Southern California Arbitration Mediation and Conflict Resolution : Settle it Now Dispute Resolution Services : Serving Los Angeles, Beverly Hills, Century City : Settle It Now Negotiation Blog

Women in the United States Judiciary

2009 State Court Judges in the US:

• 4,325 women of 16,950 total
• 26% women

2008 Federal Court Judges

• 47 of 164 active judges on the thirteen federal courts of appeal are male (29%).
• 25% of United States district (or trial) court judges were women in 2008.

Women in Corporate America

• In November 2002, women represent 15.7% of the corporate officers in America’s 500 largest companies. These percentages are up from 12.5% in 2000 and 8.7% in 1995.
• In April 2002, there were six female CEOs in the Fortune 500 and a total of eleven in the Fortune 1000.
• The number of women corporate officers:  2,140 out of 13,673.
• The number of women corporate officers:  2,140 out of 13,673. T
• Almost 95% or 2,141 of the top earning corporate officers are men, compared to only 188 or 5.2% of women top earners in the Fortune 500.

Earnings on the Dollar Compared to Men

• Asian/other women: 67 cents
• White women: 59 cents
• African American women: 57 cents
• Hispanic women: 48 cents

Family

• Women managers are more likely to be single parents than male managers.
• Women managers who are unmarried and have children under 18: 22 percent African-American, 15 percent Hispanic, 8 percent White, and 5 percent Asian/other women.

Women Lawyers

 JOIN THE PROFESSIONAL WOMEN'S NETWORK OF SOUTHERN CALIFORNIA TODAY!  We're "on the ground" locally and online nationally.  Building business one relationship at a time.

• Email This
• Print
• Comments
• Trackbacks

Here's a copy of the Judgment Confirming Final Arbitration Award.

Comment later.  In the meantime, Money Money Money from Cabaret.

• Email This
• Print
• Comments
• Trackbacks

Although a California Court may properly sanction a non-party insurance carrier who possesses the authority to settle litigation for its failure to participate in a mandatory settlement conference, there is no statutory (nor inherent) authority given the Court to sanction the carrier or a party for its purported failure to negotiate in "good faith."  As the Court in Vidrio v. Hernandez (2d DCA) explained today:

In sum, even were we to agree with the trial court's assessment of the conduct of counsel and the [insurance] adjuster, the failure to increase a settlement offer or to otherwise participate meaningfully in settlement negotiations violates no rule of court and is not a proper basis for an award of sanctions.11 (See, e.g., Triplett v. Farmers Ins. Exchange (1994) 24 Cal.App.4th 1415, 1424 [“[w]e eschew any notion that a court may effectively force an unwilling party to settle by raising the specter of a post hoc determination that failure to do so will be evidence of failure to participate in good faith”]; Sigala v. Anaheim City School Dist., supra, 15 Cal.App.4th at p. 669 [“„[a] court may not compel a litigant to settle a case, but it may direct him to engage personally in settlement negotiations, provided the conditions for such negotiations are otherwise reasonable‟”].) [Defendant] filed an appropriate settlement conference statement; her lawyer and Mercury [the insurance carrier] attended the conference and participated in it. While the trial court‟s frustration at the parties‟ lack of movement is understandable, no more was required.
 

In particular, the Court of Appeal, held that the Court was not at liberty to "judge" whether the defendant and its carrier "should have" offered more than had previously been offered at a mediation either because the case was "worth" more or because the offer was so low in light of the attorneys fees and costs that would likely be incurred at trial.

I believe most mediators would approve of this ruling, even though it applies only to settlement conferences and not to mediations, the latter of which is protected from the Court's inquiry by Evidence Code section 1119.  Whether or not a mediator, a settlement judge, a party or a trial judge believes a defendant "should" offer more or a plaintiff "should" accept less by way of settlement, should not form the basis of an award of sanctions.  Not only would such a rule decrease citizens' trust and respect for the Courts, whose job it presumably is to provide a forum in which litigated disputes may be tried, such a rule would impermissibly chill the parties' Constitutional right to a jury trial.  

• Email This
• Print
• Comments
• Trackbacks

As every lawyer knows and most students of high school geometry must learn in mastering "proofs," the answer often comes first, the rationale later.  I used to say, "I'm a litigator, I can rationalize anything."  As a mediator, my rationalizations have turned from the way in which facts can be shoe-horned into causes of action or affirmative defenses to the way in which harm arising from a dispute (including, most assuredly, the moral harm of injustice) can be monetized.

Now David Brooks in the New York Times (which appears to have disabled the "copy" function/1) tells us that philosophy has been sacrificed on the alter of emotion in his column The End of Philosophy. 

As Brooks explains, reasoning comes after moral judgment and "is often guided by the emotions that preceded it."  The good news is that those emotions are not merely competitive.  Brooks again:

Like bees, humans have long lived or died based on their ability to divide labor, help each other, and stand together in the face of common threats.  Many of our moral emotions and intuitions reflect that history.  We don't just care about our individual rights, or even the rights of other individuals.   We also care about loyalty, respect, traditions, religions.  We are all the descendents of successful cooperators.

My mediation experience teaches me that the "soft" arts of influence, empathy, community-building, and prejudice reduction, are as important (and often more important) to the successful (i.e., satisfying) resolution of a lawsuit than our prized ability to parse the evidence,  rationalize away the bad and privilege the good to sell our "proof" to judge or jury.

Most importantly, I find that when attorneys' clients leave a mediation with the belief that a certain rough justice has been obtained, they are more satisfied with the outcome, and with their attorneys' representation of their interests, than they might have been had they left with 10% more change jingling in their pockets.

The experts who study mediation tell us that "neutrals" don't make the difference between settling or not settling.  The cases will settle with or without us.  The difference mediators make is not settlement, but  client satisfaction.  Satisfied clients are  an absolute necessity for a successful legal practice at any time.  In these hard times, legal practices may fail in the absence of resolutions addressing the justice issues your client sought out a lawyer to resolve in the first place.

Money is the instrument.  But justice is the issue.

_____________

1/  More about this at IP ADR later today.

• Email This
• Print
• Comments (1)
• Trackbacks

Interviews with ADR giants: Mediate.com opens video archive for month of April

Posted by: Diane Levin in Cool Things on the Web, Mediation, Mediation in Practice

Mediate.com, the world’s premier source for news, information, and articles about mediation, has opened its video archive to the public during the month of April.

For description of the type of videos available, run right over to Diane Levin's blog by clicking on the title up top.

Thanks Diane for getting the word out about this.

For a taste of some of the offerings, watch this short video of Ken Cloke talking to Robert Benjamin about the evolution of conflict  over the lifetime of an individual as well as over the lifetime of a civilization.

Cloke is my mentor and his insights are just as useful to the settlement of commercial litigation than are some of the competitive negotiation skills I've learned along the way.  Check out all of Ken's videos.

• Email This
• Print
• Comments
• Trackbacks

Challenges to good faith settlements that cut off the rights of non-settling defendants to seek indemnification and contribution from settling defendants are nearly always doomed to failure.  Trial courts are understandably eager to clear their dockets and there's no docket-clean-up pitcher like the first defendant to settle.  Deny the motion and bring a settled defendant and his trial-ready resources back in to the litigation when the first defendant-domino has just successfully toppled over?   Not likely, my friend. Not in the trial court at any rate.

These motions are so difficult to oppose that I've seen a target defendant threaten a marginal player (my client) with sanctions just for challenging the target's very low six-figure settlement in an eight-figure antitrust action.

It looks like low value settlements got just a little bit harder to defend yesterday when the Second District Court of Appeal reversed a trial court's good faith settlement finding in  Long Beach Memorial Medical Center v. Superior Court (Conners).

Best quotation:  "The hospital contends that the physicians‟ $200,000 settlement -- representing 2 percent of plaintiffs‟ $10 million damages estimate -- was so far out of the “ballpark” it was not even in the parking lot."  With a first runner-up to "If section 877.6 is to serve the ends of justice, it must prevent a party from purchasing protection from its indemnification obligation at bargain-basement prices."

The Court of Appeal relied upon the following "facts" in finding that the trial court abused its considerable discretion in granting a good faith motion to defendant physicians in light of defendant hospital's opposition.

• payment of $200,000 in settlement for a $10 million claim, which the appellate court found to be "wholly disproportionate."  As the Court opined "[e]ven a slight probability of liability on [the settling doctor's] part would warrant a contribution more significant than 2 percent."
•  the "evidence" supporting the court's finding that the settling physician's probable fault was "not de minimis,"  which appears to have been based upon Plaintiff's attorney's fault analysis (not generally known for its unbiased nature) and the physicians' counsel's candid (?) suggestion that his clients' contribution to a global settlement might be in the range of $1.5 million;
• the availability of $2 million in coverage, which "militated against a good faith determination" because the settlement constituted only 10% of available policy limits [carrier alert here!];
• the non-settling Hospital's contention that the physicians and their attorneys engaged in "bad faith tactics" during two mediation sessions -- a factor the appellate court acknowledged it was barred by mediation confidentiality from considering -- but which it neatly avoided by concentrating on post-mediation negotiations; /*
• the timing of the physicians' settlement offer, which suggested to the appellate court that their "reason for entering into the settlement with plaintiffs was to cut off the hospital's . . .  right to indemnity from the physicians" (I thought that was a legitimate reason to settle litigation but see the Court's citation to Mattco Forge, stating that when a defendant  “enters into a disproportionately low settlement with the plaintiff solely to obtain immunity from the cross-complaint, the inference that the settlement was not made in good faith is difficult to avoid.” Mattco, supra (emphasis added); and,
• a consideration I've never seen defeat a good faith motion before - that a settlment "dictated by the tactical advantage of removing a deep-pocket defendant . . . is not made in 'good faith' consideration of the relevant liability of all parties. . . ." (leading to the question whether we're now required to consider the interests of clients other than our own in entering into a settlement agreement on a contested claim)

If this case isn't depublished (an unfortunate California practice) or taken up for review, it will bear re-reading and deeper thinking about the stategy and tactics of breaking away from the mob to cut a separate deal beneficial to one's own client without "consider[ing] . . the relevant liability of all parties . . . "

Comments welcome!!

________________

*/  This is a good place to note the importance of either indicating in the parties' post-mediation written negotiations that the mediation is continuing (hence the communications remain absolutely protected) or that the mediation has concluded (hence bringing those post-mediation settlement negotiations outside the scope of the strictly enforced mediation confidentiality restrictions).

• Email This
• Print
• Comments
• Trackbacks

If you live in Ohio, there's some hope that you can negotiate your way out of foreclosure with a Court-annexed foreclosure mediation program.  See Foreclosure filings rise in five counties at the the Crescent News. Excerpt below.

UPDATE:  Connecticut also has a foreclosure mediation program: See
Success For Mortgage Mediation in Connecticut?

Effective July 1, 2008, Connecticut established a mediation program for foreclosures.  Statistics available for the latest period ending November 30 2008 reveal some interesting detail.  Mediators are working diligently to rescue residential homes from the auctioneer.  However, the program is missing important components.

In the period of July 1st to November 30th, there were 9,917 foreclosures filed in the state, an average of 450 cases per week.  In that period, mediators successfully negotiated 519 cases so that homeowners got to remain in their homes.  This is just slightly over 5% of all cases filed.  Only 380 cases or 3.83% resulted in a modification of the mortgage terms.  Despite the hard work of Connecticut’s mediators, the state’s residents are not being protected from foreclosure.

UPDATE:  You can find a podcast about the New Jersey foreclosure mediation program on the New Jersey Law Blog here!  Here's the New Jersey Court's material for that program.

UPDATE:  Thanks to the ABA Dispute Resolution Magazine for informing us that Minnesota now also has a foreclosure mediation program.  See Minnesota Law Offers Foreclosure Mediation to Homeowners at the Foreclosure Listings blog here.

UPDATE:  Foreclosure Mediation Programs Commenced Under Local Ordinance in Providence, Rhode Island: Providence Foreclosure Ordinance Aims to Protect Renters (excerpt below):

 PROVIDENCE, R.I. (WPRI) - In an effort to protect families from foreclosure, Providence Mayor David Cicilline unveiled two ordinances Monday morning during a news conference in the city's Olneyville neighborhood.

The first proposal, Tenants Protection Against Foreclosures Ordinance , is meant to protect renters from eviction when their apartments are subject to foreclosure proceedings.

A proposed state law, that would have provided similar requirements, failed in the General Assembly last year. Rhode Island Housing Executive Director Richard Godfrey applauded Providence for stepping in to provide that protection.

The second proposal, Foreclosure Mediation Ordinance , would require financial institutions and property owners to engage in mediation with a HUD-approved counselor before moving ahead with a foreclosure.

UPDATE:  Lawsuit stops eviction in predatory lending case in California here.

"We have a court adjunct mediation program," said Schmenk. "The worst thing people can do is do nothing. The best thing is to get an answer filed on their behalf and open up a discussion with the mortgage holder to avoid it going to the foreclosure sale. Often times they can get something worked out with the lending institution short of losing their home."

When a foreclosed home goes up for auction bids start at two-thirds of the property's appraised value.

"Most time the lenders are holding significantly more than that in debt," said Schmenk. "We've noticed in a number of cases things get worked out and they are able to enter into some kind of accommodation that works for lender and mortgage borrower."

Schmenk encourages individuals facing foreclosure to take part in mediation programs.

There was a mediation just last week in Defiance County, said Cheryl Timbrook of the common pleas court. Overall, she said that they haven't had many requests for mediation so far.

Sonnenberg said Henry County has had a mediation program available for foreclosure for a year. She said there has been an increase in requests for mediation since the court started sending out information about the program as well as how to file an answer to the foreclosure summons received by defendants.

"I don't think many people knew about it before," she said.

Chris DelFavero, mediation coordinator for the state's Northwest Ohio Court Mediation Services, said he's seen an increase in individuals asking for foreclosure mediation. Northwest Ohio Court Mediation Services covers Henry, Defiance, Fulton, Paulding, Williams and Putnam counties. The program started last spring.

"With the help of the (Ohio) Supreme Court we established a process for referrals through the (county) clerk's offices," said DelFavero, who added that referrals started to pick up this summer. "Last month I had the most referrals since we started. I had 11 referred this past month. We started with just two or three a month, and now we have two a week."

DelFavero said that many cases involve jumps in interest rates, causing payments to increase or individuals who have seen a decrease in pay.

"Those are the cases we hopefully can resolve and come up with a repayment plan or refinance their rates," he said. "The general problem in the industry was the subprime rates. Some of it is the economy, with people losing their overtime. Sometimes loans are given based on people making $40,000 and then they lose their overtime so now they are making $30,000. They are working, but may have fallen four to five months behind. The lender usually will work with them."

• Email This
• Print
• Comments (3)
• Trackbacks

It's getting very late in hour eleven of the mediation and everyone is tired and cranky.  We've agreed upon:

• the total sum of the settlement;
• the period of time over which the settlement will be paid;
• the Stipulated Judgment in the event of default; and,
• the amount of the Stipulated Judgment (far more than the agreed upon settlement sum).

We could put these terms in a skeletal settlement agreement right now; include the "magic language" from Evidence Code section 1123 that will permit enforcement of the mediated agreement; and, let everyone get on the road, onto a plane and into bed.

Because these parties couldn't agree on what year it is, however, no one balks at my suggestion that we write up the entire deal -- settlement agreement with mutual general releases; the Stipulation for the Entry of Judgment; and, the proposed Stipulated Judgment itself.

The first problem is everyone's failure to bring a form Settlement Agreement and Mutual Release, let alone one that included enforceable terms for the entry of a Stipulated Judgment in event of default.   

ADVICE???  Carry these documents on a "flash" or "jump" drive whenever you're going to a settlement conference or mediation.  Heck, carry them with you to the first day of trial where you might be startled to learn that your adversary is prepared to settle the case right now!

Fortunately, I had access to my own files which contained detailed forms for everything we needed, forms I offered to counsel as guides. I did so only with the express understanding that I did not recommend my own forms as adequate, complete or enforceable.  

I'm just the mediator, not the legal representative of the deal in loco parentis.

It's a good thing we made the effort to fully document the deal because it threatened to fall apart over all of the following terms:

• the dismissal of ancillary proceedings
• forbearance from inducing future actions by non-parties
• liquidated damage clauses for the breach of certain critical deal points
• indemnification for future actions if induced by certain of the parties

Each of these items required separate negotiation and compromise and as to each I helped the parties calculate the degree of possible misbehavior by their adversaries and the protections that might "fit" the probable harm.  I do not believe the parties would have been able to resolve these terms (as well as others too confidential to mention) without third party assistance.  One was so difficult to predict both the series of possible events and potential remedies that we provided for arbitration of that term alone in the event of alleged default.

When we all finally left the building at one in the morning, we had fully completed paperwork, signed by all parties in hand. 

And yes, I was the only one present who could type.

• Email This
• Print
• Comments (4)
• Trackbacks

The anger, suspicion and ill will that has characterized the first eight hours of this mutli-party, eight-figure antitrust mediation is about to heightened as I deliver Defendants' terms:  they will pay the settlement agreed upon in six equal yearly installments over three full years without any security to back it up.

Are you wondering what your mediator is thinking at times like this?

Aaaarrrrggggghhhhhhhhhhhhhhhhh!!!!!!!!!!!

That "thought" is momentary, however, like the cry you squelch when the trial judge does something like, say, grant the other side's motion to disqualify your expert witness during the second week of trial. 

I don't have a plan, but I do have ideas.  Just as my suggestion that we use a bracketed offer to break impasse had eventually done just that, I'm already thinking of ways that the parties' most intractable and conflicting positions might move them toward agreement.

"They can wait," defense counsel is saying, "or they can try the case in February and see if they can collect it," to which a principal adds,  "this puts them on our side for a change.  If we make the money we believe we can, they'll benefit too."

"I thought you said you knew you could," I say, laying groundwork for the contingency ahead. 

"Yes, absolutely.  We know we can."

Back in the Plaintiffs' caucus room, the parties and their counsel aren't simply angry; they're flabbergasted.

"They sand-bagged us," says Plaintiffs' counsel.  "We'll report this to the Judge.  They didn't come here in good faith.  They're deliberately wasting our time."  

After some calming discussion about why the cash-poor defense would deliberately pay their own attorney and one-half of my daily fee in bad faith . . . a question to which no answer ever eventuated . . . Plaintiffs and their counsel begin to confidently predict the defense's inability to make a single installment payment.  Plaintiffs believe the defendants have resources - secreted away somewhere - but will never use them to settle this case.

When the temperature of the room has diminished to that of the sun's surface rather than its core, I ask about the possibility of a stipulated judgment in the event of default. 

"In a sum you hope the jury will award you at trial," I proffer.  "If you're right; if they have no intention, nor any ability, to pay even the first installment, you'll be in the same position on default that you'd be in if you prevailed at trial.  And if they're capable of paying, they're much more likely to do so if the alternative is a mutl-million dollar judgment against them."

Though the total sum of the Stipulated Judgment is the main topic of discussion over the following two hours, the parties' insistent conflicting predictions for the future make it all but inevitable they will eventually reach agreement.  If the defense never pays, the Plaintiffs will have their judgment more or less immediately, without the burden of proving it up.  And if the defendants are good for their word that they can service the "debt" the settlement agreement creates, they never have to worry about this potential judgment becoming a reality. 

The Stipulated Judgment as Contingency Contract

As Professor Leigh Thompson of the Kellogg School of Management, Northwestern University, writes in The Mind and Heart of the Negotiator, the contingencies built into the parties' agreement (and the Stipulated Judgment providing for its enforcement) permit them to use their differences to reach agreement - betting on their own predictions for the future and protecting themselves against their worst fears about the other.  As Professor Thompson instructs:

Often, a major obstacle to reaching negotiated agreements concerns negotiators' beliefs about some future event or outcome.  Impasses often result from conflicting beliefs that are difficult to surmount, especially when each side is confident about the accuracy of his or her prediction and consequently uspicious of the other side's forecasts.  Often, compromise is not a viable solution, and each party may be reluctant to change his or her point of view.

Fortunately, contingent contracts can provide a way out of the mire.  With a contingency . . . differences of opinion among negotiators concerning future events do not have to be bridged; they become the core of the agreement. . . . [Parties] can bet on the future rather than argue about it.

Here, the agreement calling for a Stipulated Judgment of sufficient size to deter default, allowed the parties to:

1. bet on rather than argue about their different forecasts for the future;
2. manage their decision-making biases (overconfidence and egocentrism) by building them into the settlement agreement itself;
3. solve the trust problem by creating a contingency (judgment) against the unknown ability of the defendants to perform
4. diagnose the other side's honesty by "daring" him to bet on his own predictions
5. reduce risk through sharing the upside gain (defendant will pay) and the potential loss (defendant will default)
6. increase defendants' incentive to perform at or above contractually specified levels.

See The Mind and Heart of the Negotiator, The Six Benefits of Contingency Contracts, Box 8-2.

There's more, however.  The parties agree to the Stipulated Judgment in principle and sum during hour eleven and we've got three more hours to go.

Stay tuned!

• Email This
• Print
• Comments (3)
• Trackbacks

It's 8 p.m. and you've just spent nine straight hours negotiating the settlement of complex commercial litigation with multiple parties that was filed before George Bush first took office.  The case has been up on appeal twice and is now scheudled for trial in February.  All defendants but the final three standing have settled.   Three of the principals have flown in from out of state and two of the attorneys have driven a few hundred miles to Los Angeles from their home towns. 

"Let's just write up the deal points," says Lawyer No. 1, yawning.  "We can write up the full agreement over the long weekend."

Lawyer No. 2 turns to me and says "Judicate West has a form, right?  Let's use that."

Before we go further, let me give you the complete, verbatim language of the online skeletal Judicate West form.

Date:_________________

Stipulation for Settlement


    VS.                           

IT IS HEREBY STIPULATED by and between the parties through the respective counsel or representative of each that the above-referenced case has been settled according to the terms memorialized herein below.  This document is binding on the parties and is admissible in court pursuant to Evidence code section 1123 and enforceable by motion of any party hereto pursuant to CCP section 664.6.                                                                                   

In order to facilitate the above specified terms of settlement, the parties further agree that on or before the          day of          they will execute or change the following:

• Settlement / Release Agreement   Prepared by _____plaintiff_____defendant

• Request for Dismissal     Prepared by _____plaintiff_____defendant

Other____________________________________________________________

All relevant parties must sign below.  Copies are acceptable in lieu of originals.

I know.  You didn't expect the case to settle.  At least that's what I've been hearing you all tell me since hour one of the mediation.  But now we're in hour nine and the basic deal points have been reached.  It's January 15.  Trial is in 30 days.  You have all the parties present and the mediator who has by now sussed out the BS; developed a good working relationship with all sides of the dispute; knows how hard the parties worked to get here; and, is unlikely to let the "devil" in the details sink the settlement ship.

What do you do?

My own answers in next post.

• Email This
• Print
• Comments (3)
• Trackbacks

Daily Journal Newswire Articles www.dailyjournal.com © 2009 The Daily Journal Corporation. All rights reserved.

