One last time!! before the door closes on the opportunity to have your picture in the WLALA Tribute book and to share two tables with your fellow neutrals at the WLALA annual Installation Dinner and Gala. 

I have three more places at the table and on that ad.  I need your check for $175 and a .jpg by Friday to put you in it!  Please, let's show WLALA how eager we are to cross-refer business.

This is a particularly good year to join us as we begin the first WLALA ADR initiative in its nearly 100 year history.

ONE HUNDRED YEARS! of women lawyers - way past time to reach and firmly occupy the higher reaches of the profession.  We've been graduating from the nation's law schools in nearly equal numbers with men for more than 20 years.  My own U.C. law school class (King Hall, '80) was 50% women thirty years ago.

The ADR pipeline is full of competent -- indeed glorious -- women.  Yet the statistics at the top remain grim.

Chopped Liver?

Why is your ADR practice not everything that Tony Piazza's or Eric Green's or even Steve Cerveris' is?  Research shows that both men and women have negative implicit attitudes toward women in leadership and authority positions.  The good news is that women are slightly less pre-disposed than are men to picture a man in a suit when they're looking for access to money and power.  I've had at least half a dozen women commercial litigators look straight at me and say "I don't know any women mediators."

Huh????

Followed by, "well their names are never on the lists [circulated in my firm]."

Women, with their slightly reduced inability to "see" women in authority positions, are our foot in the door. And the new WLALA ADR Committee is our opportunity to open that door wide.

As a member of the CPR-led Joint Task Force on Diversity, I have heard the verdict of JAMS and the AAA.  "The market has spoken.  Commercial lawyers just don't hire women and minorities."

What????

We're advocates, for goodness sakes.  When we come into town we have to register our skills of persuasion with local law enforcement authorities.  We're change agents, opinion makers, powerful holders of the keys to the kingdom. 

And the market has spoken? 

We make the market!

This year's ADR Committee is dedicated to closing the gaping void between men and women neutrals.  We're not going to ask for special treatment, picket the LASC's ADR office, pass new laws or burn our ADR certificates, Super Lawyer plaques, Ivy League diplomas, or our bras (not at this age!). 

We're going to market like no one has ever marketed before and we're going to do so as a group so that we don't each hesitate, as we women tend to do, to promote ourselves and our services.

2010 and 2011 will be the years in which top women will refer to other top women.  2010 and 2011 will be the years in which we close the income gap not only between men and women neutrals but between men and women lawyers (its 40% at the top).  2010 and 2011 will be the years in which we make a market younger women lawyers will be entering in the next decade and the one after that -- one in which they'll flourish after they grow weary of fighting over interrogatory objections and e-discovery.

How?

Marketing.  Proctor and Gamble does  not say, "well, the market doesn't want a new improved laundry detergent."  P&G asks "how?" not "can we?"  And it certainly never says "we give up, the market has spoken."

We're putting our first stake in the ground on September 16 at the  WLALA Gala.  There's no event more important for women neutrals to attend this year. 

Our current attendees will appear in two full-page ads in the Tribute Book and two color flyers to be distributed at the dinner. 

To date those women are Eleanor Barr, Joan Kessler, Lynne Bassis, Katherine Edwards, Laurel Kaufer, Linda Klibanow, Denise Madigan, Stephanie Maloney, Deborah Rothman, Jan Frankel Schau, Gretchen Taylor, Caroline Vincent, Diane Wayne, Linda Bulmash, Lisa Gates (my She Negotiates business partner), Kathy Balin, and Erica Bristol. 

We need three more women neutrals to fill table two.  If you want to sit at another table, ask a woman litigator to change places with you while whispering "cross-refer" in her ear.  The key is that you'll be there to network.  You'll show your support to WLALA by showing up and WLALA women (among the most entrepreneurial in the Bar) will see your beautiful face and panel affiliation or business name in the  Tribute Book while enduring the inevitably tedious speeches at these events. 

Do you want to double your income by 2012?  If we've lasted this long in a profession that was solidly male when so many of us were in high school, we can close this gap by coming together and just doing it.

And if the $175 is too steep a price during these recessionary times or if you'll be out of town or otherwise engaged on the 16th of September, please let me know that you want to be a member of the new WLALA Committee by return email.

Our first event will be an afternoon on arbitration in October with CPR CEO Kathy Bryan and other powerful women attorneys, GC's and CEO's who arbitrate, either as advocates, as clients or as arbitrators.  The panel will be moderated by complex-commercial AAA arbitrator Deborah Rothman.

Shock me!  Let's fill Table Three!!

I look forward to hearing from you and to kicking the last pitiful shards out of that darn glass ceiling.

Best,

Vickie

Victoria Pynchon, Esq., Incoming Chair, WLALA ADR Committee
ADR Services, Inc. and She Negotiates Consulting and Training

Thanks to the SCOTUS Blog for the following resources on the upcoming Kagan hearings.  Follow SCOTUS Blog all week for commentary. 

Why should negotiators be interested in the composition of the Supreme Court?  Because the freedom to negotiate requires a strong rule of law culture.  And because everything we negotiate assumes the enforcement of certain agreements and non-enforcement of others, of particular interest to negotiators and ADR practitioners - arbitration agreements. 

SCOTUS whitepapers below:

Diversity Hiring

Abortion

Diversity on the Court

Gays in the Military

Corporate Rights (Citizen's United)

Conservatives

Executive Power

Kagan's Qualifications to Serve

Asher Hawkins

A minor Supreme Court victory this morning in an employment-related arbitration case has left the pro-arbitration camp hopeful that the justices will see things their way in a hotly anticipated consumer-related legal battle the court will hear next term.

This morning's ruling in Rent-A-Center West Inc. v. Jackson saw the court's conservative wing rule in favor of Rent-A-Center's push to have an arbitrator, and not a court, rule on the enforceability of an arbitration agreement between the company and an employee who'd filed an employment discrimination suit. In so holding, the five-justice majority reinstated a ruling from a Nevada federal court judge that had been reversed by the U.S. Court of Appeals for the Ninth Circuit.

Continue reading the Forbes' post here.

Hawkins and Rent-A-Center's attorney Carter Phillips of Sidley Austin may be reading the tea leaves correctly, but the Court's hyper-technical decision-dodging suggests the absence of a plurality on the real issue presented - whether the Court or the arbitrator should be making the decision whether the arbitration agreement is unconscionable or not.

One assumes the Court would not have granted cert if it was going to waste everyone's time and effort by penning a decision whose only precedent is this - we can avoid deciding the central issue in a case if the Appellant hasn't raised the problem in the right way. 

Really!  This is either the kind of nit-picking that gives American justice a bad name or suggests that the Court is presently unable to gather enough "yea" or "nay" votes to decide the thing.  Whether that's good news for conservative court watchers or not will be revealed when the Court hears - and hopefully decides - AT&T Mobility Inc. v. Concepcion which "raises the question whether state courts can strike down arbitration agreements that don't let disgruntled consumers join together in class action lawsuits."

Until that time, everyone on both sides of the issue should be holding their breath.

Here's a more alarmist view of the case from Balkinization - a respected source.  Excerpt below.  Full analysis at link.

The Court’s holding turns on its head our constitutional tradition of access to the courts, and effectively relegates hard-working Americans like Antonio Jackson to arbitration proceedings that, all too often, are structurally biased to favor large corporations. The problem here was not the law – as Justice Stevens showed in another powerful dissent, nothing in the Federal Arbitration Act, its history, or the Court’s precedents, remotely compelled this result – it was the five conservative Justices in the majority. In fact, the Justices had already recognized that a plaintiff was entitled to bring suit in federal court notwithstanding an arbitration agreement if he or she had been forced to go to arbitration as part of an unconscionable bargain. Justice Scalia’s opinion in Rent-a-Center changed the rules to make it much harder for Americans subject to an arbitration agreement to make this showing. With millions of Americans forced to arbitrate their claims – whether by their employers, cell phone or credit card companies – it is hard to miss the obvious fact that shutting the courthouse doors to plaintiffs like Antonio Jackson will have a lasting effect on access to justice for men and women across the country.

