United States District Court, W.D. Louisiana, Shreveport Division
ANTHONY TELLIS, ET AL.
JAMES M. LEBLANC, ET AL.
HORNSBY, MAGISTRATE JUDGE.
ELIZABETH E. FOOTE, UNITED STATES DISTRICT JUDGE.
the Court is Plaintiffs' motion for sanctions based on
Defendants5 alleged disclosure of confidential settlement
negotiation information. [Record Document 243]. Plaintiffs
urge the Court to use its inherent supervisory authority to
impose sanctions, the primary one being the removal of
Defendants' counsel. [Record Documents 243-1 at 8 and 256
at 10]. Defendants opposed the motion and Plaintiffs had the
opportunity to reply to Defendants' opposition. [Record
Documents 250 and 256]. Plaintiffs' motion [Record
Document 243] is DENIED.
2019, the Court ordered that the parties engage in a
settlement conference with Magistrate Judge Hayes. [Record
Document 202]. In preparation for this conference, Magistrate
Judge Hayes ordered the parties to submit confidential
statements containing a "bottom-line settlement
proposal." [Record Document 203 at 2]. The parties
participated in an unsuccessful settlement conference in
September 2019. [Record Document 218].
October 2019, Plaintiffs filed a motion to strike
Defendants' jury demand. [Record Document 225].
Defendants' opposition to the motion to strike presented
arguments about the nature of the injunction Plaintiffs seek.
[Record Document 229 at 2]. In making this argument,
Defendants stated that "Plaintiffs seek a wholesale
change in the way [David Wade Correctional Center] is
administered" and enumerated several policy changes that
they believe Plaintiffs will request should they be
successful in this litigation. [Record Document 229 at 2].
Defendants explained in a footnote that their representations
about Plaintiffs' goals are "not mere
conjecture" because they "have ascertained that
these are the Plaintiffs' goals through attending the
pretrial settlement conferences this Court ordered."
[Id.] This forms the basis for the instant motion
for sanctions. [Record Documents 229 and 243 at 1].
argue that Defendants' disclosure was a willful and bad
faith violation of this Court's local rules surrounding
the confidentiality of mediation, Magistrate Judge
Hayes's order regarding the settlement conference,
Louisiana state law, and Plaintiffs' transmission to
Defendants stating that settlement negotiations shall be
confidential. [Record Document 243-1]. They claim that
Defendants' conduct is prejudicial to their ability to
negotiate with Defendants in the future, to their ability to
interact with putative class members, and to the trust future
litigants will have in the confidentiality of mediation
conducted in this district. [Record Document 243-1 at 5-7].
admit that the footnote stating they received the information
through settlement negotiations "may have been
improvident," but maintain that they did not act in bad
faith. [Record Document 250 at 4]. They further contend that
their descriptions of Plaintiffs' demands are nothing
more than generalizations that can be ascertained through
looking at Plaintiffs' non-confidential pleadings.
[Record Document 250 at 3-4].
courts possess the inherent power to issue sanctions beyond
those provided for in the Federal Rules of Civil Procedure,
but this power should be exercised with "restraint"
and "discretion." Chambers v. NASCO, Inc.,
501 U.S. 32, 43-44 (1991). Before imposing sanctions, a court
must find that "a party engaged in 'bad-faith
conduct' which is 'in direct defiance of the
sanctioning court.'” F.D.LC. v. Maxxam, Inc.,
523 F.3d 566, 591 (5th Cir. 2008) (quoting CJC Holdings,
Inc. v. Wright & Lato, Inc., 989 F.2d 791 (5th Cir.
1993)) (emphasis in original). A finding of bad-faith may be
inferred "[w]hen bad faith is patent from the record and
specific findings are unnecessary to understand the
misconduct giving rise to the sanction[.]" Blanco
River, L.L.C. v. Green, 457 Fed.Appx. 431, 438 (5th Cir.
argue that Defendants' disclosure "demonstrates bad
faith in their handling of confidential information."
[Record Document 256 at 5]. They assert that Defendants
"intentionally and maliciously" made the disclosure
at issue and suggest that Defendants' "refusal to
acknowledge their misconduct" is further support that
they are acting in bad faith. [Record Document 256 at 6].
Defendants responded by "affirmatively
represent[ing]" to the Court that they did not act in
bad faith. [Record Document 250 at 4]. They maintain that
their argument about Plaintiffs' demands in this case
were generalized, contained no specifics of the offers made
in confidence, and can be found in Plaintiffs'
non-confidential pleadings. [Record Document 250 at 3-4].
the Court certainly agrees that the inclusion of the footnote
directly tying Defendants5 argument to representations gained
through mediations was "improvident," this alone
does not demonstrate that Defendants acted in bad faith.
Plaintiffs have provided no other evidence that Defendants
disclosed this information, whether confidential or not, for
any other purpose than to highlight for the Court why they
believed the injunction at issue in this case would be
outside the scope of what is traditionally issued by a court
of equity. [Record Document 229 at 2].
evidence that Defendants made this disclosure in an attempt
to prejudice Plaintiffs or directly violate a court order,
this Court cannot make the requisite finding of bad faith
needed to impose sanctions. Therefore, the Court declines to
impose sanctions on Defendants for this behavior at this
time. In the future, however, both parties are cautioned to
proceed with extreme care when making statements that relate
to settlement negotiations or any ...