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If mediation is the triumph of hope over experience, GOOD FOR US!

This, from today's New York Times (full article here):

With anxiety running high in classrooms across the nation after the Virginia Tech attacks, the authorities in Sacramento [California] arrested four secondary school students on Thursday, including one carrying a loaded gun. . . .

[A] 14-year old . . . had photographs of two female McClatchy [High School] students.  The police said they believed that the boys were planning to shoot them. . .

School counselors had been working on [a] problem [among four female McClatchy students] and planned to mediate the dispute on Thursday . . .

The police said they believed that the two boys [with the gun] . . . were enroute to the mediation, possibly to shoot their targets before or after the meeting."

We're hoping that if the police had not intervened, a shooting wouldn't have occurred after the mediation.

I'm also hoping mediators won't have to begin frisking their disputants before joint sessions, at least not here in Second Amendment land where we are packing 65 million hand guns!

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Step four in The Art of Getting the Best Deal:  Solve the Joint Problem

(left:  my first 2-wheeler on which my grandfather, the sign-painter, inscribed my name)

Exploring Different but Compatible Interests

Lax and Sebenius suggest that many negotiators "simply assume their interests to be the opposite of yours -- rather than different and potentially compatible."

You cannot, however, simply instruct the parties to search for different but compatible interests.  The mediator needs to listen long and carefully for the needs and concerns that are driving the parties' legal positions.

But First, a Little Reactive Devaluation*

You'll recall that the parties to my hypothetical patent infringement action had already made lists of extremely valuable non-economic benefits that they might exchange with one another to resolve the dispute.  They soon pushed those bargaining chips aside, however, quickly reverting to purely monetary issues.  

Why do litigants abandon business opportunities more valuable than their total monetary demand?   "Reactive devaluation." ** 

Money seems objective and certain while the value of intangibles is imprecise and risky. 

Non-quantifiable benefits are greeted with the suspicion one reserves for the street vendor hawking Louis Vuitton handbags.  This apprehension is probably expressed by litigators more often than any other professionals -- "if he wants it, it can't possibly be good for me."  

____________________

**  I learned everything I know about the social psychology of conflict from University of Missouri Law School Professor Richard Reuben.  This is one of his best and most comprehensive Power Point Presentations.  Take a look when you have a moment.  Learning social psychology is is like hitting the "reveal codes" key in WordPerfect or seeing the matrix:  your entire conflict-life is mapped, graphed and revealed.  Thanks again Richard! 

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As promised, we bring you Step Three from the Lax and Sebenius article, the "Art of Getting the Best Deal. 

Bringing the Deciders and Assessing Party Interests (a Brief Review)

Yesterday we stressed the importance of identifying the "deciders" and those who might get in the way of the deciders' decision (the known unknowns and the unknown unknowns).  

Today, we apply those principles, along with the third Batna step, to a hypothetical patent infringement mediation.  

Because litigators are trained to organize party interests around legal theories and business people to organize their own thinking around commercial interests, your mediator should be facile with both.  At some point, the mediator should assist the parties and their counsel in shifting their attention from litigation "interests" (costs, merits) to business and marketing interests.

Why?

Because there are thousands of ways to make a deal and only a handful of legal remedies to resolve a dispute.       

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(for more of the brilliant Charles Fincher, Jr., see LawComix.com)

When I hear from my old litigation buddies that "all mediators do is divide by two" I am tempted to wander into the "hard sell" marketing zone I usually avoid.  Last night at the Los Angeles ABTL dinner, for instance, I runined my record of never overtly marketing my services by nakedly promoting myself in response to one such complaint.

For those litigators disappointed by the mediation services they receive, I'm supplying an executive summary (with commentary) of Harvard negotiation gurus Lax and Sebenius excellent article, "The Art of Getting the Best Deal."  

Don't Say "Yes, Yes, Yes," When You Really Mean "No, No, No, No, No."

