Law 360 – Sidley’s Blown Deadline In $40M Case Provides Stark Lesson – David Peirez quoted
The Federal Circuit ruled that Judge Orlando Garcia of the Western District of Texas was correct in 2014 when he barred AT&T from appealing a jury’s verdict that the company infringed streaming media patents owned by Two-Way Media LLC.
The 30-day period for filing an appeal of the verdict began running when the judge denied AT&T’s post-trial motions seeking judgment as a matter of law that it did not infringe, but Sidley and local counsel Davis Cedillo & Mendoza Inc. did not meet the deadline.
The firms argued that they were not properly notified that the 30-day clock had begun running because the electronic filing notices they received from the court mistakenly stated that the judge had ruled only on a motion to seal, not the post-trial motions themselves.
The Federal Circuit agreed with the trial judge that that was no excuse. It noted that the actual post-trial orders were linked to the email, but that none of AT&T’s 18 attorneys at the two firms clicked the link.
“In this era of electronic filing … we find no abuse of discretion in a district court’s decision to impose an obligation to monitor an electronic docket for entry of an order,” the appeals court said in an opinion by Judge Kathleen O’Malley.
The ruling highlights just how critically important it is for attorneys to carefully read all email notices from the court, said Eric J. Magnuson, head of the appellate practice at Robins Kaplan LLP, who has followed the case.
“The problem with email is that people just glance at it and say they’ll deal with it later, and then forget about it,” he said. “It’s hard to separate the wheat from the chaff, but the lesson here is that there is no chaff. You really have to be diligent in looking at it.”
That is particularly true when it comes to appeal deadlines, said Magnuson, the former chief justice of the Minnesota Supreme Court. Appellate deadlines are self-executing and begin running when a ruling is issued, and courts are famously disinclined to forgive mistakes or grant extensions, he noted.
“If you’re not watching, this is what happens,” he said.
The case attracted attention last year when Judge Garcia rejected AT&T’s request for more time to file an appeal, writing that he found it “very troublesome” that none of the company’s attorneys “bothered to read the orders issued by the court.”
Attorneys who have read about that decision have been taking it to heart, said John Whitaker of Whitaker Law Group.
“I get a lot of electronic filing notices, and I read them all a little more closely now,” he said.
The Federal Circuit’s decision makes clear that it’s not enough for attorneys to wait for electronic notices from the court about important issues like when post-trial motions have been resolved, said David Peirez of Reisman Peirez Reisman & Capobianco LLP.
Instead, law firms should have an office calendar that shows when such motions has been filed and attorneys should make periodic, affirmative checks with the court to see whether an order has been issued, he said.
“If you go to the court’s website to see what’s going on, that way you can’t flub it,” he said.
Peirez said he found it tough to sympathize with AT&T’s situation since it had 18 attorneys working on the case, none of whom realized the court had issued the post-trial motions until weeks after the appeal deadline passed.
“It’s mind-boggling to me that 18 people dropped the ball,” he said.
The sheer number of attorneys involved appears to be “what stuck in the craw of the judges,” Whitaker said.
“Eighteen attorneys is a lot of people, and it seems like they were saying, ‘Judge, you’re not important enough for us to read everything you send us,'” he said. “That’s just not going to fly.”
AT&T was able to win over one judge on the Federal Circuit. In a dissent, Judge Timothy Dyk wrote that the email notices from the court did not let AT&T’s attorneys know that the post-trial motions had been resolved.
“In my view, since notice of entry of the orders was never provided — the only event that triggers the time for appeal — both the district court and the majority err” in holding that AT&T was barred from appealing, he said.
Whitaker said Judge Dyk “makes a pretty compelling argument” for why AT&T should have been allowed to appeal, which the company and Sidley can latch on to in their likely inevitable efforts at a further appeal to overturn the judgment.
“They have to try to get this heard en banc, and I’m sure they’ll leave no stone unturned,” he said.
Attorneys said they found it somewhat surprising that the Federal Circuit didn’t come up with some way to allow an appeal, given the major company and law firm involved and the vast damages at issue.
“AT&T is staring a big monetary judgment in the face, and courts usually don’t want to see a client penalized because its lawyers dropped the ball,” Peirez said.
Nevertheless, having firm appellate deadlines serves the important public policy goal of ensuring finality in litigation, Magnuson said. If courts began carving out exceptions for when an appeal deadline can be missed without penalty, “it would add a level of uncertainty to the whole process,” he said.
The key takeaway for attorneys is that you can never be too diligent about reading emails from the court and closely monitoring the docket, Magnuson said.
“There’s nothing new about this decision. It’s what we all knew all along,” he said. “It’s just a really unfortunate circumstance for the lawyers and the client involved.”
Sidley attorneys in the case could not be reached for comment.
Circuit Judges Kathleen O’Malley, Evan Wallach and Timothy Dyk sat on the panel for the Federal Circuit.
AT&T is represented by Carter Phillips, Constantine Trela, Richard Cederoth, Robert Hochman and Nathaniel Love of Sidley Austin LLP.
Two-Way Media is represented by Leslie Payne, Michael Heim, Micah Howe and Nathan Davis of Heim Payne & Chorush LLP and Max Tribble, Ian Crosby, Rachel Black and Parker Folse of Susman Godfrey LLP.
The case is Two-Way Media LLC v. AT&T Inc., case number 2014-1302, in the U.S. Court of Appeals for the Federal Circuit.