The Winklevosses are sophisticated parties who were locked in a contentious struggle over ownership rights in one of the world’s fastest-growing companies. They engaged in discovery, which gave them access to a good deal of information about their opponents. They brought half-a-dozen lawyers to the mediation. Howard Winklevoss—father of Cameron and Tyler, former accounting professor at Wharton School of Business and an expert in valuation—also participated.
In specific response to the claim that Facebook misled the Winklevosses during the mediation leading to their execution of a skeletal “deal point” settlement agreement, the Court had several responses:
the mediation confidentiality agreement signed by all parties prohibited them introducing into evidence “in any arbitral [or] judicial. . . proceeding” any statements made during the mediation;
the skeletal deal point agreement provided for the execution of the broadest possible release of claims by all parties, which clearly encompassed the Securities Fraud cause of action the Winklevosses were attempting to pursue; and,
people engaged in litigation with one another have little reason to believe anything their adversary says when pursuing the settlement of a claim – a fact of life with which the Winklevosses and their stable of high-priced lawyers were well acquainted.
For lawyers and litigants, the central lesson of this case is far more important than the fate of a few billionaires. If you’re in federal court in the Ninth Circuit's hood (Alaska, California, Arizona, Hawaii, Idaho, Montana, Nevada, or Washington) you cannot rely on mediation confidentiality provisions contained in the District Court’s rules nor upon state law protections.
The evidence the Winklevosses asked the lower court to consider would have been admissible even though made in the course of a mediation if the parties had not entered into a written agreement to the contrary.If you're not thinking out all of the ramifications of the absence or presence of a bullet-proof confidentiality clause in your mediations, you might as well put your malpractice insurance carrier on notice right now.
So, Is It Over Yet?
Not on your life or the life of future Winklevoss generations. If those Olympic rowers had their way, this would be the internet’s Bleak House. When you’re already rich and insatiable, it’s never over brother. This from the Wall Street Journal:
Jerome Falk of Howard Ross in San Francisco, lawyer for the Winklevosses [said]: “I respectfully disagree with the Ninth Circuit’s conclusions. In my judgment, the opinion raises extremely significant questions of federal law that merit review by the entire Ninth Circuit Court of Appeals. For that reason, my colleagues and I will file a Petition For Rehearing En Banc within the next fifteen days.”
For a few ways to Winklevoss-proof your mediated settlement agreement (and avoid malpractice for having failed to do so) read on here. Hat tip to intellectual property lawyer Jackie Hutter for the new legal term. Jackie left this comment, appropriately on my Facebook page, this morning:
Working on a settlement now with a founder–lawyer said he is striving to make it “Winkelvoss-Proof.” They spent alot of money to lose this litigation, but at least they got a legal term named after them.
For my full article on the Winklevoss loss at ForbesWoman, They're Handsome, They're Rich and They Didn't Invent Facebook, click here.
As a member of the Los Angeles Chapter of the Federal Bar Association and incoming Chair of the FBA's ADR Section, I'd like to wish the Central District's new Settlement Officer Panel Czar a hearty welcome to the District and to Los Angeles.
Having served on the ADR panels of the U.S. District Court for the Northern District of California and other Bay Area superior courts, Ms. Killifer is well acquainted with the challenges facing federal attorneys, mediators, administrators and the judiciary in running the robust and highly qualified settlement officer panels that the U.S. Courts are known for.
Ms. Killefer served as an Assistant United States Attorney in San Francisco from 1989 to 2001. She served as a Deputy Chief, Civil Division, 1994-1998, and as Chief, Civil Division, 1998-2001. Prior to joining the U.S. Attorney’s Office, she served as a Trial Attorney with the U.S. Department of Justice, Torts Branch, in Washington, D.C., and as a law clerk to the Honorable Barrington D. Parker (D.D.C.). She received a B.A. from Stanford University and a J.D. from the Vermont Law School.
Welcome Gail!! We have a great community of neutrals here, all of whom are all eager to get to know you (without overwhelming you with Welcome Wagon invitations) and to assist you in any way we can with your challenging and important new position.
Thanks to the SCOTUS Blog for the following resources on the upcoming Kagan hearings. Follow SCOTUS Blog all week for commentary.
Why should negotiators be interested in the composition of the Supreme Court? Because the freedom to negotiate requires a strong rule of law culture. And because everything we negotiate assumes the enforcement of certain agreements and non-enforcement of others, of particular interest to negotiators and ADR practitioners - arbitration agreements.
More important than her religious background (Jewish) her Ivy League Credentials (Harvard) her progressive, liberal or conservative Democrat political leanings, is the prospect that Kagan's addition to the Supreme Court will result in the magic number of three women on the United States Supreme Court.
The not so secret opinion among mediators is that attorneys make settlement more difficult. Just as lawyers are heard to say that "litigation would be great if it just weren't for the clients" (a "problem" only class action plaintiffs' lawyers have actually resolved), mediators tend to say "mediation would great if it weren't for the lawyers."
Esteeming the rule of law in America as I do (especially in the recent era of its greatest peril) I have never seen lawyers as a problem in facilitating settlement of the lawsuits they have been eating, drinking, sleeping and, dating for years longer than I've spent reading their briefs and engaging in some pre-mediation telephone discussions.
I can't say lawyers are a problem because: (1) they're my job; and, (2) they're "my people" in the "tribal" sense. A few bad apples aside, lawyers are among the hardest working, most ethical, creative, multi-talented professionals I know. And they are pretty much solely responsible for fighting the battle, on every common weekday, to preserve the rule of law as a bulwark against tyranny on the right and anarchy on the left.
Let's start with this particularly widespread canard from the article:
Attorneys may delay the settlement of a dispute through mediation for financial reasons. For example, the payment of professional fees on the basis of hours worked could motivate the attorney to delay the settlement of the dispute to increase the number of hours billed to the client (citations omitted). Such non financial reasons as a desire to build or preserve a reputation for “hardball negotiating” in highly publicized cases could also motivate an attorney to delay settlement of the dispute [which the authors don't mention often results in a far better outcome for the client]. In addition, attorneys’ (or their clients’) commitment to or belief in their case based on questions of justice or other principles [which are worth, in my opinion, greater attention that purely monetary outcomes] could also delay settlement until “defending the principle becomes too costly” (citation omitted). Finally, attorneys may wish to justify both their role and their fees with unnecessary interactions./1
Are we mendacious, self-serving, parasites of the "justice system," feathering our own comfortable nests as we attempt to preserve the "outdated" notion that the justice system is capable of delivering justice? I don't believe so, but let's not get all anecdotal about these questions when we have cold, hard statistics within reach. What were the results of this study on the way in which attorneys might "get in the way of" a successful mediation?
Here's the bottom line assessment (please read the article yourself to draw your own conclusions).
The empirical data we collected in this study indicate that the presence of an attorney in a mediation does not significantly affect the settlement rate, the time needed to reach an agreement, the perceived fairness of the process, the parties’ level of satisfaction with the agreement, or the parties’ level of trust that the agreement will be honored. These results indicate that attorneys have much less impact than is claimed by those mediators who do not welcome their involvement in the mediation process.
Nevertheless, the results also demonstrate that the presence of an attorney does affect mediation outcomes in at least two ways: by reducing the parties’ level of satisfaction with the mediator’s performance and by reducing the level of reconciliation between parties.
So the Myth Busters of this study conclude that attorneys:
don't "significantly affect the settlement rate" /2
don't significantly affect "the perceived fairness of the process";
don't significantly affect "the parties' level of satisfaction with the agreement; and,
don't significantly affect the "parties' level of trust that the agreement will be honored."
This is the subjective viewpoint of the litigants, mind you, in a dynamic where the mediator often openly attributes the success of the mediation to the clients' attorney - an observation which is more deeply true than most mediators would care to admit with all their white horse hi-ho silver, magic bullet off-to the-rescue enthusiasm.
What did litigants report to the authors of this article? They indicated that attorneys adversely affected mediation outcomes in two ways: (1) they reduced the parties' "level of satisfaction with the mediator's performance"; and, (2) they "reduced the level of reconciliation between the parties."
Of all of the purported effects of attorneys' presence at mediation - without whom, it must be noted, the parties would not likely be induced to sit down and mediate at all -- the only significant perceived difference is the failure of the mediation process to reconcile the parties - something in which the legal system has little to no interest.
Please read the article for proposed solutions to the reconciliation issue. As to the remainder of the study's findings, I have this to say:
whenever two or more people are gathered together, the dynamics of the group more profoundly affect the outcome than do the contributions of any individual member of the group. Our "reality," especially as it appears in a group setting, is "co-created." See the New York Times must-read article on the Psychology of Terrorism and Retail Marketing at Google Books (the latter noting that because people live in a social world which is co-created in social interaction with others . . . . [they] can be thought of as both products and producers of the social world." Id. at 218.)
try as you may, you will never be able to untangle the threads that create the intricate tapestry of a settlement; every member contributes something invaluable without which the precise result could not possibly have been achieved.
who is therefore responsible for the good and who responsible for the purportedly bad results of mediation? That's easy: EVERYONE IS.
That being the case, we are all responsible for our outcomes - whether our contribution is "negative," i.e., resisting settlement, for instance, or "positive," i.e., problem solving the reasons given by Mr. Negative that the case simply can't settle on terms acceptable to all. Remember your University philosophy class? Thesis, Antithesis, Synthesis. We need people willing to state the negative to problem solve it positively. The relationships cause the outcome, not one member of a group unless that member is a tyrant with loyal troops at his command.
If you'll allow me a literary reference that justifies my own collegiate career and says far more eloquently than I ever could why we're all accountable, I first give you one of my favorite authors, Paul Auster (who you may remember as the screenwriter of the movie Smoke).
The world can never be assumed to exist. It comes into being only in the act of moving towards it. Ese est percipii. Nothing can be taken for granted: we do not find ourselves in the midst of an already established world, we do not, as if by preordained birthright, automatically take possession of our surroundings. Each moment,each thing, must be earned, wrested away from the confusion of inert matter, by a steadiness of gaze, a purity of perception so intense that the effort, in itself, takes on the value of a religious act. The slate has been wiped clean. It is up to [us] to write [our] own book.Paul Auster,The Decisive MomentfromThe Art of Hunger.
The second excerpt I will leave for your thoughtful consideration is by the greatest scholar of comparative religions to ever inhabit the planet - Joseph Campbell (skip the intro with the new age music).
Schopenhauer, in his splendid essay called "On an Apparent Intention in the Fate of the Individual," points out that when you reach an advanced age and look back over your lifetime, it can seem to have had a consistent order and plan, as though composed by some novelist. Events that when they occurred had seemed accidental and of little moment turn out to have been indispensable factors in the composition of a consistent plot. So who composed that plot? Schopenhauer suggests that just as your dreams are composed by an aspect of yourself of which your consciousness is unaware, so, too, your whole life is composed by the will within you. And just as people whom you will have met apparently by mere chance became leading agents in the structuring of your life, so, too, will you have served unknowingly as an agent, giving meaning to the lives of others, The whole thing gears together like one big symphony, with everything unconsciously structuring everything else. And Schopenhauer concludes that it is as though our lives were the features of the one great dream of a single dreamer in which all the dream characters dream, too; so that everything links to everything else, moved by the one will to life which is the universal will in nature.
It’s a magnificent idea – an idea that appears in India in the mythic image of the Net of Indra, which is a net of gems, where at every crossing of one thread over another there is a gem reflecting all the other reflective gems. Everything arises in mutual relation to everything else, so you can’t blame anybody for anything. It is even as though there were a single intention behind it all, which always makes some kind of sense, though none of us knows what the sense might be, or has lived the life that he quite intended.
Lawyers, mediators, clients, experts, consultants, legal assistants, and, yes, even your spouse with whom you consulted before today's mediation, every one of them is part of the "net of gems, where at every crossing of one thread over another there is a gem reflecting all the other reflective gems [so that] [e]verything arises in mutual relation to everything else, so you can't blame anybody for anything" and, by the way, we can't credit credit nor bear all the responsibility for anything. We are all capable. We are all accountable. And we all contribute something to the whole.
So we can stop pretending to be better than we are now. We can all put down the burden and shame of our own entirely human fallibility; the myth that we ever do anything without the contribution of others; and, the pretense that we don't behave as badly, or as well, as other people do. We're part of the team. We're in it together. Isn't that good news for the New Year?
And to give you a treat from having gotten this far, a scene that is all about seeing, from Paul Auster's Smoke.
1/ I'd be interested, of course, in what the authors consider to be "unnecessary interactions."
2/ This is a particularly interesting finding since mediators have also been found not to improve the settlement rate but only greater party satisfaction in several studies.
Don Philbin, the author of this must-read article (click on the image for the .pdf) on the reasons you walk away from negotiations fearing you've either left money on the table or paid too much for what you receive in exchange, is an attorney-mediator, negotiation consultant and trainer, and arbitrator.
Don is listed in The Best Lawyers in America (Dispute Resolution), The Best Lawyers in San Antonio, and the Bar Register of Preeminent Lawyers.
Don's ADR Toolbox where this article can also be found is an indispensable resource for all attorneys negotiating the settlement of a lawsuit or a business deal (wait a minute! the negotiation of a settlement is a business deal!)
And, it's not inconsequential that Don is one of the nicest guys I know. If you're going to spend a day or a week or a month with a mediator or an arbitrator, you deserve not only the brightest, most wise and best prepared arbitrator or mediator, you also deserve to have a little fun in the process because . . . you know . . . the money simply isn't worth the unhappiness that comes when dealing with . . . . the other sort too often.
Because Doug, Lee Jay and I spent the entire day yesterday talking about legal rights and remedies as well as legal procedure in the context of negotiating the resolution of litigation, I was once again engaged in the soul-searching that always accompanies situations challenging my loyalty to the adversarial/rights-remedies business and stimulates my enthusiasm for the interest-based, consensus building, collaborative, problem solving negotiated resolution business.
Before giving you an excerpt that should tempt you to download the article and put it on your nightstand, I want to say this: I work on the razor's edge of my lifetime career-investment in the adversarial system, on the one hand, and my new'ish passion for collaborative, interest-based negotiated resolutions to disputes, on the other. I spent 25 years as a warrior who rightfully took advantage of my adversary's weaknesses. I was not a problem solver. I was engaged in a fight to the death on a pre-determined field with rules in which I believed for causes I knew to be just. As a result, I approach all alternatives to the adversarial process with a litigator's skepticism, wariness and world-wearyness. There is no kumbya in me. It is only my intellectual curiosity that survived the beating my heart took from the world-weary, cynical, grizzled old defense attorneys who taught me how to practice law (as adversaries testing my mettle) in Sacramento thirty years ago.
Sic transit gloria mundi.
The engine that drives litigation's morality tale is that conflict resolution is a contest between parties, one of whom necessarily represents good and the other necessarily represents bad. As a result, litigation seeks to designate who has committed moral transgressions by breaching legal norms (or, from the perspective of the defendant, who wrongfully accuses others of having done so).
The Story of Mediation subverts these norms by transforming this familiar morality tale into a story of collaboration. This subversion begins through how mediation conceives of conflict itself. Implicit in the Story of Litigation is that conflict represents a breach of the norms of conduct, thereby ripping the social fabric in some way large or small. In contrast, in mediation, conflict is a norm of conduct, a necessary byproduct of humans having distinct experiences and personalities and needs. Conflict is thus not necessarily a disruption of the moral order, and, indeed, can sometimes be productive.
Mediation's normalization of conflict, however, cannot eliminate what appears to be a deep-seated human need to understand experience in terms of struggles and strivings. Humans have great difficulty perceiving events as generated by causes beyond our control - what Amsterdam and Bruner evocatively describe as an inability to see events as "One Damn Thing After Another." We must instead "shape them into strivings and adversities, contests and rewards, vanquishings and setbacks."
The meta-narrative of litigation maps these "strivings" and "vanquishings" onto the struggle of one party against another and enlists the aid of the court to vindicate justice on behalf of the wronged party. In contrast, the meta-narrative of mediation seeks to map these "strivings" and "vanquishings" onto a collaborative struggle to resolve conflict. This narrative casts all participants as players in a process - collaboration - that is focused on reaching the common goal of successfully resolving or transforming a dispute. This story has moral entailments because collaboration is accepted as a social and moral good. Unlike litigation, however, this story does not generate a binary moral universe that divides the good from the bad, but, rather, a universe that values collaborative striving to achieve common ground and resolution.
This story places mediators in a role that is very different from the role played by decision-makers in litigation. Rather than being heroes of moral vindication to whom wronged parties appeal for justice, mediators promote and model collaborative striving to overcome conflict. This plays out in many accepted techniques in mediation. Mediators, for example, often seek "commitment" from participants to the process of mediation, although mediators are careful not to extend this commitment to a commitment to agree. This commitment to process is a proxy for a commitment to collaborate to seek to resolve conflict, thus incrementally moving participants away from contested litigation and towards collaborative problem solving. Similarly, mediators often "reframe" participants' statements in order to emphasize "common ground." This is also an effort to move parties away from a morally charged contest and into collaboration. Finally, mediators encourage and model collaboration through a positive message of optimism and progress towards resolution, even when (or, perhaps, especially when) impasse appears likely.
Moreover, mediation approaches the narrative movement from Efforts to Restoration of Steady State in a very different way than litigation. Whether the Steady State is Restored or Transformed constitutes what I have earlier characterized as a "fork in the road" in the Austere Definition of Narrative. The very language through which litigants seek redress of grievances - to "be made whole," "to pay your debt society" (with its implication that payment of the debt would return the ledger to balance), even the word "remedy" - implies Restoration. In contrast, mediation tends to reject Restoration as a state to which the parties (and society as whole) should or even can return. Rather, mediation seeks Transformation on the part of all disputants so that conflict is resolved. It does so by embracing the notion that perceptions of the world (including perceptions of the actions of others) are unstable, thus enabling parties to appreciate alternative perspectives as a way to promote resolution of conflict. Mediation, therefore, does embody a plot that adheres to the narrative movement described by the Austere Definition, albeit in ways that are utterly alien to the morality tale of the story of litigation. The story of mediation can be characterized as follows:
Steady State: Whatever Each Party Views as Pre-Conflict
Trouble: Whatever Each Party Views as Constituting Conflict
Efforts: Collaborative Striving To Overcome Conflict as Modeled and Promoted by Mediator
Transformation of Steady State: A New Relationship Among Parties
I hereby agree to submit to binding arbitration all disputes and claims arising out of the submission of this application. I further agree, in the event that I am hired by the company, that all disputes that cannot be resolved by informal internal resolution which might arise out of my employment with the company, whether during or after that employment, will be submitted to binding arbitration. I agree that such arbitration shall be conducted under the rules of the American Arbitration Association. This application contains the entire agreement between the parties with regard to dispute resolution, and there are no other agreements as to dispute resolution, either oral or written.