As Lax and Sebenius stress, business people should only say "yes" to a deal that "meets [their] real interests better than [their] best no-deal option."  Mediators call the "no-deal" option your BATNA -- a Better Alternative to a Negotiated Agreement.

Let me reiterate:  there is no reason to say "yes" to any deal that is worse than no deal.  Ever.  Period.

Tell that to the mediator the next time you're feeling pressured to accept an offer or meet a demand that makes your client really really really unhappy.  Say, "I can do better at trial."  Say, "I can negotiate a better deal than that."  Say, "if I can't negotiate a better deal that that today, I'll approach the matter differently tomorrow."  Say, "I don't believe the best settlement is one that leaves everyone unhappy."  Say, "that's not what I promise my clients when they hire me."  Say, "I've read Lax and Sebenius."  Say, "good luck with your mediation career" and pack your bag.  Bow out nicely but firmly. 

Find the Deciders and Draw a Deal Diagram

A deal diagram is not a decision tree.  Decision trees are about legal strategy.  Business decisions are not driven by legal strategy.  Business decisions are driven by finance, markets, business needs, and, commercial realities.  Only lawyers are kept awake at night by legal dilemmas.  CEO's are concerned with mergers and acquisitions, S.E.C. reporting requirements and how a settlement with a competitor might affect stock prices.

So what's a "deal diagram"?  I'll let Lax and Sebenius explain:

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Everyone who knows the difference between distributive and integrative bargaining and the iconic story of the ONE ORANGE should go directly this morning to Geoff's blog, Mediator Blah Blah.  First, a snippet to encourage you:   

Today I found myself inducted into the Mediators' Mile High Club at 23,000ft when two young, remarkably similar looking girls seated in 16E and 16F needed my help.

(yes, they look sweet and compliant now, but just wait until the plane takes off!)

for remainder of story click here.

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This is taken straight from the Met News.  I will read this case and provide my analysis at the beginning of the coming week.

Where it was discovered after arbitration that the judge who granted order compelling arbitration had, prior to granting such order, engaged in discussions concerning possible employment as a dispute resolution neutral, it was proper to disqualify judge who granted the order compelling arbitration and vacate that order, but it was premature to vacate arbitration award. Where order compelling arbitration is void because judge was disqualified from granting it but is not set aside until after arbitration is concluded, award may stand if newly assigned judge makes a de novo determination that the parties were contractually bound to arbitrate, that acts of disqualified judge did not taint the arbitration, and that no other grounds exist to vacate the award.

Rossco Holdings v. Bank of America

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by Justin Kelly, ADRWorld.com

Maryland's highest court has approved an amendment to the state's Rules of Procedure that encourages lawyers to inform clients of alternative dispute resolution options when a new case is likely to be headed to court.

[T] Hon. Joseph F. Murphy, Jr. . . . said that the change would "highlight for counsel what they should be doing if ADR could work in their case," explaining . . . . the comment . . . that "where ADR is appropriate, lawyers should advise their clients of that fact." 

                                               *                             *                          *

Rule 2.1, which addresses the lawyer's role as a counselor, states, "In representing a client, a lawyer should exercise independent judgment and render candid advice. In rendering advice, a lawyer may refer not only to law but to other considerations such as moral, economic, social and political factors that may be relevant to the client's situation."

                                          *                                  *                                        *

The amendment adds the following new sentence to Comment 5: "[W]hen a matter is likely to involve litigation, and in the opinion of the lawyer, one or more forms of alternative dispute resolution are reasonable alternatives to litigation, the lawyer should advise the client about those reasonable alternatives." 

"The amended Comment is intended to encourage informed discourse between the lawyer and client whenever ADR may be an appropriate option," the Reporter's Note says.

An earlier proposal to amend Comment 5 had suggested requiring lawyers to inform clients about ADR options. But a mandatory requirement was dropped out of concern that it would lead to litigation by clients against their attorneys.

