Court Opinion

ID: 9477774
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:30:44.498175+00
Date Added: 2024-06-11T17:46:02.252971
License: Public Domain

*1423FLAUM, Circuit Judge,
dissenting.
I disagree with the majority’s conclusion that the Federal Rules of Civil Procedure do not authorize district courts in appropriate circumstances to require parties to send a representative, in addition to counsel, to attend pretrial settlement conferences.1 “The authority to convene a settlement conference under Rule 16 is a hollow authority indeed if the power is lacking to require the presence at the conference of the parties themselves.” G. Heileman Brewing Co., Inc. v. Joseph Oat Corp., 107 F.R.D. 275, 281 (W.D.Wis.1985). I therefore respectfully dissent.
I.
When a party files a lawsuit in federal court he or she invokes the use of a public resource at great expense to the litigants and the public. A party who refuses to meet personally with the opposing side to discuss the possibility of settlement misuses this expensive resource. Once a lawsuit is filed “it is the public’s business, and it is the duty of all to see to it that it is moved along to final disposition.” Fox, Settlement: Helping the Lawyers to Fulfill Their Responsibility, 53 F.R.D. 129, 132 (1971) (quoting Kaufman, Citation of Discovery Motions and Pretrial Conferences (1962)). Federal Rule of Civil Procedure 1 specifically recognizes this fact and therefore provides that all of the Rules “shall be construed to secure the just, speedy, and inexpensive determination of every action.”
One of the most effective means of ensuring the just and efficient resolution of disputes is by encouraging the settlement of cases prior to trial. Independent of what occurs in court, “we need careful study to make sure that every case which reaches the courtroom stage is there only after possibility of settlement has been exhausted.” Fox, 53 F.R.D. at 130 (quoting Chief Justice Burger, Remarks Delivered at the National Judiciary Conference, March 11, 1971). Settlement conferences, however, are often unproductive unless all of the necessary parties are present and have full authority to settle the case. Thus, to allow district courts to effectively utilize one of the most valuable tools they possess to manage their dockets — the ability to conduct productive settlement conferences — they must have the authority to require the presence of all necessary parties at these conferences.
Oat argues that it would have been a waste of its resources to send a representative to the settlement conference because it had no intention of settling the case. However, as the district court aptly noted:
It is always possible that exposure of the decisionmakers to the realities of a case will bring about a re-evaluation of settlement posture on the part of those persons. Thus it is appropriate for a judicial *1424officer to require that, particularly in complex and protracted litigation, the de-cisionmakers be made aware of all aspects of the case and the anticipated costs of its prosecution and defense by being personally present before the court.
Heileman, 107 F.R.D. at 277. It is for this very reason that district courts must be able to order the parties themselves to attend settlement conferences.
A.
In 1983, the Federal Rules of Civil Procedure were substantially amended. The clear import of the amendments to Rule 16 was to provide federal courts with the means to effectively manage their ever burgeoning caseloads. See Fed.R.Civ.P. 16 (advisory committee notes to the 1983 amendments). One of the most effective tools a district court has to control its docket is the ability to conduct productive settlement conferences. To this end, the pretrial procedures of Rule 16 were amended to further the goal of effective scheduling and case management. See id. The rule explicitly provides that district courts can schedule conferences to facilitate settlement, Fed.R.Civ.P. 16(a)(5), and that “the possibility of settlement or the use of extrajudicial procedures to resolve the dispute” is one of the subjects to be addressed at the pretrial conference. Fed.R.Civ.P. 16(c)(7).
The drafters of the 1983 amendments to Rule 16 recognized that for settlement to be an effective means of resolving disputes in an efficient manner, forceful judicial management and open-minded participation by the litigants is required. Fed.R.Civ.P. 16 (advisory committee notes to the 1983 amendments). Thus, Rule 16 provides for sanctions if a party is unprepared to participate in a conference or fails to participate in good faith. Fed.R.Civ.P. 16(f). Of course, district courts may not coerce parties into settling a case against their will. See, e.g., Kothe v. Smith, 771 F.2d 667, 669 (2d Cir.1985) (Rule 16 “was not designed as a means for clubbing the parties — or one of them—into an involuntary compromise.”). There is, however, “a significant distinction between being required to agree to a settlement or stipulation and merely being required to attend and confer.” Heileman, 107 F.R.D. at 276. Courts have the authority to require parties to attend a settlement conference and participate in good faith; they do not have the power to force the parties to settle their dispute.
