel, supra, at  573-74 (citing similar cases).  This would be an extension of  Feltman and we are unsure whether the court would take the  step.

31
Because of our uncertainty about whether local law supports a finding of apparent authority in this case, and because  of the importance of determining when a lawyer has apparent  authority to settle a case, we have decided to ask the D.C.  Court of Appeals for its views.  See Tidler v. Eli Lilly & Co.,  851 F.2d 418, 426 (D.C. Cir. 1988);  Joy v. Bell Helicopter  Texitron, Inc., 999 F.2d 549, 563-64 (D.C. Cir. 1993).  Pursuant to D.C. Code  11-723, the following question is certified  to the D.C. Court of Appeals:

32
Under District of Columbia law, is a client bound by a settlement agreement negotiated by her attorney when the client has not given the attorney actual authority to settle the case on those terms but has authorized the attorney to attend a settlement conference before a magistrate judge and to negotiate on her behalf and when the attorney leads the opposing party to believe that the client has agreed to those terms?

33
So ordered.

34
Karen LeCraft Henderson, Circuit Judge, dissenting:

35
"The little plaintiff or defendant, who was promised a new  rocking-horse when Jarndyce and Jarndyce should be settled,  has grown up, possessed himself of a real horse, and trotted  away into the other world."

36
--Charles Dickens, Bleak House 52 (Norman Page ed.,  Penguin Books 1971) (1853)

37
In my view, the majority has misconstrued District of  Columbia (District or D.C.) agency principles and has erroneously certified a question whose answer is clear.  As a result,  it has further delayed the enforcement of a valid settlement  agreement between the District and the appellant, Brenda E.  Makins.  Accordingly, and for the reasons set forth below, I  dissent.

38
Makins makes two separate challenges to the district  court's order enforcing the September 12, 2000 settlement. First, citing dicta from Alexander v. Gardner-Denver Co.,  415 U.S. 36, 52 n.15 (1974), she contends that the district  court committed reversible error by failing to determine  whether she had "voluntarily and knowingly" entered into the  agreement.  Br. of Appellant at 10-14.  Second, she argues  that the district court applied the incorrect legal standard in  deciding that her then-lawyer, John Harrison, had apparent  authority to settle her Title VII action.  See id. at 14-18.

39
The majority correctly rejects the first of Makins's claims. Her assertion that "settlement agreements resolving Title  VII claims must be entered into 'voluntarily and knowingly'  by the plaintiff before the court will find that [she] has waived  [her] federally protected right to seek redress," id. at 11, is  unsupported by any holding of the United States Supreme  Court or of any court of appeals.  Indeed, the only court to  rule on the issue held that the voluntary-and-knowing standard "is not the applicable standard when reviewing a case in  which the employee [seeking relief under Title VII] was  represented by an attorney who settled the matter on the  employee's behalf."  Hayes v. Nat'l Serv. Indus., 196 F.3d 1252, 1254 n.2 (11th Cir. 1999) (emphasis added).  In any  case, nothing in the text of Title VII requires that settlement of a suit thereunder be entered "voluntarily and knowingly." See generally 42 U.S.C.  2000e et seq.

40
In addressing Makins's second claim, the majority properly  adheres to the principle that "neutral state [rules] that do not  undermine federal interests should be applied unless some  statute (or the Constitution) authorizes the federal court to  create a rule of [federal law]."  Maj. op. at 7 (quoting Morgan  v. South Bend Cmty. Sch. Corp., 797 F.2d 471, 475 (7th Cir.  1986)).  Like the majority, I see no reason to exempt this  case from the general rule that "enforcement of settlement  agreements is [an issue] governed by state contract law." Maj. op. at 6.  Thus, I agree that District of Columbia agency  principles govern the enforceability of the settlement between  the District and Makins.  I dissent, however, because the  majority's interpretation of those principles--and its certification to the D.C. Court of Appeals for clarification thereof--is,  in a word, unsettling.

41
The District's certification statute states that its Court of  Appeals

42
may answer questions of law certified to it by ... a Court of Appeals of the United States ... if there are involved in any proceeding before any such certifying court questions of law of the District of Columbia which may be determinative of the cause pending in such certifying court and as to which it appears to the certifying court there is no controlling precedent in the decisions of the District of Columbia Court of Appeals.

