G. Heileman Brewing Co., Inc. v. Joseph Oat Corp.

• Citation: 871 F.2d 648
• Decision Date: 27 March 1989
• Docket Number: No. 86-3118,86-3118
• Parties: , 13 Fed.R.Serv.3d 8 G. HEILEMAN BREWING CO., INC., Plaintiff-Appellee, v. JOSEPH OAT CORPORATION, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 648

871 F.2d 648

57 USLW 2566, 13 Fed.R.Serv.3d 8

G. HEILEMAN BREWING CO., INC., Plaintiff-Appellee, v. JOSEPH OAT CORPORATION, Defendant-Appellant.

No. 86-3118.

United States Court of Appeals,

Seventh Circuit.

Argued May 20, 1987.

Rehearing En Banc Sept. 27, 1988.

Decided March 27, 1989.

Carroll Metzner, Bell, Metzner & Gierhart, S.C., Madison, Wis., for defendant-appellant.

Richard S. Florsheim, Thomas L. Shriner, Jr., Foley & Lardner, Milwaukee, Wis., for plaintiff-appellee.

Before BAUER, Chief Judge, CUMMINGS, WOOD, Jr., CUDAHY, POSNER, COFFEY, FLAUM, EASTERBROOK, RIPPLE, MANION and KANNE, Circuit Judges.

KANNE, Circuit Judge.

May a federal district court order litigants--even those represented by counsel--to appear before it in person at a pretrial conference for the purpose of discussing the posture and settlement of the litigants' case? After reviewing the Federal Rules of Civil Procedure and federal district courts' inherent authority to manage and control the litigation before them, we answer this question in the affirmative and conclude that a district court may sanction a litigant for failing to comply with such an order.

I. BACKGROUND

A federal magistrate ordered Joseph Oat Corporation to send a "corporate representative with authority to settle" to a pretrial conference to discuss disputed factual and legal issues and the possibility of settlement. Although counsel for Oat Corporation appeared, accompanied by another attorney who was authorized to speak on behalf of the principals of the corporation, no principal or corporate representative personally attended the conference. The court determined that the failure of Oat Corporation to send a principal of the corporation to the pretrial conference violated its order. Consequently, the district court imposed a sanction of $5,860.01 upon Oat Corporation pursuant to Federal Rule of Civil Procedure 16(f). This amount represented the costs and attorneys' fees of the opposing parties attending the conference.

II. THE APPEAL

Oat Corporation appeals, claiming that the district court did not have the authority to order litigants represented by counsel to appear at the pretrial settlement conference. Specifically, Oat Corporation contends that, by negative implication, the language of Rule 16(a)(5) prohibits a district court from directing represented litigants to attend pretrial conferences. ¹ That is, because Rule 16 expressly refers to "attorneys for the parties and any unrepresented parties" in introductory paragraph (a), a district court may not go beyond that language to devise procedures which direct the pretrial appearance of parties represented by counsel. Consequently, Oat Corporation concludes that the court lacked the authority to order the pretrial attendance of its corporate representatives and, even if the court possessed such authority, the court abused its discretion to exercise that power in this case. Finally, Oat Corporation argues that the court abused its discretion to enter sanctions.

A. Authority to Order Attendance

First, we must address Oat Corporation's contention that a federal district court lacks the authority to order litigants who are represented by counsel to appear at a pretrial conference. Our analysis requires us to review the Federal Rules of Civil Procedure and district courts' inherent authority to manage the progress of litigation.

Rule 16 addresses the use of pretrial conferences to formulate and narrow issues for trial as well as to discuss means for dispensing with the need for costly and unnecessary litigation. As we stated in Link v. Wabash R.R., 291 F.2d 542, 547 (7th Cir.1961), aff'd, 370 U.S. 626, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962):

Pre-trial procedure has become an integrated part of the judicial process on the trial level. Courts must be free to use it and to control and enforce its operation. Otherwise, the orderly administration of justice will be removed from control of the trial court and placed in the hands of counsel. We do not believe such a course is within the contemplation of the law.