In the present case, the magistrate merely ordered the parties to be present at the settlement conference, he did not try to force the parties to settle their dispute. The magistrate’s actions were substantially different from the actions of the courts in the cases on which the majority relies. In each of those cases the court improperly tried to force a party to do much more than simply appear and confer; the court actually tried to compel a party to take a specific action with which the party disagreed. These cases are therefore inapposite. See Strandell v. Jackson County, 838 F.2d 884 (7th Cir.1988) (addressing the narrow question of “the legality of compelled participation in a summary jury trial” and concluding that a court can require litigants to consider the possibility of using a summary jury trial, but cannot force them to do so); Identiseal Corp. of Wisconsin v. Positive Identification Sys., Inc., 560 F.2d 298 (7th Cir.1977) (courts can order litigants to appear and consider the possibility of admissions, but cannot coerce a litigant to engage in discovery to facilitate acceptable admissions); and J.F. Edward Constr. Co. v. Anderson Safeway, 542 F.2d 1318 (7th Cir.1976) (courts can order litigants to try to stipulate all possible facts, but Rule 16 does not authorize courts to force litigants to stipulate to any specific fact). None of these cases supports the position that a court does not have the authority to require mere attendance at a settlement conference.
B.
The majority argues that the language of Rule 16 deprived the magistrate of the power to require Oat to send a representative other than counsel to the settlement conferences. Rule 16 provides:
*1425(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.
Although this rule does not specifically provide for the presence of represented parties themselves, neither does it prohibit the district court from requiring their presence. Federal Rule of Civil Procedure 83 provides in relevant part that:
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.
Finally, as noted above, Federal Rule of Civil Procedure 1 provides that all of the Rules of Civil Procedure “shall be construed to secure the just, speedy, and inexpensive determination of every action.”
Requiring a party to send a representative other than counsel is not inconsistent with the language of Rule 16 which is specifically designed to provide district courts with the necessary tools to manage their dockets. It cannot be inconsistent with Rule 16 to allow district courts, pursuant to Rules 1 and 83, to require the very parties who invoke the court’s jurisdiction to simply attend settlement conferences. When Rules 1, 16, and 83 are considered in conjunction with the express purpose of Rule 16, they provide courts with the authority in appropriate cases to order parties to simply send a representative, in addition to counsel, to attend a settlement conference.2
The majority asserts that “where the federal rules specifically address an area, it is inappropriate to rely on inherent power to go beyond the bounds the rules set.” Supra at 1419. The cáses on which the majority relies in support of this proposition, however, do not stand for such an expansive prohibition on a court’s authority. In Strandell, we noted that “a district court no doubt has substantial inherent power to control and manage its docket.” 838 F.2d at 886 (citations omitted). We also recognized that this power “must, of course, be exercised in a manner that is in harmony with the Federal Rules of Civil Procedure.” Id. We did not conclude in Strandell that whenever a rule specifically addresses an area, courts can never rely on their inherent powers to effectuate the purpose of the rule. Our holding was limited to the conclusion that courts simply cannot exercise this authority in a manner that would upset the balance between the litigants’ rights and the need for judicial efficiency. Id. at 886-87. Similarly, the Supreme Court’s holding in Societe Internationale v. Rogers, 357 U.S. 197, 78 S.Ct. 1087, 2 L.Ed.2d 1255 (1958) does not support the majority’s proposition. The So-ciete Court simply held that where a more specific rule “allows a court all the flexibility in framing an order appropriate to a particular situation,” 357 U.S. at 208, 78 S.Ct. at 1094, reliance on a more general rule is unnecessary.
In the present case, the more specific Rule 16 does not provide the district courts with the flexibility they need to further the purposes of that rule. The reliance on Rules 1 and 83 in addition to Rule 16 neither causes a conflict between the rules nor upsets the balance between the litigants’ rights and the needs of judicial efficiency. In fact, allowing district courts to require parties to attend settlement discussions furthers the goals of Rule 16 and expressly fulfills the purpose of Rules 1 and 83 by helping to ensure that all litigants will re*1426ceive a fair and efficient resolution of their disputes. Thus, neither Strandell nor So-ciete prohibits a court from ordering the parties themselves to simply attend a pretrial conference.
C.
Two other courts have recognized that courts can require parties to attend settlement conferences. The Sixth Circuit in In re LaMarre, 494 F.2d 753, 756 (6th Cir. 1974), stated that “[w]e perceive no grounds for denying the trial judge the power to require attendance of any party to the case at any session of the court where the judge deems his [or her] presence to be necessary.” The LaMarre court acknowledged that a district court cannot compel settlement, but neither can a party “refuse a lawful order to attend such a conference to discuss the matter.” Id. The majority attempts to distinguish this case by arguing that it involved “an extraordinary situation.” See supra at 1422. The situation in LaMarre—a settlement was reached by counsel but rejected by the party on the morning of trial — is no more extraordinary than the present case. Here all of the parties in a complex action were on the verge of settlement, with the exception of one party who refused to participate in any manner in any settlement effort. In any event, the court in LaMarre did not justify the district court’s order on the basis of the supposed extraordinary nature of the case. Rather, the court concluded that the district court’s order—which required the presence of a representative of a party’s insurance carrier at a settlement conference — was expressly authorized by the Federal Rules of Civil Procedure.
