## Facts

- Gee Gee Nick sued Morgan’s Foods, Inc. and Morgan’s Foods of Missouri, Inc. under Title VII for sexual harassment and retaliation.
- The district court held a Rule 16 scheduling conference, and the parties consented to court-ordered ADR under local rules, with a deadline to report results.
- The district court entered an ADR referral order requiring compliance with local ADR rules, including submission of pre-mediation memoranda and attendance by persons with full settlement authority.
- Morgan’s did not submit the required ADR memorandum.
- Morgan’s did not send a representative with sufficient settlement authority to the ADR session.
- Morgan’s attributed its noncompliance to outside counsel’s view that the court’s instructions were “guidelines.”
- The district court found Morgan’s failed to participate in ADR in good faith, imposed monetary sanctions (including attorney’s fees and ADR-related costs), denied reconsideration, and imposed additional monetary sanctions for filing a meritless reconsideration motion that increased litigation costs.

## Issues

1. Whether Rule 16(f) and the court’s inherent powers authorized sanctions for failure to participate in good faith in court-ordered ADR.
2. Whether Rule 16(f) permits monetary sanctions in the form of fines payable to the court.
3. Whether the district court abused its discretion by sanctioning the corporate defendants rather than limiting sanctions to outside counsel.
4. Whether additional sanctions were permissible for a reconsideration motion deemed frivolous and cost-increasing.

## Decision

- The Eighth Circuit affirmed the district court’s order denying reconsideration and imposing additional sanctions.
- The court held the ADR referral order was enforceable as a Rule 16 pretrial order, and noncompliance supported sanctions under Rule 16(f).
- The court held Rule 16(f) permits monetary sanctions, including fines payable to the court, when “just” to address and deter noncompliance.
- The court held the district court did not abuse its discretion by sanctioning Morgan’s as a party, even if outside counsel contributed to the violations.
- The court held the additional sanctions for the reconsideration motion were within the district court’s discretion under Rule 16(f) and inherent authority to control proceedings and deter misuse of process.

## Legal Principles

- A district court may require meaningful participation in court-ordered ADR through Rule 16 and applicable local rules, and may enforce ADR referral orders through Rule 16(f).
- Failure to comply with ADR obligations—such as omitting required submissions or failing to appear with full settlement authority—can constitute bad-faith participation and violation of a pretrial order.
- Rule 16(f) authorizes monetary sanctions that are “just,” which may include compensation to the opposing party and fines payable to the court.
- Sanctions under Rule 16(f) may be imposed on the party, counsel, or both; a party cannot avoid sanctions solely by attributing noncompliance to counsel.
- Courts may impose additional monetary sanctions for filings that unreasonably increase costs, under Rule 16(f) and the court’s inherent authority.

## Conclusion

The Eighth Circuit upheld substantial monetary sanctions against a corporate defendant for failing to comply with a court-ordered ADR referral order and for pursuing an unwarranted reconsideration motion, confirming that Rule 16(f) and inherent judicial authority support both compensatory and court-payable monetary penalties to enforce good-faith ADR participation.


Nick v. Morgan's Foods, Inc., 270 F.3d 590 (8th Cir. 2001)