FORUM (FORUM & FOCUS)  •  Jan. 08, 2009 Every Case Is a Winding Road FORUM COLUMN By Victoria Pynchon I have a confession to make. I am about to become embroiled in litigation. Though I preach the religion of negotiated resolution, I've nevertheless hired litigation counsel to assert my rights and pursue my remedies. This is one of those moments when the rubber of our ideology meets the road of personal circumstance, the moment we are called upon to decide to walk our talk or take the more familiar road. For more than 30 years - first as paralegal, then as a law student and finally as a commercial litigator - I'd been swimming in the waters of legal rights and remedies. The adversarial ocean had become so familiar a habitat that it rarely occurred to me that I was under the surface. One day toward the end of my first year of mediation practice, a much more experienced friend hooked me by the cheek and threw me on the deck of his ship, where I was gasping for air. He'd asked me to co-mediate a will contest without the benefit on my clergy - lawyers with experience in the field. The "fish out of water" conversation that ensued went something like this: Joe Mediator: "The family doesn't want to hire a lawyer. They just want to mediate." Vickie: "But I know absolutely nothing about wills, trusts and estates. The parties need to talk to a lawyer first to learn their rights and remedies." Joe: "You still don't get it, do you?" Vickie: "Get what?" Joe: "It's not about rights and remedies. It's about interests." Vickie: "But how can they evaluate their interests without knowing their rights and remedies?" Joe: "Because they're not interested in what the law says - they want to do what they believe is right for them as a family under the circumstances." These people wanted to resolve a legal dispute without knowing their legal rights? Were they nuts? I understood "interests" - they were all the rage in ADR circles - the desires, fears and needs of the parties that drove them to take legal positions. Sometimes those interests were non-economic - the need for revenge, the desire to be personally accountable, the fear of failure, the hope for forgiveness and reconciliation. Others, though economic, could not be remedied by way of damages - better access to foreign markets, for instance, or wider distribution chains; the acquisition of better manufacturing processes; or, the retention of executives with "pull" in Washington. But all of those matters were secondary to legal rights and remedies, weren't they? You had to know what your rights were. To read entire article, click here. Here's a .pdf of the article taken from the "hard copy" of the paper.

• Email This
• Print
• Comments
• Trackbacks

Thanks LACBA for the daily case reports!

Trial court lacked authority to review discretionary, prehearing order by arbitrator, who imposed stay on arbitration of dispute concerning uninsured motorist policy until plaintiff--who was driving on work-related business in company car provided by employer when rear ended--pursued workers’ compensation benefits in light of Insurance Code Sec. 11580.2.

Briggs v. Resolution Remedies

• Email This
• Print
• Comments
• Trackbacks

Friend and colleague Los Angeles attorney-mediator Linda Bulmash of ADR Services, Inc. advises  us to be consistent in negotiating the resolution of litigation in this month's LACBA negotiation tip.

The Power of Consistency in Negotiation and Mediation
 
When a person makes a public commitment to a course of behavior, the human psyche will push them to follow through with their commitment. For instance we break New Years resolutions because we seldom share them with others and usually do not write them down.

An interesting phenomenon occurs when the commitment is made public or a person pro-actively takes the first step to follow through with a course of action. An interesting research study found that although people are often unsure of their choice of the winning horse at a racetrack, they become much more confident of their choice once they place their bet. They are driven to consistency once they make a public commitment to a course of action.

Therefore experienced negotiators and mediators focus on getting people to publicly verbalize and/or write down each small commitment to follow a certain course of action (e.g. buy a car or resolve a dispute) knowing that once done publicly, it is highly likely that they will believe this is the best choice and will find a way to attain the object of their commitment.

Thanks, as always, for the great advice Linda!  And if you're looking for a local neutral, check out Lucie Baron's dynamite list of L.A. mediators here!

• Email This
• Print
• Comments (1)
• Trackbacks

Nothing irritates a court more than doing unnecessary work because counsel fails to comply with the local rules.  Here in Huschke v. Slater, the Court was sufficiently put out to order that the attorney "personally" pay the sanctions ("don't even think about asking your client to pay, buster!") and to order the opinion published for all the world to see.

Like that pesky appeal where the Court called my client a "school yard bully" for failing to stipulate to the genuine nature of the insurance policies at issue (and no I am not providing a link to that one).  Ordered it published too. Grrrrrrrr.

I'm filing this one under "Advice to Young Lawyers" in the hope that they do not have to learn how to ignite the appellate court's wrath the hard way.

Hey!  Let's all be careful out there!

• Email This
• Print
• Comments
• Trackbacks

Many in the legal blogosphere are buzzing about the recent Supreme Court decision letting stand a Central District injunction barring wheelchair-bound Jarek Molski from filing further ADA accessibility cases in our local federal trial court here in Los Angeles.  See Justice Berzon's and Kozinski's spirited dissents to Ninth Circuit's Per Curiam refusal of the Petition for a full panel re-hearing here.

Mr. Molski was declared a vexatious litigant by the California Central District federal court back in 2004.  See Wendel Rosen's excellent report of that case here.  Molski v. Mandarin Touch Restaurant, 347 F. Supp. 2d 860 (C.D. Cal.2004) (declaring Molski a vexatious litigant and requiring court approval prior to his filing future lawsuits); aff'd Molski v. Evergreen Dynasty here.

Still active is Molski's case in the Eastern District of California which was recently permitted to go forward by the same Ninth Circuit Court of Appeal.  As the Ninth Circuit explained the factual background of Mr. Molski's "serial litigation,"

[Plaintiff] Molski and his lawyer Thomas Frankovich (“Frankovich”) were purportedly in the business of tracking down public accommodations with ADA violations and extorting settlements out of them. On cross examination, Molski acknowledged that: he did not complain to any of [the defendant's] employees about his access problems; he had filed 374 similar ADA lawsuits as of October 8, 2004; Frankovich had filed 232 of the 374 lawsuits; even more lawsuits had been filed since that date; Molski and Frankovich averaged $4,000 for each case that settled; Molski did not pay any fees to Frankovich; Molski maintained no employment besides prosecuting ADA cases, despite his possession of a law degree; Molski’s projected annual income from settlements was $800,000;2 Molski executed blank verification forms for Frankovich to submit with responses to interrogatories; they had also filed lawsuits against two other restaurants owned by Cable’s; they had filed a lawsuit against a nearby restaurant; and Sarantschin obtained up to 95% of his income from Frankovich’s firm for performing investigations for ADA lawsuits.

See Molski v. MJ Cable, Inc. here.

Despite these apparently damning facts, in its 2007 affirmance of the vexatious litigant finding, the Ninth Circuit noted some of the reasons why Molski and his lawyer could not be condemned for their pursuit of serial ADA litigation.  The ADA, noted the Court,

does not permit private plaintiffs to seek damages, and limits the relief they may seek to injunctions and attorneys’ fees. We recognize that the unavailability of damages reduces or removes the incentive for most disabled persons who are injured by inaccessible places of public accommodation to bring suit under the ADA. See Samuel R. Bagenstos, The Perversity of Limited Civil Rights Remedies: The Case of “Abusive” ADA Litigation, 54 U.C.L.A. L. Rev. 1, 5 (2006).

As a result, most ADA suits are brought by a small number of private plaintiffs who view themselves as champions of the disabled. District courts should not condemn such serial litigation as vexatious as a matter of course. See De Long, 912 F.2d at 1148 n.3. For the ADA to yield its promise of equal access for the disabled, it may indeed be necessary and desirable for committed individ- uals to bring serial litigation advancing the time when public accommodations will be compliant with the ADA.

But as important as this goal is to disabled individuals and to the public, serial litigation can become vexatious when, as here, a large number of nearly-identical complaints contain factual allegations that are contrived, exaggerated, and defy common sense. False or grossly exaggerated claims of injury, especially when made with the intent to coerce settlement, are at odds with our system of justice, and Molski’s history of litigation warrants the need for a pre-filing review of his claims. We acknowledge that Molski’s numerous suits were probably meritorious in part—many of the establishments he sued were likely not in compliance with the ADA.

On the other hand, the district court had ample basis to conclude that Molski trumped up his claims of injury. The district court could permissibly conclude that Molski used these lawsuits and their false and exaggerated allegations as a harassing device to extract cash settlements from the targeted defendants because of their noncompliance with the ADA. In light of these conflicting considerations and the relevant standard of review, we cannot say that the district court abused its discretion in declaring Molski a vexatious litigant and in imposing a pre-filing order against him.

In other words, when the legislature puts the enforcement of the ADA in the hands of disabled individuals without permitting them to recover damages, you can't blame private attorneys for working the market created for the private enforcement of public laws even if you can blame them for the manner in which the market is worked.

So what does this have to do with the settlement of litigation and, in particular ADA Litigation?

Because these accessibility cases always cost more to defend than to settle and because they're often indefensible, the rational business decision is simply to settle the darn things.  

No one, however, wants to be extorted.  And in the few ADA cases I've mediated, it's the principled refusal to pay money at the point of a gun that interferes with a business establishment's willingness to do the economically "rational" thing rather than, say, try it;  appeal it to the Ninth Circuit; and, pursue it to the Supreme Court of the United States.

For those representing defendants who are feeling extorted, I offer my own (previously posted) ADA mediated settlement story below.

• Email This
• Print
• Comments (1)
• Trackbacks

I have recently been asked by several lawyers to write a few posts on mediation and negotiation terminology not only because some attorneys are unfamiliar with these terms, but also because different mediators and negotiators use them to mean different things. 

Mediators, lawyers and negotiators who read this post are invited to add, correct, object, or suggest further refinements and to add their thoughts on further strategic and tactical uses and perils of the impasse-busters we discuss today - the bracketed offer and the mediator's proposal.

And because my readers may find this post as dry as bones, I once again offer the X-rated "Negotiation Table" as pretty #%$@ true and funny  (think Ari Gold). 

Bracketed Offer:  Party A makes an offer to bargain in the zone he wishes to see the negotiation move to.  This is often used when neither party wishes to step up to the line of probable impasse and it can also be used to re-anchor the bargaining zone.  Quite simply, Party A offers to bargain in the range of, say, $2 million and $3 million.  He offers to put $2 million on the table if party B is willing to put $3 million on the table, i.e., "I'll offer to pay you $2 million if you'll offer to accept $3 million to dismiss your suit."

If party B does not accept the bracket, party A will not be "stuck" with having actually placed $2 million on the table when the next exchange of offers and counter-offers begins.

Responding to a Bracketed Offer:  Party B can:  1.  respond with a counter-bracket, i.e., I'll make an offer to accept $3.5 million in settlement if you'll put $2.5 million on the table; or, 2.  refuse the bracket and ask for an unbracketed counter.

Mediator's Proposal: 

The basics:  the mediator chooses a number for the parties, making an "offer" to settle for, say $2.3 million which the parties are free to accept or reject.  It is a double-blind "offer."  If either party rejects the "offer" neither party knows whether the other accepted or rejected.  Acceptances are communicated only if both parties accept, in which case they have a deal.

The circumstances:  The parties should seek a mediator's proposal only when they have reached a hard impasse.  A hard impasse exists when both parties have actually put their true bottom line on the table or their next to the bottom line and they see no hope of it closing the deal.

The purpose:  Both parties believe they could convince their principal  to accept a deal that is more than they wanted to pay or less than they wanted to accept, but they cannot convince their principals to put $X on the table or accept $Y.  They hope to use the authority of the mediator to sell the deal to their principals.  If they are the principals, they are willing to settle for a number lower or greater than planned but not willing to close the bargaining session having made such a concession, which would have the effect of setting the floor or establishing the ceiling of all future bargaining sessions.

The Mediator's number:  I do not know whether there is a general practice among mediators about how they choose the number proffered.  When parties ask me to make a mediator's proposal (I rarely recommend one in the first instance) I explain my practice as follows:  When I make a proposal I am not acting as a non-binding arbitrator or early neutral evaluator.  In other words, my proposal is not a reflection of the value of the case.  The number I propose will be a number that I believe the Plaintiff is likely to accept and the Defendant is likely to pay.

In rare instances, the parties wish to continue bargaining in the event a mediator's proposal is not accepted by both parties.  I have permitted this in a few circumstances after explaining to the negotiating parties that it often causes resentment on the other side because they feel as if the party who wishes to continue negotiating is unfairly attempting to use the mediator's number as a new bench-mark from which to bargain. 

I highly recommend against continued bargaining after the rejection of a mediator's proposal on the day of the mediation.  It should serve as a hard stop because the parties respond to it as an ultimatum.  That's part of its power.  Take it or leave it. 

Just as you would not continue bargaining after indicating that you were putting your last dollar on the table, you should not continue bargaining (during that session) after the mediator has, in effect, put both parties' anticipated bottom lines on the table for them.

• Email This
• Print
• Comments (1)
• Trackbacks

First she's all about the election and now she's back to post-mid-Century America's gender wars?  Say it ain't so, Vickie!

These are just statistics from an extremely limited sample that tells more about this particular program in this particular place concerning the particular types of cases being mediated than they are about the relative abilities of male and female mediators.

I'm unaware, however, of any controlled studies on gender differences in mediation results.  I do know that there's a gender imbalance in the profession and have had panel administrators acknowledge on the QT that even when they're choosing mediators or settlement officers pro bono lawyers tend to choose men most of the time.  

So for women struggling in the profession, here's your moment of zen.

Examining the graphical representation of mediator gender and settlement rates, one can see that there are male mediators who settle cases at higher than average rates, as well as female mediators who settle cases are lower than average rates. Nevertheless, it appears that most of the popular mediators who settle cases at higher than average rates are women, while the majority of popular mediators who settle cases at lower than average rates are men.

Some may object to this “battle of the sexes” analysis on the grounds that men and women should be treated as equals. Based on our data, however, male and female mediators are not statistically equal with respect to the rate at which they settle cases. Whether this “good” or “bad” is more a matter of philosophy than statistics.

In her book In a Different Voice, Carol Gilligan described how men and women think about moral conflicts differently. Her research suggests that men tend to consider conflict in terms of rights while women generally view conflicts in terms of dynamic relationships. Accordingly, a “female” approach to conflict resolution may be better suited to the process of facilitating mediated settlements than a “male” approach to conflict.

For a colored chart and remainder of post, see Correlation of Mediator Gender to Settlement Rate at Practical Dispute Resolution here.

When I think of my own experience as a neutral for the past four years and compare it to my experience as an attorney in the first four years of my practice 1980-1984, I can only say that it is somewhat similar.

What made the difference in the years that followed?  Women flooding the profession.  As women litigators and bench officers begin to retire, I suspect that we'll begin to see greater use of women neutrals.  And no, I do not believe that the paucity of women on commercial mediation panels nor what I believe to be their greater struggle to build a thriving practice there is based upon conscious sexism.

Like the tendency to prefer judges over attorney mediators (a preference I believe to be waning) I believe that the sub-conscious preference for male over female mediators arises from a continuing misunderstanding among members of the bar about what settles cases.  Too many attorneys continue to believe that they need a mediator who can overpower the will of their adversary.  And if you're looking for raw power (particularly the power of authority) in American commerce and law, you will naturally choose the judge over the attorney and the man over the woman.

I haven't written about this in the past because it is a topic that tends to divide people and it is not my intention to start a tiny gender war in the tiny world of mediation.

But when these statistics started pouring into my in-box, I couldn't ignore the topic any longer.

Please feel free to comment.

• Email This
• Print
• Comments (1)
• Trackbacks

It's official!  I've joined the faculty of Solo Practice University™

Huh?

I don't see that University in any tier of the U.S. News and World Report's Law School Rankings!  And if it's not ranked for goodness sakes, does it even exist?

Yes, Virginia, a school for legal practitioners does exist "as certainly as love and generosity and devotion exist, and you know that they abound and give to your life its highest beauty and joy."

O.K.,Solo Practice University™ is not Santa Claus but it comes pretty darn close.

Solo Practice University™ is a revolutionary new web-based educational community that picks up where your legal education left off.

Learn from some of the most progressive lawyers, marketing pros, technology consultants and legal business giants how to:

* Plan, build and grow your private practice
* Differentiate yourself from the competition
* Attract and engage new clients more easily

… and much more. They just can’t teach you that in law school.

Need to transform your marketing strategy in these troubled economic times?  You can learn  not just how to blog your way into your desired market, but how to leverage what you love into how much you make from Blawgfather and SPU Professor Grant Griffiths.

Wondering whether to put rocket fuel into your networking vehicle by adding online social media?  You couldn't find a better teacher than SPU Professor Toby Bloomberg who has over 15-years of traditional strategic marketing experience and four years with social media through her company Bloomberg Marketing/Diva Marketing.

Are your clients peppering you with questions you can't answer about their rights and remedies in Cyberspace?  Then it is Christmas, Hannukah and Kawanza all rolled up into one when SPU Professor Brett Trout is teaching a course on intellectual property in cyberspace.

Whether your presence in Cyberspace is solo or in connection with a group practice, let SPU Professor Stephanie L. Kimbo help you hang out your virtual shingle. 

Don't yet know your way around the courtroom?  Thinking of adding criminal defense to your practice as a growth industry in troubled economic times?  Need to ask questions of a seasoned trial attorney that would make you feel inadequate to ask of your supervising attorney in the PD's office?  There's no better winter holiday gift than SPU Professor Scott Greenfield's semester-long course “The Practice of Criminal Defense - The Road to Perdition.”

Still waiting to take that first deposition?  Taking your 20th and can't stop worrying that the Court Reporter thinks you're just a tiny bit pathetic?  Don't know how to deal with obstreperous opposing counsel?  Afraid to run a line of killer cross-examination to re-position your case for summary judgment or settlement?  Wish you'd gotten the expert to admit that he'd consider the moon to be green cheese if his attorney had told him to assume it? (yes my partner did). 

Then you'll want to sign up for my Deposition Skills course based upon the NITA techniques I've taught for more than a dozen years and my own OJT during a 25-year commercial legal practice.

Let your real legal education begin at Solo Practice University™

• Email This
• Print
• Comments (3)
• Trackbacks

Excerpts from Kullar v. Foot Locker Retail, Inc. below.  Comment will follow.

[T]he fact that the settlement was reached during mediation to which Evidence Code section 1119 applies does not eliminate the court’s obligation to evaluate the terms of the settlement and to ensure that they are fair, adequate and reasonable. If some relevant information is subject to a privilege that the court must respect, other data must be provided that will enable the court to make an independent assessment of the adequacy of the settlement terms.

[T]he fact that communications were made during the mediation and writings prepared for use in the mediation that are inadmissible and not subject to compulsory production does not mean that the underlying data, not otherwise privileged, is also immune from production. (Evid. Code, § 1120 [“Evidence otherwise admissible or subject to discovery outside of a mediation . . . shall not be or become inadmissible or protected from disclosure solely by reason of its introduction or use in a mediation . . .]; Rojas v. Superior Court (2004) 33 Cal.4th 407, 417; Wimsatt v. Superior Court (2007) 152 Cal.App.4th 137, 157-158.)

Foot Locker’s payroll records, for example, if relevant to the quantification of the claims being settled, are subject to discovery and may be introduced in opposition to the settlement even if they were disclosed to class counsel during the mediation, and even if class counsel was shown only a summary or analysis of those records that is not itself subject to production because prepared for use in the mediation.

                           *                           *                      *

Following the opportunity for limited discovery, the trial court should redetermine whether the proposed settlement is fair, adequate and reasonable. The court may and undoubtedly should continue to place reliance on the competence and integrity of counsel, the involvement of a qualified mediator, and the paucity of objectors to the settlement. But the court must also receive and consider enough information about the nature and magnitude of the claims being settled, as well as the impediments to recovery, to make an independent assessment of the reasonableness of the terms to which the parties have agreed.

We do not suggest that the court should attempt to decide the merits of the case or to substitute its evaluation of the most appropriate settlement for that of the attorneys. However, as the court does when it approves a settlement as in good faith under Code of Civil Procedure section 877.6, the court must at least satisfy itself that the class settlement is within the “ballpark” of reasonableness. (See Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499-500.)

While the court is not to try the case, it is “ ‘called upon to consider and weigh the nature of the claim, the possible defenses, the situation of the parties, and the exercise of business judgment in determining whether the proposed settlement is reasonable.’ ” (City of Detroit v. Grinnell Corp., supra, 495 F.2d at p. 462, italics added.) This the court cannot do if it is not provided with basic information about the nature and magnitude of the claims in question and the basis for concluding that the consideration being paid for the release of those claims represents a reasonable compromise.

By remanding we do not suggest that the proposed settlement ultimately may not pass muster. We hold only that the trial court may not finally approve the settlement agreement until provided with sufficient information to assure itself that the terms of the agreement are indeed fair, adequate and reasonable.

• Email This
• Print
• Comments
• Trackbacks

Here are my upcoming speaking and teaching engagements in November and January!

I'm baaacccckkkkkkkkkkkkkkkkkkkk!!!!!!!!!!

Judicate West Neutral and IP ADR Mediator and Blogger Victoria Pynchon.

Coach/Instructor, National Institute of Trial Advocacy: Building Trial Skills
Location: Loyola Law School Los Angeles
City: Los Angeles, CA
Dates: 1/2/2009 - 1/8/2009
Director: Williams, Gary C.

This is a week-long intensive program for new and/or experienced attorneys who need to learn/brush up on their basic trial skills.  If you can take the time, your entire practice will benefit from the experience.

BrightTALK Intellectual Property Summit here! on November 11, 2008 Webcast Free

Negotiating a Settlement in IP Litigation

   12:00 pm
   Presenting Victoria Pynchon, Judicate West, CPR, Settle It Now, IP ADR Blog

And coming soon!  Deposition Skills Training (NITA techniques) at Solo Practice University!!

• Email This
• Print
• Comments
• Trackbacks

Civil Procedure Sec. 998--which permits a defendant to shift costs to plaintiff if plaintiff rejects a settlement offer and then fails to obtain a more favorable judgment--does not eliminate substantive requirements for awarding attorney fees to a prevailing Fair Employment and Housing Act defendant; prevailing defendant in FEHA action is only entitled to recover fees if plaintiff rejects defendant's settlement offer, fails to obtain a more favorable judgment, and plaintiff's action was without any legal or factual foundation. Mangano v. Verity, Inc.
 
 

• Email This
• Print
• Comments
• Trackbacks

Geoff Sharp at Mediator blah blah today asks the first academic question with which I was forced to grapple in my LL.M studies at the Straus Institute -- can you cherry pick transformative mediation techniques to settle commercial litigation?  

I realized I had re-entered the academy the day Joe Folger -- author, with Baruch Bush, of The Promise of Mediation -- said only transformative mediation "works" and its principles  must be strictly followed. 

(drawing courtesy of Charles Fincher at LawComix.com)

Why was this an echt academic moment?  Because the course I was taking from Joe -- "Ideologies of Mediation" -- had, before that moment, been suggesting that all ideologies interfere with durable, party-satisfying resolutions.  Now it seemed the problem wasn't with ideology itself but with the wrong ideology.  Hmmm, felt like law school.  Forget Pennoyer v. Neff.  It's all about this Buckeye case with the exploding boiler.

