Court Opinion

ID: 7008560
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:58:25.620674+00
Date Added: 2024-06-11T16:10:08.601386
License: Public Domain

KAREN LeCRAFT HENDERSON, Circuit Judge,
dissenting:
“The httle plaintiff or defendant, who was promised a new rocking-horse when Jarn-dyce and Jarndyce should be settled, has grown up, possessed himself of a real horse, and trotted away into the other world.”
—Charles Dickens, Bleak House 52 (Norman Page ed., Penguin Books 1971) (1853)
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.
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, 94 S.Ct. 1011, 1022 n. 15, 39 L.Ed.2d 147 (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.
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 *554voluntary-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.
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 548 (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 547. 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.
The District’s certification statute states that its Court of Appeals
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.
D.C. Code § ll-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 dis-positive question ... and to whether the ‘case is one of extreme public impor-tanee[.]’ ... 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 ar-guendo, 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.
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 549. 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?
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 be*555half 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 549 (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.
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:
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.
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 552. 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 549 — the majority limits the “something other” to what it calls “custom and usage.” Id. at 552. 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”).
The majority’s reluctance to accept Felt-man at face value, Maj. op. at 552, 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).
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 548, 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 *556963, 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 548-49. 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 549. 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., Felt-man — is clear, I would decide the matter before us without farther delay.
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, 21 S.Ct. 371, 374, 45 L.Ed. 563 (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 551. 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).
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 551-52. 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 *557standard could render the settlement process “unworkable.” Id. at 532.
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 552. 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 1 Conduct R. 4.1(a)). Yet the majority ignores the likelihood that a “solemn statement ... made in open [cjourt ... 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.1947), may well make more reasonable a third party’s belief that the lawyer has authority to settle than would an out-of-court statement.
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:
[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....
[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....
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 552. 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.
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 545-46 (quoting Makins v. Dist. of Columbia, No. CV-98-2693, mag. order at 2 *558(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 144r-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 552, 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.
I would, therefore, affirm the district court’s order enforcing the settlement.

 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.