3. The law (and your lawyer) only care about relevant facts - the most important part of your dispute may well not even be addressed, let alone resolved, by a jury verdict in your favor.
4. As your trial date nears, everyone - the judge, your lawyer, their lawyer, your spouse, your friends, and random acquaintances will urge you to negotiate a resolution with a neutral third party (a mediator).
5. Your attorney settles 90% of every case s/he litigates. S/he rarely goes to trial anymore. Ask her about the last verdict she won and then the one before that. If you have a skill (piano, golf, cooking a souffle) ask yourself how well you'd perform if you haven't used that skill recently or often.
6. Litigation is an extremely expensive board game, much of which is simply the cat and mouse exercise of discovery. Here's how it's played. I ask for documents. You object. I write you a letter demanding compliance. You write back refusing to comply and reminding me I have to "meet and confer" with you before we ask the discovery referee to intervene. We meet. We accomplish nothing. I make a motion (write a "brief") to compel you to turn over documents. You write an opposition. I write a reply. We pay the discovery referee to read our papers and listen to our oral argument. The discovery referee splits the baby in half or fourths or tenths. One of us asks the Judge not to sign off on the discovery referee's decision. More papers, more writing, more time, more of your money. The Judge, not a lion of courage, splits the baby again and refuses to award either party the costs of forcing compliance. Two months later (at least six have now elapsed) you get a stack of documents and a privilege log listing the documents that aren't being provided. I write you a letter demanding that you turn over documents on the privilege log. Rinse. Repeat.
7. As if the disrespect of the original dispute were not enough, I now get to sit you down in a conference room with a court reporter and spend a day or two asking you questions you don't want to answer. Often, the questions are asked in a disrespectful manner. When you complain to your attorney, he says "that's just the way the game is played." Focus on the word game. Are you having fun yet?
8. You get a bill for legal services rendered every month but you're no closer to resolution after receiving and paying 12 of these than you were on day one.
9. You're a business person. You negotiate business deals every day. Your lawyer does not.
10. You have given away any power you might once have possessed to resolve this dispute to a lawyer who does not understand your business, your life or the facts that drove you to seek legal advice in the first place.
Had enough? There are people out there - mediators - who are specially trained in helping you first communicate with your attorney and then helping you negotiate the resolution of your dispute with the "other side." Choose carefully. There are as many bad mediators there as there are litigators. My best advice? Negotiate the resolution of the dispute yourself even if it requires you to swallow your pride and to be the first one to say, "let's sit down and figure out how best to serve your interests and mine at the same time."
Over at B-School today, you'll find a collection of blog posts that will give you an entire semester's worth of negotiation knowledge, training and (if you practice) experience. Don't miss it. Excerpt below and link here.
Learning to be a great negotiator is a skill that will serve you in a variety of situations. Whether you're buying a car, setting a salary, or in an international business deal, negotiation skills are essential to getting what you want. These blog posts share tips, strategies, and more for becoming a better negotiator.
Ladies and gentlemen, start your settlement engines. Your clients will repay you with more work than you can handle!
Worried about bias against women, minorities or majorities in the courtroom? Come join us for a great WLALA Presentation at the Los Angeles Athletic Club on March 17, 2011. Click on the notice below to obtain more details and to register.
For now, let me give you a very brief overview and point out the areas in which the mediator may continue to be a valuable player.
An expedited jury trial ("EJT") is heard on a date certain, and the entire trial (from voir dire to closing arguments) is completed on that date. Participation in the EJT process is voluntary. Certain provisions of the rules are mandatory; others may be modified by the parties.
These are mandatory: (1) the parties generally waive their rights to appeal and to make post-trial motions; (2) the jury is smaller; (3) the parties are allowed fewer peremptory challenges; and (4) each side must present its case within three hours, including time spent on cross-examination. Otherwise, there is a lot of flexibility and room for the parties to come to agreement.
Here are a few of the areas where flexibility and room for negotiation exist:
Modifications to timing of pretrial submissions
Stipulations to factual and evidentiary matter
Limitations on number of witnesses per party
Modification of rules re exchange of expert witness information and presentation of expert testimony
Preparation of joint form questionnaires for voir dire
Innovative methods to present matters to the jurors
But of all of the areas in which the mediator can continue to be of service to the parties, perhaps the most significant is reaching a "high/low agreement."
The high/low agreement is defined in the Act (C.C.P. section 630.01) as: a written agreement entered into by the parties that specifies a minimum amount of damages that a plaintiff is guaranteed to receive from the defendant, and a maximum amount of damages that the defendant will be liable for, regardless of the ultimate verdict returned by the jury.
Social scientists contend that the difference is more than just cosmetic. They cite a 2006 study by the Wellesley Centers for Women that found three to be the magic number when it came to the impact of having women on corporate boards: After the third woman is seated, boards reach a tipping point at which the group as a whole begins to function differently. According to Sumru Erkut, one of the authors of that study, the small group as a whole becomes more collaborative and more open to different perspectives. In no small part, she writes, that's because once a critical mass of three women is achieved on a board, it's more likely that all of the women will be heard. In other words, it's not that females bring any kind of unitary women's perspective to the board—there's precious little evidence that women think fundamentally differently from men about business or law—but that if you seat enough women, the question of whether women deserve the seat finally goes away. And women claim they are finally able to speak openly when they don't feel their own voice is meant to be the voice of all women.
Over at She Negotiates, we use the power of women to support, encourage, cheer and brainstorm in every class we offer, with the greatest power coming to and from our post-graduate Negotiation Master Classes which are limited to only four women. For additional information about how you can use woman-power to improve your bottom line, contact either Lisa or Vickie using our contact form or catch either one of us at our direct numbers.
This isn't about gender-war, this is about human peace and prosperity!
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.
Architect David Denton spends much of his time on a lush tropical island, where he experiments with cutting-edge building designs and creates spaces for artists to showcase their work.
Never mind that the island only exists in the virtual-reality world of Second Life, a popular online venue where people interact via digital avatars. Denton, 62, said he purchased the island for about $700 — real money, not virtual cash — from its former owner, and considers it his property.
Here's the thought this article triggers. If 90% of all litigation involving people (I'll skip corporate litigation and litigation brought to vindicate rights such as that declaring Prop 8 unconstitutional) will end with a retired Judge telling the people that litigation is too expensive and a jury trial too uncertain for them to bear, why don't we just litigate virtually (with Linden dollars!) giving the parties the experience of litigation that will eventually drive them to settlement?
I'm sure some smart programmer can come up with an algorithm for most personal disputes, including both factual templates and the application of simple legal principles. A "ticker" could keep track of the dollars your virtual attorney is billing on your law suit's screen everyday. Continuances, discovery motions, pre-trial proceedings and depositions could all be simulated.
Then the parties return from the virtual life of Second Life Litigation and sit down in the old fashioned way to negotiate a resolution to their dispute or, if necessary, hire a village elder trained in conflict resolution, sometimes called a mediator, to help them do so.
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.
I know, opposing a law that seeks to prevent workplace bullying is like criticizing mom and apple pie. Still. More workplace litigation??? And why isn't the existing cause of action for the intentional infliction of emotional distress a perfectly good alternative for anyone who's truly "severely" damaged by "outrageous" conduct that goes beyond the bounds of human civility?
One of the great benefits of posting on this topic over at Forbes.com is the number of comments it generates. Not because it insures "hits" but because it engages a far larger community in a constructive multilogue on an issue of genuine and important public interest. Here's an excerpt:
According to the Journal, the law would "allow workers who've been physically, psychologically or economically abused while on the job to file charges against their employers in civil court."
Economically abused????? The mind boggles.
The bill defines "bullying" broadly as the "repeated use of derogatory remarks, insults and epithets" that the (mythical and chronically overly sensitive) "reasonable person" would "find threatening, intimidating or humiliating."
Let's give this proposal a second thought, particularly in the context of legal practice. We lawyers do endeavor to "keep calm and carry on." We have been known, however, to push ourselves and to be pushed past our tempers' limits. We're human. We're under a lot of pressure. And we're fallible.
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.
We’re celebrating Mothers Day by posting Blawg Review #263 at the She Negotiates Blogfor one obvious and some not so obvious reasons. The obvious reason is the word “She.” The not-so-obvious reasons are: (1) Mother’s Day was a peace and reconciliation movement before it was a holiday; and, (2) peace exists only when we have the political will to seek and the negotiation tools achieve the resolution of conflict.
Thanks Roger! This didn't just make my day; it made my year!
Plaintiff’s Motion to Compel Acceptance of Lunch Invitation
The Court has rarely seen a motion with more merit. The motion will be granted.
The Court has searched in vain in the Arizona Rules of Civil Procedure and cases, as well as the leading treatises on federal and Arizona procedure, to find specific support for Plaintiff’s motion. Finding none, the Court concludes that motions of this type are so clearly within the inherent powers of the Court and have been so routinely granted that they are non-controversial and require no precedential support.
The writers support the concept. Conversation has been called “the socializing instrument par excellence” (Jose Ortega y Gasset, Invertebrate Spain) and “one of the greatest pleasures in life” (Somerset Maugham, The Moon and Sixpence). John Dryden referred to“Sweet discourse, the banquet of the mind” (The Flower and the Leaf).
Plaintiff’s counsel extended a lunch invitation to Defendant’s counsel “to have a discussion regarding discovery and other matters.” Plaintiff’s counsel offered to “pay for lunch.” Defendant’s counsel failed to respond until the motion was filed.
Defendant’s counsel distrusts Plaintiff’s counsel’s motives and fears that Plaintiff’s counsel’s purpose is to persuade Defendant’s counsel of the lack of merit in the defense case.
The Court has no doubt of Defendant’s counsel’s ability to withstand Plaintiff’s counsel’s blandishments and to respond sally for sally and barb for barb. Defendant’s counsel now makes what may be an illusory acceptance of Plaintiff’s counsel’s invitation by saying, “We would love to have lunch at Ruth’s Chris with/on . . .” Plaintiff’s counsel. 1
1 Everyone knows that Ruth’s Chris, while open for dinner, is not open for lunch. This is a matter of which the Court may take judicial notice.
Read on by clicking on the .pdf above.
And how could I resist adding the "will you go to lunch!" scene from David Mamet's Glengarry Glen Ross.
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.
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.
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.
A big question in trial for lawyers to consider is whether to apologize for their client’s “alleged” conduct. Many lawyers are reluctant to do so under the theory that it could lead to a greater chance of liability being imposed on them. Recent research sheds light on this issue.
According to researchers at George Mason University and Oklahoma State University apologizing to a jury may lead more favorable results. The results of the study will be available in a the journal Contemporary Accounting Research.
Assistant accounting professors Rick Warne of Mason and Robert Cornell of OSU found that apologizing can result in lower frequencies of negligence verdicts in cases when compared to a control group receiving no apology or remedial message. The researchers hypothesized that apologies allow the accused wrongdoer to express sorrow or regret about a situation without admitting guilt. Alternatively, a first-person justification allows the accused to indicate the appropriateness of decisions given the information available when decisions were made.
“We found that apologies reduce the jurors’ need to assign blame to the [wrongdoer] for any negative outcomes to the client,” says Warne. “It also appears that an apology “influences the jurors impression that the auditor’s actions were reasonable and in accordance with professional standards.”
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
As every mediation advocate must know by now, the California Supreme Court has locked down mediation confidences from attack at every turn. There can be no implied waiver of Evidence Code section 1119's protections and you cannot be estopped to assert it (Simmons v. Ghaderi) (.pdf of the opinion here).
Your client may have been coerced into signing off on the agreement; may not have understood what she was signing; or her assent could have been induced by your opponent's material misrepresentations of fact. Your client's insurance carrier may be guilty of actionable bad faith during the course of the mediation. Too bad. The mediation proceeding is given greater protection than given to penitents in a confessional.
But you can inadvertently expressly waive the protections of mediation confidentiality if you've carelessly crafted your own confidentiality agreement.
California's Second District Court of Appeal held in Thottam (.pdf of opinion here) that a party's confidentiality agreement did just that -- waived the protection -- permitting one party to introduce an otherwise inadmissible draft agreement into evidence for the purpose of enforcing an otherwise unenforceable mediated settlement agreement.
As the Court in Thottam held, Section 1123(c)'s requirement that all parties to a mediated settlement agreement "expressly agree in writing . . . to its disclosure," may be satisfied by terms contained in a writing other than the alleged settlement agreement itself, including a writing executed before a settlement agreement has purportedly been entered into. Because the "draft agreement" at issue in Thottam did not contain 1123's "magic" enforcement language and because the term sheet drawn up during the mediation was not sufficiently certain to enforce in any event, one party to the subject probate proceeding objected to its introduction into evidence and to the admission of testimony concerning otherwise confidential statements made during the mediation.
Had there been no confidentiality agreement, the issue would have been controlled by Evidence Code sections 1115 et seq.; the "agreement" would have been excluded from evidence as non-compliant with section 1123; and, no evidence of statements made during the mediation would have been admitted into evidence.
Here's the danger of drafting your own confidentiality agreements in an attempt to expand the scope of mediation confidentiality.
According to the appellate court opinion, because the parties expanded the scope of confidentiality beyond that provided by the statute, the exception to the protection ("except as may be necessary to enforce any agreements from the Meeting") was broader than the enforcement exception contained in section 1123. As one blogger cogently put it at the time, "the big print giveth and the small print taketh away."
I think it's safe to say that this result was pretty much completely unpredictable and that it was within the standard of care for counsel to expand the protections contained in section 1119 (for an example of the problems created by its relatively narrow confines, see mediator Debra Healy'scomments and my response about the scope of mediation confidentiality in an earlier post in this series).
Post-Thottam, however, counsel must be extremely careful in drafting confidentiality agreements lest they inadvertently take away the protections the legislature created and the Supreme Court has so assiduously enforced.
In short, don't get fancy. Just stick with the language of section 1119
Before I begin to get hate mail from attorneys about this series, let me say that it is meant to sound the alarm, raise red flags, and make attorneys overly cautious so that our clients wouldn't even ever think of suing us for malpractice.
I don't mean to suggest here that drafting an arbitration clause a Court refuses to enforce or to apply to a given claim constitutes malpractice. The way the Courts are dealing with arbitration clauses these days, it's probably not outside the standard of care to fail to satisfy their passing fancies on scope and unconscionability.
I do, however, WANT TO DISCOURAGE ALL LAWYERS FROM USING BOILER PLATE ARBITRATION CLAUSES which is why I'm alerting you to yesterday's opinion by the Fifth Circuit Court of Appeal refusing to apply Halliburton's employment arbitration provision to a sexual assault claim.
Here's the clause.
You understand that the Dispute Resolution Program requires, as its last step, that any and all claims that you might have against Employer related to your employment . . . must be submitted to binding arbitration instead of to the court system.
Pretty broad, but not, according to Jones v. Halliburton, broad enough to include a sexual assault claim that occurred in worker housing. With one Justice dissenting, the Court was careful to limit is opinion strictly to the facts of the case before it. Here's the holding:
The one consensus emerging from [our] analysis is that it is fact-specific, and concerns an issue about which courts disagree. When deciding whether a claim falls within the scope of an arbitration agreement, courts “focus on factual allegations in the complaint rather than the legal causes of action asserted”. Waste Mgmt., Inc. v. Residuos Industriales Multiquim, S.A. de C.V., 372 F.3d 339, 344 (5th Cir. 2004) .Here, the allegations are as follows: (1) Jones was sexually assaulted by several Halliburton/KBR employees in her bedroom, after-hours, (2) while she was offduty, (3) following a social gathering outside of her barracks, (4) which was some distance from where she worked, (5) at which social gathering several co-workers had been drinking (which, notably, at the time was only allowed in “non-work” spaces).
* * *
Under these circumstances, the outer limits of the “related to” language of the arbitration provision have been tested, and breached. Halliburton/KBR essentially asks this court to read the arbitration provision so broadly as to encompass any claim related to Jones’ employer, or any incident that happened during her employment, but that is not the language of the contract. We do not hold that, as a matter of law, sexual-assault allegations can never “relate to” someone’s employment. For this action, however, Jones’ allegations do not “touch matters” related to her employment, let alone have a “significant relationship” to her employment contract.
N.B. Review the case law; forecast the types of claims that might be made against your client. Tell the client there's no way you can provide it with any absolute assurances that the arbitration clause will be enforceable in every given situation. Say that in writing. Do your best. Maintain a great working relationship with your clients and you'll be fine. Just fine.
If you didn't already understand how to protect your mediated settlement agreement from challenge, you do now.
But wait a minute! Is that what you want?
What if your client entered into the agreement only because its opponent made a material misstatement of fact? What if one of your co-defendants challenges your settlement agreement as not having been made in good faith, thus exposing your client to potential liability for indemnity or contribution? Can you win the "good faith settlement" motion without the testimony of the participants in the mediation?