After three years of negotiation and general ADR blogging, I feel the need to narrow my Negotiation Blog posts and expand my IP ADR Blog posts to the type of work that consumed the vast bulk of my 25-year litigation and trial career – general commercial litigation.

In the course of handling business-to-business disputes, I’ve prosecuted and defended legal actions for copyright, tradename, trademark, and patent infringement; securities fraud; and, insurance coverage (particularly concerning catastrophic environmental liabilities); antitrust; and, unfair competition disputes.  I have also represented both the Plaintiffs and the Defendants in nationwide class actions; and, from time to time, represented attorneys and accountants in malpractice cases.  I even have a small amount of experience representing employees and employers in wrongful termination and discrimination cases, but certainly not enough to call myself an expert in that field.

In the course of my ADR career, I have continued to focus my practice on commercial disputes, although I have also mediated employment, legal and medical malpractice, and personal injury cases.

Colin Powell famously said that the most important knowledge to possess in international diplomacy is the “other guy’s decision cycle.”  What interests must the client serve and to whom does he or she answer?  What potential damage might there be to the career of in-house counsel or a high-level manager if the litigation goes south or the mediated settlement agreement angers the Board, the shareholders or even the public?  Are there tensions between counsel and client that should be resolved if the settlement reached will serve everyone’s interests?  Are there upcoming mergers or other significant corporate events that make “circumstances” more important than the merits of a particular piece of litigation?

This describes just the tip of the iceberg of the commercial litigation and settlement “decision cycle” that I know intimately. I know what keeps clients awake at night because their concerns have been my business for more than a quarter of a century.  I also know at greater depth than I know anything else the competing demands and hard hours my new “clients” – commercial litigators – labor under on a daily basis.  And having cut the law firm umbilical cord five years ago, I finally know first hand the challenges of running one’s own business.

This is what I bring to my mediation practice, along with the negotiation and mediation skills I have been studying, writing about, and teaching with great diligence for the past five years.  I continue to teach trial and deposition advocacy for the National Institute of Trial Advocacy just to keep my hand in the adversarial system.  I also continue to follow developments in the law of all of the specialties that consumed my practice as an attorney.

And then there’s that LL.M in Conflict Resolution that perplexes most people in the legal community.  One of my dearest friends – a man who served as my discovery referee for seven years – asked me “how many ways are there to stir the mediation  pot?”  Thousands, it turns out, particularly given the enormous progress that has been made in the science of the mind, the study of decision-making and the identification of cognitive biases since I was at University.

Sitting on this side of the table for the past few years has been as confounding as it has been exhilarating.  I remain steadfastly convinced that the principle problem at hand is a commercial one to which there is almost always a better business, than a legal, solution.  That does not mean that I ignore or marginalize the “merits” or “positions” of the parties.  The ability to analyze the facts and the law of matters that have been in litigation for years — sometimes decades — in several hours or a couple of days is the mandatory minimal qualification for anyone who wishes to help litigators resolve commercial disputes.

Though the law “monetizes” injustice, no one – not even the most cynical Fortune 50 client – wants to settle a case that leaves the bitter taste of injustice in his mouth.    To deliver the benefits of the legal system to our clients we must never forget that they seek out the services of the “justice system” because they believe they have been treated unfairly.  A critical element of every “commercial” solution to every legal/business conflict, is therefore the resolution – even at the level of “rough” justice – of what brought clients to lawyers in the first instance – their perception that they have been cheated, blackmailed, insulted, taken advantage of, lied to, coerced or disrespected.

After twenty-five years of legal practice, I can say with conviction that the highest and best use of every mediator is to help the lawyers help their clients obtain – at a minimum – a “deal” that not only releases them from the trap of litigation, but one that releases them from the grip of injustice.

All of these goals; each of these interests; and, every one of these skills, are possessed by dozens of mediators with whom I have worked or who I have observed in the course of their work.  I’m certainly not the best nor the only passionately competent commercial mediator in the business.  I’m just one of them.

This new Commercial ADR Blog will cover not only negotiation and mediation strategy and tactics — including tips for resolving thorny legal and commercial problems, but also the social psychology of conflict as it relates to the business of commerce.  I will also cover  developments in commercial law and civil procedure that are particularly relevant to the settlement of litigation.

I hope you’ll join me.

Here's the clause:

I hereby agree to submit to binding arbitration all disputes and claims arising out of the submission of this application. I further agree, in the event that I am hired by the company, that all disputes that cannot be resolved by informal internal resolution which might arise out of my employment with the company, whether during or after that employment, will be submitted to binding arbitration. I agree that such arbitration shall be conducted under the rules of the American Arbitration Association. This application contains the entire agreement between the parties with regard to dispute resolution, and there are no other agreements as to dispute resolution, either oral or written.

This decision is made more interesting by the recent Parada decision (.pdf) (covered here and here) where the drafter's failure to attach the JAMS arbitration rules cited in the agreement was one of the reasons the Court concluded the arbitration clause was substantively unconscionable.  I think it's safe to say at this point in the development of California law on these issues that it's not malpractice for an attorney to fail to draft an enforceable arbitration clause.  But as the opinions multiply, you can be sure some employer will be looking around for someone to name its legal counsel as the source of his discontent, blame its law firm for having to bear the expense of litigation, and claim damages as a result. 

The best protection for drafters of arbitration clauses (particularly in California where the Courts remain suspicious of adhesion arbitration contracts) is to be familiar with all the case law on the topic in the last five years; to avoid any provision the Courts have used to tip the "sliding scale" in favor of non-enforcement and include those provisions which favorably incline the courts to enforce the clauses.  

What does the 200-year present have to do with conflict resolution week?  It reminds us that new forms never really completely replace the old ones.  We continue to employ every technique we've ever used to suppress, avoid, deny, resolve, transform, or transcend conflict, including force (violent and non-violent such as injunctions subject of a Trial Warrior Blog post this week); thievery (the Trade Secrets Blog); shaming (which Scott Greenfield does to bloggers "looking for fights and dumb as dirt" and which Volokh suggests we do to health insurers); bullying (solutions to which appear at the Citizen Media Law Project); torture (still with us at the Crim Prof Blog); cheating (Make Yourself Better with Their Secrets at Concretely Ambiguous) ingratiation (at the Law School Expert); persuasive argumentation; appeal to third party authority; bargaining; communication; and, problem solving (The Tao of Advice at the Business of Creativity). 

Whichever dispute resolution mechanism you use, it should be much improved if you take up  juggling (as reported this week at Idealawg).

Transformative conflict resolution of the type covered by New York City police officer, Jeff Thompson at Enjoy Mediation, requires accountability (by lawyers, for instance, to the principle of justice at Law21); recognition (at JD Bliss); apology, amends, reconciliation (at Opinio Juris); power with (negotiation and cooperation at the Ohio Family Law Blog) instead of power over (at the Election Law Blog); and, interests rather than rights (at the Gay Couples Law Blog).

No brand of law-giver or enforcer has ever entirely left the scene.  Cops, negotiators, mediators (on the international scene at the Business Conflict Blog); conciliators, arbitrators, trial attorneys (marking tattoos as exhibits over at LawComix), corporate lawyers, legislators  (fomenting a Franken Amendment at the ADR Prof Blawg); judges (whether elected or appointed at Legally Unbound), and, juries (who might be biased at SCOTUS Blog). 

And of course the gadflies (wolf protection lawsuits anyone? at  Point of Law). 

Win, lose, settle, enjoin (at Charon QC) or simply give up (6 Ways We Gave Up Our Privacy at CSO Security and Risk).  We regulate crime and prescribe punishment (Polanski at Sentencing Law and Policy and The End of an Era at Defending People). 

