Negotiating Bankruptcy

My favorite local bankruptcy mediators

Ben Siegel of Buchalter (left)

former bankruptcy judge Herb Katz (right)

Bankruptcy mediation catches on nationwide

A decade ago, there were only a handful of mediation programs in bankruptcy courts.

Long associated with family law disputes, mediation programs were slow to catch on in complex business litigation, including bankruptcy cases.

But that's changing.

More than two-thirds of the 90 bankruptcy courts have mediation available, according to Robert Niemic, senior attorney at the Federal Judicial Center. Even more offer some other form of alternative dispute resolution, such as judicial settlement conferences.

In the U.S. Bankruptcy Court for the Central District of California, more than 3,800 cases have been referred to mediation since 1995. About 64 percent of those cases were resolved through settlements.

To keep costs down, the first day of mediation is free. Parties choose from a list of 200 attorneys and non-attorneys, such as accountants and financial experts, who volunteer as mediators.

Chief Bankruptcy Court Judge Barry Russell, who launched the mediation program in 1995, said that most cases settle in a day, producing major cost savings for both the court and the parties involved.

For full article, click here.

Change Your Definition of Winning?

Change your definition of “winning” to include the business perspective. “Winning for the business” may not mean victory in a trial but preserving management time and protecting the business’s reputation and brand.  From Early Case Assessment from Seagate Services.

Seagate is selling an e-discovery product (reason number one for leaving commercial litigation now -- e-discovery).  But the quote above nails my own attitude toward resolving complex commercial disputes.

Negotiating Revenge

Who negotiates revenge? 

Lawyers, of course. 

In the criminal law, the negotiation ends either in a plea bargain or the Best Alternative to it -- trial.

Most civil lawyers don't think about revenge much.  When settling a case, however, they should understand their clients' desire for vengence if they want to break past the psychological impasse to giving up the ultimate reward in a society based upon the law -- vindication of a party's  position and punishment of the opposition by way of a jury verdict.

Today, the New York Times -- in Calculating Economics of an Eye for an Eye by Patricia Cohen -- brings us a better way to understand the primal need for vengence which, it seems, is based not only on our "human nature" but also on our acculturation and personal experience. 

Even Dr. Melfi wants revenge in a world where the "justice system is %$^#'ed up."

 

The good news for countries clinging to the rule of law (as we are despite the recent assaults upon it) is as follows:

vengeful feelings are stronger in countries with low levels of income and education, a weak rule of law and those who recently experienced a war or are ethnically or linguistically fragmented. Anthropologists tend to believe that vengeful feelings were useful in binding a family or group together in early human society. They were protective devices before states were established and did the job of punishing wrongdoers.

Check out the full article here.  H/T to Marginal Revolution here.

Head's Up for Blawg Review No. 171 at the IP ADR Blog

This is how hard I'll be working this week -- with a little help from my IP ADR Blogger colleagues -- to bring Settle It Now's readers one of the best Blawg Reviews of the year over at the IP ADR Blog this coming Monday. 

If you've never participated in a Blawg Review before, check out the guidelines for submission here.

Though we've been reading Blawg Review since we put up our first tentative post on blogger (here!)  in June of 2006, as hosts, we're Blawg Review virgins.  So send your best posts this week to Blawg Review (follow those guidelines above) for possible inclusion in possibly one of the best BR's ever (we like to set our own bar high!)

And if you're a true Blawg Review virgin, here's how Blawg Review explains itself:

The Carnival of Law Bloggers

Blawg Review is the blog carnival for everyone interested in law. A peer-reviewed blog carnival, the host of each Blawg Review decides which of the submissions and recommended posts are suitable for inclusion in the presentation. And the host is encouraged to source another dozen or so interesting posts to fit with any special theme of that issue of Blawg Review. The host's personal selections usually include several that reflect the character and subject interests of the host blawg, recognizing that the regular readership of the blog should find some of the usual content, and new readers of the blog via Blawg Review ought to get some sense of the unique perspective and subject specialties of the host. Thanks to all the law bloggers who collaborate to make Blawg Review one of the very best blog carnivals of any genre.

Blawg Review 170 Negotiates Simple Justice

My friend, Joe Mockus, a criminal defense attorney in the San Francisco Bay area, once asked me, "just what is it that you do all day long?"   I know what Joe did.  He had at least one hundred court appearances a day and once in awhile tried a major felony case.  He was negotiating while I was writing stake-in-the-heart summary judgment motions in cases with 2 million documents coded in the Phillipines.  I took a lot of depositions and, if I was very very very lucky, I got to try a case to a jury once every five to ten years.

If you're a civil litigator like me (read:  "not really a trial attorney") and you haven't thought of criminal law since your first year of law school (it has something to do with a man jumping out a 20 story window and then being shot by an angry mistress from the 10th floor, right?  Cf. Magnolia below) then amble on over to Scott Greenfield's Simple Justice for a satisfying look at the world criminal lawyers inhabit every day.

And next week, we'll be hosting the Blawg Review over at the IP ADR Blog.  Which reminds me, this is likely the first and only post on this blog you'll get this week!

Habeas corpus actus reus corpus delicti crimen falsi crimen innominatum crimem laesae maiestatis de minimis non curat lex.



The Magnolia criminal law bar exam question half-way through this opening to the darkest comedy of the 20th Century, Magnolia.

Florida Insurance Carriers Barred from Requiring Policy Holders to Arbitrate Disputes

Florida Insurance Commissioner Praises Mandatory Arbitration Ban

Thanks to the LexisNexis Insurance Center Staff


TALLAHASSEE, Fla. -- Florida Insurance Commissioner Kevin McCarty welcomed the First District Court of Appeal's decision affirming the Office of Insurance Regulation's denial of United Insurance Company of America's request to include a mandatory arbitration clause in its life insurance contracts.

Arbitration would have forced disgruntled policyholders to bypass the legal system to settle disagreements. United appealed OIR's action and the court affirmed the denial.

"Policyholders have fewer rights and constitutional protections under the more restrictive arbitration process than they would have in a civil court proceeding," said McCarty. "I'm pleased that the Court made it clear that Florida consumers should not be shut out of the traditional legal system to press their grievances against insurance companies."

Although United argued that federal arbitration law superseded the Florida law that allows policyholders to use the courts for contractual disputes, the Court stated that the matter "specifically relates to the business of insurance" and was, therefore, exempt from being superseded by federal law

SCMA Town Hall Meeting on Mediator Expertise

Live blogging from the SCMA Town Hall Meeting

Lee Jay Berman:  What Makes a Great Mediator:  Brain Storm Session with Attendees

  • integrity
  • resourceful
  • reflective
  • etiquette
  • diplomatic
  • non-attachment
  • presence
  • tolerance of silence
  • spontaneous
  • plan
  • common sense
  • love
  • money
  • ethical
  • insight
  • optimism
  • intelligence
    • knowledge
    • self-knowledge
    • emotional
    • social
  • discernment
  • sensible
  • mindful
  • attractive
  • empathy
  • timing
  • compassion
  • open-minded
  • charasmatic
  • process
  • faith
  • hope and safety
  • ubuntu
  • curious
  • open-minded

First Panel:  Substance v. Process:  Lee Jay Berman standing; left to right:  Joan Kessler, Jim Lingl and Therese Gray

Jim Lingl

  • can resolve most disputes with the proper process
  • but when disputes involve people outside the room, need substantive knowledge

Joan Kessler

  • any mediator can handle any type of dispute
  • legal issues important in litigated cases
  • she's evaluative
  • she gives bad news to both sides in separate caucus
  • she's a former jury consultant

Therese Gray

  •  people who come into mediation aren't thinking clearly
  • her life experience very important
  • attorney students take 3 weeks until they're comfortable
  • attorneys are suspicious because she isn't a lawyer
  • her negotiation teachers were federal mediators
  • it's always about people, not money
  • not an attorney - also not a therapist

Herb Katz:  retired judge

  • it's up to the lawyers to explain the legal issues

 

Second Panel:  Myer Sankary at Podium Excitedly Announcing the Neuroscience Seminars Upcoming at the SCMA annual conference.  Left to right:  Sandy Gage, Len Levy, Ken Reed and Alex Polsky