Parties are entitled to walk out of a mediation with a whole range of outcomes, from a completed settlement agreement, to a term sheet, to an oral understanding, to a promise to think over the other side's last offer, to a promise to see the other side in court! As long as both sides understand what they are getting at the conclusion of the mediation session, there should be no basis for a malpractice claim for any of these outcomes. If the parties choose to use a term sheet with no language in it indicating that they have settled their case, they just need to understand that any party can renege on the deal after the mediation. In some cases, that may be what the parties want, to give them some time to think the whole thing over.
Joe's comments put the emphasis in mediation advocacy back where it belongs -- on the fully informed assent of the parties and on the strategic plans of litigation counsel.
So here's yet another way to commit legal malpractice as a mediation advocate: don't fully understand the implications of mediation confidentiality on the final resolution of your client's dispute. I'll just bullet point ways to protect yourself and your client below and ask others to chime in with their recommendations:
if your client is relying upon the veracity of its opponent's representation in entering into the deal, write that representation into the agreement or deal points, i.e., "Party A and Party B both understand that Party A is entering into this agreement based upon the following representation/s: .................................... " Then you can include any other language that makes sense in the context of the agreement. You can provide that Party B's production of documents confirming its representations to Party A is a condition precedent to Party A's obligations under the settlement agreement. If your client simply needs protection down the line in the event FACT X proves to be untrue, you can include a liquidated damage clause in the agreement or provide for an expedited means of resolving any dispute resulting from the falsity of FACT X ; or, you could provide that the falsity of FACT X will render the settlement agreement null and void;
you could avoid the problems created by the strict enforcement of mediation confidentiality by agreeing with your opponent (in writing!) that the neutral-facilitated settlement negotiation is not a mediation to be governed by Evidence Code section 1115 et seq. but a settlement conference governed by Evidence Code section 1152 et seq. This option would be a useful one to a defendant who is settling the action separately from co-defendants who might bring a motion challenging the good faith of your settlement.
Less drastically, you could simply include in your settlement agreement a provision by which the parties agree that the mediation confidentiality protections as codified in section 1119 will not apply in the event a co-defendant challenges the good faith of the settlement. Remember that the mediator is considered incompetent to testify so that your waiver of mediation confidentiality in the event testimony is needed to oppose a challenge to the good faith of your settlement may not permit the mediator to testify at the hearing (or to offer a declaration in opposition to the motion) as well he or she -- a neutral party -- shouldn't.
You're a litigator. There are probably hundreds of ways to skin this particular cat. The keys are knowing and understanding the law of mediation confidentiality and thinking through all of the implications it might have on your clients' rights or interests down the line. That's what we litigators do and we shouldn't abandon those strategic considerations just because we believe we're settling this case for good and it will never come back to haunt us or our clients again.
Remember, you are in control of the process. If you don't like mediation confidentiality, tailor a confidentiality agreement to suit your circumstances. You will, of course, have to "sell" your proposal to your opponent. The best time to do that might well be at the end of the mediation rather than at its commencement. By that time, your opponent is pretty darn committed to the resolution of the lawsuit. His client is already planning on ways he can more profitably spend his time and money other than on further litigation, attorneys' fees, and court costs. The plaintiff is, I guarantee you, already spending the settlement monies or planning the celebration back at the office and wondering whether this might lead to the promotion he or she has been waiting for.
Yet another way to commit legal malpractice (and how to avoid it) tomorrow!
That's not a summons and complaint for malpractice, is it? Because of something you didn't know about ADR advocacy?
C'mon! ADR is all about avoiding litigation, not creating it, right? The good news is that there hasn't yet been an ADR malpractice suit of note. The bad news is, I see ADR negligence at least once a month and am holding my breath against the day lawsuits began a'poppin.
To help you avoid ADR malpractice, here is just one of ten pitfalls to be covered in this series that can make you a malpractice magnet for disgruntled clients.
write up a "term" sheet reflecting your mediated settlement agreement without including the "magic language" of Evidence Code section 1123
absent this language, a party with buyer's remorse can resist the enforcement of a "term sheet" if he feels he was was coerced into signing it; entered into it based upon a misrepresentation of material fact made during the mediation; or, that it simply does not accurately reflect the terms the parties' orally agreed upon during the mediation
use the magic language of Evidence Code section 1123 and your "term sheet" should be enforced and your client's bargaining partner precluded from introducing into evidence (pursuant to section 1119) any statement made by anyone during the course of the mediation, including allegedly coercive, misleading, or, fraudulent statements of fact allegedly inducing his consent.
the cure (from Caplan again) is the following "belt and suspenders" clause:
The parties intend this Agreement to be admissible, binding and enforceable, and subject to disclosure within the meaning of those terms in California Evidence Code § 1123 (a), (b) and (c), and this Agreement is expressly not privileged from disclosure under California Evidence Code § 1119. In addition, if the formal Settlement and Mutual Release Agreement contemplated hereinabove is [e.g., not executed within ten (10) days of the date of this Agreement] this Agreement may be enforced by motion under California Civil Code § 664.6 and the court shall retain jurisdiction over this Agreement until performance in full of the settlement terms herein.
Below is an Orange County Superior Court form that satisfies the requirements of section 664.6 (providing an expedited enforcement mechanism for the settlement agreement) but which fails to recite all of the magic words including admissible, enforceable, and subject to disclosure. So please don't trust any form other than your own!! Even forms issued by the Courts. The fact that you are entitled to an expedited hearing under 664.6 to enforce your mediated settlement agreement does not mean that you will be permitted to enforce the agreement against your opponent's will.
Of course the best way to avoid claims arising from buyer's remorse is to create a durable settlement that all parties will want to enforce. That means avoiding agreements that your client enters into when he or she is hungry, angry, lonely (i.e., sidelined) or tired (HALT). It also includes agreements that feel coerced by an overly aggressive mediator preying on the weaker of the two (or three or four) parties. And yes, Virginia, there is always a more vulnerable party; all mediators recognize who that is; and, too many mediators make a beeline for that party's soft under-belly.
Another way to avoid challenges to the mediated settlement agreement include:
bringing a fillable template settlement agreement (and these days, also a Stipulation for the Entry of Judgment in the event of default on a payment plan) that is a complete, final and binding agreement that contains the "magic language" of section 1123 that all parties execute before they leave the mediation session (no matter how tired everyone is and how much everybody wants to just go home and deal with the inevitable nit-picking over the relatively inconsequential terms of the agreement tomorrow).
not letting your fear that the "details" might blow up the "deal" you've spent so many hours negotiating.You know how these deals go off the rails the following morning when your opponent begins to nit pick terms, often as a face-saving mechanism. Let the mediator help you close the deal right there and now, assisting the parties in resolving the minor terms that can blow up in your face if left until tomorrow.
And speaking of tomorrow, I'll have Tip No. 2 for avoiding malpractice litigation arising from mediated settlement agreements. Stay tuned!
For more posts on confidentiality in both California state and 9th Circuit district courts, click here.
Emotion terms are notoriously slippery. But if we understand empathy as the ability to take the perspective of another, it ought to be uncontroversial that empathy is an important component of judicial judgment. Empathy, so understood, is a basic and necessary tool for making sense of the intentions and actions of others.
So, as Mark Graber asks, who could be against empathy? And more particularly, why is empathy liberal, if we all use it? Perhaps because empathy goes by another name when it comes easily—for example, when Supreme Court justices take the perspective of those from similar backgrounds or with similar worldviews. This sort of empathy looks neutral and natural, not ideological or partial. It tends to be portrayed as garden-variety judicial reasoning.
We all use empathy, and despite our best intentions, it is always selective and riddled with blind spots. We can try to correct for this partiality if we are self-aware. But those who study cognitive psychology and decision-making find that we aren’t all that good at identifying and critiquing our own background assumptions. A better way to encourage this sort of correction is through debate with others who hold differing viewpoints. Judges, like the rest of us, make better decisions when forced to examine and articulate their premises.
According to a recent article in the New Yorker (voice of the effete empathizing liberal east-coast establishment) we owe our conscious mind -- that which makes us human -- to the mirror neurons that give rise to to empathy (because we could "feel" the mind of another, at some point we turned that thought back against ourselves and consciousness was born).
What does this have to do with negotiation? Anyone who continues to believe that decisions are (or could potentially be) the product of a solely rational process are losing the benefit of the emotional sway every great negotiator exercises over his or her bargaining partner.
Geesh, even George Bush professed compassion(so long as the government wasn't providing it). Does the Republican Party really wish to become the home of Darth Vadar? /1
1/ Perhaps Jon Stewart of Comedy Central's The Daily Show described coverage of the pairing best. The show aired a clip of The Weekly Standard's William Kristol saying of the back-to-back speeches, "Just going to be fun, don't you think? Luke Skywalker and Darth Vader, you know? And I want to say that I was always on Darth Vader's side." Stewart retorted, "Now you tell us. You know, as one of the main intellectual forces behind the Iraq war, that's kind of a weird thing to admit. You might have wanted to mention, 'Oh, quick caveat to my plan on a new American century: I'm on the Darth Vader side.' "
Although a California Court may properly sanction a non-party insurance carrier who possesses the authority to settle litigation for its failure to participate in a mandatory settlement conference, there is no statutory (nor inherent) authority given the Court to sanction the carrier or a party for its purported failure to negotiate in "good faith." As the Court in Vidrio v. Hernandez(2d DCA) explained today:
In sum, even were we to agree with the trial court's assessment of the conduct of counsel and the [insurance] adjuster, the failure to increase a settlement offer or to otherwise participate meaningfully in settlement negotiations violates no rule of court and is not a proper basis for an award of sanctions.11 (See, e.g., Triplett v. Farmers Ins. Exchange (1994) 24 Cal.App.4th 1415, 1424 [“[w]e eschew any notion that a court may effectively force an unwilling party to settle by raising the specter of a post hoc determination that failure to do so will be evidence of failure to participate in good faith”]; Sigala v. Anaheim City School Dist., supra, 15 Cal.App.4th at p. 669 [“„[a] court may not compel a litigant to settle a case, but it may direct him to engage personally in settlement negotiations, provided the conditions for such negotiations are otherwise reasonable‟”].) [Defendant] filed an appropriate settlement conference statement; her lawyer and Mercury [the insurance carrier] attended the conference and participated in it. While the trial court‟s frustration at the parties‟ lack of movement is understandable, no more was required.
In particular, the Court of Appeal, held that the Court was not at liberty to "judge" whether the defendant and its carrier "should have" offered more than had previously been offered at a mediation either because the case was "worth" more or because the offer was so low in light of the attorneys fees and costs that would likely be incurred at trial.
I believe most mediators would approve of this ruling, even though it applies only to settlement conferences and not to mediations, the latter of which is protected from the Court's inquiry by Evidence Code section 1119. Whether or not a mediator, a settlement judge, a party or a trial judge believes a defendant "should" offer more or a plaintiff "should" accept less by way of settlement, should not form the basis of an award of sanctions. Not only would such a rule decrease citizens' trust and respect for the Courts, whose job it presumably is toprovide a forum in which litigated disputes may be tried, such a rule would impermissibly chill the parties' Constitutional right to a jury trial.
Challenges to good faith settlements that cut off the rights of non-settling defendants to seek indemnification and contribution from settling defendants are nearly always doomed to failure. Trial courts are understandably eager to clear their dockets and there's no docket-clean-up pitcher like the first defendant to settle. Deny the motion and bring a settled defendant and his trial-ready resources back in to the litigation when the first defendant-domino has just successfully toppled over? Not likely, my friend. Not in the trial court at any rate.
These motions are so difficult to oppose that I've seen a target defendant threaten a marginal player (my client) with sanctions just for challenging the target's very low six-figure settlement in an eight-figure antitrust action.
Best quotation: "The hospital contends that the physicians‟ $200,000 settlement -- representing 2 percent of plaintiffs‟ $10 million damages estimate -- was so far out of the “ballpark” it was not even in the parking lot." With a first runner-up to "If section 877.6 is to serve the ends of justice, it must prevent a party from purchasing protection from its indemnification obligation at bargain-basement prices."
The Court of Appeal relied upon the following "facts" in finding that the trial court abused its considerable discretion in granting a good faith motion to defendant physicians in light of defendant hospital's opposition.
payment of $200,000 in settlement for a $10 million claim, which the appellate court found to be "wholly disproportionate." As the Court opined "[e]ven a slight probability of liability on [the settling doctor's] part would warrant a contribution more significant than 2 percent."
the "evidence" supporting the court's finding that the settling physician's probable fault was "not de minimis," which appears to have been based upon Plaintiff's attorney's fault analysis (not generally known for its unbiased nature) and the physicians' counsel's candid (?) suggestion that his clients' contribution to a global settlement might be in the range of $1.5 million;
the availability of $2 million in coverage, which "militated against a good faith determination" because the settlement constituted only 10% of available policy limits [carrier alert here!];
the non-settling Hospital's contention that the physicians and their attorneys engaged in "bad faith tactics" during two mediation sessions -- a factor the appellate court acknowledged it was barred by mediation confidentiality from considering -- but which it neatly avoided by concentrating on post-mediation negotiations; /*
the timing of the physicians' settlement offer, which suggested to the appellate court that their "reason for entering into the settlement with plaintiffs was to cut off the hospital's . . . right to indemnity from the physicians" (I thought that was a legitimate reason to settle litigation but see the Court's citation to Mattco Forge, stating that when a defendant “enters into a disproportionately low settlement with the plaintiff solely to obtain immunity from the cross-complaint, the inference that the settlement was not made in good faith is difficult to avoid.” Mattco, supra (emphasis added); and,
a consideration I've never seen defeat a good faith motion before - that a settlment "dictated by the tactical advantage of removing a deep-pocket defendant . . . is not made in 'good faith' consideration of the relevant liability of all parties. . . ." (leading to the question whether we're now required to consider the interests of clients other than our own in entering into a settlement agreement on a contested claim)
If this case isn't depublished (an unfortunate California practice) or taken up for review, it will bear re-reading and deeper thinking about the stategy and tactics of breaking away from the mob to cut a separate deal beneficial to one's own client without "consider[ing] . . the relevant liability of all parties . . . "
*/ This is a good place to note the importance of either indicating in the parties' post-mediation written negotiations that the mediation is continuing (hence the communications remain absolutely protected) or that the mediation has concluded (hence bringing those post-mediation settlement negotiations outside the scope of the strictly enforced mediation confidentiality restrictions).
the economists David Hemenway and Sara Solnick demonstrated in a study at Harvard, many people would prefer to receive an annual salary of $50,000 when others are making $25,000 than to earn $100,000 a year when others are making $200,000.
Why? Because we "care more about social comparison, status and rank than about the absolute value of our bank accounts or reputations." In other words, we're more concerned with justice (fairness) than we are about the money. Which is why our clients have sought out our help with their personal, financial and commercial problems -- because we're in the justice business. When we understand this, the negotiation of financial settlements becomes a whole lot easier because there are many more ways to deliver justice than by throwing money at it.
"Twitter posts are like any other electronically stored information," explained Douglas E. Winter, a partner at Bryan Cave in Washington, D.C. and head of the firm's Electronic Discovery unit. "They are discoverable and should therefore be approached with all appropriate caution."The increasing popularity of Twitter has made electronic discovery even more complicated.
Litigators! Remember, you and your opponent(s) have a choice. It's not only in arbitration that you can make your own law, but by way of stipulated case management orders cooperatively crafted with an eye toward relative cost and likely benefit (ask me for a template!)
I don't need to tell you that clients are cutting back in 2009. The litigation practice that thrives will be the most efficient and effective dispute resolution vehicle on the road.
And now, for your moment of zen - Charlie Dickens.
Jarndyce and Jarndyce drones on. This scarecrow of a suit has, in course of time, become so complicated that no man alive knows what it means. The parties to it understand it least, but it has been observed that no two Chancery lawyers can talk about it for five minutes without coming to a total disagreement as to all the premises. Innumerable children have been born into the cause; innumerable young people have married into it; innumerable old people have died out of it. Scores of persons have deliriously found themselves made parties in Jarndyce and Jarndyce without knowing how or why; whole families have inherited legendary hatreds with the suit. The little plaintiff or defendant who was promised a new rocking-horse when Jarndyce and Jarndyce should be settled has grown up, possessed himself of a real horse, and trotted away into the other world. Fair wards of court have faded into mothers and grandmothers; a long procession of Chancellors has come in and gone out; the legion of bills in the suit have been transformed into mere bills of mortality; there are not three Jarndyces left upon the earth perhaps since old Tom Jarndyce in despair blew his brains out at a coffee-house in Chancery Lane; but Jarndyce and Jarndyce still drags its dreary length before the court, perennially hopeless.
