CLARK BARTHOLOMEW; TANYA BARTHOLOMEW; and A.B., a Minor, By His Next Friend CLARK BARTHOLOMEW; Plaintiffs,
BURGER KING CORPORATION; CTI FOODS HOLDING CO., LLC.; UNITED STATES ARMY AND AIR FORCE EXCHANGE SERVI76CES; DOES 1-150, Defendants.
ORDER (1) OVERRULING OBJECTIONS TO MAGISTRATE JUDGE’S OCTOBER 27, 2014 AMENDED FINDINGS AND RECOMMENDATION; AND (2) ADOPTING OCTOBER 27, 2014 AMENDED FINDINGS AND RECOMMENDATION TO GRANT DEFENDANTS’ JOINT MOTION FOR SANCTIONS
J. Michael Seabright United States District Judge
Before the court are Plaintiffs Clark Bartholomew (“Clark”), his wife Tanya Bartholomew (“Tanya”), and their minor son A.B.’s (collectively, “Plaintiffs”) Objections to Findings and Recommendations issued by Magistrate Judge Richard L. Puglisi to grant Defendants’ Joint Motion for Sanctions stemming from Plaintiffs’ failure to comply with court orders requiring in-person attendance at a September 10, 2014 settlement conference. Doc. No. 251. An October 16, 2014 Findings and Recommendation (“F&R”) recommended a compensatory sanction of an award of attorneys’ fees and costs incurred by Defendants Burger King Corporation (“BKC”), CTI Foods Holding Co., Ltd. (“CTI”), and the United States of America and Army and Air Force Exchange Service (“AAFES”) (collectively, “Defendants”). Doc. No. 246, F&R at 8. An October 27, 2014 Amended Findings and Recommendation (“Amended F&R”) incorporated the F&R, and recommended awards of $3, 560.34, $3, 668.00, and $1, 231.76 to BKC, CTI, and AAFES respectively. Doc. No. 250, Amended F&R at 9. (Because the Amended F&R reiterates the conclusions in the F&R, the court construes Plaintiffs’ Objections as directed towards the Amended F&R.)
Plaintiffs argue that the sanctions are punitive and violate the Fifth Amendment to the United States Constitution, contending that (1) Plaintiffs did not disobey the Court’s Orders of July 3 and 15, 2014, (2) Plaintiffs took all reasonable steps to comply with the court’s orders, and (3) Defendants did not sustain actual losses of attorneys’ fees and costs because of Plaintiffs’ absence. Based on the following, the court OVERRULES Plaintiffs’ Objections, ADOPTS the Amended F&R, and GRANTS Defendants’ Joint Motion for Sanctions.
On one level, this proceeding is simple -- the court ordered at least one Plaintiff (as well as each Defendant) to personally appear at the September 10, 2014 settlement conference. No Plaintiff appeared. No prior notice was given to the court or the Defendants. Plaintiffs thus violated a court order, and the court has authority to sanction them.
Although the settlement conference was held, the dynamics of a settlement conference are much different when the parties themselves attend. The case did not settle, and Defendants sought costs or dismissal as a sanction. Magistrate Judge Puglisi examined the circumstances, and recommended an award of fees and costs, but not dismissal. His decision was correct. The court explains these circumstances in more detail below.
A. Factual Background
During a July 3, 2014 status conference, this court directed that “[a] further settlement conference, with at least one person with authority to settle from each party, shall be scheduled by Friday, July 17, 2014.” Doc. No. 231. The case, which was filed in 2011, had reached a critical juncture -- it was nearing trial (then-set for August 19, 2014), see id., and prior settlement conferences had not resolved the case. See, e.g., Doc. No. 223. On July 15, 2014, Magistrate Judge Puglisi issued an Order Setting Settlement Conference (the “July 15 Order”) specifically ordering “all parties and their lead counsel” to appear on September 10, 2014. Doc. No. 233, July 15 Order at 1 (emphasis added). The July 15 Order further directed that “[e]ach party or a designated representative with final settlement authority, other than an attorney of record, must personally attend the settlement conference.” Id. (emphasis added). The July 15 Order noted that:
“Final settlement authority” means that the insurance representatives at the settlement conference must be authorized to explore settlement options fully and to agree at that time to any settlement terms acceptable to the parties. The person should have “unfettered discretion and authority” to change the settlement position of a party. The purpose of requiring a person with unlimited settlement authority to attend the conference contemplates that the person’s view of the case may be altered during the face-to-face conference. A limited or sum certain of authority is not adequate.
Id. at 1 n.1. The July 15 Order reiterated the need for the parties’ attendance explaining that “[t]he order for parties’ personal appearance is intended to increase the efficiency and effectiveness of the settlement conference, by reducing the time for communication of offers and expanding the ability to explore options for settlement.” Id. at 3.
At the September 10, 2014 settlement conference, two counsel of record appeared in person for Plaintiffs, and one representative, along with counsel, for each Defendant. Doc. No. 236. But no Plaintiff appeared in person. Id. Neither Plaintiffs nor their counsel had given any prior notification that they would not appear. Nor had they previously sought permission to appear, or to be available, only by telephone. According to Clark, he was unable to attend in person because he recently obtained employment in Virginia, had not accrued sufficient leave to fly to Hawaii, and needed to be present to answer questions in connection with his employer’s investigation into his background; however, both he and Tanya were available by telephone. Doc. No. 243-1, Bartholomew Decl. ¶¶ 1-3, 5. Despite Plaintiffs’ failure to attend in person, a settlement conference was held, but the case did not settle. Id.
B. Procedural Background
On September 15, 2014, BKC and CTI filed a Joint Motion for Sanctions, to which AAFES joined, Doc. No. 240, for “Clark[’s] failure to attend said settlement conference, in violation of this Court’s orders.” Doc. No. 237, Mot. at 3, 5. Plaintiffs filed their Opposition on September 29, 2014, alleging in part that BKC violated four pretrial orders requiring the parties to exchange written settlement offers. Doc. No. 243, Pls.’ Opp’n at 1-4. Defendants BKC and CTI filed Replies on October 3 and 6, 2014, Doc. Nos. 244, 245, noting that Plaintiffs failed to seek relief from the July 15 Order prior to the settlement ...