This decision is made more interesting by the recent Parada decision (.pdf) (covered here and here) where the drafter's failure to attach the JAMS arbitration rules cited in the agreement was one of the reasons the Court concluded the arbitration clause was substantively unconscionable. I think it's safe to say at this point in the development of California law on these issues that it's not malpractice for an attorney to fail to draft an enforceable arbitration clause. But as the opinions multiply, you can be sure some employer will be looking around for someone to name its legal counsel as the source of his discontent, blame its law firm for having to bear the expense of litigation, and claim damages as a result.
The best protection for drafters of arbitration clauses (particularly in California where the Courts remain suspicious of adhesion arbitration contracts) is to be familiar with all the case law on the topic in the last five years; to avoid any provision the Courts have used to tip the "sliding scale" in favor of non-enforcement and include those provisions which favorably incline the courts to enforce the clauses.
Patrick Deane of Nestlé is senior counsel to the largest food company in the world, and the disputes he runs into involve distributors, retailers, suppliers and consumers in every part of the globe. His ideal mediator combines logic and intuition; a concern for detail; and the knack of an epatheic listener. He noted that commercial disputes — even financial ones — are seldom dry, but instead involve personalities, risk of loss of face, and other human attributes just as much as more personal claims do. The question of subject-matter expertise was of little importance to Deane, compared to these essential qualities in a mediator who must be expert in a process that, at heart, is aimed at cost effectiveness. “A lack of industry expertise has never caused a failure of the mediation process.
Here's my opinion (as if you didn't already know). As Colin Powell says, the most important knowledge to have in international negotiations is the other guy's decision cycle. I imagine the great predictor, the political scientist and Hoover Institute Fellow Bruce Bueno de Mesquitas would say something along the same lines (see TED lecture below). See also the NYT piece, Can Game Theory Predict When Iran Will Get the Bomb?
What is the "other guy's" decision cycle? It is comprised of every interest he must satisfy and every person he is accountable to for the foreseeable (and probable unintended) consequences of that decision. Personal injury attorneys turned mediators are well acquainted with the decision cycles of both Plaintiff and Defense counsel as well as with the interests, needs, and desires of injured Plaintiffs, on the one hand, and insurance adjusters and their supervisors on the other. Employment attorneys turned mediators are also deeply knowledgeable about the decision cycles of counsel on both sides of the table (one usually specializing in employees and the other in employers) as well as with the interests, needs and desires of terminated, demoted, or harassed employees on the one hand and of employers - both large and small - who often feel as if the Plaintiff is little better than a highway robber. Judges turned mediators are better acquainted than anyone else of the decision cycles of juries -- a jury verdict being the alternative to a negotiated resolution.
You knew I'd come to my own "specialty" knowledge. Some of it is industry specific -- insurance and financial institutions, for instance, and the garment, manufacturing, health care, commercial real estate, construction, and technology industries. Though my experience in these fields adds some value to my commercial mediation practice, what I'm most skilled at is knowing the decision cycles of commercial litigators and their business clients. I understand, for instance, the clients' reporting relationships; the metrics against which their performance and that of their corporate superiors are measured; the impact of SEC reporting requirements in "bet the company" litigation; and, the effect settlements in nine or ten figures might have on upcoming plans for mergers or acquisitions.
I can read a financial statement.
At a minimum, I can ask the questions necessary to obtain the knowledge required to ascertain the interests that must be satisfied by both parties to transform the litigation into an opportunity to make a business deal. And I know how to make the commercial clients happy with their attorneys' final resolution of the business problem burdened with the justice issue that brought the case into court in the first instance.
I am also schooled in the "field" of conflict resolution. I understand at depth the cognitive biases -- universal tendencies in the way we think -- that inhibit rational decision making. I know how conflict escalates and, more importantly, how it can be deescalated. I understand the role emotion plays in decision making (particularly the emotion most common among business litigation clients - anger); the gentle (and not so gentle) art of persuasion and, perhaps most importantly, the optimal negotiation strategies and tactics for the business problem at hand.
And, I know in the knuckles of my spine what keeps commercial litigators awake at night, worrying about the next strategic, tactical, legal or extra-legal move to make; how to explain to the client that the case has suddenly gone south; and, how to deliver that bad news to the client in a way he or she can hear it and successfully report it to the GC, the CEO, the Board of Directors or e ven the shareholders.
I know this sounds like a lot of boastful self-promotion (it is). Please don't take my word for it. Anyone charged with finding, retaining and hiring a mediator to assist the parties in resolving a piece of hard-fought, sophisticated, complex commercial litigation would do well to check with his or her peers on any mediator's boastful self-appraisals.
This is what I recall of mediator-hunting, however. I'd send out a list to my colleagues. I'd invariably get back opinions that were all over the board. He/she is great with clients but usually ends up splitting the baby in half. He/she talks too much and listens too little. He/she marginalized the client and made me look bad. He/she charges $15,000 per day and is one of the go-to mediators for this type of case but I was unimpressed, as was the client. This guy/gal can settle anything. Brilliant. Magical.
So what's a beleaguered litigator to do? Ask people you respect both inside and outside your law firm. Ask how the mediator handles the "process dimensions" of the mediation. Does he/she simply carry numbers and rationales back and forth between separate caucus rooms. Can she give bad news to both sides. Can he go beyond positional, zero-sum bargaining and into interest-based negotiated resolutions? Is the client happy with the result and with the process? After you've done this basic research, call the mediator yourself and ask him/her about the way in which she/he might handle the mediation of the particular matter you need to have resolved. You should not only have the best information possible in making your choice, you should get a fair amount of terrific free advice and external brain-storming along the way.
I really just meant to cite the Business Conflict Blog and get back to revising The ABC's of Conflict Resolution - my second draft due on October 30.
So what's my answer to the question whether the mediator should have industry knowledge? That answer lies, as most legal problems do, in the gray zone. Industry knowledge helps. But every commercial litigator knows that we can learn any industry if we have a basic understanding of how commercial enterprises work. That's what I know -- commercial litigation -- and it is the reason I don't mediate personal injury or employment disputes with anyone below the rank of senior executive. I don't know the right questions to ask and I don't know -- at depth -- the parties' or counsel's decision cycles.
My own personal 200-year present spans the life of my maternal grandparents who were nine years old in 1909, and that of my step-children’s children, who (assuming they procreate on a reasonable schedule) should be ninety-five'ish in 2109.
My imagined grandchildren,  born sometime between today and 2014, will not be strangers to any of my grandfather’s technologies. Despite the advent of compact fluorescent light bulbs, the early lives of my step-children's children will likely pass under the glow of the same incandescent lights that brightened granddad’s one-room school house. They will be transported to school in cars with internal combustion engines, learn the same alphabet from the same cardboard and paper books (as well as from the "e" variety)  and play many of the same games he did – hop scotch, jump rope and ring-around the rosy.
Change will etch itself into the lives of my grandchildren as surely as it did my own, my parents' and my grandparents'. Hybrids will give way to fully electric (and perhaps hemp-powered) vehicles (effective or defective) and though electricity will continue to be generated by hydroelectric dams, wind farms and nuclear power plants, some new and unimaginable source of power will surely push back the nights of my grand children's children. 
Law, politics, society and culture also exist in the 200-year present of conflict resolution. In my personal 200-year span, the law seems to have changed the most profoundly. Was it the law first and culture later? Or do they weave our future together?
The first U.S. woman lawyer, Myra Bradwell, was admitted to practice a mere ten years before my grandmother was born. Mrs. Bradwell’s legal career was the subject of one of the sorriest U.S. Supreme Court decisions ever handed down, in which the Court opined,
The civil law as well as nature itself, has always recognized a wide difference in the respective spheres and destinies of man and woman. Man is, or should be, woman’s protector and defender. The natural and proper timidity and delicacy which belongs to the female sex evidently unfits it for many of the occupations of civil life. The constitution of the family organization, which is founded in the divine ordinance, as well as in the nature of things, indicates the domestic sphere as that which properly belongs to the domain and functions of womanhood. The harmony, not to say the identity, of interests and views which belong, or should belong, to the family institution is repugnant to the idea for a woman adopting a distinct and independent career from that of her husband … for these reasons I think that the laws of Illinois now complained of are not obnoxious to the charge of any abridging any of the privileges and immunities of cities of the United States.
My grandparents', parents' and step-children's 20th Century was dominated by genocide on a scale and a technological precision unimaginable to our earlier forebears. Mid-century brought with it the threat of nuclear annihilation but also liberated millions of people enslaved by colonialism. We cured polio in my own lifetime with both "dead" and "live" vaccines (neither of them counterfeit) - a singular moment in scientific history during which no one took ownership of the cure and no one tried to stop others from seeking another, a problem Patently O addressed this week in Reverse Payments.
Whether god or satan, heaven or hell, war or peace "won" the twentieth century, the world's greatest peace-making body was created during it -- the United Nations. And here in the U.S., the “living room war,” Viet Nam, coupled with the largest generation of adolescents ever to grace American society, ended the forcible induction of young men into the military. 
With the recent discovery of our earliest ancestor, Ardi, our biological and social lives exist in a 4.4 million year now. Our physical bodies “evolve” in the womb along the same lines as did our species and, once born, we carry with us our earliest organs.  Most critical of these to conflict escalation and avoidance is our “fight-flight” mechanism – the amygdala. And the most pertinent biological agents to promote the collaborative resolution of conflict are our “mirror neurons” which
provide a powerful biological foundation for the evolution of culture . . . absorb[ing] it directly, with each generation teaching the next by social sharing, imitation and observation.
How we’ve manage to survive despite our tendency to misread one another’s actions, intentions and emotions, is often the subject of those who advise us how to choose and move juries -- here -- Anne Reed at Deliberations (explaining why "they" don't see things like "we" do here); and, the Jury Room (explaining why pain hurts more intensely when we believe it's been intentionally inflicted here).
The Most Effective Conflict Resolution Technology is the Oldest
One of our true original gangsters, Al Capone, is reported to have said that “you can get much further with a kind word and a gun than you can with a kind word alone” and one of our greatest Presidents, Theodore Roosevelt said “speak softly and carry a big stick.”
As Robert Wright, author of The Moral Animal explained, had Tit for Tat been tossed into the game with 50 steadfast non-cooperators, there would have been a 49-way tie for first place. But none of the players' programs failed to cooperate in at least some circumstances, leaving Tit for Tat the clear victor. According to Wright, humans, like the programs in Axelrod's competition, are evolutionarily “designed” to cooperate under at least some circumstances. The engine and benefit of cooperation is present in our neurochemistry. When scientists observed the brain activity of volunteers playing the Prisoner’s Dilemma game, for instance, they found that the participants' “reward circuits” were activated and their impulsive "me first" circuits inhibited when they cooperated. Cooperation, retaliation, forgiveness and a return to cooperation. Tit for Tat.
We don't "dis" lawyers here at the Negotiation Blog. We simply remind ourselves that our primary purpose is the promotion of justice, with a stable societal order closely behind. Most people don't understand, for instance, that Shakespeare's famous the first thing we do, let's kill all the lawyerswas not an insult. In King Henry IV, Act IV, Scene II, Shakespeare's sentiment was not his own, but that of a revolutionary who wished to destroy the social order.
The historic "present" of laws and lawyers is in the thousands, not simply the hundreds, of years. Hammurabi (make of his choice for the memorialization of his laws what you will) was the sixth king of Babylon, remembered for creating -- in his own name (and likeness?) - the first written and systematic legal code.
For the wrongful killing of another, for instance, the victim’s kin were paid according to the social status of the deceased party. Thus the ‘man price’ for killing a peasant was 200 shillings and that for a nobleman 1200 shillings. Payments were not, however, tailored to the loss, but fixed according to types of affront, a distinction we continue to make when we punish intentional torts more severely than negligent ones. >
Lawyers, litigators and trial lawyers are too often demonized by the ADR community as if you could get someone to sit down to negotiate without first pointing the gun of litigation at their heads; I salute you (and myself, for that matter!) for bringing us all to the bargaining table. See Steve Mehta's recent post at Mediation Matters, Factors When Peace Makes Sense for a note that touches upon the symbiotic relationship between litigation and mediation, litigators and mediators.
I shouldn't cite single legal blogs twice, but I cannot resist this quote of Scott Greenfield's on another pundit's view of the future lawyers have in store for them, i.e.,
shucking oysters for a living if we don't accept a future of lawyers being piece workers in factories, sending our work off to Bangalore in pdf files and complementing people on their choice of forms at Legal Zoom.
Which came first? Public civil trials or private arbitrations? You’ll be surprised, I’ll wager, to hear that arbitration was one of the earliest forms of dispute resolution, practiced by the juris consults of the Roman Empire. Roman arbitration predates the adversarial system of common law by more than a thousand years. 
Ah, the glory of Rome! The juris consulti were (like too many mediators) amateurs who dabbled in dispute resolution, raising the question whether they (and we) should be certified or regulated as Diane Levin asks at The Mediation Channel this week. The Roman hobbyists gave legal opinions (responsa) to all comers (a practice known as publice respondere). They also served the needs of Roman judges and governors would routinely consult with advisory panels of jurisconsults before rendering decisions. Thus, the Romans – god bless them! - were the first to have a class of people who spent their days thinking about legal problems (an activity some readers will recall Ralph Nader calling "mental gymnastics in an iron cage").
It was Buckminster Fuller who famously opined that the "significant problems we face cannot be solved at the same level of thinking we were at when we created them." If you keep this aphorism in mind for the remainder of this post, you'll likely have some extraordinarily innovative comments to make in the comment section below.
As the Law Guru wiki reminds us, we can trace the adversarial system to the "medieval mode of trial by combat, in which some litigants were allowed a champion to represent them." We owe our present day adversarialism, however, to the common law's use of the jury - the power of argumentation replacing the power of the sword.
The Act abolishing the infamous Star Chamber in 1641 also granted every "freeman" the right to trial by "lawful judgment of his peers" or by the "law of the land" before the Crown could "take or imprison" him or "disseis[e] [him] of his freehold or liberties, or free customs." Nor could he any longer be "outlawed or exciled or otherwise destroyed." Nor could the King "pass upon him or condemn him."
English colonies like our own adopted the jury trial system and we, of course, enshrined that system in the Fifth, Sixth, and Seventh Amendments. Whether this 17th century dispute resolution technology can be fine-tuned to keep abreast of 21st century dispute creation technology (particularly in the quickly moving area of intellectual property) remains one of the pressing questions of legal and ADR policy and practice, particularly in a week in which a Superior Court verbally punished the lawyers before it for filing The Most Oppressive Motion Ever Presented (see the Laconic Law Blog). The motion?
Defendants['] . . . motion for summary judgment/summary adjudication, seeking adjudication of 44 issues, most of which were not proper subjects of adjudication. Defendants’ separate statement was 196 pages long, setting forth hundreds of facts, many of them not material—as defendants’ own papers conceded. And the moving papers concluded with a request for judicial notice of 174 pages. All told, defendants’ moving papers were 1056 pages.
Mediator, author and activist, Ken Cloke, suggests that interest-based resolutions to conflict must replace power and rights based resolutions if we expect to create a future in which justice prevails. As Ken wrote in Conflict Revolution:
Approaching evil and injustice from an interest-based perspective means listening to the deeper truths that gave rise to them, extending compassion even to those who were responsible for evils or injustices, and seeking not merely to replace one evil or injustice with another, but to reduce their attractiveness by designing outcomes, processes, and relationships that encourage adversaries to work collaboratively to satisfy their interests.
Evil and injustice can therefore be considered byproducts of reliance on power or rights, and failures or refusals to learn and evolve.
All political systems generate chronic conflicts that reveal their internal weaknesses, external pressures, and demands for evolutionary change. Power- and rights-based systems are adversarial and unstable, and therefore avoid, deny, resist, and defend themselves against change. As a result, they suppress conflicts or treat them as purely interpersonal, leaving insiders less informed and able to adapt, and outsiders feeling they were treated unjustly and contemplating evil in response.
As pressures to change increase, these systems must either adapt, or turn reactionary and take a punitive, retaliatory attitude toward those seeking to promote change, delaying their own evolution. Only interest-based systems are fully able to seek out their weaknesses, proactively evolve, transform conflicts into sources of learning, and celebrate those who brought them to their attention.
These are the words I leave with the readers of Blawg Review #234 because they are the ones that informed my personal and professional transformation from a legal career based on rights and remedies to one based upon interests and consensus.
Whatever my own personal 200-year present was, is and will be, it is pointed in the direction of peace with justice, with an enormous and probably unwarranted optimism best expressed by the man after whom my law school was named: Martin Luther King, Jr. - the arc of history is long, but it bends toward justice.
Blawg Review has information about next week's host, and instructions how to get your blawg posts reviewed in upcoming issues. Next week's host, Counsel to Counsel, will devote its round-up of the week's best legal posts to the Great Recession.
 Earlier scientific theory posited that each human embryo (see Embryo Mix-Up at the Proud Parenting Blog) passes through a progression of abbreviated stages that resemble the main evolutionary stages of its ancestors, i.e., that the fertilized egg starts as a single cell (just like our first living evolutionary ancestor); as the egg repeatedly divides it develops into an embryo with a segmented arrangement (the “worm” stage); these segments develop into vertebrae, muscles and something that sort of looks like gills (the “fish” stage); limb buds develop with paddle-like hands and feet, and there appears to be a “tail” (the “amphibian” stage); and, by the eighth week of development, most organs are nearly complete, the limbs develop fingers and toes, and the “tail” disappears (the human stage). It turns out that this one-to-one correlation was too simplistic, but it remains safe to say that our biological development still passes through several stages that “recapitulate” the evolution of our species.