We wage war (at Prawfs Blog) and seek peace (at the Delaware Employment Law Blog) as conflict inevitably erupts over Obama's (embarrassing) peace prize (at Balkinization).

And, lest we forget our primary purpose, we bend our efforts toward justice (which, according to BLT is not necessarily available to card-carrying members of the ACLU).

My own personal 200-year present spans the life of my maternal grandparents who were nine years old in 1909, and that of my step-children’s children, who (assuming they procreate on a reasonable schedule) should be ninety-five'ish in 2109. 

My grandfather, born in 1900, witnessed the birth of electricity, saw the first automobile roll off an assembly line ^[2] and stood awestruck in a cornfield as one of mankind’s first airplanes took flight. ^[3]  Although we've progressed from bi-planes to jets and rockets (some of which may someday be green) we still fly balloons of the type first launched in 1783 -- both Goodyear Blimps and the backyard variety, covered this week by Legal Blog Watch as Law and More

asked here whether the shiny, flying, silver Jiffy Pop-looking craft tethered in the backyard of Richard Heene was an "attractive nuisance" under the law.

Grandpa's first war was, well, the First and his second was the Second,^[4]  as if there'd never been any wars before the Great One. By the time I was born, mid-century, we'd fought the war to end all wars twice and knew we'd never survive a third. 

My imagined grandchildren, ^[6] born sometime between today and 2014, will not be strangers to any of my grandfather’s technologies. Despite the advent of compact fluorescent light bulbs, the early lives of my step-children's children will likely pass under the glow of the same incandescent lights that brightened granddad’s one-room school house. They will be transported to school in cars with internal combustion engines, learn the same alphabet from the same cardboard and paper books (as well as from the "e" variety) ^[7] and play many of the same games ^[8]  he did – hop scotch, jump rope and ring-around the rosy. 

Change will etch itself into the lives of my grandchildren as surely as it did my own, my parents' and my grandparents'.  Hybrids will give way to fully electric (and perhaps hemp-powered) ^[9] vehicles (effective or defective) and though electricity will continue to be  generated by hydroelectric dams, wind farms and nuclear power plants, some new and unimaginable source of power will surely push back the nights of my grand children's children. ^[10]

Law, politics, society and culture also exist in the 200-year present of conflict resolution.  ^[11] In my personal 200-year span, the law seems to have changed the most profoundly. Was it the law first and culture later?  Or do they weave our future together?

The first U.S. woman lawyer, Myra Bradwell, was admitted to practice a mere ten years before my grandmother was born. Mrs. Bradwell’s legal career was the subject of one of the sorriest U.S. Supreme Court decisions ever handed down, in which the Court opined,

The civil law as well as nature itself, has always recognized a wide difference in the respective spheres and destinies of man and woman. Man is, or should be, woman’s protector and defender.  The natural and proper timidity and delicacy which belongs to the female sex evidently unfits it for many of the occupations of civil life. The constitution of the family organization, which is founded in the divine ordinance, as well as in the nature of things, indicates the domestic sphere as that which properly belongs to the domain and functions of womanhood. The harmony, not to say the identity, of interests and views which belong, or should belong, to the family institution is repugnant to the idea for a woman adopting a distinct and independent career from that of her husband … for these reasons I think that the laws of Illinois now complained of are not obnoxious to the charge of any abridging any of the privileges and immunities of cities of the United States.

^[12]

Another nineteen years would pass after Bradwell began her practice before she (and my nineteen year old grandmother) were guaranteed the right to vote. ^[13] And another 30 years would pass after my women's movement -- the Second Wave -- before we'd have our own  business magazine -   ForbesWoman (my part in it here).  And let us not forget that despite the 20th Century's great civil rights achievements, when America catches a cold, black America gets pneumonia.  See e.g. Problems All Around for Blacks in Big Law at Being a Black Lawyer.

My grandparents', parents' and step-children's 20th Century was dominated by genocide ^[14] on a scale and a technological precision unimaginable to our earlier forebears.  Mid-century brought with it the threat of nuclear annihilation but also liberated millions of people enslaved by colonialism.  We cured polio in my own lifetime with both "dead" and "live" vaccines (neither of them counterfeit) - a singular moment in scientific history during which no one took ownership of the cure and no one tried to stop others from seeking another, a problem Patently O addressed this week in Reverse Payments.

Whether god or satan, heaven or hell, war or peace "won" the twentieth century, the world's greatest peace-making body was created during it -- the United Nations.  And here in the U.S., the “living room war,” Viet Nam, coupled with the largest generation of adolescents ever to grace American society, ended the forcible induction of young men into the military. ^[15]

With the recent discovery of our earliest ancestor, Ardi, our biological and social lives exist in a 4.4 million year now. Our physical bodies “evolve” in the womb along the same lines as did our species and, once born, we carry with us our earliest organs. ^[16] Most critical of these to conflict escalation and avoidance is our “fight-flight” mechanism – the amygdala.^[17] And the most pertinent biological agents to promote the collaborative resolution of conflict are our “mirror neurons” which

 provide a powerful biological foundation for the evolution of culture . . . absorb[ing] it directly, with each generation teaching the next by social sharing, imitation and observation.

 ^[18]

As “exquisitely social creatures,” our “survival depends on understanding the actions, intentions and emotions of others.” Id. That our misunderstandings and cognitive biases -- mentioned by Volokh on Paternalism and Michael Carbone on reactive devaluation at Mediation Strategies this week -- threaten our survival as a species is undeniable (cf. Lawyers Must Survive or Face Extinction at the Lawyerist). 

How we’ve manage to survive despite our tendency to misread one another’s actions, intentions and emotions, is often the subject of those who advise us how to choose and move juries -- here -- Anne Reed at Deliberations (explaining why "they" don't see things like "we" do here); and, the Jury Room (explaining why pain hurts more intensely when we believe it's been intentionally inflicted here). 

The Most Effective Conflict Resolution Technology is the Oldest

One of our true original gangsters, Al Capone, is reported to have said that “you can get much further with a kind word and a gun than you can with a kind word alone” and one of our greatest Presidents, Theodore Roosevelt said “speak softly and carry a big stick.”

Capone and Roosevelt didn't know it, but they were talking about the most effective (and most ancient) form of conflict resolution – tit for tat. In 1980, political Scientist Robert Axelrod asked game theory experts to submit computer programs designed to prevail in a game that provided the highest reward to cooperating pairs -- the famous Prisoner's Dilemma. (See also Max Kennerly's excellent post on Game Theory and Medical Malpractice Settlements at the Philadelphia Litigation and Trial Blog).

The winner of Axelrod's competition was a program named tit for tat.  Tit for tat was programmed to cooperate ^[19]  with its first encounter with any other programmed player.  It  rewarded cooperation with cooperation (just as networking will reward the savvy lawyer over at Chuck Newton's Ride the Third Wave) and punished non-cooperation with retaliation. Because Tit for Tat retaliated in the face of non-cooperation (just as a former employee did according to Hell Hath No Fury at Chicago Law Blogger) it was never repeatedly victimized. And because Tit for Tat “forgave” non-cooperators upon their return to cooperative game playing (as some believe Mr. Polanski should be forgiven over at the Marquette U. Law School Faculty Blog) it never got locked into mutually costly chains of mutual betrayal. ^[20]

As Robert Wright, author of The Moral Animal explained, had Tit for Tat been tossed into the game with 50 steadfast non-cooperators, there would have been a 49-way tie for first place. But none of the players' programs failed to cooperate in at least some circumstances, leaving Tit for Tat the clear victor.  According to Wright, humans, like the programs in Axelrod's competition, are evolutionarily “designed” to cooperate under at least some circumstances. The engine and benefit of cooperation is present in our neurochemistry.  When scientists observed the brain activity of volunteers playing the Prisoner’s Dilemma game, for instance, they found that the participants' “reward circuits” were activated and their impulsive "me first" circuits inhibited when they cooperated. Cooperation, retaliation, forgiveness and a return to cooperation. Tit for Tat. 

