In re Stone ( 1993 )


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  • 1    IN THE UNITED STATES COURT OF APPEALS
    
    2               FOR THE FIFTH CIRCUIT
    
    
    3                  _______________
    
    4                    No. 92-1406
    5                  _______________
    
    
    6               IN RE:   M.P.W. STONE,
    
    7                                        Petitioner.
    
    
    8                  _______________
    
     9                   No. 92-1462
    10                 _______________
    
    
    11     IN RE:     INTERNAL REVENUE SERVICE
    12                       and
    13                SONJA ROUNDTREE,
    
    14                                       Petitioners.
    
    
    15                 _______________
    
    16                   No. 92-1573
    17                 _______________
    
    
    18     IN RE:    UNITED STATES OF AMERICA,
    
    19                                       Petitioner.
    
    
    20                 _______________
    
    21                   No. 92-1592
    22                 _______________
    
    
    23     IN RE:    UNITED STATES OF AMERICA,
    
    24                                       Petitioner.
    25                      _______________
    
    26                        No. 92-1625
    27                      _______________
    
    
    28   IN RE:   GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
    29                            and
    30                UNITED STATES OF AMERICA,
    
    31                                          Petitioners.
    
    
    
    
    32                      _______________
    
    33                        No. 92-1909
    34                      _______________
    
    
    35            IN RE:   UNITED STATES OF AMERICA,
    
    36                                          Petitioner.
    
    
    37                      _______________
    
    38                        No. 92-1977
    39                      _______________
    
    
    40            IN RE:   UNITED STATES OF AMERICA,
    
    41                                          Petitioner.
    
    
    
    42                      _______________
    
    43                        No. 92-9004
    44                      _______________
    
    
    45            IN RE:   UNITED STATES OF AMERICA,
    
    46                                          Petitioner.
    
    
    
    
                                   2
    47              _______________
    
    48                No. 92-9065
    49              _______________
    
    
    50    IN RE:   UNITED STATES OF AMERICA,
    
    51                                    Petitioner.
    
    
    52              _______________
    
    53                No. 93-1032
    54              _______________
    
    
    55    IN RE:   UNITED STATES OF AMERICA,
    
    56                                    Petitioner.
    
    57
    58              _______________
    59
    60                No. 93-1094
    61              _______________
    62
    
    63    IN RE:   UNITED STATES OF AMERICA,
    
    64                                    Petitioner.
    65
    
    66              _______________
    67
    68                No. 93-1192
    69              _______________
    70
    
    71    IN RE:   UNITED STATES OF AMERICA,
    
    72                                    Petitioner.
    
    
    73        _________________________
    
    74   Petitions for Writs of Mandamus to
    75     the United States District Court
    76    for the Northern District of Texas
    77         _________________________
    78              (March 12, 1993)
    
    
                           3
    79    Before JOLLY, DAVIS, and SMITH, Circuit Judges.
    
    80    PER CURIAM:
    
    81           In these petitions seeking writs of mandamus, we decide
    
    82    whether a federal district judge has the power, by a standing
    
    83    order, to direct the federal government to send a representative
    
    84    with full settlement authority to settlement conferences and, if
    
    85    so, whether he abused his discretion by so doing in these routine
    
    86    civil lawsuits        involving    the     United    States.      In   addition   to
    
    87    requiring counsel to attend these conferences, the court also
    
    88    requires the attendance of a designated representative of each
    
    89    party with full authority to settle the case; that representative
    
    90    must appear in person )) availability by telephone is not suffi-
    
    91    cient.      We conclude that although the district judge possesses the
    
    92    ultimate power to require the attendance at issue, it is a power to
    
    93    be very sparingly used, and here the district judge, albeit with
    
    94    the best of intentions, has abused his discretion.
    
    
    
    95                                               I.
    
    96           In each of the petitions before us, the federal government
    
    97    objects to this order as applied to it.                  By statute, the Attorney
    
    98    General of the United States has the power to conduct all litiga-
    
    99    tion   on    behalf   of   the    United       States,   its   agencies,   and    its
    
    100   officers, unless otherwise provided by law.                     28 U.S.C. § 519
    
    101   (1988). Pursuant to authority given by 28 U.S.C. § 510 (1988), the
    
    102   Attorney General has developed a set of regulations delegating
    
    103   settlement authority to various officials. See 28 C.F.R. §§ 0.160-
    
    
                                                     4
    104   0.172 (1991); see also directives reprinted at 28 C.F.R. pt. 0,
    
    105   subpt. Y app. (1991).
    