Murphy noted that Comment 5 says that attorneys "should advise," instead of "shall advise," and that this was a "compromise." He said that as revised, Comment 5 imposes no "automatic" requirement to inform clients about ADR options.

Some other states have ADR-related provisions in their rules of professional conduct. Vermont has the "shall advise" language, while Alaska, Colorado, Hawaii, Massachusetts, Tennessee, and Virginia have the "should advise" language.

The change in Comment 5 will take effect July 1, 2007.

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While Joe Francis sits in jail for misbehaving during a mediation, we take a moment to contemplate mediation's first principles:  voluntariness and self-determination.  

In their exhaustive review of appellate mediation case law Disputing Irony:  A Systematic Look at Litigation about Mediation (Spring 2006) 11 Harv. Negot. L. Rev. 43, James R. Coben and Peter N. Thompson discuss the law to date on duress and undue influence.

As Coben and Thompson stress, 

To make a successful duress defense the proponent must establish that a wrongful threat by the adverse party deprived the proponent of free choice, resulting in an unfair agreement benefiting the adverse party. As with other contractual defenses, the standard is quite difficult to meet in a mediation context. A mediation party was successful in claiming duress in only one of the thirty-six opinions [reported during the prior five year period].

That as many as seven of the thirty-six cases reviewed were directed at alleged mediator coercion is troubling, particularly in light of Magistrate Brazil's opinion in Olam v. Congress Mortgage Co. * which makes pursuing any claim of duress or undue influence seem a foolhardy mission.  As Coben and Thompson note, although the plaintiff in Olam

was sixty-five years old, suffered from high blood pressure, headaches and abdominal pains, and testified that she was in pain, weak and dizzy, and that she was pressured by her lawyer, the defendants and their counsel, the court found that this agreement obtained at 1:00 A.M. after fifteen hours of mediation was not obtained by undue influence. 

Coben and Thompson revisited the issue of duress under the rubric of mediator misconduct, citing ten opinions where a party charged the mediator with exerting undue pressure to obtain agreement.  Most of these charges will look familiar to lawyers, who might ask themselves what they look like to the man or woman on the street:

• the gist of the complaint in several cases was the mediator's recitation of a list of "horribles" that the parties would suffer if they did not settle and had to experience the dreaded civil trial (called "reality-testing" by the authors)
• one claim was based upon the alleged coercive statement by the mediator that if the party  "didn't sign the agreement [he] would ruin [the mediator's] record of being always able to settle the case."
• another claim (this one successful) was based upon the mediator's alleged threat "to tell the judge that she was the cause of the settlement failure, speculat[ion] that the court would rule against her, and [pr]offered opinions about the potential legal costs[, as well as] how refusing to settle would affect her pensions.

We are bound to see more claims of mediator misconduct, duress and coercion.  The problem is clear.  We'll discuss potential solutions in future posts.     

* Note that the District Court's order requiring the mediator to testify would likely not stand up under the current law in California.  See In re Marriage of Kieturakis (2006) 138 Cal.App.4th 56. 

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The noisiest, most opinionated people in the world, Bloggers, will be observing a Day of Blog Silence on April 30, 2007, for the victims at Virginia Tech.  We invite our fellow bloggers to join in (thank you Tammy Lenski of Mediator Tech for the head's up). 

Before then, we noisily give you the following for your thoughtful consideration:

The Brady Campaign to Prevent Gun Violence

You've seen her interviewed by the network news about the tragedy at Virginia Tech.  Now buy my friend Princeton Professor Katherine Newman's book, Rampage, the Social Roots of School Shottings.  

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Appellate opinions concerning the enforceability of mediated settlement agreements are coming fast and furious.

If you haven't prepared your form term sheets and memoranda of understanding by now,  you might end up litigating the settlement whose purpose it was to stop the litigation. 

Oh the irony!    

Today's case Irvine v. Regents of University of California (4th Dist. 2007) was decided on a narrow procedural ground, leaving at large the questions of fraud, duress and mistake alleged by the Plaintiff as a bar to enforcement of her mediated settlement agreement.

