After the personal injury claim against Mazda was successfully mediated, in Anthony v. Abbot, 2008 U.S. App. LEXIS 25704 (3d Cir. December 9, 2008), the defense lawyer drafted a release that extended to Mazda’s insurers and suppliers. One would have thought this unobjectionable, since the carriers would not pay without a release from Mazda and Mazda did not want to be exposed to third party claims from suppliers. The plaintiff objected, however; a magistrate judge imposed sanctions in an order that was ambiguous as to whether Mazda or its counsel was the sanctioned party; the district court affirmed, and so did the Third Circuit:

The District Court correctly concluded that Mazda does not have standing to challenge the award of sanctions against Bennett. We generally will not review a party's challenge to a sanctions order when the sanctions are levied only against the party's attorney. Bartles v. Sports Arena Employees Local 137, 838 F.2d 101, 104 (3d Cir. 1988). The attorney him or herself is, in that instance, the party in interest. In this case, it is true that the language used by the Magistrate Judge in his opinion granting Anthony's sanctions motion is imprecise, as he twice states that "Mazda will be sanctioned" (App. 21). However, the motion itself only sought sanctions against Bennett. Indeed, the motion invoked 28 U.S.C. § 1927, which is strictly a basis for sanctions against an attorney. See 28 U.S.C. § 1927 (applies only to "[a]n attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof."); In re Prudential, 278 F.3d at 188 (stating that "[section] 1927 sanctions are applicable only to an attorney") (citation omitted). Despite the somewhat confusing prefatory language, it appears that the Magistrate Judge intended to, and did, grant the motion as it was presented. That is how the District Court perceived it as well, since it concluded that the Magistrate Judge's order imposed sanctions only against Bennett.

[Footnote 3:] While Bennett himself is named as a party to this appeal, he did not appeal the Magistrate Judge's order to the District Court. Bennett argues that his failure to appeal the sanctions order to the District Court should not prevent him from being a party to this appeal. We need not decide that issue, however, because even if he has a right to be before us, Bennett did not present to the District Court the arguments he now presents to us. The Magistrate Judge's order states that the "plaintiff's motion for sanctions as it related to the post-settlement motions is granted." ... That order put Bennett on notice that the sanctions motion, which by its terms sought sanctions solely against him, had been granted. Even if we were to accept Bennett's premise that he did not understand the Magistrate Judge's order to impose sanctions only on him, that must have changed once the District Court issued an order denying Mazda standing. At that point, Bennett had the lay of the land and an opportunity to request relief from the District Court, but he failed to do so. There are no exceptional circumstances which persuade us to disregard the general rule that we will not consider on appeal issues that were not raised before the district court. See Continental Cas. Co. v. Dominick D'Andrea Inc., 150 F.3d 245 (3d Cir. 1998) (declining to hear appeal from magistrate's sanctions order where party had not appealed that order to the district court.) We therefore have no occasion to opine on whether Bennett's conduct was sanctionable.

Without second guessing anyone: Next time, the issue should be raised during the mediation, at which point no one will care or feel aggrieved or object -- or the release should be drafted to achieve the same result via judgment reduction. And always, always, always counsel must appeal in their own name. Regrettable result for a lawyer who was doing the right thing for his client.