Sandy Gage

    • if can't get out of the pattern that you're in (in a specialty) then you unnecessarily limit your possibilities
    • he got called for insurance bad faith cases because he handled them
    • how did Lee Jay Berman (non-lawyer) become so respected in a field dominated by lawyers
    • trust your instincts
      • do you shudder when you hear about the subject of the case?
      • are you not interested in it?
    • do your homework
      • learn what it's about
      • be prepared to handle the case from a knowledge base
  • Len Levy :
    • this is perception of people using our services
    • consumers in construction and employment believe you need subject area expertise in these areas
    •  
  • Ken Reed
    • he feels more competent as a mediator when he understands the legal issues
    • he doesn't think it's necessary to be an expert in any subject matter
    • to be effective financially, it is important to be recognized and trusted as someone who knows the underlying subject matter
    • we all learned disputing from our families
    • learned that there are parent experts that would solve the problem (mom and/or dad)
    • when we want a third party to help us resolve our dispute, we're thinking of someone with subject matter expertise -- judge or expert
  • Alex Polsky 
    • Alex was told he'd never make it because:
      • he wasn't a judge
      • he was the first non-judge at JAMS
      • now the group is 40% non-judges
      • he represented defendants and plaintiffs would never hire him
      • Topic today is POWER
        • market place power
        • who cares what we think about expertise
        • it's a gateway issue
      • the parties have to EMpower the mediator to handle the session
      • the less subject matter expertise he has, the greater amount of preparation he must undertake
        • briefs
        • pre-hearing calls
      • why are we hired?
        • evaluative
        • competitive
        • with expertise sometimes
        • mediations morph -- they change throughout the day
        • ask them for help without looking weak
        • then you'll get the cases

 

Tags:

SCMA Town Hall Meeting in Malibu Tomorrow July 26!!

Just in case you're a local Southern California mediator with nothing planned tomorrow morning, come and join us at the Town Hall Meeting at Pepperdine.  DJ article by the best friend ADR ever had in L.A., Greg Katz, below.  See Lee Jay Berman's calendar of events here.

Town Hall Meeting Will Address Mediator Expertise
By Greg Katz
Daily Journal Staff Writer

LOS ANGELES - Do mediators need law degrees? Should neutrals who mediate business disputes have experience litigating those types of cases? Or, is it enough simply to have effective mediation skills and great insight into people and their interests? These questions have remained a topic of controversy as the practice of mediation has proliferated over the past few decades, with the field's most highly sought practitioners coming from the ranks of lawyers, psychologists, CEOs and general contractors.

They re-emerged recently, when the Los Angeles County Superior Court began requiring nonattorneys on its mediator panel to get supplemental legal training.

Never ones to shy away from conflict, local mediators will convene to discuss and debate those questions Saturday at a town hall meeting called "Mediator expertise: What does it take?" The meeting, which convenes at 8:30 a.m. at the Pepperdine University School of Law in Malibu, is the sixth annual town hall staged by the Southern California Mediation Association, the state's largest organization of mediators.

"It's an extremely hot issue," said attorney-mediator Phyllis Pollack, a member of the association's board who helped organize the event.

The town hall will kick off with a presentation on the history of mediation by attorney-mediator Richard Millen, who has been called "the Yoda of the mediation world" and holds that subject matter expertise is not an important factor in mediation. After Millen's presentation, there will be three panel discussions on various aspects of mediator expertise. Among the mediators scheduled to be on the panels are Edward Davis, a former transportation company executive; Joan Kessler, who holds a Ph.D. in communications and Alexander Polsky, who practiced criminal and civil law as an attorney. Lee Jay Berman, who came to mediation through the real estate world and never attended law school, will be the mediators' moderator.

Does that mean the association doesn't think mediators need legal training? "Like everything else in life, SCMA takes no position," Pollack joked. "We have members who are both attorneys and nonattorneys. We welcome all mediators of all stripes."

The event is free and ends at noon. Attendees can register at scmediation.org.

Don't Know How to Tell Your Client It's About to Be Fined $25K a Day?

This may be the biggest break-down in attorney-client communication in the history of litigation.  Because this public statement by Allstate about its former attorney would be highly defamatory if not true, I'm taking Allstate at its word here.   

Allstate claimed that it had not deliberately flouted Manners’ orders. Rather, it said, its now-former attorney — then with the firm of Wallace, Saunders, Austin, Brown & Enochs — had failed to respond to discovery requests.

Allstate said it was appalled when it learned last year that it was being threatened with contempt.

“Allstate litigates hundreds of bad faith cases each year,” Allstate stated in court documents. “And it responds to discovery requests — just like the ones in this case — in many of them. There is no reason in the world for Allstate not to participate in discovery — particularly in this case, where there is an underlying judgment of $1 million.”

Allstate said it “immediately removed” the attorney from the case and retained new counsel.

Read the article about the lifting of the daily $25,000 contempt sanctions against Allstate in the wake of its settlement of the bad faith action in which they were imposed here.

The answer to the question "how to break bad news to my client" can be found at any of the links below.  Most of these links are for health care professionals, who have to break bad news to their patients and their families far more often than we have to tell our clients that something went terribly awry.  Put that at the top of your attorney gratitude list.

The Breaking Bad News Web Site

Breaking Bad News by Telephone

A Framework for Breaking Bad News  (anyone who read my Negotiating Life's End series knows that my father's physician could have used this excellent framework for delivering bad medical news to a patient's family)

Another excellent British source on breaking bad news listing the following traps for the unwary (partial list):

  • Do not avoid seeing the [client] or leave them anxiously waiting for news. Sometimes anticipation can be worse than even the worst reality.
  • Treat others as you would wish to be treated yourself.
  • Get the facts before you start.
  • Make sure you will not be disturbed. If necessary switch off phones or bleeps.
  • Be factual but sympathetic. Always be empathetic however you may feel personally.
  • Give time for the information to sink in and the opportunity to ask questions before moving on. Do not seem rushed.
  • If the [client] does not seem able to take any more be prepared to end the consultation and to take it up again later.
  • Look for all the cues, verbal or others. , , , Perhaps they would like you to speak to someone else or to have someone with them for the next meeting.
  • Never say that nothing can be done or the [client] will lose all hope.
  • Whilst trying to be positive never lose track of the fact that this is a serious and potentially fatal [reverse in the litigation].  Be optimistic but do not promise success or anything else that may not be delivered.

Employer Did Not Waive Right to Arbitrate by Telling Employee His Election to Arbitrate Was Premature

Not an earth-shaking opinion from the Ninth Circuit but a good one to keep around the next time you want to claim -- or resist a claim of -- waiver.  Thanks to the Met News for summarizing these opinions on a daily basis and to LACBA for putting them into my email box every night. 

What on earth would we do without them?

Where employment-related dispute arose between employer and employee who had executed employment agreement containing a mandatory arbitration clause, and employee wrote letter requesting arbitration to which employer responded by telling employee that it did not consider his claim ripe for arbitration, district court's order—after employee's termination—denying employer's motion to compel arbitration on ground that employer previously breached its agreement and waived right to arbitrate disputes was error because employee did not properly initiate arbitration under agreement's terms; district court improperly concluded employer waived arbitration where it was debatable whether employer acted inconsistently with right to arbitrate, employer initiated arbitration immediately upon learning of suit, and employer's actions did not prejudice employee.

Cox v. Ocean View Hotel Corporation - filed July 23, 2008

Can You Say What You're Writing to Opposing Counsel Face-to-Face? Would you Want to?

Thanks to David R. Donoghue at the Chicago IP Litigation Blog for picking up my recent Daily Journal article on the Dangers of Email in Litigation and running with it in A Call for Face-to-Face Communication in Litigation.  As David comments:

It is no surprise that increased aggression in a naturally aggressive proceeding has negative consequences. For example, parties that often meet for the first time at a mediation or settlement conference arrive not trusting or respecting each other, making resolution much more difficult. Pynchon suggested a somewhat radical solution to the email problem -- live meetings with opposing counsel. She suggested that you routinely have live meetings with opposing counsel throughout the course of a litigation, including perhaps even doing some meetings over a meal. The face-to-face contact would generate the trust and respect needed to resolve issues that always arise during a litigation. I have always advocated live meetings with co-counsel in a multi-party litigation. Email communications (or even conference calls) tend to get out of hand and the parties tend not to pay enough attention to others' positions. I am going to expand that practice to opposing counsel.

One other thought, that I do not know if Pynchon will agree with. Those who still avoid email and continue using letters as a main communication means are not off the hook. I started practicing when letters, not emails, were how you communicated with opposing counsel. Those letters tended to be far more aggressive than the attorneys were in a live conversation. And I suspect people tended to read extra aggression into the letters they received. I do not know if aggression is stronger in emails than letters, but the same problem exists whether you hit send, hit print or use a pen to write to opposing counsel.

Looking for help with your communication skills?  Though directed at teachers, here is a list of Six Ways to Improve Non-Verbal Communication Skills that will assist lawyers and their clients in resolving conflict face-to-face. 