The narrow issue here was whether a party could be excused from meeting the deadlines imposed by California Rule of Court 3.1385 simply by asserting that the challegned settlement agreement was uneforceable. 

The Irvine Court, reversing the trial court's Rule 3.1385 dismissal, answered the question in the affirmative, explaining: 

The only decision before the court at a rule 3.1385 hearing is whether to dismiss the case or restore it to the civil active list. By alleging a dispute over whether the parties reached a binding settlement, plaintiff demonstrated good cause to restore the case to the civil active list. In reaching this conclusion, we have not considered whether any of plaintiff's contentions have merit.

There you have it.  Now the parties will be litigating the compromise they reached to avoid litigation.  Don't let this happen to you.  Start (but do not finish) here, where I have provided articles and case law bearing upon the enforceability of mediated settlement agreements. 

If you want your agreements to be durable take the time to read the case law, check the statutory provisions and, yes, even read the Rules, like 3.1385 here, which requires that an action be dismissed within 45 days after the Court receives notice of settlement unless good cause is shown why the case should not be dismissed.

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Thanks to Michael D. Young of Judicate West and Weston Benshoof Rochefort Rubalcava & MacCuish for passing along a mediation story so improbable that you'd expect to see it appear on a mediator's bar exam.   

Young apparently reviewed the entire court file (!!) to supply the following tale of woe, ending in Joe Francis' jail sentence for mediation misconduct.  

Huh???? 

Read on, my friends, read on.

The Claimed Mediation Misconduct

In October of last year, defendant Joe (Girls Gone Wild) Francis was ordered to private mediation in a Florida civil action.  That mediation, to say the least, went badly.  

Florida's mediation confidentiality protections apparently include an exception for threats of physical violence.  It was this exception upon which Plaintiffs relied in telling the following tale out of mediation "school."      

Francis [arrived at the mediation] wearing sweat shorts, a backwards baseball cap, and was barefoot. He was playing [with an] electronic device. As [plaintiffs' counsel] began his presentation, Francis put his bare, dirty feet up on the table, facing plaintiffs' counsel.

[Plaintiffs' counsel] said four words, "Plaintiffs were minor girls,"  when Francis barked, "are the girls minors now?"  Continuing, [Plaintiffs' counsel] said, "plaintiffs are minor girls who were severely harmed by Defendant."

Francis then erupted. "Don't expect to get a fucking dime -- not one fucking dime!" This was Francis' mantra which he repeated, about fifteen times, during his tantrum that ensued. "I hold the purse strings. I will not settle this case, at all. I am only here because the court is making me be here!" 

As plaintiffs' attorneys were leaving, Francis' threats escalated. "We will bury you and your clients!" Francis threatened. As [Plaintiffs' counsel] walk[ed] out of the room, Francis got up and faced off with [him] . . . bark[ing], "I'm going to ruin you, your clients, and all of your ambulance chasing partners!"

Francis' aggressive move and threats to "bury" and "ruin" [Plaintiffs' counsel] were clearly an assault . . . intended to . . . prevent the mediation from ever beginning. As a result of Francis' assault . . . no mediation as to Francis as an individual defendant ever occurred.

Francis then made the only offer he was to make that day.  "Suck my dick," Francis shouted repeatedly, as plaintiffs' counsel left the mediation room.

Plaintiffs sought an order from the court requiring Francis to behave civilly and pay sanctions.  

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We've talked before about complaints that mediators sometimes use time- authority- and fear-pressure tactics to wrest agreement from the parties. 

If a client can prove she was coerced into settling a Title VII case, the Federal District Court for the Northern District of California has a remedy for her -- rescission.  

As reported last year by the National Arbitration Forum, the Court In Ryles v. Palace Hotel, rescinded a mediated settlement agreement as violative of federal law governing the release of Title VII claims.  The release of such claims must be “voluntary, deliberate, and informed.”

