## Facts

- Anthony Guillory, a Domtar Industries employee, suffered a catastrophic workplace injury when a forklift fork fell and struck his head, leaving him permanently quadriplegic.
- Guillory filed a federal products-liability action against Deere & Company and John Deere Industrial Equipment Company (collectively, Deere), among others, seeking damages for the injury.
- The case proceeded toward trial, and the district court ordered the parties to participate in a settlement conference.
- Before the conference, the district court requested written statements from the parties describing their settlement positions.
- At the settlement conference, Deere offered \$100,000 to settle the case.
- The district court found that, given the scale of Guillory’s claimed damages and the value of his workers’ compensation benefits, a settlement that would cause Guillory to relinquish those benefits would likely require a fund in the millions.
- The district court concluded that Deere came to the conference without a genuine intent to make a meaningful settlement effort and that Deere’s position—communicated during the conference—was that it preferred to proceed to trial.
- The district court determined that Deere could have informed the court beforehand that the conference would be futile, which would have avoided wasting the court’s and the parties’ time.
- As a result, the district court sanctioned Deere \$8,500, representing expenses incurred in preparing for the settlement conference.
- After trial, a jury awarded Guillory more than \$6 million in damages, and Deere appealed, including a challenge to the sanctions order.

## Issues

1. Did the district court abuse its discretion by imposing monetary sanctions on Deere for failing to participate in the court-ordered settlement conference in good faith?
2. Did the district court have authority to sanction a party based on its conduct at a settlement conference when the party argues it cannot be punished merely for making a low settlement offer?

## Decision

- The Fifth Circuit affirmed the sanctions order.
- The court held that the district court acted within its authority to manage pretrial proceedings and settlement conferences and to address conduct that wastes judicial and party resources.
- The court concluded that the sanctions were not imposed simply because Deere offered an amount the court considered too small; rather, the record supported the district court’s finding that Deere participated in a manner the court could treat as bad faith under the circumstances.
- The Fifth Circuit found no abuse of discretion in requiring Deere to reimburse the expenses attributable to the failed conference.

## Legal Principles

- A federal district court may require meaningful participation in a court-ordered settlement conference and may respond to conduct that defeats the purpose of the conference.
- Monetary sanctions may be appropriate when a party’s settlement-conference conduct causes needless expenditure of time and money by the court and other parties.
- Sanctions are reviewed on appeal for abuse of discretion, and an appellate court will uphold a sanctions order when the district court’s findings are supported by the record and the sanction is tied to the costs caused by the sanctioned conduct.
- A sanctions order may be upheld when it rests on the party’s overall course of conduct at the conference (including failure to communicate its true position in advance), not solely on the numeric amount of an offer.

## Conclusion

Guillory v. Domtar Industries, Inc. affirms a district court’s power to manage settlement proceedings by upholding an \$8,500 sanction against Deere after the court found Deere attended a required settlement conference without a genuine intent to pursue settlement and thereby caused avoidable expense and wasted court time.


Guillory v. Domtar Industries, Inc., 95 F.3d 1320 (1996)