Jarndyce and Jarndyce has passed into a joke. That is the only good that has ever come of it. It has been death to many, but it is a joke in the profession. Every master in Chancery has had a reference out of it. Every Chancellor was "in it," for somebody or other, when he was counsel at the bar. Good things have been said about it by blue-nosed, bulbous-shoed old benchers in select port- wine committee after dinner in hall. Articled clerks have been in the habit of fleshing their legal wit upon it. The last Lord Chancellor handled it neatly, when, correcting Mr. Blowers, the eminent silk gown who said that such a thing might happen when the sky rained potatoes, he observed, "or when we get through Jarndyce and Jarndyce, Mr. Blowers"--a pleasantry that particularly tickled the maces, bags, and purses.
How many people out of the suit Jarndyce and Jarndyce has stretched forth its unwholesome hand to spoil and corrupt would be a very wide question. From the master upon whose impaling files reams of dusty warrants in Jarndyce and Jarndyce have grimly writhed into many shapes, down to the copying-clerk in the Six Clerks' Office who has copied his tens of thousands of Chancery folio-pages under that eternal heading, no man's nature has been made better by it. In trickery, evasion, procrastination, spoliation, botheration, under false pretences of all sorts, there are influences that can never come to good. The very solicitors' boys who have kept the wretched suitors at bay, by protesting time out of mind that Mr. Chizzle, Mizzle, or otherwise was particularly engaged and had appointments until dinner, may have got an extra moral twist and shuffle into themselves out of Jarndyce and Jarndyce. The receiver in the cause has acquired a goodly sum of money by it but has acquired too a distrust of his own mother and a contempt for his own kind. Chizzle, Mizzle, and otherwise have lapsed into a habit of vaguely promising themselves that they will look into that outstanding little matter and see what can be done for Drizzle--who was not well used--when Jarndyce and Jarndyce shall be got out of the office. Shirking and sharking in all their many varieties have been sown broadcast by the ill-fated cause; and even those who have contemplated its history from the outermost circle of such evil have been insensibly tempted into a loose way of letting bad things alone to take their own bad course, and a loose belief that if the world go wrong it was in some off-hand manner never meant to go right.
Thus, in the midst of the mud and at the heart of the fog, sits the Lord High Chancellor in his High Court of Chancery.
The National Law Journal's annoying practice of making its "best" content available only with a secret decoder ring forged in the fire of subscription dollars, nevertheless did not stop me from access to an intriguing article about arbitration's "e-discovery conundrum" (here for people with the secret code).
. . . as litigation discovery techniques have become more prevalent in arbitration, arbitration has become just as time-consuming, expensive and burdensome. Without the benefit of an appeal process for the losing party, the primary remaining benefit for binding arbitration -- privacy -- is often outweighed by the other negative factors.
Parties and their litigation counsel have pointed to runaway discovery as one major reason why they have abandoned arbitration in favor of mediation in the United States and even internationally.
So how can "the long-recognized benefits of arbitration -- speed and cost savings -- be restored?"
The author recommends that the process must "address the needs and interests that led them to arbitration in the first place: to balance the need to discover those documents reasonably necessary for a party to prove its case with the cost, burden and time involved in producing such documents, while taking into account the need for fundamental fairness and to avoid surprise and trial by ambush."
Here's where reformers fail to get the direction the law is moving in. It's not about finding a process that fits your needs - it's about creating the process that is tailor-made for your one and only completely unique and unrepeatable dispute.
The beauty of arbitration is not what it is. It is what it can be. The beauty of arbitration is that it allows you to make up your own $%#@^ law and procedure. It restores control of the process to you.
What, you say? Your opponent and you can't agree? This is no longer a good enough reason, particularly because I do not see many attorneys making the effort to craft discovery and case management plans that reasonably addresses the parties' actual need for every document that someone marginally involved in the dispute might have once breathed upon.
I know whereof I speak.
The solution? Sit down, for goodness sake, with your adversary, for as many days as it takes, to reach agreement about what each side actually needs. Leave your huffing and your puffing, your posturing and your adversarial chops at the conference room door. There will be plenty of time for all of that after the only people who actually understand the dispute -- YOU -- agree upon the type of process necessary to resolve it as efficiently and effectively as possible.
The law firms that do this will survive the recession.
A common question asked by investment fraud victims is whether they should partake in a class action lawsuit of a securities arbitration claim. Often, investors are presented with a choice of either partaking in a class action lawsuit or FINRA arbitration action. As a general rule of thumb, investors are better off avoiding class action lawsuits. The recovery rate in class action lawsuits tend to be paltry. Please realize this is not always the case but it is very common.
The main reasons for why FINRA securities arbitration actions are typically better than class action lawsuits for investors include the following reasons…
Trial court lacked authority to review discretionary, prehearing order by arbitrator, who imposed stay on arbitration of dispute concerning uninsured motorist policy until plaintiff--who was driving on work-related business in company car provided by employer when rear ended--pursued workers’ compensation benefits in light of Insurance Code Sec. 11580.2.
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.
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.
O.K.,Solo Practice University™ is not Santa Claus but it comes pretty darn close.
Solo Practice University™ is a revolutionary new web-based educational community that picks up where your legal education left off.
Learn from some of the most progressive lawyers, marketing pros, technology consultants and legal business giants how to:
* Plan, build and grow your private practice
* Differentiate yourself from the competition
* Attract and engage new clients more easily
… and much more. They just can’t teach you that in law school.
Need to transform your marketing strategy in these troubled economic times? You can learn not just how to blog your way into your desired market, but how to leverage what you love into how much you make from Blawgfather and SPU Professor Grant Griffiths.
Wondering whether to put rocket fuel into your networking vehicle by adding online social media? You couldn't find a better teacher than SPU Professor Toby Bloomberg who has over 15-years of traditional strategic marketing experience and four years with social media through her company Bloomberg Marketing/Diva Marketing.
Are your clients peppering you with questions you can't answer about their rights and remedies in Cyberspace? Then it is Christmas, Hannukah and Kawanza all rolled up into one. 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.
If you believe that law blogging is not only informative and entertaining, but capable of transforming our lives, our society, our culture and our legal system as well, run don't walk over to Peter Black'sFreedom to Differ which not only rocks, it twitters, on One Web Day. Surely this will be the BlawgReview of the year!
. . . .one recurring theme on this blog has always been a recognition of the value in a strong and free internet. Therefore it is an honour to be able to host Blawg Review on Monday September 22, 2008, which is One Web Day 2008. One Web Day was founded three years ago by Professor Susan Crawford from the University of Michigan, and she describes it as an "Earth Day for the internet". The One Web Day website describes the day in the following terms:
The idea behind OneWebDay is to focus attention on a key internet value (this year, online participation in democracy), focus attention on local internet concerns (connectivity, censorship, individual skills), and create a global constituency that cares about protecting and defending the internet. So, think of OneWebDay as an environmental movement for the Internet ecosystem. It’s a platform for people to educate and activate others about issues that are important for the Internet’s future.
If you'd like to host BlawgReview or submit to it, click here. All future BlawgReview hosts please note -- THE BAR HAS BEEN RAISED!
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.
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.
A lessee of commercial office space complains that the common areas are not being properly maintained. The local high school has just banned Catcher in the Rye. Again. A prestigious law firm fires a first year associate because he refuses to remove his new “tongue stud.” These seemingly disparate disputes have one quite obvious but ill understood characteristic in common – they are all examples of unresolved conflicts that have ripened into discrete disputes.
Pretend for a moment that you never went to law school. I know. It's hard. But give it a shot.
Lawyers (those other people who went to law school) are are trained to understand, manage and remedy all disputes, no matter however different they might be, in a single, highly controlled manner.
To help their clients deal with the problems mentioned here, lawyers will read the lease; research the latest Supreme Court rulings ("Fuck the draft"); and, study the statutes. Once they understand the facts that are relevant to the law, they “think like lawyers.”
How do they do that? "Think" like lawyers?
First, they subject the facts and the law to as much scrutiny as any idea can bear before it disintegrates into the dust of first principles. They create a chronology of events, highlighting and tailoring the "story" of the conflict that "fits" the available "causes of action" giving rise to "rights" in their client, obligations in their "opponent" and remedies for the harm suffered.
This "legal" dispute was once about a relationship between people. Now it is an "actionable" claim in an extremely controlled process in which one of the parties will "win."
That, of course, rarely happens because the legal system has become too expensive and the law too uncertain for most people to risk what used to be it's goal -- a jury trial.
Lawyers recognize frivolous or baseless or "defendable" claims by observing just how uncomfortably the “facts” sit inside their opponent's “causes of action.” When called upon to justify their entitlement to get their client's claim before a jury (demurrers, motions for judgment on the pleadings, summary judgment motions, non-suits) the Plaintiff's attorneys can and will simply change the way the story is told. They make the facts fit the law. There's nothing wrong with that. That's their job. If the facts won't "fit" the law, lawyers apply themselves to the law's creative expansion.
What attorneys do not learn in law school is how and why conflict develops into a dispute and then predictably evolves, usually getting more acrimonious and difficult to resolve.
My friends who are lawyers (I never went to law school, remember? and neither did you) tell me that they know how to escalate conflict but not how to de-escalate it. They also tell me that they see a lot of injustice. Sometimes the injustice arises because the laws themselves are unjust. Sometimes the tragic and unfair consequences of human interactions just don't have any legal remedy. And sometimes the legal process itself makes disputes worse -- more protracted, frustrating and expensive -- rather than better.
In common law countries, like ours, where the law is forged in the fire of conflict, shouldn't attorneys be taught not only how to "win the case" but also how to dampen the flame? Most litigators I know would respond with a resounding "no!"
Conflict resolution that is not "handled" as litigation or arbitration is for some other professional to deal with. Therapists come to mind. Don't they help the parties deal with that most uncontrollable aspect of any dispute -- something not only lawyers but the law itself exclude from the legal action?
Feelings. Not just sad or mad feelings. But the type of feelings that make teenagers shoot other teenagers on the streets of Los Angeles. Feelings of loss, tragically unfair outcomes, powerlessness, rage and despair.
The purpose of this post and the new thread that it is meant to begin? To start something radical.
If you're not aware of what I'm about to tell you, you should be.
I was just talking to a friend over coffee the other day about how we're using 18th Century technology (the jury trial) to solve 21st Century problems.
Here's the idea. A legal TED Conference.
If you'll look at what TED accomplishes, you'll know what I don't mean. I don't mean a conference to trot out any new/old "ADR" ideas -- mediate this, arbitrate that, create new rules and forms for the lawyers to use.
I mean creating the highest level think tank we can to first envision and then implement a dispute resolution technology that incorporates what we've learned since we first enshrined the jury trial in our Constitution more than 200 years ago.
I have one man in mind -- Larry Lessig. But surely there are others. The first step would be to suggest names for the coordinating committee.
Why do I think of TED? Because what it envisions cannot be accomplished. It cannot even be envisioned. It's a fool's errand. One I'd be willing to spend the rest of my own life working on.
Although I do I try to steer clear of politics, I simply cannot resist during this compelling political week and particularly on this historic day.
F. Scott Fitzgerald said that the mark of a first rate intelligence is the ability to simultaneously hold two contradictory ideas in your mind. I aspire to having a first rate intelligence. Particularly today.
I do not support Obama because he is bi-racial. Nor did I support Hillary because she was a woman. I'm an old fashioned party Democrat. The Republicans could nominate a gay disabled mixed "race" black and asian orphan from Spanish Harlem and I would not vote for him or her.
I nevertheless pause the Negotiation Blog this evening to celebrate the great effort -- the individual and collective acts of heroism as well as the small daily tender merices -- that have moved us so far beyond the society in which I was raised -- one in which Southern de jure and the Northern de facto segregation was an accepted fact -- never to be altered.
But there are many signs that the struggle is only beginning. Jacob Weisberg canvasses the lingering legacy of racism in the US, and Patricia J. Williams puts it in vivid detail:
[W]hile some of us are listening to the soothing tones of National Public Radio, a much larger audience—and larger by millions—is listening to Rush Limbaugh singing those subterranean fears of “Barack, the magic Negro,” or to radio shock jocks cackling about “jigaboos,” or to Pat Buchanan fretting that Obama is a radical, unpatriotic, extremist “elitist” to whom the liberal media hands a pass as a “special-ed,” “affirmative-action” candidate. Not that any of them mean it in a racist way. Hey, lighten up. Don’t you have a sense of humor?
(while we're walking down memory lane anyway, "Have It Your Way" from 1976)
When I ask litigators why they don't choose arbitration over litigation before unpredictable judges in a crowded court, their answer invariably is "because I can't appeal the ruling." We cling to appellate review even though we appeal fewer cases than we try -- which is a very small percentage of our case load as it is.
Not surprising, however, we litigators, as Max Kennerly recently noted, tend to be risk-averse, not risk-embracing (h/t Blawg Review # 174). To give up that one last chance for our client to be vindicated and for us to be triumphant is generally just too much for us.
Now we can have our arbitration cake and and follow it up with appellate ice cream. Yesterday, the California Supreme Court in Cable Connection, Inc. v. DirecTV held that arbitrating parties' agreement to seek appellate review of legal errors is enforceable in California State Courts despite its uneforceability in federal court. As the Supreme Court explained:
However, the high court went on to say that federal law does not preclude “more searching review based on authority outside the [federal] statute,” including “state statutory or common law.” (Id. at p. __ [128 S.Ct. at p. 1406].) In Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1 (Moncharsh), this court reviewed the history of the California Arbitration Act (CAA; Code Civ. Proc., § 1280 et seq.).
The California rule is that the parties may obtain judicial review of the merits by express agreement. There is a statutory as well as a contractual basis for this rule; one of the grounds for review of an arbitration award is that “[t]he arbitrators exceeded their powers.” (§§ 1286.2, subd. (a)(4), 1286.6, subd. (b).)
Here, the parties agreed that “[t]he arbitrators shall not have the power to commit errors of law or legal reasoning, and the award may be vacated or corrected on appeal to a court of competent jurisdiction for any such error.” This contract provision is enforceable under state law, and we reverse the contrary ruling of the Court of Appeal.
If You Know the Case Law, Litigation Doesn't Have to be Robotic
By Victoria Pynchon
Here in California, there's no stronger rule of confidentiality than that applied to a mediation. It cannot be impliedly waived like most privileges, including the near-sacred attorney-client privilege. Simmons v. Ghaderi, 2008 DJDAR 11107. You cannot be estopped from relying on it. Eisendrath v. Superior Court, 109 Cal.App.4th 351 (2003). And if you want your mediated settlement agreement enforced, you must strictly comply with the requirements of Evidence Code Section 1123. Fair v. Bakhtiari, 40 Cal.4th 189 (2006).
Insurance policy-holder counsel Kirk Pasich of Dickstein Shapiro has criticized nearly all recent interpretations of mediation confidentiality by the California Supreme Court on the ground that they permit insurance carriers to use mediation proceedings to engage in acts of bad faith.
"Why should a carrier get a license to act in bad faith in mediation," Pasich asked, adding, "Cases settled, and still settle, in mandatory settlement conferences without that same shield. I don't think a process should exist that encourages, rather than discourages, a party from acting in bad faith."
If you do not understand the differences between settlement conferences and mediations, you are not alone. My informal surveys indicate that litigators believe there's no difference whatsoever between the two and few mediators are able to distinguish between them despite their training in the field. Nor have California's courts been of any real assistance.
What's in a name? Here, plenty. The application of California's Rules of Evidence to mediations has such significant potential economic consequences that mediator and litigator malpractice actions are surely looming on the horizon.
What type of misbehavior can occur in a mediation? Here are just a few examples: One party can make a misrepresentation of material fact on which the other relies in entering into a settlement agreement; as Pasich notes, an insurance carrier can act in bad faith; one mediating party could tortiously interfere with a third party's contract or prospective economic advantage; or the mediating parties can enter into a collusive settlement agreement, depriving the settling parties' co-defendants from learning facts necessary to challenge the settlement in a "good faith" hearing.
Even if all parties have expressed complete agreement during the mediation, which they then memorialize in a term sheet, absent strict compliance with the requirements of Evidence Code Section 1123, no evidence probative of that agreement will be admissible in a California court.
If the mediating parties are engaged in a settlement conference, none of this potentially bad behavior would be protected.
Given the potentially significant adverse economic consequences that can flow from a mediation, California's courts have clarified the differences between the two procedures, right?
In some cases -- complex construction litigation comes to mind -- fees for a referee can be one of the most substantial costs of litigation. Yesterday, the Fifth District California Court of Appeal held that a stipulated judicial reference agreement under CCP 638 precludes recovery of prevailing party's fifty percent share of the referee's fees as an item of costs if the parties have agreed in the reference stipulation to split the referee fees.
Solution? Include in your agreement a provision indicating that the prevailing party in the litigation will be entitled to recover its half of the referee's fees.
Heck -- given that we spend nights and weekends feeding this blog, there's a pretty strong argument that we're crazier than the next guy.
We fret about whether each and every one of the ten million documents has been reviewed and coded correctly, and we change commas into dashes -- and back again -- in footnote nine on page thirty of the brief.
We believe that our clients are more likely to win if we do our jobs right, and we devote an awful lot of energy to that cause.
And then the system kicks in.