As the National Arbitration Forum article explained

In applying that standard, courts must consider the “totality of the circumstances.” The factors to be considered include the clarity of the agreement, the claimant’s education and business experience, whether the atmosphere for the execution of the agreement was coercive, and whether the plaintiff had the benefit of counsel.

All but one of those factors favored enforcement. However, one of the factors – whether the atmosphere for the execution of the agreement was coercive – weighed heavily against enforcement because of the “intense pressure” applied by Ryles’ attorney. Based on that factor, the Court held that Ryles could rescind the settlement agreement.

In reaching its holding, the Court cited Ryles’ letter to the Court as bolstering her credibility. Moreover, the Court rejected Palace Hotel’s argument that California law required coercion by the other party to the contract, noting that the release of Title VII claims is governed by federal law.

More on mediation "duress" soon.

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Thirty years ago (more or less) my law school trial advocacy professor taught me this:

Trial is not about ascertaining the truth.  Nor is it about justice.  It is simply one way to finally resolve a dispute.

I have to admit that my legal career was probably more marked than others by the belief that I was working on the side of truth and justice.  

But then, I was working small. 

Did the word "sudden" mean "quick" or only "gradual" and "unexpected" within the meaning of the pollution exclusion contained in a policy of comprehensive general liability insurance? 

Was it misleading to omit the exchange rate from advertising for the transmission of money to foreign countries? 

Could you negligently conspire to drive a medical provider out of business? (answered affirmatively, believe it or not, by the trial court).

Now that my view of the adversarial system is one of mediator and sometimes arbitrator,  what the "truth" is seems murky again, the way it did when I was clerking for a federal district court judge during law school.

So this post is the beginning of a series of posts about "justice" and fact-finding.  A series that will follow the path of my interest and discovery.  A series that raises questions that might never be answered.

To begin the exploration, I borrow freely from the excellent article by Professor Lisa Blomgren Bingham  When We Hold No Truths to Be Self-Evident:  Truth, Belief, Trust and the Decline in Trials.  This article, from a 2006 Symposium Issue for the Journal of Dispute Resolution, can be found on Westlaw and Lexis-Nexis and likely elsewhere on the internet.  I do not, unfortunately, have a free link to the article itself. 

We start with JUSTICE.

Distributive Justice

Distributive justice has its roots in social equity theory. It posits that social behavior occurs in response to the distribution of outcomes. Distributive justice emphasizes fairness in the allocation of outcomes. Thus, in mediation research, distributive justice suggests that satisfaction is a function of outcome, specifically the fact and content of a settlement or resolution. In theory, participants are more satisfied when they believe that the settlement is fair and favorable. There is a substantial body of empirical research that supports the distributive justice model as an explanation of satisfaction. The research suggests that distributive justice is a better explanation for satisfaction related to conflicts over resource allocation, such as wage disputes than other cases in which fairness matters. 


Procedural Justice

Procedural justice refers to participants' perceptions about the fairness of the rules and procedures that regulate a process. In contrast to distributive justice, which suggests that satisfaction is a function of outcome (the content of the decision or resolution), procedural justice suggests that satisfaction is a function of the process (the steps taken to reach that decision). Among the traditional principles of procedural justice are impartiality, voice or opportunity to be heard, and grounds for decisions. 

Procedural issues such as neutrality of the process and decision-maker, treatment of the participants with dignity and respect, and the trustworthiness of the decision-making authority are important to enhancing perceptions of procedural justice. Extensive literature supports procedural justice theories of satisfaction in a variety of contexts involving both courts and dispute resolution. In general, research suggests that if organizational processes and procedures are perceived to be fair, participants will be more satisfied, more willing to accept the resolution of that procedure, and more likely to form positive attitudes about the organization.

