By Daniel Wiessner
NEW YORK, Jan 24 (Reuters) - A federal appeals court has
denied a communications company's bid to appeal a decision
related to the bankruptcy of WorldCom, finding that the
company's attorney failed to meet a key deadline through his own
negligence.
In a split decision on Thursday, the Circuit Court of
Appeals for the 2nd Circuit found that the failure of
Communications Network International's attorney, W. Mark
Mullineaux, to update his email address in the district court's
electronic filing system did not justify filing a late notice of
appeal.
Mullineaux, of the Pennsylvania firm Astor Weiss Kaplan &
Mandel, claimed he missed the 30-day deadline in 2010 because
the court sent notice of entry of the judgment to his old email
address.
The latest decision overturned a 2011 district court ruling
that excused CNI's untimely notice of appeal under Federal Rule
of Appellate Procedure 4(a)(6). The rule gives courts the
discretion to sidestep the statutory 30-day deadline if the
appellant proves that it never received notice and if the other
party faces no prejudice as a result.
"There is nothing in the history of the rules ... to suggest
that the drafters sought to provide relief when the fault lies
with the litigants themselves," wrote District Judge Lewis
Kaplan, who was sitting in the 2nd Circuit by designation.
He said CNI's failure to receive notice "was entirely and
indefensibly a problem of (Mullineaux's) making, and Rule 4(a)6
was not designed to reward such negligence."
The court said it was the first time that an appeals court
found an abuse of discretion in a trial court's granting of a
4(a)(6) motion.
Mullineaux on Thursday said he was reviewing the decision
and declined immediate comment.
WorldCom in 2002 filed for Chapter 11 bankruptcy. MCI
WorldCom, an affiliate that was later purchased by Verizon,
subsequently filed suit against Communication Network
International to recover money for alleged unpaid
telecommunications services.
In 2007, MCI was awarded $2.4 million in damages, interest
and attorneys' fees. Communications Network International
appealed, and the Southern District in 2010 affirmed.
LATE FILINGS
According to the 2nd Circuit, Mullineaux never received
notice of the Southern District ruling because he had not
updated his email address in the court's electronic notification
system.
Mullineaux filed a notice of appeal 56 days after the trial
court's order, missing the 30-day deadline by nearly a month. He
filed a motion under Rule 4(a)(6) to excuse the late filings.
District Judge George Daniels of the Southern District of
New York in 2011 found that MCI had shown no prejudice from
Mullineaux's untimely filing and granted the motion.
The 2nd Circuit on Thursday reversed.
"It is remarkable that Mr. Mullineaux could fail to take
(the) most basic steps to receive proper notifications, while at
the same time relying entirely on such notifications to ensure
that he filed a timely notice of appeal," Kaplan wrote.
Kaplan was joined by Circuit Judge Robert Katzmann.
In dissent, Circuit Judge Gerard Lynch said that Rule
4(a)(6) was created expressly to excuse, with good reason, the
failure to properly use the court's electronic system.
"According to the majority opinion, district courts may not
grant relief, despite the contrary text of the rule, when the
conditions of the Rule are satisfied, unless the litigant was
without fault," Lynch wrote.
Andrew Muller, who represented Verizon, declined to comment.
Verizon did not return a request for comment.
The case is Communications Network International, Ltd v. MCI
Worldcom Communications, U.S. Circuit Court of Appeals for the
2nd Circuit, No. 10-4588.
For CNI: W. Mark Mullineaux of Astor Weiss Kaplan & Mandel.
For MCI WorldCom/Verizon: Mark Shaiken and Andrew Muller of
Stinson Morrison Hecker.
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