Courts make utterly unpredictable procedural rulings that dramatically change the value of our cases. The MDL Panel, for example, may decide to consolidate a set of cases in a jurisdiction that previously had nothing to do with the litigation -- like sending Breast Implants to Alabama or Albuterol to Wyoming -- and all of a sudden an unanticipated body of local appellate law governs your federal issues, and your cases are either won or lost for reasons beyond your control. (See In re Korean Airlines, 829 F.2d 1171 (D.C. Cir. 1987).)
Or you tee up a legal issue in front of a judge, and you can't predict the result, because the cases are breaking fifty/fifty in that area. The judge might grant summary judgment, or he might deny it. Or, as happened in Tucker v. SmithKline Beecham recently, he might grant the motion in September and reconsider the following July. Your lawyering skills presumably had nothing to do with it.
One judge grants a Daubert motion, holding that the evidence linking Accutane to inflammatory bowel disease is junk science, inadmissible in a court of law. But, a couple of weeks earlier, a New Jersey jury had awarded millions of dollars of damages based on that same evidence.
One judge holds that a claim accrued on the day the plaintiff was diagnosed with a disease, and another holds that the identical claim -- on identical facts -- didn't accrue until the plaintiff "discovered" his claim based on press coverage or an article in the scientific literature. The statute of limitations bars the first claim; the second one goes forward.
You're a hero or a goat, and you had nothing to do with it.
One judge holds that the warnings on your client's product are adequate as a matter of law. Another holds that the question of adequacy is one of fact, to be decided by a jury.
One jury then finds in your client's favor, but a second jury -- looking at precisely the same warnings -- finds the opposite.
We're not complaining about this, really.
They're our lives, after all, and we picked this profession, and it can be awfully exciting and challenging and, yes, fun.
But doesn't it sometimes feel a tad random?
More to the point, our system sinks tens of millions of dollars into massive discovery to ensure that every last fact is known -- presumably in pursuit of an accurate result. But those carefully honed inputs then yield results that are both unpredictable and flatly inconsistent with each other (which means that at least one was wrong).
If the system ultimately values cases wildly inconsistently, just why does society invest massive resources into trying to ensure accuracy? Aren't there better things to do with our collective wealth?
But we digress.
We have to go back to scrutinizing the footnotes in all of the drug and device precedents, to pry out of them every last ounce of utility for our clients.
If we didn't, then a brief might not be perfect, and we might be more likely to lose.
Before further discussing the problems created by the Thottam holding,I'm providing a "brief" of the case about which I ranted and raved earlier here today.
A mediation confidentiality agreement entered into by the parties in Thottam provided that “all matters discussed, agreed to, admitted to, or resulting from ... [the mediation meeting]...
"shall be kept confidential and not disclosed to any outside person . . . ;
"shall not be used in any current or future litigation between us (except as may be necessary to enforce any agreements resulting from the Meeting), and,
"shall be considered privileged and, as a settlement conference, non-admissible under the California Evidence Code in any current or future litigation between us.”
One of the parties contended that a chart drawn up and signed by the parties during the mediation,
was sufficiently certain to be enforced according to its terms; and,
was admissble into evidence under section 1123(c) despite its failure to satisfy any of 1123(c)'s requirements.
Evidence Code section 1123(c) provides that a "written settlement agreement prepared in the course of, or pursuant to, a mediation, is not made inadmissible, or protected from disclosure . . . if
"the agreement is signed by the settling parties and any of the following conditions are satisfied . . .
"(c) all parties to the agreement expressly agree in writing . . . to its disclosure."Id. (emphasis added).
PROCEEDINGS IN THE TRIAL COURT
Without finding that the settlement "chart" constituted a "written settlement agreement" under section 1123, the Thottam trial court required one of the parties to testify about otherwise confidential mediation communications because the Confidentiality Agreement required the disclosure of mediation confidences "necessary to enforce any agreements resulting from the [mediation.]"
Apparently before Elizabeth could testify, the civil action to enforce the alleged settlement agreement was consolidated with other proceedings in the Probate Court,
at the trial of the consolidated matters, the Probate Judge refused to accept the settlement chart into evidence because it did not comply with the provisions of section 1123(c).
THE APPELLATE DECISION
the appellate court reversed the Probate Court's decision.
Section 1123(c)'s requirement that all parties to a mediated settlement agreement "expressly agree in writing . . . to its disclosure,"
may be satisfied by terms contained in a writing other than the alleged settlement agreement itself; and,
may be satisfied by terms contained in a writing executed before any alleged settlement agreement has purportedly been entered into.
Here, the Confidentiality Agreement satisfied those requirements; and,
The skeletal written settlement chart was enforceable because its material terms were, or could be made, certain.
Because the proceeding in which Appellant attempted to introduce the alleged settlement agreement was an action "to enforce what he claims is a settlement agreement reached in mediation," and,
the parties carved out of the Confidentiality Agreement any discussions that were "necessary to enforce any agreements resulting from the [mediation]"
the Confidentiality Agreement satisfied the requirements of section 1123(c); and,
the skeletal Settlement Chart was therefore admissible in evidence under that subsection.
This opinion threatens to blow a hole in sections 1119 and 1123 large enough to obliterate their protections -- protections thathave been repeatedly enforced to the letter of the law by the Supreme Court in its fairly recent Fair v. Bahktiariopinion -- holding that parties to a mediated settlement agreement must include in it an express provision that they intend to be bound thereby -- and Simmons v. Ghaderi in which the Court held that parties cannot impliedly waive confidentiality nor be estopped from asserting it.
Most Confidentiality Agreements I've seen (and used) naturally carve out an exception for the enforcement of a settlement agreement. If you sign such an agreement after Thottam, you risk the enforcement of a non-1123-compliant "settlement agreement" and risk being required to disclose otherwise confidential mediation communications on the sole ground that one of the parties alleges that the opposition entered into an enforceable settlement agreement during the mediation.
Were I attempting to resist the disclosure of mediation confidences my adversary claimed should be fair game under Thottam, I'd contend that the Thottam Confidentiality agreement, and hence its carve-out, was unusually broad and that the Court's holding should therefore be read narrowly and limited to its facts.
As California lawyers know, the Second Appellate District has jurisdiction over matters litigated in the Los Angeles Superior Court. It is therefore particularly important to take a look at the impact this decision might have upon matters mediated by the neutrals on that Court's pro bono or party pay panels. All such parties are required to sign a Confidentiality Agreement that protects from disclosure all mediation-related "written" and "oral communication[s] made by any party, attorney, neutral, or other participant in any ADR session" except "written settlement agreement[s] reached as a result of this ADR proceeding in an action to enforce that settlement."
Under Thottam, a colorable argument could be made that the mandatory Superior Court Agreement's confidentiality "carve-out" should be treated as either:
an express agreement by the parties to waive confidentiality for the purpose of enforcing "written settlement agreement[s]" even if they do not satisfy the requirements of section 1123(c); and/or,
a part of the alleged settlement agreement so that the two agreements together (confidentiality carve-out + non-compliant settlement agreement) satisfy the requirements of section 1123(c).
What to do? Don't sign any Confidentiality agreement that could possibly be interpreted in a manner similar to the one subject of Thottam unless you want to risk the disclosure of mediation confidences arising from a writing that does not comply with section 1123(c).
You can certainly refuse to sign the Superior Court's agreement in light of the Thottam holding. I don't know as a matter of Court policy whether that limits parties' ability to use the Court's pro bono or party pay mediators.
I'd have to say that this case puts confidences made in mediation sessions controlled by the Superior Court's Confidentiality Agreement at risk whenever one party is contending that the other entered into an agreement pursuant to a signed term sheet.
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.
TALLAHASSEE, Fla. -- Florida Insurance Commissioner Kevin McCarty welcomed the First District Court of Appeal's decision affirming the Office of Insurance Regulation's denial of United Insurance Company of America's request to include a mandatory arbitration clause in its life insurance contracts.
Arbitration would have forced disgruntled policyholders to bypass the legal system to settle disagreements. United appealed OIR's action and the court affirmed the denial.
"Policyholders have fewer rights and constitutional protections under the more restrictive arbitration process than they would have in a civil court proceeding," said McCarty. "I'm pleased that the Court made it clear that Florida consumers should not be shut out of the traditional legal system to press their grievances against insurance companies."
Although United argued that federal arbitration law superseded the Florida law that allows policyholders to use the courts for contractual disputes, the Court stated that the matter "specifically relates to the business of insurance" and was, therefore, exempt from being superseded by federal law
This may be the biggest break-down in attorney-client communication in the history of litigation. Because this public statement by Allstate about its former attorney would be highly defamatory if not true, I'm taking Allstate at its word here.
Allstate claimed that it had not deliberately flouted Manners’ orders. Rather, it said, its now-former attorney — then with the firm of Wallace, Saunders, Austin, Brown & Enochs — had failed to respond to discovery requests.
Allstate said it was appalled when it learned last year that it was being threatened with contempt.
“Allstate litigates hundreds of bad faith cases each year,” Allstate stated in court documents. “And it responds to discovery requests — just like the ones in this case — in many of them. There is no reason in the world for Allstate not to participate in discovery — particularly in this case, where there is an underlying judgment of $1 million.”
Allstate said it “immediately removed” the attorney from the case and retained new counsel.
The answer to the question "how to break bad news to my client" can be found at any of the links below. Most of these links are for health care professionals, who have to break bad news to their patients and their families far more often than we have to tell our clients that something went terribly awry. Put that at the top of your attorney gratitude list.
Do not avoid seeing the [client] or leave them anxiously waiting for news. Sometimes anticipation can be worse than even the worst reality.
Treat others as you would wish to be treated yourself.
Get the facts before you start.
Make sure you will not be disturbed. If necessary switch off phones or bleeps.
Be factual but sympathetic. Always be empathetic however you may feel personally.
Give time for the information to sink in and the opportunity to ask questions before moving on. Do not seem rushed.
If the [client] does not seem able to take any more be prepared to end the consultation and to take it up again later.
Look for all the cues, verbal or others. , , , Perhaps they would like you to speak to someone else or to have someone with them for the next meeting.
Never say that nothing can be done or the [client] will lose all hope.
Whilst trying to be positive never lose track of the fact that this is a serious and potentially fatal [reverse in the litigation]. Be optimistic but do not promise success or anything else that may not be delivered.
I will, however, provide the appellate court's comment on human fallability -- a recognition we all need to carry into any settlement conference or mediation with us. Vast conspiracies are the rare one-off. As Al Gore once said -- we think we can evacuate the planet but not New Orleans? It's our human capacity for error coupled with our human tendency to search the field for someone to blame that accounts for most unresolved conflict. Here's the local Met News article on the opinion and the appellate opinion itself (from our own Second District here in Los Angeles):
"The jury system is fundamentally human, which is both a strength and a weakness. . . . Jurors are not automatons. They are imbued with human frailities as well as virtues. If the system is to function at all, we must tolerate a certain amount of imperfection short of actual bias. To demand theoretical perfection from every juror during the course of a trial is unrealistic."
In late June, the Missouri Court of Appeals addressed the legal enforceability of a program adopted by Hallmark requiring employees to arbitrate employment disputes. The court held that Hallmark's ADR program did not constitute a contract and that there was no consideration to bind the employees to the promise to arbitrate claims.
The employer's arguments in favor of enforcement in this case were very much like those argued by O'Melveny & Myers here in California with the same result in the Ninth Circuit -- the employee was not bound by an agreement by continuing to work after all employees were notified that their continued work for the company would constitute consent to being bound by the arbitration provision.
The idea that an employer can create any legal contract it dares to create (based on a condition of at-will employment) cannot be sustained upon reflection. Imagine, for instance, an employer publishing a memo to employees stating that:
Anyone who continues to work for us through next Monday will be conclusively deemed to have agreed, as a condition of remaining in our employ through that date, that you will contribute twenty dollars per month over the next ten years to the National Association of Manufacturers (NAM), whether or not you remain employed here during that time. If you do not agree, you will need to resign your employment immediately, because by continuing to work, you are agreeing.
Today, the Supreme Court handed down a unanimous ruling in the long-awaited Simmons v. Ghaderi case about which I've commented on many occasions -- both on the importance of the confidentiality laws the Supreme Court held were air-tight today and on the process itself as a common example of a failed mediation proceeding.
Highlights from the opinion:
"The Legislature chose to promote mediation by ensuring confidentiality rather than adopt a scheme to ensure good behavior in the mediation and litigation process."
[T]he legislative history of the mediation confidentiality statutes as a whole reflects a desire that section 1115 et seq. be strictly followed in the interest of efficiency. By laying down clear rules, the Legislature intended to reduce litigation over the admissibility and disclosure of evidence regarding settlements and communications that occur during mediation. (citation omitted). Allowing courts to craft judicial exceptions to the statutory rules would run counter to that intent."
In Foxgate, we reasoned we "were bound to respect the Legislature’s policy choice to protect mediation confidentiality rather than create a procedure that encouraged good faith participation in mediation. Thus, we held that evidence of a party’s bad faith during the mediation may not be admitted or considered."
Here's the appellate decision that was reversed on nearly every ground raised in Justice Aldrich's compellingly well-reasoned dissent.
“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.
POPULAR ADR BLOGGER GETS SOME FACE TIME IN LOS ANGELES
By Greg Katz
Daily Journal Staff Writer
SANTA MONICA - Nearly everybody in the Southern California mediation community knows the face of mediator Geoff Sharp but not too many have met him.
That's because the New Zealand-based mediator's scruffy mug sits atop his popular ADR blog, Mediator Blah ... Blah ..., at mediatorblahblah.blogspot.com.
Sitting down for coffee at a beachfront hotel with Los Angeles mediator and fellow ADR blogger Victoria Pynchon, Sharp said his blog is what got him his ticket for this trip to Southern California.
He was in town at the request of the Pepperdine University School of Law, giving a lecture at the Straus Institute for Dispute Resolution's annual summer dispute resolution conference last week.
"For someone like me to get to Pepperdine - why would you ask a farm boy like me?" Sharp said, laughing. "The blog's the only way that I talk to these people."
Sharp's witty and concise blog helps chart the course of the online mediation conversation. There are about 150 ADR blogs worldwide, according to one blogger, and many of them link back to Sharp's.
He blogs a potpourri of ADR links, anecdotes and opinions on a wide range of mediation topics, most of them relevant to both local and international audiences.
In one recent post, he chided some "lazy" neutrals who have given parties the impression that mediation is "a process where you show up at a downtown building but never speak to, or even meet, the room full of people with whom you have your problem and whose cooperation you require to solve it."
In another post, Sharp described a mediation in which a lawyer asked him to calculate the hypotenuse of a right triangle.
Sharp said he initially was worried that he couldn't do it.
"But I am pleased to report dear reader, that I was equal to the task," he wrote.
Sharp also broaches sensitive subjects, writing at length about how difficult it is for mediators to build their practices.
But whether the difficulties of mediation are financial or mathematical, he wouldn't think about going back to litigating.
In the late 1990s, Sharp left his litigation practice at Bell Gully, a large New Zealand law firm, to start mediating.
Sharp is now a member of the advanced mediation panels for both of New Zealand's widely recognized mediation training organizations, LEADR and the Arbitration and Mediation Institute of New Zealand.
He also is consulting with the International Mediation Institute on its proposed mediator qualifications standards. Mediator standards are a frequent subject of his blog posts, as well.
He said he relishes the freedom he gained from leaving a big firm, though mediating often proves lonely.
"If you ask why [mediators] blog, it's because we're so solitary," Sharp said.
Becoming an ADR blogger, he said, was like making friends "on the same block in a new town," even though most other bloggers are in other countries.
Sharp said that blogging about mediations, with their strict confidentiality rules, can be complicated.
At first, he would post about specific events in mediations, such as one lawyer who wore his Bluetooth headset throughout a mediation, even when he "went to the john," Sharp said.
Was it blinking?" Pynchon chimed in.
But now, with a wider audience, Sharp focuses on the more philosophical and legal issues in mediation. When he wants to tell a particular story, he embellishes the events that happened in mediation so no one feels their confidential conduct is being publicized.
"I haven't let the facts get in the way of a good story," says the disclaimer on his blog.
Pynchon, who writes the popular ADR blog Settle It Now, at negotiationlawblog.com, said that even when bloggers are careful, mediator blogs can disturb parties. One party recently came to Pynchon asking whether a post referred to that party's case.
Another post, about the California Supreme Court mediation confidentiality case, Simmons v. Ghaderi, provoked the defendant to call Pynchon personally.
"It's like having a cartoon character come to life," Pynchon said of being contacted by someone she only knew through reading briefs and opinions. Simmons v. Ghaderi, 143 Cal.App.4th 410 49 Cal.Rptr.3d 342 (2006).
But despite the occasional hassle, blogging has become a way of life for the two mediators.
"For me, blogging and dispute resolution rest on the same principles: collaboration and reciprocity," Pynchon said.
Sharp nodded his agreement.
"I don't do this profit," he said with a smile. "I do it for ego."
