Must all material representations made during a settlement conference be truthful? Can a lawyer be sanctioned for misrepresenting a material fact during a settlement conference? Southern District Magistrate Judge James L. Cott recently addressed these questions in Otto v. Hearst Communications, 2019 WL 1034116 (S.D.N.Y. Feb. 21, 2019). Although Judge Cott declined to impose sanctions, he characterized plaintiff’s counsel’s conduct as presenting “a close call.” If there had been clear evidence that (1) plaintiff’s counsel had, in fact, knowingly made a materially false statement at the settlement conference and (2) defendant had been prejudiced by the false statement (e.g., defendant had agreed to a settlement in reliance on the false statement), Judge Cott likely would have imposed sanctions.

‘Otto’

Otto v. Hearst Communications is a copyright infringement case. The matter arose when plaintiff took a photograph of President Trump (the Photograph) with his camera phone while attending a friend’s wedding in June 2017 at a Trump-owned golf course. Defendant subsequently obtained the Photograph from a third-party’s social media account and published it on one of its websites in an article titled “President Trump Is the Ultimate Wedding Crasher.” In response, plaintiff filed suit alleging that defendant committed copyright infringement by displaying the Photograph without a license. On Dec. 10, 2018, Southern District Judge Gregory H. Woods awarded plaintiff summary judgment on liability and scheduled a trial on damages to begin on July 15, 2019.

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