As the week and month roll to a close, we have the D.C. Circuit zapping a Rule 11 sanction entered sua sponte against a plaintiff’s employment lawyer, holding that the district court itself misapprehended the law. The Sixth Circuit, in a tidy unpublished opinion, reverses a district court’s decision enforcing a settlement, finding that the employee timely and validly revoked it.
Lucas v. Duncan, No. 07-5264 (D.C. Cir. July 31, 2009): The district court denies summary judgment in the underlying ADEA case and the case goes to trial. The defendant, the Department of Education, comes out on top; no appeal is taken from the merits. But during the litigation of the case, the district court sua sponte hits the plaintiff’s lawyer with $3000 in attorney fees (and a referral of the lawyer to the District of D.C.’s Committee of Grievances, for supposedly misrepresenting eleven facts in his responsive factual statement on the summary judgment motion.
On appeal, with an assist by the National Employment Lawyers Association as amicus, the panel tosses the sanctions. The Department, though it did not ask for sanctions, defends the result as not being an abuse of discretion; the parties engage in extended briefing on the appropriate standard of review. Yet the panel holds that because the order was premised on two legal errors, the standard of review issue did not matter.
First, the panel holds that the district court erred in holding that the lawyer was obliged to clearly label each item in his statement of facts as either a “fact” or an “inference,” and that numerous of his enumerated “facts” were really just “inferences” from facts. The panel holds:
“There is no basis in the text of Rule 11(b)(3) for the legal proposition that an attorney must separately identify ‘fact’ and ‘inference.’ The Rule merely requires an attorney to certify that the factual contentions in a paper he presents to the court ‘have evidentiary support.’ FED. R. CIV. P. 11(b)(3). ‘Inferences’ — which are commonly described as ‘circumstantial evidence’ — are as capable of providing evidentiary support as ‘facts’ — which are commonly described as ‘direct evidence.'”
Second, the district court erroneously held that a party responding to a summary judgment — the non-movant — must disclose all facts relevant to case, including those prejudicial to the party’s claim. The panel disagrees:
“The pleading at issue here was an opposition to the defendant’s motion for summary judgment. The defendant’s motion asserted that ‘there is no genuine issue of material fact precluding the entry of judgment for defendant as a matter of law.’ Def.’s Mem. in Supp. of Its Mot. for Summ. J. at 1. Under Local Rules 7(h) and 56.1, Karl’s obligation in opposing the defendant’s motion was to file a separate statement ‘setting forth all material facts as to which it is contended there exists a genuine issue necessary to be litigated.’ To do that, Karl was obliged to do no more than set forth facts in contravention of the defendant’s claims. The rules do not require him to rehearse the government’s evidence, and nothing in Rule 11 imposes that added burden. Nor could the omission of that evidence have been misleading to the reader. Many of the facts that the magistrate judge criticized Karl for failing to disclose in his opposition were contained in the government motion to which he was responding.”
Oh, and as for the complaint to the Committee of Grievances, the Committee dismissed that long before this appeal, finding that the summary judgment paper was “appropriate.” Hurray for justice and common sense!
Neely v. Good Samartian Hospital, No. 07-4281 (6th Cir. Jul. 31, 2009): In 2005, employee and employer mediate to conclusion her Title VII case, reaching an oral agreement. The employer submits for approval to the employee a written settlement agreement which includes (1) a general release, including the ADEA; (2) a seven-day cooling-off period for the employee to revoke (borrowed from the ADEA Older Workers Benefit Protection Act); and (3) a merger clause rendering the written agreement “the entire understanding and agreement between the parties.” Employee signs, then five days later she revokes. Two years later (!), the employer moves in the district court to enforce the original settlement. The district court grants the relief after a testimonial hearing (!!), finding that the revocation clause was invalid because it was not part of the original oral agreement; it severs the revocation clause and enforces the rest.
The Sixth Circuit reverses, finding that the revocation clause was validly part of the contract. The panel holds that because the parties bargained for a general release, the revocation clause was required to be effective against an age discrimination claim: “The plain language of paragraph 2, which Good Samaritan drafted, unmistakably conveys that the parties agreed to generally release any and all manner of action or actions, whether known or unknown to Neely, including, inter alia, ‘the Age Discrimination in Employment Act’ and ‘the Older Workers Benefits Protections Act.’ The only way for Good Samaritan’s written release to be effective as a general release was if Good Samaritan included the ADEA’s revocation language. See 29 U.S.C. § 626(f). Contrary to Good Samaritan’s argument (Good Sam. Br. 7), the right to revoke need not be bargained for. Indeed, it is required by law. See § 626(f)(2)(a). Because Neely must be given the statutory right to revoke, Neely must also be given the opportunity to exercise that right. The record demonstrates that she has properly exercised that right.”
The panel also notes, owing to the way that the contract was written (by the employer’s lawyers), that the right to revoke applied not just to any ADEA claim, but all claims. “To be sure, under the ADEA, Neely may not waive an age claim in a written agreement without a revocation clause as part of the terms. 29 U.S.C. § 626(f). Perhaps a better solution would have been for the district court to have ordered the enforcement of the settlement agreement with the revocation clause operable as to only age claims. However, that avenue is also blocked by Good Samaritan’s decision to include the merger clause in the written agreement.”