    106        As we read these regulations, United States Attorneys often
    
    107   will be able to settle a case without approval from a higher
    
    108   authority, as the regulations provide that each local United States
    
    109   Attorney has settlement authority up to $500,000.             If the client
    
    110   agency disagrees with the United States Attorney over the terms of
    
    111   the settlement, however, an Assistant Attorney General must approve
    
    112   the settlement. 28 C.F.R. § 0.168(a). In addition, settlements in
    
    113   various classes of important cases always must be approved by the
    
    114   Deputy Attorney General or one of the Assistant Attorneys General.
    
    115   See 28 C.F.R. §§ 0.160, 0.161.1
    
    
    
    116                                        II.
    
    117        Although    it   is   historically     reserved   for   "extraordinary"
    
    118   cases, we have used the writ of mandamus as a "one-time-only device
    
    119   to `settle new and important problems' that might have otherwise
    
    120   evaded expeditious review."         In re Equal Employment Opportunity
    
    121   Comm'n, 
    709 F.2d 392
    , 394 (5th Cir. 1983) (quoting Schlagenhauf v.
    
    122   Holder, 
    379 U.S. 104
     (1964)).             As district courts continue to
    
    123   become more heavily involved in the pretrial process, appellate
    
    124   courts may be asked more often to issue writs of mandamus to
    
    125   protect the asserted rights of litigants.         Pretrial orders such as
    
    
    
               1
                  Even if a case is to be settled for not more than $500,000, so that a
          United States Attorney could settle it under the regulations, his settlement
          authority disappears upon disagreement over the terms of the settlement by the
          client agency.
    
                                                5
    126   the ones before us raise important issues but are ill-suited for
    
    127   review after final judgment.
    
    128         Because these cases present an important, undecided issue
    
    129   involving the efficient administration of justice, we may appropri-
    
    130   ately invoke mandamus review.       See id.   In fact, the district judge
    
    131   who   issued   the   instant    directives    has   acknowledged,   in   his
    
    132   responses to the petitions, that the issue is appropriate for
    
    133   review on petitions for writs of mandamus.          We will grant the writ
    
    134   only "when there is `usurpation of judicial power' or a clear abuse
    
    135   of discretion."      Id. at 395 (quoting Schlagenhauf, 379 U.S. at
    
    136   110).   The government has the burden of establishing its right to
    
    137   issuance of the writ.     Id.
    
    
    
    138                                       III.
    
    
    139 A. 140
             The district court claims inherent power to issue the order.
    
    141   As explained helpfully in Eash v. Riggins Trucking, 
    757 F.2d 557
    ,
    
    142   562-64 (3d Cir. 1985) (en banc), there are three general categories
    
    143   of inherent powers.
    
    144         The first category delineates powers that are "so fundamental
    
    145   to the essence of a court as a constitutional tribunal that to
    
    146   divest the court of absolute command within this sphere is really
    
    147   to render practically meaningless the terms `court' and `judicial
    
    148   power.'"   Id. at 562.    In other words, once Congress has created
    
    149   the court, article III of the Constitution vests the courts with
    
    150   certain implied powers.        See Anderson v. Dunn, 19 U.S. (6 Wheat.)
    
    
                                               6
    151   204, 227 (1821).       Within the scope of these powers, the other
    
    152   branches of government may not interfere; any legislation purport-
    
    153   ing to regulate these inherent powers would be invalid as an
    
    154   unconstitutional     violation    of   the   doctrine   of   separation    of
    
    155   powers.2
    
    156        Fortunately, history provides few examples of legislative
    
    157   attempts to interfere with the core inherent powers of the judicial
    
    158   branch.    But as a result, prior jurisprudence has not identified
    
    159   exactly which inherent powers fall into this category, and we will
    
    160   not attempt to do so here.        At least one decision of the Supreme
    
    161   Court appears to have identified one such power. See United States
    
    162   v. Klein, 80 U.S. (13 Wall.) 128, 146-47 (1872).               Although the
    
    163   meaning of the opinion has been subject to some debate, Klein seems
    
    164   to hold that Congress may not interfere with a court's inherent
    
    165   power to decide cases by dictating the result in a particular case.
    