Noting the benefits of appellate mediation and the desirability of participants attending in person, a California appellate court warned insurers in Campagnone v. Enjoyable Pools & Spas that even the potential of coverage requires a representative with full settlement authority to attend court-ordered appellate mediations in person, unless excused in writing by the mediator. Further, the court warned parties and counsel that they may also face sanctions if they fail to notify insurers with potential coverage about appellate mediations. The court noted that California’s strict mediation confidentiality provisions prevent mediators from disclosing whether anyone fails to attend, but that an aggrieved party may do so in seeking sanctions from the court. The court withheld sanctions in this case only because no previous opinion had spelled out these requirements, even though the insurer was only liable for amounts in excess of $3 million and the judgment in the trial court was $2.4 million.
And thanks to arbitrator and mediator extraordinaire Deborah Rothman for passing this along to me. (speaking of gender politics, Deborah graduated with the first class of women to be admitted to Yale University)
O.K., the subject line was meant to shock you and to draw criticism for what I will admit is my greatest unresolved prejudicial default -- that white men over 65 who didn't participate in the American cultural revolution of the late nineteen sixties and early 1970's did not and will never "get it."
failed to disclose that he'd been censured while on the bench for making "sexually suggestive remarks to and asked sexually explicit questions of female staff members; referred to a staff member using crude and demeaning names and descriptions and an ethnic slur; referred to a fellow jurist’s physical attributes in a demeaning manner; and mailed a sexually suggestive postcard to a staff member addressed to her at the courthouse.”
The majority arbitrators deciding the malpractice case stated that the female claimant was not credible because the "severity of the symptoms to which she testified went beyond what she described to her doctors, adding, “This claimant has had five prior facial surgeries.”
Similarly, in summarizing the claimant's expert’s testimony, these arbitrators noted, “One thing probably everyone can agree upon, after five facial surgeries, [claimant] could have done without a sixth one.”
Back to My Own History as Descriptive of -- But No Excuse for -- My Own Biases
We all have biases that we hide from others and some that we successfully hide from ourselves.
We live, I'm told, in a 200 year present. That means that my early life affects your life today. After all, I'm an old white woman, about whom you may well have biases. If I sit on your arbitration panel, you're going to want to understand those biases. That's why I'm giving you a bullet-pointed history of what the world was like when I was forming my essential character at 17 years of age in 1969.
the "want-ads" in the classified section of every major newspaper in American were categorized by gender -- "help wanted - women" and "help wanted - men"
in my senior year in high school, my entire class took "preference aptitude" tests to give us an idea of what our future careers might look like -- the girls were given "pink" tests and the boys "blue" tests -- had I shown an aptitude for, say, math (and no I didn't) I would have been steered into nursing; my male friends into "medicine" as physicians.
women were subject of explicit ridicule in magazine and newspaper cartoons -- we were airheads, bimbos, bad drivers, harpies or -- the "new" stereotype -- communist-longhair-folk-singing-America-hating-hippie-riot-inciting-"girls" who were alternately "men hating" or -- an old phrase -- "of easy virtue."
it wasn't until the 1970's, when I was in college and already planning a career teaching English (after all, nursing required math-skills) that the idea of a career in the law for women as anything other than a secretary began to seem possible.
by the year I graduated from law school in 1980, Columbia's female population had grown to a whopping 32%
although the enrollment of women in my law school class at U.C. Davis was nearly 50% in 1980, when I told my beloved mother in 1976 that I was going to apply to law school she said "why do that, honey? Be a legal secretary, then you can marry a lawyer."
when my husband attended Yale Law School ('67-'70) he had seven women classmates
when I was practicing law (these all from the early '80s)
a partner for whom I worked told me that women weren't permitted at the local "men's only" club because "we don't want our wives there."
a Judge required me to identify myself as Mrs. or Miss and when I said I didn't think it necessary to identify myself by my marital status, asked "what are you some kind of [women's] libber?" (yes, I lost the motion)
I was advised by the few women attorneys senior to me not to get pregnant until after I made partner
secretaries were allowed to refuse to be assigned to a woman attorney
the first woman to make partner at my law firm was quite openly referred to as "the first muff partner" by her colleagues
on the other hand, when a client said (of my assignment to its case) that the company did not want to be represented by a "girl," my partner told the client "then you don't want this firm representing you because she's the best associate I have"
I promise to work on my prejudices. And I advise anyone who is about to appear before any dispute resolver -- be that person male, female, white, black, young or old, GOOGLE THEM FIRST!
A tremendous effort accomplished today by Blawg Review # 167 at E-Commerce Law, bringing us at least one post from blogs in all 50 states organized by the date of their entry into the union. Blogger Jonathan Frieden must have devoted much of any lawyer's cherished 3-day week-end to this effort, for which all legal bloggers should give him a hearty round of applause.
On the ADR front, Jonathan gives us Oregon, admitted on February 14 (how very Oregonian) 1859 and The National Arbitration Forum Blog entry Americans Increasingly Denied Access to Justice. Here's the attention-grabbing lede. Click on the link for the full post.
The latest California Bar Journal contains an alarming and attention-grabbing piece from the Bar President. In The neglected middle class, Jeff Bleich explained how hard it has become for the hardworking American to get their day in court.
"[O]ur legal system is increasingly serving only the wealthiest interests or the very poorest ones: those who have great resources and those who are lucky enough to get help through legal aid, despite the serious underfunding of that system."
And while we're thinking of the flag and all things patriotic, here are a few random links on patriotism and justice.
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)
"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).
Nearly every condominium complex harbors an outlaw -- the man, woman, couple or family who refuse to follow the rules. The young couple who blasts the woofers off their stereo system at 3 a.m. The elderly woman who doesn't clean up after her dog. The raucous family that plays "Marco Polo" in the community pool after midnight.
Offended and outraged, other homeowners make demands on their volunteer board who contact the (often unresponsive) management company. The HOA board does its best. It issues warnings to procure compliance. To no avail. Eventually, someone reads the CC&R's. They learn that the Board has enforceable legal duties and the homeoweners actionable legal rights.
Welcome to community mediation -- the non-zero sum, value-based, rights-seeking, joint session transformative dispute resolution process. We're well trained and we're free.
But can we deliver justice?
Attorneys, the Law, Mediation and Justice
Maybe it was just my G-g-g-generation, but I went to law school primarily because I was interested in the delivery of justice. Although my primary involvement in the 20th Century 's civil rights movements was as a Vista volunteer at an activist women's center in San Diego in the early 1970's, I wasn't simply pursuing my own narrow self-interests when I applied to law school.
As early as I can recall -- long before I'd conclude that 1950's and '60s women were oppressed -- I'd already developed a deep longing for the reconstruction of adult relationships along the lines of fairness. This must be atypical childhood longing premised upon our predicament of being physically small and powerless. An "unjust" world that rewards only power would not ensure our survival while a world in which everyone is valued and treated fairly would.
Couple a child's sense of justice with televised images of "the law" aiming fire-hoses at peacefully demonstrating "Negroes" and you get a life-long commitment not simply to the "rule of law" but to the necessity for that "rule" to be premised upon justice.
Are Negotiated and Mediated Resolutions Trumping Justice?
These are just a few of the reasons it troubles me so when scholars suggest that mediated and negotiated resolutions to litigated disputes are unjust. Seeyesterday's post here and the article that prompted it, Justice Trumps Peace (etc.) here. If mediation is truly what its critics contend it to be -- a full-frontal assault upon the rights gained by marginalized citizens during the Civil Rights era -- I'm in serious moral trouble here.
Consider this contention in Justice Trumps Peace:
“ADR rhetoric” reinforce[s] a conservative challenge to “the law and reform discourse of the 1960s, a discourse concerned with justice and root causes, and with debates over right and wrong.” “The rights theme, consistent throughout earlier debates over legal resources,” was conspicuous by its absence in “the policy discussion on alternative dispute resolution.” . . . .
Laura Nader . . . not[ed] that ADR’s “process of communication” ethos took necessary rough, ideological edges off claims, and fostered what she called “coercive harmony.” Nader argued that ADR was permeated with “conformist ideology,” which was employed to “suppress the realities of class, gender, and racial antagonism” endemic to American society, and as such, it comprised an “unreal law movement.” Nader contended that ADR’s emphasis on conciliation meant that critical considerations of “blame or rights” were “avoided and replaced by the rhetoric of compromise and relationship.” She concluded that “cultural notions of justice are factored out.”
This tendency to screen-out unpleasant, divisive, but nonetheless vital social concerns supports Fiss’s characterization of ADR as a “sociologically impoverished universe,” in which critical issues of class, race and gender are subsumed to construct “a world composed exclusively of individuals.”
Rawls asked us to think of justice as a matter of agreement. He suggested that we think of the principles guiding a just society as the ones that individuals would agree to -- with the crucial proviso that they do not know where they themselves would end up in society, on the top or the bottom. They would thus act from behind a "veil of ignorance . . . Given this constraint, no individual could tailor the principles of justice to his or her special talents or circumstances, which is why Rawls called this approach "justice as fairness." Rawls suggested that the principles that would be agreed to would be ones that were deeply committed ot basic human rights and had a strong presumption in favor of economic equality. Inequalities would only be tolerated if they most greatly benefited the least well off.
According to Ryan, Rawls concluded in his later writings that the reciprocity inherent in bargained-for resolutions and negotiation's search for mutual advantage were insufficient to ensure justice. Rawls therefore shifted the basis of his theory from the search for rational resolutions to the implementation of reasonable ones. "The question to ask of principles of justice," posited Rawls, was,
what were the most reasonable ones for people to agree to given the nature of our society and the nature of who we are? Justice, thus reconceived, lost the harsh individualism that Rawls' earlier theory seemed to possess. The stress on reasonableness meant that people taking others into account was an essential part of what justice was all about. His theory also moved away from his earlier hyper-abstraction, insofar as we talk of what is "reasonable" invariably refers not to some hypotheitcal persons with hypotheical aims but to real people -- in this case, us, here and now.
John Jones had practically memorized the CC&R's governing the Board's duties and the homeowner's rights. His wife repeatedly broke into tears as she described sleepless nights spent on the living room couch where the upstairs neighbor's early morning antics were the least disturbing. The volunteer Board member was sympathetic but at a loss for solutions. She'd contacted "management" and sent warnings to the miscreants, all to no avail.
Only punitive measures would do at this point, said Jones. The CC&R's called for sanctions to be imposed on rule-breakers but lacked a means of implementation and enforcement. The HOA representative indicated that she not only had the Board's authority to settle the matter, but to impose any necessary and reasonable rules to flesh out the CC&R's inadequate policies.
"We want monetary sanctions imposed," Jones was saying, "sanctions that can be made liens against the property just as HOA dues can be."
"What about notice?" I asked. "And a hearing? There's nothing in the rules about the procedure for imposing sanctions."
"24 hours!" shouted John. "If they don't comply, a $500 sanction to be made a lien against their property. And another $500 for every day they continue to violate the noise restrictions contained in the CCR's."
Not knowing about Rawls' veil-of-ignorance-just-rule-making principle, I nevertheless wondered aloud whether Mr. and Mrs. Jones understood that the bylaws they were suggesting could be used by their scofflaw neighbors as easily as they could be pursued by the Jones.
"What set of rules do you think would be fair?" I asked.
Two hours later, we had achieved what my Con Law professor would have called "procedural due process" -- a set of rules that would likely pass Constitutional muster that camefrom the parties -- not from the mediator.
Whether justice and fairness are, at some level, hard-wired into us (see Brain reacts to fairness as it does to money and chocolate) or culturally controlled, it seems that Rawls' conception of "justice and fairness" based upon reasonableness and enlightened self-interest might flow more or less naturally from a mediated dispute resolution forum where the parties, rather than the mediator, are in control.
Agree with Fiss, Ellinghausen, Laura Nader and Carrie Menkel-Meadow or not, there shouldn't be a mediator practicing who is unaware of these serious criticisms of the mediation process. If we're not aware of them, we can't avoid the potential for "muscle" mediation to prevent even the aspirational goal of delivering justice without regard to gender, color, power, social status, wealth and all the rest of the social markers the law has been so careful to avoid paying obeisance to.
The friendly bailiff unlocked the small courtroom. After telling me to make myself at home, he pointed to a small red button on the wall. “If you need me, just press that button and I’ll be in here faster than you can blink and eye. It’s an emergency button.”
“Ok, thanks,” I replied, and began to unpack my briefcase.
“I mean it,” he said. “Just press the button. Maybe you should set up your chair so you’re near it.”
I gave him a long look. “You seem to want me to know about that button. Is there something else you want to tell me?”
I'm asked this morning by an ADR colleague whether we can criticize diversity without sounding like racists. The question itself is problematic because it not only assumes a racial divide, it places "us" on the "white" side of it.
introducing supplier diversity to the ADR profession [by] extend[ing] business opportunities to certified minority and women ADR neutrals. These efforts, coined as "second tier," allow Shell to influence prime or majority ADR firms, with whom they do business, to also contract with minority and women owned ADR firms within the business community.
In the upcoming months Shell will be targeting . . . ADR services to participate in second tier efforts. Shell astutely recognizes that by embracing the concept of inclusion, the company will rise to a higher level, reflecting its belief that it "will benefit from diversity through better relationships with customers, suppliers, partners, employees, government and other stakeholders, with positive impact on the bottom line."
I'm assuming that my questioner does not agree with the "affirmative action" aspect of this program. Having debated the affirmative action issue since I began law school at U.C. Davis where the Supreme Court Bakke decision originated, I know well how divisive this issue can be. But it is an important issue -- an issue critical to a nation not only "conceived in liberty" but "dedicated to the proposition that all men (sic) are created equal."
So Let's Take a Look at ADR and Diversity
I'll ask the academics over at the ADR Prof Blog to correct me if I'm wrong.
I understand the academic criticism of mediation to be this: in the immediate post-civil rights era while greater legal protections have been afforded to women and under-represented minorities, the "people" have been channeled into a system -- mediation -- that lacks the prejudice-flattening constraints of the rule of law. More disturbing, say critics, is the fact that this "lawless" system is largely presided over by -- excuse me if this offends anyone -- OLD WHITE MEN.
I've learned more about racial bias talking to my liberal (white) "unprejudiced" friends this election season than I have since I participated in the "second wave" women's movement in the early nineteen seventies (remember consciousness raising?) I do not judge them, nor myself, for our necessarily limited view which just happens to be that of the dominant culture.
I know we still have a serious racial divide because when I talk to my educated and liberal African American friends they say things that shock me. Things like -- the U.S. may have started the AIDS epidemic to rid the world of Africans. OK. I get it. There's something about their experience of America that is so radically different from mine that I think their point of view is, frankly, just a little nuts. This is what I do know -- I will never truly be able to see the world from their point of view.
That said, I do think we can criticize people for taking advantage of "diversity" issues to forward an agenda -- or their own personal advancement -- other than forwarding diversity itself. We can criticize those who would deepen the divide to profit from it.
If I could write a sentence in a circle at this point, instead of linearly as the language requires me to do, I would do so. Here is what I understood Obama's response to the question of the racial divide in America to be.
Acknowledge it Heal it Move on Heal it Move on Acknowledge itMove On Heal it Acknowledge it
There are no periods in this sentence because this activity needs to be constant and on-going. Because we will always be stuck in our own point of view. Because in-group and out-group prejudice will always be with us. And because the more visible markers there are for "otherness" in others, the more prey we are to the error of dividing the world into "us" and 'them."
The answer? Diversity. Vigilance. Education.
Toward that end, here are some ADR Diversity resources:
Center for Dispute Resolution, whose mission is to "to promote and provide education and comprehensive approaches to dispute resolution that constructively serve the needs of our culturally diverse society."
[T]he case reminded me why mediators have such an important, but difficult, job in supporting justice, civil society and social capital. Many parties simply cannot find a way out of escalating conflict and assume that justice can only be served in the courts. This case was a perfect example of several time-tested conflict lessons.
Emotions get the better of us. Here were two well-educated, well-off individuals who let their anger, hurt, offense, and desire for revenge get the best of them.
Communicating is the hardest thing to do. A second phone call, an attempt to be conciliatory, or a short email asking to set a different tone didn’t happen. Somehow, the simplest thing to do—talk—became the hardest.
Sunk costs sink us further. Clearly, the plaintiff was trying to recover his sunk costs, but had passed the point of no return. From an economic standpoint, he had failed to get out when it made dollars and sense (pun intended) and was embarrassingly digging himself deeper and deeper.
Taking responsibility is harder than fighting over it. The facts, as we came to understand them, suggested that this dispute could and should have been resolved months earlier—to everyone’s benefit. Yet the parties chose to point fingers and relinquish their responsibility for resolving the dispute efficiently, fairly, and expeditiously.
