Ethics in Brief

Ethics in Brief is designed to present ethical issues that practitioners might well face on a daily basis. It is a service of the Legal Ethics Committee of the San Diego County Bar Association.

An Attorney’s Reliance on an ECF Entry Incorrectly Labeling a Court Order Does Not Constitute Good Cause or Excusable Neglect for Extending or Reopening an Appeal Period

This year the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) affirmed a district court’s denial to either extend or reopen the time to appeal a final judgment where a law firm failed to read an order that was mislabeled on the Court’s ECF noticing system and led to the firm missing the deadline to file an appeal from a $40 million verdict against its client.  Two-Way Media, LLC v. AT&T Inc., Case No. 14-1302 (Fed. Cir., Mar. 19, 2015). 

Closer to home, Ninth Circuit Court of Appeals Judges M. Margaret McKeown and John B. Owens prominently featured this decision in their presentation, Ethical Issues for Appellate Advocates and Judges, at the Judith N. Keep Civil Practice Seminar held in San Diego on September 17, 2015, and highlighted the following from the opinion:

The [district] court concluded that it is the responsibility of every attorney to read the substance of each order received from the court and that it is not sufficient to rely on the mail notifications received from the electronic filing system.

In this era of electronic filing ... [there is] an obligation to monitor an electronic docket for entry of an order which a party and its counsel already have in their possession and know that the clerk at least attempted to enter.

In Two-Way Media, AT&T was sued for patent infringement relating to the streaming of audio and video content over the internet. A jury found in favor of Two-Way Media and awarded damages. AT&T filed four motions for judgment as a matter of law (JMOL) or for new trial. These filings stayed the running of the time for AT&T to file an appeal. AT&T filed three of the four JMOL motions under seal for confidentiality reasons. The district court denied all four of the JMOL motions, granted Two-Way Media’s request for costs, and entered a judgment against AT&T, all on November 22. 

When the district court initially docketed the denial of AT&T’s motions, it labeled the three orders addressing the confidential motions as orders granting the motions to seal but did not indicate that the same orders denied the relief sought in the underlying motions. The parties, through counsel, received notice of electronic filings (NEFs) for each of those orders labeled “Order Granting Motion for Leave to File Sealed Document.” The content of the orders, denying the merits of AT&T’s JMOL motions, could have been accessed by clicking on the hyperlink in the NEFs.  At the same time, the court docketed its order denying the fourth, non-confidential JMOL and its order on Two-Way’s bill of costs. Both of these orders were correctly identified in the NEFs to the parties. Three days later the district court updated the description of the incorrectly named orders on the docket, but did not send new NEFs to the parties. 

On January 15, after the appeal period had expired, AT&T asserted that it first discovered that the November orders actually denied all of its post-trial motions and the next day it filed a motion to extend the time to file the appeal period pursuant to Rule 4(a)(5) and a motion to reopen the time to file an appeal pursuant to Rule 4(a) (6) of the Federal Rules of Appellate Procedure (FRAP). The district court denied AT&T’s motions finding that there was no showing of excusable neglect or lack of notice as required by the Rules. AT&T appealed to the Federal Circuit.

The Federal Circuit affirmed and held that the district court did not abuse its discretion when it found AT&T did not satisfy its burden to show excusable neglect. Even a complete lack of notice would not qualify as excusable neglect under FRAP 4(a)(5) without some additional showing. Here, it was noted that the NEFs were sent to 18 attorneys at two firms representing AT&T, the assistants at those firms actually downloaded copies of all the orders on the firms’ internal systems, and entry of the order denying the unsealed JMOL motion and bill of costs on the same day as the incorrectly labeled orders, should have alerted AT&T that there was no longer a stay of the appeal period. The neglect could not be excused where notice of entry of an order was received electronically (albeit incorrectly named), and the attorneys failed to read the underlying orders.

Further the Federal Circuit found there was no clear error in the district court’s factual finding that AT&T failed to establish that it did not receive the notice as contemplated in FRAP 4(a)(6)(A). The Court agreed that AT&T did receive notice of the entry of judgment when it received and downloaded the judgments from the electronic docket.

All attorneys that file pleadings electronically in the Ninth Circuit should be aware of this Federal Circuit decision and be mindful that they need to download and read the content of the docket entries rather than rely on the name of electronically filed notices received from the Court. Further, attorneys should monitor the court docket to ensure that an order triggering a deadline has not been entered regardless of whether or not electronic notice is given.

-- Radmila A. Fulton

**No portion of this summary is intended to constitute legal advice. Be sure to perform independent research and analysis. Any views expressed are those of the author only and not of the SDCBA or its Legal Ethics Committee.**