Practice Tips For Settlement Conferences Before U.S. Magistrate Judges – Litigation, Mediation & Arbitration

Bizar Male

U.S. Magistrate Judges have been utilized more fre­quently
in recent years for alternative dispute reso­lution in the
federal court system. This article dis­cusses the history of
the referral process, how and why cases are assigned to U.S.
Magistrate Judges in the Houston and Galveston Divisions of the
Southern District of Texas for settlement conferences, and what to
expect if you are ordered to participate in a settlement
conference.

In 1990, prompted by significant delays and costs
as­sociated with civil discovery, Congress enacted the Civil
Justice Reform Act, which makes recommendations to ad­dress
those problems by implementing case management principles and
encouraging early judicial involvement in the discovery
process.1 Among the recommendations was the use of
court referrals of appropriate cases to
media­tion.2 In the years following, federal
judges increasingly imposed mediation deadlines in their scheduling
orders or, if the scheduling orders were silent on alternative
dispute resolution, entertained motions compelling the parties to
mediate. It was only a matter of time before U.S. Magis­trate
Judges were viewed as case management resources, especially in
cases the U.S. District Judge believed should be mediated but where
a party, typically a pro se litigant, could not afford to
hire a mediator. Referrals to magistrate judges have expanded
beyond cases with indigent parties and now encompass the full range
of federal cases. How­ever, limitations apply.

U.S. Magistrate Judges, as case management resources, are not
free mediators for the asking. An attorney cannot simply call a
magistrate judge’s case manager to schedule a settlement
conference because by statute, a U.S. District Judge must refer the
case to the magistrate judge for a set­tlement
conference.3 Magistrate judges in the Houston and
Galveston Divisions are paired with two or three district judges
who delegate matters to the assigned magistrate judge. Each
district judge has his or her own philosophy about the use of the
assigned magistrate judge in the pre­trial management of a
case. Some judges refer entire cases to the magistrate judge for
full pretrial management, in­cluding dispositive motions; other
judges only refer dis­covery matters or individual
motions.4 This difference in philosophies extends
to referrals of cases to magistrate judges for settlement
conferences.

For example, some district judges are reluctant to use court
resources-the magistrate judge’s time-to provide free
mediations to represented parties. Those judges rare­ly, if
ever, refer a case to a magistrate judge for a settle­ment
conference, even if requested by the parties. Other district judges
may use information learned at the Rule 16 pretrial scheduling and
management conference to iden­tify whether the case should be
referred for a settlement conference. In cases involving limited
damage claims, an early settlement conference before a magistrate
judge pro­vides the parties an opportunity to resolve the case
in a cost-efficient manner. The district judge may order that the
parties exchange written discovery but limit the number of
depositions that the parties may take prior to the settle­ment
conference. This strategy is particularly effective in fee-shifting
cases such as employment or consumer cases, where the
attorneys’ fees can quickly outstrip the actual damages and
prevent a settlement at a later date.

Sometimes a case may be referred for a settlement
confer­ence after the close of discovery, either before
dispositive motions have been decided or after. In the former
scenario, the district judge may hope that the case can be resolved
without the necessity of his or her ruling on a complicated or
time-consuming motion for summary judgment that may not fully
dispose of the case. The district judge might refer the case for a
settlement conference after all disposi­tive motions are
resolved if the district judge believes that one or both of the
parties need a reality check on the likeli­hood of a
plaintiff’s success, on a defendant’s avoidance of
liability, or on the amount of damages that may be awarded by the
court or the jury. If a magistrate judge can resolve a case in less
than eight hours, the district judge may con­sider that to be
an efficient use of a judicial officer’s time if the memorandum
opinion on the pending motion was anticipated to take a week or
more to complete or if a trial could be avoided.

Of course, there are only time savings if the case settles.
Because magistrate judges preside over their own consent cases in
addition to handling cases, motions, and disputes referred by the
district judge, they will expect the parties to be respectful of
their time and negotiate quickly. Liti­gants should not expect
a magistrate judge to allocate an entire day to a settlement
conference. A magistrate judge is not likely to be tolerant of a
plaintiff whose opening de­mand is grossly unrealistic or of a
defendant who wants to increase counteroffers by $500 a round. A
private mediator expects to take several hours listening to the
parties in or­der to understand the dispute and to establish
trust that fa­cilitates a negotiated compromise. Importantly,
the private mediator is compensated for this time. A magistrate
judge, on the other hand, due to pressing judicial duties, does not
have the luxury of spending hours establishing trust with the
parties or conducting pre-conference telephone calls to get a feel
for the backstory of the dispute. The bottom line here is that a
settlement conference with a magistrate judge is more like the
afternoon of a typical mediation; everyone needs to get to the
point and do it quickly. If the parties are not making sufficient
progress toward a resolu­tion, the judge will end the
conference.

