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Lawyers Fail to Read Orders, Miss Deadline to Appeal $40 Million Decision

An incredible story this week solidifying the truth that when it comes to lawyers, quantity is not a substitute for diligence:

(Bloomberg) — Call it AT&T Inc.’s $40 million “whoops.”

The telephone company will have to shell out that much in a patent-infringement case because its lawyers didn’t read a court document, an appeals court ruled Thursday.

AT&T missed a deadline to appeal a jury verdict for $27.5 million, plus interest, won by closely held Two-Way Media LLC for using its technology for tracking what you watch on streaming video services.

The problem started with a faulty court docket notice, which said the trial judge had granted AT&T’s request to seal some documents. A reading of the actual order showed the judge had denied AT&T’s request to overturn the jury verdict, setting the 30-day clock ticking for the time to appeal.

AT&T’s lawyers at the firm Sidley Austin were never notified when the docket entry was corrected and, by the time they realized what the judge had done, 51 days had passed.

AT&T said its missed deadline was “excusable neglect” because of the incorrect docket entry. But the U.S. Court of Appeals for the Federal Circuit sided with the trial judge, who said at least 18 lawyers and assistants had been given the information needed to know when the deadline was. He refused to extend the time period for the appeal. […]

The appeals panel, in a 2-1 ruling, said District Judge Orlando Garcia in San Antonio acted within his rights when he said 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.”

A number of things happened here, but based on our observation of how cases with multiple lawyers work, it is likely that each of these 18 individuals relied on the other 17 to read the actual orders (as opposed to just the court clerk’s summary entry) because they thought it was of minimal importance. Yet any lawyer who has practiced for some time should know that court clerks make mistakes on a regular basis, and that the lawyer therefore cannot rely exclusively on a clerk’s word or action in matters of great significance, such as filing deadlines or other irreversible events. Moreover, lawyers should know that orders aren’t always black or white, but sometimes contain unexpected nuances, making it truly inexcusable to fail to read any court order in any case of any size.

With that said, judges generally want to try to find a way around a missed deadline, in large part because they don’t want the client to be punished to harshly and abruptly for the lawyer’s mistake. So what happened here?

“More often than not, the courts will bend over backward to grant a re-opening and save the day for the party who missed a key deadline,” David Peirez, a corporate lawyer with Reisman Peirez in New York, said. “However in this case, it is tough to sympathize with AT&T since 18 lawyers dropped the ball.”

Not only can a larger number of lawyers working on the same case fall into the trap of missing the basic requirements of diligence, but they might also be treated more harshly by the courts.

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