At the time, my litigator husband was skeptical of all mediators and all mediation techniques.  We took a long walk down a Malibu beach after one of Joe's classes while I tormented him with questions about ways in which mediators could help him settle the case he was then working on -- the World Trade Center insurance coverage litigation. 

Frustrated, I interviewed Folger and Bush -- raising Steve's questions -- which I crafted into a Q&A for mediate.com -- Can Transformative Mediation Work in Commercial Litigation?

Later, Ken Cloke (Conflict Revolution) would tell me "you are the technique," opening the door for me to use mySELF to best settlement effect, remembering old lessons while continuing to learn new ones.  See We Tell Ourselves Stories in Order to Live.

If you wonder why I'm such a joint session fanatic, it's due largely to Joe's and Baruch's teaching as well as my own experience mediating community disputes locally -- the only place true transformative mediation is practiced.  Engage the people with the problem and you're more than half way home.  You just have to be capable of getting the lawyers to trust you enough to give up just a tiny bit of control to help the process happen.

As another mentor -- Richard Millen -- taught me, people don't have legal problems, "people have people problems" which are burdened with justice issues. 

Choose your mediator wisesly, collaborate with him/her and you will not only settle the case, but emerge with a client who got what he/she/it hired you for -- to resolve the commercial problem and  the justice issue that called for the retention of a lawyer in the first place.

And if you're in the UK, check out Justin Patten's post on small companies missing the benefits of mediation -- complete with an offer of a free consultation. 

• Email This
• Print
• Comments
• Trackbacks

The following important update on the recovery of bad faith treble damages from the lawyers at  Edwards, Angell, Palmer & Dodge

California Federal Court: Insured Plaintiff Can Seek Treble Punitive Damages For Insurer’s Alleged Bad Faith

The U.S. District Court for the Central District of California recently denied a motion to strike and allowed a plaintiff to pursue treble punitive damages against his insurer for the insurer’s alleged bad faith. Novick v. UNUM Life Insurance Co. of America, C.A. No. 08-02830-DDP-PJW (Aug. 7, 2008).

The insurer issued a long term disability benefits policy to the plaintiff in 1976, providing benefits should the plaintiff become totally disabled due to an accident sustained during the course of his career as a surgeon. In June 1992, the plaintiff filed a disability claim with his insurer after sustaining a spinal injury that allegedly prevented him from performing surgery. The insurer initially paid benefits to the plaintiff, but discontinued making the benefits payments on January 18, 2007. Shortly thereafter, the plaintiff filed suit against its insurer alleging breach of contact and breach of the covenant of good faith and fair dealing.

In his complaint, plaintiff seeks punitive damages pursuant to California Civil Code §3294, which allows an award of punitive damages for conduct that constitutes malice, fraud or oppression. The plaintiff also seeks treble punitive damages pursuant to California Civil Code §3345, which provides for an award of treble damages “in actions brought by, on behalf of, or for the benefit of senior citizens or disabled persons . . . to redress unfair and deceptive acts or practices or unfair methods of competition . . . [when] a trier of fact is authorized by statute to impose either a fine, or a civil penalty or other penalty, or any other remedy for the purpose or effect of which is to punish or deter . . . .”

The insurer argued that §3345 does not provide for the trebling of damages for insurance bad faith claims. The court reviewed the legislative intent behind the statute and determined that the legislature did not intend for the statute to be limited to actions that specifically mention unfair business practices. The court noted that, as bad faith claims redress unfair practices, §3345 applies to insurance bad faith claims. Accordingly, as the plaintiff alleges that the insurer acted in bad faith, the court held that the plaintiff is entitled to pursue his request for treble punitive damages.

Full text of opinion here.

• Email This
• Print
• Comments
• Trackbacks

John DeGroote of Settlement Perspectives soon to appear at Mediate.com Featured Blogs.  The missing link between mediators and litigators. 

The client!!

Now we just need a blogging claims adjuster and we can bring peace to the Middle East.

Below are John's impressive credentials.  We meant to meet for a "quick" cup of coffee.  We talked negotiation strategy and tactics for nearly three hours.

As I review websites I often wonder about the experiences of the authors and the biases they bring, so I feel I should disclose mine for those who want to know more. I have been fortunate to work with two “hands on” in-house legal teams, with settlement negotiations handled primarily by employed lawyers rather than their law firms. I am also lucky to have practiced in law firms with true trial lawyers who generated genuine negotiating leverage whether settlement was their objective or not. Through these experiences I have settled cases threatened, pending or mediated in about 20 states - from Montana to Florida and from New Hampshire to California - and have managed the resolution of disputes around the world. Working with and against some very good lawyers and employing some of the truly legendary mediators, I feel fortunate to have seen a real cross-section of styles and approaches. In almost all of these cases I have had the opportunity to work behind closed doors with the people who really decide when cases settle - CEOs, CFOs, General Counsel, COOs, individual plaintiffs, insurers, board members, auditors, and more.

• Email This
• Print
• Comments (1)
• Trackbacks

I note today that yesterday's post was . . . . well . . . a little snippy.  

Now that I've managed to get my hands on a copy of Professor Murray's article on the privitization of justice (which I'll post as soon as someone gives me permission to do so) I have a few more observations that are more nuanced than my first reaction.

First, I note that much of Professor Murray's article focuses on arbitration agreements that are forced down the throats of consumers -- an injustice that is so far removed from one that might arise in a mediated settlement conference that I'd like to address it separately on another day.  

Second, I am not without criticism of court-annexed mediation practices -- those criticisms populate this blog in great number.  Nor am I naive or inexperienced enough to pretend that mediators do not effect party decisions even when they are represented by attorneys who are presumably mediation- and mediator-savvy.     

Nevertheless, re-reading Professor Murray's criticisms of mediation this morning, I am once again stuck by the number of untested assumptions upon which he bases his pretty radical suggestion that mediated settlement agreements be vetted by judicial officers. The major and minor premises of Professor Murray's accusation that mediation corrupts justice include the following:

• there is only one set of "powerful repeat players" -- insurance companies -- who choose and use the services of mediators;
• the other set of repeat players -- plaintiffs' personal injury and employment counsel -- are more or less universally poorly equipped to either influence the mediator or to protect their clients from mediator bias;
• the easily influenced plaintiffs' bar, if not protected from mediator bias, will counsel their clients to voluntarily enter into sub-optimal settlement agreements that favor the interests of insurance carriers over those of their own clients';
• there is such a thing as an "objectively bad settlement" that a judicial officer would be  equipped to detect and remedy; 
• money paid to a "neutral" is the only pernicious influence on dispute outcome, as opposed to, say, racial, nationality, gender, and/or any other socio-economic differences between a judicial officer and a litigant or between the jury and a litigant; and,
• judicial officers are not subject to the influence of the repeat attorney-players who appear before them and socialize with them at Bar Association and other events.

Of all of the assumptions requiring testing before we impose a supervisory judiciary upon mediators, the premise that an objective, measureably "reasonable" settlement of any dispute exists is the one that most requires addressing.  

Because I could write a book on this topic, let me just highlight some of the factors that would make third-party vetting of mediated settlement agreements difficult to impossible. 

• money is not the only reason people file suit nor the only basis for their decision to settle it;
• whether the litigation at issue is a $2500 slip and fall action between a local grocery store and its customer; or a billion dollar insurance coverage dispute between an insurance carrier and an oil company, the people and commercial players involved are at least as -- if not more -- concerned with injustices that the law does not address as they are with those that it can address;
• though mediated settlement agreements are partially based upon the cost of further litigation and trial, on the one hand, and the probability of victory times the potential jury verdict on the other hand, they are also based on party needs, desires and fears that have nothing whatsoever to do with legal causes of action such as:
  • a corporation's fear that it will not be able to overcome jury bias against commercial enterprises, particularly if that enterprise is engaged in providing liability and/or property damage insurance to its customers;
  • the fear of individuals that they will not be able to overcome jury bias against any marker of their marginalization from the dominant culture such as color, gender, nationality, sexuality or religion;
  • the desire that one's opponent acknowledge responsibility for the role he/she/it played in the events giving rise to the dispute and for the actions taken to resolve it, many of which further inflame the parties' experience of injustice; 
  • party desires for revenge; and,
  • party tendencies to "read" and "spin" the dispute in a way that is favorable to him/her/it in all particulars -- misperceptions that are often corrected in the course of joint sessions between the parties who actually experienced the injury-causing event.

Examples of ways in which parties are able to resolve conflict in the context of their highly individual interests rather than the little buckets of rights and remedies into which we pour the facts of their dispute?

• a physician gives his consent to settle a malpractice action when he realizes that the Plaintiff is not attempting to "hold him up" but genuinely experienced the breast examination he gave her as an assault;
• the creditor agrees to settle for pennies on the dollar when convinced by evidence proffered during a confidential mediation session that the debtor would be bankrupted by any payment in excess of the offer (evidence not discoverable in litigation because it is not "relevant" to the causes of action alleged);
• garment manufacturers settle acrimonious copyright infringement litigation after their counsel allow them to have a confidential mediation conversation which cannot be used in court against them during which they learn that they have more in common -- and more ways to advantage one another economically -- than they have to fight about;
• a claims adjuster is brought to tears -- and seeks greater settlement authority -- by a father's frank confession in a confidential mediation conversation of the guilt he carries for the loss of his child in an automobile accident caused by the  high speed blow-out of an allegedly defective tire; and,
• family members not only settle their lawsuit but reconcile after years of self-imposed exile when they realize the "family" asset they've been fighting over is worth less to them than their love for one another. 

What I'd like Professor Murray and everyone who reads his article to understand is that we all share this justice problem.  The adjudication system is not working well for the people it was designed to serve.  The ADR options we've put in place to smooth out the rough edges of 18th century adversarial theory and practice are themselves insufficient to efficiently and fairly resolve 21st century conflicts.      

That's why I'm calling for a LegalTED Conference.  And if Professor Murray will forgive the snippiness of yesterday's post, I'd like him to be one of the members of  the Steering Committee.

• Email This
• Print
• Comments (1)
• Trackbacks (2)

(while we're walking down memory lane anyway, "Have It Your Way" from 1976) 

When I ask litigators why they don't choose arbitration over litigation before unpredictable judges in a crowded court, their answer invariably is "because I can't appeal the ruling."   We cling to appellate review even though we appeal fewer cases than we try -- which is a very small percentage of our case load as it is. 

Not surprising, however, we litigators, as Max Kennerly recently noted, tend to be risk-averse, not risk-embracing (h/t Blawg Review # 174).  To give up that one last chance for our client to be vindicated and for us to be triumphant is generally just too much for us. 

Now we can have our arbitration cake and and follow it up with appellate ice cream.  Yesterday, the California Supreme Court in Cable Connection, Inc. v. DirecTV  held that arbitrating parties' agreement to seek appellate review of legal errors is enforceable in California State Courts despite its uneforceability in federal court.  As the Supreme Court explained:

On the first question, the United States Supreme Court has held that the Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq.) does not permit the parties to expand the scope of review by agreement. (Hall Street Associates, L.L.C. v. Mattel, Inc. (2008) __ U.S. __ [128 S.Ct. 1396, 1404-1405] (Hall Street).)

However, the high court went on to say that federal law does not preclude “more searching review based on authority outside the [federal] statute,” including “state statutory or common law.” (Id. at p. __ [128 S.Ct. at p. 1406].) In Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1 (Moncharsh), this court reviewed the history of the California Arbitration Act (CAA; Code Civ. Proc., § 1280 et seq.).

We adhere to our holding in Moncharsh, recognizing that contractual limitations may  alter the usual scope of review.

The California rule is that the parties may obtain judicial review of the merits by express agreement. There is a statutory as well as a contractual basis for this rule; one of the grounds for review of an arbitration award is that “[t]he arbitrators  exceeded their powers.”  (§§ 1286.2, subd. (a)(4), 1286.6, subd. (b).)

Here, the parties agreed that “[t]he arbitrators shall not have the power to commit errors of law or legal reasoning, and the award may be vacated or corrected on appeal to a court of competent jurisdiction for any such error.” This contract provision is enforceable under state law, and we reverse the contrary ruling of the Court of Appeal.

• Email This
• Print
• Comments
• Trackbacks

AUGUST 25, 2008 | FORUM

If You Know the Case Law, Litigation Doesn't Have to be Robotic

By Victoria Pynchon 

Here in California, there's no stronger rule of confidentiality than that applied to a mediation. It cannot be impliedly waived like most privileges, including the near-sacred attorney-client privilege. Simmons v. Ghaderi, 2008 DJDAR 11107. You cannot be estopped from relying on it. Eisendrath v. Superior Court, 109 Cal.App.4th 351 (2003). And if you want your mediated settlement agreement enforced, you must strictly comply with the requirements of Evidence Code Section 1123. Fair v. Bakhtiari, 40 Cal.4th 189 (2006).

Insurance policy-holder counsel Kirk Pasich of Dickstein Shapiro has criticized nearly all recent interpretations of mediation confidentiality by the California Supreme Court on the ground that they permit insurance carriers to use mediation proceedings to engage in acts of bad faith.

"Why should a carrier get a license to act in bad faith in mediation," Pasich asked, adding, "Cases settled, and still settle, in mandatory settlement conferences without that same shield. I don't think a process should exist that encourages, rather than discourages, a party from acting in bad faith."

Why, indeed?

If you do not understand the differences between settlement conferences and mediations, you are not alone. My informal surveys indicate that litigators believe there's no difference whatsoever between the two and few mediators are able to distinguish between them despite their training in the field. Nor have California's courts been of any real assistance.

What's in a name? Here, plenty. The application of California's Rules of Evidence to mediations has such significant potential economic consequences that mediator and litigator malpractice actions are surely looming on the horizon.

What type of misbehavior can occur in a mediation? Here are just a few examples: One party can make a misrepresentation of material fact on which the other relies in entering into a settlement agreement; as Pasich notes, an insurance carrier can act in bad faith; one mediating party could tortiously interfere with a third party's contract or prospective economic advantage; or the mediating parties can enter into a collusive settlement agreement, depriving the settling parties' co-defendants from learning facts necessary to challenge the settlement in a "good faith" hearing.

Even if all parties have expressed complete agreement during the mediation, which they then memorialize in a term sheet, absent strict compliance with the requirements of Evidence Code Section 1123, no evidence probative of that agreement will be admissible in a California court.
If the mediating parties are engaged in a settlement conference, none of this potentially bad behavior would be protected.

Given the potentially significant adverse economic consequences that can flow from a mediation, California's courts have clarified the differences between the two procedures, right?

Not so much.

If you have a DJ subscription, continue reading here.

Enforcement of Mediated Settlement Agreements in California - Get more Legal Forms

• Email This
• Print
• Comments
• Trackbacks

If you've been following the conversation between Settle It Now and Max Kennerly's Philadelphia Litigation and Trial Blog, you'll know that a "settlement unicorn" is composed of "two hostile parties on the verge of a lawsuit [who] get lawyers, almost file suit, and then, through deft representation, settle their differences peacefully and move on." 

I believe in Unicorns and Max doesn't so I've promised to keep my eyes open for appearances of that storied creature.  Previously, I have reported the Unicorn's appearance here (community mediation; potential lawsuit, no lawyers); here (litigation + lawyers who send the parties to community mediation); and, here (litigation + lawyers + clients who seek mediation without lawyers to resolve dispute).  

Today, I have a story of the Unicorn visiting the mediation room in a litigated case -- a case of the type that my (new) friend Max Kennerly suggests will not attract that shy beast because: 

The parties to a lawsuit do not have intertwined interests: they have directly adverse interests. Unless there's some possibility of a future relationship, the defendant doesn't want to resolve the conflict: they want the plaintiff to drop their frivolous claim. In their mind, their best alternative to a negotiated agreement ("BATNA") is for the plaintiff to crawl in a hole and die.

[My Comment:  the "intertwined interests" all parties to litigation have is the litigation itself with its attendant cost, delay, and, uncertainty, not to mention the discomfort "ordinary" people experience when plunged into the foreign environment occupied by attorneys with their strange "causes of action" and "affirmative defenses," their demurrers and JNOV's; their res ipsas and, most importantly, their view that only facts pertaining to a "cause of action" or "affirmative defense" are relevant to the injustice suffered by their clients.] 

[T]he plaintiff usually prefers imposing a conflict on the defendant (who the plaintiff believes cast the first stone) in pursuit of justice, an imposition they will only relieve for at least "full" compensation. . . .

The problem is that most parties don't consider their claims to be assets; the problem isn't that there's emotional baggage around the economic understanding, it's that the parties interpret their dispute as fundamentally non-economic.

[My Comment:  I've said before that all litigation is "fundamentally non-economic" -- it's about justice.  Though Max is one of the few practicing litigators who agrees with me, he does not believe in the existence of my solution -- a settlement conference or mediation conducted in joint session].

Hence a Mediation Unicorn with litigation and attorneys prior to any meaningful discovery.

I'm talking to a plastic surgeon whose artistry not only went unappreciated, but which gave rise to a lawsuit for battery and malpractice. 

The plaintiff is a model and an actor.  The surgery, she claims, left permanent scaring on her nose.  Her opening demand is $500,000.  I am trying to persuade the physician, his attorney, and the claims adjuster, not to walk out.  The plaintiff's deposition has been taken and the doctor's is scheduled for the following week.  No experts have been retained.  

The parties have made the rare effort to settle the case early in the litigation.

This is what the defense thinks about the opening demand in response to their good faith participation in an early mediation:  

%&*#%*#%@& and %&^@(% and *&$)*#! 

I am suggesting to the defense in separate caucus that they allow me to conduct a joint session in which the parties can talk about the surgery, the scarring and their post-surgical communications.  I explain that the Plaintiff is more angry than acquisitive.  She believes that the doctor disrespected her when she complained about the scarring. 

He denied that I had a scar.  He was rude and dismissive.  He disrespected me.  He had no bedside manner.  

She is one of the few personal injury plaintiffs who comes right out and says what so many plantiffs feel.  

I want him to suffer.  My attorney says he has to report any settlement in excess of $30,000 to the Medical Board.  I want to make him do that.  I want him to suffer as I have.  It's not about the money.  It's about accountability.  I want him to be accountable.   

The parties resist a joint session and we spend two hours negotiating in the strato- and nano-spheres.  $10,000.  $490,000.  $12,500.  $475,000. 

"We're getting nowhere," says Plaintiffs counsel.  "Tell them we're leaving." 

"The case will never settle.  This is a waste of time for my doctor and my claims examiner.  Tell them we're leaving. The case will never settle.  It simply won't settle.  The case cannot settle." 

Click Your Heels Three Times and Say "There's No Place Like Home."

Attorneys are fond of saying that all mediators do is "keep them in the room."  They might be right, but the difference is the room I keep them in.  It's a mediation room, not a conference room or a deposition room or a courtroom.  It's a room in which I ask the doctor if the feeling he has is something akin to a fish being hooked, pulled up out of the water and thrown onto the deck of someone's boat, gasping.  He cracks a smile for the first time that morning.

It's a room in which I say there must have been a miscommunication, a misunderstanding.  It's a room in which I say to the defense that the Plaintiff feels angry and disrespected.  It's a room in which I caution the Plaintiff that the physician is from a different culture than her own -- one where a doctor does not express empathy but only certainty in his skill and expertise. 

The claims adjuster asks me if I'd been able to see the Plaintiff's scar from where I was sitting -- across a conference room table.  I admit that I could not.  I acknowledge what is patent in the defense room -- the Plaintiff is blindingly beautiful.  A jury is unlikely to award her much in the way of damages.  I have said as much to the Plaintiff.  But she is angry and wants a pound of flesh.

I have another mediation in the afternoon.  I tell the defense we have fifteen more minutes.  The claims adjuster keeps repeating "the case will not settle, the case will not settle, the case will not settle." I take this to mean that the defense very much wants to settle the case. 

"If someone repeats something over and over again," my mentor Ken Cloke taught me, "that is the key to the resolution."  While that might be so, I haven't yet found a way to use that key to open any door.  But it is not really my case to settle.  It's my job to keep them in the room.

"I Want to See the Scar," says the claims examiner.

I wish I could take credit for the following but I cannot.  The Plaintiff's attorney says "why don't they go to the ladies room where my client can show Ms. Y the scar and together they can look at it."

I hear the click of the Unicorn's hooves in the hallway.  The plaintiff's attorney is male.  I don't believe he knows what he's suggesting.  He wants to send two women into one of the safest and most congenial, soul-bonding rooms in all of God's creation -- the women's room.

I know the case will settle.

We are finally in joint session.  The claims examiner says, "I want to tell you that I now see the scar.  I'm sorry I denied it.  We'd like to offer you $X to settle the case."

Did $X settle the case?  No.  But $X + $Y settled the case ten minutes later.

And just around the corner, you could see the shadow of the settlement unicorn rear up on its hind legs in celebration.

• Email This
• Print
• Comments
• Trackbacks (2)

Judge Alexander Williams' retirement from the bench and entry into private neutral practice with ADR Services is good news for the legal community.  I co-mediated dozens of cases with the Judge while I was earning my LL.M from the Straus Institute and have spent many hours discussing the nuances of mediation practice with him.  Once known for his temper (and the bow tie he appears to have forgotten to wear in the photo at right)  the Judge has learned the rewards of patience. 

Always one of the Los Angeles Superior Court's most charming and articulate bench officers, Williams is now also among the most calm and canny settlement officers available in a town fairly crawling with mediators.  Couple his bench strength with an Ivy League intelligence and unusual depth of knowledge of mediation theory and practice, and you have one of the new go-to guys on the block.

An excerpt from the Daily Journal's article on Judge Williams below with a link if you're a subscriber to read the entire article.

Retired Judge's New Mantra: 'Deal or Ordeal'

By Greg Katz

LOS ANGELES - Superior Court Judge Alexander H. Williams III is about to take his first job ever in the private sector. He will step down from the bench Sept. 15 and join Century City's ADR Services as a mediator.

Williams started his law career in the U.S. Navy's Judge Advocate General's Corps in 1969, worked as an assistant U.S. attorney from 1975 to 1984, and then was appointed to the bench by Gov. George Deukmejian.

Even earlier than that, he worked briefly as a police officer in his native Virginia.

"My very first day on the job, I wrecked a police car on a railroad track," a catastrophe that made the front page of a local newspaper, he said with a laugh.

His dispute resolution career isn't likely to be a trainwreck, though.

Once known for his fiery temper - "I used to be a judge beating up on parties," he told the Daily Journal in 2004 - Williams long since has reversed that reputation.

After studying mediation at Pepperdine University's Straus Institute for Dispute Resolution 10 years ago, Williams began to settle nearly all the cases in his courtroom. His skill and advocacy for dispute resolution won him the Southern California Mediation Association's Peacemaker of the Year award in 2003.

To continue reading, click here.

