A law firm accused of malpractice for allegedly turning down a settlement offer lost its bid to compel a federal mediator to testify about settlement negotiations between the parties at the mediation. McKissock & Hoffman, P.C. v. Waldron, Civil Action No. 10-7108 (E.D. PA, August 4, 2011)
This federal district court case grew out of a legal malpractice lawsuit that was filed in Pennsylvania state court. In the state court case, plaintiff company alleged that, during a mediation held in a prior case in federal court in which plaintiff was represented by the defendant law firm, defendant committed legal malpractice by failing to advise the plaintiff to accept a $25,000,000 settlement offer presented by the mediator. The law firm denied that the offer was ever presented. As part of its defense to the state legal malpractice claim, the law firm sought to take testimony by deposition of the chief mediator for the United States Court of Appeals for the Third Circuit who had facilitated the mediation in the prior federal court matter. The clerk of the court denied the law firm’s request to depose the mediator. The clerk cited several reasons for her decision: (1) sovereign immunity prevents a state court from compelling the testimony of a federal employee; (2) the mediator’s testimony would be a breach of confidentiality; and (3) other factors set forth in the subpoena regulations for the federal judiciary weighed against allowing the mediator to testify.
The law firm then filed a separate lawsuit in federal court to compel the chief mediator’s deposition. The law firm asserted that the clerk’s denial violated the Administrative Procedure Act (“APA”), 5 U.S.C. § 701, et seq. The plaintiff in the legal malpractice moved to dismiss the law firm’s complaint, or in the alternative, for summary judgment.
After oral argument, the federal district court granted the motion to dismiss. The court found that the APA does not apply to “the courts” — a term that the court interpreted to include the court clerk. Further, the court ruled that the clerk’s decision to deny the law firm’s request to depose the mediator “cannot be challenged under the APA” because the clerk reports directly to the judges of the 3rd Circuit and her action involved the handling of a case before the court. As a result, the actions of the court clerk were held to be exempt from judicial review under the APA.
The case is annexed here – McKissock & Hoffman, P.C. v. Waldron
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