Nick v. Morgan's Foods, Inc.

270 F.3d 590 (8th Cir. 2001)

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Nature of the Case

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Facts

P sued D on June 15, 1998, alleging sexual harassment and retaliation in violation of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000(e) et seq. A pretrial scheduling conference was held on May 20, 1999. The parties consented to ADR with a court-appointed mediator. The district court issued an Order Referring Case to Alternate Dispute Resolution (' Referral Order') mandating that the ADR process be conducted in compliance with the local rules and listing other specific requirements. At least seven days before the first ADR conference, each party shall supply the mediator with a memorandum presenting a summary of the disputed facts and its position on liability and damages; that all parties, counsel, corporate representatives and claims professionals with settlement authority shall attend all mediation conferences and participate in good faith; and that noncompliance with any court deadline could result in the imposition of sanctions against the appropriate party or parties. On D's request, the district court agreed to postpone the first ADR conference until October 18, 1999. D did not file the memorandum that was required to be filed at least seven days before the first ADR conference. D's outside counsel, Seibel; and a corporate representative of D who had no independent knowledge of the facts of the case and had permission to settle only up to $500 attended. Any settlement offers over $500 had to be relayed by telephone to Craig, who chose not to attend the ADR conference on the advice of outside counsel Seibel. P twice made offers of settlement that were rejected without a counteroffer by D. The ADR conference ended shortly thereafter without a settlement having been reached. The mediator informed the district court of D's minimal level of participation, and the district court issued an order directing D to show cause why it should not be sanctioned for its failure to participate in good faith in the court-ordered ADR process. D stated that it decided not to comply with the guidelines because doing otherwise would be a waste of time and money. P moved to sanction D for failing to participate in good faith in the ADR process and requested attorneys' fees and costs arising out of her participation in the mediation. after a hearing, the court sanctioned D $1,390.63 and D's outside counsel $1,390.62. The court also ordered D to pay a $1,500.00 fine to the Clerk of the District Court as a sanction for failing to prepare the required memorandum and for its decision to send a corporate representative with limited authority to settle to the ADR conference. The district court ordered D and D's outside counsel each to pay $30.00 to P for the costs she incurred attending the ADR conference. D filed a Motion for Reconsideration and Vacation of the Court's Order Granting Plaintiff's Motion for Sanctions (motion for reconsideration). It was denied and the court imposed additional sanctions against D and D's counsel in the amount of $1,250.00 each to be paid to the Clerk of the District Court for vexatiously increasing the costs of litigation by filing a frivolous motion. D appealed the sanctions levied against it that are to be paid to the Clerk of the District Court; D does not contest the sanctions levied against it that are to be paid to P and her counsel.