• Email This
• Print
• Comments
• Trackbacks

Check out today's post at the IP ADR Blog on the Supreme Court's mediation confidentiality decisions and ways to protect your client from the resulting pitfalls -- Malpractice Alert:  Is it a Settlement Conference or a Mediation? 

Why you should care about the answer and what you can do to protect your client and yourself.

• Email This
• Print
• Comments
• Trackbacks

This page can always be found under Links to the left. 

• Email This
• Print
• Comments
• Trackbacks

This just in from Sydney,  Australia. 

I imagine the results are as good or better here in the States, particularly in Los Angeles where mediation practice is both broad and deep.

Couples, families choosing mediation in battle of wills

DE FACTO couples disputing about property after splitting up, and siblings fighting over their parents' wills, are increasingly using mediation rather than dragging their battles through the court system.

The latest figures show that NSW Supreme Court registrars had done as many mediations in the first half of this year as they had done in total last year as people realised they could sort out their disputes on their own terms, in privacy, rather than in front of a judge, the Attorney-General, John Hatzistergos, said.

Most disputes were resolved without going any further, freeing up courts and judges for other matters, he said. "It is very encouraging that so far this year 59 per cent of the mediation sessions have concluded with the litigants resolving their dispute," Mr Hatzistergos said.

"Mediation ensures cases . . . . continue reading here.

• Email This
• Print
• Comments
• Trackbacks

UPDATE:  See the analysis of Thottam at May it Please the Court, noting that the "big print giveth and the small print taketh away."

Before further discussing the problems created by the Thottam holding, I'm providing a "brief" of the case about which I ranted and raved earlier here today.  

• THE FACTS: 
  • A mediation confidentiality agreement entered into by the parties in Thottam provided that “all matters discussed, agreed to, admitted to, or resulting from ... [the mediation meeting]...
    • "shall be kept confidential and not disclosed to any outside person . . . ;
    • "shall not be used in any current or future litigation between us (except as may be necessary to enforce any agreements resulting from the Meeting), and,
    • "shall be considered privileged and, as a settlement conference, non-admissible under the California Evidence Code in any current or future litigation between us.”  
  • One of the parties contended that a chart drawn up and signed by the parties during the mediation, 
    • was sufficiently certain to be enforced according to its terms; and,
    • was admissble into evidence under section 1123(c) despite its failure to satisfy any of 1123(c)'s requirements.
  • THE RULES:
    • Evidence Code section 1123(c) provides that a "written settlement agreement prepared in the course of, or pursuant to, a mediation, is not made inadmissible, or protected from disclosure . . . if
      • "the agreement is signed by the settling parties and any of the following conditions are satisfied . . .
      • "(c) all parties to the agreement expressly agree in writing . . . to its disclosure."Id. (emphasis added).
  • PROCEEDINGS IN THE TRIAL COURT
    • Without finding that the settlement "chart" constituted a "written settlement agreement" under section 1123, the Thottam trial court required one of the parties to testify about otherwise confidential mediation communications because the Confidentiality Agreement required the disclosure of mediation confidences "necessary to enforce any agreements resulting from the [mediation.]"
    • Apparently before Elizabeth could testify, the civil action to enforce the alleged settlement agreement was consolidated with other proceedings in the Probate Court,
    • at the trial of the consolidated matters, the Probate Judge refused to accept the settlement chart into evidence because it did not comply with the provisions of section 1123(c).
  • THE APPELLATE DECISION
    • the appellate court reversed the Probate Court's decision.
  • THE HOLDINGS
    • Section 1123(c)'s requirement that all parties to a mediated settlement agreement "expressly agree in writing . . . to its disclosure,"
      
      • may be satisfied by terms contained in a writing other than the alleged settlement agreement itself; and,
      • may be satisfied by terms contained in a writing executed before any alleged settlement agreement has purportedly been entered into.
    • Here, the Confidentiality Agreement satisfied those requirements; and,
    • The skeletal written settlement chart was enforceable because its material terms were, or could be made, certain. 
  • RATIONALE
    • Because the proceeding in which Appellant attempted to introduce the alleged settlement agreement was an action "to enforce what he claims is a settlement agreement reached in mediation," and,
    • the parties carved out of the Confidentiality Agreement any discussions that were "necessary to enforce any agreements resulting from the [mediation]"
    • the Confidentiality Agreement satisfied the requirements of section 1123(c); and,
    • the skeletal Settlement Chart was therefore admissible in evidence under that subsection.

This opinion threatens to blow a hole in sections 1119 and 1123 large enough to obliterate their protections -- protections that have been repeatedly enforced to the letter of the law by the Supreme Court in its fairly recent Fair v. Bahktiari opinion -- holding that parties to a mediated settlement agreement must include in it an express provision that they intend to be bound thereby -- and Simmons v. Ghaderi  in which the Court held that parties cannot impliedly waive confidentiality nor be estopped from asserting it.

Most Confidentiality Agreements I've seen (and used) naturally carve out an exception for the enforcement of a settlement agreement.  If you sign such an agreement after Thottam, you risk the enforcement of a non-1123-compliant "settlement agreement" and risk being required to disclose otherwise confidential mediation communications on the sole ground that one of the parties alleges that the opposition entered into an enforceable settlement agreement during the mediation.    

Were I attempting to resist the disclosure of mediation confidences my adversary claimed should be fair game under Thottam, I'd contend that the Thottam Confidentiality agreement, and hence its carve-out, was unusually broad and that the Court's holding should therefore be read narrowly and limited to its facts.  

As California lawyers know, the Second Appellate District has jurisdiction over matters litigated in the Los Angeles Superior Court.  It is therefore particularly important to take a look at the impact this decision might have upon matters mediated by the neutrals on that Court's pro bono or party pay panels.  All such parties are required to sign a Confidentiality Agreement that protects from disclosure all mediation-related "written" and "oral communication[s] made by any party, attorney, neutral, or other participant in any ADR session" except  "written settlement agreement[s] reached as a result of this ADR proceeding in an action to enforce that settlement."

Under Thottam, a colorable argument could be made that the mandatory Superior Court Agreement's confidentiality "carve-out" should be treated as either:

• an express agreement by the parties to waive confidentiality for the purpose of enforcing "written settlement agreement[s]" even if they do not satisfy the requirements of section 1123(c); and/or,
• a part of the alleged settlement agreement so that the two agreements together (confidentiality carve-out + non-compliant settlement agreement) satisfy the requirements of section 1123(c).

What to do?  Don't sign any Confidentiality agreement that could possibly be interpreted in a manner similar to the one subject of Thottam unless you want to risk the disclosure of mediation confidences arising from a writing that does not comply with section 1123(c).    

You can certainly refuse to sign the Superior Court's agreement in light of the Thottam holding.  I don't know as a matter of Court policy whether that limits parties' ability to use the Court's pro bono or party pay mediators. 

I'd have to say that this case puts confidences made in mediation sessions controlled by the Superior Court's Confidentiality Agreement at risk whenever one party is contending that the other entered into an agreement pursuant to a signed term sheet.

• Email This
• Print
• Comments
• Trackbacks (3)

The new Estate of Thottham case on the enforcement of mediated settlement agreements is troublesome because

• it appears to contravene the holding of the Supreme Court in Fair v. Bahktiari (full opinion here)
• it turns upon the interpretation of one ambiguous sentence in the parties' confidentiality agreement which I'm almost certain was not meant to create an exception to (or satisfy the requirements of) Evidence Code section 1123(c)
• it shows a remarkable persistence in the trial and appellate courts of the desire to enforce term sheets in non-compliance with the Evidence Code, privileging finality over the the parties' reasonable expectations that all the proclamations about confidentiality will be honored.  
• it creates uncertainty in the law, making it difficult for attorneys to guide their clients before, during and after mediation proceedings.

This is a ripe area for malpractice actions -- binding parties to agreements they later claim were not reached.  The Supreme Court keeps saying -- we mean what we say (Simmons v. Ghaderi) -- no exceptions to the requirements of 1123(c).  Nevertheless, the trial and appellate courts find enforcing skeletal mediation term sheets (this one was a chart) nearly irrisistable.  They just can't seem to get their minds around the idea that the point of mediation -- a non-legal process -- is to create a durable agreement that the parties all want to enforce.

If a mediated agreement were a consumer contract, there'd be a cooling down period during which the "buyers" could re-think a decision made in the heat of the moment with mediators and attorneys leaning on them to settle or else . . . . you know . . . whatever the parade of horribles is.   

Are parties bullied into settlement by mediators and even by their counsel?  Let's look again at the definition of bullying:  the repeated and deliberate abuse of power by one person or group of people over another person or group.

I'm not suggesting that mediators and attorneys know they are abusing the power of their position and authority to "persuade" the parties to accept a settlement that leaves the taste of injustice in their mouths.  We just sometimes forget how much power we possess and how overwhelming our importuning can feel to someone unfamiliar with the legal system.  Think about how helpless you feel trying to communicate with someone who speaks another language.

I've observed mediations in which the mediator -- repeatedly and, it can only be said, deliberately -- abuses his or her authority to gain the consent of parties who are clearly not comfortable with settling their case on the terms proposed and are certainly not satisified with the "deal."

Keep 'em in the room; wear them out; highlight their fears; diminish their hopes and then, when they're at their weakest, put a pen in their hand, ask them to sign and then elevate that signed agreement above all else because what we're after here is efficiency, brother, not justice -- a term too many mediators feel forced to put in quotes.  "Justice."  As if it could possibly be anything other than a cynical joke.

OK.  I misused this post to rant.

I'm going to come back and "brief" this case for you next, highlighting the traps for the unwary and commenting on the form agreement used by the Los Angeles Superior Court ADR panel -- a form that is now mandatory.

HEAD'S UP FOR THE NEXT POST NEW LAW STUDENTS -- THIS IS WHY IT'S IMPORTANT TO LEARN HOW TO DE-CONSTRUCT A LEGAL DECISION AND TEASE OUT THE HOLDING FROM THE RATIONALE, THE RULES AND THE DICTA. 

This Met News report, accurate as it is, doesn't do justice to the traps and troubles lurking here.

Evidence Code Sec. 1123(c)'s exception to mediation confidentiality--providing that a written settlement agreement prepared in mediation is not made inadmissible or protected from disclosure if signed by parties, and all parties expressly agree in writing to disclosure--applied in appellant's civil action to enforce chart prepared during mediation and signed by all parties which appellant claimed was a settlement agreement because estate beneficiaries, in agreement to mediate dispute over distribution of assets, agreed all matters discussed or agreed to in mediation would be kept confidential and not used in any litigation among them "except as may be necessary to enforce any agreements resulting from" mediation, and because chart--setting forth material terms which were sufficiently certain to provide a basis for determining what obligations to which parties had agreed--was a "settlement agreement."

Estate of Thottam - filed August 13, 2008, Second District, Div. Four Cite as 2008 SOS 4917
 

• Email This
• Print
• Comments
• Trackbacks (2)

The jig is finally up.  I've been hemming and hawing long enough.  I need to just go ahead and answer Max Kennerly's question whether it's  possible to convene an early settlement conference in which the parties are united in a desire to settle the litigation.  

This is how you know I'm still as much a lawyer as I am a mediator. 

The answer is yes and no. 

But you can help change the "no" to a yes.

That's the hope part.

Here's the dispiriting part --The answer will not become "yes" if the parties continue to primarily engage in position-based distributive bargaining sessions in separate caucuses.  

My own professional experience (and the behavioral research of which I'm aware) suggests that Mr. Kennerly's Unicorn will only come into a room in which an interest-based negotiation is taking place, one in which there is at least one joint session among the baragaining parties.  

But first a story.  

This very morning I failed to settle a very small case that is poised to become a very big case with cross-actions for legal malpractice and malicious prosecution. 

The delta between the Plaintiff's final demand and the defendant's final offer?   

$3,000.

And I offered to throw in half the delta myself by making a contribution to the presidential candidate/s of the parties' choice.  Shock value.

The parties' failure to achieve settlement couldn't have been about money could it?  

(image from The Sphere of Economic Calculation at the Ludwig von Mises Institute)

Why not?  Because it was economically irrational not to settle. Which is not unusual.  Because there is no rational economic man.  Because we are incapable of making a decision in the absence of emotion.  /**  

As Professor Lee Alan Dugatkin explains in his article Discovering That Rational Economic Man Has a Heart,  

Although some economic decisions are made outside a social context, they are a minority. Social dynamics, many economists believe, are at the core of economic decision making—that is, decision-making about resource acquisition and expense allocation. What I decide affects you, what you decide affects me, and, even more to the point, I care how I fare economically compared with how you fare.  

I send a client a bill for $15,000.  He pays $9,000, refusing to pay the additional six because he believes I didn't earn it or that I did my job badly or that I didn't communicate to him all of the items I would naturually include in my bill.  There is a written agreement but no attorney fee clause.  It will cost me at least $3,000 in attorney fees to collect the six.  My client offers to pay me half of what is owed. 

Do you have the hypothetical in mind?  What would the rational economic man do?

The rational economic man would take the $3,000 because he cannot do better at trial.    

Did rational economic man appear at the mediation this morning?  Of course not.  Because he is a Unicorn!  He doesn't make decisions based upon numeric calculations or emotionless cost-benefit analyses -- which is why I knew  the parties would not accept my gap-closing political contribution suggestion (whew!)

Why Rational Economic Man is a Unicorn

In a social-economic experiment known as the Ultimatum Game, many researchers have found that when one party offered less than half the money subject of the game, "the other player often rejected it, even though by doing so he end[ed] up with nothing."  Id.  Dugatkin describes the results of one research project involving this Ultimatum Game as follows: 

 Alan Sanfey, Ph.D., and his colleagues at Princeton University examined the Ultimatum Game with 19 subjects in the role of responder and . . . observe[d] their brain activity. They found that when unfair offers (defined as those of less than half the resource) were made, responders often rejected them. As they did so, the area of their brains associated with negative emotional states (in this case, the bilateral anterior insula), rather than those associated with complex cognition (in this case, the dorsolateral prefrontal cortex) were most active. The more the offer deviated from fair, the more active was the bilateral anterior insula when such an offer was rejected. Anger at being treated unfairly by other players appeared to override rational economic reasoning. In the minority of cases when the offer was accepted, the dorsolateral prefrontal cortex was most active.

 We, like the capuchin monkeys mentioned yesterday, will deprive ourselves of thousands, tens of thousands, even millions of dollars if we believe the compensation being offered is so little related to our value or our loss that it seems unfair.  We will not pay money at the point of a gun nor accept money offered to us by villains or cheapskates. 

Mediation, Money and Justice

In today's semi-hypothetical mediation, the $3,000 offered felt too unfair to the plaintiff and the hypothetical $6,000 demanded felt too unjust to the defendant for the parties to reach a rational economic deal.  The parties' potential to achieve settlement was also seriously undermined by the degree of anger they expressed toward one another and the way in which they had villified one another - "rich deadbeat" on one side and "dishonest fiduciary" on the other.

I am neither magician nor miracle worker.  Nor am I in the social work or therapy business.  I do, however, know that when parties to a lawsuit are hopping mad and believe that the opposition behaved immorally, money is unlikely to change hands. 

In an effort to defuse the anger and de-demonize the parties, I held two joint sessions -- one that was not coached and one that was.  Then I separated the parties for the purpose of conducting a distributive bargaining session (she offered x; he counters with y, etc.)

In both the joint session and in the separate caucuses, I strove to humanize the parties for one another; attempted to reframe their behavior in a less villianous light; and, assisted them in conducting as rational a cost-benefit analysis as possible.  I also helped the parties reality test their beliefs about the likely outcome at trial and to evaluate the likelihood that the strength of their feelings today would translate into a hearty appetite for further, higher-stakes litigation two years down the line.  

No dice.

So What Can You Do?

I would love to deliver a stirring tale of a heroic mediator helping parties settle their dispute in the early stages before the threatened action and cross-actions were even filed.  But I can't.  This is more art than science and compared to my 25 years of experience as a litigator, I'm still a little green as a mediator after four years of full-time neutral practice.      

Let me just say this.  Mediating settlements in the early stages works more often than it fails, particularly if you do one or more of the following:

• hire a mediator who can rock and roll with the process rather than one who is a one-trick pony -- head-banger, or evaluator, or prophet of doom; peacemaker, or rabble-rouser or King of the Distributive Bargain -- your mediator should be able to play all or any of these roles as the situation demands;
• if you're angry and if you have villified opposing counsel or the opposition party, take a deep breath, sit down at your computer and write down the best, the mid- and the worst-case scenarios (I know you've done it already; but take a fresh look again right before the settlement conference)
• share these evaluations with your client
• if a trustworthy mediator with whom you've worked before suggests that it would be useful in joint session for your client to express his irritation, disappointment, anger or any other feeling that might interfere with his ability to make a rational decision, don't reject it out of hand 
• help your client de-demonize the opposition, reminding him that the "other side" is human and therefore fallible and is rarely downright evil
• remind your client that many disputes that seem to arise from malicious conduct actually stem from faulty communication
• know your bottom line and stick to it unless you genuinely learn something that makes you see the entire dispute in a different light, remembering that "a foolish consistency is the hobgoblin of little minds" 
• despite everything I've now said about litigants behaving irrationally, as I've written elsewhere in greater detail, Harvard negotiation gurus Deepak Malhotra and Max H. Bazerman suggest that negotiators too often confuse hidden interests and constraints with irrationality.  The mistakes and solutions when this is the case?  
  • Mistake No. 1: They are Not Irrational; They Have Hidden Interests -- find out what they are and you may well be able to resolve the dispute and settle the litigation without putting any more money on the table or making any further concessions;
  • Mistake No. 2: They are Not Irrational; They Have Hidden Constraints -- keep one ear to the ground for hidden constraints, explore them with the mediator, opposing counsel or the opposing party; often those constraints can be problem-solved away;
  • Mistake No. 3: They are Not Irrational; They Are Uninformed -- listen and respond; respond and listen.  You will find that EACH of you is uninformed about something that will likely make a genuine difference in the manner in which the litigation is resolved.
• If your opponent cannot or will not see reason, there's always the joy of just trying the darn thing.

______________________

**/  This thesis is based on the work of  Antonio Damasio as described by him in Descartes’ Error. 
 

• Email This
• Print
• Comments
• Trackbacks (1)

Max Kennerly over at Litigation and Trial has graciously and profusely responded to our call for comments about the road-blocks to achieving optimal negotiated resolutions to litigated disputes.

Because Max and I are straining toward the same goal every litigant does when the burdens of a lawsuit begin to outweigh its anticipated benefits, I'm going to include my readers in the conversation.

Our Interests are Adverse, Not Mutual or Intertwined

Max suggests that the hypothetical "business school" negotiated resolution doesn't provide litigators with much guidance in resolving litigated disputes because the buyer-seller-mutual-or-intertwined-interest template cannot be comfortably laid over a conflict between parties whose interests are entirely adverse.  As Max explains:  

The parties to a lawsuit do not have intertwined interests: they have directly adverse interests. Unless there's some possibility of a future relationship, the defendant doesn't want to resolve the conflict: they want the plaintiff to drop their frivolous claim. In their mind, their best alternative to a negotiated agreement ("BATNA") is for the plaintiff to crawl in a hole and die.

Same with the plaintiff. Unlike buyers and sellers, who usually don't get much joy out of their 'conflict' as a conflict, the plaintiff usually prefers imposing a conflict on the defendant (who the plaintiff believes cast the first stone) in pursuit of justice, an imposition they will only relieve for at least "full"  compensation. 

The problem is that most parties don't consider their claims to be assets; the problem isn't that there's emotional baggage around the economic understanding, it's that the parties interpret their dispute as fundamentally non-economic. 

Before moving on to adverse/intertwined/mutual interests, I want to emphasize that what the parties "interpret . . . as fundamentally non-economic" is the key to the settlement of litigated disputes -- not a roadblock. 

Nor can the feelings that accompany litigation be called  "emotional baggage" unless we interpret the desire for justice as pathology. 

This hunger for justice is so fundamental to our social relationships that even  primate relatives like  capuchin monkeys will deprive themselves of food if they sense it is being distributed unfairly.  In capuchin monkey land, injustice appears to consist of being required to do five times more work to "earn" the same benefits as another.  

People seek out lawyers rather than therapists to resolve the emotional issues that accompany conflict -- because they believe themselves to be victims of  injustice and lawyers are in the justice business.  Our clients have not simply suffered an injury (tripped over their own feet) but have a wrong (stumbled over a trip wire placed in their path by a malicious or careless actor).  We can explain until we're blue in the face that money is the only remedy the law can provide.  Our clients will continue to seek justice and will not easily settle for money alone.  

"The Unicorn Settlement"

Max asks that I acquaint him with the Unicorn -- the state "where two hostile parties on the verge of a lawsuit get lawyers, almost file suit, and then, through deft representation, settle their differences peacefully and move on" Unicorns. Excluding business disputes where the parties have an existing and potentially mutually beneficial on-going relationship, this type of settlement, says Max, is a myth.  He explains:

I entered the law expecting The Unicorn to be rare but real; by this point, I have been trained by defense lawyers not to bother to check for it. I still usually do, throwing out what I think is a perfectly reasonable offer early on, which is routinely ignored or dismissed by a letter that gratuitously refers to my claims as baseless, frivolous, or made in bad faith.

So that's my biggest question to you: how do you suggest I get defendants, prior to the courthouse steps, to even enter the mindset that there's a valid claim and mediation / settlement should be considered? Reframed in words closer to your post: what can I do to (a) get the joint session to happen and (b) ensure everyone's in the right mindset?

The Conditions in Which Unicorns Flourish

When I started practice -- in 1980 -- I did so in a small community -- Sacramento -- where everyone was a "repeat player" with everyone else.  Perhaps more importantly, you could file a suit in year one and try it to a jury in year two.  Not only defense counsel, but insurance adjusters, knew which plaintiffs' attorneys would try cases and which would not.  They also knew which ones could persuade a jury to bring back a hefty award.    

Though I only handled personal injury litigation for my first two years of practice (after which I changed firms and moved on to commercial litigation) I saw dozens of "unicorns" in my first few months of practice.  As the junior-most attorney in a small P.I. practice, I settled hundreds of cases without ever filing a lawsuit -- on the telephone with insurance adjusters.  (A really, really good reason to leave PI practice, but that's another story). 

I settled these cases in the world of "three times specials" at a time when and in a place where everyone knew one another and used a common metric to evaluate potential liability and damages.  In that environment, Unicorns flourished.

Unicorn Hunting in the 21st Century

Max isn't asking me to shoot ducks in a barrell here.  He's asking me to deliver the holy grail of mediation -- how to convene an early settlement conference in which the parties (and their attorneys) are united in a desire to settle litigation without protracted discovery or pre-trial procedural wrangling.  

I hate to keep leaving my readers on the edge of a satisfactory resolution, but I DO have work to do and will return to this -- and Max's further observations -- soon, really soon.  Stay tuned.  And join the conversation by leaving your own comments here.