Laws and Lawyers

First and most importantly, I suppose, are the social media signs that you're "tweeting" like a lawyer over at the Social Media Law Student Blog.  Why first or important?  Know thyself.  Everything else follows that.

We don't "dis" lawyers here at the Negotiation Blog.  We simply remind ourselves that our primary purpose is the promotion of justice, with a stable societal order closely behind.  Most people don't understand, for instance, that Shakespeare's famous the first thing we do, let's kill all the lawyers was not an insult.  In King Henry IV, Act IV, Scene II, Shakespeare's sentiment was not his own, but that of a revolutionary who wished to destroy the social order.

The historic "present" of laws and lawyers is in the thousands, not simply the hundreds, of years. Hammurabi (make of his choice for the memorialization of his laws what you will) was the sixth king of Babylon, remembered for creating -- in his own name (and likeness?) - the first written and systematic legal code. 

These laws provided for a mix of physical punishment - 60 lashes with an ox hide whip - ‘measure for measure’ awards (still with us in the form of lethal injection as covered by The StandDown Texas Project) – eye for eye, bone fracture for bone fracture – and monetary compensation – 20 shekels for tooth injuries – (preserved by workplace injury awards such as those discussed at the Workers Compensation Blog) depended not only upon the type of injury, but the social classes involved in the loss, i.e., ‘measure for measure’ sanctions were specified for losses among the upper classes while monetary awards were required for losses caused to and by commoners (reminding us that disrespect still too often turns on social status or "outsider" classification as discussed at Balkinization this week).  ^[23] 

For the wrongful killing of another, for instance, the victim’s kin were paid according to the social status of the deceased party. Thus the ‘man price’ for killing a peasant was 200 shillings and that for a nobleman 1200 shillings. Payments were not, however, tailored to the loss, but fixed according to types of affront, a distinction we continue to make when we punish intentional torts more severely than negligent ones.  ^[24]>

Criminal law and civil, it all comes down to a process that is "due" (a topic covered in a blistering post about tea-partiers and other "protectors" of the Constitution at the Criminal Jurisdiction Law Blog) and a set of guidelines against which we can exercise some small degree of control over our own commercial and personal futures (like those subject of Delays Not "Party Time, Excellent" for Subcontractor at the Construction Contract Review).

Lawyers, litigators and trial lawyers are too often demonized by the ADR community as if you could get someone to sit down to negotiate without first pointing the gun of litigation at their heads; I salute you (and myself, for that matter!) for bringing us all to the bargaining table.  See Steve Mehta's recent post at Mediation Matters, Factors When Peace Makes Sense for a note that touches upon the symbiotic relationship between litigation and mediation, litigators and mediators.

I shouldn't cite single legal blogs twice, but I cannot resist this quote of Scott Greenfield's on another pundit's view of the future lawyers have in store for them, i.e., 

shucking oysters for a living if we don't accept a future of lawyers being piece workers in factories, sending our work off to Bangalore in pdf files and complementing people on their choice of forms at Legal Zoom.

Legal Rebels:  the Sky is Falling at Simple Justice.  Charon QC also weighs in on the ABA Legal Rebels project here.

Arbitration

Which came first? Public civil trials or private arbitrations? You’ll be surprised, I’ll wager, to hear that arbitration was one of the earliest forms of dispute resolution, practiced by the juris consults of the Roman Empire. Roman arbitration predates the adversarial system of common law by more than a thousand years. ^[25]

Ah, the glory of Rome! The juris consulti were (like too many mediators) amateurs who dabbled in dispute resolution, raising the question whether they (and we) should be certified or regulated as Diane Levin asks at The Mediation Channel this week.  The Roman hobbyists gave legal opinions (responsa) to all comers (a practice known as publice respondere). They also served the needs of Roman judges and governors would routinely consult with advisory panels of jurisconsults before rendering decisions. Thus, the Romans – god bless them! - were the first to have a class of people who spent their days thinking about legal problems (an activity some readers will recall Ralph Nader calling "mental gymnastics in an iron cage").

18th Century Dispute Resolution Technology:  The (Inevitably Polarizing) Adversarial System

It was Buckminster Fuller who famously opined that the "significant problems we face cannot be solved at the same level of thinking we were at when we created them."  If you keep this aphorism in mind for the remainder of this post, you'll likely have some extraordinarily innovative comments to make in the comment section below.

As the Law Guru wiki reminds us, we can trace the adversarial system to the "medieval mode of trial by combat, in which some litigants were allowed a champion to represent them."  We owe our present day adversarialism, however, to the common law's use of the jury - the power of argumentation replacing the power of the sword.

The Act abolishing the infamous Star Chamber in 1641 also granted every "freeman" the right to trial by "lawful judgment of his peers" or by the "law of the land" before the Crown could "take[] or imprison[]" him or "disseis[e] [him] of his freehold or liberties, or free customs."  Nor could he any longer be "outlawed or exciled or otherwise destroyed."  Nor could the King "pass upon him or condemn him." 

English colonies like our own adopted the jury trial system and we, of course, enshrined that system in the Fifth, Sixth, and Seventh Amendments.  Whether this 17th century dispute resolution technology can be fine-tuned to keep abreast of 21st century dispute creation technology (particularly in the quickly moving area of intellectual property) remains one of the pressing questions of legal and ADR policy and practice, particularly in a week in which a Superior Court verbally punished the lawyers before it for filing The Most Oppressive Motion Ever Presented (see the Laconic Law Blog).  The motion? 

Defendants['] . . . motion for summary judgment/summary adjudication, seeking adjudication of 44 issues, most of which were not proper subjects of adjudication.  Defendants’ separate statement was 196 pages long, setting forth hundreds of facts, many of them not material—as defendants’ own papers conceded.  And the moving papers concluded with a request for judicial notice of 174 pages.  All told, defendants’ moving papers were 1056 pages.

Id. (and ouch!)  On a less Dickensian note (think Bleak House) take a look at the IP Maximizer's post on IP litigation not being smart source of revenue for inventors. 

Mediator, author and activist, Ken Cloke, suggests that interest-based resolutions to conflict must replace power and rights based resolutions if we expect to create a future in which justice prevails.  As Ken wrote in Conflict Revolution:

Approaching evil and injustice from an interest-based perspective means listening to the deeper truths that gave rise to them, extending compassion even to those who were responsible for evils or injustices, and seeking not merely to replace one evil or injustice with another, but to reduce their attractiveness by designing outcomes, processes, and relationships that encourage adversaries to work collaboratively to satisfy their interests.

Evil and injustice can therefore be considered byproducts of reliance on power or rights, and failures or refusals to learn and evolve.

All political systems generate chronic conflicts that reveal their internal weaknesses, external pressures, and demands for evolutionary change. Power- and rights-based systems are adversarial and unstable, and therefore avoid, deny, resist, and defend themselves against change. As a result, they suppress conflicts or treat them as purely interpersonal, leaving insiders less informed and able to adapt, and outsiders feeling they were treated unjustly and contemplating evil in response.

As pressures to change increase, these systems must either adapt, or turn reactionary and take a punitive, retaliatory attitude toward those seeking to promote change, delaying their own evolution. Only interest-based systems are fully able to seek out their weaknesses, proactively evolve, transform conflicts into sources of learning, and celebrate those who brought them to their attention.

These are the words I leave with the readers of Blawg Review #234 because they are the ones that informed my personal and professional transformation from a legal career based on rights and remedies to one based upon interests and consensus. 

Whatever my own personal 200-year present was, is and will be, it is pointed in the direction of peace with justice, with an enormous and probably unwarranted optimism best expressed by the man after whom my law school was named:  Martin Luther King, Jr.  - the arc of history is long, but it bends toward justice.