    166   80 U.S. at 146-47.
    
    167        The second category of inherent powers encompasses those
    
    168   "necessary to the exercise of all others."              Roadway Express v.
    
    169   Piper, 
    447 U.S. 752
    , 764 (1980) (quoting United States v. Hudson,
    
    170   11 U.S. (7 Cranch) 32, 34 (1812)).         For the most part, these powers
    
    171   are those deemed necessary to protect the efficient and orderly
    
    172   administration of justice and those necessary to command respect
    
    173   for the court's orders, judgments, procedures, and authority.             Id.
    
    
    
               2
                  See Michaelson v. United States, 
    266 U.S. 42
    , 64 (1924) (recognizing
          that the Constitution vests courts with some powers unalterable by legisla-
          tion); Eash, 757 F.2d at 562 (noting that courts may exercise this category of
          powers despite legislation to the contrary).
    
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    174   Like the first category of inherent powers, this category also
    
    175   stems   from    article    III,    once     Congress    creates    the   court.
    
    176   Michaelson, 266 U.S. at 65-66.            Congress may interfere with this
    
    177   category of inherent power within "limits not precisely defined,"
    
    178   so long as it does not abrogate or render the specific power
    
    179   inoperative.    Id.
    
    180        Courts have recognized several examples of this type of
    
    181   inherent power.      The contempt sanction long has been recognized as
    
    182   among the most important of these powers.              Id. at 65; Hudson, 11
    
    183   U.S. at 34.     In addition, the Supreme Court has recognized the
    
    184   power   to   levy     sanctions    in   response   to    abusive    litigation
    
    185   practices.     Roadway Express, 447 U.S. at 766 (court may assess
    
    186   attorneys' fees against counsel who abuses judicial processes);
    
    187   Link v. Wabash R.R., 
    370 U.S. 625
    , 630-31 (1962) (court may sua
    
    188   sponte dismiss case for failure to prosecute).
    
    189        The     third    category    of    inherent   powers    includes     those
    
    190   reasonably useful to achieve justice.          Eash, 757 F.2d at 563.      This
    
    191   category of powers recognizes that the legislature cannot foresee
    
    192   every tool the courts might need to employ to reach a just result
    
    193   in all cases.    Where it appears that a court cannot adequately and
    
    194   efficiently carry out its duties without employing some special
    
    195   device, the court has inherent power to do so.            Ex parte Peterson,
    
    196   
    253 U.S. 300
    , 312 (1920).         This category of inherent power arises
    
    197   from mere necessity and, consequently, can be completely regulated
    
    198   by Congress.     See id.    As an example of this type of power, the
    
    199   Supreme Court has upheld the power of a district court to appoint
    
    
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    200   an auditor to aid in litigation involving a complex commercial
    
    201   matter.    Id.; see also Ruiz v. Estelle, 
    679 F.2d 1115
    , 1161 (5th
    
    202   Cir. 1982), cert. denied, 
    460 U.S. 1042
     (1983).
    
    203        By employing the above three categories, we may now establish
    
    204   a method for reviewing purported exercises of inherent powers.
    
    205   Initially, we must determine in which category the invoked power
    
    206   belongs.    If the power belongs in the first category, any statute
    
    207   that seems to interfere with the power is unconstitutional under
    
    208   the doctrine of separation of powers.
    
    209        If the power belongs in the second category, we must ascertain
    
    210   whether a valid statute or rule attempts to regulate the court's
    
    211   use of the power.         If such a law exists, we then must determine
    
    212   whether    the   law    abrogates    or       renders     the    power    practically
    
    213   inoperative.     Michaelson, 266 U.S. at 66.
    