Another difference between a private mediation and a settlement
conference before a magistrate judge is that settlement conferences
tend to be more evaluative than private mediations. The parties
should be prepared to discuss what evidence and law supports their
respective positions and how damages will be calculated or
defeated. It is im­portant to underline that the magistrate
judge is imparting his or her evaluation of the case and no more.
Despite what some lawyers may believe, U.S. Magistrate Judges do
not discuss with U.S. District Judges the cases referred for
settlement conferences, and a magistrate judge therefore has no
knowledge about how the district judge may rule on any particular
motion. However, magistrate judges can call on their own knowledge
of the case law and jury verdicts to give the parties points to
consider when evaluating their respective positions
vis-à-vis settlement. If a case does not settle, the
magistrate judge communicates only that fact to the district
judge’s case manager. If the case settles, the district
judge’s case manager will be told when the parties will submit
their closing documents or how many days the court should
incorporate into its conditional order of dismissal.

At the settlement conference, the magistrate judge will assist
in obtaining an agreement on material terms but will not draft a
settlement agreement or provide proposed settlement documents to
the parties. Remember, confidentiality applies to all settlement
conferences before a U.S. Magistrate Judge, so the settlement
conference may not be used as a conduit to the district judge
concerning complaints by one party that the other party has been
uncooperative or has otherwise misbehaved in discovery. The
district judge will not be informed of offers and demands made in
the settlement conference or why the case did not settle.

Preparation for a settlement conference should include a
pre-conference discussion with the client about the strengths and
weaknesses of the case. The settlement conference is not a good
time for your client to learn that his or her expectation of a
large damage award is unlikely, that a certain witness’s
testimony was unfavorable, or that you have not designated a
damages expert or taken a key deposition and all deadlines have
expired. You may be asked to explain the factual basis for your
damages calculation. If you are seeking attorney’s fees, be
prepared to produce your billing records. Having to admit at the
conference that you have not kept time records certainly will not
help your bargaining position in obtaining your fees as part of the
settlement.

Parties referred for a settlement conference should remember
that it is a court proceeding. The parties can explain their
respective cases to a judge, which sometimes can serve as a needed
catharsis that helps pave the way for a settlement. However, the
court expects all parties and counsel to conduct themselves
professionally and with courtesy to the opposing party and to the
court. A continued failure to behave appropriately could end the
mediation and impair that attorney’s ability to receive future
referrals for settlement conferences. If a party or an attorney
fails to appear for a scheduled settlement conference, the
magistrate judge may assess costs against the non-appearing party
or counsel.

In sum, a referral to a magistrate judge for a settlement
conference is a valuable court resource not to be taken lightly.
Remember that although a settlement conference before a magistrate
judge offers the same cloak of confi­dentiality as private
mediation, you and your client are appearing before a judicial
officer pursuant to a court order. Be courteous and respectful of
the court’s time. Be pre­pared to discuss the merits of
your case and move quickly in your negotiations. Magistrate judges
have successfully resolved both big and small cases through
settlement conferences, but success depends on the parties’
preparation and willingness to compromise. Make sure both you and
your client are ready to discuss settlement terms and to take
advantage of the evaluative nature of a settlement conference
before a U.S. Magistrate Judge.

The Hon. Nancy K. Johnson (Ret.),
who served as a United States Magistrate Judge in the Southern
District of Texas for 30 years, is presently a full-time mediator
and arbitrator with JAMS in Houston.

This article originally appeared in the Jan./Feb. 2021 edition
of The Houston Lawyer and is reprinted here by permission.

Footnotes

1 Janet Civil Justice Reform Act of 1990, 28 U.S.C.
§§ 471-82.

2  Id. § 473.

3 Federal Magistrates Acts, 28 U.S.C. §
636.

4 If a case has been assigned to a magistrate judge for
full pretrial management, that magistrate judge cannot conduct a
settlement conference or refer the case to another.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

Next Post

Serious cyberattacks in Europe have doubled in the past year

The European Union Agency for Cybersecurity, ENISA, told CNN there were 304 significant, malicious attacks against “critical sectors” in 2020, more than double the 146 recorded the year before. The agency also reported a 47% rise in attacks on hospitals and health care networks in the same period, as the […]