Justice is sought but not necessarily served. The parties, both angry, both determined that they were right, decided to take their case all the way to jury. Each was going to get a verdict in his favor one way or another! But the reality was that several partial settlements were offered, winnowing the total amount down, and the judge retained the right to rule on legal fees. We, the jury, were left with a seemingly trivial case, wishing we could punish them both for being so foolhardy.
Serving on a jury reaffirmed to me that justice doesn’t simply emanate Solomon-style from on high. Here’s what I learned.
Justice is not divined; it is negotiated. As our jury deliberated, I realized that this was in fact a negotiation, constrained as it might be by our charge and the evidence. Was the contract valid? Did the defendant actually breach the contract? If so, how much were the damages really worth? When parties hand over their dispute to a jury, they are not avoiding a serious negotiation, they are simply leaving it in the hands of strangers.
Justice is blind. As jurors, we couldn’t ask questions. We couldn’t get at the parties’ deeper motivations, feelings, and emotions (like a mediator might). We did issue a verdict, but we did so blindly, due to our exceedingly limited information and understanding.
Juries deliver verdicts, not necessarily justice. I feel our verdict was fair and reasonable, given what we knew. My fellow jurors (all twelve) took the case seriously, considered the evidence, and did their best to arrive at logical conclusions.
However, we probably didn’t deliver much on the larger front of justice. We couldn’t help the parties find a resolution that left them better off in terms of lower costs, less bitterness, and greater self-respect. We couldn’t censure the lawyers for not doing a better job of restraining their clients’ emotions. We couldn’t issue an admonition against abusing the courts with cases that should be settled by reasonable people elsewhere. We couldn’t aid society by helping its citizens take responsibility for their actions, emotions, and disputes.
So, mediators, next time you sit with parties who are rearing to go to court, I encourage you to keep in mind that court is really settlement, formal as it may be, by other means. And to the future parties of such a suit, it would be well to remember that there is no certainty—and in fact much reason to doubt—that a judge and jury will issue a better verdict or clearer justice than you might arrive at by your own making.
State courts are reversing arbitration awards for employees at a "statistically significant" rate compared to reversing employer-friendly awards, according to a new study.
Professor Michael LeRoy of the University of Illinois College of Law, a professor of labor and employment, recently released his findings after analyzing arbitration awards from an appellate perspective.
The study, published as a paper, "Do Courts Create Moral Hazard? When Judges Nullify Employer Liability in Arbitrations: An Empirical Analysis," looked at 443 state and federal court rulings on arbitration awards from 1975 to 2007.
While federal courts upheld 85.7 percent of employer wins and 85 percent of awards for employees, LeRoy found markedly different results in the state court system.
There, lower level appellate courts affirmed employer awards 87.2 percent and employee wins 77.6 percent of the time, while the upper appellate courts were even more divergent, with 86.7 percent of employer awards affirmed and only 56.4 percent of employee victories upheld.
These findings suggest a "snowballing futility for employees," LeRoy writes, because the options after being reversed on appeal are limited. Either the employee must start over at the beginning of arbitration, "or worse, be stuck with a useless award and no other recourse."
LeRoy terms this trend a "moral hazard" which is "created by risk sharing contracts or public policies that discourage individuals from avoiding costly behaviors."
Here's a local community protest being "handled" -- in part -- as a community-wide "mediation," "facilitation," or "public dialog."
We have an attempted engagement here over the apparently unwanted "gift" of a new Home Depot in the Sunland-Tujunga community. It appears that the community would like to see an Environmental Impact Assessment conducted and an EIR filed before the Depot moves in (if ever).
The City Attorney stepped in to help -- recruiting community mediators and facilitators to conduct a community dialog. It's my understanding that Home Depot representatives were not present at this dialog (please correct me if I'm wrong about this). For that reason alone -- a missing critical stakeholder -- a suspicious or hostile community response is unsurprising.
Let me say, however, that we/** are new at this -- making an effort to engage an entire community in a facilitated conversation about the issues giving rise to a protest. We're bound to make the type of errors highlighted by community members below. So let's not call this a failure but an opportunity to learn.
Here, for instance, is a recent blog entry calling the "community meeting" a facilitation rather than a mediation -- correctly noting that mediators have no allegiance to one side or the other and no agenda. See the Zuma Times -- LA Daily Blog coverage with one or more YouTube videos here.
SUNLAND - Amid a contentious battle over a proposed Home Depot, city officials tried to cool tempers Saturday by hosting a community dialog aimed at finding a middle ground between warring factions.
About 200 community residents attended, although organizers had been expecting up to 1,000.
Although a few supporters, including Home Depot employees, noted the project would likely bring more jobs to the community, most in the crowd were against it.
Asked for opinions, most listed complaints such as traffic and an increase in day laborers. Some even used the term "community assassination." . . . .
Some residents sat and listened patiently as mediators engaged them in dialog in an effort to understand their concerns and to work toward constructive solutions.
Billed as "the Sunland/Tujunga dialog," the meeting at Mount Gleason Middle School was set up by the Los Angeles City Attorney's Office as part of an agreement with The Home Depot Inc., which suspended a $10 million lawsuit against the city while it seeks a building permit.
The company is seeking to build a store on the old Kmart lot on Foothill Boulevard . . .
Attorney Barbara Goldfarb, a volunteer facilitator with the dispute-resolution team that conducted the meeting, made sure everyone knew that she and her staff had no connection to the home-improvement company.
"I do not have a Home Depot credit card," she said before people split up into 27 groups. "I do not own Home Depot stock."
Goldfarb said the dispute-resolution program is funded by grants and funds from the city and county.
"Certain times (these types of efforts) don't work. Other times, they work out wonderfully," Goldfarb said.
"There's always an answer to conflict if people will talk."
Lots of folks have comments and questions about the evaluation form we were asked to fill out at the end of the small groups. I have some of my own, too. I was shocked and horrified at some of those questions. I thought the questions showed a slanted, pre-conceived idea of what someone thought our issues should or would be, not what our concerns really are. I spoke with Barbara Goldfarb, the lead facilitator, about it. Yep, the evaluation form was written by the RAND Corporation, just as the pre-questions were. Ms. Goldfarb agreed with me that some of those questions were way off the mark, too complex to be answered by just checking a box, or unrelated to our actual concerns.
I just want to add that I am so proud of us, all of us who showed up yesterday. We were well prepared, and participated with a mature and honest approach. Also, to those who wrote intelligent, well thought out answers to the questions, I applaud you. There were a lot of people who let us know that they were unable to attend the “dialog” due to other commitments, but those of us who were there, carried the message loud and clear! No Home Depot in Sunland-Tujunga! Home Depot must follow the rules! We want our EIR!
/** When I say "we" I'm referring to mediators in general who are part of a theory and practice of facilitated dialog as well as many other strands of the mediation movement including consensus-building, prejudice-reduction, settlement conferences, mediations of litigated cases, community mediation, restorative justice and the like. I personally have had nothing to do with the community "dialog" or facilitation or "mediation" arising from the dispute over the development of a Home Depot in Sunland-Tujunga.
I give you only the article's conclusion, daring you to click on it without reading it to the end.
The overarching question of why the bank didn’t settle remains a puzzle.[The Bank's counsel] thought he gave the bank solid advice. All the lawyers who joined in the bank’s defense hold to that position: Legally, they contend, the bank was within its rights in seizing the $1.7 million.
But the case ran away from them. It got bigger and bigger and worse and worse. And there was no stopping it. One defense lawyer observed, “It went to hell in a handbasket.”
Maurice Mitts says his client is willing to call it quits for the $56 million. But First Union still isn’t willing to pay a big number. Mitts isn’t surprised.
“ ‘We know the law, we are the law, and too bad for you,’ ” Mitts said. “That’s been their attitude all along.”
Thanks to the Philadelphia law firm of Mitts Milavec, LLC for fighting the good fight and posting this dynamite legal tale.
If you aren't using writs of attachment in contract cases where the amount due is certain, you aren't using the most powerful means of increasing your bargaining power in litigation.
Attend LACBA's Brown Bag Lunch with Judge James Chalfant at the Stanley Mosk Courthouse 111 N. Hill Street, Los Angeles on May 15, 2008. Program Description:
Writs and Receivers: Practice tips for those who are rarely there. Judge James Chalfant will host a brown bag lunch highlighting tips and tricks for those who may not have much experience in this area. There is no cost to attend, but participation is limited to the first 12 attorneys who register. The program will be held in the judge's chambers at Stanley Mosk Courthouse, Dept 85. Please note, there is no CLE credit for this program.
The Famous Trials website, the Web's largest and most visited collection of original essays, images, and primary documents pertaining to great trials, has been an ongoing project of Professor Linder's since 1996. Professor Linder has contributed book chapters, participated in video projects, and presented public speeches on the subject of historic trials.
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.
Just a quick note on a recent appellate case here holding that where the parties have agreed to conduct their arbitration in accordance with California law, the Federal Arbitration Act does not preempt state law on arbitrability.
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.
Appellate judges may have a draft opinion prepared, and may rarely change their minds due to oral argument, but — according to at least one justice I’ve spoken to — sometimes they are actually looking for the appellate advocate to give them a reason to change their mind.
So, hey Greg!! My readers, who are looking to change their opponent's case evaluation, would like to know your techniques for: (1)ascertaining what the appellate panel most likely wants to know; and, (2) addressing their concerns in a way that would allow the Justices to reach a decision other than the one they are leaning toward!
It’s a long-held rule in California that a defendant sued on a contract may recover attorney fees pursuant to a provision in the contract even if the defendant prevails on a theory that he was not a party to the contract or that the contract is nonexistent, inapplicable, invalid or unenforceable. The rule exists in order to further the purpose of Civil Code section 1717, which is to make unilateral fee provisions reciprocal. . . . .
Consider now whether a similar rule should apply to arbitration provisions. . . . . Should a defendant be able to compel arbitration pursuant to a contractual arbitration provision in a contract alleged by plaintiff even if the defendant denies the existence of that contract?
When we bought our house 6 years ago, Mr. Thrifty struck all ADR provisions from the sales contract. He's come to respect ADR much more in the last few years. Still, I believe he'd choose access to the justice system over its alternatives.
Though Mr. Thrifty -- a litigator -- was bold enough to alter a form contract, few other home buyers would be.
Now it appears that the California courts will protect home buyers from arbitration agreements buried in the voluminous documents all home buyers sign when they purchase a house. See Bruni v. Dideon, just decided by the Fourth Appellate District of California. Summary below courtesy of the Metropolitan News-Enterprise.
Where homebuyers alleged that arbitration clause was contained in preprinted and "voluminous" documents, there was no negotiation, they understood the documents were being presented to them on a "take it or leave it" basis, they [were] generally . . not familiar with real estate documents or with "legalese," were not told to read to read warranty--which contained arbitration provisions . . . . and were not given enough time to read the warranty or any of the other documents [prior to signing, the] issue as to whether homebuyers knowingly agreed to arbitrate was subject to judicial determination regardless of provision requiring that issues regarding enforceability of arbitration clause be submitted to arbitration.
Where . . . plaintiffs had to accept arbitration provisions if they wanted to buy a house, [the]provisions were part of a preprinted form contract, any attempt to negotiate . . . . the terms of the warranty would have been fruitless, the provisions took up one page of a 30-page booklet that was buried in [a] "voluminous" stack of purchase and sale documents, and plaintiffs were never asked to read the arbitration provisions before signing, those provisions were adhesive and unconscionable, and trial court correctly exercised its discretion by refusing to enforce them.
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.
When fists fly at an arbitration proceeding, the arbitrator isn't liable for not averting the altercation, a New Jersey appeals court says in an interpretation of the model Arbitration Act.
The judges, in Malik v. Ruttenberg, A-6615-06, reversed a trial court's refusal to dismiss a suit charging an arbitrator knew of a lawyer's dangerous propensities yet did not remove him from the case, and an assault allegedly ensued when a recess was called.
The appeals court found that decisions relating to control of the arbitral forum are within the immunity accorded by the N.J. Arbitration Act, adopted from the model act devised by the National Conference of Commissioners on Uniform State Laws.
Eric Tuchman, the general counsel for the American Arbitration Association -- a defendant in the case -- says the ruling is the first in the nation to interpret the act's immunity provision.
The act has been adopted in 13 states, including New Jersey, and is under consideration in four others.
"Opinions like this really permit arbitrators and sponsoring organizations to preside over and administer cases in a way that is free and impartial," Tuchman says.
O.K., from time to time I draft a brief for someone. It keeps my hand in the game and REALLY -- it's MUCH EASIER to make $$$ doing what I did for 25 years than for what I've been doing for four. I have HIGH HOPES that my research and writing mini-career will soon be shut down by my ADR career, but in the meantime . .. . . .
Shameless plug: Listen . . . . I'm very very very very good at negotiating the resolution of complex commercial litigation. I should be in heavy rotation. Try me! I won't let you down.
Yesterday, I spent hours researching a fairly obscurecontract interpretation question. I didn't find case ONE and I'm a pretty good little first year research associate -- always was. So what did I do? I turned to my virtual buddy, Ken Adams (who never writes a rambling post like this one)over at the brilliant, thorough and sophisticated Adams Drafting. My brain must have been turned off yesterday because I couldn't find anything by searching his blog either.
Voila!! In my in-box this morning, a link to the most comprehensive, practical, brilliant (relatively lengthy) article ON MY PRECISE LEGAL QUESTION that could easily make the difference between winning a $2.5 million appeal or losing it.
Listen. You can't find this stuff in academic articles. And you can't find it in Witkin or CalJur or AmJur or in the case law. You can't find it in the California Civil Code's canons of construction or maxims of jurisprudence (my favorite: "superfluity does not vitiate").
Ken Adams is the foremost authority on contract drafting in the nation. And I have that wisdom tucked into my back pocket the moment it finally occurs to me to go over to his blog to have a look see.
So that's how I use the legal blogosphere. It's my law firm. It's my community. It's my home.
Negotiations of the type I mediate on a regular basis are rarely the subject of appellate opinions -- at least not the part of negotiations we call the "dance."
Having stumbled across this opinion while searching for something else, I couldn't resist the pulll of posting it here -- both for my readers' enjoyment and, frankly, using the blog as my own personal filing cabinet for some of my favorite appellate opinions (yes, I am a geek!).
The prose below is from Judge Barbara Johnson's dissent in a transactional legal malpractice case that made its way up to and then back down from the California Supreme Court.
Contract negotiations are fluid events. Offers and counteroffers, and counter-counter offers, and counter-counter-counteroffers, etc., typically flow back and forth across the table. It is a sophisticated ballet often ending in mid-pirouette or even mid-leap-when the contract is finally signed. But if one side of the negotiations stops the dance too soon, only because their lawyer promises them they have the very terms they told him they wanted despite the fact they don't, that side should not be foreclosed from suing their lawyer for his malpractice. It is one thing if the lawyer only misjudges when the deal is at the optimum for his clients. It is entirely different when the lawyer misrepresents the terms of the deal-as the evidence indicates happened here-and thus leads his clients to sign a bad contract.
Under this third scenario, whether the plaintiff would or would not have been better off with “no deal” than the deal they got is simply irrelevant. Also irrelevant is whether they could have obtained the exact deal they wanted and thought they had. The real question is whether they could have gained a better deal than they ended up with, had the negotiations continued. In most instances under this third scenario, it will not prove to be quite as good a deal as they thought they had. That is, to gain some favorable contract language important to them, they may well have to give somewhat on other contract terms. But almost certainly it will be a “better net deal” than the one they mistakenly signed.
If juries are capable of deciding Lightstone would or would not have accepted terms more favorable to the Viners, they certainly can be entrusted with the determination whether Lightstone would have accepted those terms if the Viners had offered new terms on other issues, which terms were more favorable to him. Cross-examination often would prove especially revealing-as someone in Lightstone's position was exposed to a succession of questions about what changes in the Viners' position on certain contract terms might have caused him to alter his position on other terms.
For instance, had the Viners offered to reduce the price of purchasing their stock by $250,000, would Lightstone have been willing to modify the ambiguous language in 1.10 that arguably prevented them from pursuing movie and television deals with Dove authors and readers? How about if they cut the price by $500,000? How much did Dove's earnings increase because of the existence of that language in 1.10? Furthermore, beyond cross-examination of this nature, other testimony and circumstances also could point in the same direction. If the negotiations had not stopped in mid-stream because Sweet erroneously told the Viners they had already “won,” further negotiations would have been possible and would have led to a more favorable contract (perhaps to both sides) than the one they signed.
Two short-short stories. Both to acquaint you with who I was as a litigator and how I can help you as a mediator.
A Born Moralist
I was on the telephone with my client talking about a Rand Corp. statistical study that was originally prepared as answers to contention interrogatories (!!) but eventually became the centerpiece of Plaintiff's proof that my client had engaged in a massive conspiracy to drive the Plaintiff out of business. Claimed damages soaking wet: $250 million.
I was talking about how wrong the opposition was on so many levels -- evidentiarily, practically, legally and, yes, morally.
My client said, "I've finally figured out what you are."
"You, Vickie, are a born moralist."