Blawg Review has information about next week's host, and instructions how to get your blawg posts reviewed in upcoming issues. Next week's host, Counsel to Counsel, will devote its round-up of the week's best legal posts to the Great Recession.

Thanks to Timothy R. Hughes - @vaconstruction in my twitter network - for the head's up.

At the Federal Bar Association luncheon today I sat at attorney Wendy Lascher's table to hear the Dean of the new U.C. Law School at Irvine, Erwin Chemerinsky speak about the new Supreme Court term.  Wendy represented the losing party in Burlage and was awaiting word from the Court of Appeal on her Petition for Rehearing, which was granted this afternoon.

Here's the Petition for Rehearing; the Answer to the Petition and the Reply.

My further thoughts below, which are 180 degrees from my initial thoughts. (As a friend recently said to me "I said THAT? about THAT issue?  Did you hit the 'refresh' button?")

The question presented to the arbitrator was whether evidence of a post-escrow remedy was admissible in light of the (apparent) rule of law that damages should be measured as of the date escrow closed. Because the purchaser of the property purchased a lot line adjustment eliminating the encroachment subject of the arbitration two years after the close of escrow, the arbitrator excluded the evidence as irrelevant to the issue of damages. The trial court vacated the arbitration award under section 1286.2, subdivision (a)(5), "which requires vacation of an arbitration award when a party's rights are 'substantially prejudiced' by the arbitrator's refusal to hear 'evidence material to the controversy.'"  Two members of the three-member appellate panel affirmed.

When I spoke with attorney Lascher over lunch yesterday, she noted that questions such as "substantial prejudice" would require the trial court to review the entire record. Determining that substantial prejudice existed would also depend upon the application of the law to the facts. How, for instance, could there be "substantial prejudice" if the arbitrator was right about the law, i.e., that because the damages were required to be measured at the date escrow closed, evidence of a post-escrow cure were irrelevant. The appellate court opinion doesn't mention this issue, let alone resolve it.

Since the Court can't review the decision based upon the law or the findings of fact, the arbitrator could have permitted the evidence to be introduced and granted the identical relief.  Presto, the arbitration award would have been made bullet-proof. I understand from reading the rehearing briefs that the arbitrator knew the "facts" that the excluded evidence would have proven, so it's highly unlikely that permitting the facts to come into evidence would have changed the result.

The Lascher rehearing brief suggests that the Burlage holding would incentivize arbitrators to admit all proffered testimony and documents into evidence to insure their awards are not made subject to judicial review, thereby making arbitration lengthier and more burdensome. Lascher also suggests that there is little to disincentivize losing parties from seeking to vacate arbitration awards whenever any evidence is excluded at the arbitration. Both of these results would, she argues, further proceduralize and undermine the utility of arbitration as an alternative to litigation.

She may well convince me that my own initial analysis of the case was wrong. We'll see whether the Court of Appeal rethinks this one. In any event, I believe we can expect to see this one before the California Supreme Court at day's end.

Yes, I am on this panel.

The American Arbitration Association (AAA), the world’s leading provider of conflict management and dispute resolution services, has unveiled new services for parties involved in business-to-business, business-to-consumer, and employer-employee disputes. AAA’s Non-Binding Dispute Resolution Services provide an appropriate alternative to pre-dispute binding options.

The non-binding suite of services includes both AAA’s traditional mediation services and a new non-binding arbitration service. Non-binding arbitration can be particularly attractive to parties who want to put their case together to see its merit and foster settlement. Even if a full settlement is not reached, non-binding arbitration can help parties reduce their issues in dispute and prepare them better to resolve remaining issues. In addition, AAA staff facilitators stand ready to aid parties in selecting the settlement options most appropriate for their needs and the circumstances at hand.

“Today, more than ever, it is critical for parties to resolve disagreements in a cost-effective and timely manner, all the while protecting valuable relationships. With AAA’s Non-Binding Dispute Resolution Services, those who avail themselves of our services can rest assured that they have the resources and flexibility they need to handle potential disputes,” said William K. Slate II, President and Chief Executive Officer of the AAA.

As part of the non-binding suite of services, new sets of Non-Binding Arbitration Rules have been created for business and consumer disputes as well as for employment disputes. A new resource, titled a Guide to Drafting Non-Binding Arbitration and Mediation Contract Clauses, has also been created to assist in writing these new clauses into contracts. 

The AAA’s Non-Binding Dispute Resolution Services offer smart, effective solutions that provide:

• Viable contractual alternatives to binding options like litigation
• The chance to preserve relationships with partners and customers
•  Streamlined process and low costs

Non-Binding Suite of Services in Detail

Mediation enables parties to arrive at a settlement solution of their own making with the assistance of a neutral facilitator. This process can be valuable when the parties are willing to be flexible in their positions, when time and other resources are precious and when parties seek to have greater control over the outcomes.

Non-binding arbitration provides the parties with a hearing on documents or an informal hearing on the dispute’s merits but without the finality of a binding decision. Non-binding arbitration can be especially valuable for less complex business-to-business, business-to-consumer or employer-employee disputes where the parties may be too far apart in their viewpoints to mediate or in need of an evaluation of their respective positions.

The AAA has a panel of arbitrators ready to serve on non-binding business, consumer, and employment arbitrations. The panelists are distinguished by their level and breadth of experience in arbitration, the law and their industry knowledge, which ranges from technology, insurance, and consumer products to financial services, healthcare, ERISA, pension and benefits matters, and more. The panel of arbitrators also includes former federal and state judges and attorneys experienced in personal injury, and handling general civil disputes.

To view information on the AAA Non-Binding Dispute Resolution Services fees, please view the following links:

For Business and Consumers http://www.adr.org/si.asp?id=5682

For Employers and Employees http://www.adr.org/si.asp?id=5681

To find more information on these innovative non-binding solutions, go to: http://www.adr.org.

About the American Arbitration Association

The global leader in conflict management since 1926, the American Arbitration Association is a not-for-profit, public service organization committed to the resolution of disputes through the use of arbitration, mediation, conciliation, negotiation, democratic elections and other voluntary procedures. In 2007, nearly 128,000 cases were filed with the Association in a full range of matters including commercial, construction, labor, employment, insurance, international and claims program disputes. Through 30 offices in the United States, Ireland, Mexico, and Singapore, the AAA provides a forum for the hearing of disputes, rules and procedures and a roster of impartial experts to resolve cases.

I don't mean to suggest here that drafting an arbitration clause a Court refuses to enforce or to apply to a given claim constitutes malpractice.  The way the Courts are dealing with arbitration clauses these days, it's probably not outside the standard of care to fail to satisfy their passing fancies on scope and unconscionability.  

I do, however, WANT TO DISCOURAGE ALL LAWYERS FROM USING BOILER PLATE ARBITRATION CLAUSES which is why I'm alerting you to yesterday's opinion by the Fifth Circuit Court of Appeal refusing to apply Halliburton's employment arbitration provision to a sexual assault claim. 

Here's the clause. 

 You understand that the Dispute Resolution Program requires, as its last step, that any and all claims that you might have against Employer related to your employment . . . must be submitted to binding arbitration instead of to the court system.

Pretty broad, but not, according to Jones v. Halliburton, broad enough to include a sexual assault claim that occurred in worker housing.  With one Justice dissenting, the Court was careful to limit is opinion strictly to the facts of the case before it.  Here's the holding: 

The one consensus emerging from [our] analysis is that it is fact-specific, and concerns an issue about which courts disagree. When deciding whether a claim falls within the scope of an arbitration agreement, courts “focus on factual allegations in the complaint rather than the legal causes of action asserted”. Waste Mgmt., Inc. v. Residuos Industriales Multiquim, S.A. de C.V., 372 F.3d 339, 344 (5th Cir. 2004) .Here, the allegations are as follows: (1) Jones was sexually assaulted by several Halliburton/KBR employees in her bedroom, after-hours, (2) while she was offduty, (3) following a social gathering outside of her barracks, (4) which was some distance from where she worked, (5) at which social gathering several co-workers had been drinking (which, notably, at the time was only allowed in “non-work” spaces).

