Restructuring

Contributed by Melissa Siegel
Early this week, a California Bankruptcy Court schooled counsel on abiding by local rules, avoiding gamesmanship, and maintaining a level of civility in litigation proceedings.  These lessons arose in the context of an adversary proceeding in which counsel filed an emergency motion for a continuance of the deadline to respond to a complaint following retention of new counsel. 
Lesson #1: Check for Typos
The court began by discussing counsel’s typographical error regarding the date it was retained noting a lack of consistency of the date throughout the pleadings.  Indeed, one date cited by counsel as the date on which it was retained was a date four weeks into the future!  The court ultimately discerned the correct retention date, but it was not a good start for counsel.
Lesson #2: Comply With Local Rules
The court continued to reproach the defendant for his inability to comply with the local bankruptcy requirements governing emergency motions and notice.  The court noted that “[a]lthough Defendant styles this motion as an emergency motion (defined under Local Bankruptcy Rule 9075-1 as a motion requiring an order on less than 48 hours’ notice), Defendant has not complied with the requirements of Local Bankruptcy Rule 9075-1 . . . .”  The court pointed out that, because the plaintiff’s counsel had represented that no default would be requested that week, there did not appear to be a reason for an order for emergency relief on less than 48 hours’ notice, and defendant would, in reality, have at least four days.  By this reasoning, the defendant should have (but did not) request a hearing on shortened notice for non-emergency motions.  Instead, the court was left to infer what the defendant and his counsel meant — a position counsel should seek to avoid.
Lesson #3: Be Civil, Be Professional, and Be Cooperative
The crux of the opinion focused on the court’s “chagrin . . . by the inability of both counsel to work out a reasonable extension of time in this situation and their lack of civility and professionalism . . . .”  The court described counsels’ “sharp and unbecoming litigation gamesmanship and posturing in their email correspondence,” which were attached to the moving papers.  Yes, every email should be viewed as a potential exhibit for opposing counsel!
After declaring that “[t]he court would think both counsel would know better,” the court stated that it felt “compelled to comment on civility and professionalism in litigation since the lack of such seems to becoming a noticeable problem in local litigation practice.”  The court then cited an op-ed piece by a local California litigator referring to a “discernible erosion of civility and professionalism in our courts.”  The court noted that “counsel should have been able to agree” to a reasonable, short extension, without attaching extraneous conditions.  The court further admonished counsel for taking action “for tactical reasons” and not considering an extension of the response deadline “beyond a stingy two days” unless the defendant complied with an “extraneous condition” of first providing discovery material.
Ultimately the court relied on its case management authority to supervise proceedings under the Federal Rules of Bankruptcy Procedure and Federal Rules of Civil Procedure and set its own deadlines for the parties to respond.  Time will tell if the parties will cooperate and avoid further gamesmanship in the proceedings to come.