And I took that to be a compliment.
Anything You Can Get Away With
Toward the end of my career all my cases seemed to hover around the quarter-billion dollar mark. This one was an environmental coverage suit for a major petroleum company's potential liablities for 500 + toxic waste sites in every Canadian province. This is one of the few cases in which the insurance carrier can wear a "white hat." My client -- Lloyds of London.
This stuff is complicated. It involves coverage across a couple of decades and up the ladder of excess policies to the billion dollar mark. We use "coverage charts" -- often color coded -- to understand the policy profile at a glance.
At every oral argument in the trial court -- up to the winning summary judgment motion -- I arrived with a clutch of color-coded coverage charts that supported my client's position. On every occasion, plaintiff's counsel complained about the charts. But he never brought competing charts with him. The Judge -- one of the best on the Superior Court bench -- really wanted to understand the issues and get it right. So she spent each oral argument listening to both parties while scrutinizing my coverage charts.
I genuninely believe that this is why I won.
What Does This Have to Do with Mediation Advocacy?
First, if you believe in the very depths of your soul that your client is right -- as I always did -- your mediation advocacy will improve if you begin to understand the principles of mediation advocacy. It's banal, already, to say that these principles are non-adversarial. Yet few litigators are able to shift from a litigation to a mediation model in circumstances in which making the shift would dramatically improve their mediation outcome.
Most attorneys are likely to settle this case at the mediation if they've brought the right stakeholders, properly prepared their strategic and tactical moves, and counseled their clients appropriately. Yet they take their summary judgment briefs or demurrers or complaints, change the title to "Confidential Mediation Brief," make a few editorial changes -- primarily by removing references to the Judge granting their motion or providing them with relief -- send these briefs to the mediator, arrive with one (or more) bottom lines and, too often, a "prove you can settle this case" attitude toward the mediator.
This is not an indictment of the litigation bar nor even a complaint from a mediator. This is the beginning of a series of posts about helping me help you help your client help you win the mediation.
Stay tuned. Really. Your mediation practice is about to go thermo-nuclear. Take it from the "born moralist" who did whatever was (ethically) necessary to win. Usually with pretty darn good results.
What does the decision in Riegel v. Medtronic have to do with dispute resolution? A lot if we collectively pause to commit ourselves to using this calamity/victory as an opportunity to benefit both industry and the public at the same time.
Is that possible? I'm a mediator for goodness sakes. If I didn't believe that to be possible, I'd serve the world better by getting a real estate license.
Re: what follows: I rarely see anyone representing a narrow set of industry interests respond to a victory of any magnitude with the humility and vision expressed by Mark Herrmann in his post from Drug and Device Law -- Much is Given, Much is Expected, excerpted below.
The medical device industry, or at least the most innovative part of it, received major relief from product liability litigation yesterday in Riegel v. Medtronic (now online at 2008 WL 440744). As long as our clients with PMA-approved devices comply with federal law, they’re not going to be subject to much in the way of product liability. Not only that, as we pointed out only two weeks ago, so-called “parallel” (or “violation”) claims have their own conceptual problems, given the exclusive grant of enforcement authority to the FDA.
That’s not what we’re talking about right now, though. We’re stone, cold sober.
We won. What does that mean? At bottom, it means that, just as Riegel gives some of our clients the opportunity for a more litigation-free existence, that increased freedom carries with it a correspondingly increased responsibility.
Plaintiffs lawyers like to say (at least when they’re not piously denying the “regulatory effect” of tort law in briefs opposing preemption) that product liability litigation serves as an incentive to make safer products.
We defense lawyers retort that product liability litigation is horribly ineffective (given the influence of so many non-merits issues), inefficient (plaintiffs’ lawyers take 33% or more of most recoveries, and that’s not even counting defense costs), and downright counterproductive (deterring innovation, and punishing manufacturers for doing the right thing when they discover problems) compared to governmental regulation as a means of ensuring product safety.
Well, now we’re going to find out who’s really right.
In other words, the PMA medical device field is going to determine in practice whether a high regulation, low litigation environment is as effective a method of ensuring the safety of the public as we think it is – or if it’s as lousy a way of ensuring safe medical devices as the other side claims.
So, to the medical device industry – to the regulators at the FDA – and to our colleagues who practice FDCA regulatory law…. Don’t let us down, please.
If one takes the . . . coldly realistic view that powerful interests generally get their way (in the end), then the fact that law serves powerful interests is merely one manifestation of the ordinary course of things.
The key question is not whether law serves power (of course it does), but rather, are there any effective ways to temper or limit power? Other than the presence of competing sources of power serving to limit one another’s ambitions, our most effective social invention for constraining power is law. This is the side of law that “shapes, channels and restrains power,” . . .
This effect is achieved by the relative autonomy of law . . . To obtain credibility with the populace, the law must regularly live up to (or appear to live up to) its claims to be just and to apply to the powerful and weak alike, and this is how law comes to restrain power, even as it also serves power. Moreover, over generations, owing to the effect of legal ideals, people (including government officials) come to genuinely believe in the law, and this belief has a constraining effect on actions.
The process by which law works is almost magical: belief in and commitment to law and to legal ideals creates a reality in which law matters.
In situations where people are pervasively cynical about the law, this magical effect does not work. Law and legal interpretation, then, are manipulated (exploiting the indeterminacy of law) without restraint to do whatever one wants with a legal imprimatur; like, for example, coming up with a twisted legal interpretation of “torture” that purports to exclude waterboarding
. . . . . [I]f you don’t believe in the rule of law, or if you believe that supporting the rule of law tightens the chains that secure an unjust social order, then it’s hard to come to the defense of the rule of law in times like this.
* * * .
This does not mean that one should not expose the ways in which rhetoric about the neutrality of the law conceals a particular bent and bias. . . .
* * *.
The rule of law is an essential political ideal. When confronted with bad things accomplished in the name of the law, the best response is not to undermine law as a fraud. The best response is to demonstrate that these offensive applications betray the ideals about right and justice that law espouses and claims to represent.
This is a time honored (agonizingly slow) way of advancing the state of the law. And it’s the best we have.
The elided material has to do with leftism -- which survives here primarily in academic institutions -- and Critical Legal Studies -- neither of which is of much interest to me. If either topic is of interest to you, follow the link above to read the full Balkinization post.
Crystal and Keith /* are the unmarried parents of a seven year old girl, Taniyah. They have sought the services of the West Hollywood community mediation center because they want to discuss the resolution of their custody dispute outside the presence of their attorneys.
After introductions, Keith and Crystal push a proposed settlement agreement across the conference table. They are shy with one another but united in their desire to reach agreement without any pressure from "The Attorneys."
Two hours later, we are at item no. 23 -- "neither Parent nor either set of grandparents shall physically strike The Child at any time."
"Is this a provision you agree with?" I ask. "It means you can never slap Taniyah's hand," I add. "Is that something you want to agree to?"
"We don't have a choice," says Crystal. Keith nods in assent.
I let the word "choice" hang in the air for a moment as I begin to understand why these two bright, well-educated and articulate young parents have so reluctantly given their meek and mutual approval to every previous item they said they came to the mediation center to discuss.
The Shadow Conflict
I put the "proposed" agreement aside.
"Why don't you have a choice?"
"Because Taniyah's attorney put this into the agreement," says Keith as Crystal nods in agreement, repeating Keith's remark "we don't have any choice."
Taniyah has an attorney, I learn, because Keith's mother -- one of Taniyah's primary caretakers -- left Taniyah at home with her nine-year old cousin, Arabelle to run an errand. Arabelle, a curious child, led Taniyah on an expedition to her grandparents' bedroom where the two found a stash of light porn -- Playboy and the like. That, I'm told, is the only reason Taniyah has an attorney.
It quickly becomes apparent that Crystal and Keith simply assume that Taniyah's attorney is a decision-maker. I'm still considering how to approach this problem when Keith asks the question that leads to the resolution of the "shadow" dispute between the parents and Taniyah's attorney.
"How do we get our power back?"
Justice, Mediation and the Rule of Law
I tell this lengthy story as preface to another from this weekend's Mediators Beyond Borders Founding Congress. Yesterday, someone suggested from the podium that we should include mediation and arbitration agreements in our own contracts with our own clients.
I raised my hand.
"Why," I asked, "do you want to restrict our clients' access to the justice system?" once again demonstrating a fractious lack of diplomacy that makes some people wonder how I could possibly be an effective mediator. /**
It wasn't a well-placed question but it is of a type I often find myself more or less compelled to shoe-horn into any conversation that assumes mediation is best for other people.
A number of scholars have pointed out the danger lying in an ideology of harmony related to ADR where agreement is seen as the panacea in every conflict.
They have argued that mediation was essentially supported by [the] middle upper class and social scientists whereas people . . . involved in conflicts[, including the] working class were expecting law and rights to protect them.
Emphasizing free choice, individualism, autonomy and advantage, and assuming instrumental rather than normative and religious orientations of social action, the concept [of mediation as an ideal form of dispute resolution] seems to describe the culture of professional elites rather than of residents of these urban/ethnic neighborhoods.
As Abel has stated, "there is considerable evidence that people want authority rather than informality. They want the leverage of state power to obtain the redress they believe is theirs by right, not a compromise that purports to restore a social peace that never existed."
According to those scholars, ADR could serve as a means of control and domination in keeping and reinforcing power relations. For instance, Milner Ball has defined ADR as "another form of the deregulation movement, one that permits private actors with powerful economic interests to pursue self-interest free of community norms. "
They argue that in traditional societies . . . mediation is used [when] there is no danger of retaliation from the weaker party. The . . . focus on relationships [diminishes the parties' focus on] justice[;] individual satisfaction has become the main purpose of conflict resolution.
Although they are conscious of the paradoxes of Law which can either "symbolize justice or conceal repression, reduce exploitation or facilitate it, prohibit the abuse of power or disguise abuse in procedural forms, promote equality, or sustain inequality, they argue that "Without legal power, the imbalance between aggrieved individuals and corporations or government agencies cannot be redressed".
* I have changed the parents' names and merged two separate mediations in the interest of confidentiality.
** The answer to this question is as follows: I am not mediating when I am engaged in discussion with friends and colleagues. Just as I do not observe the rules nor use the language of the courtroom at a dinner party, I do not observe the niceties of mediation in public discourse. It would be better if I did. I know that. I'm working on it and will post some insights about constructive public conversations on difficult and divisive topics in my next post.
the plaintiff [in that case] argued that the judge's encouragement of settlement talks demonstrated bias; the court strongly disagreed. It is entirely appropriate for a judge to suggest that parties resolve their claims through mediation. . . "No less renowned a figure than Abraham Lincoln recognized the desirability of settlement when possible...it borders on the offensive for a party to claim that a justice should be recused for adhering to this policy [of encouraging settlement]."
As "amusing" as this might first be to lawyers, I don't want to let it pass us by without pausing a moment to consider the possible communication gap between Judges and lawyers -- on the one hand -- and people seeking justice -- our clients -- on the other.
People Seek the Services of Lawyers to Solve a Justice Problem
Having recently earned my LL.M and taught a semester of ADR theory and practice to law students, I can report back from the law school trenches that cynicism about justice is not limited to old dogs like me. By their second year in law school, most aspiring attorneys have narrowed their view of justice/injustice to those wrongs the law will remedy. See Writing on a Piece of Rice in a World of Injustice. More troubling, they've narrowed to a vanishing point their former hopes, if any, to be part of a system that delivers justice.
When I ask defense attorneys in settlement conferences why they think their opponent filed the lawsuit against their client they answer with a single voice: MONEY!
"But why do you think they hired a lawyer," I persist.
"Money," they respond again, as if I'd suddenly lost all reason.
"But why did Mr. X even think of seeking resolution in Court . . . under the law . . . why did he turn to the justicesystem?"
Losses the Law Will Redress
People suffer losses every day of the week. They lose their luggage in Madrid. They don't get a raise or a year-end bonus. They slice off the tip of their finger while chopping onions for Sunday dinner. If they are lawyers of my generation, they got a 610, instead of a 700 on their LSAT -- thereby losing any hope of attending an Ivy League law school.
The cynical persist. "People have been known to sue for those losses too," they say.
True, but they are among the very very very few. Most people who undertake the considerable effort to find an attorney willing to take their case do so because they believe they have been treated unfairly. They believe themselves to be victims of an injustice.
And attorneys, not clients, are the first ones who monetize injustice for their clients. Still, years after that injustice has been monetized, right before trial when most mediations and settlement conferences take place, the clients continue to long for justice.
A Monetary Solution to a Justice Problem
So we should pause before we give in to the temptation to make light of the client who must have urged his lawyer to recuse the Judge for even suggesting that he not immediately be given access to justice -- a jury trial. A client who likely feared he'd be strong-armed into accepting injustice in a Court suggested mediation.
Our clients are speaking and we are not listening. We are in danger of processing monetary claims rather than helping our clients come to terms with the justice issues they brought to us to resolve.
As a mediator, I can tell you that most clients need to have monetary resolutions framed as "fair" or "just" results. And if that is impossible, they need -- at a minimum -- to have the injustice they are suffering acknowledged by the mediator.
As to those Judges who "encourage" mediation, I suggest that the directive be framed as an attempt to achieve, through settlement, that which it may not be possible to achieve in Court. I would, in all events, assure the people seeking justice who appear before me, that I will be there, ready and able to try their case -- happy to serve their justice needs -- if the mediation I suggest they pursue fails to deliver the fair result they are seeking.
I often find myself explaining lawyers to their clients and clients to their attorneys. Here are some typical client complaints I hear about their litigator attorneys:
he tells me to forget about the most important losses I've suffered
she keeps editing my story
I don't understand why I can't . . . i.e., recover my attorneys' fees or cross-complain, etc.
he wouldn't let me tell the mediator everything I wanted to
she didn't let me talk to the other side
And here are the typical litigator complaints I hear about clients:
his expectations of success or recovery are commpletely unrealistic
if I tell her the weaknesses of her case, she says I've become the enemy
I've explained the limitations of the case to him, but he just doesn't seem to understand
Translating the Law into Justice -- An Explanation for Clients
The chart above and photos below are simple ways to explain to clients the gap between the law and justice. Sample explanation --
The dispute you're having exists in the world of injustice.
Picture the earth.
Now picture a grain of rice somewhere on the earth.
The grain of rice represents the injustices the law will remedy.
The earth represents the injustices the law will not.
Square Pegs in Round Holes -- An Explanation of the "Legal Story" for Clients
It feels like your attorney is "editing" or shaping or "spinning" your story of injustice because she is. The yellow square represents the facts necessary to obtain relief in court (damages, an injunction, etc.). It also represents the facts necessary to defeat your opponent's claim for relief.
The entire dispute -- everything that happened inside the green circle -- is generally what you, the client, want to resolve.
IT OFTEN INCLUDES FACTS THAT WOULD BE HARMFUL TO YOUR CASE.
That's why your attorney doesn't let you talk in the presence of the "other side" and asks you not to discuss the dispute with your opponent anymore. Because you might reveal something in the green area that's bad for proving your case in the yellow area.
THE MEDIATION ZONE -- AN EXPLANATION FOR ATTORNEYS AND THEIR CLIENTS
Mediators work in the green area. Clients almost always want to resolve all of the issues raised by the dispute, not simply the "legal" ones. Perhaps more importantly, there are many opportunities for resolution in the green mediation zone that no one has yet seriously explored because the green zone is not the focus of the legal action. Only the yellow legal zone is.
Mediation restores the dispute to the people who have it. They are the only ones who know and understand that dispute in all its detail, texture, dimension and meaning. Party interests -- their hopes, fears, desires, needs, etc. -- exist in both zones. The good news of mediation is that the party interests outside the legal zone can often be traded for concessions that are in or out of it.
When you have only one currency to negotiate with -- dollars -- you often reach impasse. Why? Because it seems so unfair to both parties that they should give in, compromise, split the baby in half, etc. just because the cost and aggravation of getting to trial is so high.
When you have more than one currency to negotiate with, however, like dollars and "face" or dollars and unexplored business opportunities or dollars and apology, or dollars and an explanation for the dispute's events that has the ring of truth, you can trump legal impasse with party interests.
Writing on a Grain of Rice
Vendors who line beach boardwalks or the sidewalks of tourist towns often include the guy who will write your name on a grain of rice. HERE!!!
Sometimes I feel as if my entire career as a litigator was written on a grain of rice -- that's how small the legal zone sometimes looks from here. It's O.K., though. Litigation isn't just a job or even just a career. It's a calling, this business of rights and remedies, of following a rule of law instead of a strong arm or the snake-oil's charm.
As the poet Lao Tzu wrote,
whether a man dispassionately
Sees to the core of life
Sees the surface,
The core and the surface
Are essentially the same,
Words make them seem different
Only to express appearance.
If name be needed, wonder names them both:
From wonder into wonder
Listen, if corporate entities believed they couldn't overcome juror bias, they would never try a case. How to accomplish that feat is the difficult task of every great trial attorney who represents a corporate defendant.