43
D.C. Code  11-723(a) (emphasis added).  Consistent with  the statute, we recently held that "[i]n deciding whether to  certify a case we look to whether local law is 'genuinely  uncertain' with respect to a dispositive question ... and to  whether the 'case is one of extreme public importance[.]' ...  If, however, there is a 'discernible path for the court to  follow,' then we do not stop short of deciding the question." Dial A Car, Inc. v. Transp., Inc., 132 F.3d 743, 746 (D.C. Cir.  1998) (citations omitted).  I believe the prerequisites mentioned in Dial A Car preclude us from certifying the question  posed by the majority.  Plainly, the issue of whether Harrison had apparent authority to bind Makins under D.C. agency  principles is a "dispositive" one.  And I am willing to concede,  at least arguendo, that the scope of a lawyer's settlement  authority is a matter of "extreme public importance."  Nonetheless, I am not convinced that D.C. law is "genuinely  uncertain" with respect to the question the majority certifies.

44
The majority believes that the extraordinarily narrow question it poses is one "about which [the D.C. Court of Appeals]  has never thought."  Maj. op. at 9.  Of this there is probably  little doubt.  The certification standard under D.C. Code   11-723, however, is not whether the Court of Appeals has  ruled precisely on the issue before us but simply whether its  case law gives us a "discernible path ... to follow" in  deciding the broader question:  Under what circumstances  does a lawyer have apparent authority to effect a settlement  on behalf of his client?

45
The majority recognizes that "the D.C. Court of Appeals  relies on  27 of the Restatement (Second) of Agency to  determine whether an agent has the authority to enter into a  binding agreement on behalf of the principal."  Maj. op. at 548  (citing Sigal Constr. Corp. v. Stanbury, 586 A.2d 1204, 1219  (D.C. 1991)).  And it acknowledges that, under section 27,  apparent authority arises from "written or spoken words or  any other conduct of the principal which, reasonably interpreted, causes the third person to believe that the principal  consents to have the act done on [her] behalf by the person  purporting to act for [her]."  Id. at 9 (quoting Restatement  (Second) of Agency  27 (1958)) (emphasis added).  Mistakenly, however, the majority then throws in the towel, declining to decide what D.C. case law makes clear:  retaining a  lawyer and holding him out as the individual with whom the  opposing party should negotiate is sufficient to confer apparent authority to settle the client's case.

46
In Feltman v. Sarbov, 366 A.2d 137 (D.C. 1976)--one of the  cases upon which the district court expressly relied--the D.C.  Court of Appeals declared:

47
Apparent authority arises when a principal places an agent "in a position which causes a third person to  reasonably believe the principal had consented to the exercise of authority the agent purports to hold.  This falls short of an overt, affirmative representation by a principal." ... [That is, apparent authority] arises when the principal places the agent in such a position as to mislead third persons into believing that the agent is clothed with authority which in fact he does not possess.

48
Id. at 139-40 (citations omitted);  see also Sigal Constr. Corp., 586 A.2d at 1218-19 (same standard);  Mgmt. P'ship, Inc. v.  Crumlin, 423 A.2d 939, 941 (D.C. 1980) (same standard).  As  the majority observes, this "not[ ] particularly remarkable"  pronouncement reminds us that apparent authority can be  created "from something other than statements of the principal."  Maj. op. at 14.  Citing the Restatement (Third) of the  Law Governing Lawyers--upon which, it surmises, the D.C.  Court of Appeals would rely in deciding a case like this one,  see id. at 10--the majority limits the "something other" to  what it calls "custom and usage."  Id. at 14.  While custom  and usage are undoubtedly factors to consider when determining the existence of apparent authority, see Crumlin, 423 A.2d at 941, the limitation is unwarranted;  Feltman contemplates apparent authority if the principal merely "places an  agent in a position" that reasonably suggests authority. Feltman, 366 A.2d at 139 (emphasis added);  see also Crumlin, 423 A.2d at 941 (for apparent authority to attach, "it is  essential that the principal have put the agent in a position  where the power exercised would normally be within the  reasonable scope of authority").

49
The majority's reluctance to accept Feltman at face value,  Maj. op. at 14, is baffling.  That "the case did not deal with a  settlement agreement," id., does not render it inapplicable  here.  As Goozh v. Capitol Souvenir Co., 462 A.2d 1140 (D.C.  1983), makes clear, in the District of Columbia "settlement  agreements are entitled to enforcement under general principles of contract law."  Id. at 1142 (citation omitted) (emphasis  added).  Indeed, because D.C. "law favors the settlement of  controversies," a "settlement will be enforced as any other  contract."  Id. (citation omitted) (emphasis added).