 

And then the juror applauded . . . .

Thanks to Anne Reed at Deliberations for following California case law on juror misconduct and bias.  I won't steal her thunder -- click here for What is the Sound of One Juror Clapping?

I will, however, provide the appellate court's comment on human fallability -- a recognition we all need to carry into any settlement conference or mediation with us.  Vast conspiracies are the rare one-off.  As Al Gore once said -- we think we can evacuate the planet but not New Orleans?  It's our human capacity for error coupled with our human tendency to search the field for someone to blame that accounts for most unresolved conflict.  Here's the local Met News article on the opinion and the appellate opinion itself (from our own Second District here in Los Angeles): 

"The jury system is fundamentally human, which is both a strength and a weakness. . . . Jurors are not automatons. They are imbued with human frailities as well as virtues. If the system is to function at all, we must tolerate a certain amount of imperfection short of actual bias. To demand theoretical perfection from every juror during the course of a trial is unrealistic."

Negotiating Culture: The Summer Issue of R.KV.R.Y. is UP!

(art by Red Grooms)

As I've often said before, law is the default profession for liberal arts majors.  And make no mistake, many of us continue to dance, sing, play musical instruments, act, paint, sculpt, and even write poetry. (See Strangers to Us All - Lawyers and Poetry)

We have five lawyer writers in the summer 2008 issue of the r.kv.r.y. quarterly literary journal here.

Joe Mockus, San Francisco criminal defense attorney, an old college buddy and the man who taught me how to read poetry, has contributed poetry once again, for which we thank him mightily.  Even more gratitude flows north from Los Angeles now that he has agreed to co-edit the poetry section of the journal with Joel Deutsch.

Local litigator and writer Rick Wirick contributes another book review -- of James Tate's new collection -- even though I continue to urge him to send me poetry!

Rick Hoel, a fellow writer for The Complete Lawyer gives us a short story A Ride Home.

Irvine tax attorney Scott Kauffman, gives us Part One of his Novella Debbie's Ranch.

And, yes, I am too lazy to submit my poetry anywhere else but my own journal.  Here.

Missouri Employers Can't Lock Employees in Arbitration Chains

Thanks to ContractsProf Blog for the following: 

In late June, the Missouri Court of Appeals addressed the legal enforceability of a program adopted by Hallmark requiring employees to arbitrate employment disputes. The court held that Hallmark's ADR program did not constitute a contract and that there was no consideration to bind the employees to the promise to arbitrate claims.

The employer's arguments in favor of enforcement in this case were very much like those argued by O'Melveny & Myers here in California with the same result in the Ninth Circuit  --  the employee was not bound by an agreement by continuing to work after all employees were notified that their continued work for the company would constitute consent to being bound by the arbitration provision.

Check out the ContractsProf Blog analysis here.  We particularly like this comment by the Court:

The idea that an employer can create any legal contract it dares to create (based on a condition of at-will employment) cannot be sustained upon reflection. Imagine, for instance, an employer publishing a memo to employees stating that:

Anyone who continues to work for us through next Monday will be conclusively deemed to have agreed, as a condition of remaining in our employ through that date, that you will contribute twenty dollars per month over the next ten years to the National Association of Manufacturers (NAM), whether or not you remain employed here during that time. If you do not agree, you will need to resign your employment immediately, because by continuing to work, you are agreeing.

Yes, I did see the Beatles play the Hollywood Bowl in 1964, with an emphasis on SEE -- couldn't hear a thing!  Just a little nostalgia for my boomer readers.
 

Simmons v. Ghaderi: When the Legislature Said Mediation Was Confidential, It Meant What it Said

Today, the Supreme Court handed down a unanimous ruling in the long-awaited Simmons v. Ghaderi case about which I've commented on many occasions -- both on the importance of the confidentiality laws the Supreme Court held were air-tight today and on the process itself as a common example of a failed mediation proceeding.

Highlights from the opinion:

  • "The Legislature chose to promote mediation by ensuring confidentiality rather than adopt a scheme to ensure good behavior in the mediation and litigation process."
  • [T]he legislative history of the mediation confidentiality statutes as a whole reflects a desire that section 1115 et seq. be strictly followed in the interest of efficiency. By laying down clear rules, the Legislature intended to reduce litigation over the admissibility and disclosure of evidence regarding settlements and communications that occur during mediation. (citation omitted).  Allowing courts to craft judicial exceptions to the statutory rules would run counter to that intent."
  • In Foxgate,  we reasoned we "were bound to respect the Legislature’s policy choice to protect mediation confidentiality rather than create a procedure that encouraged good faith participation in mediation. Thus, we held that evidence of a party’s bad faith during the mediation may not be admitted or considered." 

Here's the appellate decision that was reversed on nearly every ground raised in Justice Aldrich's compellingly well-reasoned dissent.

Here are our previous commentaries:

Take Steps to Ensure Mediation Agreements Can Be Enforced (co-authored by local arbitrator and mediator Deborah Rothman, first published in the Daily Journal)

You Say Waiver, I Say Estoppel, Let's Call the Whole Thing Wrong -- Another Look at Simmons v. Ghaderi  

If I Settle, It Will Mean that I Killed Her -- Anatomy of a Failed Medical Malpractice Mediation, at the National Institute for Advanced Conflict Resolution

Here's a veiw that opposes my own -- Kirk Pasich Replies:  the Mediation Privilege and Bad Faith Carrier Conduct.

Summer Associate Advisory: The Staff Knows More Than You Do

The Wall Street Journal Law Blog (Don't Wear Flip-Flops and Other Advice for Summer Associates) points us to a valuable new site for young associates (and would-be associates) -- The Hiring Partner's Office.   Whether or not this anonymous blog is posted by a hiring partner or a savvy summer associate makes little difference to the quality of the advice provided.  Check out Top Ten Things that Annoy Your Hiring Partner, one of which recognizes what most summer associates don't yet know -- the power in the firm as far as you're concerned, rests with people you might be naive enough to believe are "beneath" you. 

Number three on the list of what not to do this summer is --     

Being rude to support staff. If you say thank you to everyone who helps you, you would be amazed at how the staff will respond. Support staff work hard to help make you and the firm look good to clients and other third parties. DO NOT treat them like doormats. DO treat them with respect and show your appreciation.

Why do we mention this in a negotiation law blog?  Because you need to know who the secret stakeholders are when you are attempting to resolve any conflict or broker any deal.  They are not who they appear to be. 

And, head's up!!  "Your" secretary has been "practicing law" for decades.  S/he knows the judges, the court reporters, the clerks at the courthouse and the pecking order in the law firm.  S/he also knows where the bodies are buried.

Be nice.  Be teachable.  Learn.  Thrive.

Even if They're Just Hoops to Jump Through ADR Clauses are Worth Getting Right

Bob Hunt over at Realty Times has a nice consumer-friendly article entitled Californa Court Holds That Mediation Provision "Means What It Says".  /*

As Hunt writes, 

The standard residential purchase contract in California is produced by the California Association of Realtors® (CAR). It contains two sections that are easy to overlook or to take as “boilerplate”, but that can be very important if things go awry between the parties. One of those sections deals with attorney fees, providing that, in the event of any proceeding between buyer and seller, the prevailing party shall be entitled to attorney fees and costs from the non-prevailing party. The attorney fee section contains an exception, however, and that exception is spelled out in the portion of the contract referring to mediation. There it is said that, if either party initiates an action “without first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees… .” [my emphasis] /*

When Mr. Thrifty and I purchased our house in '02, we were presented with one of these form contracts.  I'm a lazy form contract signator myself.  Negotiation training or not, I generally assume these contracts are "take it or leave it" and I sign them accordingly.  /**

Not Mr. Thrifty.

"What's the procedure?"  I recall him pressing our real estate agent.    "When is the demand for mediation supposed to be made and how are the parties supposed to conduct it and what happens if the parties can't reach agreement on the mediator to conduct the process?"

He was having none of it. 

"I'm crossing it out," he said, as blue ink flowed over the mediation provision and our agent let out of small gasp of dismay.

By that time, everyone was so "bought in" to the sale, that Mr. Thrifty's effort to strike  the form language prevailed.  No mediation necessary in this household!

Beware of Form Contract Language

As Bob Hunt explains, the Lange Court gave the back of its hand to the contention that it was "too difficult" to make the required demand for mediation.  

“If the [sellers] could be found and served with a lawsuit by mail, they could have been sent a mediation demand by mail[,]” [held the Court]  All that the plaintiff had to do was attempt to mediate before he filed suit; and he didn't. Quoting a related case, the court noted that the mediation provision “means what it says and will be enforced.” 