    214        Where    the   law    sufficiently         weakens    the    court's     inherent
    
    215   powers, we will strike it down as an unconstitutional violation of
    
    216   the doctrine of separation of powers and will review the court's
    
    217   actions for abuse of discretion.                When, however, the law can be
    
    218   characterized as an appropriate regulation of inherent powers, we
    
    219   will prevent     the    district    court's       exercise       of   power   if   that
    
    220   exercise either        violates    the    law    or   constitutes        an   abuse   of
    
    221   discretion.
    
    222        Finally, where there is no law or rule that governs the
    
    223   invoked inherent power, we review the district court's actions for
    
    224   abuse of discretion.        Link, 370 U.S. at 633.               Of course, we need
    
    225   not address the issues in the order set out above.                       We also note
    
    
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    226   that, while we review the court's exercise of such powers only for
    
    227   abuse of discretion, we define the powers narrowly, as they are
    
    228   shielded from effective democratic control and must be exercised
    
    229   with restraint.     Roadway Express, 447 U.S. at 764.
    
    230         Finally, if the power fits in the third category, we also must
    
    231   determine whether a valid statute or rule prevents the court from
    
    232   exercising a specific inherent power.             If so, the district court
    
    233   may not exercise that power.
    
    
    
    
    234 Barb. 235
             The district court's standing order invokes its inherent power
    
    236   to   manage   its   own   docket   to   achieve    the   just   and   efficient
    
    237   disposition of cases.       Landis v. North Am. Co., 
    299 U.S. 248
    , 254
    
    238   (1936) (court has inherent power "to control the disposition of the
    
    239   causes on its docket with economy of time and effort for itself,
    
    240   for counsel, and for litigants"); Edwards v. Cass County, 
    919 F.2d 241
       273, 275 (5th Cir. 1990); Taylor v. Combustion Eng'g, 
    782 F.2d 525
    ,
    
    242   527 (5th Cir. 1986).3       On the basis of our discussion above, we
    
    243   conclude that this power fits most appropriately in the second
    
    
    
    
                3
                  Several of our sister circuits, similarly, have opined that such
          general inherent authority resides in the district courts. See, e.g., In re
          Novak, 
    932 F.2d 1397
    , 1405, 1407 (11th Cir. 1991) ("[T]he power to direct
          parties to produce individuals with full settlement authority at pretrial
          settlement conferences is inherent in the district court."); Heileman Brewing
          Co. v. Joseph Oat Corp., 
    871 F.2d 648
    , 656 (7th Cir. 1989) (en banc) (district
          courts have "`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"). We reiterate that
          such inherent power, though broad, is subject to the abuse-of-discretion
          standard.
    
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    244   category.4
    
    
    
    
    245 Cow. 246
             We are able to conclude, based upon the foregoing, that,
    
    247   subject to the abuse-of-discretion standard, district courts have
    
    248   the   general    inherent     power   to   require   a   party    to    have   a
    
    249   representative with full settlement authority present )) or at
    
    250   least     reasonably    and    promptly    accessible     ))     at    pretrial
    
    251   conferences.      This applies to the government as well as private
    
    252   litigants.      We find no statute or rule that attempts to regulate
    
    253   the court's use of that inherent power.         But a district court must
    
    254   consider the unique position of the government as a litigant in
    
    255   determining whether to exercise its discretion in favor of issuing
    
    256   such an order.5
    
                4
                  In defense of its standing order, the district court also asserts the
          authority of the local district rules and of FED. R. CIV. P. 83, which permits
          district courts to adopt local rules and states that "[i]n 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." The local rules require "[t]he parties in every
          civil action [to] make a good-faith effort to settle" and to enter into
          settlement negotiations at the earliest possible time. N.D. TEX. R. 9.1.
                The district court makes this argument only in its reply brief and
          relies primarily upon inherent power to justify its standing order. Moreover,
          we do not read the local rule to authorize, in every case, the sweeping order
          that is at issue here. Nor can local rules be relied upon at the expense of
          other considerations of federal law. See In re Dresser Indus., 
    972 F.2d 540
    ,
          543 (5th Cir. 1992).
                5
                  As we noted above, the Attorney General has power to develop
          regulations dealing with the settlement of lawsuits involving the federal
          government. The government contends that the district court's order
          interferes with those regulations; it makes the bold assertion that a court
          may never compel the Department of Justice to alter its regulations governing
          its procedures for handling litigation. We disagree. If that were the case,
          the executive branch could use the courts as it pleased. The executive branch
          is not above the law. United States v. Nixon, 
    418 U.S. 683
     (1974). Moreover,
          the government misinterprets Touhy v. Ragen, 
    340 U.S. 462
     (1951), the
          authority relied upon for this argument.
                In Touhy, a low-level official of the Department of Justice, obeying an
                                                                         (continued...)
    