50
Furthermore, Bronson v. Borst, 404 A.2d 960 (D.C. 1979), a  decision the majority cites, is consistent with Feltman and  Goozh.  Contrary to the majority's suggestion, Maj. op. at 8,  Bronson's declaration that "regardless of the good faith of the  attorney, absent specific authority, an attorney cannot accept  a settlement offer on behalf of a client," Bronson, 404 A.2d at  963, leaves plenty of room for apparent authority.  The  statement in Bronson means nothing more than that a lawyer  cannot end his client's case without either actual or apparent  authority.  As the majority itself explains, the Bronson litigation "was brought by the attorney against the client to  enforce the settlement in order to recover his contingent fee." Maj. op at 8-9.  Because "Bronson, unlike this case, did not  deal with the interests of a third party who entered into the  settlement with the attorney," the court simply had "no  occasion ... to consider whether an opposing party could  enforce a settlement agreement when the other party's attorney possessed only apparent authority."  Id. at 9.  In other  words, Bronson is inapposite.  If governing D.C. precedent  were uncertain, certification and concomitant delay would be  justified.  But because the applicable D.C. case law--i.e.,  Feltman--is clear, I would decide the matter before us  without further delay.

51
Moreover, I believe the local courts follow the Sixth Circuit's view that "when a client hires an attorney and holds  him out as counsel representing him in a matter, the client  clothes the attorney with apparent authority to settle claims  connected with the matter."  Capital Dredge & Dock Corp. v.  City of Detroit, 800 F.2d 525, 530 (6th Cir. 1986) (applying  Michigan law).  As the District demonstrates, see Br. of  Appellee at 18, the facts of Feltman bear out this analysis. In Feltman, the court found that a lawyer had apparent  authority to bind his client to a lease because the lawyer had  drafted the lease and "handled all the negotiations with  regard to its initial execution, its renewal, and its premature  termination."  Feltman, 366 A.2d at 140.  The lessor (i.e., the  principal) argued that he had not made any express representations directly to the lessee (i.e., the third party);  apparent  authority attached nonetheless because the lessor "held out this attorney as the person with whom the lessee should  deal."  Id.  Resisting this conclusion, the majority quotes  from the United States Supreme Court's decision in United  States v. Beebe, 180 U.S. 343, 352 (1901):  "[T]he utter want of  power of an attorney, by virtue of his general retainer only, to  compromise his client's claim, cannot, we think, be successfully disputed."  Maj. op. at 12.  The D.C. court's view, however,  is not inconsistent with the Supreme Court's--that is, both  courts reject the Restatement's proposition that "[t]he manifestation of the principal may be made ... to a third person  ... by continuously employing the agent."  Restatement  (Second) of Agency  8 cmt. b (emphasis added).

52
The majority also expresses concern that, under Feltman,  "an attorney [will] nearly always have apparent authority to  end the case despite the wishes of his client."  Maj. op. at 1213.  But "nearly always" overstates the case;  whether the  client has made clear her lawyer's authority by placing him in  a position of authority--e.g., by sending him to a settlement  conference--is only the first half of the inquiry.  For apparent authority to attach, the client's manifestation must also  "cause[ ] a third person to reasonably believe the principal  ha[s] consented to the exercise of authority the agent purports to hold."  Feltman, 366 A.2d at 139.  In my view, the  D.C. Court of Appeals has wisely declined to adopt a standard  under which a lawyer's representation of his settlement authority is unreliable as a matter of law if the client herself has  made no direct representations to opposing counsel.  Such a  standard, it seems to me, "would require litigants to go  behind counsel to the opposing party in order to verify  authorization for every settlement offer."  Capital Dredge, 800 F.2d at 531.  Indeed, such a standard could render the  settlement process "unworkable."  Id. at 532.

53
Finally, I take issue with the majority's suggestion that the  location of settlement negotiations may not affect the apparent authority analysis under D.C. law.  Maj. op. at 13.  True,  a lawyer has "a duty of truthful representation, not only to  the magistrate in court, but also to the District outside the  courtroom."  Id. (citing D.C. Rules of Prof'l Conduct R.  4.1(a)).  Yet the majority ignores the likelihood that a "solemn statement ... made in open [c]ourt ... as to the terms  of the settlement," Ashley v. Atlas Mfg. Co., 7 F.R.D. 77, 77  (D.D.C. 1946), aff'd, 166 F.2d 209 (D.C. Cir. 1948), may well  make more reasonable a third party's belief that the lawyer  has authority to settle than would an out-of-court statement.