Though it's not surprising to find bare bones ADR provisions in industry form contracts -- bones so bear that their meaning must be litigated -- defeating the purpose of the summary proceedings provided for -- it is surprising to find attorneys continuing to paste form contract language into their client's negotiated agreements.  This is particularly troublesome when what's at stake -- the attorneys' fees -- makes the difference between bringing litigation or not or settling litigation or not.

If it's worth putting a clause into your contract, it's worth spending the time to imagine what might happen if circumstances triggering that clause arise.  If you're practicing in a firm with both transactional and litigation attorneys, I highly recommend that the wordsmiths run the "standard" ADR, attorney fee, choice of law, and venue provisions by the litigators who have undoubtedly already tested these provisions in the fire of conflict.  You won't be sorry you did.       

_______________________

*/  The case -- Lange v. Schilling -- was originally ordered not not to be published.  Had that Order stood, the case would not create precedent under California law.  As the reader of the linked opinion can see, however, it was subsequently ordered published and can be cited as authority. 

**/  The form contract language at issue reads as follows:

Buyer and Seller agree to mediate any dispute or claim arising between them out of this Agreement, or any resulting transaction, before resorting to arbitration or court action. . . . If, for any dispute or claim to which this paragraph applies, any party commences an action without first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in any such action.

Good Hands or Boxing Gloves? Allstate Case Settles

(logo links to Allstate's '07 Social Responsibility Report)

Keep your eyes open on July 21 for a hearing on Allstate's settlement in the case that brought Allstate's "Boxing Glove" McKinsey documents out of the closet.  Thanks to the Lexis Nexis Insurance Law Center for pointing us to Allstate Settles in Disputed Records Case here.  

We previously posted a link to the documents themselves in the post The Zero Sum Game - Allstate's McKinsey Documents here.

Allstate, policyholder agree to settle case that centered on insurer's disclosure of records

KANSAS CITY, Mo. (AP) -- Allstate Insurance Co. has agreed to settle an insurance case that had attracted national attention over the insurer's refusal -- and eventual agreement -- to provide key documents on how it evaluates and pays claims.

The company's reluctance to release the records led to more than $7 million in fines from Jackson County Judge Michael Manners.

Manners has scheduled a July 21 hearing on whether to approve the settlement, which is the day the case was scheduled to go to trial.

Attorneys for both sides say the terms of the deal are confidential.

Allstate spokesman Mike Siemienas said the nation's second-largest home and auto insurer was happy to resolve the case. He declined to comment further.

Humane Society Protects Animal Rights by Purchasing "Puppy Mill"

Sometimes it's better to skip the legal wrangling altogether and move directly to settlement options -- like purchasing puppy mills from negligent owners rather than asking the state to shut them down by way of a lawsuit.  

Not only do you avoid the high transaction costs of engaging the machinery of the legal system, you waste no time when time means continued suffering. 

Here's the New York Times article -- Wisconsin Anti-Pupply Mill Tactic -- reporting that the Wisconsin Humane Society took the fast track to end suffering by

buy[ing] and clos[ing] one of the nation’s largest dog-breeding facilities.

Cory Smith of the Humane Society of the United States says the effort may be the first time a chapter has dealt with the issue of so-called puppy mills by buying one of them. The Wisconsin society said it would find homes for the more than 1,100 dogs at the Puppy Haven Kennel in Markesan. An American Kennel Club spokeswoman, Daisy Okas, says the club suspended and fined the kennel’s owner in 2006 over the facility’s conditions.

Continue reading here.

Are Discovery and Pre-Trial Victories the Only Big Game in the Litigation Hunt?

The quote below (though unduly harsh)  points to a problem we've had in the AmLaw 200 since most cases became too big to try. 

I'm coming back to this, promise. 

Now I'm just linking to John Wade's (as always brilliant) article -- Judicial Decision Making in Australia -- that quotes it.

“Because litigators rarely win or lose cases, they derive job satisfaction by recasting minor discovery disputes as titanic struggles. Younger lawyers, convinced that their future careers may hinge on how tough they seem while conducting discovery, may conclude that it is more important to look and sound ferocious than to act co-operatively, even if all that huffing and puffing does not help (and sometimes harms) their cases. While unpleasant at first, nastiness, like chewing tobacco, becomes a habit… Without guidance as to appropriate conduct from their elders, either at the firm or at the bench, it is easy for young lawyers not only to stay mired in contumacious, morally immature conduct, but to actually enjoy it.”  D Yablon, “Stupid Lawyer Tricks: An Essay on Discovery Abuse” (1996) 96 Columbia Law Rev 1618.

 

Mediator Geoff Sharp Up Close and Personal (with Vickie Pynchon tagging along)

DAILY JOURNAL NEWSWIRE ARTICLE
http://www.dailyjournal.com
© 2008 The Daily Journal Corporation.
All rights reserved.
-------------------------------------------

June 23, 2008

POPULAR ADR BLOGGER GETS SOME FACE TIME IN LOS ANGELES
By Greg Katz
Daily Journal Staff Writer 

SANTA MONICA - Nearly everybody in the Southern California mediation community knows the face of mediator Geoff Sharp but not too many have met him.

That's because the New Zealand-based mediator's scruffy mug sits atop his popular ADR blog, Mediator Blah ... Blah ..., at mediatorblahblah.blogspot.com.

Sitting down for coffee at a beachfront hotel with Los Angeles mediator and fellow ADR blogger Victoria Pynchon, Sharp said his blog is what got him his ticket for this trip to Southern California.

He was in town at the request of the Pepperdine University School of Law, giving a lecture at the Straus Institute for Dispute Resolution's annual summer dispute resolution conference last week.

"For someone like me to get to Pepperdine - why would you ask a farm boy like me?" Sharp said, laughing. "The blog's the only way that I talk to these people."

Sharp's witty and concise blog helps chart the course of the online mediation conversation. There are about 150 ADR blogs worldwide, according to one blogger, and many of them link back to Sharp's.

He blogs a potpourri of ADR links, anecdotes and opinions on a wide range of mediation topics, most of them relevant to both local and international audiences.

In one recent post, he chided some "lazy" neutrals who have given parties the impression that mediation is "a process where you show up at a downtown building but never speak to, or even meet, the room full of people with whom you have your problem and whose cooperation you require to solve it."

In another post, Sharp described a mediation in which a lawyer asked him to calculate the hypotenuse of a right triangle.

Sharp said he initially was worried that he couldn't do it.

"But I am pleased to report dear reader, that I was equal to the task," he wrote.

Sharp also broaches sensitive subjects, writing at length about how difficult it is for mediators to build their practices.

But whether the difficulties of mediation are financial or mathematical, he wouldn't think about going back to litigating.

In the late 1990s, Sharp left his litigation practice at Bell Gully, a large New Zealand law firm, to start mediating.

Sharp is now a member of the advanced mediation panels for both of New Zealand's widely recognized mediation training organizations, LEADR and the Arbitration and Mediation Institute of New Zealand.

He also is consulting with the International Mediation Institute on its proposed mediator qualifications standards. Mediator standards are a frequent subject of his blog posts, as well.

He said he relishes the freedom he gained from leaving a big firm, though mediating often proves lonely.

"If you ask why [mediators] blog, it's because we're so solitary," Sharp said.

Becoming an ADR blogger, he said, was like making friends "on the same block in a new town," even though most other bloggers are in other countries.

Sharp said that blogging about mediations, with their strict confidentiality rules, can be complicated.

At first, he would post about specific events in mediations, such as one lawyer who wore his Bluetooth headset throughout a mediation, even when he "went to the john," Sharp said.

Was it blinking?" Pynchon chimed in.

But now, with a wider audience, Sharp focuses on the more philosophical and legal issues in mediation. When he wants to tell a particular story, he embellishes the events that happened in mediation so no one feels their confidential conduct is being publicized.

"I haven't let the facts get in the way of a good story," says the disclaimer on his blog.

Pynchon, who writes the popular ADR blog Settle It Now, at negotiationlawblog.com, said that even when bloggers are careful, mediator blogs can disturb parties. One party recently came to Pynchon asking whether a post referred to that party's case.

It didn't.

Another post, about the California Supreme Court mediation confidentiality case, Simmons v. Ghaderi, provoked the defendant to call Pynchon personally.

"It's like having a cartoon character come to life," Pynchon said of being contacted by someone she only knew through reading briefs and opinions. Simmons v. Ghaderi, 143 Cal.App.4th 410 49 Cal.Rptr.3d 342 (2006).