• Email This
• Print
• Comments (1)
• Trackbacks (2)

In the actual news (the New York Times) are the results of a new study finding that

most . . . plaintiffs who decided to pass up a settlement offer and went to trial ended up getting less money than if they had taken that offer . . . 

Plaintiffs, however, are not the only ones who made the "wrong" decision -- defendants were mistaken in 24% of the cases.  Defense errors, however, were far more costly. 

getting it wrong cost plaintiffs . . . about $43,000 . . . For defendants, who were less often wrong about going to trial, the cost was . . . . $1.1 million.  

What to do?

It's no answer to say " take the last best settlement offer,"  though one party or the other will 80 to 90 percent of the time and often on the courthouse steps, i.e., at the point of a gun when decision-making is at its most flawed. 

Nor, I must concede, is the answer simply mediation, which is, after all, pretty much a pig in a poke.  Why?  Because mediation practice ranges all the way from

• a retired judge bullying an "injured, situationally-weakened client with no negotiation skills" (cf. Max Kennerly's recent post at  the Litigation and Trial Blog) or disrespecting a marginalized defendant (cf. Dr. Ghaderi)  
• to a mediator who knows only how to repeat "trial is expensive and the result uncertain"
• to a settlement officer who does nothing more than shuttle numbers back and forth between two rooms
• to a "transformative" mediator who allows the parties free reign to "vent" their "feelings" without helping them get a grip on the very real and serious consequences of the negotiated resolution that has been proposed to them.  

A friend of mine who is a psychoanalyst once told me that patients get better in therapy despite their analysts' "technique."  It's the relationship that's curative, she told me.  A patient in need will find the water of healing in the desert of a therapist's theory.  If the same can be said of mediation -- that it's the relationship that's curative -- the question that naturally arises is whose relationship?  

Why the disputants of course, which is why I recommend joint sessions.  Not stylized adversarial position-based, chest-thumping, shoe-banging joint sessions ("we will bury you") but interest-based, inquisitive, collaborative, reality-testing mediator-and-attorney directed negotiation sessions. 

Before talking about joint sessions, however, let's look at the problem every litigator faces when advising his/her client whether to accept, make, or reject a settlement offer.  

The Problem in Bullet-Points

• we can't predict the future (darn)
• we think so much like lawyers that we've fogotten how to talk to juries like normal people (cf. Gerry Spence)
• too few of us get to try enough cases to be any good at predicting results based on experience
• we're subject to all the cognitive biases every other human being is, including,
  • self-serving bias -- the tendency to evaluate ambiguous information in a way that "fits" our existing view of the world
  • egocentric bias --  recalling the past in a self-serving manner
  • hind-sight bias -- filtering memory of past events through present knowledge
  • bias blind spot -- the tendency not to compensate for our biases 
  • optimism bias — the systematic tendency to be over-optimistic about the outcome of planned actions
  • overconfidence effect -- when we say we're 99% certain, we're wrong 40% of the time
  •  fundamental attribution error -- the tendency to over-emphasize personality-based explanations for behaviors observed in others while under-emphasizing the role and power of situational influences and reversing this error when the behavior at issue is our own.
  • Just-world phenomenon — the tendency for people to believe that the world is "just" and therefore people "get what they deserve"
• We get so stuck in our positions that we fail to ask diagnostic questions that have been proven to result in significantly better negotiated outcomes for both parties.
• We're so averse to leaving money on the table that we walk away from negotiations without having learned that our respective "bottom lines" actually overlap

Joint Sessions

My friend Judge Alexander Williams -- the soon to retire full-time settlement Judge in the downtown Los Angeles Superior Court -- has the following poster hanging in his jury room.

The surface is what the lawyers know.

The depth and breath; the texture and particularity; the details of the dispute and the desire for justice that exists on both sides, is known only to the litigants.  And they haven't (and won't) tell you what they know or want.

Why you should never leave a mediation or settlement conference without letting a skilled mediator facilitate a joint session in which the litigants can explore their joint interests and conflicting goals will be the subject of my next post.

See also Nuts and Boalts (You Had Me at Your Initial Offer) which directs us to Prospect Theory as a good explanation for our settlement errors.

• Email This
• Print
• Comments
• Trackbacks (2)

(image:  Le Silence O Redon)

In today's Daily Journal, reporter Greg Katz writes  that DESPITE RULES, NEUTRALS ARE RARELY BLAMED WHEN THEY MEDIATE AND TELL.

"What happens," asks Katz, "when a mediator is accused of breaking mediation confidentiality, the thing many mediators say is essential to their craft?"

The answer: probably nothing.

As Katz reports, the Simmons v. Ghaderi opinion that made mediation confidentiality iron-clad, arose from a mediation in which the neutral provided a sworn declaration to the Court reciting "details about [his attempt] to persuade Ghaderi to sign her consent," among other things.  

Ron Kelly, an architect of the state's confidentiality statutes, opined that the Declaration filed by the mediator in the Simmons case breached "Evidence Code Section 1121, which forbids mediators, in most instances, from reporting to the courts anything that takes place in their mediations."  Kelly concluded by saying,

If you were going to go after a mediator for malpractice, it seems like an open-and-shut case of violating the law would be a good start, don't you think?

Yes I do.  Yet local attorneys and mediators seem unconcerned.  Lucie Baron of ADR Services told Katz that her panel of neutrals had no policy on the matter because the mediators -- after all -- are attorneys and independent contractors to boot.  They don't, she noted, ask her for legal advice. 

Not a bad call on Baron's part.  But what about the neutrals? 

Their lack of attention to the spectre of "open-and-shut" malpractice litigation is perplexing.  Though the Simmons mediator could colorably claim that the law of confidentiality was unsettled at the time he submitted his declaration -- or that the factual scenario before him permitted the disclosures made -- in a post-Simmons environment, neutrals cannot be so sanguine.  Any disclosure of any communications during a mediation by the neutral would likely be actionable so long as it caused one of the litigants appreciable harm.     

When someone is unhappy with a result -- as too many litigants of mediated settlements are /* -- they search the field for people to blame. 

So far, mediators haven't been among the potential culprits.   

I wouldn't count on that situation lasting much longer.

_____________________

*/  More on this topic soon.

• Email This
• Print
• Comments
• Trackbacks (2)

There's been some salacious commentary (such as WAC's Like a Vixen) about Blawg Review # 171.  I just want to say to anyone who missed the sexual revolution -- on either side of the generation gap -- we're sorry to have started it all.  We just never really left high school.

We've also heard some complaints that the most recent Blawg Review is just too darn long.  In honor of our sister blog and those attorneys who are still billing 2400 hours/year, we give you the IP Executive Summary of the Virgin Blawg Review #171 below. 

Isaac Newton.  The Straight Dope thinks the virginity of this octogenerian scientist and mathematician is less surprising that the fact that the math gene somehow keeps perpetuating itself.   We consecrate Newton's virginity to this week's best IP and IT posts.  William ("I am virginal") Patry is asking questions about the government's engagement in copyright infringement  but it is  Patry's final blog post that we celebrate as a true virginal moment.  Pause here.  

My late mother, aleha ha-shalom, told me repeatedly that I had a religious obligation to learn every day, and I have honored her memory by doing exactly that. Learning also involves changing how you think about things; it doesn't only mean reinforcing the existing views you already have. In this respect, Second Circuit Judge Pierre Leval once said that the best way to know you have a mind is to change it, and I have tried to live by that wisdom too. There are positions I have taken in the past I no longer hold, and some that I continue to hold. I have tried to be honest with myself: if you are not genuinely honest with yourself, you can't learn, and if you worry about what others think of you, you will be living their version of your life and not yours.

Other IP bloggers have, of course, reflected on Patry's Final Blog Words here and here. 

Back in the worldly word, Patently O -- which promiscuously shares itself with millions of readers every year -- turns its pen over to David McGowan who discusses why we should not interpret the recent Quanta decision too broadly.  Lou Michels suggests we be the masters of our own domains, using the the recent San Francisco IT fiasco as a cautionary tale -- don't let a single person have control of all the keys to your kingdom.

We've heard tell that reading your iPhone has replaced the cigarette for post-coital bliss, in which case you'll be glad to hear Brett Trout at BlawgIT suggest that you might soon be watching television from that device.  Protection, protection, protection.  In a software license, boilerplate integration and non-reliance terms might not insulate a firm from claims based upon its salesfolks "over"promises.  Elsewhere, at least one IP Blogger wonders whether blog content licensing might be dying for lack of buyers? (people pay for Blog content while I give it away for free?????)

The IP Dispute of the Week, of course, is Hasbro's suit against Rajat and Jayant Agarwalla for their Facebook hit Scrabulous.  Scrabble itself was invented during the Depression by Alfred Mosher Butts, an out-of-work architect.  How did he do it?  As the New York Times explained in its review of Steve Fastis book, Word Freak (Zo. Qi. Doh. Hoo. Qursh) Scrabble's inventor assumed that the game would work best if the game letters  "appear[ed] in the same frequency as in the language itself."  So he

counted letters in The New York Times, The New York Herald Tribune and The Saturday Evening Post to calculate letter frequencies for various word lengths. Playing the game with his wife, Nina, and experimenting as he went along, Butts carefully worked out the size of the playing grid (225 squares, or 15 by 15), the number of tiles (100), point values for the letters, the placement of double- and triple-score squares, the distribution of vowels and consonants, and so on.

In response to the Hasbro lawsuit Ron Coleman at Likelihood of Confusion asks "How Many Points is Infringement?" -- one of those rare legal questions that actually has an answer rather than 20 more questions.     

If Player 1 opens with "fringe" (double word) for 24 points; Player 2 follows by slapping an "i" on the triple word score followed by an "n" for "infringe" and 33 points; and, Player 1 responds with "ment" for 19 points, the combined score for "infringement" is 75 points. Our readers can do the math and moves on "trademark" and copyright." 

On the matter of greater moment --  Will the ax fall on Scrabulous -- Jonathan Zittrain at The Future of the Internet answers his own question in the affirmative based on the name alone, opining that by calling it "rainbows and buttercups” instead of “Scrabulous” there’d be little claim of brand confusion but noting the "residual claim that the Scrabulous game board infringes the copyright held in the Scrabble game board."  More on Scrabulous and its replacement with Word Scraper at the Video Game Law Blog here. (Mr. Thrifty's and my first game of Word Scraper here!) 

Has anyone recently said God bless the best IP aggregator in the universe -- the IP Think Tank's Global Week in Review?  This week IPTT points to the following posts on the Hasbro Scrabble debacle -- (Spicy IP), (Techdirt), (The Trademark Blog), (Out-Law), (Law360).  While we're talking IP aggregation, check out Patent Baristas' regular Friday IP Round-up.  All around aggregators include Anne Reed's (Deliberations) reading list and Kevin O'Keefe's LexMonitor.

Both Geoff Sharp and I picked up 8 impediments to settling patent cases on appeal (a desire for "justice" is not an impediment but a means to settlement).  While we're taking an ADR angle, Virtually Blind's post Second Life Lawsuit Avoided; Law is Cool's Love, Actionable; and,    Slashdot's recommend reading of the week (The Pragmatic CSO) are all well worth a look.  

Slashdot also reminds us that IP prevention is worth a pound of IP litigation with the post WB Took Pains to "Delay" Pirating of the Dark Knight as follows: 

"a new studio tactic [is] not to prevent piracy, but to delay it . . . Warner Bros. executives said [they] prevent[ed] camcorded copies of the reported $180-million [Dark Knight] film from reaching Internet file-sharing sites for about 38 hours. Although that doesn't sound like much progress, it was enough time to keep bootleg DVDs off the streets as the film racked up a record-breaking $158.4 million on opening weekend. .  . The success of an anti-piracy campaign is measured in the number of hours it buys before the digital dam breaks.'"

If you're sufficiently virginal to believe in magic, check out the Law and Magic Law Blog's announcement of the dismissal of a defamation lawsuit against Magic Mag as protected opinion while Ernie the Attorney has at least one more make to make your iPhone magic here.

Meanwhile, the Legal Talk Network gathers together bloggers and co-hosts, J. Craig Williams and Bob Ambrogi to welcome Attorney Kevin A. Thompson from the firm Davis McGrath LLC, and Lauren Gelman, Executive Director of Stanford Law School's Center for Internet and Society to discuss Viacom's suit against Google's YouTube for the violation of its copyrights in a $1 billion lawsuit.

Because I used to type patent applications for Uniroyal (IBM Selectric - 5 carbon copies) I get a sweet whiff of nostalgia from Wiki Patents -- like this one -- Flexible Row Redundancy System 7404113 -- a row redundancy system is provided for replacing faulty wordlines of a memory array having a plurality of banks. The row redundancy system includes a remote fuse bay storing at least one faulty address corresponding to a faulty wordline of the memory array . . . .  Another available data base for the engineering-attorney crowd is the subject of  Securing Innovations post IBM Technical Disclosures' Prior Art Data Base.  Concurring Opinions covers IP in the News this week, Peter Zura's 271 Patent Blog considers a patent that was a "Colossal Waste of Time" and  IP Kat curls up with Small and Sole.  

Next week, the Blawg Review will be hosted by the Ohio Employer's Law Blog which we expect will be far more respectful of BR's readers' political, religious and sexual sensitivities than this one was.  Thanks for letting us play.  And a very, very, very good night!

• Email This
• Print
• Comments (1)
• Trackbacks (1)

Check out Underdog's Blog post Practicing non-anger if you're feeling stressed and cranky.   Because there's a riot of unruly pre-school children residing inside of me, I too center myself as often as possible by remembering that everything is internconnected.  Here's what DUI attorney Jon Katz does to keep himself from boiling over.  

One approach I try to use in staying consistently calm and not angry is in focusing on how everyone ultimately is interconnected. Those who reach such a view from a deeply-held religious perspective -- which I do not, still remaining an agnostic who is into Judaism and Buddhism nonetheless -- might have an easier time sticking to the view than I do.

In any event, the more we see that we are interconnected, the less we will be tempted to cause disharmony to others and the more we will want to help everyone rise as we rise, and not to try to pull them into a ditch even if we find ourselves in one.

Read the remainder of the post here.

I was just telling Mr. Thrifty over the dinner dishes that my life as a litigator got far far better when one of my biggest and most enduring pieces of litigation was assigned to Judge Carolyn Kuhl over at the Complex Court here in Los Angeles.  She set such an even-tempered example that opposing counsel and I aspired to live up to it.  We wanted to please her.  Everything got better after that.  

That led me to think about the way Judges' ill tempers effects their dockets.  The Judge bats the attorneys around the courtroom like cat toys and they begin to behave like caged animals on an electrified grid.  The attorneys behave badly and that irritates the Judge who demeans and belittles them.  The attorneys then demean and belittle each other and everyone is trapped in the vicious cycle. 

Maybe if Judges realized that they have this effect on attorneys, they'd adjust their own attitudes and see the attorney wrangling before them chill out a little.

Thanks for the wise words, Jon.

• Email This
• Print
• Comments
• Trackbacks

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."

• Email This
• Print
• Comments (3)
• Trackbacks

Update:  there's a good discussion of the holding and rationale at the Complex Litigator -- Simmons v. Ghaderi: mediation privilege trumps allegation of oral settlement agreement here.

I'm re-posting this "how to" now that Simmons v. Ghaderi has been decided.  You no longer have even a fighting chance of enforcing a mediated settlement agreement that fails to comply with the Code.  So here's the procedure, as recommended by my and Deborah Rothman's article in the Daily Journal in November 2006 -- Take Steps to Ensure that Mediated Settlement Agreements Can Be Enforced. 

Assuming your client insists on orally memorializing the settlement reached in mediation, you must comply strictly with Evidence Code Sections 1118 and 1124. An oral agreement reached during a mediation can be proven and enforced only if (1) its terms are recited to a court reporter or recorded by a sound device in the presence of all parties and the mediator, (2) the parties expressly agree to those terms on the record, (3) the recording is reduced to writing and signed within 72 hours of its recordation and (4) all parties to the agreement expressly agree in a writing, in the sound recording or in the reported record that the signed written transcript may be disclosed.

Th[e] procedure for enforcing an oral settlement is so technical and cumbersome . . . (counsel and mediators rarely have court reporters standing by or tape recorders in their breast pockets), that we recommend against it.

We instead suggest that the parties document all settlements in writing, even if the writing contains only skeletal deal terms and even if someone has to begin drafting it at 2 a.m. The agreement should provide that the parties intend it to be enforceable or binding and that all parties expressly agree in writing to its disclosure. . . . If an action is pending between the parties, the memorandum of understanding should be made enforceable under Code of Civil Procedure Section 664.6.

See also the Supreme Court's decision in Fair v. Bhaktiari, interpreting the phrase "words to that effect" in section 1123(b) as requiring a written mediated settlement agreement to "directly express the parties’ agreement to be bound by the document they sign."

Almost right will not do.  You must strictly comply with these provisions or your mediated settlement agreement will not be enforceable.

• Email This
• Print
• Comments
• Trackbacks

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.

• Email This
• Print
• Comments
• Trackbacks

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)

• Email This
• Print
• Comments
• Trackbacks

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! 

• Email This
• Print
• Comments
• Trackbacks

Gini Nelson of Engaging Conflicts ran a six-part series recently on "Adding Cooperative Practice to the ADR Toolkit."  Her final part in this series -- linked supra -- is the final entry of Guest Blogger Law Professor John Lande’s posts.  Linked here is his article The Promise and Perils of Collaborative Law -- which is also linked in Gini's blog with her comments here.

Before you run over to Gini's site to read Lande's excellent post or his great article, I'd like to simply bullet-point some observations based upon my four-years of full-time mediation and arbitration practice.

• when I co-arbitrate with some of the best commercial arbitrators in the business -- these are Ivy League lawyers with many decades of experience representing Fortune 50 Companies in AmLaw 100 Law Firms, the ultimate decision changes many times during the course of deliberations and almost always could go either way.
• having spent a considerable time in the Los Angeles Complex Court as an experienced commercial litigator "externing" for credit to earn my LL.M in '06, I can tell you that the deliberations in chambers of these highly respected jurists is not much different that those in which I have engaged when sitting on an arbitration panel

The take away?  No matter who is hearing your case, your chances of winning are 50-50.  Flip a coin.  Think this doesn't apply to you?  I have arbitrated cases being handled by the top ten law firms in the country.  I have seen those same type of firms litigate and try cases in the Complex Court.  It's 50-50 friends.

Below -- observations on how you and your mediator can be "happy together."  (And the Turtles from 1967 so that you can have a little musical accompaniment to this post) 

Observations of End-Game Litigation from a Mediator's and Settlement Consultant's Perspective.

Despite years of inquiry and the review of millions of documents, sophisticated parties (Fortune 50) represented by dynamite law firms (AmLaw 50) haven't yet learned the most fundamental information about the following matters -- most of which are more important to the settlement of the case than the cost-detriment-benefit-position-driven-chance-of-victory settlement posture:

• what are the hidden interests that your opponent must satisfy before accepting a settlement that is below the number he once told his client should never under any circumstances be accepted?
• what are the hidden constraints upon your opponent's authority that must be removed before he can pay more money than he once told his client should never under any circumstances be paid?
• why was this litigation initiated in the first instance?
• who gave the litigation the "green light"?
• what are the probable consequences to the continued financial security of the person who gave the litigation the "green light" in the first place or who has authorized the defense bills for the last 5, 10, or 15 years?
• is the person who green-lighted the litigation in the first place still employed by your client?
• what are the probable consequences to the financial well-being of the corporation who must pay more than it wishes to pay or accept less than it wishes to recover?
• Who is the most frightened person in the room, i.e., whose hide might be sacrificed if the litigation settles for more/less than predicted, or, often worse, actually goes to trial.

There are so many of these settlement-driving and -inhibiting questions that only my own personal time contraints -- I must start my day's work -- make me stop listing them.  

Let me conclude with this however.  Never underestimate your client's reluctance to settle the case on terms that seem unjust to it.  This is the most important function a mediator can play on the day of settlement -- explaining justice issues to the clients and helping the clients de-demonize their opponent -- which occurs most easily in JOINT SESSION yet which most litigators would rather have their teeth drilled than attend.

O.K. I can't conclude without saying this.  If you have the courage to try a case, you possess the cajones to participate in at least one joint session to help the parties come to terms with the justice issues -- which are often driven by the conclusion, affirmed over and over again in the course of the litigation, that their opponent is an evil, mendacious, grasping, greedy, malicious, duplicious lying liar with his pants on fire.  

This is almost never true.  The parties on both sides almost always possess equal parts of good and bad, just like the rest of us. 

Let your parties re-adjust their perception of "the enemy" in joint session.  I can almost guarantee you that a conversation will ensue in which the parties spontaneously tell each other what interests they really need to satisfy to settle and what constraints they are really working under.  And I don't guarantee a lot of things. 

Why can't I do this for the parties?

Because often neither side will disclose these matters to me because they don't trust that I won't use that information to help settle the case and because the parties won't believe what I say about their opposition in the first place (obviously, they've pulled the wool over my eyes). 

"How do you know he's not lying?"  is a question mediators are asked on a regular basis.  My answer is "I have no idea."  But if you let your client talk to the opposition -- with any constraints, restrictions and control you wish to retain -- which I can orchestrate for you -- your client will be able to elicit the details that give any story a ring of truth (or falsity) while at the same time watching the body language that constitutes between 60 and 80% of all communication.

Would you try a case without 80% of the information you need?  Of course not!  And yet you're content to avoid a joint session when that session could provide you with between 60 and 80% more information than you had when you arrived on the morning of the mediation or settlement conference?

Suspend your disbelief in the mediator ("who-will-do-anything-to-settle-the-case") for just a couple of minutes.  Remember that we're in possession of confidential information we cannot divulge to you.  

Take our lead.  And if you don't trust us to do so, for heaven's sake find a mediator you can trust!

• Email This
• Print
• Comments
• Trackbacks

There is no principle I hold more dear than the rule of law.  I've written before about some critics' contention that our own government has turned away from the rule of law here.  Some of those  critics go so far as to accuse our government of waging war on the rule of law -- calling its strategy "lawfare."

I've also written before about critcisms levelled against ADR practices as threats to the principle that all men, women, and institutions will be judged by the same gender-blind, color-blind, nationality-blind, disability-blind (etc.) rules of law. 

There are those who believe that mediation -- which is practiced without rules, best practices or even a common theoretical basis --  permits mediators -- who are primarily over-40 white men -- to unfairly pressure litigants to settle their lawsuits against their better judgment.  There are further charges that mediation re-injects favortism and prejudice back into a system that spent most of the latter half of the 20th century ridding itself of.  

I take these criticisms very very seriously, repeating throughout any mediation session my opening assertion that my role is to present the parties with choices and to faciliate a settlement if they believe it may be better alternative to continued litigation, not to hustle them away from their right to a jury trial.  

