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Attorneys' Failure to Read a Document Costs AT&T $40 Million

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By Mark Wilson, Esq. on March 23, 2015 10:01 AM

Usually it's clients who suffer because they didn't read something all the way through. This time, though, it's the lawyers who didn't heed that most lawyerly of advice.

Thanks to its lawyers -- the good people at Sidley Austin, LLP -- AT&T has to pay a $40 million jury verdict that would have been appealable, if only they'd filed the notice of appeal on time.

The World's Biggest Late Fee

After five years of patent infringement litigation, Two-Way Media won a jury verdict against AT&T on October 7, 2013. Three days before, AT&T renewed JMOL motions, which is what you're supposed to do. Filing the JMOL motions stopped the clock on the time required to file the notice of appeal.

AT&T moved to file three of those motions were under seal. On November 22, the district court denied all of the motions, but mistakenly labeled them orders granting the motion to file under seal, not orders denying the JMOL motions themselves. AT&T's lawyers received email notifications that the orders had been filed electronically, and while also incorrectly titled, the documents themselves were not incorrectly titled.

Both Rule 4 of the Federal Rules of Appellate Procedure, and 28 USC section 2107, require a notice of appeal in a case like this to be filed within 30 days of the final judgment. So color AT&T's lawyers surprised when they learned on January 15, 2014 -- long after the time to file a notice of appeal expired -- that the November orders denied the JMOL motions, unpausing the appeal clock.

Nope, This Is All Your Fault

AT&T moved to extend the period for a notice of appeal, but was denied by the district court. It appealed to the Federal Circuit Court of Appeals, but was denied there on Tuesday. A court can extend the appeal period for "excusable or neglect or good cause" or reopen the appeal period if the "the moving party did not receive notice" of the final order.

The Federal Circuit found that neither of these situations applied. AT&T's lawyers had actually downloaded the full copies of the orders themselves, meaning it was fully capable of reading them and knowing what they were. While AT&T insisted that the electronic notices were misleading and induced them not to read the orders denying the JMOL motions, the court of appeals said other orders -- like orders denying costs -- should have at least raised the suspicion that the orders were final judgments.

And, of course, there's the fact that 18 different lawyers and assistants downloaded the full documents themselves. " Given these circumstances, the district court concluded that it was inexcusable for AT&T's multiple counsel to fail to read all of the underlying orders they received, or -- at minimum -- to monitor the docket for any corrections or additional rulings, which might explain why costs had been awarded to TWM," the court said.

The obvious lesson? Read the documents you receive, especially if they're documents that don't make sense together. The court of appeals found it pretty hard to believe that an order awarding costs, which normally happens after a final judgment, didn't raise eyebrows when coupled with what looked like an order allowing filing under seal. Monitor your dockets, use your good judgment, and don't rely solely on the titles of electronic notifications.

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