                                         *                     *                   *

Under these circumstances, the outer limits of the “related to” language of the arbitration provision have been tested, and breached. Halliburton/KBR essentially asks this court to read the arbitration provision so broadly as to encompass any claim related to Jones’ employer, or any incident that happened during her employment, but that is not the language of the contract. We do not hold that, as a matter of law, sexual-assault allegations can never “relate to” someone’s employment. For this action, however, Jones’ allegations do not “touch matters” related to her employment, let alone have a “significant relationship” to her employment contract.

N.B.  Review the case law; forecast the types of claims that might be made against your client.  Tell the client there's no way you can provide it with any absolute assurances that the arbitration clause will be enforceable in every given situation.  Say that in writing.  Do your best.  Maintain a great working relationship with your clients and you'll be fine.  Just fine.

Hat tip to Pop Tort for the head's up on this case!

As the Court explained, despite the fact that an undisclosed encroachment on the claimants' property was "fixed" after its purchase, the arbitrator nevertheless permitted them to:

present[] expert testimony about the effect of what had become a nonexistent encroachment. Their experts testified about the cost to move [the encroaching] pool and fence, neither of which had to be moved [and respondent] was not even permitted to refute [claimants'] expert who opined that the encroachment reduced the value of the property $100,000. [Respondent] could not show that the title company solved the encroachment issue through a payment of approximately one-tenth that amount.
Without this crucial evidence, the arbitration assumed the nature of a default hearing in which the [claimants] were awarded $1.5 million in compensatory and punitive damages they may not have suffered.

Respondent's motion to the trial court to vacate the arbitral award was granted under section 1286.2, subdivision (a)(5), "which requires vacation of an arbitration award when a party's rights are 'substantially prejudiced' by the arbitrator's refusal to hear 'evidence material to the controversy.'"  Two members of the three-member appellate panel affirmed.

Noting that the Respondent could not receive the benefit of the arbitration bargain if deprived of the opportunity to present material evidence, the majority had no qualms affirming the trial court's order, even in the face of a dissent that the majority opinion "makes suspect every arbitration ruling disallowing evidence."

As the majority concluded:

We agree with the trial court's acknowledgment that not every evidentiary ruling by an arbitrator "can or should be reviewed by a court." We also agree with its comment, "[T]hat's not the same as saying no evidentiary ruling can or should be reviewed by a court. . . . [I]t would have the effect of . . . deleting subsection 5 from the statute [section 1286.2, subdivision (a)(5)]." This answers the dissent's concern that our opinion makes suspect every arbitration ruling disallowing evidence. In our view, should the award be affirmed, arbitration itself would be suspect.

The majority's willingness to draw a line in the sand for arbitration awards based upon the exclusion of evidence that would have flatly disproved the existence of damages awarded is a good thing for arbitration, assuring arbitrating parties that the arbitral tribunal will provide a process that is "due" -- i.e., notice and an opportunity to be heard.  I'm hoping the Supreme Court will not depublish this opinion as it sometimes does when it's not ready to deal with an issue, particularly from an appellate panel apparently still smarting over the high court's "reversal" of its Moncharsh decision nearly twenty years ago. /*

______________________

*/ The Burlage Court opens its opinion as follows:

In 1991, we wrote what we thought was a routine arbitration opinion. (Moncharsh v. Heily & Blase (Apr. 2, 1991, B048936) [nonpub. opn.].) We relied on decades of precedent in our unpublished decision to affirm the arbitration award because no error appeared on the face of the award. In dicta, we noted that had the error appeared on the face of the award and created substantial prejudice, we would have reversed.  To our surprise, our Supreme Court granted review. Our holding was affirmed, but our dicta "reversed." (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1.) Oh well, nobody's perfect.

(right, our fearless leader, Simeon H. Baum)

The subjects covered in this issue include the chaotic state of federal mediation confidentiality protections [by Phyllis G. Pollack]; the dangers of [mediator] class action fairness declarations [by Jay McCauley and Jeff Kichaven] and the difficulties inherent in applying federal conflict of interest laws developed with attorney advocates in mind to attorney neutrals and their law firms [by Robert J. Rose].

Though these issues are of critical importance to daily practice in our federal courts, very few advocates are aware that these problems exist, let alone how they might be fixed. The Resolver’s first mission is to make available to FBA members the highest level of scholarship and best practices in federal mediation and arbitration practice. The second—and perhaps the most important— mission of The Resolver, is to commence a robust and sophisticated conversation among federal lawyers, on the one hand, and district and circuit court mediators on the other, about the means by which we can more efficiently, effectively, and durably help our clients resolve their litigated disputes.

(from the Letter from the Editor by yours truly)

You'll also want to read the Message from the [ADR] Section Chair, Simeon H. Baum, whose energetic leadership is making the ADR Section of the Federal Bar Association a dynamic new force in the ADR field.

As Baum's message notes, we have great things in store for the work of the FBA's ADR Section. Simeon writes:

For those of you who are interested in what you encounter in The Resolver, we welcome you to participate actively in the FBA. Become a liaison to the section on behalf of your local chapter. If you have thoughts on pending or possible legislation that affects the dispute resolution field . . .  please feel free to share them with us—publish your piece in the next issue of The Resolver.

Or, reach out to the section and your chapter and look to put your cause at the forefront of the FBA’s legislative agenda. We can take advantage of Bruce Moyer and the FBA Governmental Relations Council to cultivate the best in the ADR field through national legislation, where appropriate.

If you have a CLE program on ADR that you would like to promote, please let us know through the ADR Section, and the section can collaborate with your local chapter [Board member Jeff Kichaven is the CLE Chair this year and you can reach him at the link above].

Along these lines, the section is hoping that FBA chapters will host fireside chats or roundtable discussions featuring the circuit mediator for that area [and local Board members will be reaching out to those chapters to initiate those roundtables.

These CLE events—perhaps accompanied by a breakfast, lunch, or cocktail reception—can provide an excellent opportunity not only to enhance the use of those ADR forums, but also to meet with likeminded neutrals and representatives.

With this first issue of The Resolver at hand—thanks to the efforts of editor Vickie Pynchon, our generous contributors, and FBA sections and divisions manager Adrienne Woolley  (awoolley@fedbar.org), we invite you to join us in the unending way of creative service to your clients, the bar, and society via the path of resolution.

The entire issue is here.

No, this isn't becoming an arbitration blog, but the threat of arbitration directly impacts the value of litigation and negotiating the price of a release from litigation is what I spend my days helping attorneys negotiate.  So this news from the Second District Court of Appeal (controlling Los Angeles trial court decisions) is yet another shot across the bow of arbitration's efficiency for the resolution of disputes (and did I mention how much better mediation is?  No?  Well, later on that).  An excerpt from the Los Angeles Daily Journal and a link for paying subscribers below:

A California appellate court on Monday upheld a lower court's decision to throw out a $1.5 million arbitration award in a Ventura County property dispute - a decision that some observers said could lead to increased judicial review of arbitration and larger legal bills for litigants.

"As far as I know, it's the first time the Court of Appeal has reversed an arbitration award," said Lisa J. Perrochet, a partner at Horvitz & Levy in Encino, who, along with John A. Taylor Jr., represented land-seller Martha Martinez Spencer.

A 2-1 decision of the 2nd District Court of Appeal determined that JAMS' David D. Perez erred by preventing Spencer from showing that a title company solved the land encroachment problem of a couple that bought a property from Spencer in 2004. Burlage v. Superior Court [.pdf] . . .

The court's decision will do much to dispel the "urban legend" that arbitration awards are bulletproof on appeal, Perrochet said.

