Your friends at PL Matters aim to keep you updated regarding best practices, especially when it comes to professional obligations. However, sometimes best practices just boil down to the basics, including careful reading of court directives. AT&T recently learned this lesson the hard way. Last week, an appeals court ruled that the telecom giant will have to pay $40 million in connection with a case because its attorneys failed to read a court document.
This disaster arose when AT&T missed a deadline to appeal a $27.5 million jury verdict (plus interest) won in a patent-infringement case by its adversary. Specifically, following trial, AT&T moved to overturn the verdict. The district judge denied this motion, and the court posted the denials on its docket, but the denial notices contained a “typo” of sorts – their labels that omitted the actual substance of the rulings.
Attorneys on both sides received emailed notices of the court filings with those labels. In reality, a reading of the actual order showed the judge had denied AT&T’s request to overturn the jury verdict, setting the 30-day clock ticking for the time to appeal. The labels were updated with descriptions of the underlying orders a few days later, but no new notices were sent to attorneys. By the time AT&T’s lawyers realized the discrepancy between the docket and the order, 51 days had elapsed.
AT&T argued that the missed deadline was “excusable neglect” because of the incorrect docket entry. However, the U.S. Court of Appeals for the Federal Circuit disagreed, particularly because the district judge noted that it was “troublesome” that none of the 18 lawyers and assistants who received the electronic notices “bothered to read the orders issued by the court.” The district judge admonished the attorneys for relying only on emailed notifications.
The appeals court, in a 2-1 ruling, affirmed, holding that the district judge properly exercised his discretion in holding it was “inexcusable for AT&T’s multiple counsel to fail to read all of the underlying orders they received, or — at minimum — to monitor the docket for any corrections or additional rulings.” What’s next? In this instant case, AT&T can ask the appeals panel to reconsider its decision, or request a hearing before all active judges of the court. If that fails, the next step would be the Supreme Court.
Perhaps more importantly from a malpractice standpoint, this could spell trouble for AT&T’s counsel, as well as other attorneys who may be guilty of “glossing over” dockets and court directives. Indeed, the recent appeal ruling may actually increase the risk that the inactions of AT&T’s attorneys may rise to the level of a malpractice claim. As the court noted, the civil docket “had a complete description of those orders had AT&T bothered to check the docket, as it should have done.”
AT&T is out $40 million dollars (granted, this is just a drop in the bucket, or less than a day’s worth of sales, for AT&T, which reported $132.4 billion in revenue last year) and their attorneys seem to have gotten themselves into further hot water by seeking relief for their own oversight. What do you think? Should the court (and the client) have given AT&T a pass? Or is it truly inexcusable that 18 different attorneys and assistants failed to actually read the court’s directive?