But despite the occasional hassle, blogging has become a way of life for the two mediators.
"For me, blogging and dispute resolution rest on the same principles: collaboration and reciprocity," Pynchon said.

Sharp nodded his agreement.

"I don't do this profit," he said with a smile. "I do it for ego."

The Comforts of Litigation

I am writing an appellate brief.  I do this from time to time to keep my hand in the game.  I also do it because . . . . .  well, it's a heckuva lot easier to make money as a lawyer than it is to make money as a mediator.

Just saying.

Not only that.  Litigation is a heckuva lot more comfortable than mediation. 

Why?

  • I'm right

          Alone in my office with Lexis/Nexis, Westlaw, and the cold appellate record I am right about my client's position, its version of the facts, and its read of the law.  I've read the other side's arguments and they're . . . wrong, wrong wrong.  They mis-state the factual record, cite irrelevant case law, construe the contract contrary to its plain meaning and misapply its provisions under their own recitation of the facts.  They elide, evade, fail to answer the hard questions, and mislead the court.    

  • I'm on the side of truth, justice and the American way 

          I'm not only right.  I'm righteously right.  With this brief, I will correct every injustice my client has suffered, justify every humiliation I have suffered at the hands of the trial judge, vindicate myself for all of the times my client has doubted my first [perfectly right and righteous] evaluation of the merits of its case.  For this moment, as I sit at my computer alone, I live in a country and work in a system in which compromise is not necessary; loss need never be suffered; my client can be made "whole."

  • The chaos of community is orderly and predictable 

          There is precedent for this messy business problem.  The courts have laid out the grid.  All I have to do is meet the 3 tests, satisfy the 4 conditions, perch the right facts on each of the 5 prongs, prove the elements of my rectitude.  All of my versions of the facts being true, true, true, there is only one right and predictable outcome possible.  It is the one I have always said was right.  Chaos will be vanquished.  Order restored.  

  • I do not have to suffer loss

          Until the last appeal has been made to the highest court in the land, neither I nor my client need suffer loss.  We do not need to experience injustice; make an effort to make peace with our neighbors; accept the possibility that our memories are spotty; our analysis subject to criticism; our behavior less than laudatory; our reverses irreversible. 

  • As long as I am writing this brief, the world conforms to my vision.

          As long as I am writing, I am not only potentially victorious, I live in a world of my own choosing, that conforms to my sense of the way things ought to be.  The characters in my world are good or evil.  There is no middle ground.  They are telling the truth or they are lying.  They live their lives by right principle or they are scoundrels whose evil deeds will surely be their undoing.  

  • I am innocent again

          As long as this appeal lasts, I am a child again.  It is 1962 and I am in the fifth grade.  The Lone Ranger will always ride to the rescue. I do not yet have to worry about Tonto's place in the social and economic order of the day.  The cattle rustlers will be punished.  The hard working ranchers' goods will be returned.  Honor will be vindicated.  The bandits will be put behind bars or buried in their graves.  

 A fiery horse with the speed of light, a cloud of dust and a hearty "Hi Ho Silver!" The Lone Ranger.  With his faithful Indian companion Tonto, the daring and resourceful masked rider of the plains, led the fight for law and order in the early west. Return with us now to those thrilling days of yesteryear. The Lone Ranger rides again!

Insurers with Potential Coverage Must Personally Attend Mediation Sessions

Head's up insurance carriers and their counsel!

Noting the benefits of appellate mediation and the desirability of participants attending in person, a California appellate court warned insurers in Campagnone v. Enjoyable Pools & Spas that even the potential of coverage requires a representative with full settlement authority to attend court-ordered appellate mediations in person, unless excused in writing by the mediator. Further, the court warned parties and counsel that they may also face sanctions if they fail to notify insurers with potential coverage about appellate mediations. The court noted that California’s strict mediation confidentiality provisions prevent mediators from disclosing whether anyone fails to attend, but that an aggrieved party may do so in seeking sanctions from the court. The court withheld sanctions in this case only because no previous opinion had spelled out these requirements, even though the insurer was only liable for amounts in excess of $3 million and the judgment in the trial court was $2.4 million.

Campagnone v. Enjoyable Pools & Spas, No. C055050 (Cal. App.3d Dist., May 30, 2008)


Thanks to Keith Seat Mediation Newsletter for the case.

And thanks to arbitrator and mediator extraordinaire Deborah Rothman for passing this along to me.  (speaking of gender politics, Deborah graduated with the first class of women to be admitted to Yale University)

What if This Were Our Sole Purpose?

What if the sole purpose of our rise from the apes and of all of our history, knowledge, and technology were to get us far enough away from earth to realize we are responsible for the stewardship of this planet?

Would it make a difference to the way we conduct our relationships with one another?

This picture of the Earth and Moon in a single frame, the first of its kind ever taken by a spacecraft, was recorded September 18, 1977, by NASAs Voyager 1 when it was 11.66 million km (7.25 million miles) from Earth.

The moon is at the top of the picture and beyond the Earth as viewed by Voyager. - In the picture are eastern Asia, the western Pacific Ocean and part of the Arctic. Voyager 1 was directly above Mt. Everest (on the night side of the planet at 25 degrees north latitude) when the picture was taken. - The photo was made from three images taken through color filters, then processed by the Image Processing Lab at Jet Propulsion Laboratory (JPL). Because the Earth is many times brighter than the Moon, the Moon was artificially brightened by a factor of three relative to the Earth by computer enhancement so that both bodies would show clearly in the prints. - Voyager 1 was launched September 5, 1977 and Voyager 2 on August 20, 1977. JPL is responsible for the Voyager mission.

From about.com

Arbitrating? Be Careful Out There

(find Rolling Stones American Flag sticker -- image right - here)

Thanks to the National Arbitration Forum for passing this nugget along from a Texas Appellate Court -- nullifying the American Rule on attorneys fees in arbitration proceedings permitting the arbitrator to award "just and equitable relief."

Arbitration Rules Provided Legal Basis for Attorney Fees Award By Authorizing Arbitrator to Grant Any "Just and Equitable" Relief

Providian Bancorp Services v. Thomas, No. 08-07-00246-CV, 2008 WL 2058524 (Tex. Ct. App. May 15, 2008)  

Where the rules of arbitration authorize the arbitrator to grant any "just and equitable" relief, the arbitrator may award attorney fees without any other contractual or statutory basis for the award, according to the Texas Court of Appeals. In light of the Court's holding, if parties select arbitration rules that permit any "just and equitable" relief, they are effectively opting out of the American Rule, which provides that parties are responsible for their own attorney fees in the absence of any contractual or statutory basis for shifting such fees.

In Providian Bancorp Services v. Thomas, No. 08-07-00246-CV, 2008 WL 2058524 (Tex. Ct. App. May 15, 2008), Thomas sued Providian, her former employer, for discrimination and assault and battery. Providian moved to compel arbitration pursuant to an arbitration agreement between the parties . . . continue reading here . . . .

A Works Progress Administration Act for Mediators?

California mediators, listen up!  Your legislature is working for you (and for the AAA).   

Thanks to the Institue for Conflict Management Blog (h/t to Diane Levin) for hipping us to Senate Bill 1642 requiring public entities to mediate  3rd-party claims relating to a public works contract if the claimant demands that mediation be pursued.  The guts of the proposal below: 

In the event there is any portion of a claim that remains unresolved, the party who submitted the claim, at its discretion, may demand mediation with the parties mutually agreeing to a mediator within 30 days from the date of the demand for mediation. If the parties are not able to mutually agree on a mediator, the parties shall utilize the American Arbitration Association to assist in the selection of a mediator.

(4) If any portion of the claim remains unsettled after mediation, the contractor and the local agency, charter city, or charter county shall submit the dispute to binding arbitration, and shall follow the same procedure for selecting an arbitrator as set forth in paragraph (2) for the selection of a mediator.

(5) Failure by the local agency, charter city, or charter county to respond to a claim within the time periods set forth in this subdivision shall result in the claim deemed being approved in its entirety, and shall be processed for payment within five days from the expiration of the time period in which the local agency, charter city, or charter county is required to act. Failure by the contractor to respond to a claim from the public entity, charter city, or charter county within the time periods prescribed in this subdivision shall result in the claim being denied. The parties may extend the time period for response by mutual agreement.

(6) If either party is required to initiate a civil action in which to enforce the rights provided under this section, the prevailing party shall be entitled to its reasonable attorney fees
and costs.

