In re Stone

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.

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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)

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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-

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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.)

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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 B.

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 C.

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...)

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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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