54
For the foregoing reasons, I would hold that the district  court employed the proper apparent authority standard.  See  Makins v. Dist. of Columbia, No. CV-98-2693, mem. op. at 6  (D.D.C. Dec. 11, 2000) (quoting Crumlin, 423 A.2d at 941; Feltman, 366 A.2d at 139).  Moreover, because we look only  for clear error when reviewing the district court's factual  findings, see Foretich v. ABC, 198 F.3d 270, 273 (D.C. Cir.  1999), I would affirm its holding that "[o]n the facts presented  here ... Harrison had apparent authority to settle the case  for $99,000 without job reinstatement."  Makins, mem. op. at  6.  The "facts presented here," as the district court found  them, are as follows:

55
[Harrison] had represented Makins against the District of Columbia since 1996 when he was retained before the adverse action.  He then represented Ms. Makins at the time she filed her EEO complaint.  Finally, he was retained to represent her in the present lawsuit which was filed in 1998....

56
[In the present lawsuit, Harrison] carried out all the duties an attorney ordinarily carries out in terms of filing pleadings, answering motions, appearing at the pretrial after filing a complete pretrial statement, and participating in the [settlement conference] with breaks to place telephone calls to his client....

57
Id. at 6-7.  Also, as the majority recognizes, Makins authorized Harrison "to attend [the] settlement conference before  [the] magistrate judge and to negotiate on her behalf."  Maj.  op. at 15.  In other words, under the D.C. approach, Makins  "placed [Harrison] in a position" that led the District to  believe he had authority to settle her case.

58
For at least two reasons, I am convinced the district court  correctly held that that belief was reasonable.  See Makins,  mem. op. at 6.  First, although the magistrate judge ordered  the "lead attorney(s) for the parties" to appear before him at  the settlement conference, he permitted the parties to absent  themselves so long as they were "available by telephone for  the duration of the settlement conference."*  Maj. op. at 2-3  (quoting Makins v. Dist. of Columbia, No. CV-98-2693, mag.  order at 2 (D.D.C. July 7, 2000)).  By all outward appearances, Makins was available by telephone for the duration of  the conference.  Harrison, in fact, left the conference at least  three times to discuss with Makins by telephone the status of  the proceedings.  See Makins, mem. op. at 2.  The third  time, he returned with telephone in hand to accept the  District's offer with the new condition that Makins's forms be  amended to reflect resignation instead of termination.  See  JA 144-45.  These circumstances, taken together, reasonably  suggested to the District that Makins was actively involved in  the bargaining and specifically told Harrison to settle only if  the District agreed to alter her forms.  Second, although the  majority "see[s] nothing in the record to prove that Harrison  told the magistrate he had authority to settle the case on the  terms ultimately agreed upon," Maj. op. at 13, I do.  Before  adjourning the settlement conference, the magistrate judge  asked the lawyers to confirm that the terms of "the parties'  agreement" were the exchange of $99,000 and the aforementioned amendment of Makins's records for dismissal of the  suit with prejudice.  JA 30 (emphasis added).  Both Harrison  and counsel for the District affirmed that those were, indeed,  the terms.  See id.  Harrison's "solemn" representation in  open court that the parties (including Makins) had that  agreement bolsters the reasonableness of the District's belief  that Harrison had authority to settle on Makins's behalf.  Cf.  Ashley, 7 F.R.D. at 77.

59
I would, therefore, affirm the district court's order enforcing the settlement.

Notes:

*
  The magistrate judge's order permitting availability by telephone follows the district court's rules of alternative dispute resolution:
The Court will require, whenever possible, that representatives of the parties with authority to bind them in settlement discussion be present or available by telephone during settlement negotiations and ADR proceedings.
LcvR, App. A, Part II, Sec. 11C (cited in Br. of Appellee at 24). Although the September 12, 2000 settlement conference was not an  ADR proceeding, the magistrate judge's order supports the District's argument that its belief in Harrison's authority was reasonable because Makins's availability "by telephone rather than in  person was not unusual in any way."  Br. of Appellee at 24.

60