The Third Circuit issued a non-precedential opinion yesterday that will scare the living bejeezus out of lawyers.
Here’s what happened, as described in the opinion (emphasis mine):
Quebec filed an involuntary bankruptcy petition against John Doe, which the Bankruptcy Court dismissed. Doe then filed a motion asking the Bankruptcy Court to declare Quebec’s petition to be in bad faith and for damages. Quebec failed to appear at the hearing on the motion allegedly due to the then-hospitalization of Quebec’s representative, and on March 24, 2015, the Bankruptcy Court granted the motion and awarded approximately $1 million in punitive damages. Quebec then retained its current counsel. Twenty-one days after the appeal deadline passed, Quebec sought an extension of time for filing the appeal, asserting that it did not receive a copy of the Bankruptcy Court’s March 24, 2015 order. The Bankruptcy Court denied the extension request. Quebec appealed that ruling to the District Court, and that same day, it received notice that it needed to file a designation of portions of the Bankruptcy Court record for the appeal by September 8, 2015. Quebec failed to do so, and the District Court dismissed the appeal on September 30, 2015 without an opinion. Quebec asserts that it failed to timely file the designation due to its counsel’s erroneous calendaring of the deadline as October 22, 2015.
The opinion doesn’t name Quebec’s current counsel, the lawyer who assertedly missed the district-court deadline, although he is identifiable on Pacer.
Quebec sought post-judgment relief from the dismissal, which the district court (after proceedings not relevant here) denied on the ground that the party had not shown excusable neglect. Still represented by the same lawyer, Quebec appealed.
The Third Circuit affirmed the denial of relief from the million-dollar judgment, stating:
“The District Court aptly found that counsel’s oversight could have been prevented through effective office procedures and reasonable diligence on the part of counsel in checking the bankruptcy docket.”
Moreover, the District Court correctly observed that it was “difficult to excuse” counsel’s incorrect recording of the September 8 deadline as October 22, “nearly two months after he filed the notice of appeal (and received the email notification)” and far beyond the fourteen-day deadline, in light of “the appellate practice [Quebec’s counsel] professes to maintain.”
Although Quebec’s present counsel was retained after the Bankruptcy Court issued its decision on Quebec’s bad faith filing of the bankruptcy petition, reasonably diligent counsel entering at that late stage of the litigation would have reviewed the record, observed the history of dilatoriness and prior finding of bad faith, and ensured that future filings complied with all applicable rules and orders.
For the poor lawyer involved, this is no doubt horrifying.
For the rest of us, this case offers at least three points to consider:
- Obviously, it is another ice-in-the-veins reminder that rules and deadlines matter, and sometimes they matter a lot.
- Both the district court and the Third Circuit held the lawyer’s professed practice as an appellate lawyer against him in analyzing whether his error was excusable. (The lawyer’s firm’s website states, “WE ARE THE APPEALS FIRM IN PENNSYLVANIA,” for example.) Judges may use language like that against lawyers if something goes wrong.
- Was it a blunder for this lawyer to handle an appeal in which his own actions below were at issue, rather than withdrawing for another lawyer to do the appeal? The same has been true of at least three other recent Third Circuit cases that turned out real badly for the lawyers involved. Lawyers who find themselves in this situation must think hard about whether new counsel for the appeal is in their clients’ best interests–and their own.