 The amygdala is a region of the brain that permits the formation and storage of memories associated with emotional events. It permits us to “read” the emotional responses of our fellows and is thought to facilitated our ability to form relationships and live and work in groups. It is also the source of our “fight or flight” response to danger.
Studies show that some mirror neurons fire when a person reaches for a glass or watches someone else reach for a glass; others fire when the person puts the glass down and still others fire when the person reaches for a toothbrush and so on. They respond when someone kicks a ball, sees a ball being kicked, hears a ball being kicked and says or hears the word "kick."
“When you see me perform an action - such as picking up a baseball - you automatically simulate the action in your own brain,” said Dr. Marco Iacoboni, a neuroscientist at the University of California, Los Angeles, who studies mirror neurons. ”Circuits in your brain, which we do not yet entirely understand, inhibit you from moving while you simulate,” he said. ”But you understand my action because you have in your brain a template for that action based on your own movements. “
 Looking toward the future, the Neuroethics and the Law Blog predicts that in the “experiential future, we will have better technologies to measure physical pain, pain relief, and emotional distress. These technologies should not only change tort law and related compensation schemes but should also change our assessments of criminal blameworthiness and punishment severity” here.
The adversarial system of medical negligence fails to satisfy the main aims of tort law, those being equitable compensation of plaintiffs, correction of mistakes and deterrence of negligence. Instead doctors experience litigation as a punishment and, in order to avoid exposure to the system, have resorted not to corrective or educational measures but to defensive medicine, a practice which the evidence indicates both decreases patient autonomy and increases iatrogenic injury.
(Iatrogenic, by the way, is a fancy term for “we have know idea whatsoever what the source of this ailment is). Chris is looking for comments so run on over there if you’ve been thinking about medical malpractice litigation during the marathon American health care debates.
From preparation to closing, some of L.A.'s most prominent mediators reveal the secrets of getting the best deal available for your clients.
Read former CAALA Trial Lawyer of the year Sandy Gage's article on Getting the Best Results in Mediation and AIM founder, mediator and trainer Lee Jay Berman'sTwelve Ways to Make Your Mediator Work Harder for You.
My ADR Services, Inc. colleagues Jan Schau, Michael Diliberto, Joan Kessler (the brains behind the entire issue!) and Leonard Levy round out the issue with Telling Lies, Telling Secrets (Schau); Opening Offers: Who's on First (Diliberto); The Defense Reveals Mistakes that Could Cost Your Client Money; and Kessler's incisive executive summary of them all.
Oh, yes, I'm here too with one of my mediation narratives, We Tell Ourselves Stories in Order to Live.
The online Advocate can be read like a magazine, complete with turning pages. It's a pretty cool online journal format in addition to being a great contribution to the growing literature on best mediation practices.
Dive in! The water is warm and the natives are friendly.
The following is the conclusion of an excellent post on the recent Pfizer-Justice Department settlement noting that it met "the People's" justice interests better than a judgment could have. The full article, Settlement and Justice for All by Robert C. Bordone & Matthew J. Smith** can be found here at the Harvard Negotiation Law Review.
More than honoring principles a court might champion, the negotiated settlement with Pfizer allows the Justice Department to secure commitments from Pfizer that would have been unlikely in a court verdict. In addition to the enormous cash payment, the settlement agreement allows for closer monitoring of Pfizer by Justice Department officials in the years ahead, ensuring corporate accountability and providing an extra measure of protection for consumers. As part of the deal, Pfizer entered into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services and will be required to maintain a corporate compliance program for the next five years.While a judge might choose to retain judicial oversight in a particular case, federal courts typically lack the expertise or resources to provide the kind of enforcement needed to ensure a systemic and long-term remedy in a technical or highly specialized case such as this.
The Pfizer settlement represents the best kind of transparent, efficient, and wise government law enforcement. It holds Pfizer wholly accountable for its actions, sends a strong and clear message to the public that corporate malfeasance will not be tolerated, provides for ongoing enforcement, and it does it all at a fraction of the cost of trial. While many cases should proceed to trial for reasons of precedent and public policy, negotiated settlement – when approached with wisdom and aplomb – can be a most efficient and effective means of law enforcement.
Thanks to Don Philbin for being one of the best navigators of quality in the ADRosphere! "Friend" him on Facebook here.
**/ Robert C. Bordone is the Thaddeus R. Beal Clinical Professor of Law at Harvard Law School and Director of the Harvard Negotiation and Mediation Clinical Program. Matthew J. Smith is a Lecturer on Law at Harvard Law School and a Clinical Fellow at the Harvard Negotiation and Mediation Clinical Program
The subjects covered in this issue include the chaotic state of federal mediation confidentiality protections [by Phyllis G. Pollack]; the dangers of [mediator] class action fairness declarations [by Jay McCauley and Jeff Kichaven] and the difficulties inherent in applying federal conflict of interest laws developed with attorney advocates in mind to attorney neutrals and their law firms [by Robert J. Rose].
Though these issues are of critical importance to daily practice in our federal courts, very few advocates are aware that these problems exist, let alone how they might be fixed. The Resolver’s first mission is to make available to FBA members the highest level of scholarship and best practices in federal mediation and arbitration practice. The second—and perhaps the most important— mission of The Resolver, is to commence a robust and sophisticated conversation among federal lawyers, on the one hand, and district and circuit court mediators on the other, about the means by which we can more efficiently, effectively, and durably help our clients resolve their litigated disputes.
(from the Letter from the Editor by yours truly)
You'll also want to read the Message from the [ADR] Section Chair, Simeon H. Baum, whose energetic leadership is making the ADR Section of the Federal Bar Association a dynamic new force in the ADR field.
As Baum's message notes, we have great things in store for the work of the FBA's ADR Section. Simeon writes:
For those of you who are interested in what you encounter in The Resolver, we welcome you to participate actively in the FBA. Become a liaison to the section on behalf of your local chapter. If you have thoughts on pending or possible legislation that affects the dispute resolution field . . . please feel free to share them with us—publish your piece in the next issue of The Resolver.
Or, reach out to the section and your chapter and look to put your cause at the forefront of the FBA’s legislative agenda. We can take advantage of Bruce Moyer and the FBA Governmental Relations Council to cultivate the best in the ADR field through national legislation, where appropriate.
If you have a CLE program on ADR that you would like to promote, please let us know through the ADR Section, and the section can collaborate with your local chapter [Board member Jeff Kichaven is the CLE Chair this year and you can reach him at the link above].
Along these lines, the section is hoping that FBA chapters will host fireside chats or roundtable discussions featuring the circuit mediator for that area [and local Board members will be reaching out to those chapters to initiate those roundtables.
These CLE events—perhaps accompanied by a breakfast, lunch, or cocktail reception—can provide an excellent opportunity not only to enhance the use of those ADR forums, but also to meet with likeminded neutrals and representatives.
With this first issue of The Resolver at hand—thanks to the efforts of editor Vickie Pynchon, our generous contributors, and FBA sections and divisions manager Adrienne Woolley (firstname.lastname@example.org), we invite you to join us in the unending way of creative service to your clients, the bar, and society via the path of resolution.
(right, the ultimate in lame reason giving: the dog ate my homework!)
To reinforce anchoring and framing effects of first offers and offer-characterization, always state the reason you are valuing the item to be traded in the manner you are.“I’m offering to pay you $20,000 in exchange for a dismissal because (choose one or more):(a) I impeached your witness with interrogatory answers in the deposition; (b) the only case law in your favor has been questioned by the Supreme Court and hasn’t been cited since 1972; (c) your expert witness went to Ralph’s School of Law and mine went to Harvard; (d) recent jury verdicts for the theft of trade secrets of this nature have been less than the cost of doing the first round of discovery; and, (e) anything else you have.
In experiments on reason giving, researchers have found that people are far more likely to accommodate others if a reason is given even if the reason makes no sense whatsoever.In one such experiment, students were asked to cut into a line at Kinkos.One group was instructed to give no reason; another to give a good reason ("I’m late for class”) and another to give an irrational reason (“because I want to”). Those who provided no rationale were, not surprisingly, the least successful. Only sixty percent of them were allowed to "cut" into the line. Those who presented a logical rationale got what they wanted an extraordinary 94% of the time.But here's the truly remarkable part. Those students who presented a meaningless rationale such as, "I want to cut in line because I need to," racked up a ninety-three percent success rate, only one percent less than their logical peers.
Every new offer or demand provides another opportunity to influence your adversary about the value (or lack thereof) in the subject matter of the lawsuit.
There's nothing litigators do better than rationalize, justify, explain, elaborate, rebut, support, and opine. Don't leave those excellent tools at home when it comes time to negotiate the resolution of your lawsuit.
Someone recently told me that you can't argue with a story, only with a position or another argument. That's why narrative is such a powerful impasse breaker and why asking diagnostic questions, which elicit stories rather than arguments, so often bridges gaps between the parties that yawn as wide as the Grand Canyon That's why I'm listing Asking Diagnostic Questions as the second most powerful means of breaking negotiation impasses.
Diagnostic questions are those that reveal your bargaining partners’ desires, fears, preferences and needs. Though your bargaining partner will never reveal its true bottom line, it may well acknowledge that it places a far lesser or higher value on the subject of litigation – real property, for instance -- than you do. And though your adversary will never acknowledge the rectitude, nor even often the good faith, of your legal or factual position, she may easily disclose that she needs the money she seeks to infuse capital into her business, to pay back debts, to put her children through college or to acquire much-needed catastrophic health insurance.
You may also find that your bargaining partner is willing to disclose whether he is risk averse or risk courting and whether his predictions for the future of an enterprise – yours perhaps – are more optimistic or pessimistic than your own. Once you learn what your opponent wants, needs and prefers, you can commence – or reconvene – a negotiation that is more tailored to your adversary’s desires; one that will increase the number and value of items both of you have to exchange with one another.
Just a few examples from my own practice:
a case concerning the repayment of over-paid health insurance benefits to physicians settled at a number the defendant said she would never pay when the Plaintiff revealed the existence of an agreement between it and a board member that no one else who was overpaid would get a better deal than he had.
a case concerning the dissolution of a partnership settled when I asked Partner A what his valuation of the enterprise's inventory was in a case to dissolve the partnership. Because he placed a far lower value on that inventory than did Partner B, Partner B (who planned to continue in the import-export business) was happy to accept A's valuation, offering to purchase it from him on the spot (and agreeing to a lower valuation of the good will of the partnership business than he'd earlier been prepared to acknowledge).
a property damage case settled when I asked the Plaintiff, in separate caucus, what he planned to do with the proceeds of the settlement. The defendant, who "knew someone in the business," was able to obtain the item Plaintiff wanted at a lower cost than Plaintiff could have procured it, bridging the gap between the parties' negotiating positions.
a patent infringement case settled when I asked the Plaintiffs what they were afraid would happen if they agreed to give the alleged infringer a license to manufacture and market the allegedly infringing product. Plaintiffs said they believed the market would "get really hot" in three years time, allowing the infringer to make a killing on their technology. When I asked the defendant what he thought about Plaintiffs' suspicions, he said he planned to phase the product out of his product line within three years. I suggested that the defendant agree to a graduated royalty which would require him to pay an unusually high percentage of its sales during the years Plaintiffs were convinced he'd be selling "their" product and at a time when Defendant swore he would not.
In a lemon law case, I asked the Plaintiffs to tell the mobile home manufacturer to explain why they'd purchased the $200,000 vehicle in the first place. Plaintiff's answer so undermined the defendant's "buyer's remorse" theory of the case that the matter settled quickly thereafter.
I asked a perplexed defendant why the Plaintiff had chosen to sue it out of the entire universe of Plaintiff's competitors. Defendant quickly responded: "because we have better people, more talent and potentially better technology. Plaintiff wants to remove us from the market" I thereafter brokered a deal involving a joint venture between the two companies using company A's talent and company B's far larger distribution network.
As you can see from these few examples, diagnostic questions break impasse on "pure money" cases, as well as in those where the parties more or less obviously have something other than money to trade. Once again, it is critical to remember that no one wants money but everyone wants something that money can buy. Ask the ultimate reporter question about your negotiating partner's fears, desires, wants and needs -- WHY? -- and you will see impasse dissolving before your very eyes.
With apologies to "staying on topic" purists, I give my Lit Major readers the literary passage that comes to mind whenever I think too long about asking questions:
try to love the questions themselves as if they were locked rooms or books written in a very foreign language. Don't search for the answers, which could not be given to you now, because you would not be able to live them. And the point is to live everything. Live the questions now. Perhaps then, someday far in the future, you will gradually, without even noticing it, live your way into the answer.
I begin a series today on what I believe are the five most effective ways to break impasse. This morning's impasse-breaker will aid business people negotiating the settlement of a commercial dispute the most because it requires the generation of hitherto unseen business advantages to sweeten the pot.
Transform the dispute into an opportunity to make a business deal
Google’s CEO Eric Schmidt famously said that “litigation is just a business negotiation being conducted in the Courts.” If you look at litigated disputes in that light, the settlement option landscape immediately broadens. There are only certain remedies available in court or arbitration and those remedies may not be exactly what the parties are looking for.
If we remember that money is simply the means to obtain something else the parties desire – better distribution networks; insurance against future calamity; the security of knowing one’s intellectual property has not fallen in a competitor’s hands; health care; a college fund; even the acknowledgement that we have heard and understand our opponent’s point of view – we can add value to our negotiations before attempting to distribute it in a way that seems fair and just under the circumstances.
Often more important than finding commonalities between bargaining partners is locating those items that the parties value differently. A dollar may just be a dollar, but one company’s inventory, trade secrets or present pool of talent will seldom be worth the same in our competitor’s hands as it is in ours. In some cases our assets may be more valuable to another than they are to us, in which case we can choose the higher value as the central rationale for our proposal, remembering that where value is uncertain, the first party to put a price tag on it will “anchor” the bargaining range in his favor throughout the course of the negotiation.
Therefore, a savvy negotiator searches for both common and divergent interests in an attempt to put as many different options on the bargaining table as possible. Generating such options can melt impasse over hard “bottom line” dollar and legal position conflicts and transform a distributive negotiation session ("what I lose, you win and what you lose I win") into a business opportunity that will leave both parties better off than they could have imagined.
I cannot recommend John DeGroote's Settlement Perspectives blog too highly or too often. This week he praises CPR's new Early Case Assessment Guidelines. Praise from John is hard to come by. I join in his comments below and suggest that all my readers click on the link below for his excellent commentary.
The International Institute for Conflict Prevention & Resolution, known also as the CPR Institute, has recently published CPR’s Early Case Assessment ; Guidelines (2009), which are designed to “set forth a process designed to help businesses decide early on how to manage disputes, including identifying key business concerns, assessing risks and costs, and making an informed choice or recommendation on how to handle the dispute.” They certainly meet their objectives.
I spent the day at an advanced mediation training session at the U.S. District Court in Los Angeles where I serve as a settlement officer. I came away troubled by the wide array of responses to questions concerning the mediator's "right" or "desire" or "need" to use deception in separate caucus mediation - the primary form mediation takes in Southern California litigated cases.
[C]onsensual deception is the essence of caucused mediation. This statement should not come as a shock to the reader when it is considered in the context of the nature and purpose of caucusing. Actually, it is quite rare that caucused mediation, a type of informational game, occurs without the use of deception by the parties, by their lawyers, and/or by the mediator in some form. This is so for several reasons.
First, a basic groundrule of the information system operating in any mediated case in which there is caucusing is that confidential information conveyed to the mediator by any party cannot be disclosed by the mediator to anyone (with narrowly limited exceptions). This means that: (1) each party in mediation rarely, if ever, knows whether another party has disclosed confidential information to the mediator; and (2) if confidential information has been disclosed, the nondisclosing party never knows the specific content of that confidential information and whether and/or to what extent that confidential information has colored or otherwise affected communications coming to the nondisclosing party from the mediator. In this respect, each party in a mediation is an actual or potential victim of constant deception regarding confidential information — granted, agreed deception — but nonetheless deception. This is the central paradox of the caucused mediation process. The parties, and indeed even the mediator, agree to be deceived as a condition of participating in it in order to find a solution that the parties will find "valid" for their purposes.
Second, mediation rarely occurs absent deception because the parties (and their counsel) are normally engaged in the strategies and tactics of competitive bargaining during all or part of the mediation conference, and the goal of each party is to get the best deal for himself or herself.
These competitive bargaining strategies and tactics are layered and interlaced with the mediator’s own strategies and tactics to get the best resolution possible for the parties — or at least a resolution that they can accept. The confluence of these, initially anyway, unaligned strategies, tactics, and goals creates an environment rich in gamesmanship and intrigue, naturally conducive to the use of deceptive behaviors by the parties and their counsel, and yes, even by mediators. Actually, even more so by mediators because they are the conductors — the orchestrators — of an information system specially designed for each dispute, a system with ambiguously defined or, in some situations, undefined disclosure rules in which the mediator is the Chief Information Officer who has near-absolute control over what nonconfidential information, critical or otherwise, is developed, what is withheld, what is disclosed, and when it is disclosed. As mediation pioneer Christopher Moore has noted: "The ability to control, manipulate, suppress, or enhance data, or to initiate entirely new information, gives the mediator an inordinate level of influence over the parties."
Third, the information system manipulated by the mediator in any dispute context is itself imperfect. Parties, rarely, if ever, share with the mediator all the information relevant, or even necessary, to the achievement of the mediator’s goal — an agreed resolution of conflict. The parties’ deceptive behavior in this regard — jointly understood by the parties and the mediator in any mediation to fall within the agreed "rules of the game" — sometimes causes mediations to fail or prevents optimal solutions from being achieved.