Interactional Justice

Beginning in the 1980s, organizational justice researchers developed the notion of interactional justice, defined as the quality of interpersonal treatment received during the enactment of organizational procedures. In general, interactional justice reflects concerns about the fairness of the non-procedurally dictated aspects of interaction. Research has identified two components of interactional justice: interpersonal justice and informational justice. These two components overlap considerably. However, empirical research suggests that they should be considered separately as each has differential and independent effects upon perceptions of justice. 

Informational Justice

Informational justice focuses on the enactment of decision-making procedures. Research suggests that explanations about the procedures used to determine outcomes enhance perceptions of informational justice. Explanations provide the information needed to evaluate the structural aspects of the process and how it is enacted. However, for explanations to be perceived as fair they must be recognized as sincere and communicated without ulterior motives, be based on sound reasoning with logically relevant information, and be determined by legitimate rather than arbitrary factors.  

Interpersonal Justice

Interpersonal justice reflects the degree to which people are treated with politeness, dignity, and respect by authorities. The experience of interpersonal justice can alter reactions to decisions, because sensitivity can make people feel better about an unfavorable outcome. Interpersonal treatment includes interpersonal communication,  truthfulness, respect, propriety of questions, and justification, and honesty, courtesy, timely feedback, and respect for rights. 

What all of this means in the "lay" terms of this blog, will be the subject of later posts, all labeled, "Truth, Justice and the American Way"  if the topic is of interest to you and you'd like to follow it (and comment upon it!)

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As a follow-up to yesterday's post on collaboration and cooperation, we recommend a recent article in the Harvard Business School's invaluable online resource "Working Knowledge" -- The Value of Openness in Scientific Problem Solving, by Karim R. Lakhani, Lars Bo Jeppesen, Peter A. Lohse, and Jill A. Panetta.

The HBS Executive Summary below; link to full article above. 
  

Scientists are generally rewarded for discoveries they make as individuals or in small teams. While the sharing of information in science is an ideal, it is seldom practiced. In this research, Lakhani et al. used an approach common to open source software communities—which rely intensely on collaboration—and opened up a set of 166 scientific problems from the research laboratories of twenty-six firms to over 80,000 independent scientists. The outside scientists were able to solve one-third of the problems that the research laboratories were unable to solve internally.

Key concepts include:

Opening up problem information to a large group of outsiders can yield innovative technical solutions, increase the probability of success in science programs, and ultimately boost research productivity.

Open source software communities provide a model for improving the process of solving scientific problems.

Outsiders can see problems with fresh eyes; in this study, problems were solved by independent scientists with expertise at the boundary of or even outside their field.

Achieving true openness and collaboration will require change in the mindsets of both scientists and lab leadership.

A timely post for solving the problems of WORLD 3.0. 

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(left:  courage)

In Lessons From a Large-Firm Partner Who Set Up His Own Shop ... and lived (well) to tell about it, Mark P. Zimmett tells the nitty-gritty of every BigLaw associate's and partner's ultimate fantasy -- solid, sophisticated legal work with your own name on the firm stationary.

For the full tale, see Mark's American Lawyer article here.  Excerpt below.    

Many partners in large firms dream of chucking it all and setting up their own practice. However, many also fear that without their firm's name recognition and resources, they will miss out on major matters. A seat at the table is no big deal in a penny-ante game.

But you can leave a big firm and keep a big practice. Today, one can handle sophisticated high-stakes legal work in a small firm. Add profits that can rival those at top 10 Am Law firms and control over your professional (and personal) life, and striking out on your own becomes an appealing alternative.

Getting started is relatively easy. As a friend described it: "Starting your own firm is only slightly more complicated than setting up the corner newsstand." True enough, but the real risks are realized along the way; like bungee-jumping with a family on your back, strapping on the harness is the easy part.

I hung out my shingle on Nov. 1, 1990, and hung out everything else with it.

For a local example, check out the excellent work being done by Lee and Tran formerly of Morgan Lewis, Quinn Emanuel, Skadden Arps, and Wilson Sonsini.

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