I would be far more successful in being "neutral" about proceeding to a jury trial if there were an easier, less costly, and speedier way to bring a dispute before a jury.  We have, lamentably, permitted our cherished rule of law to become so procedurally encrusted that it sometimes seems like no option at all -- at least not an option available to all but the wealthy or those represented by lawyers willing to accept a contingent fee.

All of this troubles me.  I invite comment at the same time that I provide the thoughts of some of our greatest statesmen and jurists about the right to trial by jury.      

George Washington

"There was not a member of the Constitutional Convention who had the least objection to what is contended for by the advocates for a Bill of Rights and trial by jury." (1788)

John Adams 

"Representative government and trial by jury are the heart and lungs of liberty. Without them we have no other fortification against being ridden like horses, fleeced like sheep, worked like cattle and fed and clothed like swine and hounds." (1774)

Thomas Jefferson 

"I consider trial by jury as the only anchor ever yet imagined by man, by which a government can be held to the principles of its constitution." (1788)

"Trial by jury is part of that bright constellation which has gone before us and guided our steps through an age of revolution and reformation." (1801)

"The wisdom of our sages and the blood of our heroes has been devoted to the attainment of trial by jury. It should be the creed of our political faith." (1801)

James Madison 
"Trial by jury in civil cases is as essential to secure the liberty of the people as any one of the pre-existent rights of nature." (1789)

John Quincy Adams 

"The struggle for American independence was for chartered rights, for English liberties, for trial by jury, habeas corpus and Magna Carta." (1839)

Patrick Henry of Virginia [Patriot who said "Give me liberty or give me death!"]
"Trial by jury is the best appendage of freedom by which our ancestors have secured their lives and property. I hope we shall never be induced to part with that excellent mode of trial." (1788)

Alexander Hamilton 

"The friends and adversaries of the plan of the convention, if they agree in nothing else, concur at least in the value they set upon the trial by jury; the former regard it as a valuable safeguard to liberty; the latter represent it as the very palladium of free government." (1788)

Daniel Webster

"The protection of life and property, habeas corpus, trial by jury, the right of an open trial, these are principles of public liberty existing in the best form in the republican institutions of this country." (1848)

Judge Stephen Reinhardt 

"Our constitutional right to trial by jury does not turn on the political mood of the moment, the outcome of cost/benefit analyses or the results of economic or fiscal calculations. There is no price tag on the continued existence of the civil jury system, or any other constitutionally-provided right." (1986)

David Hume 

"Trial by jury is the best institution calculated for the preservation of liberty and the administration of justice that was ever devised by the wit of man." (1762)

Judge William Bryant [First African-American federal district court judge in D.C]

"If it weren't for lawyers, I'd still be three-fifths of a man." (2004)

Justice William O. Douglas

"The Massachusetts Body of Liberties was a new Magna Carta. It contained many of the seeds of the civil liberties which today distinguish us from the totalitarian systems, including the right to trial by jury." (1954)

Justice Hugo Black

"Our duty to preserve the Seventh Amendment is a matter of high Constitutional importance. The founders of our country thought that trial by civil jury was an essential bulwark of civil liberty and it must be scrupulously safeguarded." (1939, 1943)

Justice Ward Hunt

"Twelve jurors know more of the common affairs of life than does one man, and they can draw wiser and safer conclusions than a single judge." (1873)

Quotations excerpted from In Defense of Trial by Jury: Vols. I and II by the American Jury Trial Foundation (1993) and copied verbatim and in their entirety from the web site of the American Association of Justice (i.e., the American Trial Lawyers Association).

• Email This
• Print
• Comments (7)
• Trackbacks

The cost of a thing is the amount of life that you must exchange for it -- now or in the long run (Thoreau)

• if you have an on-going relationship -- even as limited as a note payable -- squeezing the last nickel out of the deal may impair your bargaining partner's ability to perform 
• what goes up, must come down, i.e., squeezing out the last nickel creates enemies who  none of us can afford when times are good, let alone when times are bad 
• taking advantage of another's weaknesses tears at the social fabric
• it makes us all more watchful and less productive
• it doesn't actually feel good to line your pockets with the misery of others
• sometimes the downtrodden rise up -- every couple of centuries or so, creating an entirely new order -- the generous man and woman will not be on the wrong side of that revolution
• global warming -- think about it -- the order will change as will the countries who will be asking for favors
• you reap what you sow (I'm pretty sure I learned this in Sunday School)
• social relations do not exist "out there" -- they are co-created by one person's relationship with every other person -- the society you inhabit is the one you create -- if you don't want your neighbor taking your last dime, don't take his
• collaborative effort results in greater progress than individual activity -- if you decrease trust, you impede advancement in business, the arts and science

Readers!  Can I count on you to give us all more reasons?

• Email This
• Print
• Comments (1)
• Trackbacks

You know, I've been reading the Daily Journal my entire legal career.  I never gave much thought to the men and women whose job it is to report the daily legal news.  Now I have.

There's a reporter at the DJ named Noah Barron who not only reported my dad's passing, but talked on the telephone with me for more than an hour at a time when I really needed to talk about my dad to someone who makes his living being curious about people's personal lives.  It made a huge difference in my experience of my father's passing.

You see.  We make these differences in one another's lives all the time.  We just usually fail to acknowledge one another for it. 

So I want to thank Noah for the article carrying his by-line published in the DJ today.  

And I want to thank Dad for following his own best advice from our river rafting adventures:  keep your oar in the water (for balance) and paddle through your fear.  I would never have had the courage to go to law school were it not for the example he set -- which you can read about in Noah's fine article below. 

DAILY JOURNAL NEWSWIRE ARTICLE
© 2008 The Daily Journal Corporation.
All rights reserved.
-------------------------------------------

June 17, 2008

JURIST FOUGHT FOR GAY RIGHTS BEFORE IT WAS POPULAR
By Noah Barron
Daily Journal Staff Writer
This article appears on Page 2

LOS ANGELES - Superior Court Commissioner Donald W. Pike was a self-made millionaire, a self-taught thinker who went to law school but never college, an adventurer and a legal pioneer who broke ground on gay marriage rights three decades before it was fashionable. He died in his Los Angeles home on his 84th birthday on June 9 from complications from Parkinson's disease.

Back in 1982, the Daily Journal profiled Pike, setting down in print many of the stories that came to form the man: his impoverished beginnings in Nebraska, the fifth of nine children, his family's "Grapes of Wrath"-esque exodus to California and his early jobs as a child of 14 working as a farm laborer.

Before he was appointed commissioner to the Los Angeles County Superior Court bench, he was a milkman, an insurance salesman, a merchant marine in World War II and a lawyer, and then in his 60s became a millionaire through his real estate investments.

"I am ridiculously proud of my father," Pike's daughter, Victoria Pike Pynchon, said. "He took every opportunity to improve his station in life and improve the future of his children. But he didn't accomplish these things alone. No one does."

Pike's marriage collapsed in 1962 and he moved from Los Angeles to Sacramento to start a new life.

Later, presiding over domestic cases in Los Angeles, he would say that his failed marriage gave him special insight into family woes.

"Having had two marriages helps me understand family law," he said in a 1982 Daily Journal profile.

Pynchon said she was deeply hurt when Pike left home but reconnected with him as an adult, becoming a lawyer herself and watching him on the bench. She said he sometimes grew emotional during custody battles.

"He would call a recess whenever he was going to burst into tears," she said. In describing his leaving his family, Pike said, "I was terribly guilty."

Pike was 35 before he earned his high school equivalency. When he set out to start over in his 30s, he visited a a psychologist whose IQ test told him for the first time that he was intelligent.

"I thought the rich were smart and the poor were dumb," he said in a 1982 interview.

"He lived in fear of poverty," his daughter said.

Pike wasted no time, passing a college equivalency test offered by the State Bar and then attending McGeorge School of Law by night while delivering Dad's Root Beer by day, sending support checks home all the while. He passed the Bar Exam on his first attempt.

Gary Pike, the commissioner's nephew, said that while Pike was practicing civil law, he drafted contracts for gay men and women that emulated the rights of married couples.

The work reflected a legal sensibility decades ahead of its time, Gary Pike said.

Retired Los Angeles County Superior Court Judge Eli Chernow worked with Pike when Pike was a commissioner, from 1973 to the mid-1990s.

"He was a good friend and great colleague. He left a big hole when he left the bench," Chernow said.

Pike is survived by his wife, Juanita; his two daughters Sharon Lawrence and Victoria Pynchon; and two grandchildren. Four of his nine siblings are still alive, Oscar, Lois, Dorothy and Kenneth Pike.

Private memorial services will be held in Pynchon's Los Angeles home. Instead of flowers, the family asks donations be made in Pike's memory to the Alliance for Children's Rights at http://www.kids-alliance.org

noah_barron@dailyjournal.com

• Email This
• Print
• Comments (1)
• Trackbacks

Here I am again hectoring litigators about their obligations to determine whether or not their clients have insurance, to decide whether that insurance might cover the claim or suit against them; and, make a timely demand for coverage, particularly under E& O claims made policies.

Professionals and business people hesitate before tendering "claims" to their insurance carrier because the no. 1 response to conflict is denial.  This is particularly true where a professional's or business person's competence has been called into question.  You don't want to admit that you might have committed malpractice to yourself let alone to your insurance carrier.

This is a particular problem for professionals because Errors and Omissions insurance generally requires claims to be both made and reported during the policy period.  Often, litigators don't see clients until after they've been sued and clients generally don't get sued unless there's a previous demand letter (i.e., a claim). 

So what's the very first thing litigation counsel must do?  Get a copy of the E&O policy and the first demand letter.  Tender the defense and indemnity of the action to the carrier immediately.

You might get a little fudge room by reporting the claim when suit is filed, but if your insured doesn't report the claim in its application for coverage the following year, the carrier will deny coverage on the ground of non-disclosure.

Come to think of it -- transactional attorneys should remind their clients of their obligations to report claims when made, no matter how feeble the claim may look.  Take a look at yesterday's ruling on what constitutes a claim with thanks to the Met News for the summary and LACBA for the daily email summaries.

Where policy defined a "claim" as a written demand for civil damages or other relief commenced by the insured’s receipt of such demand, a letter from a third-party claimant’s attorney to insured informing insured that the third-party claimant had been subjected to discrimination and received a right-to-sue letter and suggesting a settlement constituted a claim. Although the letter did not expressly demand payment or refer to any specific amount, the meaning was clear that, absent some form of negotiated compensation, the claimant would sue. Where policy stated that all claims arising from the same events or series of related facts could be deemed a single claim, and third-party claimant filed litigation authorized by the right-to-sue notice mentioned in the letter, the lawsuit was part of the same claim as the letter under the policy. Where insured did not notify insurer of the claim until after the lawsuit was filed, insurer’s notification was untimely, and insurer was not required to tender a defense.

Westrec Marina Management, Inc. v. Arrowood Indemnity Company - filed June 16, 2008, Second District, Div. Three, Cite as 2008 SOS 3511, Full text http://www.metnews.com/sos.cgi?0608%2FB195047.

• Email This
• Print
• Comments
• Trackbacks

I've linked to Negotiating:  Thinking it Through from the Business Growth Blog before, but haven't quoted the Eight Preparation Questions listed there.  The more I mediate (yes, one's practice does grow) the more I'm reminded that litigators resist interest-based bargaining techniques. 

I get stuck in position-based negotiations as well.  It remains a challenge for me, after 25 years of litigation practice, not to be sucked into the attorneys' arguments about why they are right.  To help all of us in the mediation room . . .

[h]ere is a list of 8 questions you can ask yourself when you suddenly realize that you have to prepare for a negotiation. Use these to generate quick preparation for any negotiation.

1. What are my intended outcomes and interests?

This is about having your goal in mind but also about thinking about the bigger picture at the same time - if you're goal is to get to work on time, speeding to get there might seem like the right choice until the cop pulls you over.

2. What are their possible interests and outcomes?

Look at the negotiaion from their point of view. What do they really want from this?

3. What are some of the options of agreement?

Where are the points of agreement? Focusing on this beforehand will set a tone of reaching agreement rather than a tone of conflict.

4. What is my Plan B?

Once you've thought through the first three questions, what's your fall back position? Having your Plan B in mind gives you a feeling of options so if the deal goes to far against you, you are comfortable with your option B.

5. What is my worst case scenario?

Answering this question sets your "don't cross" line. You've predetermined what you're willing to give up and more than that is a deal breaker… that means you can negotiate confidently, since you know your direction.

6. What are some possible external standards?

External standard are outside measures that can move the negotiation away from personal stakes to measures from an outside authority. Examples might be interest rates, rate of exchange or time frame.

7. What is or are my reserve price / terms / limits?

Knowing what your limits are and then not not going past them results in more useful and enjoyable negotiation.

8. What is my game plan?

Map it out. What do you want and how are you going to get there?

• Email This
• Print
• Comments (2)
• Trackbacks

It happened at a settlement conference again just last week. Defense counsel said there was "no insurance" for the defense or indemnity of a professional malpractice claim.

This naturally surprises me.  Some professionals are required to have coverage or disclose its non-existence to their clients.  No such disclosure had been made in this case.

"No insurance policy?"

"She has an insurance policy; there's just no coverage."

"Why did the carrier deny coverage?"

"The carrier said there was no coverage."

"Why?"

"I don't know.  I'm not coverage counsel."

"Is there coverage counsel?"

"No.  I told you there's no coverage.  Let's get back to negotiating the settlement."

After obtaining (via fax) the policy, the demand and the denial, it turned out that there was a good reason for the carrier to deny coverage for the plaintiff's claim.  But the denial letter expressly withheld comment on the existence of coverage for the defendant's principal, who had not failed to make a timely claim for coverage, and who had not yet been sued.

Call me an activist or a "fund raising" mediator if you will, but when there's not enough money to settle a case and the parties continue to wish it could be settled, I start asking questions about sources of available funds.  

And, listen.  Every litigator must be enough of a "coverage lawyer" to evaluate the likelihood that any existing insurance policy might provide defense or indemnity for the law suit you are defending.  

So, if you are a commercial litigator -- or any type of litigator who defends your clients against claims -- you must

• ask your clients for all of their insurance policies, even those that seem unlikely to provide coverage;
• carefully review the precise wording of the policy's insuring agreements, paying particular attention to the language concerning the defense of claims and the deadlines for submitting those claims to the carrier;
• research the case law in the relevant jurisdiction(s) to determine how the courts have interpreted the insuring agreements and other pertinent policy provisions contained in your clients' policies under facts similar to those alleged in the lawsuit you've been asked to defend;
• except for some narrow additional protections provided to insureds, be aware that there is no such thing as "the law" of coverage under any particular type of policy -- all coverage flows directly from the precise language of the insuring agreement;
• remember that in most jurisdictions, that language -- if ambiguous -- will be interpreted in favor of the insured's objectively reasonable expectations -- that means the law of coverage always favors your client's claim for coverage; 
• understand that in most jurisdictions the rule of contra proferendum will require a court to construe any ambiguity in an insurance policy against the insurance carrier, once again meaning that the law of coverage will favor your client's claim for coverage; 
• never accept the carrier's refusal to provide a defense without asking yourself -- or a coverage specialist -- why in the heck you should accept the carrier's word for it when you were born to contradict everything from "good morning" to "let's have lunch";
• never conclude your client doesn't have coverage before tendering the claim; the response to the tender will outline the pertinent policy provisions in stark enough detail -- not to mention 12-point type -- and the denial in sufficiently weasley words to activate your B.S. meter;
• if you finally accept the fact that your client's policy won't cover the defense of the litigation or indemnify your client in the event of a judgment, continue to keep the carrier informed of the litigation's progress in any event, inviting the carrier to attend all mediations and settlement conferences and to respond to all settlement demands;
•  remember that the law of coverage changes on a daily basis; read those coverage decisions sent down by your local appellate courts and subscribe to Mealey's on coverage remembering that a really good reason for a client to sue a lawyer for malpractice is your failure to give it reasonably informed legal advice about the availability of insurance coverage; and,
• retain coverage counsel If the cost of the lawsuit is beyond your client's means or will deprive it of capital necessary to meet its business goals for the next few years. 

UPDATE:  See Perry Itkin's post about the perils of entering into a mediated settlement agreement without knowing your policy limits.  Also note that the result in the case cited by Perry would be different in  California if the provisions governing the enforceability of mediated agreements are not met . . . at least so long as the Supreme Court does what we believe it will in Simmons v. Ghadheri.  Excerpt from Florida Mediator below:

In Leff and Physicians Financial Consultants Corporation v. Ecker, M.D., 972 So.2d 965 [Fla. 3rd DCA 2007], the plaintiff went into the mediation conference without a clear picture of what the insurance policy limits were. Notwithstanding this limited knowledge, plaintiff chose to go ahead with the mediation and entered into an agreement at the end of mediation.

The Defendants filed a motion to enforce the mediated settlement agreement [Guess why! Good guess!]. The Plaintiff argued that a “mutual mistake” allowed him to avoid the parties’ mediated settlement agreement.

Not so fast   . . . .

Continue reading here.  There are two solutions to this problem in any jurisdiction:  (1) know your policy limits; or, (2) make your agreement to settle contingent on verifying them.  

For the seasoned attorneys in the crowd, take a look at Anderson Kill insurance recovery attorney Mark Garbowski's article at the Lexis New Attorney Hub:  Are You Covered While Doing Good?: Make Sure Your Employees Are Insured Even When Doing Pro Bono.

If you have a really really really really big insurance coverage matter, I recommend those seeking insurance coverage to call my own brilliant insurance recovery squad over at Dickstein Shapiro, particularly my beloved husband Stephen N. Goldberg.

• Email This
• Print
• Comments
• Trackbacks

Lexis-Nexis isn't just about legal research anymore.  L-N is posting a broad array of practice development materials for new lawyers at its New Attorney Hub site here.  And you don't have to be an L-N subscriber to benefit.  All of the materials provided are free.

Though there aren't yet a lot of ADR skill development materials at Hub, I'm proud to say that they've included my posts Ten Settlement Conference/Mediation Traps for the Unwary and On the Job Deposition Training with their other Skill Building Materials. 

You can find Professional Skills, Practice Area Skills and Research and Writing Skills there.

The editors of these materials are combing the internet to provide the most up-to-date materials from some of the oldest hands in the business.  They contacted me, after all, and the one thing I do know myself is that I'm an old --- er, make that experienced -- litigator.

If the Lexis-Nexis people are tracking mentions of their Hub site in the blogosphere, I refer them to my link page here for additional materials -- particularly those included in the blogs listed in the ADR and Intellectual Property sections on that page.

• Email This
• Print
• Comments
• Trackbacks

If you aren't using writs of attachment in contract cases where the amount due is certain, you aren't using the most powerful means of increasing your bargaining power in litigation.

Attend LACBA's Brown Bag Lunch with Judge James Chalfant at the Stanley Mosk Courthouse 111 N. Hill Street, Los Angeles on May 15, 2008.  Program Description:

Writs and Receivers: Practice tips for those who are rarely there. Judge James Chalfant will host a brown bag lunch highlighting tips and tricks for those who may not have much experience in this area. There is no cost to attend, but participation is limited to the first 12 attorneys who register. The program will be held in the judge's chambers at Stanley Mosk Courthouse, Dept 85. Please note, there is no CLE credit for this program.

Click here to register online.

• Email This
• Print
• Comments
• Trackbacks

You haven't really experienced unvarnished brilliance in a mediator until you've spent some time co-mediating a construction case with Jerry Kurland of JAMS.  When I say "co-mediate" I'm talking 70% Jerry, 29% former Oliver Award winner Judge Victoria Chaney and 1% Vickie Pynchon. 

I have co-mediated at least a hundred cases with various highly respected mediators and bench officers in Los Angeles over the past four years and I have to say that Jerry Kurland is the most supple, savvy, even-tempered, big-picture mediator I have ever had the pleasure to work with.  And the hardest working. 

I know Jerry is booked months in advance, but if I had a sophisticated construction case with dozens of moving parts,  I'd book Jerry at the same time I filed my initial pleadings.

CONGRATULATIONS JERRY.  News item about his nomination below.

ANAHEIM, CALIF. (April 17, 2008) — JAMS Neutral Gerald A. "Jerry" Kurland, Esq. has been nominated for the prestigious 2008 West Coast Casualty Jerrold S. Oliver Award of Excellence. The award will be presented at the 15th Annual West Coast Casualty Construction Defect Seminar at the Disneyland Hotel in Anaheim, California on May 8th.

Named after the late Judge Jerrold S. Oliver, a JAMS mediator and arbitrator, and a "founding father" in using ADR to resolve construction claims, this award recognizes an individual who is outstanding or has contributed to the betterment of the construction community with the same spirit of commitment, loyalty and trust as that displayed by Judge Oliver. The award is affectionately known as the "Ollie Award." The organization puts out a call for nominees from 1,900 members of the construction community.

"We congratulate Jerry for being one of four finalists for this terrific award," said Chris Poole, JAMS President and CEO. "As one of our most respected neutrals in the field of construction, Jerry is known for his experience, talent, and great personal skills. He is certainly deserving of the nomination, and we wish him the best of luck in being selected as the award recipient."

Continue reading here.

• Email This
• Print
• Comments
• Trackbacks

I promised you a series of posts on mediating complex and sophisticated commercial mediation. 

Here's what I'm really most interested in doing -- starting a high level conversation among commercial litigators and commercial mediators about the best way in which we can help one another help your clients to achieve the best resolution possible to their commercial dispute and the legal problem/solution associated with it. 

I'm always looking for the smartest guy or gal in the room because. I'm just a geek who really enjoys spending time with people who are savvy, astute, original well-read, and, well-spoken.  These people tend to see things more clearly than I do and that clarity of vision often results in a way of approaching problems that generates better results in a shorter amount of time than is the norm.

One of the smartest guys in any room is AAA arbitrator and Judicate West mediator, Jay McCauley.  O.K., he's Harvard Law and I'm just a state university girl.  But pedigree doesn't matter to me.  Brilliance and creativity does.  Jay and I have recently spent a lot of time talking about the way we feel that we're sometimes talking past our attorney clients and they us.  So we have plans to write some really interesting articles that we hope will help both mediators and attorneys achieve better results more consistently when they decide to settle, rather than to try, a case.

Jay's written a lot already.  And because I'm now getting around 11,000 hits/month (!!yay!!) I've decided to simply pull up his existing articles on mediating particular commercial disputes before launching our jointly written posts.  If any of those 11,000 monthly "hits" come from commercial litigators, we'd LOVE to hear back from you on this series.  

That said, here's Jay's article on Wage and Hour Class Action Mediation.     

There is no such thing as a "cookie cutter" mediation. Nonetheless, most mediations have, among other things, the following general characteristics: 

•  At least four participants whose interests are not naturally aligned - Plaintiff, Plaintiff's counsel, Defendant and Defendant's counsel. 
• Little or no genuine concern that a settlement will foster future claims. 
• Some prospect of integrative, or "value adding," resolutions. 
• A rich body of applicable case law to serve as the empirical basis for risk-based claims valuation analysis. 
• A virtually unrestricted free market where almost any resolution agreeable to the parties can be turned into a contract fully enforceable by the courts.

