Kothe v. Smith – Case Brief
Kothe v. Smith, 771 F.2d 667 (2d Cir.1985).
Facts: Judge Sweet held a pretrial conference and directed that settlement negotiations be held. The judge recommended that the case be settled for between $20,000 and $30,000. The judge cautioned that if the parties settled for a comparable figure after the trial began, he would award sanctions against the dilatory party. Smith (D) offered $5,000 on the day before trial but the offer was rejected. Kothe’s (P) attorney informed the judge that his client would settle for $20,000 but requested that that figure not be disclosed to D. The lowest settlement offer communicated was for $50,000. The case settled for $20,000 after one day of trial. The district court penalized D alone and D appealed.
Issue: May a trial judge effect a settlement by coercion?
Holding and Rule: No. A trial judge may not effect a settlement by coercion. Pressure tactics to coerce settlement are not permissible. This was an abuse of power under Rule 16(f). Rule 16 was not designed as a means for clubbing parties into an involuntary compromise.
Disposition: Judgment vacated.