But Wendy C. Lascher of the Ventura-based Lascher & Lascher, who represented Ronald and Cheryl Burlage, the couple who sued Spencer, said the court's decision "will do away with many of the advantages arbitration is supposed to have."

Daily Journal subscribers can read more here.  My brief of this case appears here.

Since posting the holding of the recent Parada decision here yesterday, I've had further thoughts on the matter which I posted to both the AAA LinkedIn and the Commercial and Industry Arbitration LinkedIn Group sites.*/  I provide those thoughts here for anyone who represents businesses struggling to draft enforceable arbitration clauses and attorneys who oppose or are attempting to enforce them.

(above, lawyer on verge of bagging practice to mediate and arbitrate instead)

Follow the hilarious Charles Fincher at LawComix and on Twitter @CharlesFincher @BeatriceBitcher  @ RichardPrickman and @LawComix.

 The California Supreme and appellate courts HATE consumer/employee arbitration clauses. It's almost impossible to draft one that will pass their unconscionability standards -- even O'Melveny failed to get it right.

In this case the Court found the arbitration clause substantively unenforceable even though the Plaintiffs were "investors" and hence neither the "consumers" nor the "employees" for whom prohibitively expensive arbitration alone can render the clause unenforceable. This case does not extend the prohibitively expensive doctrine into non-consumer contracts, but instead uses the expense as one of the factors leading to the conclusion that the arbitration provisions are substantively unconscionable.

This creates a slippery slope for the Courts to import (implicitly rather than explicitly) the prohibitively expensive doctrine into its consideration of arbitration clause enforceability when the contract is "adhesive." For this reason, it wouldn't surprise me if the California Supreme Court de-published it.

This is one of those issues where the Courts' self-interest in clearing their dockets does not defeat a continuing strong bias against arbitration at the appellate level. Of course the appellate courts do not have to deal with the litigation as the trial courts do and the trial courts continue to somewhat reflexively grant motions to compel arbitration.

This leaves everyone who wishes to avoid the Court system and use arbitration to resolve commercial disputes in a position of uncertainty that the law of contracts is designed to prevent.

One solution - the one I suggest - is to use the AAA's expedited commercial procedures for contracts where the individuals signing are likely able to demonstrate an inability to pay for arbitration.

Note that the failure to attach the arbitration rules agreed upon was a factor in the Court's decision that the arbitration clauses were unenforceable. I doubt that any company proffering arbitration to customers attaches the often lengthy rules but they would be wise now to do so if they're operating in California.

The bottom line in California now? If the contract is non-negotiable (form; customer no opportunity to bargain) and the customer will be able to demonstrate an inability to pay AAA or JAMS fees, an expedited procedure should be offered in the arbitration agreement or the business enterprise should assume the cost of arbitration (with a prevailing party clause to recoup the expense should the commercial enterprise prevail). The governing rules should also be attached.

The point is to make the arbitration option as clear and transparent as possible and as inexpensive an option as Court would be. Even those who believe they can distinguish Parada from their own case should know it's in their best interest to adhere to the Parada guidelines or be forced to defend their arbitration clause in Court against strenuous opposition.

__________________

*/  I belong to two groups on LinkedIn that any attorney who arbitrates cases or who counsels clients to put arbitration clauses into their contracts should join.  They are the Greater AAA Connection, which describes itself as:

 a professional and social network of current and former employees, neutrals, and students of the AAAU from around the world. If you have an AAA connection, this might be your connection. Join in!

and the Commercial and Industry Arbitration Group, which describes its mission as:

the open discussion of issues and sharing of information concerning commercial and industry arbitration, mediation and other forms of alternative dispute resolution. Commercial and industry ADR is a broad topic and covers the spectrum from arbitrations and mediations arising out of general, commercial contracts through more specialized forms of dispute resolution used by various industries, including the reinsurance, maritime, telecommunications, securities, financial services, construction industries and others. We also consider labor and employment arbitration and mediation to be within this spectrum.

The arbitration provisions at issue in Parada were contained in a form contract between individual investors and a company called Monex which dealt in precious metals.  After suffering investment losses, three customers brought suit in a single consolidated proceeding.  The arbitration clause required each party to individually bring a claim against Monex before a panel of three JAMS arbitrators. 

The trial court granted Monex's motion to compel arbitration and the Fourth District vacated that Order in response to the Plaintiffs' petition for a writ of mandate.  In granting the writ, the appellate court held that the cost of a three-Judge JAMS arbitration panel together with a prohibition against consolidating or joining claims rendered the provisions both procedurally and substantively unconscionable. 

The factors upon which the Court premised its unconscionability decision included the following:  (1)  because Plaintiffs had no meaningful opportunity to negotiate the terms of the agreement, it was an adhesion contract; (2) assuming the arbitration of Plaintiffs' individual claims would require four days of hearing time, JAMS arbitrator and administrative fees would have amounted to a minimum of $20,800 per party; (3) the prohibitions against joinder or consolidation unnecessarily increased the cost to each party of bringing their claims against Monex; (4) the parties demonstrated their inability to afford the JAMS proceeding; and, (5) the provisions requiring arbitration according to JAMS rules -- which provided for sanctions in the event of a party's inability to pay, were not attached to the contract.  

As the Court concluded:

Having determined the presence and degree of procedural and substantive unconscionability, we return to the sliding scale measurement to determine whether the Arbitration Panel paragraphs and No Consolidation paragraphs of the . . . Agreements are enforceable. (Morris, supra, 128 Cal.App.4th at pp. 1318–1319.) 

We concluded the [arbitration provisions] fall in the low to middle range of the procedural unconscionability scale. Without considering each Petitioner’s ability to pay, the unjustified requirement of a panel of three arbitrators from JAMS and the prohibition on consolidation or joinder of claims render the Arbitration Panel paragraphs and No Consolidation paragraphs substantively unconscionable to a high degree. Consideration of Petitioners’ ability to pay pushes those paragraphs even further into substantive unconscionability territory.

On the sliding scale, this low- to mid–range amount of procedural unconscionability and the high degree of substantive unconscionability render the Arbitration Panel paragraphs and No Consolidation paragraphs of the [arbitration provisions] unconscionable and, hence, unenforceable.

This decision, resting as heavily as it does upon the inability of parties to pay arbitration fees and the failure to disclose the arbitration rules that would govern the resolution of the parties' claims, should give every litigator and transactional lawyer pause when advising their clients concerning the enforceability of arbitration clauses.

In my own mediation practice, I have seen many consumer fraud cases ordered into arbitration based on adhesion contracts requiring arbitration according to the rules of the AAA.  None of these contracts included the rules that would bind the parties and in many cases the Plaintiffs would be unable to afford to fees charged by AAA arbitrators.  Attorneys resisting the enforcement of such agreements would do well to study Parada as would those who advise clients about the enforceability of standardized form arbitration provisions included in contracts which have not been reviewed for unconscionability under recent court rulings. 

For those businesses dealing with consumers, particularly those not given the option of negotiating the terms of an arbitration provision, a possible safety net is the AAA's Expedited Commercial Arbitration Panel, which charges a modest fee for a single day of arbitration before a AAA arbitrator.  Be sure to attach the AAA Expedited Commercial Rules to your contract and avoid the uncertainties created by Parada.

_______________________

*/  In What Every Litigator Should Know About Enforcing or Avoiding ADR Clauses, panelists Rebecca Callahan, Brian Reider, Commissioner Michele Flurer and Victoria Pynchon will "explain the most commonly-used ADR proceedings, contractual ADR clauses and ADR enforcement mechanisms and discuss significant issues lawyers must “consider or avoid” when dealing with those ADR provisions" at the State Bar Convention in San Diego on Saturday, September 12, 2009 at 2:15 p.m.  CLE: 1.5 Hour

Justice Victoria Chaney, Associate Justice of the Second Appellate District, Division One
Deborah Rothman, Mediator and Arbitrator
Stephen N. Goldberg, Dickstein Shapiro LLP.
Jonathan Stein, Law Office of Jonathan Stein, Moderator DATE: Wednesday, September 9, 2009
Program: 12:30 - 1:30 p.m.