                                                11
    257        As the Supreme Court recently has observed, the executive
    
    258   branch's "most important constitutional duty [is] to `take Care
    
    259   that the Laws be faithfully executed.'"             Lujan v. Defenders of
    
    260   Wildlife, 
    112 S. Ct. 2130
    , 2145 (1992).                 The purpose of the
    
    261   structure   established     by    the   Attorney   General   is   to   promote
    
    262   centralized decisionmaking on important questions.                The Supreme
    
    263   Court has recognized the value of such centralized decisionmaking
    
    264   in the executive branch.         Touhy, 340 U.S. at 468.
    
    265        Centralized       decisionmaking        promotes     three     important
    
    266   objectives. First, it allows the government to act consistently in
    
    267   important cases, a value more or less recognized by the Equal
    
    268   Protection Clause.     Second, centralized decisionmaking allows the
    
    269   executive branch to pursue policy goals more effectively by placing
    
    270   ultimate authority in the hands of a few officials.          See Heckler v.
    
    271   Chaney, 
    470 U.S. 821
    , 831 (1985) (litigants should not interfere
    
    272   with agency discretion, as that could impede with agency policy
    
    273   goals).     Third, by giving authority to high-ranking officials,
    
    
    
               5
                (...continued)
          internal departmental regulation, refused to produce papers demanded by a
          subpoena. Given the potentially sensitive nature of Justice Department
          documents, the Court held that he properly could refuse to turn over the
          documents. At best, this case stands for the proposition that courts should
          observe reasonable regulations of the Executive Branch that have strong
          underlying policy justifications. The Court's opinion and Justice
          Frankfurter's concurrence explain that the Court did not decide whether a
          district court could force the Attorney General to turn over documents. 340
          U.S. at 469-73. Our holding today allows us to avoid deciding whether forcing
          the Attorney General to alter the settlement regulations would run afoul of
          the doctrine of separation of powers.
                The government also relies upon a portion of the Judicial Improvements
          Act of 1990, 28 U.S.C.A. § 473 (West Supp. 1992), which gives district courts
          the power to adopt local rules to require parties with full settlement
          authority to attend settlement conferences. This statute does not affect the
          issue before us, as the district judge did not act pursuant to a local rule
          passed pursuant to this statute; instead, he primarily asserts inherent
          powers. See supra note 4.
    
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    274   centralized       decisionmaking        better      promotes        political
    
    275   accountability.
    
    276        Given the reasonable policy justifications for the Justice
    
    277   Department's   settlement         regulations     and   the    insignificant
    
    278   interference with the operation of the courts, the district court
    
    279   abused its discretion in not respecting those regulations.              Where
    
    280   the interference with the courts is slight, courts should not risk
    
    281   becoming   "monitors   of   the    wisdom   and   soundness    of   Executive
    
    282   action."   Laird v. Tatum, 
    408 U.S. 1
    , 15 (1972).              The order at
    
    283   issue here imposes a major inconvenience on at least one of the
    
    284   parties without the showing of a real and palpable need.
    
    285        The district court contends that the government is not special
    
    286   and should not be treated differently from private litigants.             The
    
    287   government is in a special category in a number of respects,
    
    288   however, in addition to its need for centralized decisionmaking.
    
    289   "It is not open to serious dispute that the Government is a party
    
    290   to a far greater number of cases on a nationwide basis that even
    
    291   the most litigious private entity . . . . "               United States v.
    