The pretrial settlement of litigation has been advocated and used as a means to alleviate overcrowded dockets, and courts have practiced numerous and varied types of pretrial settlement techniques for many years. See, e.g., Manual for Complex Litigation 2d, Secs. 21.1-21.4 (1985); Federal Judicial Center, Settlement Strategies for Federal District Judges (1988); Federal Judicial Center, The Judge's Role in the Settlement of Civil Suits (1977) (presented at a seminar for newly-appointed judges); Federal Judicial Center, The Role of the Judge in the Settlement Process (1977). Since 1983, Rule 16 has expressly provided that settlement of a case is one of several subjects which should be pursued and discussed vigorously during pretrial conferences. ²

The language of Rule 16 does not give any direction to the district court upon the issue of a court's authority to order litigants who are represented by counsel to appear for pretrial proceedings. Instead, Rule 16 merely refers to the participation of trial advocates--attorneys of record and pro se litigants. However, the Federal Rules of Civil Procedure do not completely describe and limit the power of the federal courts. HMG Property Investors, Inc. v. Parque Indus. Rio Canas, Inc., 847 F.2d 908, 915 (1st Cir.1988) (citations omitted).

The concept that district courts exercise procedural authority outside the explicit language of the rules of civil procedure is not frequently documented, but valid nevertheless. Brockton Sav. Bank v. Pete, Marwick, Mitchell & Co., 771 F.2d 5, 11 (1st Cir.1985), cert. denied, 475 U.S. 1018, 106 S.Ct. 1204, 89 L.Ed.2d 317 (1986). The Supreme Court has acknowledged that the provisions of the Federal Rules of Civil Procedure are not intended to be the exclusive authority for actions to be taken by district courts. Link v. Wabash R.R., 370 U.S. 626, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962).

In Link, the Supreme Court noted that a district court's ability to take action in a procedural context may be grounded in " 'inherent power,' governed not by rule or statute but by the control necessarily vested in courts to manage their own affairs so as to achieve the orderly and expeditious disposition of cases." 370 U.S. at 630-31, 82 S.Ct. at 1389 (footnotes omitted). ³ This authority likewise forms the basis for continued development of procedural techniques designed to make the operation of the court more efficient, to preserve the integrity of the judicial process, and to control courts' dockets. ⁴ Because the rules form and shape certain aspects of a court's inherent powers, yet allow the continued exercise of that power where discretion should be available, the mere absence of language in the federal rules specifically authorizing or describing a particular judicial procedure should not, and does not, give rise to a negative implication of prohibition. See Link, 370 U.S. at 629-30, 82 S.Ct. at 1388; ⁵ see also Fed.R.Civ.P. 83 ("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.").

Obviously, the district court, in devising means to control cases before it, may not exercise its inherent authority in a manner inconsistent with rule or statute. As we stated in Strandell v. Jackson County, 838 F.2d 884, 886 (7th Cir.1988), such power should "be exercised in a manner that is in harmony with the Federal Rules of Civil Procedure." This means that "where the rules directly mandate a specific procedure to the exclusion of others, inherent authority is proscribed." Landau & Cleary, Ltd. v. Hribar Trucking, Inc., 867 F.2d 996, 1002 (7th Cir.1989) (emphasis added).

In this case, we are required to determine whether a court's power to order the pretrial appearance of litigants who are represented by counsel is inconsistent with, or in derogation of, Rule 16. We must remember that Rule 1 states, with unmistakable clarity, that the Federal Rules of Civil Procedure "shall be construed to secure the just, speedy, and inexpensive determination of every action." This language explicitly indicates that the federal rules are to be liberally construed. Cf. Hickman v. Taylor, 329 U.S. 495, 507, 67 S.Ct. 385, 392, 91 L.Ed. 451 (1947). There is no place in the federal civil procedural system for the proposition that rules having the force of statute, though in derogation of the common law, are to be strictly construed. C. Wright & A. Miller, Federal Practice and Procedure: Civil 2d Sec. 1029 (1987).

"[The] spirit, intent, and purpose [of Rule 16] is ... broadly remedial, allowing courts to actively manage the preparation of cases for trial." In re Baker, 744 F.2d 1438, 1440 (10th Cir.1984) (en banc), cert. denied, 471 U.S. 1014, 105 S.Ct. 2016, 85 L.Ed.2d 299 (1985). Rule 16 is not designed as a device to restrict or limit the authority of the district judge in the conduct of pretrial conferences. As the Tenth Circuit Court of Appeals sitting en banc stated in Baker, "the spirit and purpose of the amendments to Rule 16 always have been within the inherent power of the courts to manage their affairs as an independent constitutional branch of government." Id. at 1441 (citations omitted).

We agree with this interpretation of Rule 16. The wording of the rule and the accompanying commentary make plain that the entire thrust of the amendment to Rule 16 was to urge judges to make wider use of their powers and to manage actively their dockets from an early stage. We therefore conclude that our interpretation of Rule 16 to allow district courts to order represented parties to appear at pretrial settlement conferences merely represents another application of a district judge's inherent authority to preserve the efficiency, and more importantly the integrity, of the judicial process.

To summarize, we simply hold...