PLACE: LAWRY’S, 100 North La Cienega Blvd., Beverly Hills
Free Underground Self Parking
PRICE: $65.00 for all BHBA Litigation/Section on Conflict Resolution Section Members who pay in advance*
$85.00 for all BHBA Members who pay in advance*
$40.00 for BHBA Law Students with valid student I.D./Summer Associates
$105.00 for all others who pay in advance*
*($20.00 more at door for all)

This event is FREE for members of The Order of Distinguished Attorneys:  SIGN UP HERE

*MINIMUM 24 HOURS - Refund with 48 hours notice - Raincheck with 24 hours notice MCLE CREDIT: Legal Education credit by the State Bar of California in the amount of 1 hour and the Beverly Hills Bar Association certifies that this activity conforms to the standards for approved education activities prescribed by the rules and regulations of the State of California governing minimum continuing legal education.

A friend recently reminded me of a book review I wrote for one of those "get rich" books The Go Giver (below) for the sorely-missed Complete Lawyer.   I reprint it here in the Negotiation Blog because I talk a lot about the power of reciprocity in bargaining.  I'd summarize my response here, but I can't say it any better than I did below. 

The Go-Giver, A Guide to a Life Lived Richly

American business people have been writing self-help guides to financial success since Benjamin Franklin penned Advice to a Young Tradesman and Poor Richard’s Almanac. Business consultants Bob Burg and John Davis Mann add to this tradition a new parable -- The Go-Giver, A Little Story About a Powerful Business Idea.              

As the title suggests, Burg and Mann recommend that we discard “go getting” -- hard work focused on individual success -- in favor of “go giving” – authentically passionate work focused on the success of others. To demonstrate how material wealth follows generous action, Burg and Mann create an elusive but legendary business consultant “Pindar,” who shares his Five Laws of Stratospheric Success with anyone who promises to practice these principles in all their affairs.    

The pilgrim in this progress is “Joe,” an earnest and hard-working salesman on the brink of a third failed quarter. After promising to follow the laws Pindar teaches him, Joe meets a handful of spectacularly successful givers. These include former hot dog vendor Ernesto, who credits his restaurant and real estate empire to giving more than you take; Nicole, who owes her rise from school teacher to educational software titan to giving much to many; former insurance salesman Sam, whose many philanthropies thrive on giving without expectation of return; and, Debra, who learns to succeed in business by giving of her true self. Having quickly learned each lesson, Joe himself exemplifies Law No. 5 – the willingness to receive the bounty that flows from giving.  

Unfortunately, as a guide to financial success, The Go-Giver is more fairy tale than instruction manual. All of the business icons Joe visits ascribe their riches to acts of authentic generosity. It is apparent from the context in which these stories arise, however, that the key here is neither virtue nor the inherent satisfaction to be found in giving. The key is choosing the right people to give to – those with wealth, monied connections or the power to create economic opportunities for others.   

If we are moved to visit shut-ins; bring recovery meetings to incarcerated felons; or make micro-loans to third-world entrepreneurs, this book is not for us. This is focused giving and the focus is on the “haves,” not the “have nots.”  If we are among the unemployed; the sick; or, the elderly, we’ll need another set   of “Laws” for success  – chief among them laws guaranteeing the education; training; and, health care necessary to enable us to make use of the opportunities created by the Go-Givers’ generosity.  [1]

Walking the Razor’s Edge

Most Complete Lawyer readers are, however, the type of business people for whom The Go-Giver is written.   No matter where we appear on the legal economic ladder, as educated people with access to the justice system, we are well poised to engage in random acts of kindness for, and reap rewards from, those who are well situated to spread a little green.  [2]   So long as we successfully negotiate the razor’s edge between opportunism and genuine acts of generosity, Burg and Mann’s advice will likely redound not only to our emotional and spiritual well-being, but also to our financial success.    

Most readers will, of course, recognize Joe’s spectacular rise from failing salesman to coffee-bean multi-millionaire as the fairy tale the The Go-Giver all but announces itself to be. There is value here, however, in the quotidian acts of kindness in which Joe engages to satisfy Pindar’s requirement that he promptly practice the “Laws” conveyed.     

The most credible results of Joe’s baby steps on the road to becoming a generous human being are his improved relationships with his fellows. Practicing “not keeping track,” Joe foregoes telling his wife his own work-a-day worries, focusing his entire attention upon the challenges of her day. His reward? An entirely believable note of love and gratitude on her pillow the following morning. Practicing “giving more value” than he receives, Joe serves coffee to his workmates as they struggle to meet a collective quarter-end deadline. Though Joe reports “feeling like an idiot” in doing so, it is clear that the warmth and bemused surprise expressed by is co-workers is its own reward.     

The true lesson of The Go-Giver is not so much that material reward follows an expansive spirit, but that one’s daily pleasure increases with the size of one’s own heart. After all, when financial success eludes us – or crashes with the national economy – what we have to rely upon is not numbers on a ledger sheet, but the family, friends and neighbors who will see us through. If we give authentically without expectation of reward – because we “love to . . . as a way of life” – what we will reap is a life richly lived even if we do not thereby “get rich” in the process.

Here's the entire text of the triple A's announcement (h/t to Disputing here)

The American Arbitration Association® Calls For Reform of Debt Collection Arbitration

Largest Arbitration Services Provider Will Decline to Administer Consumer Debt Arbitrations until Fairness Standards are Established

New York, NY– (July 23, 2009) – The American Arbitration Association (AAA), the world’s largest conflict management and dispute resolution services organization, today recommended in a House subcommittee hearing that the process surrounding consumer debt collection arbitration needs major reform and recommended a national policy committee to identify and research solutions. AAA said it will not administer any consumer debt collection programs until those solutions are determined.

AAA senior vice president Richard Naimark told the Domestic Policy Subcommittee of the House Oversight and Government Reform Committee that the AAA “has not administered significant numbers of debt collection arbitrations relative to some other organizations,” and has not handled any since June after it concluded a single high-volume program. However, he said that AAA had independently reviewed areas of the process and concluded that it had some weaknesses. As a result of that review, it is evident to the AAA that “a series of important fairness and due process concerns must be addressed and resolved before we will proceed with the administration of any consumer debt collection programs.” According to Mr. Naimark, areas needing attention from the national policy committee include consumer notification, arbitrator neutrality, pleading and evidentiary standards, respondents’ defenses and counterclaims, and arbitrator training and recruitment.

“AAA has been working with the Domestic Policy Subcommittee to review potential improvements in consumer debt collection arbitration procedures for some time. We believe that arbitration can play a major role in consumer debt collection disputes. A national policy committee dedicated to meaningful reform can enhance an array of due process elements so that there is deeper fairness and transparency. Consumers deserve an alternative to litigation, but they also need to be able to trust that option. Our goal will be to achieve that trust,” Mr. Naimark said after the hearing.

“We have been studying this issue for some time. We made our decision to impose a moratorium on administering consumer debt arbitration independently and not at the behest of any outside entity as has been claimed. We commend the Domestic Policy Subcommittee for its initiatives to protect consumers in debt collection cases, and we will continue to work with it willingly and enthusiastically,” Mr. Naimark said.

The State of Minnesota filed a lawsuit against National Arbitration Forum, a leading arbitration provider, claiming that NAF is a front for debt collectors and their law firms and not an independent arbitration service.  Here’s a copy of the complaint–it’s long–for anyone who is interested.

For Sugarman's full post, click here.

Though the National Arbitration Forum focuses on the arbitration of disputes, it also administers mediations.  For information on its mediation services, click here.