Wage & hour class action mediation, by contrast, has none of these characteristics.

• Mediating with Only Three Participants

All fictions aside, there are three, not four, interested participants in a wage & hour mediation. They are the defendant, its counsel, and the counsel for the class. Plaintiffs themselves (including the named representatives) are literally absent from the negotiation altogether, and are typically absent physically from the mediation sessions.

Any imbalance resulting from the absence of plaintiffs themselves is, in theory, "corrected" by an institutional device unique to class actions: the fairness hearing, in which a court imposes outside boundaries on the settlement for the protection of the plaintiffs.

Nonetheless, the absence of the plaintiffs themselves is significant. The court is not, in any sense, a substitute negotiator for the plaintiffs. It simply either approves or rejects the settlement agreement, in accordance with reasonably well-established standards, after the settlement has been negotiated by plaintiffs' counsel and the defense team.

The actual negotiators have a common interest in avoiding agreements so extreme that they will be either rejected by the court, or undermined by excessive "opt-outs" from the plaintiffs themselves. But subject to these outside limits, the three players at the negotiating table have an interest in maximizing two things: the portion of the settlement funds that goes to plaintiffs' counsel as approved fees; and the portion of the settlement funds available to be returned or otherwise used by the defendants.

The upshot is this: Plaintiff's counsel seek, and usually get, one third of the settlement funds as fees; amounts unclaimed by class members revert to the defendant to the extent the court permits ; and the stated settlement amounts include the resulting social security and FICA charges the company will have to bear as a consequence of the settlement - an amount that turns out to be 13.85% of the total paid to the class members. These terms are easily arrived at because those at the negotiating table can "give" each other these benefits, without cost to themselves.

The absence of the plaintiff also eliminates one of the most common challenges a mediator has to face in "ordinary" litigation - the challenge of plaintiffs resisting economically advantageous proposals because of a desire to use the courts to obtain perceived benefits that go beyond economics: retribution for perceived wrongs; public vindication; and principled refuge in the Rule of Law.

This not to say that the issues addressed in wage & hour class action mediations are entirely economic. But the non-economic issues characteristically arise from the defense side, and tend to break down into two categories. The first category is the common "principled" resistance to a fairly rigid statutory scheme that typically strikes defendants as entirely inconsistent with the statutory purpose and with common sense. Specifically, those rationally thought to be managers cannot be treated as exempt in California if the time they spend in identified categories of non-exempt functions (e.g. sales) happens to take up more than half their time. The "player-manager" may be thought of as a manager, but there will be exposure if he is paid like a manager, and that fact is a hard-to-swallow surprise for many companies. 

• The Defendant's Need to Deter Future Claims
  
  Then there is the second form of defendant resistance to otherwise attractive settlement opportunities. This one is born of a genuine dilemma: the company concludes it cannot "turn managers into foremen" without losing the critical work incentives or esprit-de-corps or "company culture" that it concludes comes with classifying class members as exempt; but to "buy off" the class action claim through settlement without also turning class members into non-exempt workers for the future would be to inspire, by that act, endless waves, every three or four years, of new wage and hour claims.

These claims would come from new employees who are not collaterally estopped or otherwise bound by the class action judgment supporting the settlement. It would also come from its current employees, class members, who have a basis to argue their release can only apply to past "wrongs," but cannot release the continuing "wrongs" that take place after the release is entered into. Such companies are sorely tested take their chances at trial to escape the dilemma. The prominence of that question is an unusual hallmark of wage & hour mediations. And much of the focus of mediations I have handled has involved finding creative solutions to this very dilemma.

• The Absence of Integrative Bargaining Opportunities
  
  While there is a need to find creative techniques to subdue extraordinary needs for deterrence that wage & hour defendants will often have, there is a curious absence of opportunity to employ another form of creativity - that of finding integrative (rather than purely distributive) resolutions to the dispute. With one obvious exception , the "Jack Sprat" non-monetary exchanges that are the special joy of mediators - where parties give what's cheap to get what's dear, and thereby optimize the likelihood, as well as the quality, of the resolution - are not to be found in this arena.
  
  The reason is not that negotiators in this specialty are not creative, but simply that the inherent nature of class actions virtually eliminates any prospect that the form of any exchange will be anything other than money. Specifically, one stricture of class actions is that similarly situated class members be treated uniformly, and the only uniform needs the members will have is the presumptively universal need for money. As a result, the nature of class action bargaining is heavily distributive, not integrative. 
• The Absence of a Rich Body of Case Law to Support Risk-Based Claims Valuation Analysis
  
  It is a bit of an irony that a field which is so tilted toward distributive bargaining is also one in which mediators are essentially deprived of a major tool used to facilitate such bargaining - a substantial body of actual outcomes at trial in analogous cases to provide a realistic assessment of the actual risk of trial, and therefore the reasonable settlement value of a release. Because the large volume of wage & hour class actions is historically new, and because so few that do exist go to trial, little such evidence of likely outcomes in fact exists.
  
  What girds the negotiation in the absence of that evidence? It is four things. First, the statutory scheme in this area is fairly administrable, and results are arguably more predictable for this reason even in the absence of extensive actual results.
  
  Second, there is an extensive and ever increasing body of evidence of actual class certification decisions, and the factors relevant to class certification decisions in wage & hour actions are more closely related to the ultimate issues at trial than they are in other actions (compare, for example, securities fraud class actions, where the class certification issues have almost nothing to do with the significant issues at trial).
  
  Third, some narrowing of the range of potential settlement is achieved by the fact that extreme low ball offers typically are not made, even preliminarily, because both sides know (or can be reminded) that there is a certain threshold that will not survive a fairness hearing, nor sustain the plaintiff's counsels basic need to preserve reputation in the context of a settlement record that (unlike the settlement of individual claims) is always public.
  
  Finally, and perhaps most importantly, parties tend to be guided by a kind of "market price" for these claims - settlements tend to fall within a fairly well defined band established by publicly available information of what other cases have settled for relative to the total potential exposure in the case.
  
  What is notable is that, given the fairly strict and administrable standards of liability set forth in the statutes, the market price of the claims is probably materially below the amounts that a standard risk-based discounted claims valuation analysis would yield. This probably makes sense in light of the various incentives of the participants. Defendants need attractive offers (relative to exposure) to overcome both non-economic resistance factors as well as the lack of extensive palpable evidence of trial results. Defense counsel, paid hourly, have, if anything, an economic advantage to honor the client's resistance, as well as reputational and self-fulfillment benefits to keeping at least some quota of cases to try.

Plaintiffs' counsel, particularly specialists in demand, reach a certain threshold where the economically optimal course is to declare the offered amount to be enough and free up their time to fry another fish. And that threshold, in turn, need be no greater than a respectable outcome as compared only to the settlement market price itself. The Court, for its part, is institutionally loath to second-guess the norm, and institutionally dependant on most large cases settling in any event. Finally plaintiffs, themselves, are, for all practical purposes, absent from the process. They can opt out, and thereby preserve the right to bring claims on an individual basis, but the value of individual claims is rarely enough to warrant the transaction costs.

• Role of the Mediator
  
  It helps immensely for the mediator to have substantive familiarity with the rhythms and restrictions of class actions generally, and specific familiarity with the rights and duties of employers regarding wage and hour matters. That is the environment in which the mediator is applying his or her skills. But the mediator's primary contributions come from the use of more general "process skills" to anticipate, analyze and avert impasse in the negotiation process. Those skills are not unique to wage & hour mediations.
  
  Some taste of the actual process of analyzing and averting impasse may be provided by an actual example of an email I sent to defendant's counsel to overcome an impasse in a wage & hour class action I was mediating. The text - attached as "Attachment 1" - has been left in its raw form, with one exception: all names appearing in the original have been made generic so as to fully protect confidentiality. The case settled shortly after the email was sent.

John (Jay) McCauley is a mediator who also serves as an arbitrator on the Complex Commercial Panel of the American Arbitration Association and an Adjunct Professor at the Straus Institute for Dispute Resolution at Pepperdine University School of Law.  He is also a hearing officer for the ADR firm Judicate West.  

Website: www.mediate.com/mccauley.

E-mail: mailto:info@mccauleylaw.com

Phone number: (800) 848-5591.

• Email This
• Print
• Comments
• Trackbacks

Thanks to Geoff Sharp for leading me to John Day's terrific series of posts on What it Takes to Be a Great Trial Lawyer particularly Part 11, The Courage to Tell the Client the Truth, excerpt below.

As information is learned in a given case, great trial lawyers also tell their client the truth. They give an opinion about whether to make, accept or reject a settlement proposal, or indicate that the proposal is so within the range of reason to make it a toss-up. They give these honest opinions whether the client likes the advice or not, and explain the basis for the opinion.

A great trial lawyer will not hesitate to tell a client that the client is making a mistake by not taking a recommendation of the lawyer, but then will follow the client's wishes so long as the course of action is legal and ethical.

In other words, great trial lawyers understand that client is the boss, and unless the client is demanding illegal or unethical action or the relationship between lawyer and client has become so impaired that the lawyer cannot adequately represent the client, the lawyer yields to the client's wishes.

• Email This
• Print
• Comments
• Trackbacks

From AAA arbitrator and Judicate West mediator Jay McCauley's website:  The Role of Specialized Settlement Counsel

At bottom, virtually all litigation is a tool of negotiation. The numbers say it all: Ninety-five percent of all filed lawsuits in fact settle before trial, and upwards of ninety-nine percent perhaps should. Nonetheless, the specialized and challenging task of negotiation is normally left to the “trial lawyer” – a person whose training and orientation are focused on trial preparation, and whose efforts at negotiation are almost always secondary and often ineffectual.

The problem is not that trial lawyers don’t settle lawsuits; they almost always do. But when the mission of settlement is left to the trial lawyer, opportunities for early and optimal settlements are lost.

The solution for clients is not simply to engage trial lawyers who are sensitive to the task of negotiation and skilled in that art. Regardless of such lawyers’ negotiating skills, the reality is their task cannot be optimally accomplished while they are otherwise burdened with the "role” of being the trial lawyer.

The reason for this is basic: negotiation, by its nature, is driven by an inescapable tension – the tension between cooperation and competition. To display enough cooperation to promote early settlement, a trial lawyer almost inevitably must risk the client’s competitive position in the bargain. When a trial lawyer extends a proposed resolution to the adversary, the adversary will focus not only on the advantages of the proposal, but also on the firmness of the trial lawyers’ resolve. When a proposal is attractive enough to be tempting in itself, the fact that it is offered at all undermines the trial lawyer’s apparent resolve to fight, thereby tempting the adversary to do the wrong thing: defer or avoid serious settlement discussion.

Trial lawyers know this. And a vicious cycle therefore develops – to protect against the risk of appearing to lack resolve, they naturally tend to make their opening bids extreme. As a consequence, their adversary is characteristically left with nothing but two bad options: either to respond in kind (with an equally extreme and polarizing counter-offer) or not respond at all. Further negotiation is thereby sidetracked, while each party spends more time and treasure on “trial preparation” – i.e., extensive and expensive discovery exercises – to show further resolve and thereby bring the other side to its (apparently missing) senses.

Repeated experience tells us this vicious cycle is rampant in litigation. And an extensive body of literature from the fields of game theory and cognitive psychology tells us why: litigants are playing out the consequences of reactive devaluation – the dynamic wherein an otherwise attractive proposal becomes unattractive by virtue of its being presented by the adversary. See Lee Ross, “Reactive Devaluation in Negotiation and Conflict Resolution,” in Barriers to the Negotiated Resolution of Conflict (Kenneth Arrow et al, eds., 1995).

What, then, is the solution? Police departments bargaining for a confession from the suspect really do separate the “good cop” role from the “bad cop” role. Clients exposed to major lawsuits would do well to separate the roles as well – by engaging a specialized settlement counsel in addition to the needed trial lawyer, and commissioning the settlement counsel to bring his or her skills to bear on a single critical objective: early and optimal resolution of the dispute.

Who are settlement counsel? They are, by background, experienced trial lawyers capable quickly to become intimately familiar with the subject matter of the dispute at hand. They are also more than this: specialists in the methodology of risk-based claims valuation analysis and in the science and art of interest-based negotiation. Ideally, they are also experienced in the techniques of mediation advocacy, and familiar enough with the mediators in their community to advise and represent the client in achieving mediated resolutions in cases that warrant that treatment.

But they are not the trial lawyers for the case. By design, their mission is a short one. If they do not achieve a settlement quickly, they pass the baton to the trial lawyer, along with the full benefit of their early analysis. Their role is revealed to the adversary from the outset. It is because they are nothing more and nothing less than settlement counsel that they can afford to use some needed cooperative techniques to foster early resolution. No lack of resolve is conveyed by that effort. They can demand and measure a response in kind from the adversary, and exact a unique penalty if that response is not forthcoming: their own departure. The adversary knows from the outset that if, through recalcitrance, the mission of early settlement is not achieved, a new lawyer will appear – one who is single-mindedly focused on an entirely different mission: victory at trial.

• Email This
• Print
• Comments (2)
• Trackbacks (1)

UPDATE:  FOR THE LAW.COM AMERICAN LAWYER ARTICLE ON THE NEGOTIATION OF THIS SETTLEMENT, FAMILIAR FACES CENTRAL TO SETTLEMENT (ETC.) CLICK HERE; EXCERPT BELOW:

When you're negotiating a multibillion-dollar settlement, it helps if you've already made similar deals with the lawyers on the other side of the table.

The veteran dealmakers who put together W.R. Grace & Co.'s settlement of asbestos claims, which was announced Tuesday, "know each other well and know the process well," says David Bernick, the Kirkland & Ellis partner who led the talks for Grace. The lawyers representing asbestos plaintiffs in the negotiations were Perry Weitz of Weitz & Luxenberg, Joseph Rice of Motley Rice, Steve Baron of Baron and Budd, and John Cooney of Cooney & Conway.

"These are the same folks I've done business with for many years," adds Bernick. "That makes it much, much easier."

For remainder of article, click here.

The Baltimore Business Journal announced today the W.R. Grace & Co. tentative $2B settlement on asbestos claims here. 

W.R. Grace & Co. Inc. has reached a proposed settlement of all current and future asbestos-related personal injury claims against the company -- a huge step toward Grace's goal of emerging from bankruptcy reorganization.

Columbia-based chemicals giant Grace (NYSE: GRA) filed Chapter 11 bankruptcy in 2001, facing huge liabilities related to asbestos. The company said Monday that it has reached the tentative settlement with a committee of asbestos personal injury claimants, a representative handling future claims and a committee of Grace stockholders.

The complex settlement would total more than $2 billion and would include:

• $250 million in cash;
• Deferred payments of $110 million per year for five years beginning in 2019, and $100 million per year for 10 years beginning in 2024. The deferred payments would be backed by just over half of Grace's common stock;
• Warrants to buy 10 million shares of Grace common stock at an exercise price of $17 per share. The warrants would expire a year after Grace's reorganization plan takes effect. Grace shares were trading at $26.78 late Monday morning, up 8 percent;
• Rights to proceeds of Grace's asbestos-related insurance coverage;
• The value of cash and stock under settlements of litigation with Sealed Air Corp. and Fresenius Medical Care Holdings.

For the complete article, click here.

• Email This
• Print
• Comments
• Trackbacks

HERE IS THE LINK TO THE ALLSTATE MCKINSEY DOCUMENTS; YOU MUST AGREE TO VIEW THE DOCUMENTS FOR NEWS OR INFORMATIONAL PURPOSES:  CLICK "ACCEPT" AND YOU WILL BE DIRECTED TO A PAGE CONTAINING ALL OF THE DOCUMENTS MENTIONED HERE

See also Tort Burger's Post on the Zero Sum Game Aspect of this Controversy here.

I have had a lot of traffic to this post and comments here and elsewhere on the internet about it and the Slabbed post it excerpts.

Because I never meant to "take sides" on a matter I know next to nothing about, I'm now including along with the Slabbed excerpt originally posted, an excerpt of a recent article from Bloomberg.com - Allstate Releases McKinsey Records (etc.) below.        

This post was originally meant to highlight Allstate's (or its consultant's) unfortunate use of the term "Zero Sum Game," when discussing claims handling procedures.  My original comment was that "those who continue to play it often get their  . . . uh . . . soft parts caught in a wringer."

The Slabbed post highlights the damage done to an admitted "Zero Sum Game Player" who is engaged in a human-harm-cost-benefit analysis.  The Pinto punitive damages award came readily to mind because the case was decided while I was in law school learning about negligence.      

For my non-attorney readers, I need to stress that it's not wrong to engage in a cost-benefit analysis for the compensation of injury under a negligence system.  In fact, this is what the law itself (and injured Plaintiff's attorneys) do, i.e., "calculate" the risk of harm + the potential severity of the injury against the cost of avoiding that harm.

People react badly when they see that type of calculation being applied to human injury or the loss of human life because those losses are considered to be "incommensurable," i.e., no amount of money can recompense someone for, say, the loss of a child. For an excerpt from my own article discussing the concept of incommensurability -- The Cost of a Thing is Your Life, click here.

I'm hoping my non-attorney readers will understand that these formal monetary calculations are routinely made by businesses and governments when making decisions about how much risk to human life is worth taking when they engage in potentially dangerous activities for the purpose of creating a significant benefit for many. 

That said, I give you again this excerpt from Slabbed's post on the McKinsey Allstate document furor -- The Herald Tribune Takes the Allstate Challenge --

In a previous post that received a notice in the Silicon Investor BB I spoke of insurers and their lawyers using the court system as instruments of institutionalized bad faith. Indeed Allstate has taken much criticism for ignoring lawful subpoenas over these documents as well as substantial fines as noted by Ms St John. This brings me to the beginning of the main story.

For more than a decade, Allstate Insurance Co. kept a secret from its auto policyholders — a national strategy to force customers to accept reduced cash payouts or face years in court.

Thousands of pages of Allstate documents reviewed by the Herald-Tribune detail how the nation’s second-largest insurer systematically cut payments to customers as a way to boost profits.

The documents describe a two-pronged strategy.

First, the company evaluates claims with a computer program designed to reduce payouts by as much as 20 percent of what the company once paid for the same injuries.

Second, Allstate pushes policyholders to accept quick settlements without the help of lawyers. Policyholders who try to fight for more money face Allstate attorneys coached to refuse to negotiate and to drag out litigation.

The approach often forces car accident victims to take what Allstate offers right away or spend years in court while their bills go unpaid — a strategy Allstate spelled out in guidelines for claims adjusters that “forces the claimant and attorney to think about the obstacles they must overcome …”

Indeed it appears we have a road map of how tort reform is being used against us. Limits on damages only make it easier for these large insurers to get away with outrageous behavior. The story continues:

It was a “Zero Sum Economic Game. Allstate gains … others must lose,” declared a consultant’s PowerPoint slide from a 1994 presentation to executives.

During the next five years of Allstate’s claims overhaul, the same consultant, New York-based McKinsey & Co., chose confrontational words to describe the new system. In PowerPoint presentations and discussion papers drawn up for Allstate executives, McKinsey used “boxing gloves” to characterize how Allstate should treat policyholders who balk at settlements. For customers who hired lawyers, McKinsey urged, “align alligators,” adding these instructions: “sit and wait.”

The documents also show:

Allstate removed much of the discretion of local claims agents to set payouts, requiring them to base their recommendations on a computer program called Colossus. Under that program, average payouts for bodily injuries dropped more than 20 percent in the first few years, internal documents show, a big step toward reaching McKinsey’s goal of “establishing a new fair market value” of such injuries.

Allstate recognized that when an injured driver hired a lawyer, the insurer lost money. In repeated presentations to Allstate executives, McKinsey coached tougher and increased legal action. By 1996, Allstate had doubled its legal force, hiring 225 more lawyers. “The bottom line is that Allstate is trying more cases than ever before,” a corporate newsletter said . . .

For full post from Slabbed click here.

Bloomberg.com's article, Allstate Releases McKinsey Records (etc.) Update No. 2 is here.

Excerpt from Bloomberg.com article below:

Allstate Corp., the second-biggest U.S. home and auto insurer, released 150,000 pages of documents sought by opposition lawyers and company critics related to McKinsey & Co.'s review of claims-handling practices.

McKinsey suggested strategies for the company to become more profitable by paying less in claims, according to videotaped evidence presented in Fayette Circuit Court in Lexington, Kentucky, in a civil case involving a 1997 car accident. Lawyers for policyholders said Allstate's previous refusal to release the documents showed the company wasn't treating its customers fairly. The insurer has said the documents include trade secrets.

``Public criticisms by people with a vested interest in creating an inaccurate picture of the company's claim practices have been based unfairly on only snippets from the documents taken out of context,'' the Northbrook, Illinois-based insurer said in a statement today. ``Because of the need to address misunderstandings resulting from the growing misplaced focus by our critics on very small pieces of the whole, we have decided to make the documents public.''

One slide the consultant prepared for Allstate was entitled ``Good Hands or Boxing Gloves,'' and recommended the insurer put on ``boxing gloves'' to deter about 10 percent of claims deemed to be exaggerated, padded, or fraudulent, according to portions of the report shown to the Kentucky jury. For more than 50 years, Allstate has advertised its employees as the ``Good Hands People,'' telling customers they will be well cared for in times of need.

Rising Claims

The strategy proposed by McKinsey would ``send a message to the attorneys of our proactive defense stance'' in cases dealing with minor impact soft tissue injuries, the consultant said in the document. Lawyers would have to ``think about the obstacles they must overcome to recover significant settlement or the benefits of a smaller, walk-away settlement.''

Allstate implemented the plan in the 1990s because studies showed more people were submitting claims even though accident rates were declining and cars were safer, Allstate lawyer Floyd Bienstock told the Kentucky jury. The McKinsey report found Allstate was overpaying bodily injury claims by 16 percent, Bienstock said.

``It was never a plan to intimidate people,'' he said.

To continue reading, click here.

• Email This
• Print
• Comments (12)
• Trackbacks (1)

Lawyers ask me this question more often than any other.  This week's Blawg Review Host -- TechnoLawyer -- reminded me that I once wrote a very short article on the topic -- contained in the TechnoLawyer Problem Solution Guide available again at the Blawg Review No. 152 here.

Using Your Case Management Order or ADR Panel to Convene Your Mediation

There are many reasons you may not wish to initiate mediation. Many lawyers justifiably do not wish to appear overly desirous of settlement. Others are discouraged because their opponents

• long ago indicated their client would not consider paying/accepting anything less/or more than $X, which is a non-starter;
• say they won’t consider settlement until after some key event; or,
• insist their client will “pay millions for defense but not a penny in tribute.”

The best way to encourage settlement discussions without any loss of face is to agree upon a mediator (or mediation services provider such as Southern California’s Judicate West) at the commencement of the case, authorizing the neutral to suggest mediation at any time without prompting by the parties. This is the general practice in most multi-party construction defect cases and there's no good reason to limit the benefits of this practice to complex litigators.