Thus, if agreed deception is a central ingredient in caucused mediation, the question then becomes what types of deception should be considered constructive, within the rules of the mediation game, and ethically acceptable and what types should be considered destructive, beyond the bounds of fair play, and ethically unacceptable. Or, perhaps more simply, in the words of mediator Robert Benjamin, in mediation what are the characteristics of the "noble lie" — deception "designed to shift and reconfigure the thinking of disputing parties, especially in the conflict and confusion, and to foster and further their cooperation, tolerance, and survival"? Because formal mediation is generally viewed as "nothing more than a three-party or multiple-party negotiation," we can begin to formulate an answer to this question by examining the current limits of acceptable deception as employed by lawyer-negotiators.
Mediators can assist parties in reaching a zone of possible agreement by making limited and heavily filtered disclosures of the parties’ private concessions that the parties disclose in caucus sessions (Brown and Ayres call this “noisy” communication).
I urge all my readers to comment, but particularly litigators like my husband who may not know what many mediators have apparently known for quite some time -- that they are making "filtered disclosures of the parties' private concessions" after promising to keep all separate caucus communications strictly confidential.
My husband assured me on the way home tonight that he will henceforth require all of the mediators he retains to guarantee him that they will not "signal" his negotiating positions, tactics or strategies to his bargaining partners.
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.
I've scaled my MCLE way back this year, including any continuing education that requires travel unless, of course, it's something I'm speaking at to continue growing my business. Some MCLE courses, however, stay on my radar -- particularly those that don't require me to leave the office and that teach me skills to help me thrive in hard times. This IP settlement webinar is one of those continuing education courses I'd attend unless I thought I was already the best settlement attorney I could be. So seriously consider joining me and Chicago-IP lawyer extraordinaire R. David Donoghue of Holland + Knight for Hard Times? Learn How to Negotiate the Best IP Litigation Resolution
In a difficult economy, intellectual property protection and assertion is more important than ever. The combined stressors of a poor fiscal climate and shrinking legal budgets place a significant strain on any business dependent upon IP assets. as companies face difficult economic decisions, it is increasingly difficult to fit the expense and extended uncertainty of copyright, patent and trademark litigation into a forward looking business plan. This one-hour seminar explores the use of alternative dispute resolution as a means of protecting intellectual property and business activity, while minimizing the expense and devotion of time related to traditional IP litigation.
What You Will Learn
This program examines how to move an IP dispute toward alternative dispute resolution; best practices for controlling the expense and length of the process; and best practices for successful alternative dispute resolution. Whether you are an experienced IP practitioner or simply one grappling with IP issues in your general commercial practice, knowing how to offer your clients a wide array of ADR options might make the difference between a practice that survives and one that thrives. The seminar will cover the following topics:
How to choose between litigation and ADR.
The most successful strategies for guiding your dispute into the best ADR forum at the most productive time.
The five basic rules of “distributive” or “fixed sum” bargaining that will give you the “edge” in all future settlement negotiations.
The five ways to “expand the fixed sum pie” by exploring and exploiting the client interests underlying your own and your opponents’ legal positions.
The Ten Mediation/Settlement Conference Traps for the Unwary.
Invest just 60 minutes at your home or office to learn about alternative dispute resolution in the IP field from this duo of experts. This audio program comes to you live on Wednesday, February 18, 2009, 1:00-2:00 pm EST, via your phone or your computer. Materials corresponding to the course may be downloaded or viewed online.
Because litigation is so often settled with insurance dollars, from time to time we bring you updates on recent judicial interpretations of common policy terms. The following article answers the question in the Fifth Circuit whether CGL policies cover certain types of construction defect claims.
A recurring dispute between insurance companies and Commercial General Liability (“CGL”) policyholders concerns whether CGL policies provide coverage for construction defect claims. In its recent decision in Mid-Continent Casualty Co. v. JHP Development, Inc., No. 05-50796 (January 28, 2009), the Fifth Circuit takes the latest step in Texas jurisprudence on the issue, concluding that the “business risk” exclusions in such policies, at least as currently drafted, do not exclude coverage for damage to a contractor’s non-defective work even if caused by his own defective work.
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.
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?
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.
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:
bet on rather than argue about their different forecasts for the future;
FORUM (FORUM & FOCUS) • Jan. 08, 2009 Every Case Is a Winding Road
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.
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.
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.
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.
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.
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.
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.
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Learn from some of the most progressive lawyers, marketing pros, technology consultants and legal business giants how to:
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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.
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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. Brett is a patent attorney and frequent national speaker on internet and intellectual property law. 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).
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.
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.
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.
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.
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.
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.
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?
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?
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. /**
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.
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.
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.
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.
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
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?
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.
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.
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.
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.
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.
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."
"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.'"
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!
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.
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.
A decade ago, there were only a handful of mediation programs in bankruptcy courts.
Long associated with family law disputes, mediation programs were slow to catch on in complex business litigation, including bankruptcy cases.
But that's changing.
More than two-thirds of the 90 bankruptcy courts have mediation available, according to Robert Niemic, senior attorney at the Federal Judicial Center. Even more offer some other form of alternative dispute resolution, such as judicial settlement conferences.
In the U.S. Bankruptcy Court for the Central District of California, more than 3,800 cases have been referred to mediation since 1995. About 64 percent of those cases were resolved through settlements.
To keep costs down, the first day of mediation is free. Parties choose from a list of 200 attorneys and non-attorneys, such as accountants and financial experts, who volunteer as mediators.
Chief Bankruptcy Court Judge Barry Russell, who launched the mediation program in 1995, said that most cases settle in a day, producing major cost savings for both the court and the parties involved.
“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.
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!
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.
"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)
"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)
"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)
"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)
"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)
"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)
"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)
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?
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.
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?
It happened at a settlement conference again just last week. Defense counsel said there was "no insurance" for the defense orindemnity 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."
"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.
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.
"Inordinancy" is not, I think, a matter of time but of focus. One's sexual interests might be classfied as prurient if they are stirred by a single act, item or physical characteristic and disregard the humanity of the object of one's desire. In feminist terms, pornography objectifies people, elevating their parts above the sum of their parts and using them to satisfy our own -- but not their -- desires.
And how is pornography like litigation, Ms. Pynchon?
After more than 10 years as a judge of this [Ninth Circuit Court of Appeal] I find that the flow of cases begins to resemble a moving train, with each window revealing a still life of an individual human drama. The sheer volume of cases, and the fact that we rarely see the faces of the participants--just written words on paper and, sometimes, the arguments of lawyers--makes it difficult to remember that there are human beings somewhere looking to us with hope and yearning for a decision in their favor. The law, too, is quite complex. Cases often turn on legal technicalities that bear only a tangential relationship to concepts such as fairness and equity. Justice, we tell ourselves--and I do believe this--is done if the law is applied without regard to the outcome in a particular case.
The artifacts of litigation -- usually called "briefs" and sometimes sprung into life as depositions or trial testimony -- make a fetish of one or more aspects of a complex human drama. Litigation sucks the people out of the play, requiring both litigants and attorneys to objectify and demonize one another. By the time the "case" is ready to be "mediated" or "settled," the people with the problem often feel as if they long ago watched the litigation train leave with someone else's story in it -- that the "still-life" Kozinski observes at a glance through the moving window has little to do with the people and a lot to do with process.
Are we interested in knowing one another? Would a genuine interest in the man Kozinski be more satisfying, finally, than the briefly titillating party joke we might wish to make of him? Do we privilege the prurient or the personal?
If you do this, you will no longer be capable of reducing Kozinski to a ribald joke or reveling in his public embarassment. You will recognize the humanity in him, which is the necessary pre-requisite to recognizing and forgiving the fallible humanity in all of us.
And litigation? Here's my unsolicited advice: Let your clients tell their stories to one another in a joint mediation session. Neither you nor they will thereafter be capable of reducing the "opposition" to a single demonic character trait.
I will say it again. Litigation is not about money. It is about justice.
The defense balks at paying Plaintiff at the point of a gun. The Plaintiff resists releasing the defendant from liability until satisfied that a wrong has been righted or never really existed in the first place.
You can accomplish justice with money. But you can accomplish it far more easily, and with far greater satisfaction for your clients, if you allow them to once again share the depth and dimensionality of their dispute with one another; harmonizing their mutual stories of injustice and betrayal.
In the meantime, I suggest we let Kozinski -- and ourselves -- off the hook by recognizing that the sum of the parts is greater -- and in the end far more interesting -- than the temporary public revelation of the smallest part of any man.
Cyberspace is weird and obscure to many people. So let's translate all this a bit: Imagine the Kozinski's have a den in their house. In the den is a bunch of stuff deposited by anyone in the family -- pictures, books, videos, whatever. And imagine the den has a window, with a lock. But imagine finally the lock is badly installed, so anyone with 30 seconds of jiggling could open the window, climb into the den, and see what the judge keeps in his house. Now imagine finally some disgruntled litigant jiggers the lock, climbs into the window, and starts going through the family's stuff. He finds some stuff that he knows the local puritans won't like. He takes it, and then starts shopping it around to newspapers and the like: "Hey look," he says, "look at the sort of stuff the judge keeps in his house."
Susan Estrich's 'take" in her post Good Humor, excerpt below:
If everyone who ever viewed or shared pornography were disqualified from judging the line between protected speech and criminal obscenity, we all would be in trouble. The problem facing Judge Kozinski illustrates what's wrong with the prosecution, not with the judge.
Which brings us to the broader point. Judge Kozinski's actions affect the reputation of the judiciary, on which rest foundations of the state, like public respect for the rule of law. To the extent that this public disclosure undermines public confidence in the judiciary or the rule of law, it's a very bad thing. There's a reason for the outrage that's expressed when the public hears about judges' bad behavior. As Stephen Gillers told the LAT, "The phrase 'sober as a judge' resonates with the American public."
The National Law Journal's compilation of Expert Opinionon the matter including legal ethics professor Ronald Rotunda's opinion that the material on Kosinzki's site was "demeaning, infantile, pornographic, [and] offensive," which just makes me want to see what type of internet porn the good Professor prefers.
Take a page from theBarbie- Bratz litigation which the AmLaw Daily reports was partially settled with the assistance of Pierre-Richard Prosper, a former ambassador-at-large for war crimes issues in the Bush administration.
The AmLaw Daily reports that Prosper was "brought into the case by federal district court Judge Stephen Larson to oversee settlement negotiations among all three parties because (according to Prosper) the "judge and the parties thought [his] international experience mediating and negotiating armed conflicts would translate here." See Barbie and Bratz Head to Trial here (emphasis mine).
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.
Thanks to Perry Itkin's Florida Mediator for linking to this Memorandum Opinion enforcing, by way of contempt proceeding, a mediation confidentiality order entered by a federal magistrate in the District of Columbia in January of this year.
We were just discussing this issue at the yearly Settlement Officer (my own S.O. profile here) "brown bag" lunch meeting with Judge Morrow of the U.S. District Court in the Central District of California. Some of those present were concerned of the the confusion that might be caused to counsel by the unsettled state of the law of mediation confidentiality in federal practice and by the Court's own "Procedures for Implementing Settlement Options," re-printed below. Notice that the Court's procedures use the terms "mediation type settlement proceedings," settlement "procedures," and, "settlement conferences" without defining any of them.
Confidentiality of Proceedings . All settlement proceedings shall be confidential. No part of a settlement proceeding shall be reported, or otherwise recorded, without the consent of the parties, except for any memorialization of a settlement and the Clerk’s minutes of the proceeding.
Procedures for Implementing Settlement Options below:
In every civil case, the parties, unless exempted by the trial judge, shall participate in one of the settlement procedures set forth in Local Rule 16-15 or as otherwise approved by the trial judge. No later than 45 days before the final Local Rule 16 pre-trial conference, the parties shall select and participate in one of the suggested settlement procedures as set forth in Local Rule 16-15 or as otherwise approved by the trial judge. Except as otherwise ordered by the Court, a Notice and Request of Settlement Procedure Selection (ADR-1), signed by counsel for both sides, shall be filed not later than 14 days after entry of the schduling order under F.R.Civ.P. 16 (b).
If Settlement Procedure No. 1 (Local Rule 16-15.4) is selected: If the assigned district judge is to conduct the settlement procedure, the parties must contact that district judge’s courtroom deputy and arrange a date and time for the settlement conference. The courtroom deputy will calendar the matter accordingly. If the assigned discovery magistrate judge is to conduct the settlement conference, the courtroom deputy shall refer the matter for settlement conference to that assigned magistrate judge. The magistrate judge’s courtroom deputy will calendar the matter accordingly. Further questions regarding this option may be referred to the courtroom deputy for the assigned district judge or assigned discovery magistrate judge, as appropriate.
If Settlement Procedure No. 2 (Local Rule 16-15.4) is selected: The parties must access the Attorney Settlement Officer Panel List available from the website. There are two panel lists on the website, one alphabetical and the other by area of law. The website also contains personal profiles of those panel members who voluntarily provided such information. The Attorney Settlement Officer Panel List is updated periodically by the Panel Coordinator. If the parties do not have the ability to access the website, the parties may contact the courtroom deputy to the assigned judge for the case. The courtroom deputy will make a photocopy of the appropriate section of the list that relates to the type of case that the parties are litigating and fax or mail that appropriate section to the requesting party. The parties shall then make a selection from the list, obtain consent from the Attorney Settlement Officer selected and file a Stipulation Regarding Selection of Attorney Settlement Officer (ADR-2).
The parties and the Attorney Settlement Officer shall arrange for an agreed upon date, time and place for a settlement conference and shall so notify the Panel Coordinator. If the parties cannot agree on an appropriate Attorney Settlement Officer from the list, they shall submit the ADR-2 requesting a random assignment of an Attorney Settlement Officer. The Panel Coordinator will perform the random assignment of an Attorney Settlement Officer from the particular area of law designated on the ADR-2 and will notify the parties by mail of the selection. Within five days after the conclusion of the settlement proceeding, the Attorney Settlement Officer shall file with the court and serve the parties and the Panel Coordinator an Attorney Settlement Officer Proceeding Report (ADR-3). Further questions regarding the Attorney Settlement Officer Panel may be referred to Dawn Osborne-Adams, Attorney Settlement Officer Panel Coordinator, at 213-894-1215.
If Settlement Procedure No. 3 (Local Rule 16-15.4) is selected: The parties shall appear before a retired judicial officer or other private or non-profit dispute resolution body for mediation-type settlement proceedings. The parties shall make any necessary arrangements in this regard and should file a notice with the court naming the person who will conduct the settlement conference and indicating the date set for the settlement conference.
If a "Notice to Parties of ADR Pilot Program" has been issued: Along with the Notice provided to plaintiff's counsel at the time of the filing of the complaint, plaintiff's counsel (or defense counsel if a removal case) will also be given an "ADR Pilot Program Questionnaire." This Questionnaire is to be completed jointly by the parties and filed concurrently with the report required under Federal Rules of Civil Procedure 26(f). After reviewing the Questionnaire, if the judge assigned to the case determines that the case is suitable for referral to the program the parties will receive an "Order/Referral to ADR Pilot Program." For further information on the program, please see General Order 07-01 which is available on the Court's website.
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.
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.
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.
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:
you're tired of his case and want to get rid of him
you're in cahoots with opposing counsel, with whom, frankly, you have a far more enduring if not affectionate relationship than with your client
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
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
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
he feels extorted and no one is paying any attention to that
he feels like he's being sold down the river and no one is paying any attention to that
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.
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
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.
Because the mediator's job is not to settle the case.
The mediator's job is to:
assist you in helping your client understand the options available to him
assist you in delivering bad news to your client in a way your client can hear it
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
assist you in resolving for your client the justice issues that your client originally brought to you to resolve
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
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
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
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
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
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.
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
ask your clients for all of their insurance policies, even those that seem unlikely to provide coverage;
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;
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
in most jurisdictions, that language -- if ambiguous -- is interpreted in favor of the insured's objectively reasonable expectations; and,
in most jurisdictions the rule of contra proferendum will require a court to construe any ambiguity in an insurance policy against the insurance carrier
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;
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;
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;
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;
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
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!
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.
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 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.
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.
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)
We conclude that the Washington State Supreme Court’s decision in Scott v. Cingular Wireless, 161 P.3d 1000 (Wash. 2007), establishes that T-Mobile’s arbitration provision is substantively unconscionable and unenforceable under Washington state law, and that there is no federal preemption in light of our decision in Shroyer v. New Cingular Wireless Servs., Inc., 498 F.3d 976 (9th Cir. 2007).
Claiming that the $4.85 billion Vioxx Settlement improperly "allows [defendant] Merck to dictate the advice a lawyer will offer" to clients, some Vioxx plaintiffs' attorneys have asked the federal judge overseeing the deal to "keep some of their clients outside the settlement while still allowing other clients to accept it."
Under the global settlement agreement reached by lead counsel in New Orleans last month, "if the lawyers want any of their clients to receive money from the settlement, they must recommend the deal to all their clients."
Those attorneys resisting the requirement are saying not only that the provision "would prevent them from offering the best independent judgment for each client" but that "[a]greeing to the provision might open them to future lawsuits from disgruntled clients."
Another reminder of the narrow scope of Evidence Code section 1152's protections has just come come down from California's Second District Court of Appeal in Zhou v. Unisource Worldwide, Inc. here.
Before discussing the Zhou holding, we remind our readers that in California, at any rate, the differences in protections between mediated settlement communications (absolute protection from disclosure) and non-mediated settlement communications (limited protection) make it imperative that counsel clearly specify, in writing, whether the settlement conference they are about to attend is a "mediated" conference -- and hence protected by Evidence Code section 1119 -- or a "non-mediated" conference -- and hence protected only by Evidence Code section 1152.
Though I'm aware of no case law on the topic, I'll go so far as to say that an attorney's failure to make this distinction will likely be found to fall below the applicable standard of care in the event the client suffers harm as a result.
The Zhou Holding
Briefly, Plaintiff, who was injured in two separate automobile accidents, sent the insurance carrier an offer to compromise -- which was just barely brought within section 1152's protections -- for Accident No. 2. During the trial of Accident No. 1, the defense proferred into evidence the settlement offer made for Accident No. 2 to prove the invalidity of the claim arising from Accident No. 1.