When Law Students are Bored, Boring Video Happens

Thank you (we think) to Legal Antics for posting this mindless video made by some pretty darn bored law students enacting their ADR of choice

Tags:

Indiana Department of Insurance Buys Bad Faith Settlement Claim

Finding ways to deny coverage IS part of the point of adjusting insurance claims.  Adjusters and their lawyers need to be reminded, however, that erring on the side of coverage (meeting the insured's objectively reasonable expectations) should trump coverage denial where the issue is a close one.  

This said by a former defense coverage attorney.  Link and excerpt from the excellent ABA Journal below (disclosure - yes I do advertise there; send me your most burning ADR question and I'll answer it there!)

Below, the potential wages of erring on the wrong side.

$50K Payment Ends Indy Law Firm’s $18M Nightmare 

After worrying for two years about an $18 million jury verdict, partners of Fillenwarth Dennerline Groth & Towe were presumably delighted to ante up $50,000 to the Indiana Department of Insurance in order to win release from the judgment against the law firm.

In return, the Indianapolis-based law firm has transferred to the department its bad-faith claim against its malpractice insurance carrier, Alabama-based ProNational Insurance Co., reports the Indianapolis Business Journal. The carrier refused to settle the case before trial for the Fillenwarth's firm $1 million policy limit, and a Marion County jury then handed down the massive $18 million verdict
  . . . .


$29 Million P.I. Arbitration Award: the Mystery Here: Why Did the Plaintiffs Want to Avoid a Jury Trial?

(RIGHT:  ARBITRATOR PRATT)

See this article from the Fresno Bee -- $29 million awarded in fatal Kings Co. apartment fire --Couple and 3 children died as relatives watched the inferno (excerpts below). 

In one of the largest wrongful death judgments in Kings County history, relatives of a young couple and three children who died in a devastating apartment fire won $29 million Tuesday.

Derik Faubion and his fiancée, Michell Mattison, both 19, perished in the fire at the Northgate Apartments along with their 2-month-old daughter, Hayden Allison Faubion. Two siblings of Mattison -- Lexus May Bisnar, 4, and her brother Ariel Nel Bisnar, 2 -- also died.

Retired Judge Daniel Pratt, acting as an arbitrator in the case, ruled Lemoore Real Estate and Property Management was negligent in maintenance of the 23-unit apartment complex at 226 E. Hazelwood Drive.

A key piece of evidence was a letter from the property management firm to tenants that stated "smoke detectors are not in place in most units." The letter was written six months before the fatal fire, court records show. . . .

Both sides agreed to let Kings County Superior Court Judge Thomas DeSantos assign the case to an arbitrator to avoid a jury trial. DeSantos chose Pratt, a retired judge in Southern California.

Pratt ruled in favor of the plaintiffs after hearing one day of testimony from Lemoore residents, firefighters and investigators. Pratt also viewed photographs of the plaintiffs who cried as they stood helpless outside the burning units. . . . 

"This is one of the saddest cases I have ever seen," said Marderosian, who has been practicing law since 1977. "It not only shocked the city, but wiped out the next generation of two families."

Hat Tip to Lawyers USA.

Federal Trial Court Holds Texas Requires Non-Signatory Heirs to Arbitrate Wrongful Death Claim

In Shanks v. Swift Transportation, the Federal District Court  for the Southern District of Texas held that where plaintiff-heirs in a wrongful death action sought survival and death benefits under a benefits plan requiring the arbitration of decedent's claims, Texas law required that those claims be arbitrated under the employment agreement's requirements despite the fact that none of plaintiffs was a signatory to the arbitration agreement.

Among the principles and holdings in this case were:

  • the Federal Arbitration Act did not apply by its own terms
  • although Texas law does not presume arbitration agreements are valid, if they are valid, doubts regarding their scope are resolved in favor of arbitration. 
  •  under Texas law non-signatories may be bound to arbitration agreements under the doctrines of:
    • incorporation by reference;
    • assumption;
    • agency;
    • alter ego;
    • equitable estoppel; and
    • third-party beneficiary
  • the heirs' survival claim and the claim for death benefits brought pursuant to the
    Plan was required to be arbitrated under the doctrine of direct benefits estoppel.
  • Because Plaintiffs’ wrongful death claims were “factually intertwined” with the survival and death benefits claims, they must be arbitrated alongside the other claims.

I do not know whether Texas law, like California law, requires employers to foot the bill for the arbitration.  If it does not, I wonder whether this decision is the death-knell to the Plaintiffs' wrongful death claims, claims that can usually be pursued only if the attorney advances the costs of the wrongful death action to the Plaintiffs.  (Seethe ABA Journal post Are Lawyers Becoming Luxury Goods?) */

I also wonder whether the Fifth Circuit would conclude that requiring the arbitration of a wrongful death claim contravenes public policy.  I'd certainly make that argument before a federal trial court sitting in California, though I doubt that this ruling would be possible under California law.  

Hat tip to Lawyers USA for bringing us this breaking legal news.

_________________________

*/   As the ABA Journal item notes:

Lawyers increasingly are becoming like luxury goods to many would-be clients, an expensive article that they can't afford or don't want to make a priority.

And that is bad news for the profession as well as for the public, says a recent article in the National (PDF), a magazine published by the Canadian Bar Association

ADR Column The Human Factor Takes Flight at The Complete Lawyer

In the last three issues of The Complete Lawyer (see the LACBA issue here!) Stephanie West Allen, Diane Levin, Gini Nelson and I have been tuning up our conflict resolution violins.  In this issue's The Human Factor column, the four of us once again share our TCL space to talk (ever so briefly) about the ways in which conflict resolution techniques can help lawyers achieve that elusive goal of a blanced work-life.

Gini Nelson calls conflict avoidance (one of my favorite techniques in "real life") "deferred relationship maintenance,"  which nails this way of handling our personal lives on the head.  Read all about it here.

Diane Levin (here) addresses the problems none of us like to talk about -- dysfunctional workplaces, noting that

Our ability to connect with others, gain their trust, influence and motivate them is the social lubricant that makes businesses thrive. In fact, Dan Hull, an attorney I admire for his focus on client service, once wrote, "Treat each co-worker like he or she is your best client." He's right—nurture relationships for a healthier law firm.

Stephanie West Allen (here) our resident brain science afficianado (see Brains on Purpose) notes that

Our brain likes to be fuel efficient; by discerning patterns, it saves energy. It studies the situations at hand, whether they are protracted mediations, playful exchanges with a partner, or steely verbal duels with opposing counsel, to see if they resemble a situation it has seen in the past. We then base our judgments on that unconscious notion of past—but we are not always fully aware of the present. Yesterday's solutions do not always fit today’s problems.

If you read this blog on a regular basis, my contribution to this issue -- Let's Start Talking About What We Genuinely Value -- will sound pretty darn familiar; here's 'the problem" at its source -- click here for at least one solution.

According to the Global Rich List, AmLaw 100 associates are among the top .01% richest people in the world. Mid-level AmLaw partners are in the top .001% and beyond that the GRL stops counting. Though of course we do not.

If a comparison of our salaries with these galactic levels of compensation make us unhappy, it is unlikely that the following knowledge will make us happy—three billion people live on less than $2 and 1.3 billion on less than $1 per day. Why does this knowledge leave us untouched? Because we don’t compare ourselves to the rest of the world. We compare ourselves to the guy sitting in the office next to us.

So how did we—some of the smartest, richest, most creative, energetic and best educated people in the world—get so unhappy about money? I personally blame it on the American Lawyer even though, like drug dealers and the paparazzi, legal journalists wouldn’t be concentrating on profits per partner unless we were all so avid to know them.

Beginning with the next issue of The Complete Lawyer we'll be taking turns writing the column.  If you like what any of us have to say about ADR's value in your work and life, stay tuned!  There will be much, much more!

The rest of the issue is also well worth reading.  The focus is on EXIT STRATEGIES -- a topic not reserved for those contemplating retirement (though our interests are addressed here as well).  This is one profession where people start talking about exit stragies around the second week of the first year of law school.  So check it out!

Integrative Power: Nirvana of Sales Relationships

Here's one of the best testimonials to integrative negotiation that I've seen lately -- Integrative Power and the Sales Negotiation -- from Paul Misner, author of the Smart Archive Blog and the Sr. Federal Civilian Account Manager for Websense.

Integrative power involves both sides working together for a mutual goal. The best outcome for an integrated solution is for both sides to win, the second best outcome is for both sides to suffer equally. Integrated power involves persuasion versus coercion, and because of this, both sides feel as they are on the same page.

I think integrative power is the Nirvana of a sales relationship. Your customers realize that you are in this for their and your mutual benefit, and your customers realize that if they squeeze every bit of profit out of you, you’ll either not stay in business, or resent having their business.

