In Koehn v. Tobias, 866 F.3d 750 (7th Cir. 2017), the Seventh Circuit upheld the imposition of a monetary sanction against the defendants for conduct in a mediation, even though Defendants prevailed at trial. Here’s what happened:
Round One: In a mediation before the Magistrate Judge, Defendants made a final offer of $75,000. Plaintiff rejected that offer, so the case didn’t settle.
Round Two: In response to a question about the status of settlement in a teleconference with the Court, defense counsel stated that their last settlement offer was approximately $150,000 and that Plaintiff had rejected that. Plaintiff’s counsel said they’d never heard the $150,000 number and that, based on this new number, a second settlement conference might be productive.
Round Three: Based on that teleconference, a new mediation was scheduled before the Magistrate Judge. However, Defendants only offered approximately $75,000 at this new mediation, which Plaintiff declined, and the mediation did not produce a settlement.
Round Four: At the end of the case, after Defendants prevailed at trial, the court entered a monetary sanction against Defendants because they were aware that the $150,000 figure was the only reason for the second mediation. While the Court noted that Defendants were not obligated to offer any number in settlement, “by changing their position so drastically without any indication that they intended to do so, Defendants did not participate in the settlement conference in good faith.”