In holding that the trial court erroneously excluded that correspondence from evidence, the Court of Appeal explained:
[I]n this case Zhou’s letters to State Farm regarding his purported injuries
from the March 1, 2004 accident were not offered to disprove the merits of the claim under negotiation, but rather “to show the invalidity of a different claim.” *
The entire case is well worth reading as a refresher if you're about to send a settlement demand, attend an MSC or pursue mediation.
* The Court also cites federal law to the same effect -- Broadcort Capital Corp. v. Summa Medical Corp. (10th Cir. 1992) 972 F.2d 1183, 1194 [federal rule barring admission of evidence relating to settlement discussions does not preclude evidence of settlement of different dispute; “the evidence was not admitted to prove the validity or amount of the ‘claim under negotiation’”]; Towerridge, Inc. v. T.A.O., Inc. (10th Cir. 1997) 111 F.3d 758, 770 [“[r]ule 408 does not require the
exclusion of evidence regarding the settlement of a claim different from the one litigated”].)
The full post is well worth reading. Most applicable to my own practial ethics needs, however, is the following post excerpt.
None of the existing or proposed ethical codes, he writes,
address the relatively common and always difficult situations in which more than one ethical principle is implicated, and in which no course of action perfectly protects all of the mediation principles involved.
One party appears to have an imperfect understanding of some aspect of a deal, the other party is credibly indicating an intention to withdraw from the mediation, the conversation up to this point suggests that the issues appearing in the legal complaint are only one component of what’s going on and what each party cares about, the case is proceeding under brutal external time constraints, the media are making regular requests for updates, and the mediator isn’t sure what the best next steps might be.
That’s not just an ethical question, but there are ethical questions embedded in there. And nothing in most articulations of mediation ethical standards even acknowledges, much less guides, the balancing I must do.
Amen, brother and thanks for joining the conversation about ethics.
Take a look at Geoff Sharp's post on the so-called pure money case and then please please please send me your stories on meaning-making about money in the course of mediated or non-mediated negotiations.
(see our previous posts on the subjective experience of money here and here)
What do I mean by "meaning making"?
Let me give you an example of the type of story I'm looking for.
I was mediating a personal injury case and we'd reached impasse. The Plaintiff was having trouble understanding how the amounts of money being discussed could possibly adequately compensate her for her injury -- a self-report of daily 3-hour headaches.
After much discussion I sat down with my calculator and "translated" the final offer of settlement into an hourly wage for two years worth of headaches "if suffering were your full-time job."
The resulting "hourly income" was pretty substantial when viewed as an hourly payment for pain. This way of presenting defendant's offer broke the impasse.
Before we translated the total settlement offer (minus costs and fees) into a compensation scheme familiar to the Plaintiff -- an hourly wage -- she had no metric against which to value that offer. The money wasn't real until she understood it in terms of earnings.
I've heard many other stories like this but my appetite for them is insatiable. Whenever a mediator or lawyer tells me a story like this, I am always inspired and heartened. Their telling also helps me become better at facilitating "pure money" negotiations. I'm hoping they will also be useful to my readers.
All things being equal -- or, more to the point -- most things being impossible to equalize -- your clients' satisfaction with the settlement you negotiate is going to depend upon something other than the absolute number attained.
In fact, the social scientists who study these things have told us that people tend to be more satisfied with the outcome of negotiations in which the following occur:
the other side makes numerous concessions (even if they are small or inconsequential);
the outcome achieved is as good or better than similar outcomes obtained by colleagues or competitors (i.e., a 10% raise in salary tends to be viewed favorably if one's co-workers receive 7% raises and unfavorably if one's co-workers receive 12% raises);
the negotiator does better than he hoped to (without regard to whether the expected outcome is "good" or "bad" based upon objective factors);
the negotiator feels that the process by which the outcome was reached was "fair and reasonable"; and,
the negotiator does not believe that his will was overridden by a stronger negotiator on the other side.
What's new about this relatively commonplace insight is that it is at work not only in sophisticated bargainers, but also in human toddlers and our primate friends the capuchin monkeys.
How do we apply this "choice preference" insight to client satisfaction with settlement outcomes?
It's not hard to do.
Whatever a client's reservations about the course a negotiation session takes, by the end of the day they've made dozens of small decisions among (potentially) equally attractive or unattractive choices. Add to the negotiation mix the fact that we tend to value choices that were made only after great difficulty and the "satisfaction outcome" is nearly guaranteed.
Even without coaching by you or assurances given by the mediator, your client should be pretty satisfied with any negotiation outcome by the end of the day. If not, only a little negotiation post-mortem back-patting should be necessary to focus your client on the difficulty of your mutual achievement and on your joint superior wisdom in settling at the time and for the number you both did.
We're not suggesting being disingenuous here. Most cases can profitably settle in a fairly wide range. So long as you've done a thorough cost-risk analysis with your client and have a firm bottom line you've agreed not to alter, most settlementsof risky and unpredictable litigation are the smartest decision you and your client can make at any stage of the proceedings.
Year-end's coming and with it the time to close the book on many cases that are becoming more problematic with time.
Clear these troublesome pieces of litigation away and both you and your client will have much to celebrate in 2008.
The heart of Professor Cole's concerns is quoted below. The questions from the Supreme Court giving rise to those concerns may be found in the linked post above.
(our earlier posts on the case -- which we referred to as the "Mattel" -- are here and here)
It may be that the[ Court is] considering whether substantive judicial review provisions contained in an agreement among parties transforms what the parties think is arbitration into a procedure governed by common law (contract law) rather than the FAA.
If that is the case, then the question becomes whether parties can ask courts to review their contracts on grounds that courts normally don’t use to review contracts. Then, the district court judge would have to look at whether he or she had authority to grant the parties’ request — in past cases, courts have used their inherent authority to grant or deny such non-traditional requests.
But, because courts’ inherent authority is discretionary, courts might reject the parties’ requests. That level of uncertainty might doom these kinds of agreements.
Let me just say I'm prejudiced on this topic before we begin yet another discussion of the Vioxx settlement -- this one focusing on the stellar and collaborative case management skills of the jurists responsible for managing these cases through litigation, trial and settlement.
I was a true-believer of the benefits of the Complex Court on the first day my nine-figure environmental insurance coverage dispute was reassigned from a downtown courtroom to the Hon. Carolyn B. Kuhl, presently the Presiding Judge of "Complex."
My respect for the Complex Court only grew when I became Judge Victoria Chaney's superannuated law extern while pursuing my LL.M degree in Conflict Resolution at the Straus Institute.
So it is no surprise that Judge Chaney was one of those Judges who were highly instrumental in pressing the parties to resolve one of the most sophisticated mass tort cases ever -- and not by "twisting arms" or "banging heads," but by the art of case management, collaboration and principled persuasion.
By December 2006, there had been enough [Vioxx jury] trials for both sides to recognize the strengths and weaknesses of their arguments, [New Jersey Superior Court Judge Carol] Higbee said.
Both sides had spent a lot of money, but the litigation was still progressing too slowly.
That month, [U.S. District Judge Eldon] Fallon, Higbee and [Ass't Supervising Complex Court Judge Victoria] Chaney met in New Orleans. Over dinner, they prepared for a meeting the next morning with attorneys from both sides. It was time, the judges had decided, for the lawyers to discuss a resolution.
The judges urged the lawyers to begin talking. They asked for monthly meetings and regular progress reports. They emphasized, among other things, the need to move the cases along.
"We were simply not going to be able to continue this slow progress," Higbee said. "It would go on forever."
Six months later, in June, the judges notified the team of plaintiff attorneys they intended to meet with Merck's legal team, Higbee said. The pace of the litigation weighed on the judges.
"Trying the cases one at a time was no longer going to be an option," Higbee said. "We never thought we would try all the cases, but there was a chance we would try another 500 cases."
The judges told Merck's lawyers they would have to start spreading the cases out among more judges, which would diminish the chance of getting a settlement. "The chance of a fair resolution was much more likely," Higbee said, "while there was a control of the litigation by the three judges."
The Judges' Management Strategy Plus the Three-Year Statute of Limitations, Pushed the Negotiations Along
Kent Jarrell, an outside spokesman for Merck's legal team, said the possibility of the lawsuits being spread out among additional judges was "a factor" that pushed the negotiations along. But Jarrell said the three-year statute of limitations, which arrived at the end of September, also was a big factor.
The statute of limitations on filing new cases gave Merck a clear definition of the litigation's magnitude, and that would prove to be a key factor in Merck's ability to formulate a settlement.
The settlement negotiations, which grew more serious during the summer months and into the fall, culminated in the early morning hours of Nov. 9.
"Both sides had a similar goal -- to settle as much of the litigation as possible and to pay people with the strongest cases, the most serious injuries, the most money," the judge said.
Higbee believes the settlement will ultimately succeed. "I'm anticipating they will get more than 85 percent of the cases," she said.
I'm a student of the social psychology of conflict. Of in-groups and out-groups. Of choosing sides and aligning interests. Of polarization and cognitive biases.
But I just never get it when a newspaper reporter -- even someone living as rarefied a journalist's life as New York Times reporter Joe Nocera -- sheds crocodile tears for BigPharma.
Call me crazy. Call me neutral. But the recently settled Vioxx cases never struck me as low-merit, extortionate rip-offs nor as slam dunk victories for injured consumers or their survivors.
Why? For all the reasons Joe notes -- it's extremely difficult to prove that one assault on a person's physical well-being (the use of a potentially life-endangering drug) is a more likely explanation for stroke, heart attack or death than the thousands of other reasons we all eventually die -- obesity, smoking, genetic pre-disposition, exposure to toxic chemicals in the workplace, stress and the like.
John Doe's Alleged Vioxx-Related Heart Attack
In negotiating the settlement of litigation, I find it best when people actually engaged in the dispute are in the room because it tends to focus the parties on the intricacies, texture, dimensionality and simple messiness of real life.
With that in mind, I'll use a hypothetical to put a little flesh and blood into the debate. More precisely, I'm going to use a hypothetical John Doe who had a heart attack about ten months after he started taking Vioxx.
What Merck Did and Failed to Do
As Nocera acknowledges in his article Forget Fair, It's Litigation as Usual, Merck did not behave with the high level of caution the consuming public would expect of a drug manufacturer creating and marketing a product we ingest to help make us better. I mean, no one was taking Vioxx as a recreational drug, right? Here's what Nocera says about Merck's marketing of Vioxx.
[Merck] caught a serious case of blockbuster fever in the 1990s. In its effort to crank out drugs with $1 billion or more in annual sales — the definition of a blockbuster drug — it over-reached. . . .
Merck spent hundreds of millions of dollars marketing Vioxx, largely through direct-to-consumer advertising, portraying it as some kind of miracle pain reliever. So instead of having a few hundred thousand users in the short time it was on the market, it had 20 million. Its annual sales grew to $2.5 billion a year.
Even before the drug was approved by the Food and Drug Administration, there were rumblings in the scientific community that Vioxx might increase the risk of heart attacks or strokes. It’s not quite right to say that Merck completely ignored those potential problems — but the company certainly tried to avert its eyes.
. . . At Merck . . . “there was a kind of studied ignorance” of the possibility that Vioxx could increase the chances of a heart attack — even after one study, called Vigor, suggested that the drug could quadruple the heart attack risk. Only in 2004, when another study confirmed the increased risk, did Merck finally react — by taking the drug off the market.
So Merck was making billions of dollarson a drug that probably should not have been marketed to the general public. Merck ignored the medical research -- some of which showed the drug could quadruple the risk of heart attack -- until yet another study confirmed the increased risk.
Nevertheless, Nocera worries about a judicial system railroading Merck into creating a fund for people who are able to demonstrate that the drug likely caused stroke, heart attack or death.
John Doe's Bereaved Family Seeks to Recover for Their Devastating Loss
As Nocera notes, you can never really be certain what caused your cancer or heart attack. No one will ever know for sure why your brother had a stroke at 35 when everyone else in your family lived into their nineties. We all have medical histories that make us vulnerable to one or more life-threatening conditions that will eventually kill us off. As the National Geographic recently noted in the chart reproduced above, our odds of death from any and all causes are 100%.
At the close of yesterday's seminar on mediation ethics for lawyers, I was asked what ethical standards guided my own practice. Other than "neutrality" and maintaining confidences, I'm sorry to say that the question caught me short.
The highly unusual agreement not only requires 85% of plaintiffs to agree before it can be finalized but also might unduly force some claimants to settle or risk losing their lawyer.
That's because the deal includes highly unusual restrictions on plaintiffs' lawyers. The settlement requires them to recommend the deal to all of their clients or none. In addition, lawyers must stop representing any clients who turn it down as long as they don't violate ethics rules.
The agreement was hammered out by Merck and a committee of top trial lawyers who represent Vioxx claimants. Lawyers for both sides said it was a good deal because it provided immediate and fair compensation instead of lengthy trials with uncertain outcomes. Merck requested the all-or-nothing conditions because it feared lawyers would settle weaker cases and cherry-pick stronger ones for trial and possible higher payouts.
Clients are not inventory that lawyers can just shed when they become inconvenient. It's forbidden.
Local trial attorney Tom Girardi, however, who took at least one 'bellwether' Vioxx case to a jury verdict before Assistant Supervising Complex Court Judge Victoria Chaney in Los Angeles earlier this year, notes that it is
always the clients' decision to accept a settlement or not, and lawyers aren't going to do anything that's unethical [and that] those considering [whether to accept the offer] should know these are not easy cases to try in court.
So is a Mass Tort Injustice on the Horizon? Not Likely.
The law -- and the contract between attorney and client -- gives both the right to withdraw from the attorney-client relationship for any or no reason. Generally, however, the relationship continues unless the same type of "irreconcilable differences" that permit husband and wife to divorce, arise between counsel and client.
One of the most common reasons for the dissolution of the attorney-client relationship is a disagreement over settlement. The attorney is not, of course, the client's indentured servant and the client is neither chattel nor "inventory."
If the attorney believes the client has been offered a settlement that is a better alternative to further litigation and trial, he would dishonor his ethical obligation if he didn't say so. If the client disagrees and their difference of opinion cannot be resolved, they separate.
The only ethical requirements on the part of the attorney in this circumstance are: (1) not to abandon the client or separate at a time when it would cause harm, i.e., bowing out on the eve of trial; and, (2) not putting the attorney's own interests above those of the client.
This is where that pesky contingency fee comes in.
Any attorney who has a one-third to fifty percent financial interest in a settlement reached or judgment entered in his client's case will often appear to have a financial interest that conflicts with his client's. This apparent conflict, however, is actually more of a guard against unnecessary litigation than the defense lawyers' practice of charging their clients an hourly fee.
A contingency attorney lives or dies by his ability to assess the risk of victory or loss and maximize the value of the threat of further litigation and trial to the defendant.
When the contingency fee intersects with mass tort practice, however, common daily practice is writ so large that the tension between attorney and client that accompanies all personal injury litigation can be made to look like injustice -- clients as inventory and attorneys as self-serving monsters.
Let's Talk About the Risks in the Real World
Tom Girardi, after trying a brilliant case to the jury in Judge Chaney's courtroom, lost to Merck. In closing, Merck's attorney argued to the jury that Tom's client was "all in" based upon his testimony about the number of Vioxx tablets he'd taken.
Clients, however, just like any other fallible human beings, "forget" or dissemble. Whatever the Plaintiff's "true" recollection, the pharmacy records proved otherwise. He had not only not taken the number of Vioxx tablets prescribed -- his recollection of how many he took was not even close.
Can the Vioxx attorneys predict victory? No. Can Merck? Nope. Did both sides take their best shot at trying a couple of dozen cases at enormous expense. I think so.
Is there an ethical problem here? Not likely. These are some of the best personal injury trial attorneys in the country. And they don't get that reputation by settling their clients' claims for less than they're worth.
Because these materials are the basis for a speech and not the speech itself, they may be a bit confusing. I'm providing them for those who attended the seminar. If you didn't, please understand that not everything discussed appears in these materials.
The entire day of speakers (a pretty high powered group) will soon be available in audio from the Pincus CLE company here.
The judge didn't care where they went, Herman said yesterday from his New Orleans office, he just wanted them -- all of them -- in one place. Fallon wanted the settlement done by the end of the week.
They converged in New Orleans, where they averaged three hours of sleep a night and lived on pizza, gumbo, diet coke and coffee.
And before dawn yesterday, they finalized the agreement . . .
This was not, of course, the first time these high-powered lawyers met to resolve the most aggressively defended pharmaceutical litigation in remembered history.
From the Star Ledger again
Herman, the plaintiff attorney in New Orleans, said the judges, including Fallon and state Superior Court Judge Carol Higbee from Atlantic City, ordered negotiations to begin last December. The judges' message, said Arnold Levin, who helped negotiate the settlement, was it was a good time to get started because the litigation had matured, or progressed.
Over the course of the past 11 months, two teams of attorneys -- 10 in all -- met face-to-face as many as 50 times in a variety of cities across the country. The negotiations, which remained confidential until late Thursday, involved as many as 100 conference calls, Herman said.
They Don't Call Them "Behind the Scenes" Negotiations for Nothing
As the Star Ledger coverage concludes:
"Negotiations over a multibillion settlement only work when they're done confidentially," Herman said, adding the attorneys were under orders by the judges to keep them secret.
In New Orleans, it was nearly 5 in the morning when the attorneys finalized the agreement. Most went off to their hotel rooms to nap or shower before they had to head over to a regularly scheduled conference before Judge Fallon.
And never underestimate the power of pizza, coca-cola and sleep deprivation to get the deal done.
And yes, only a Plaintiffs' trial lawyer from New Orleans can get away with similes like that!
Settlement negotiations began last December and have proceeded fitfully since, reportedly spurred on by Fallon and other judges. The final stretch began Thursday morning at the New Orleans offices of Russ Herman, liaison counsel for the plaintiffs, and wrapped up Friday morning around 5 a.m.
Herman says the primary lawyers for the plaintiffs included Chris Seeger of Seeger Weiss, Birchfield of Beasley Allen, and Arnold Levin of Levin, Fishbein, Sedrad & Berma. Merck was represented by Doug Marvin of Williams & Connolly, John Beisner of O'Melveny & Myers, and Adam Hoeflich of Bartlitt Beck. "It was a true, hard-fought rough and tough negotiation on a very high, professional plane," Herman told Legal Times, ALM's Washington weekly.