This strategy permits one party to suggest mediation to the neutral who can then initiate a negotiation session without divulging who, if anyone, sought the mediator’s assistance.
Any mediator worth her salt will be trained in and skilled at convening mediations without party pressure.

Some, but not all, mediation service providers also possess these skills. Judicate West’s case managers, for instance, are all skilled professionals with a minimum of five-year’s experience convening mediations for the parties.

At the commencement of your action, ascertain whether a neutral or ADR service provider in your locale specializes in the art of convening. A service provider like Judicate West will often know more about your opposition than you do, particularly in large legal markets like Southern California where you may well not “do business” with your opponent on more than one occasion.

• Email This
• Print
• Comments
• Trackbacks

Check out California appellate attorney Greg May's post today -- A Dilemma for Some Defendants Who Seek to Arbitrate here.  Excerpt below.  

It’s a long-held rule in California that a defendant sued on a contract may recover attorney fees pursuant to a provision in the contract even if the defendant prevails on a theory that he was not a party to the contract or that the contract is nonexistent, inapplicable, invalid or unenforceable. The rule exists in order to further the purpose of Civil Code section 1717, which is to make unilateral fee provisions reciprocal. . . . . 

Consider now whether a similar rule should apply to arbitration provisions. . . . . Should a defendant be able to compel arbitration pursuant to a contractual arbitration provision in a contract alleged by plaintiff even if the defendant denies the existence of that contract?

The court of appeal says “no” in Brodke v. Alphatec Spine Inc., case no G038591 (4th Dist. Mar. 20, 2008). .......................

For the full post, click here.

• Email This
• Print
• Comments
• Trackbacks (1)

The prestigious Straus Institute for Dispute Resolution has a new web site -- HERE!!! -- and a few videos that the beginning mediation or settlement advocate shouldn't miss.

Here's Judge Williams, who sits in the downtown Los Angeles Superior Court as a full-time settlement judge.  In the first part of his video, Judge Williams talks about the differences between settlement and mediation as well as a few of his favorite topics -- CHOICE, RESPECT, JUDICIAL ECONOMY ACCESS TO JUSTICE and EFFICIENT CASE MANAGEMENT. 

In part 3 of the video, Judge Williams discusses basic mediation concepts such as interest-based and distributive bargaining; impasse-breakers; trust-building; shuttle negotiation diplomacy; mediators' proposals and the like. 

If I missed Judge Williams saying "you have to hang the meat low enough for the dog to smell it," I'll apologize to him for inattention the next time I see him.  If he didn't say it, I'll be looking for the next part of the video, where gems like that may be found. 

If you wonder "why the orange?" -- listen to part 3.

Judge Helen Bendix, the Chair of the Los Angeles Superior Court ADR Committee, talks about the contribution of the Court's ADR program to the administration of Justice.  That program has not only settled thousands of cases, but has served as the training ground for thousands of mediators in assisting litigants in negotiating the resolution of their lawsuits. 

Co-Directors of the Straus Institute, Tom Stipanowich and Peter Robinson address mediation issues for the first part of this video.  If you want to go directly to Judge Bendix's discussion, move the slide bar to the middle of part 1.  

• Email This
• Print
• Comments
• Trackbacks

Sometimes reading my statistics page is the best way I have of taking the pulse of my readers and diagnosing the current actual rather than the aspirational state of settlement and mediation practice.

Listen.  Only the squeakiest client or party wheel will tell you that he is feeling coerced into settling the litigation that has become a millstone around your neck.

I'm talking to attorneys here -- but settlement officers, judges and mediators should pay attention as well.  Whether you're representing the CEO of a Fortune 500 Company or the 60-year old man who slipped on the iconic darkened bananna peel in the produce section of the local Ralphs, at some point during settlement negotiations your clients are going to suspect one or more of the following:

1. you're tired of his case and want to get rid of him
2. you're in cahoots with opposing counsel, with whom, frankly, you have a far more enduring if not affectionate relationship than with your client
3. you and your old buddy the mediator or settlement judge/officer have joined forces to to compel him to give up his legal rights in exchange for less money than you, his attorney, told him he was likely to recover two years ago
4. despite his protests, you, the mediator and opposing counsel keep saying the fact most important to his case  is "irrelevant" to his chances of recovery
5. when you talk to opposing counsel or the mediator about the case, he doesn't even recognize what you're talking about -- this is not the same case he brought to you to try two years ago
6. he feels extorted and no one is paying any attention to that
7. he feels like he's being sold down the river and no one is paying any attention to that
8. he paid his you and your law firm tens of thousands, hundreds of thousands, millions or tens of millions of dollars in attorneys fees and he thinks he could have settled the case for the sum that's being offered/demanded now before he paid you to litigate this case to the settlement conference.
9. he's really really irritated now -- angry even -- though he doesn't get angry; he gets even, and he'll have no trouble spending another few million on attorneys fees so show that lying, cheating so and so in the other caucus room a thing or two
10. he's a successful business man and he's never been treated with so little respect before.

Now let me tell you something else.  If these thoughts are some of those which race through your clients' minds during settlement conferences, your mediator should be sufficiently alert to the changing temperatures in the room to address them. 

Why?

Because the mediator's job is not to settle the case.

What??????????????????????????

The mediator's job is to:

1. assist you in helping your client understand the options available to him
2. assist you in delivering bad news to your client in a way your client can hear it
3. assist you in negotiating as good a settlement as possible for your client without making your client feel as if he has no other options
4. assist you in resolving for your client the justice issues that your client originally brought to you to resolve
5. assist you in helping your client recognize and set aside the emotional experience of the settlement conference for the purpose of doing a sober cost-benefit analysis
6. assist you in helping your client recognize that legal cases change over time; sometimes getting better and sometimes getting worse, usually both in the discovery process -- this is not the case your client originally brought to you -- untarnished by the harsh adversarial systems but puts "facts" to a more exacting test than any other process in business, political or social life
7. assist you in helping your client recognize his own fallibility, potential for error, and accountability for his part of the harm for which he is seeking recompense
8. assist you in helping your client recognize that the other side -- evil, destructive and hateful as it may well be -- also has a few items of "truth" and "justice" on its side of the balance sheet
9. assist you in helping your client make an informed decision without pressure from anyone whether he wishes to accept less than he wants to or would like to take his chances at trial
10. assist you in walking away from the mediation or settlement conference with your client clapping you on the back and saying, "great work, John.  If I'm ever in need of a litigator again, rest assured it's to you I will come.  I'll tell my friends on the block or on the Board of Directors that you're the man.

How do we accomplish these ten aspirational goals together -- attorney and mediator and client?  Stay tuned.

The Jerry McGuire video above is for our clients -- with whom we do not share just how hard we are working and what a toll it takes upon us because that's what they've paid us to do -- and paid us handsomely I might add.

• Email This
• Print
• Comments
• Trackbacks

But if you are still practicing law,

download this

great practice guide from

Merrill-Legal

Maintaining the Chain of Custody in Civil Litigation.

• Email This
• Print
• Comments
• Trackbacks

Thanks to Tulane Law School Professor Alan Childress over at the Legal Profession Blog for alerting us to this item No Bias on Encouraging Settlement about a Rhode Island Supreme Court ruling that a Judge needn't recuse himself for bias if he encourages the parties to settle. 

As Georgetown Adjunct and Legal Profession Blogger Michael Frisch reports,

the plaintiff [in that case] argued that the judge's encouragement of settlement talks demonstrated bias; the court strongly disagreed. It is entirely appropriate for a judge to suggest that parties resolve their claims through mediation. . . "No less renowned a figure than Abraham Lincoln recognized the desirability of settlement when possible...it borders on the offensive for a party to claim that a justice should be recused for adhering to this policy [of encouraging settlement]."

As "amusing" as this might first be to lawyers, I don't want to let it pass us by without pausing a moment to consider the possible communication gap between Judges and lawyers -- on the one hand -- and people seeking justice -- our clients -- on the other.

People Seek the Services of Lawyers to Solve a Justice Problem

Having recently earned my LL.M and taught a semester of ADR theory and practice to law students, I can report back from the law school trenches that cynicism about justice is not limited to old dogs like me.  By their second year in law school, most aspiring attorneys have narrowed their view of justice/injustice to those wrongs the law will remedy.  See Writing on a Piece of Rice in a World of Injustice.  More troubling, they've narrowed to a vanishing point their former hopes, if any, to be part of a system that delivers justice.

When I ask defense attorneys in settlement conferences why they think their opponent filed the lawsuit against their client they answer with a single voice:  MONEY! 

"But why do you think they hired a lawyer," I persist. 

"Money," they respond again, as if I'd suddenly lost all reason.

"But why did Mr. X even think of seeking resolution in Court . . . under the law . . . why did he turn to the justice system?"

"For justice?"

Losses the Law Will Redress

People suffer losses every day of the week.  They lose their luggage in Madrid.  They don't get a raise or a year-end bonus.  They slice off the tip of their finger while chopping onions for Sunday dinner.  If they are lawyers of my generation, they got a 610, instead of a 700 on their LSAT -- thereby losing any hope of attending an Ivy League law school.  

The cynical persist.  "People have been known to sue for those losses too," they say.  

True, but they are among the very very very few.  Most people who undertake the considerable effort to find an attorney willing to take their case do so because they believe they have been treated unfairly.  They believe themselves to be victims of an injustice.  

And attorneys, not clients, are the first ones who monetize injustice for their clients.  Still, years after that injustice has been monetized, right before trial when most mediations and settlement conferences take place, the clients continue to long for justice. 

A Monetary Solution to a Justice Problem

So we should pause before we give in to the temptation to make light of the client who must have urged his lawyer to recuse the Judge for even suggesting that he not immediately be given access to justice -- a jury trial.  A client who likely feared he'd be strong-armed into accepting injustice in a Court suggested mediation.    

Our clients are speaking and we are not listening.  We are in danger of processing monetary claims rather than helping our clients come to terms with the justice issues they brought to us to resolve. 

As a mediator, I can tell you that most clients need to have monetary resolutions framed as "fair" or "just" results.  And if that is impossible, they need -- at a minimum -- to have the injustice they are suffering acknowledged by the mediator.  

As to those Judges who "encourage" mediation, I suggest that the directive be framed as an attempt to achieve, through settlement, that which it may not be possible to achieve in Court.  I would, in all events, assure the people seeking justice who appear before me, that I will be there, ready and able to try their case -- happy to serve their justice needs -- if the mediation I suggest they pursue fails to deliver the fair result they are seeking.

• Email This
• Print
• Comments
• Trackbacks

I was a commercial, antitrust, IP and securities litigator long before I devoted nearly a decade of my practice to environmental coverage litigation.  In the process, I learned enough about Comprehensive General Liability ("CGL") coverage to make me worry about how well I'd served my commercial clients in regard to the insurance coverage potentially available to them.  

If you are a commercial litigator -- or any type of litigator who defends your clients against claims for damages or for injunctive or other equitable relief -- you must

1. ask your clients for all of their insurance policies, even those that seem unlikely to provide coverage; 
2. carefully review the precise wording of the insuring agreements and research the case law in the relevant jurisdiction to determine how the courts have interpreted those insuring agreements under facts similar to those your client's case presents;
3. except for some narrow additional protections provided to insureds, be aware that there is no such thing as "the law" of coverage under any particular type of policy -- all coverage flows directly from the precise language of the insuring agreement
   1. in most jurisdictions, that language -- if ambiguous -- is interpreted in favor of the insured's objectively reasonable expectations; and, 
   2. in most jurisdictions the rule of contra proferendum will require a court to construe any ambiguity in an insurance policy against the insurance carrier
4. carefully review the exclusions contained in those policies and research the relevant state's case law (as well as federal cases applying state laws) interpreting those exclusions; 
5. before concluding that there is no coverage, read available treatises as well as recent law review articles that may well suggest creative ways of distinguishing adverse authority or extending existing principles to bring your client's claims within the terms of the policy or outside of pertinent exclusions;
6. if you have any doubt whatsoever about the existence of coverage, tender the claim to your client's carrier and let the carrier do the analysis;
7. if the carrier denies coverage, read the reasons for denial critically and respond with any reasonable interpretation of the policy that will support a claim of coverage;
8. if the carrier continues to deny coverage, keep the carrier informed of the progress of the litigation and invite the carrier to respond to all settlement demands and to attend all mediations and settlement conferences.

If the cost of the lawsuit is beyond your client's means or will deprive it of capital necessary to meet its business goals for the next few years, retain coverage counsel for a second opinion. 

Have I mentioned that my beloved husband is one of the best coverage attorneys in the country -- having litigated the World Trade Center coverage action on behalf of Larry Silverstein's lender GMAC?  And that I formed my opinion about his brilliance while I was representing the London Market Insurance Carriers and he was representing the policy holder?  Even if your case does not justify hiring someone like my husband to give you a second opinion, there are lots of good coverage attorneys out there who can so that you can complete your coverage "due diligence" for your client.

At last, to the 2007 Fifty State Environment Coverage Analysis

I ran across this great resource while doing a little online research.  It's a comprehensive review of the law pertaining to the interpretation and application of insurance policies to potential or actual environmental liabilities entitled Environmental Insurance Litigation 2007   --  A State by State Case Law Survey by Michael F. Aylward, Esq. of Morrison Mahoney LLP.

If your clients have been hit with demands to clean up toxic waste, this is an invaluable resource.  A specialist in the field, however, should be consulted to maximize the chances that coverage will be provided.

Have I mentioned that I'm on the Insurance Coverage Mediation Panel of Neutrals with the  International Institute of Conflict Prevention and Resolution ("CPR")?  And since I'm a former defense coverage attorney currently married to policy holder counsel, you're unlikely to find many other mediators who are both extremely knowledgeable about the law of coverage and deeply neutral!

• Email This
• Print
• Comments
• Trackbacks

Because a reader recently suggested that "facilitative" mediators "tell the parties what to do," I decided it was time to revisit our terminology.   

Mediators!  Litigators!  Please feel free to weigh in!

FIRST, LET'S JUST GO AHEAD AND ADMIT UP FRONT THAT NEGOTIATION IS A COMPETITIVE SPORT -- the goal of which is to take the largest part of the delta between the two parties' real bottom lines.

EVALUATIVE MEDIATION

Evaluative mediators provide the parties with an evaluation of the strength and weaknesses of their legal positions, usually in separate caucus. If asked, the evaluative mediator will give his/her opinion about what verdict a jury would likely deliver.  Though I've co-mediated with sitting Judges quite a lot (the paradigm of evaluative settlement officers or mediators) I rarely see them tell the parties what to do -- see DIRECTIVE MEDIATION below.

Evaluative mediators often end a session with a mediator's proposal, i.e., the mediator chooses a number he/she believes would be acceptable to all parties (not necessarily what he/she believes the case is "worth") and tells the parties. If both parties accept, the deal is done. If either rejects, neither will know if the other party accepted.

I rarely make a mediator's proposal -- preferring to help the parties move toward resolution so long as no one is walking out.  They really do feel better making their own decisions.  That's why they've come to mediation and not arbitration.  So long as I believe the parties' differing "bottom lines" might overlap, I encourage continued discussion even when the parties are feeling exhausted and cranky. Persistence and optimism about resolution in equal measure. Sometimes the process just needs a cheerleader.

FACILIATIVE MEDIATION OR FACILITATED NEGOTIATION

Faciliatative mediators assist the parties, again often in separate caucus, to decide how the bargaining session will proceed, i.e., how high a first offer or demand should be; which party might benefit the most from making the initial offer; how many concessions the parties should consider making during the course of the negotiation; and, what reasoning might spur their opponent to make another concession.  Once again, I rarely see the mediator, settlement officer or Judge tell the parties what to do. But see DIRECTIVE MEDIATION.

TRANSFORMATIVE MEDIATION

Transformative mediators strive to empower the parties to express their true needs and desires; to shift from self-concern to understanding of the other and to move from entitlement and blame to accountability.  Transformative mediators do not direct the process of the mediation, which is always held in joint session.

Transformative mediators encourage the parties to set their own ground rules; state what their own desires and interests are; and, express themselves as fully as they wish, even if that includes persisting through angry outbursts, tears, recriminations, and the like.  

In its pure form, the mediator acts something like a therapist. Uh, huh, uh huh, anything else? Have you said everything to Jim or Julie that you want to say? Uh, huh, uh huh? Jim/Julie, what do you want to say back to Julie/Jim about that?  The purpose of transformational mediation is to resolve the conflict completely to the parties' mutual satisfaction even if that does not settle the actual dispute. See Bush and Folger, The Promise of Mediation.

DIRECTIVE MEDIATION -- Once again, I've never see Judge or mediator tell the parties to do anything other than to bring all the stakeholders and their insurance carrier representatives. I have, however, seen and done the following:  

I need $X from you to settle the case -- $Y is not going to do it. Please talk to you client/carrier and bring me back that number if you want to settle the case today.

This directive usually occurs very late in the proceeding and most often in a multi-party mediation in which a dozen or more defendants are contributing to the settlement. I also call this type of mediation FUND RAISING MEDIATION. I've never seen anyone do this better than Judge Victoria Chaney in the Complex Court in Central Civil West, Los Angeles.

My own "directive" suggestions to the parties generally concern the need for at least one party to step up to the line of impasse. If I believe the parties are bargaining in the nano-and stratospheres and are not getting within a hundred yards of where they'd really settle the case, I'll generally tell them so -- i.e.,

someone needs to step up to the line of impasse for this case to settle. If you don't do it, you'll likely lose your opportunity to resolve the matter today.

That's about as "directive" as I get, although I have been known to say I need $5,000 or $500,000 or $1 million more NOW. Or, I need you to drop your demand by $10K or $500K or $50 million NOW.

You can only do this if you have established a strong relationship of trust and confidence with both sides. Each side needs to know that you are not simply carrying the other side's bluff to them with your extra weight behind it. So directive and evaluative techniques -- I don't know their bottom line but I believe we're getting pretty close to it -- go hand-in-glove.  

INTEREST-BASED OR INTEGRATIVE MEDIATION

Ideologies aside, here's the real reason to probe party interests -- i.e., their genuine desires, expectations, fears, business needs, financial situation, lines of authority, reserves, reporting relationships, etc. -- it's the only way you can offer, with any credibility, your opinion about the "temperature" in the "other room" and the likelihood that party A might settle the case somewhere in the range of $X and party B somewhere in the range of $Y.

But as I tell my litigants -- "You only truly know what their bottom line is by negotiating in its direction."   I am often as shocked as the other side when the case settles for a number that one side said they would not accept. "As long as they are not walking out," I say, "they are willing to continue moving in your direction. Let's see where that takes us, shall we?"

DESPERATION MEDIATION:  ANYTHING THAT WORKS!!! 

• get the Plaintiff to concretize his monetary expectations, i.e., what he might do with the money to take the Court-as-Gambling-Casino element out of the process;
• ask the Plaintiff to imagine the offered sum sitting on the table before him -- to see it as a stack of cash or a thing or services or an improved quality of life he might purchase with it -- this makes the money real and more difficult to literally "leave on the table;"
• assist the defendant to:
  • subtract "sunk costs" from his/her/its calculations when considering the "body blow"  that paying money to their opponent will be;
  • brain-storm about business interests that could be satisfied by using the litigation as an opportunity to make a business deal;
  • come to grips with the loss that settling the litigation will inevitably entail, dealing directly and honestly about the issues of unfairness and injustice that must often be accepted to justify paying even a reasonable sum.
• don't let the parties leave until they've had principal-to-principal discussions -- the parties are often able to resolve a matter that their lawyers cannot because their lawyers are acting on instruction (I don't have the authority to settle for that) whereas the principals have more flexibility on often arbitrary "bottom lines" -- this also helps humanize the opponent who has been thoroughly demonized by the process of adversarial litigation (see autistic hostility)
• LISTEN, ELICIT, EMPATHIZE, REFRAME, HARMONIZE, and  APPEAL TO MUTUALLY SHARED HIGHER PRINCIPLES

Questions?

• Email This
• Print
• Comments (2)
• Trackbacks

Thanks to Drug & Device Law for pointing us to the CSPAN video of a recent forum on the VIOXX settlement here.

This American Enterprise Institute forum will not be beneficial to plaintiffs who are searching for advice on whether to accept the settlement themselves. I refer those people back to their attorneys. 

Here's a link to a Yahoo discussion group for Plaintiffs making the decision whether to accept the offer.

For reporters who are following this story at depth, the video includes a sophisticated presentation by Jones Day attorney Mark Herrmann about settlement strategy from Merck's point of view; a provocative presentation by Professor George M. Cohen -- who calls the settlement proposal an illegal antitrust conspiracy -- and a scholarly presentation by Professor Nagareda on the public policy issues raised by the settlement of mass tort claims.  

For attorneys who have been retained to provide their clients with a second opinion, Professor Cohen's presentation will be a useful addition to their own research and independent conclusions.  Attorney Andy Birchfield -- the only forum speaker with first hand knowledge of the negotiations leading to the settlement proposal -- may be of the greatest interest as he walks counsel for Plaintiffs through the structure, purpose and effect of the proposed settlement program.  

Speakers in this forum include:

The incredibly well-spoken Mark Herrmann of Jones Day and the Drug & Device Law Blog. 

Mark modestly fails to mention in his Blog post concerning this video that he is one of the speakers on this panel. 

Herrmann discusses the following questions:

1. did Merck's settlement strategy make sense; and,
2. will this settlement buy Merck peace.

George M. Cohen, University of Virginia Law School Professor who discusses ethical issues pertaining to the "settlement program proposal."  

Professor Cohen not only concludes that attorneys recommending this proposal to their clients are violating professional ethics, but asserts that it constitutes an illegal antitrust "conspiracy" as well. 

Vanderbilt Law School Professor Richard Nagareda, author of the book Mass Torts in a World of Settlement. 

Professor Nagareda discusses the settlement from a dispute resolution public policy standpoint. 

As a contract between Merck on the one hand and the "lawyers who have a large market share" on the other, Professor Nagareda suggests that the settlement proposal is more an artifact of the law flowing from the Supreme Court's AmChem opinion than of any legal "connivance" among the Plaintiffs' attorneys or between them and Merck.

This settlement proposal, he says, is a valuable and creative peace-making transaction for mass claims.   

Andrew Birchfield, an attorney at Beasley Allen and co-lead counsel on the Plaintiffs’ Steering Committee for the federal Vioxx litigation addresses the negotiations themselves and the structure of the settlement.

Andy says that in approaching settlement Merck required global peace -- that there couldn't be a "second round" because Merck had seen how disastrous open-ended liabilities could be for a corporation.

The plaintiffs' attorneys, says Birchfield, negotiated a settlement agreement designed to serve the best interests of each individual client no matter how strong or weak each of their cases might be.

Attorney Ted Frank of the American Enterprise Institute who once represented Merck in the Vioxx litgation. 

Frank talks about the law and economics of the settlement proposal, focusing on the weakest link of Plaintiffs' cases -- causation.

See also the Blog of the Legal Times coverage of this forum here.

• Email This
• Print
• Comments
• Trackbacks