It’s funny, and totally organic, but in the 15 years I’ve been in sales, I’ve found that I’ve pretty much drifted away from all of the customers who have either used force or economic power in negotiations. When I have engineers or managers come from out of town to meet my clients, they often comment on how nice my customers are. Part of that is a by product of my customer base, Federal Civilian Agencies, but also it has been a part of a natural selection process that has driven me to customers who work with me.

The Star Spangled Blawg Review Asks About Justice

A tremendous effort accomplished today by Blawg Review # 167 at E-Commerce Law, bringing us at least one post from blogs in all 50 states organized by the date of their entry into the union.  Blogger Jonathan Frieden must have devoted much of any lawyer's cherished 3-day week-end to this effort, for which all legal bloggers should give him a hearty round of applause.

On the ADR front,  Jonathan gives us Oregon, admitted on February 14 (how very Oregonian) 1859 and The National Arbitration Forum Blog entry  Americans Increasingly Denied Access to Justice.  Here's the attention-grabbing lede.  Click on the link for the full post.

The latest California Bar Journal contains an alarming and attention-grabbing piece from the Bar President. In The neglected middle class, Jeff Bleich explained how hard it has become for the hardworking American to get their day in court.

"[O]ur legal system is increasingly serving only the wealthiest interests or the very poorest ones: those who have great resources and those who are lucky enough to get help through legal aid, despite the serious underfunding of that system."

And while we're thinking of the flag and all things  patriotic, here are a few random links on patriotism and justice.

Obama and the Flag (pin) from the Los Angeles Times.

Patriotism, Irony and Liberty from Sinners in the Hands of an Angry Blog.

Truth, Justice and the American Way from the Long View

Patriotism:  Not Just for Lapels at Abundance of Absurdities

Patriotism and Michelle Obama: A 4th of July Reflection from Anne-Marie Slaughter (Huffington Post)

Sunday Times Report: Truth Commissions and Negotiating with the Enemy

(image from Art Throb featuring the work of South African artist William Kentridge)

Just in case you're out on the beach, in the mountains, or spending a lazy July 4th week-end around your best friends' swimming pool, here are the ADR-worthy articles you've likely missed in today's Sunday New York Times.

From the Op-Ed page, Nicholas Kristof recommends an American "Truth Commission" for our treatment of "detainees."  Excerpt and link below:

When a distinguished American military commander accuses the United States of committing war crimes in its handling of detainees, you know that we need a new way forward. 

“There is no longer any doubt as to whether the current administration has committed war crimes,” Antonio Taguba, the retired major general who investigated abuses in Iraq, declares in a powerful new report on American torture from Physicians for Human Rights. “The only question that remains to be answered is whether those who ordered the use of torture will be held to account.”

The first step of accountability isn’t prosecutions. Rather, we need a national Truth Commission to lead a process of soul searching and national cleansing.

That was what South Africa did after apartheid, with its Truth and Reconciliation Commission, and it is what the United States did with the Kerner Commission on race and the 1980s commission that examined the internment of Japanese-Americans during World War II.

Today, we need a similar Truth Commission, with subpoena power, to investigate the abuses in the aftermath of 9/11.

We already know that the United States government has kept Nelson Mandela on a terrorism watch list and that the U.S. military taught interrogation techniques borrowed verbatim from records of Chinese methods used to break American prisoners in the Korean War — even though we knew that these torture techniques produced false confessions.

It’s a national disgrace that more than 100 inmates have died in American custody in Afghanistan, Iraq and Guantánamo. After two Afghan inmates were beaten to death by American soldiers, the American military investigator found that one of the men’s legs had been “pulpified.”

Read the rest of the column here, remembering that we're only as sick as our secrets.  For more on Truth Commissions, click here, here and here.

"We don't negotiate with terrorists or enemy states."  Really?  In Speaking with the Enemy, an NYT multi-media page gives a sampling of how modern American Presidents have made contact with our adversaries.

Here's the good news from the accompanying article, For Some Foes the Chat.  For Some the Cold Shoulder.

[T]he reality is that more times than not, American presidents sweep into office proclaiming black-and-white absolutes about their foes, and end up leaving office having used everything from secret talks and back-channel negotiations to full-fledged summit meetings.

Read the full article here.

While others surf and bar-b-que, I'm using the week-end to post the Summer 2008 issue of the r.kv.r.y. quarterly literary journal.  Here's the proof of the new cover!  A labor of love (and proof of my husband's enduring patience -- thanks honey! for putting up with my 10,000 projects). 

Christopher Hitchens Tortured for Vanity Fair

Thanks to Diane Levin at the Mediation Channel for linking to this video of author Christopher Hitchens voluntarily submitting to water-boarding

I didn't want to watch it. 

I did anyway. 

It's the least we can do as we prepare to elect a new President in November.

Click here for the video.

Here's the ACLU post on the event.

Celebrating the Fourth of July in the Blogosphere

(Flag courtesy of the Tax Law Forum via photobucket)

First, thanks to A Man Among Mommies for copying the entire text of the Declaration of Independence which is must-reading in any year, let alone an election year.  I give you only the intro here:

In CONGRESS, July 4, 1776.
The unanimous Declaration of the thirteen united States of America,

When in the course of human Events, it becomes necessary for one People to dissolve the Political Bands which have connected them with another, and to assume among the Powers of the Earth, the separate and equal Station to which the Laws of Nature and of Nature’s God entitle them, a decent Respect to the Opinions of Mankind requires that they should declare the causes which impel them to the Separation.

We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness. . . .  

That whenever any Form of Government becomes destructive of these Ends, it is in the 

Continue reading here.  And check out Blawg Review for a moving video on the writing of the Declaration (mentioning the original denunciation of the slave trade contained in the first draft).

If you'd like to know why you have the day off from work today, take a look at Inflexion Advisor's July fourth post here.

The Pensacola Beach Blog celebrates the Fourth of July by warning us about the perils of the proposed FISA Act here. (hint:  our Constitutional Rights are once again at stake)

The Law Librarian Blog has recommended reading for the Fourth ('natch)

Rebooting Democracy: Ideas for Redesigning American Democracy for the Internet Age, an anthology of 44 relatively short essays, was released at Rebooting the System, the fifth annual conference sponsored by the Personal Democracy Forum.

Blogging the Boys celebrates the fourth with a short gratitude list to former civilizations (and some still chugging ahead) for our liberties (with a photo of a type never seen here that will warm the hearts of my male readers).

Comparative Quotes on Tyranny (Quotabull) at Scholars and Rogues

The Blog of Rights celebrates by giving us the ACLU's definition of patriotism

Patriotism doesn’t mean blindly following the will of a few. It means being part of an informed and involved citizenry. It means exercising dissent by speaking out when you don’t believe in what is happening. It means being constantly vigilant in the protection of civil liberties, and holding government officials accountable when they take aim at our freedoms. And above all, patriotism means loving this country so much that we will fight to protect the things that make it great for generations to come.

Underdog weighs in on the Continuing Struggle for Civil Liberties here.

By now, the United States government thrives on control backed by force, the threat of force, and punishment, not only through military might, but also through an overgrown and overbearing criminal "justice" system of police, laws, money, prosecutors, courts, and prisons; an overgrown national security system that leaves us little privacy, security, or sufficient liberty; and an overgrown spying and "intelligence" system.

Fortunately, a strong movement continues in favor of civil liberties and government by the governed rather than the reverse. The movement is led by the American Civil Liberties Union, fearless and skilled criminal defense and Constitutional lawyers, the drug legalization movement, and the list goes on.


July 4 is meaningless without an ongoing struggle for civil liberties. Now is the time to join that struggle.

Even on a National holiday, one legal blogger is still thinking about the 46.6 Million Reasons to Think about Settlement (the Ohio Employers' Law blog). 

And finally, the "out of the box" thinking we've come to expect from Conflict Zen -- the Declaration of Interdependence video.

HAPPY FOURTH OF JULY TO ALL MY READERS AND THEIR READERS AND THEIR READERS' READERS!! 

Whatever our political disputes, we Americans make the effort to be guided by the values of  Jefferson's Declaration.  

Don't Send that Email; Pass Me the Pliers!

This story occurs in the spring of 2001, in a hotel room in Toronto, at 3 a.m., the morning of a deposition I've been preparing to take of an aging petrochemical engineer.

2001 is a  year I'd dreamed of since elementary school.  But the technological changes predicted in the science fiction of my childhood and adolescence are nothing like the "hi-tech" I'm living with now.  