(left: football without the grease)
Herman says a general deal was struck 10 days ago. "But the devil's in the details and they can break down at any point," says Herman. "Nobody raised their voice. Or made threats. But people's positions were very hard. It was like each lawyer had a greased football and was running like a wild monkey."
Courts and scholars have traditionally ignored the distinction between vacatur (as to which section 10 limits the grounds, and there should not be any additional, non-statutory grounds) and appeal, about which the FAA is silent (other than perhaps section 9 which conditions the confirmation of an award on whether the parties have agreed that judgment on the award can be entered, arguably leaving that until later if they have agreed on an appeal to a court or a panel of appeal Arbitrators).
Sadly, the petitioners have also ignored this distinction, so the chances are that the Supremes will come out against appeal. As I have pointed out in the past, the clearest example of appeal next to vacatur as two distinct remedies can be found in the English Arbitration Act of 1996.
This case tests the limits of the power of contracting parties to curtail the power of their arbitrator. Section 10 of the Federal Arbitration Act (i.e., the provision stating the grounds for vacatur) already provides that an award may be vacated if the arbitrator exceeds his or her powers. The question before the Supreme Court is whether parties may contractually define those powers by specifying that the arbitrator exceeds them if he or she fails to base his or her decision on the law.
There appear to be five lines of argument supporting the proposition that such contracts should not be enforced:
1. Congress intended the grounds for vacatur to be limited to those expressly set forth in Section 10, and none of those permits vacatur based on the content of the award.
2. Part of the ethos of arbitration is that it shall be quick and efficient (not slow and accurate), regardless of what the contracting parties desire.
3. Contracting parties should not be able to dictate to courts what courts should do.
4. Allowing vacatur on the basis of the content of the award will put too big a burden on trial courts handling vacatur motions, who are not used to the reviewing function.
5. Judicial review is often not in the parties' interests. We need to prohibit review to save the parties from their own bad judgment.
I think each of these arguments is faulty.
As to Argument 1: Congress expressly said Courts may vacate when the arbitrator exceeds his power. It never prohibited the contracting parties from defining what those powers are. There is no reason to consider the four Section 10 grounds for vacatur as exclusive. As long ago as 1953, the Supreme Court itself added a content based non-statutory basis for vacatur ("manifest disregard of the law") without an excuse as great as we have here, i.e., that the parties asked for it.
The agreement at issue in Mattel calls for a deeper level of review than manifest disregard of the law. Nevertheless, the Supreme Court would be hard pressed to say that such a review would contravene Congressional intent. The Court long ago broke that supposed barrier. In any event, what Congress said it intended was to put arbitration agreements "on the same footing" as all other agreements. That should mean "carry out what the parties contracted for" so long as their contract is neither illegal nor contrary to public policy.
As to Argument 2: There is no ethos to Arbitration other than the ethos of parties' freedom to customize their own adjudication process in any way they see fit. There are many in the ADR community who think about, and advocate for, arbitration as if it were an institution that must conform to a Platonic ideal. The largest arbitration provider in the world, the American Arbitration Association, filed an amicus brief in the Mattel case, arguing that the customized arbitration the parties contracted for in this case should not be permitted because, inter alia, it runs afoul of the ethos of arbitration (i.e., quick, efficient and un-litigation-like). I have no idea why AAA, a neutral provider, would put its oar in this water at all. Nor can I fathom why they did so to pull against the direction of contractual freedom.
As to Argument 3: It is the Courts that should not be able to dictate what they do or do not do. It is Congress that has that power. And Congress already used that power to dictate to Courts what they should do in this instance: that is, "enforce the parties' agreement as written."
As to Argument 4: The best of the arguments against permitting the parties to include judicial review in their private dispute resolution process is the long recognized common law limitation on contractual freedom: impossibility or impracticability. The kind of judicial review called for here, however, is not onerous or novel. District courts have been conducting content based reviews of administrative decisions as a significant part of their ordinary duties since the 1930s.
As to Argument 5: I am the first to admit that judicial review of an arbitration award is usually, maybe even almost always, a bad idea. But those who oppose enforcement of contracts calling for judicial review are saying something more: that it is always a bad idea, and that it is such a bad idea that parties themselves should not be able to decide for themselves just how bad an idea it is for them.
It turns out that this case is the very worst scenario for judicial paternalism. Not only were the parties sophisticated players engaged in a commercial dispute, they entered into the agreement after the dispute arose (i.e., it was a true "submission agreement"), so they had reason to know precisely what they were getting into.
Something extra to watch: Just as the U.S. Supreme Court is now reviewing the Mattel case, the California Supreme Court is reviewing the Crowell case. The Crowell arbitration arose under the California Arbitration Act and raises the identical issue as that raised by Mattel.
But here is the real irony in California: One of the reasons trial courts are already experienced with vacating arbitration awards for legal error is that they have already been told to do so by the California Supreme Court in employment cases (Armendariz). They must do so even though the California vacatur statute (CCP section 1286.2) like the federal vacatur statute (FAA section 10), does not include legal error as a ground for vacatur.
Under Armendariz, California courts are not permitted to enforce an arbitration agreement if it does not provide a mechanism for judicial review. If California now prohibits private contracts requiring judicial review of commercial arbitration awards, it will be imposing two directly contrary limitations on contractual freedom: Parties may neither limit the power of commercial arbitrators (by requiring judicial review) nor expand the power of employment arbitrators (by failing to provide for judicial review).
Imposing both limitations would not be a contradiction -- they arise in different contexts. But such a decision would starkly elevate the policy of protecting employees over the policy in favor of the freedom to contract. That is, the California court would be saying that employee protection is a good enough reason to override all of the arguments against thejudicial review of arbitration awards, but freedom of contract is not.
While some might argue that judicial review would add transparency to the arbitration process by opening up the private proceeding to public judicial review would fuel the notion of a tailored private system for the rich and powerful using public resources.
Suppose the parties contract for judicial review under seal; is that OK?
If we like contract so much, why not let the parties "rent" an appellate panel? Maybe the Supreme Court will review arbitrations as well?
If we go down this road, we would need new rules as well as Congressional authority.
Who will pay for this potential new burden on the appellate system?
I doubt that mere contract alone will cut it under the current law but I predicted a Gore victory and a Supreme Court abstention so what do I know?
There you have it. Three lawyers. Three very good opinions. Don't you LOVE the law?
In Judiciary's Role in Arbitration Weighed, AP reports on the tea leaves that lawyers and business people will be reading for the next several months as we await the Supreme Court's ruling on this issue -- may the parties to an arbitration agreement contract for judicial review of any resulting arbitration award.
Because the central policy issue supporting arbitration under the Federal Arbitration Act is to allow contracting parties to control their own destiny, I'd wager the Supremes will permit them to do what they want to do here, i.e., allow federal courts to review any arbitration award the parties want them to.
Here are the tea leaves:
Chief Justice John Roberts suggested expanded judicial review is appropriate, noting the two sides negotiated an agreement with court review as an option. But Roberts also questioned whether federal law allows the expanded review the agreement between Mattel and the property owner calls for.
Justice Ruth Bader Ginsburg suggested the property owner is seeking more latitude than the law allows for judicial review of arbitration cases.
Justice David Souter told the lawyer representing Hall Street Associates that "you want to get rid of" the section of the arbitration law that specifies limited circumstances under which courts can step in and overrule an arbitrator's decision.
By the way, I get alerted to articles like this on a daily basis here -- Laywers U.S.A. It's been my best and easiest source for breaking legal news for quite some time now and it appears in my in-box on a daily basis. For curmedugeons like Mr. Thrifty who say they don't have time to read ANYTHING online, it takes about 60 seconds to scan the news items. Then one second to delete if there's nothing there of interest to you. I highly recommend it and give a long belated "thanks" here to the people at Lawyers U.S.A.
Geek heaven!! My two obscure specialties -- environmental insurance coverage and arbitration law -- have converged in a case to be decided by the U.S. Supreme Court this term. To confirm my total nerd credentials, I give you the news not from the New York or L.A. times, but from Yahoo! News, excerpted with link below:
High Court Weighs Role of Judiciary in Arbitration Case Involving Toymaker Mattel
WASHINGTON (AP) -- The outcome of an environmental cleanup dispute now before the Supreme Court could determine the future of arbitration as an alternative to lawsuits.
Tens of thousands of disagreements in the business world are resolved through arbitration each year, a process often regarded by the business community as a cost-saving, time-saving substitute for going to court.
The risk in arbitration is that the losing side cannot appeal to the judiciary except in limited circumstances. That's the subject of Supreme Court arguments on Wednesday.
The Supreme Court will consider whether the parties in arbitration can agree to take their cases to court for review of arbitration awards.
Hmm, anchoring to support aggressive opening bids? Doubtful, despite the academic literature -which in my opinion has little contact with real negotiation.
And nothing about coordination versus nash equilibrium reasoning? Big oversight, in my opinion.
Because I respect (and generally defer to) Michael's opinion, but because I disagree with him this time, I include here my response and open the discussion to our readers. To help our readers, I'd like to ask Michael, if he has the time, to provide us with his thoughts about the coordination v. nash equilibrium reasoning that is absent from my Power Point Presentation (an absence I'd like to rectify before giving this presentation on the 13th of November)
Response to Michael:
For once in my blogging-career, Michael, I'm going to differ with you but ask for help on the coordination v. Nash equilibrium reasoning.
It's difficult to "observe" the effects of anchoring and framing outside of a controlled environment. You need to have a kind of duplicate bridge experience where the bargaining partners are all negotiating the same deal to determine the effects of framing and anchoring. Research shows we'll all deny that we've been effected.
I have, however, participated in these types of role plays with "teams" of seasoned attorney negotiators.
In fact, it was the first of these experiences, on my first day of mediation training through the Straus Institute here in Malibu (at Pepperdine where the fires were yesterday -- terrible) that I experienced the power of anchoring first hand.
All twenty attorney teams negotiated a buy-sell contract for about 45-minutes. When we returned to the classroom, we all put our negotiated deals on the blackboard together with the first offer made.
I'd been taught as a young attorney NEVER to make the first offer -- folk practice where I come from, i.e., California. In the role play, without exception, the negotiator who made the first offer in the hypothetical bargaining session got the best deal -- often by many magnitudes.
THIS is the moment when I decided I wanted to return to school to learn more about this and everything else having to do with negotiation -- rules of persuasion, the effect of cognitive biases, etc.
Since that time, what I've read in the academic literature on controlled negotiation studies, not only on students but on judges and attorneys and business people, has concluded that he who makes the first offer sets the bargaining range and gets the best deal.
As to Personal Bargaining Experience.
Since I've been mediating full time, I've helped lawyers negotiate hundreds of deals. Still, it's difficult for me to say whether the first offer had a substantial anchoring effect because I don't know how the negotiation would have turned out had the other side made the first offer or if the first offer had not been more or less aggressive.
More importantly, a REAL negotiation to settle a REAL dispute is so multi-determined that I can't imagine being able to opine on which of the many factors was determinative (assuming one factor could ever be determinative) of the final deal.
Every deal in my business results from a combination of the vitality of the parties' legal and factual positions; their financial and personal or business interests; the personalities of the attorneys and the disputants; the willingness of the disputants to share information that will increase the number of options available; the negotiation and "people" skills of the mediator; and, numerous other factors that I often am never advised of, i.e., at the end of one difficult negotiation session, I learned for the first time that two of the three parties had been negotiating the sale of one of their businesses while I was negotiating the settlement of an unfair competition lawsuit.
My fellow panelists (Superior Court Judges Chaney and Williams; former Federal Magistrate John Leo Wagner; Patent Infringement and Competition Arbitrator and Mediator Les J. Weinstein; and, Complex Commercial Arbitrator and Mediator Jay McCauley) have all been working hard in preparation for our November 13, 2007 Winning Settlement Strategies Seminar (.pdf flyer here and complete program description here).
I have Christina Doucet at the National Arbitration Forum to thank for summarizing some of the most recent statistical literature available on differences between procedure, cost, duration, outcome and party satisfaction of litigated and arbitrated consumer and employee disputes.
Time and Cost Differences Between Arbitration and Litigation
Employment claims take 650 to 720 days to be resolved in court, according to the National Center for State Courts.
The median time to resolve an employee dispute by arbitration is 104 days
the median cost of resolving employment disputes by arbitration is $870.
We were just talking yesterday about our courts' obligation to provide that which the entire civil justice system hasn't been providing for [almost] my entire legal career: a swift adversarial process to resolve disputes and make public the way in which we, as a society, adjust the civil rights and duties of our citizens.
The justice system's inability to deliver on that essential obligation is once again highlighted by the upcoming 9/11 victim trials discussed in today's New York Times article, "Settlements Do Not Deter 9/11 Plaintiffs Seeking Trial." As the Times reports, relatives of some victims who were killed in the planes hijacked on 9/11 say
they would continue fighting in court to address their questions about how Islamic terrorists bypassed airport security, commandeered four jets and killed thousands of people.
When settling cases like this, impasse often occurs when the monetary terms are sufficient but no one has yet explained, for instance, why their mother died in the nursing home for no apparent reason. People want answers.
One of th[e] relatives, Mike Low, whose 28-year-old daughter, Sara, was a flight attendant on American Airlines Flight 11, the first plane to strike the World Trade Center . . .
“The frustrating thing is not having a trial date,” he said yesterday. “The wheels of justice turn excruciatingly slow. It doesn’t change my mind any. My desire and goal is to try to find some answers. I want to know why Abdulaziz Alomari and Mohamed Atta were allowed to walk on planes in Portland, Me., with prohibited weapons. I want somebody to tell me why that happened.”
And Then There's that Thing Called "Apology"
Recently, I received a call from a fellow mediator in the midst of a settlement conference asking whether he could guarantee that if the defendant apologized during the mediation, his apology could not, under any circumstances, ever be used against him in a criminal trial.
"Guarantee," he replied. "The plaintiff is satisfied with the monetary terms of the settlement but insists she'll go to trial unless he apologizes."
"I certainly wouldn't guarantee it," I replied, "but would you like me to help you brainstorm some work-arounds?"
This mediator, one of the great ones at my ADR firm Judicate West, didn't need the brainstorming help. He did what we mediators often do. He "channelled" the apology from the defendant to the plaintiff in the defendant's absence. And it worked.
When Apology Isn't Enough: Public Accountability
There are times when a private apology isn't enough. Sometimes people need to see civil wrongdoers made publicly accountable in a court of law. The Times article again.
Several of the families have said in interviews that their motives were not just economic. They have said that they wanted accountability from those they considered responsible for the attacks — including the two airlines; the airport security companies; Boeing, which manufactured the aircraft; and the Port Authority of New York and New Jersey, which owned the World Trade Center.
Carl Tobias, a law professor at the University of Richmond, said . . . [he thinks] the dynamics here may be different from what I would call more garden variety kind of tort litigation,” he said. “It doesn’t seem this is entirely driven by money, though it may be for some people. People want to tell their stories and want to find out as much as they can in court.”
There Are No "Garden Variety" Kinds of Tort Litigation
Professor Tobias' opinion is right, as far as it goes, but it is not, unfortunately, "right on the money."
Every mediator who helps people settle injury cases (or commercial cases for that matter) knows that there is no garden variety case. Not to the parties. No dispute is is ever "entirely driven by money," except, perhaps, ones brought by a sociopaths or vexatious litigants or driven by unscrupulous lawyers who, as someone once said, "ride their clients like mules for the money." And even then something other than money, some pathology, is driving those people's mad obsession with things monetary.
he expected that some families, especially those who had relatives who died in the planes that struck the twin towers, would insist on a trial.
The terms of the settlements were sealed. But Mr. Migliori said the families felt vindicated. He said they “had reached a point where they were satisfied that the mix of their motivations — from compensation to accountability, to answers — was satisfied.”
The first trial, brought by the relatives of Dr. Paul Ambrose, a passenger on American Flight 77, which crashed into the Pentagon is scheduled to go to trial at the beginning of November.
It's no surprise to hear Donald Migliori, a lawyer for the plaintiffs, say that
Judge Alvin K. Hellerstein’s ruling on the recording last week had moved settlement talks forward. He said it became clear that jurors would hear evidence that passengers were aware the plane had been hijacked and had reacted heroically.
Here's the proposal.
The courts should be deciding these issues early in the case. How much discovery had to be done (???any???) and how many motions filed before this Court was willing to go out on a limb and say, "gee, evidence that passengers on the doomed flights knew their plane was being hijacked is relevant (or not!) or too inflammatory (or not!) to the just resolution of the claims brought by families of the passengers?"
Here in California, we have established a Complex Court system in which wide latitude has been given to the Judges to raise just these kinds of issues early in the litigation unconstrained by procedural rules that might prevent sound case management.
The judiciary needs to engage now in a vigorous debate to determine whether the current approach to civil justice is efficacious . . . We must . . . consider possible reforms needed to ensure prompt, and fair, trial dates, and cost-efficient pretrial and trial procedures for cases where ADR has been unsuccessful or is inappropriate."
My own clients have, most unfortunately, been victims of a Judge's inability to effectively manage his/her caseload and unwillingness to make any ruling before its time, which, for some jurists, means when they absolutely have to in motions in limine filed immediately before trial or in evidentiary rulings during trial.
Only some of these in limine and evidentiary rulings require the context of the actual trial to make sense and permit a reasoned ruling. The cockpit tape, however, seems a good example of a decision that, if made early in the litigation, could have led to the swift resolution of these cases rather than a last minute settlement before trial a full six years after the event giving rise to suit.
To those judges engaging in the often daunting and time-consuming activity of actively managing their case loads with too few resources to do so, we praise you. Those who are not know who they are.
WARNING WAR STORY AHEAD
Once, long ago, when our client was the defendant in two identical lawsuits in two federal courts in different states, we filed motions in both courts to consolidate them in our local court. Frankly, we wouldn't have minded that greatly had they been consolidated in the foreign venue, as long as we could move forward with the litigation.
We were not happy, however, to wait two years for a ruling.
