A decision excusing a lawyer for missing a notice of appeal filing deadline because he was unaware of a $2.4 million judgment against his client was reversed yesterday by a federal appeals court.
Southern District Judge George Daniels in 2010 granted the motion of attorney W. Mark Mullineaux to reopen the time allowed to appeal, finding that the lawyer’s failure to update his email contact information on the Electronic Case Filing system, and thus receive notice of the judgment, was excusable neglect and no one was prejudiced.
But a divided U.S. Court of Appeals for the Second Circuit yesterday restated its “hard line” policy on excusable neglect for missed filing deadlines and said it was Mullineaux’s fault for failing to correct his contact information to reflect his move to Astor Weiss Kaplan & Mandel in Philadelphia.
Judge Robert Katzmann and, sitting by designation, Southern District Judge Lewis Kaplan, were in the majority in Communications Network International v. MCI WorldCom Communications, 10-4588. Judge Gerard Lynch dissented.
Kaplan, writing for the majority, said it appears to be the first time a federal appeals court has reversed a judge’s decision to reopen the time for filing an appeal under Federal Rule of Appellate Procedure 4(a)(6), where all the preconditions have been met. Rule 4(a)(6) allows a court to reopen the time for filing an appeal where no notice was received or notice was received late.
The case also involved Federal Rule of Civil Procedure 77(d), which requires the clerk’s office to send notice of an entry of judgment to the parties and the requirements of the Southern District’s own electronic case filing rules.
Mullineaux represented Communications Network International (CNI), which in the wake of the WorldCom bankruptcy was named a defendant in an adversary proceeding in the bankruptcy court brought by WorldCom affiliate MCI WorldCom to recover funds from unpaid telecommunications services.
The bankruptcy court ultimately awarded MCI $2.4 million in 2007 and appeals for the award and other rulings were consolidated before Daniels.
Mullineaux’s 2008 application to appear pro hac vice and Daniels’ grant of that application both reflected the attorneys’ new email address at Astor Weiss, but his ECF profile continued to show his old address.
So when Daniels affirmed the rulings of the bankruptcy court in 2010, the clerk’s office sent notice of judgment to the old address. Unaware of the judgment, CNI missed the 30-day deadline for appealing.
Daniels nonetheless exercised his discretion to excuse the failure, finding the clerk’s office at fault for failing to update the attorney’s profile. The case moved to the Second Circuit, where oral arguments were heard on Jan. 12, 2012.
Rule 4(a)(5) permits a district court to grant a motion for an extension to file notice of appeal where a party shows “excusable neglect or good cause.” Rule 4(a)(6) allows the judge to reopen the time to file an appeal.
Yesterday, Kaplan said the circuit has taken a “‘hard line’ when determining whether neglect is excusable under Rule 4(a)(5).”
This position, he said, reflects the sanctity of final judgments in the federal judicial system and the need for parties to know that there is an end to litigation.
Kaplan cited Silivanch v. Celebrity Cruises, 333 F.3d 355, where the Second Circuit said that “the legal system would groan under the weight of a regimen of uncertainty in which time limitations were not rigorously enforced, where every missed deadline was the occasion for the embarkation on extensive trial and appellate litigation to determine the equities of enforcing the bar.”
So a district court exercising its discretion under Rule 4(a)(6), he said, “should give substantial weight to indications that the failure of receipt was the litigant’s fault.”
Here, the lower court accepted that the fault lay with the clerk’s office, which should have created a new e-filing profile or updated Mullineaux’s contact information to reflect his move to Astor Weiss, a 26-lawyer firm with offices in Philadelphia, Bala Cynwyd, Pa., and Haddonfield, N.J.
But Kaplan said the circuit was reaffirming that Civil Rule 77(d) is meant merely as a convenience for litigants and the rule that matters is 2.1 of the district’s Electronic Case Filing rules.
Section 2.1 requires an attorney to register as a filing user, provide information including email addresses, and consent to service under those rules.
The ECF registration form also states that, “as a participating attorney, I will promptly notify the court if there is any change in my personal data, such as name, e-mail address, telephone number, etc., and I will update the appropriate data within the ECF system.”
Kaplan said the clerk’s office properly sent notice of judgment to the email address in Mullineaux’s profile but it was Mullineaux’s job to keep his profile updated.
“Updating his profile would have taken exceedingly minimal diligence on Mr. Mullineaux’s part, and he had every reason to be aware of the problem,” Kaplan said. “It is remarkable that Mr. Mullineaux could fail to take these most basic steps to receive proper notifications, while at the same time relying entirely on such notifications to ensure he filed a timely notice of appeal.”
In his dissent, Lynch said “by finding that the district court abused its discretion for no reason other than the appellant was to blame for its failure to receive notice of the adverse judgment, the majority effectively adds an additional condition to Rule 4(a)(6).”
Lynch said he was unaware of any cases in which a court of appeals has found an abuse of discretion where Rule 4(a)(6)’s conditions were satisfied.
“This garden-variety case of attorney error hardly seems the place to start,” he said.
Mullineaux argued the case before the circuit. He did not return a call seeking comment.
Mark Shaiken and Andrew Muller of Stinson Morrison Hecker in Kansas City, Mo., represented MCI WorldCom.
Mark Hamblett is a reporter for the New York Law Journal, a Legal affiliate.