 There are no one-man jets cruising the skies; no robots running my errands or cooking my dinner; no tele-transportation; and, on the political scene (it's not yet 9/11) no Big Brother

My personal 2001 "future" is mostly about my instantaneous access to information and "real time" communication via the "killer app" -- email -- telegraphic, spontaneous, unnuanced, and about to get me in a great deal of trouble.  (See Vanity Fair's must-read oral history of the internet here.)  

There's an associate back in Los Angeles, you see, the quality of whose work and the strength of whose dedication to the case at hand is in alarming decline.  More troubling, his work is deteriorating at the same time I'm taking old fashioned passenger jets from province to province to take the testimony of as many witnesses still living who know how 500+ toxic waste sites got that way in the first place.    

Did I say it's 3 a.m.?  The associate I'm thinking about failed to get me the outline I need for tomorrow's deposition on time -- or at all.  The "hard copies" that were supposed to be waiting for me when I arrived at the hotel have gone missing.  I'm tired.  I'm hungry.  I'm lonely.  And I'm angry. 

Worst of all, I'm composing an email to my  associate about my considerable disappointment in his recent performance.  There is a moment, a split second, in which my finger hovers over the "send" button while a rational voice in my head says "no."  Then I push "send."

Email Makes Settlement More Difficult  

More and more often when I'm meeting counsel on the morning of a mediation, they're also meeting one another for the first time.  In fact, they often have not even previously spoken to one another unless they've met in Court ("good morning, counsel") or in depositions (eyes averted; objections made).  Increasingly, by far the vast percentage of their communications have taken place via email.  

And that's a problem. 

Conflict Escalation

There's no question that litigation escalates whatever conflict existed when our client first walks in our door.  We don't, after all, make requests.  We issue demands.  We don't seek concessions.  We insist upon them.  We don't make inquiries.  We require responses.  And we're not such great listeners.  Rather, we impatiently tap our feet in Court, waiting for counsel to finish his argument (which we've heard dozens of times before) so we can press our case.

Are these bad things?  Not necessarily.  So long as we understand what we're doing and the likely results our conduct will have, escalation is not necessarily worse than maintaining a steady state or even deescalating conflict.  

The problem for most of us is that we don't know what we're doing and we don't understand the breadth and depth of the likely repercussions.  

In Conflict Escalation: Dispute Exacerbating Elements of E-Mail Communication, author Raymond A. Friedman of the Owen Graduate School of Management at Vanderbilt University quotes conflict specialists Rubin, Pruitt and Kim on the difficulties caused by escalation tactics and strategy.  According to Rubin, et al., escalation is 

"an increase in the intensity of a conflict as a whole.”  Escalation is important . . . because when conflict escalates it “is intensified in ways that are sometimes exceedingly difficult to undo.”  One reason why escalated conflicts are so hard to undo is that when more aggressive tactics are used by one side they are often mirrored by the other side, producing a vicious cycle.

Email, Friedman argues, unnecessarily, and often drastically, escalates conflict in ways none of us fully appreciate.  Unlike conversation -- in person or by telephone -- we are not

physically present with others, can’t see their faces or hear their voices, and can’t give or get immediate responses. The lack of contextual clues . . . impose high “understanding costs” on participants in e-mail interactions, making it harder to successfully ground the interaction. . . . /*  [T]the inability to carefully time actions and reactions . . . makes communication less precise.  

E-mail Not Only Lacks Social Clues, it is "Profoundly A-Social." 

Sitting in my Toronto hotel room at 3 a.m., reviewing online documents for tomorrow's deposition and now "penning" an email to my errant associate, I am, argues Friedman, not simply making communication more difficult, I have become "profoundly asocial" as my associate will also likely be when he reviews my email the following day.  "E-mails," writes Friedman,

are typically received and written while the writer is in isolation, staring at a computer screen – perhaps for hours at a time, so that awareness of the humanness of the counterpart may be diminished.

As evidence, Friedman cites research in which subjects played the "prisoner's dilemma" game against a computer.  Not only did the gamers act asocially in this context, "many continued to act asocially even when told that they were now playing with people (through the computer)."

E-mail, Friedman concludes, "often occurs in a context devoid of awareness of human sensibilities."

The Precise Difficulties Caused by E-Mail Communications?

Use of aggressive tactics. If e-mail communication encourages the use of more aggressive tactics during a dispute, or makes a counterpart’s tactics appear more aggressive, then escalation will be triggered.

Changes in view of other. Escalation is more likely if e-mail causes negative changes in psychological processes (e.g., perceptions and attitudes) towards the other, such as (1) seeing the other as unfair, (2) lessening empathy toward them, (3) increasing deindividuation and anonymity, or (4) or seeing the other as immoral.

Weakened interpersonal bonds. If e-mail weakens social bonds with the other, then escalation is more likely (e.g., due to reduced inhibitions for aggression).

Problems are difficult to resolve. If the communication limitations of e-mail (e.g., asynchrony deficits) make problems more difficult to solve, conflict may be escalated as frustrated disputants move from mild to more aggressive strategies to achieve their goals.

As a result, says Friedman, there are "higher rates of escalation when disputes are managed via e-mail than via face-to-face communication or other relatively rich media . . . such as telephone conversations." /**

Back in Los Angeles the Following Day

You knew this story was not going to have a happy ending.  What a cranky, tired, stressed partner types into her computer at 3 a.m. and what a fully awake associate reads with his morning coffee the following day are, as Friedman stresses, two quite different things.  And though I've rarely had a face-to-face disagreement with a colleague that cannot be mended by further communication, apologies, explanations and the like, this particular communication caused a rift that I was unable to heal.

This experience from several years ago, coupled with my recent mediation experiences, makes me want to advise, exhort, plead, beseech, entreat and pray that you commence every litigation with a telephone call rather than a "demand" letter or email.  And that you continue to communicate with opposing counsel by telephone or, even more radically, in person over a meal, throughout the litigation to make sure channels of communication are as open and clear as possible.

The difficulties saved will not only benefit your personal life (reduce stress, increase fellow-feeling and the like) but will benefit your client as well -- in case efficiencies and better settlements all around.     

 

______________________

*/  "Grounding" is the process 

by which two parties in an interaction achieve a shared sense of understanding about a communication and a shared sense of participation in the conversation. Grounding is important because “speech is evanescent...so Alan must try to speak only when he thinks Barbara is attending to, hearing, and trying to understand what he is saying, and she must guide him by giving evidence that she is doing just this."

** /  There's much more to be learned from this article, but these highlights should tell you whether further reading is in your interest or worth your time.  

The title?  The Firesign Theater here.

Money Unhinged : Should We Care?

I talk a lot about money here -- particularly its subjective meanings -- because a large part of my job is to help people rationalize the payment, or receipt, of money, to satisfy their justice needs

This is a particularly tricky job because justice is one of those items thought to be incommensurable, i.e., a thing or experience that has no price and cannot be bought or sold.  See e.g. The cost of a thing is the amount of life which is required to be exchanged for it: the subjective experience of money in the settlement of a wrongful burial practices case (2007) 1 LaTrobe Univ. Conflict Resolution e-Journal 60.

Thanks to Concurring Opinions' recent post How Much is that Simulacrum in the Window? we're directed to a far abler treatment of money's meaning and history than I was able to gin up for my LL.M. at Pepperdine -- Money as Simulacrum by John J. Chung, Associate Professor of Law at Roger Williams U SOL.

Whatever the political, historic and legal consequences of money's reduction to a pure symbol, it's good to be reminded again that there is both every and no relationship between money and value.  

As a mediator, I experience this paradox on the daily basis.  When two defendants are defending the same law suit, for example, one defendant almost invariably refuses to pay more than the other no matter what the absolute number at issue might be.  Defendants who are willing to pay, say, $250,000 to settle a case, will often refuse to pay anything unless their co-defendant matches or exceeds their offer.    

If you're interested in the ways in which money developed meaing, and the historic path the greenback has taken through American history, you couldn't do better than picking up Professor Chung's article.

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Negotiating Medical Liens on Settlement

This just in from the Met News for California practitioners. 

Where minor entered a settlement agreement with a third party tortfeasor by and through a guardian ad litem, and court made an allocation of the medical expenses portion of the settlement in the order approving plaintiff’s compromise, trial court did not err in rejecting plaintiff's later motion to reduce the amount of Medi-Cal lien against settlement proceeds by the same percentage that the settlement bore to the overall value of plaintiff’s case. 

Espericuenta v. Shewry - filed July 1, 2008, Second District, Div. Two Cite as 2008 SOS 3901

Question:  how do you determine the "overall value" of the plaintiff's case in order to reduce the lien by the same percentage that the settlement bears to that value?  Declaration by the Plaintiff's attorney?  Anyone who's actually read this case, do let my readers know!