Because you never want to ruffle a court's feathers when your motion is pending, we spent a fair amount of time and mental energy deciding what might be the best course to pry a ruling out of the court. Finally, my colleague suggested we file a "Motion to Rule." Because the motion did not, we believed, exist, my colleague called it THE THING.
We filed it, deferentially, in both courts and still didn't get a ruling. Eventually, the case settled. Today, we might have asked our opponents to mediate or even arbitrate so that we could at least have the opportunity to a business dispute that was costly to both parties.
So, my modest proposal. Case management. Early rulings on motions that, if resolved, could assist the parties to do early that which they are now likely only to do late -- negotiate a resolution.
In Catholic Mutual Relief Society et al. vs. The Superior Court . . . , victims sought to learn whether the nonprofit entity, which administers self-insurance funds for more than 300 archdioceses and other Roman Catholic entities in the United States and Canada, could meet its policy obligation should they enter into a settlement with the Archdiocese of San Diego.
In 2004, a Los Angeles County trial court judge said the victims could seek reinsurance information . . . A state Court of Appeal . . . rul[ed] that California law authorizing limited discovery of a defendant’s insurance coverage does not authorize pretrial discovery of reinsurance agreements with a “nonparty” liability insurer.
On Monday, the California Supreme Court agreed. It found that discovery of reinsurance is allowed when a reinsurer’s policy functions “in the same way as a liability policy (fronting arrangement), or where the reinsurance agreement is itself the subject matter of the litigation at hand.”
I'd just been musing on this issue (really! -- listen, only nerds blog) because I think attorneys should use discovery as much as possible to settle litigation as to try it.
Conducting Discovery to Settle the Case
I'm just back from vacation so I haven't yet read this Supreme Court opinion. I have, however, fought the reinsurance issue more times than I care to remember. I also once sought to discover the extent of a privately owned corporation's ability to pay a sizable judgment only to be thwarted by the rule that discovery must be relevant to the subject matter of the action (etc.)
Still, I recommend that counsel find creative ways to learn facts that will assist them in settling the case during depositions (where "background" questions receive less scrutiny than interrogatories).
What information pertinent to settlement is useful to obtain other than the ability to fund an award? Plenty! but since I'm still on Hawaiian time and in an Hawaiian mind, I'll provide only a few -- let your own imagination make far longer lists than the following.
The identity of those making the settlement decision is question number one, not only to assure that you have the proper parties at your first settlement conference, but also because -- as McElhaney recently suggested -- you want to "hip" corporate deciders to some of the dangers of proceeding that the company's attorneys might not have mentioned (or couldn't stress strongly enough).
Where the corporate entity is split into operating divisions, which division is going to take the "hit" if the case settles.
Whether there are any corporate acquisitions or mergers on the horizon -- or any major upheavals in management -- that might suggest that the executive team green-lighting the litigation is on its way out and less litigation-friendly management about to come on the scene.
Whether other litigation on this same issue, product, financial practice, etc. is pending, making the possibility of bad precedent an issue for any eventual settlement "team."
How can you obtain answers to these questions during a deposition when none of them are relevant to the subject matter of the action or likely to lead to the discovery of admissible evidence? The same way you do everything else in your legal practice -- with chutzpah, imagination, creativity, preparation and sheer good luck.
I'd innocently sprinkle most of these questions into the background portion of the deposition when opposing counsel is generally less attentive than during "substantive" questioning. You can also get away with "it's just background, counsel" when s/he begins to awake with his/her morning latte. If it's a big case with less experienced attorneys assigned to less important depositions, I'd first ask these questions of low level corporate representatives who might be, shall we say, under-represented.
Then there's always simple dumb luck. When I was a first year taking one of my first depositions, opposing counsel fell asleep after lunch! He was snoring while his client innocently waited for me to continue questioning him as if this were a normal event!
I genuinely didn't know what to do. Could I legitimately and ethically continue to question my opponent's client in his "absence"? I suppose a more experienced or aggressive attorney might have done so. But because it just didn't seem right to me, I woke him up before continuing with my line of questioning.
Some defenders, however, might just as well be asleep. As I teach my NITA students, you can do that which you can (ethically) get away with in a deposition. And that is quite a lot if you are a skillful poker player who doesn't let on that the questions you're asking might be strategically beneficial even though entirely irrelevant to the substance of the litigation.
It's the beginning of a new "school" year. Go get 'em!
Why am I reading Deepak Malhotra's and Max H. Bazerman'sNegotiation Genius in my comfy funky beach shack ON THE SAND on the windward side of Oahu at 8:45 a.m. (local time) listening to the waves gently slap the shore and occasionally looking up to see if the fisherman at water's edge has caught anything besides happiness this morning?
Am I insane? No, it's because:
no one taught me to negotiate in law school and despite being an B+ to A+ litigator for twenty-five years, until I met Peter Robinson at the Straus Institute, I was a C- negotiator. So learning these skills reminds me learning how to read in kindergarten (yes I do remember, running home at full speed, bursting through the front door and chortling to my mother, "I can spell 'red' Mommy, RED! It's R-E-D red!")
Bazerman and Malhotra have been my "distance learning" zen negotiation masters through the Harvard Business School Working Knowledge Newsletter for the past year and I would read with high expectation and rapt attention anything they scribbled on a napkin in a bar after a couple of drinks.
who could resist any negotiation book with chapters entitled: Negotiating from a Position of Weakness and Confronting Lies and Deception, both of which I avidly and happily consumed this morning after watching the sun rise over the Pacific around about 6 a.m.
That's it. I will be providing the executive summaries of these and other dynamite chapters for you attorneys who are billing 2000-2300 hours/year and any business manager or executive who drops by. Most of my mediator friends will be consuming it whole.
Right now, I'm putting Bazerman and Malhotra aside to follow Mr. Thrifty to the beach, clutching the new (and fabulous) new biography of Einstein in hand -- a man whose childlike wonder at the mysterious workings of the universe never faded.
This post brought to you by the letter "A" for awe.
Just because I've become a Jedi negotiator does not mean I do not continue to love the adversarial process -- and I'm just geeky enough for evidence to have been my favorite class (and highest law school grade). Thanks Professor Wydick.
ESTABLISHING EMAIL AUTHENTICITY UNDER THE FEDERAL RULES OF EVIDENCE
The bar for establishing authenticity is not high under Federal Rule of Evidence 901. In the 3rd U.S. Circuit Court of Appeals, a court need only be able to legitimately infer that a document is genuine to find it to be "authentic." . . .
Some e-mails can be self-authenticated under Rule 902(7). Business labels, including signature blocks, that evidence the company from which an e-mail was sent, or even the name of a company in an e-mail address, might be sufficient proof of authenticity on their own.
Other circumstances, such as the distinctive characteristics of an author's e-mail address or the subject matter and style of the e-mail itself, may also be sufficient to establish authenticity.
BE PREPARED TO AUTHENTICATE EVERY STEP IN THE EMAIL CHAIN
An e-mail often has attached to it the e-mail or series of e-mails to which it is responding, creating an e-mail "chain," also known as a "string" or "thread." Some courts have found that each e-mail in a chain is a separate communication, subject to separate authentication and admissibility requirements. A lawyer should thus be prepared to authenticate every step of a chain.
THE HEARSAY EXCEPTION IN EMAIL EVIDENCE
The second major hurdle for getting an e-mail into evidence is the hearsay rule. By definition, hearsay is an out-of-court statement "offered in evidence to prove the matter asserted." The first way, therefore, to overcome a hearsay challenge to the admission of an e-mail is to claim that it's not hearsay at all.
An e-mail that is an admission by a party-opponent is "not hearsay." If your opponent is an individual, this is a simple test. In the corporate setting, however, damaging admissions may be authored by lower-level employees who do not have the authority to be making such statements. In order for the e-mail to qualify as a party admission, the author needs not only to be acting in the scope of his or her employment but also to have the proper authority.
Party-opponent admissions would also include statements by "a party's agent" concerning matters within the scope of the agency, i.e., "vicarious admissions." In addition, if your opponent's e-mails contain statements of others without reservation, e.g., when a party forwarded e-mails received from others, the e-mails may be introduced in evidence as "adoptive admissions" . . . This kind of statement has indicia of reliability because "the party has manifested an adoption or belief in its truth."
IT AIN'T AS EASY AS YOU THINK: APPLYING THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE
Many practitioners would consider e-mails as classic examples of business records for corporate entities that routinely use e-mail for both internal and external communication. Under Federal Rule of Evidence 803(6), however, only "if it was the regular practice of that business activity" to make that record can a document come into evidence under the exception.
An e-mail might fit this "business records" exception if the company -- not just the individual, but the company itself -- has a reliable practice of sending, receiving and storing that kind of e-mail. A company might have that kind of practice if it takes and records purchase orders via e-mail. Notably, an e-mail that fits into the "business records" exception may also be self-authenticating, under Rule 902(11), if its authenticity is supported by an affidavit.
Many e-mails, however, do not meet the "business records" exception because they are merely chatter, statements that are made casually and not as a matter of obligation or even routine. An e-mail sent at an employee's sole discretion is not likely to have the necessary indicia of reliability and trustworthiness to be admitted as a "business record."
If an employee sends off a quick e-mail to a colleague commenting on the substance of a meeting with a business partner, it may not be admissible. By contrast, minutes of the same meeting kept by the same employee and circulated to all in attendance, in e-mail form, at the request of management could qualify under the "business records" exception.
Although there is not yet a well-established line of cases on this issue, courts appear concerned that if they allow e-mails into evidence as "business records" too easily, people will begin to use the convenience of e-mails to write self-serving internal communications.
AND HOW ABOUT THOSE BLACKBERRY COMMUNICATIONS?
With the advent of handheld devices as well as the ubiquity of laptop computers, e-mails may actually be admitted into evidence on the basis of "present sense impressions," or even as "excited utterances," as in Lorraine. People are often using e-mail to comment on events as they are transpiring, even during meetings.
If one can show that an e-mail was written while perceiving an event or immediately thereafter, or while under the stress caused by a startling event, it might meet the "present sense impression" or "excited utterance" standards of rules 803(1) and 803(2).
Of course, these standards are difficult to meet because contemporaneousness or near-immediacy is necessary. An e-mail might still meet the "present sense impression" standard if written 10 minutes after an event, but many e-mails are written hours or days later.
The special problems posed by e-mails do not change the rules of impeachment. A lawyer's ability to cross-examine a witness with a prior inconsistent statement does not change merely because the statement is contained in an e-mail.
AND FOR THE UNDER 30 SET: TEXT MESSAGES!
Text messages, instant messaging, chat rooms or "team rooms" (in which all materials concerning a project are preserved electronically for the entire project team to access) all present unique evidentiary challenges.
Practitioners need to be proactive in their efforts to ensure that key pieces of evidence can be admitted at trial. From the time of the initial review of documents through discovery, lawyers need to focus on how to get in or keep out such evidence.
Beatrice O’Donnell is a senior partner in the trial practice group of Duane Morris. She practices in the areas of product and professional liability, as well as commercial and insurance litigation. O’Donnell has tried to verdict more than 80 major civil jury trials in both state and federal courts, and has tried hundreds of arbitrations and mediations. She has been both national and regional coordinating counsel for a number of pharmaceutical and other clients facing mass tort litigation. Thomas A. Lincoln is an associate with the trial practice group of the firm.
Thomas A. Lincoln practices in the areas of products liability, consumer fraud, and commercial litigation, including complex litigation such as multidistrict litigation proceedings and class actions, representing both defendants and plaintiffs. Mr. Lincoln is admitted to practice in Pennsylvania. He is a 1999 graduate of New York University School of Law and a graduate, with honors, of Swarthmore College
Charlie Brofman, the CEO of CyberSettle, started his legal career as a criminal prosecutor in the Bronx and ended it as a civil trial lawyer in New York City.
Then he engaged in two activities so contrary to the stereotype of a New York City trial attorney that you feel you've entered the Seinfeld episode with Bizarro Jerry and Kramer and George.
First, Brofman went into business with opposing counsel. Then he chose algorithms over stare decisis.
Yes, numbers, ladies and gentlemen. Algebraic, trigonometric, calcuanalytic maddening mind-numbing numbers. The entire reason most lawyers go to law school in the first place. Because they can't do math.
How Does Cyber-Settle Work and Will It Put Lawyers and Mediators Out of Business?
Even a mathophobic such as myself can easily understand and use the CyberSettle system. Here's how it works (unless, of course, I'm wrong; in which case I'm counting on Charlie to correct me).
You've got an auto accident case and a 15/30 policy. We'll make it easy with a single injury -- soft tissue -- and $5,000.00 in medical specials. Liability is 50-50 and, well, you do the math for the probable jury award were anyone taking cases like this to trial anymore.
Plaintiff's counsel and the insurance carrier (with or without counsel) each submit three blind offers (online) and agree that they will "split the difference" if any set of those three numbers comes within $2,500 of the other's number.
No one but the offeror will ever know what these figures are, not even CyberSettle, unless the parties: (1) settle automatically online; or, (2) authorize the disclosure of the numbers for the purpose of working out a deal -- possibly with one of the neutrals with whom CyberSettle contracts to mediate the settlement.
As you can see, the automated system works a little like a mediator's proposal (the double-blind offers) without the mediator making a proposal.
Give Us An Example
Say the Plaintiff's demands are policy limits -- $15,000 -- then $12,000 and finally $10,000. The insurance carrier's are $2,500, $5,000 and $8,000.
The algorithm will compare the first two numbers against one another -- $15 and $25. They don't match and they're not within $2,500 of one another. The computer program will move on to the next two numbers. Once again, $12,000 and $5,000 are neither a match nor within $2,500 of each other.
Finally, the computer hits the parties' Zone of Potential Agreement (the ZOPA). Plaintiff is willing to accept $10,000 or split the difference between eight and ten. The carrier is willing to pay $8,000 or split the difference between ten and eight. Voila. The case settles for nine.
Will This Take Business Away from Mediators?
My answer to this question is -- I sure hope so.
Because these are the kinds of cases that don't require face to face (or phone to phone) negotiation, let alone third-party facilitation by a mediator.
I am informed that more than 100,000 lawyers have used this system, including many name-brand insurance companies. I'm also informed that CyberSettle facilitated the settlement of somewhere between 12,000 and 15,000 cases last year and sent another sizable group to live mediators when the parties authorized CyberSettle personnel to take a look at the bidding to determine whether they were "close enough" to warrant human follow-up.
But don't think this service is only for the slip and fall at your local Ralph's or the 15-mph fender bender at the corner of Merchant and Main. Recently, two litigants settled a case that had been in litigation for eighteen months for $12.5 million in eleven minutes using CyberSettle.
The average settlement, however, is in the numeric range you'd expect it to be, between $10 and $20,000 with an average fee paid to CyberSettle of $210 per case. (Here's the CyberSettle Price List).
I like it. If the parties with these smaller can can use an on-line bidding system without filing suit or, if the case is litigated, before much money is spent on litigation, it could speed money to those in need and reduce expenses for all concerned.
I'll begin worrying about losing my day job to a computer when they make one that can understand the Rule against Perpetuities.
First, the scope of review available for an arbitrator's ruling is significantly limited. . .
Second, the conventional time and cost-savings of arbitration may be lost in class proceedings, since each of the interim phases related to class- and merits- arbitral awards will carry with them potential burdens relating to discovery, briefing, hearings, and time, money and effort spent in obtaining judicial review at each of the various phases, which will not necessarily be present in individual arbitrations.
Third, the parties' arbitrator selection process will likely be guided by different factors in a class arbitration proceeding than in an individual arbitration, since the fate of all of the class claims will be decided by a single arbitrator or panel.
Fourth, the specter of class arbitration disposes of the presumption of privacy and confidentiality in arbitration.
Part II of this two-part article will address potential means for companies and practitioners to attempt to avoid these and other pitfalls of class arbitration.
Don't let this summary lead you to believe that this article is not extensive, thorough and deep. If this is a topic of interest to you, this is one of the best articles on the topic I've seen. Do click on the above link and take a peek.
In this federal case, the Ninth Circuit held that the addition of an arbitration clause to the cell phone service contract, imposed by way of the posting of a revised contract on its website with no pre-existing notice to its subscribers was unenforceable. The class action plaintiffs were therefore not required to arbitrate their claims and the class action waiver (also imposed upon subscribers in this same manner) was unenforceable. Douglas v. United States District Court for the Central District of California.
"Writing a brief," counsels McElhaney, is like trying a lawsuit."
You start with your theory of the case—the basic idea that not only explains the legal theory and the factual background but also ties as much of the evidence as possible into a coherent, credible whole.
That means making choices. You throw out arguments that aren’t plausible.
You pick between the inconsistent legal theories. You cull out the weak points. You toss out whatever gets in the way. You discard what doesn’t need to be said, even if it doesn’t hurt.
What’s left is tight. Lean. Spare. It crackles with power because it’s undiluted with stuff that doesn’t matter.
Doesn't trial and motion practice focus on the parties' positions, you ask, and the settlement of litigation on the parties' interests.
Yes, but only after you've established that you have the ammunition necessary to make your adversary your partner in the mutual problem of making the litigation go away for a price (or on terms) that make a negotiated agreement far better than potential victory at trial.
I tell people that I prefer the symmetrical to the "asymmetrical" lawsuit -- both as a litigator and as a mediator. What is an asymmetrical lawsuit? One where the plaintiff is an individual represented by an over-burdened sole or small practice contingency fee litigator and the defendant is a repeat player -- an insurance carrier or other "deep pocket."
Why? Because all too often the plaintiff is unwilling (or unable) to devote the resources necessary to pose a real threat to the defendant's interests (costs of defense and potential verdict or judgment) despite the merits of the plaintiff's case.
In these cases, the defendants can afford to wear the other side down in court (why should I settle?) and often resist settlement because they firmly believe they are victims of legal extortion (yes, this applies even to insurance carriers who work by and through people who resist and resent being pushed around by an aggressive opponent who appears to be bluffing).