The majority also argues that LaMarre is unpersuasive because it was decided before the 1983 amendments to the Federal Rules of Civil Procedure.3 If anything, the 1983 amendments support the position taken by the Sixth Circuit in LaMarre. The obvious goal of the amendments is the promotion of caseload management, of which settlement is one valuable tool. It is difficult to reconcile the argument that Rule 16 does not permit courts to order the parties themselves to attend settlement conferences with the goals of that rule. It is the parties who invoke the use of this expensive public resource; and it is recognized that settlement negotiations are often futile unless the parties themselves are present. It is hard to imagine that the drafters of the 1983 amendments actually intended to strengthen courts’ ability to manage their caseloads but at the same time intentionally rendered ineffective one of the most valuable tools the amendments provide to accomplish that goal.
Similarly, in Lockhart v. Patel, 115 F.R. D. 44, 46 (E.D.Ky.1987), the court noted that a federal court’s authority to require parties, attorneys, and insurers to attend settlement conferences and to impose sanctions if they violate such an order is “so well established as to be beyond doubt.” The Lockhart court therefore recognized that a “court cannot require any party to settle a case, whether the court thinks that party’s position is reasonable or not, but it can require it to make reasonable efforts, including attending a settlement conference with an open mind.” Id. at 47. See also Manual for Complex Litigation 2d, § 21.23 (“Conferences with the judge are customarily attended by at least one attorney for each party. In some complex litigation, however, the court may decide to depart from this model and ... call for attendance of the parties themselves.”) (footnote omitted). District courts will be surprised indeed to discover that they do not have the authority to require the very parties who invoke the courts’ jurisdiction to merely attend the pretrial conferences.
II.
Even accepting arguendo the majority’s position that the magistrate could not have ordered Oat to send a representative in addition to counsel, the magistrate clearly had the judicial mandate to require Oat’s counsel to participate in the settlement conference in good faith. At the conference Oat’s counsel indicated that his “authority” was limited to the power to accept a settlement if, but only if, the terms of the settlement provided that all of the other parties’ *1427claims were dismissed with prejudice and the settlement did not require anything of Oat; in effect a demand that the other parties drop all of their claims against Oat. Such a representation suggests a summary and unilateral refusal to elaborate on its position. Although it certainly would be appropriate for Oat to take the posture that it has no liability, it must do so in a fashion that complies with the good faith participation requirement of Rule 16(f). Fed.R.Civ.P. 16 (advisory committee notes to the 1988 amendments).
A magistrate cannot force litigants to settle their dispute, but he or she can require the parties to participate in a settlement conference in good faith. Thus, Oat cannot be sanctioned for refusing to pay money damages to settle this lawsuit; its conduct is sanctionable, however, because ■ its attorney took a stance at the settlement conference that was in derogation of the good faith participation requirement of Federal Rule of Civil Procedure 16(f).
III.
The district courts are overwhelmed by ever growing caseloads. Docket management, today more than ever, requires new and innovative approaches. Simply requiring parties, as well as attorneys, to attend settlement conferences is an easy and effective means of assisting district courts in their efforts to ensure that efficient justice is available to all litigants.
I would affirm the sanctions against Oat both for its failure to send a representative to the settlement conference in violation of the magistrate’s order and its counsel’s refusal to participate in the conference in good faith.
ORDER
A majority of judges in active service have voted to rehear this case en banc. Accordingly,
IT IS ORDERED that rehearing en banc be, and the same is hereby, GRANTED.
IT IS FURTHER ORDERED that the judgment and opinion entered in this case on June 13, 1988 be, and are hereby, VACATED. This case will be reheard en banc at the convenience of the court.

. I agree with the majority that National Union is not a party to this appeal because the notice of appeal named only Oat as the appealing party. See supra note 1. I therefore do not address the district court’s authority to sanction National Union for failing to comply with the magistrate’s order. For a discussion of the authority of a court to require the attendance of a representative of a party's insurance carrier at settlement conferences, see Lockhart v. Patel, 115 F.R.D. 44 (E.D.Ky.1987).

. In some situations a court’s order requiring the attendance of the parties might be "so onerous, so clearly unproductive, or so expensive in relation to the size, value, and complexity of the case” that it would be an abuse of discretion to order the parties themselves to attend a settlement conference. Heileman, 107 F.R.D. at 277. The magistrate recognized these necessary limitations and therefore did not require the presence of a representative of Céntrale, a Netherlands corporation. Rather, the magistrate ordered Céntrale to ensure that an authorized representative in the Netherlands would be available by telephone. The burden on Oat in relation to the complexity of this case, however, was not nearly sufficient to justify its refusal to send a representative to the conference.

. The majority fails to acknowledge, however, that ldentiseal and J.F. Edwards, both of which the majority relies on, were also decided prior to the passage of the 1983 amendments.