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Kothe v. Smith

Citation. 771 F.2d 667, 1985 U.S. App. 2 Fed. R. Serv. 3d (Callaghan) 864
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Brief Fact Summary.

Patricia Kothe (Plaintiff) brought suit for medical malpractice against four defendants, Dr. Smith, Dr. Andrew Kerr, Dr. Kerr’s professional corporation, and Doctors Hospital (Defendants). Plaintiff discontinued actions against Dr. Kerr, Dr. Kerr’s corporation and Doctors Hospital. Sanctions were imposed against Defendant, Dr. Smith, for settling the case during trial at an amount suggested by the judge prior to trial. Thus, Defendant appeals from a judgment of United States District Court of Southern District of New York, which directed him to pay $1,000 to Plaintiff’s attorney, $1,000 to Plaintiff’s medical witnesses, and $480 to the clerk of the court.

Synopsis of Rule of Law.

A trial judge may not abuse his sanction power in order to encourage settlement.


Plaintiff brought suit for medical malpractice against four defendants, Dr. Smith, Dr. Andrew Kerr, Dr. Kerr’s professional corporation, and Doctors Hospital, seeking $2 million in damages. Actions against Dr. Kerr, Dr. Kerr’s professional corporation, and Doctors Hospital were discontinued. Three weeks prior to trial, the trial judge held a pretrial conference during which he directed parties to conduct settlement negotiations. The judge recommended settlement between $20,000 and $30,000 and warned the parties that if they settled for a comparable figure after trial had begun he would impose sanctions. Defendant offered $5,000, which was rejected. Plaintiff’s attorney informed the judge that his client would settle for $20,000 but requested that the figure not be released to the Defendant. The only pretrial settlement that was released to the Defendant was $50,000. When the case settled for $20,000 after one day of trail, the district court penalized the Defendant alone. Defendant appeals.


Whether a judge may impose sanctions against the dilatory party for failure to settle prior to trial?


No. Judgment vacated and remanded. The district court’s imposition of sanctions was an abuse of the sanction power in Rule 16 (f) of the Federal Rules of Civil Procedure. A trial judge must not use pressure tactics to compel settlement. Rule 16 was designed to encourage pretrial settlement discussion, not to impose negotiations on unwilling litigants. The coercion in this case was also troublesome, since the court imposed sanctions on the Defendant alone. The Defendant should not have been required to make an offer to settle because the court wanted him to. Defendant’s attorney had every right to change his evaluation of the case after the trial had begun.


The purpose of Rule 16 is to maximize the efficiency of the court system by urging attorneys and clients to cooperate with the court and to abandon practices that interfere with the management of cases. Imposing sanctions on parties for settling cases after the trial begins is contrary to the purpose behind the rules, which is to encourage the settlement of cases. This case is more troubling, as the judge imposed sanctions on the Defendant alone for settling during the trial. CHAPTER II. The Rewards And Costs Of Litigation-Of Remedies And

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