Although it is important to convince the mediator that your case has real merit and genuine potential for judgment, it is critical to impress your opponent with:
Your theory of the case in which the evidence tells a coherent, credible story, and one of injustice that a court or jury might respond to with sufficient passionate intensity to inflict some "unjust" harm on your opponent; and,
Your ability to make good choices -- "throw[ing] out arguments that aren't plausible," "backing up those that are with the least amount but most compelling detail," and "pick[ing] between the inconsistent legal theories. . . . cull[ing] out the weak points . . . toss[ing] out whatever gets in the way. . . [and] discard[ing] what doesn't need to be said. . . "
If "[w]hat remains "is tight. Lean. Spare. . . . crackles with power" you'll force your opponent to do some intensive interest-based negotiation to arrive at a settlement that is best for both of you.
Making Money Talk is a valuable contribution to the conflict field. Andy Little correctly identifies the weakness in traditional needs-based mediation for quite a wide variety of cases, yet shows how the basic value of a facilitative, client-centered, process-oriented, communication-focused approach is still essential to money cases. This guide is well written and presented--it's a pleasure to read." Bernie Mayer, Professor, Werner Institute for Negotiation and Dispute Resolution, Creighton University, Omaha, NE
The publishers say:
Learn how to effectively deal with the peculiar problems of traditional bargaining that you face when negotiating the settlement of civil litigation cases. This new guide written by an experienced litigator and mediator will help you understand why negotiations of insured claims are difficult to get started, why they become increasingly emotional as the parties engage in round after round of proposals and counter proposals, and how they can be settled with models and techniques that have been tested in thousands of civil trial court mediations.
With these proven models and techniques--essential for the novice or seasoned professional--you will:
gain a better understanding of the dynamics of money negotiations
be able to identify the recurring problems of traditional bargaining
learn facilitative tools and models to use when positional bargaining is unavoidable
In addition, this resource provides litigators, negotiators and insurance claims representatives with the strategies necessary to prepare for settlement negotiations and avoid the many pitfalls that exist in the negotiation and settlement of civil litigation. If you're involved in a negotiation that involves a monetary settlement, this book is an invaluable tool to help you reach a favorable goal.
$42.00 regular price; $35.00 [ABA] Section of Dispute Resolution member price
There's a nice article on those situations in which attorney-mediators might serve litigants as well, or better, than former jurists in the July 2 edition of Lawyers Weekly ADR (give them your name, rank and serial number and you'll get a free 6-week trial to see whether a subscription is worth the price).
A lawyer with extensive courtroom experience is able, as a mediator, to understand and communicate the risks of mixed-blessing jury findings that give with one decision about a monetary award and take back with another that slashes the amount because contributory negligence was perceived.
To be sure, in court, even when you win, you don't always come away with what you thought you had won.
In the ADR process, parties often hear the "other side" of the case for the first time. It reinforces a humbling truth worth remembering: Very rarely does one side have a monopoly on valid arguments.
Just as important is the mediator's ability to avoid undercutting attorney-client relationships or compromising legal strategies. A knowledgeable lawyer is well positioned to navigate that sensitive course, respecting each side's need to avoid feeling coerced or backed into a corner.
The ADR process provides an open forum conducive to helping the parties involved in a dispute address the issues in good faith, explore acceptable remedies and shape the outcome. That sense of self-determination and of having a timely "day in court"— without gambling on six jurors unfamiliar with the issues — greatly increases the likelihood of satisfaction in the end.
When lawsuit adversaries emerge with an acceptable agreement they shaped after being heard by a dispassionate observer retained at their shared expense, justice is served. Sometimes the deal goes beyond dollars and cents to include an apology or expression of regret — a meaningful gesture no jury can provide.
Though I agree with Blake's analysis of the benefits of hiring an attorney-mediator, he writes primarily from an evaluative rather than a facilitative viewpoint. I would therefore add the following to his list, particularly where the settlement being negotiated is one necessary to settle commercial litigation.
because most attorneys have run their own businesses (or at least participated in the management of their law firms) they are able to understand the business needs, desires, interests and fears of the commercial adversaries, i.e., they can speak the litigants' language
former commercial mediator litigators, particularly when hired in a specialty industry such as the garment, manufacturing, professional services, and software businesses (to name a few) also understand the complex relationships between counsel and client, as well as the communication gaps that can occur over time during the litigation of any commercial case.
the experienced attorney mediator not only knows how the lawyer views the case, having now mediated hundreds of commercial cases, s/he also knows how the clients continue to view the dispute (as a commercial, not necessarily a legal, problem) and how wide the gap between those two points of view can be.
because the attorney-mediator first made his living in private practice based upon his continued beneficial relationship with his clients and his reputation in the community, s/he is not only attuned to the way in which lawyer-client communication gaps can be bridged, but also how to leave both parties with their sense of justice, dignity, professionalism and humanity intact.
perhaps most importantly, a commercial litigator-mediator knows how to plan, execute and close a deal.
There are more, but I must leave you to begin my holiday.
Happy 4th of July to you all!
/* Blake is a certified general civil mediator and founding partner at Detroit-based Blake, Kirchner, Symonds, Larson, Kennedy & Smith, P.C. His more than 25 years of experience includes mediations, facilitations, arbitrations and special case evaluations as well as representing plaintiffs and defendants in a range of civil litigation matters.
We continue to sort through the end of the Supreme Court's term, as well as the business community's reaction to it.
Why do we care? Because you settle litigation when the risk of loss and the cost of proceeding is greater than the deal being offered to call the whole thing off.
As I've said a bazillion times before, I prefer negotiating a business deal to resolve a legal problem to predicting litigation outcomes -- the latter a dicey proposition at best. In ADR terms, I have a strong preference for "facilitative" over "evaluative" mediation practice.
Still, I'll never stop being lawyer, litigator and trial attorney. I will never be completely immune to legal developments suggesting that the tide is turning for one "side" or the other.
The first big sign that Alito and Roberts were solid votes for business came on Feb. 20, when they voted with the majority -- and against Scalia and Thomas -- on the issue of punitive damages. In Philip Morris USA v. Williams, brought by the widow of a cigarette smoker, the Court ruled that jurors could not base an award in an individual case on the harm that tobacco companies did to others. Scalia and Thomas joined Ginsburg and Justice John Paul Stevens in dissent.
For Alito, as well as many of the other justices who have joined him or led him in business cases this term, suspicion of the plaintiffs bar might be one factor driving the pro-business trend.
"The entire Supreme Court has a mistrust of lawyer-driven litigation," Englert told a Washington Legal Foundation forum June 27. "The Court has inflicted a world of hurt on the plaintiffs bar. ... The justices don't see real, injured people. They see lawyers trying to extort settlements."
In Bell Atlantic v. Twombly, for example, Justice David Souter spoke repeatedly of the problem of "discovery abuse" by plaintiffs that "will push cost-conscious defendants to settle even anemic cases before reaching those proceedings." The decision, which got few headlines but may have broad practical effect, spells out higher requirements for what must be included in initial pleadings that businesses hope will weed out baseless class actions and other litigation.
In another case this term, the Court also showed a mistrust of juries in deciding complex business cases. In Credit Suisse v. Billing, the Court said securities law should trump antitrust law, in part because the Securities and Exchange Commission had more competence than jurors in assessing possible antitrust violation in initial public offerings. But consumer groups worry that agencies such as the SEC are often too protective of the businesses they regulate.
In the Credit Suisse ruling, Justice Stephen Breyer wrote with concern: "Antitrust plaintiffs may bring lawsuits throughout the nation in dozens of different courts with different nonexpert judges and different nonexpert juries."
In February 2004, CPR received the highest satisfaction ratings in ADR performance in a survey of General Counsel and their Deputies by Corporate Legal Times.
CPR was the first organization to bring together Corporate Counsel and their law firms to find ways of mitigating the extraordinary costs and delays of litigation, while achieving more satisfying and lasting results through appropriate alternatives, like negotiation, mediation, and arbitration.
CPR works around the globe, serving as a primary multinational resource for avoidance, management and resolution of business-related and other disputes.
Most recently, in partnership with The China Council for Promotion of International Trade (CCPIT), CPR established the U.S.-China Business Mediation Center in New York and Beijing.
CPR is a membership-based, nonprofit alliance of global corporations, law firms, scholars, and public institutions dedicated to the principles of conflict prevention and solution through alternative dispute resolutions.
CPR's proprietary Panel of esteemed arbitrators and mediators has provided resolutions in thousands of cases, with billions of dollars at issue, worldwide.
CPR's wealth of intellectual property and published material has educated and motivated corporate legal departments toward an increased reliance on alternatives to litigation. Much of this material is targeted toward specific industries and practice groups.
Just when you say the mediation privilege would prevent the parties from disclosing such matters as settlement authority and the activities of party representatives, along comes an out-of-state federal opinion that makes you glad you live and practice in California.
Although the District Court in Bauerlein v. Equity Residential Properties Management Corp.Slip Copy, 2007 WL 1521606D.Ariz.,2007.May 22, 2007 refused to award the costs of an unsuccessful mediation against parties whose representatives left the mediation "early" there was nary a word spoken about confidentiality of the proceedings.
Arizona and Federal Protections for Confidential Mediation Communications
It's not that Arizona doesn't have such a privilege. We understand that A.R.S. § 12-2238 recognizes as privileged and confidential "[c]ommunications made, materials created for or used and acts occurring during a mediation." (emphasis added).
Nor do the federal courts lack protections for mediation communications. Under 28 U.S.C.A. § 652(d), mediations conducted pursuant to federal court ADR programs are required to be protected by local rules, which "provide for the confidentiality of the alternative dispute resolution processes and to prohibit disclosure of confidential dispute resolution communications."
Therefore, whether protected by federal or state law, you would have expected that the parties accused of conducting themselves in "bad faith' would have objected to the introduction into evidence of one or all of the following mediation communications and activities:
the identity of carrier representatives attending;
when and why those representatives left the mediation;
the mediator's or the parties' explanation of the reason for the representatives departures, i.e., because there was a "vast divergence of the estimates of the value of the claims"
why one party put no money whatsoever on the table (because it was essentially judgment proof as a Taiwanese corporation without any U.S. holdings")
the mediator's statement to at least one of the carrier representatives that the case would not settle "based on the parties'individual evaluations of the claims because they were too far apart and had too divergent estimates of the value of their claims"
the mediator's approval of the carrier representatives leaving the mediation so long as counsel was left with authority to settle the claims.
Just as importantly, attorneys mediating their disputes should familiarize themselves with the laws applicable to the confidentiality of the proceedings -- particularly when they're in federal court where the applicable law is not as certain as it is in the state courts. See the following commentaries on the federal Northern District of California Olam opinion (largely disapproved in California) here and here.
It's my experience that most attorneys are completely unaware of the scope and nature of the mediation privilege under which they are operating. If we don't want this inexpensive "alternative" procedure to become a breeding ground for litigation over party mediation tactics, then we should make sure we learn, and follow, the applicable mediation protections, privileges and guidelines less we stumble into disclosures that need not be made. See Disputing Irony, a Systematic Look at Litigation about Mediation
Discussions about maintaining settlement agreements in confidence always come late in the day (or evening!) The parties are tired, the major deal points are decided. Then someone raises confidentiality.
For people and small businesses who are not familiar with boiler-plate confidentiality provisions, the discussion of who they can and cannot tell about the settlement of their lawsuit is always a difficult one and sometimes threatens to derail the settlement altogether.
I've often heard counsel say, "whattaya gonna do if someone breaches it? It's meaningless, really," as they talk their clients into accepting a deal point no one had ever discussed with them before.
"Sure, you can tell your husband," they say, but not your employees, next door neighbor or third cousins."
I have to say that in 25 years of legal and three years of neutral practice, I've never seen anyone try to enforce the confidentiality provision contained in a settlement agreement. Because I generally don't study that which I don't need to use, I've never looked into the question of enforcement or damages for breach.
On a slow day, I read my blog's statistics and check out who's checking me out. Today I noticed a new law firm stumbling over my site -- ulmer berne llp of Cincinnati, Ohio. When purusing law firm's web sites, I generally check out the articles buried there and sometimes bring them into the light of day for the benefit of the rest of us.
Today I found Jennifer Snyder Heis' excellent article on the enforcement of confidentiality clauses in settlement agreements and the damages, if any, that might be awarded for their breach.
The article is entitled Confidentiality of Settlement Agreements. It's worth a read before you head off to a settlement conference if you think you might be asking (or refusing to provide) a provision that the parties keep the settlement in confidence.
The referenced "oddity" in American trial law? The peremptory challenge that permits lawyers to exercise more or less control over the final composition of the jury than some believe is warranted in an aspirationally color-blind justice system. As Adam Liptak reports,
Justice Thurgood Marshall wrote that . . . . “peremptories inject [racial discrimination] into the jury selection process[, the elimination of which] . . . “can be accomplished only by eliminating peremptory challenges entirely.”
Two years ago, in the Miller-El case, writes Liptak, "Justice Stephen G. Breyer appeared to endorse that view, saying that “peremptory challenges seem increasingly anomalous in our judicial system[,]” writing that
England has eliminated peremptory challenges but “continues to administer fair trials based largely on random jury selection.
Liptak concludes by suggesting that
Peremptory strikes are an odd and arbitrary historical artifact. Unlike equal protection, they are not guaranteed by the Constitution, and in capital cases — where race matters most — they would not be missed.
The settlement angle on this? You can see it coming.
In American urban courtrooms throughout the country, settlement decisions are commonly based upon the probable racial, ethnic, gender, and socio-economic composition of a jury that will eventually give their thumbs up or down on the Plaintiff's case. If settlement decisions are governed by audacity on the Plaintiffs' side and fear on the defense side, both are often pinned upon the presumed "passion and prejudice" the "have nots" will bring to decisions affecting the "haves."
And as the gulf between these two groups widens, the fear on the defense side has become more palpable. *
Is this any way to run a justice system in a racially polarized society?
The White Reaction to the Black Reaction to the O.J. Verdict
We talk about "race cards" in this country because of the O.J. Verdict. It wasn't so much the result of the O.J. trial that shocked America, as it was was the white reaction to the black reaction to the verdict.
As Harvard Professor Henry Louis Gates, Jr. wrote in the aftermath of that trial (Thirteen ways of looking at a black man’ (23 October 1995), the phrase
’ “race card” … itself infuriates many blacks. [Federal Appellate Court] Judge Leon Higginbotham Jr. . . .[said of] charges that Johnnie Cochran played the race card. “This whole point is one hundred per cent inaccurate. . . . If you knew that the most important witness had a history of racism and hostility against black people, that should have been a relevant factor of inquiry even if the jury had been all white .. .
[Academic and activist] Angela Davis [says] ... “Race is not a card,” she says firmly. “The whole case was pervaded with issues of race.” ’
Is Race a Card?
This is too big a question for this post. I grapple with this issue an upcoming article in the LaTrobe University Dispute Resolution Journal (Vol. No. 1, so you won't yet find it online) and will link to it when it is published.
In analyzing the potential pre-trial settlement of an action, the attorneys consider everthing to be a potential "card." If the stakes are high enough, they hire jury consultants to advise them how to select a jury that favors their side because trial lawyers are advocates looking for a jury that will be prejudiced in their favor.
This is not news. It is the judge and the jury that are supposed to be neutral, not the trial attorneys. And if they can increase their chances of winning by leaving African Americans or Koreans or the marginally employed on a jury, they will do so. If it helps their case to use their peremptories to empty the jury box of women or Gen-X'ers or engineers or African-Americans, they will do that too.
And This Has What To Do with Settlement?
For a negotiated agreement to do the job of resolving the dispute in a better way than its alternative -- trial -- the parties and the mediator will have to grapple with the racial and ethnic and gender elephants in the room.
And it may just be that a mediator who is capable of setting aside his or her prejudices long enough to look past issues of race, ethnicity, nationality, obvious religious affiliation, and gender, might be the one who is most capable of helping the parties achieve something that resembles justice.
* By the 1980s the United States had become the most unequal industrialised country in terms of wealth. The top 1% of wealth holders (the ‘Super Rich’) controlled 39% of total household wealth in the United States in 1989, compared to 26% in France in 1986, about 25% in Canada in 1984, 18% in Great Britain, and 16% in Sweden in 1986. More than 46% of all outstanding stock, over half of financial securities, trusts, and unincorporated businesses, and 40% of investment real estate belong to the super rich. The bottom 90% are responsible for 70% of the indebtedness of American households. Wolff, How the pie is sliced: America's growing concentration of wealth’ (1995) 22 The American Prospect 58.
We've talked before about complaints that mediators sometimes use time- authority- and fear-pressure tactics to wrest agreement from the parties.
If a client can prove she was coerced into settling a Title VII case, the Federal District Court for the Northern District of California has a remedy for her -- rescission.
As reported last year by the National Arbitration Forum, the Court In Ryles v. Palace Hotel, rescinded a mediated settlement agreement as violative of federal law governing the release of Title VII claims. The release of such claims must be “voluntary, deliberate, and informed.”
As the National Arbitration Forum article explained
In applying that standard, courts must consider the “totality of the circumstances.” The factors to be considered include the clarity of the agreement, the claimant’s education and business experience, whether the atmosphere for the execution of the agreement was coercive, and whether the plaintiff had the benefit of counsel.
All but one of those factors favored enforcement. However, one of the factors – whether the atmosphere for the execution of the agreement was coercive – weighed heavily against enforcement because of the “intense pressure” applied by Ryles’ attorney. Based on that factor, the Court held that Ryles could rescind the settlement agreement.
In reaching its holding, the Court cited Ryles’ letter to the Court as bolstering her credibility. Moreover, the Court rejected Palace Hotel’s argument that California law required coercion by the other party to the contract, noting that the release of Title VII claims is governed by federal law.
The answer? Only the US Supreme Court will know. Excerpt from Ms. Pfadenhauer's excellent employment blog below:
One of the more interesting cases that the US Supreme Court will hear this year (BCI Coca-Cola Bottling Co v. Equal Employment Opportunity Commission) surrounds a human resources manager who terminated an employee based almost exclusively on information from the employee's supervisor. According the the EEOC, the supervisor allegedly had a history of treating black employees more adversely when compared to others and had a history of making racially disparaging remarks in the workplace. The human resources manager, who harbored no discriminatory motive, relied on the word of the supervisor when terminating the employee. In addition, the HR manager did not know that the employee was black.