    292   Mendoza, 
    464 U.S. 154
    , 159 (1984).
    
    293        This court, as well, has recognized that the government
    
    294   sometimes must be treated differently.            Obviously, high-ranking
    
    295   officials of cabinet agencies could never do their jobs if they
    
    296   could be subpoenaed for every case involving their agency.              As a
    
    297   result, we have held that such subpoenas are appropriate only in
    
    298   egregious cases.     See, e.g., In re Office of Inspector Gen., 933
    
    
    299 F.2d 276
    , 278 (5th Cir. 1991); In re Equal Employment Opportunity
    
    
                                                13
    300   Comm'n, 
    709 F.2d 392
    , 398 (5th Cir. 1983).               "[T]he efficiency of
    
    301   the EEOC would suffer terribly if its commissioners were subject to
    
    302   depositions in every routine subpoena enforcement proceeding." Id.
    
    303         In determining whether to require the government (or, for that
    
    304   matter, a private party) to send a representative to a pretrial
    
    305   conference with full authority to settle, a district court should
    
    306   take a practical approach.         The court must be permitted to conduct
    
    307   its business in a reasonably efficient manner; it need not allow
    
    308   the   parties   or    counsel    to   waste   valuable    judicial   resources
    
    309   unnecessarily.       On the other hand, the court should recognize that
    
    310   parties have a host of problems beyond the immediate case that is
    
    311   set for pretrial conference.           This is particularly true of the
    
    312   government.     We have outlined above, in some detail, the peculiar
    
    313   position of the Attorney General and the special problems the
    
    314   Department of Justice faces in handling the government's ever-
    
    315   increasing volume of litigation.
    
    316         We conclude that the district court abused its discretion in
    
    317   routinely   requiring     a     representative     of    the   government   with
    
    318   ultimate settlement authority to be present at all pretrial or
    
    319   settlement conferences.         We do not suggest that the district court
    
    320   can never issue such an order, but it should consider less drastic
    
    321   steps before doing so.
    
    322         For example, the court could require the government to declare
    
    323   whether the case can be settled within the authority of the local
    
    324   United States Attorney.          If so, the court could issue an order
    
    325   requiring   the      United   States    Attorney    to    either   attend    the
    
    
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    326   conference personally or be available by telephone to discuss
    
    327   settlement at the time of the conference.
    
    328        According to the government at argument, most of its routine
    
    329   litigation can be settled within the United States Attorney's
    
    330   authority.    Where that is not so, and failure of the government to
    
    331   extend settlement authority is a serious, persistent problem,
    
    332   substantially hampering the operations of the docket, the court
    
    333   could take additional action, such as requiring the government to
    
    334   advise it of the identity of the person or persons who hold such
    
    335   authority and directing those persons to consider settlement in
    
    336   advance of the conference and be fully prepared and available by
    
    337   telephone to discuss settlement at the time of the conference.
    
    338   Finally, if the district court's reasonable efforts to conduct an
    
    339   informed settlement discussion in a particular case are thwarted
    
    340   because the government official with settlement authority will not
    
    341   communicate with government counsel or the court in a timely
    
    342   manner, the court, as a last resort, can require the appropriate
    
    343   officials with full settlement authority to attend a pretrial
    
    344   conference.
    
    345        The measures we outline above are intended to be exemplary,
    
    346   and we express no ultimate view as to such hypothetical situations
    
    347   except to point out that there are many steps that reasonably can
    
    348   be taken, far short of the standing order at issue here.         We
    
    349   include these scenarios to demonstrate that the district court,
    
    350   before issuing an order such as the directive under review here,
    
    351   must give individualized attention to the hardship that order will
    
    
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    352   create.    The court must then exercise its discretion in light of
    
    353   the circumstances of that case.           We believe that such practical
    
    354   measures   will   enable   the   courts    to   administer   their   dockets
    
    355   efficiently while allowing the Department of Justice to handle
    
    356   effectively the burdensome volume of litigation thrust upon it.
    
    
    
    357                                       IV.
    
    358        In summary, we conclude that the district court abused its
    
    359   discretion in these cases.       We find it unnecessary to issue writs
    
    360   of mandamus, however.      The able district judge has indicated that
    
    361   he welcomes this court's exposition of this issue, and we are
    
    362   confident that he will abide by our decision and adjust his
    
    363   directives accordingly.     Thus, the petitions for writs of mandamus
    
    364   are DENIED without prejudice.
    
    
    
    
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