Disputing Blog by Karl Bayer, Victoria VanBuren, and Holly Hayes
The United States Supreme Court has reportedly been asked to review a federal court’s order refusing to set aside a jury’s verdict where a court-appointed mediator failed to disclose his close personal relationship with a partner at the law firm representing several of the defendants. In CEATS Inc. v. Continental Airlines, Inc., et al., No. 14-681, CEATS filed a patent infringement lawsuit in the Eastern District of Texas against Continental Airlines, Ticketmaster, and a number of other corporations over the companies’ alleged use of CEATS’s technology in certain seat selection software. Prior to trial, the parties twice engaged in mediation sessions that were conducted by a court-appointed mediator. After the mediator determined that a satisfactory settlement could not be reached, the lawsuit went to trial.
Following trial, jurors found that the four patents at issue were invalid due to obviousness. In response, CEATS appealed the case to the United States Court of Appeals for the Federal Circuit. The plaintiff also filed a Rule 60(b) motion for relief from judgment with the district court based on the mediator’s undisclosed relationship with counsel for the defendants. The appellate court upheld the jury’s verdict and the Eastern District of Texas denied CEATS’s motion. After that, CEATS again filed an appeal with the Federal Circuit appellate court. A Court of Appeals panel found that a mediator conflict existed, but the error at issue was harmless. Because of this, the court affirmed the district court’s order denying the plaintiff’s motion for relief from the judgment:
While we find that public confidence in the mediation process will be undermined to some extent by our failure to put greater teeth in the mediators’ disclosure obligations, we do not find that fact justifies the extraordinary relief CEATS seeks. Because CEATS had the opportunity to present its case to a neutral judge and jury, we do not believe that refusing to grant the relief CEATS seeks will undermine public confidence in the judicial process as a whole. As the Supreme Court explained, Rule 60(b)(6) “should only be applied in ‘extraordinary circumstances.’ “ Liljeberg, 486 U.S. at 864 (quoting Ackermann v. United States, 340 U.S. 193, 199 (1950)). CEATS is seeking relief from judgment by an impartial jury after litigating the matter before an unbiased judge; granting that relief is what would be most extraordinary. Because we find insufficient risk to public confidence in the justice process as a whole, we hold that the third Liljeberg factor does not weigh heavily in favor of relief under Rule 60(b)(6).
In December, CEATS filed a petition for certiorari with the Supreme Court of the United States. In its request, the company claimed that the high court should review the case due to the increasing use of mediation across the country and the general lack of clarity regarding the appropriate relief available where a mediator fails to adhere to his or her disclosure obligations. CEATS also argued that such ambiguity has a negative effect on the public’s perception of the fairness of federal judicial proceedings.
Please stay tuned to Disputing for more on this case!