Despite the research cited below, I do not suggest that plaintiffs' attorneys, as a matter of mediation strategy, suggest to corporate defendants that they will lose at trial because of juror bias. Why? Because it more or less enrages people, including corporate representatives, to be told that they must pay more money than they believe a case is worth because the system is unjust.
The report on juror bias -- particularly so-called CSI juror bias -- below.
The good news is that the bad news comes from one of the best jury consulting firms in town -- Jury Impact. What's so good about that? Jury Impact doesn't simply report bias, its people understand bias and are prepared to combat it. Without consultants like Jury Impact's Chris St. Hilaire, however, a corporation's best alternative to trial may well be a reasonable settlement that serves its commercial rather than its justice interests.
The Jury Impact report below:
In a question we’ve asked in several surveys, approximately 62% of prospective jurors say they would ignore the law in order to hold a corporation financially responsible, if they thought the individual was sympathetic.
While this is a general bias, among . . . “CSI jurors” [those who watch crime/medical drama TV shows] it’s consistently worse. Approximately 72% of the “CSI jurors” said they would ignore the law and hold a corporation responsible.
Why is this? A Hollywood producer recently gave us a pretty succinct and convincing explanation: “Look at the plotlines in these shows. Is the corporation ever the good guy? The jurors are using confirmation bias to build the storyline they want to believe…the one they’re familiar with.”
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).
For reporters who are following this story at depth, the video includes a sophisticated presentation by Jones Day attorney Mark Herrmann about settlement strategy from Merck's point of view; a provocative presentation by Professor George M. Cohen -- who calls the settlement proposal an illegal antitrust conspiracy -- and a scholarly presentation by Professor Nagareda on the public policy issues raised by the settlement of mass tort claims.
For attorneys who have been retained to provide their clients with a second opinion, Professor Cohen's presentation will be a useful addition to their own research and independent conclusions. Attorney Andy Birchfield -- the only forum speaker with first hand knowledge of the negotiations leading to the settlement proposal -- may be of the greatest interest as he walks counsel for Plaintiffs through the structure, purpose and effect of the proposed settlement program.
Professor Cohen not only concludes that attorneys recommending this proposal to their clients are violating professional ethics, but asserts that it constitutes an illegal antitrust "conspiracy" as well.
Professor Nagareda discusses the settlement from a dispute resolution public policy standpoint.
As a contract between Merck on the one hand and the "lawyers who have a large market share" on the other, Professor Nagareda suggests that the settlement proposal is more an artifact of the law flowing from the Supreme Court's AmChem opinion than of any legal "connivance" among the Plaintiffs' attorneys or between them and Merck.
This settlement proposal, he says, is a valuable and creative peace-making transaction for mass claims.
Andrew Birchfield, an attorney at Beasley Allen and co-lead counsel on the Plaintiffs’ Steering Committee for the federal Vioxx litigation addresses the negotiations themselves and the structure of the settlement.
Andy says that in approaching settlement Merck required global peace -- that there couldn't be a "second round" because Merck had seen how disastrous open-ended liabilities could be for a corporation.
The plaintiffs' attorneys, says Birchfield, negotiated a settlement agreement designed to serve the best interests of each individual client no matter how strong or weak each of their cases might be.
Attorney Ted Frank of the American Enterprise Institute who once represented Merck in the Vioxx litgation.
Frank talks about the law and economics of the settlement proposal, focusing on the weakest link of Plaintiffs' cases -- causation.
A federal grand jury in Los Angeles has begun issuing subpoenas in the case of a Missouri teenager who hanged herself after being rejected by the person she thought was a 16-year-old boy she met on MySpace, sources told The Times.
The case set off a national furor when it was revealed that the "boyfriend" was really a neighbor who was the mother of one of the girl's former friends.
Local and federal authorities in Missouri . . . said they were unable to find a statute under which to pursue a criminal case.
Prosecutors in the U.S. attorney's office in Los Angeles, however, are exploring the possibility of charging Drew with defrauding the MySpace social networking website by allegedly creating the false account, according to the sources, who insisted on anonymity because they are not authorized to speak publicly about the case.
The sources said prosecutors are looking at federal wire fraud and cyber fraud statutes as they consider the case. Prosecutors believe they have jurisdiction because MySpace is headquartered in Beverly Hills, the sources said.
Among other things, bullying is a "contentious tactic" deployed to get someone else to do something you want them to do. (see Conflict Map here)
As a mediator, I can tell you that lawyers on both sides of litigation -- and their clients -- often report being "bullied" by the other side. This is not surprising. We're trained to use power to get what we want, not to seek and obtain cooperation.
In this shocking case of cyber-bullying, the motive was not behaivor change but revenge. The mother who posed as the cyber-boyfriend who first woo'ed and then brutally rejected the 13-year old suicide victim -- was allegedly "punishing" her own daughter's former friend for terminating that friendship.
So what is it about the internet that makes it such a fertile ground for bullying?
The social scientists say that bullying -- the deliberate and repeated abuse of power – is most likely to occur in relatively stable social groups with a clear hierarchy and low supervision.
Because hierarchy – a system that ranks people one above the other -- makes low-status individuals visible and easy to get at. It also makes them less likely to receive protection by their peers.
Though the internet itself is not necessarily hierarchical -- those so often targeted on it are usually deeply enmeshed in hierarchical sub-cultures such as schools. More importantly, social networking sites make low-status individuals such as children and teenagers visible and easy to get at. Finally, the inteernet, due to its anonymity, makes those low-status individuals less likely to receive protection by their peers.
If you don't have your trial ducks in a row and can't convince the other side that you're prepared to try the case -- and try it to a highly favorable judgment in your client's favor -- you've got -- sorry to use the term -- squat for bargaining power.
"Show me the salesman," said a savvy and seasoned defendant recently, "and I'll tell you what I'm willing to pay him for his case."
And while we're talking sales -- why is it that no one ever brings demonstrative exhibits to a mediation?
Hand me a visual diagram of the parties and the facts (including the facts that are bad for you). The chart or diagram should "connect the dots" in the way that is best for your client.
During the mediation, repeatedly refer me to that diagram.
When I was litigating insurance coverage cases with hundreds of millions of dollars at stake, I arrived at every oral argument with a color-coded coverage chart representing my client's position on the issue at hand -- like whether the policy holder was required to horizontally exhaust coverage before any of the excess carrier limits would be exposed.
For reasons I never understood, opposing counsel chronically complained about this last-minute demonstrative exhibit motion practice of mine but never brought competing charts into the courtroom.
Because the Judge -- one of the best on the L.A. Bench -- needed the coverage chart to make sense of the oral arguments, she always denied Plaintiff's request to disregard them. More importantly, she spent nearly the entire course of both parties' presentations checking my coverage chart to understand their position -- which position the chart contradicted.
This is not rocket science.
I genuinely believe that I won a series of successive motions, culminating in a successful summary judgment motion, against a formidable adversary because of those darn color-coded charts.
Though I'm deeply committed to maximizing the value to be obtained in any settlement for both parties, like that Judge, I am subject to persuasion, fallible human being that I am.
This blog follows insurance coverage issues from time to time because insurance reimburses us for losses; litigation presumes loss; and, the negotiated resolution of litigation requires the parties to understand the benefits and limitations of everyone's insurance policies.
We also talk a lot about ethics here because people and businesses embroiled in litigation are -- contrary to popular belief -- seeking a just or equitable or fair or ethical resolution.
I cannot say this enough -- IT IS NEVER ONLY ABOUT MONEY.
I also have to tell you that I never once, not on a single occasion, in 25 years of legal practice, a decade of which was spent concentrating on insurance coverage issues, did I ever hear anyone ask whether any underwriting or claims practice was ethical!
Before weighing in, I'm going to just let this question percolate in my consciousness for awhile. If you go to the linked article, you'll see some thoughtful answers. Aside from a little predictable judge-bashing, the readers who paused to answer this question -- both from an underwriting and a claims perspective -- did so with a depth of understanding of the issues involved and the history of the clause at issue -- the one that is at the heart of the hurricane damage claims.
If I were allowed to give only two pieces of gratuitous advice to every lawyer and business person in 2008, they would have to be as follows:
1. if you think an insurance policy * will not indemnify you or your client against a particular loss or provide a defense to a legal action, you haven't thought deeply enough unless you have, at a minimum:
researched the law pertaining to the pertinent policy language in the jurisdiction in which the loss occurred or suit was brought;
painstakingly compared the law in that jurisdiction to the precise language contained in the insurance policy;
consulted with a policy holder insurance recovery specialist -- I understand that this attorney -- Stephen N. Goldberg of Heller Ehrman -- who represented GMAC in the World Trade Center coverage action is one of the best in the country.
2. treat others as you would expect to be treated yourself (this is the conflict avoidance part)
Two points worth noting for the health of any small city's fisc.
First, as Kingman resident and Plaintiff Travin Pennington is reported to have said, "communication and accountability, could have prevented a bill for  attorneys' fees that exceeded $40,000 following a seven-month battle with the city for e-mail records."
The Back Story?
In June, Pennington filed public records requests for thousands of pages of e-mail from then-City Manager Paul Beecher and two other employees. He said Beecher took him into the city hall parking lot, and instead of asking how to resolve the issue, Beecher allegedly made some comments that pushed Pennington to "the tipping point."
"I said, 'this guy's out of control. I'm going to take this guy to task,'" Pennington told the Miner. And he did. After the city failed to disclose more than 8,000 pages of e-mail whose contents the city claimed were personal, Pennington filed a lawsuit in the Mohave County Superior Court.
The Conflict Avoidance Point? Be civil; be responsible; be accountable; and if you fail, be willing to course correct.
But when civility, responsibility and accountability haven't worked, check your insurance coverage.
The Kingman story continues:
The city's insurance policy will cover much of the costs of the lawsuit, including the city's own attorneys' fees, which topped $32,000, according to City Attorney Carl Cooper.
Good work on the City's part in tracking down the necessary insurance coverage!
Resolution: Cutting the baby in half.
Pennington's attorneys offered $48,337.65 - 75 percent of the $64,448.50 in the plaintiff's total fees. The city came back with a $32,225 offer, and the two parties settled in the middle, at $40,281.30.
We mediators do try to generate solutions other than the one arising from the descriptive (not prescriptive) rule that any zero-sum negotiation will resolve half way between the first two reasonable offers.
The good news: you don't need a mediator to achieve this result. Even your fifth grader is capable of adding two numbers and dividing them by two. _________________________
Types of insurance include Automobile; Aviation; Boiler; Builder's risk; Business; Casualty; Credit; Mortgage; Crime; Crop; Workers'compensation; Directors and Officers Liability; Disability; Errors and Omissions; Expatriate; Fraternal; Financial loss; Fire; Hazard; Health; Kidnap and Ransom; Homeowners; Renters; Environmental Liability; Professional Liability; Locked Funds; Marine; Nuclear Incident; Pet; Political risk; Pollution; Prize Indemnity; Property; Protected Self-Insurance; Purchase Insurance; Stop-loss; Surety Bond; Terrorism; Title; Travel; Volcano; and, Workers' Compensation.
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."
As the Court itself acknowledged, under its holding,
a plaintiff could settle a disputed insurance claim, keep the money paid, and then sue for fraud (rather than on the released claim) if it was fraudulently induced to settle the claim by a misrepresentation of policy limits.
We must say we're surprised by this holding and imagine the insurance carriers are as well. The "parade of horribles" raised by State Farm, however, was dismissed as exaggerated by the appellate court, stating that the
consequences of applying this principle are not dire. Indeed, to avoid them, the insurer need only avoid misrepresenting policy limits when it settles claims. We seriously doubt insureds who settle their claims can be expected thereafter to assert groundless claims of misrepresentation of policy limits on a routine basis.
Is this a case of bad facts making bad law? Or am I missing something?
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”].)
predict[ed] that settlement values may start trending downward after reaching a record high this year. The median settlement during the first six months of this year was $9 million, up from $7 million in both 2006 and 2005, according to NERA.
The NERA researchers base this prediction on recent declines in the median investor loss, which historically has been a “strong predictor” of settlement values. For cases that settled in 2007, the median loss was $381 million, less than the $407 million median loss for cases that were resolved in 2006. This trend is also apparent if one looks at new lawsuit filings. The median investor loss for cases filed in 2007 was $240 million, down from $265 million in 2006 and $340 million in 2005.
These trends are early hints that recent filings might not lead to continued increasing average settlement values in the future, although it is still too early to know which of the recently filed cases will result in settlement as opposed to dismissal,” the NERA researchers explain.
Meanwhile, Forbes reports that that the Court in the Sprint Nextel settlement set aside 27.5 percent, or $15.8 million, for plaintiffs' legal fees, as well as an additional $2.2 million for plaintiff expenses.
Want an angry tax attorney serving as the arbitrator on your personal injury case? Then head on down to Arizona where the Ninth Circuit has just held that he can be forced by State law to serve as your neutral for $75 per day -- all without violating the U.S. Constitution.
The indentured tax attorney? Mark V. Scheehle, to whom you might throw a little tax planning work out of collegial fellow feeling.
The facts below. Link to Scheehle v. Justices of the Supreme Court here.
Arizona law requires that each superior court, by rule of court, provide for the arbitration of cases in which the amount in controversy does not exceed $65,000. Ariz. Rev. Stat. § 12- 133. At the time this action was filed, the Local Rules of Practice for the Superior Court of Maricopa County required that all attorneys who reside in the county and have been active members of the Arizona Bar for five years serve as arbitrators.
Attorneys who served as arbitrators under the Appointment System were paid a flat fee of $75 for each day in which they actually conducted an arbitration hearing.
Scheehle has been a member of the Arizona Bar since 1981, and a certified tax specialist since 1988. In September 1996, Scheehle was appointed as the arbitrator in a motor vehicle personal injury action. He served as an arbitrator and submitted a report to the Maricopa Superior Court in December 1997.
In July 1997, Scheehle was appointed as the arbitrator in a second motor vehicle personal injury suit and accepted the appointment. In October 1997, while still serving as the arbitrator in the second action, Scheehle was appointed as the arbitrator in a third personal injury action.
Scheehle decided to challenge the authority of the Arizona courts to require that he serve as an arbitrator. He returned the file to the Presiding Arbitration Judge of the Maricopa County Superior Court with a letter declining to serve as an arbitrator. He also expressed his unwillingness to serve as an arbitrator in any subsequent case, and his belief that the Appointment System was unconstitutional and violated Arizona law.
The judge responded by holding a telephone conference at which Scheehle placed his objections on the record. The judge further encouraged Scheehle to apply for relief for good cause shown from the particular assignment, but Scheehle declined, choosing to challenge the Appointment System as a whole.
Scheehle was allowed to file a brief in support of his position. In January 1998, the Presiding Arbitration Judge entered an order rejecting Scheehle’s arguments and imposing a $900 sanction on Scheehle for refusing the arbitrator appointment.
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.
Gini Nelson is the founder and author of the Engaging Conflicts Blog. Gini received her law degree from George Washington University Law School in 1983 after teaching Social Problems at the University of Kansas while completing her MA in sociology.
Gini's practice includes mediation and settlement facilitation.
Gini, who posted her response to my request for comments on mediation ethics on her own blog here, did so before I noticed and after I make a few edits here. Any flaws in this version must therefore be laid at my door.
As a starting point, I echo the physicians' ancient ethical code as First, do no harm.
When we look at short lists of ethical obligations, this bedrock principle appears to undergird all of them -- most of which emphasize client determination and transparency. This list should be short and it should be clear.
The obligation to do no harm, however, must be distinguished from the aspirational goal of "doing good."
I am concerned about the blurring of lines between the two.
Is it our ethical duty, for instance, to advance the field of mediation, as much as we might aspire to do so?
Let's Take Pro Bono Services as an Example of an Aspirational Goal
I, for one, oppose mandatory "pro bono" services, whether the professionals being hauled into servitude are mediators, lawyers, physicians, accountants or interior decorators (as much as the world would benefit were it as aesthetically pleasing as, say, every shop window in Paris).
At least in New Mexico, however, we are not ethically required to provide pro bono services. We are only asked to aspire to provide them.
This professional aspirational goal leaves it up to the individual attorney to consider what she can afford in terms of time, money and energy when considering whether to provide her services for free. Despite the clarity with which this principle is expressed in New Mexico's Code of Professional Responsibility, I've sat in meetings with a combination of practicing attorneys, practicing mediators, state bar staff, court staff, and a judge where everyone was in complete accord on a mediator's ethical obligation to provide pro bono services.
Why the Problem?
When the people responsible for establishing and implementing court-annexed mediation programs misunderstand an aspiration as an ethical obligation, they feel free to incorporate mandatory pro bono mediation services in those programs. In New Mexico, most state and city, government and judicial ADR programs require their mediators to provide their services free of charge.
I understand the budgetary constraints these programs work with. At the same time, I believe a confusion of the professional aspiration to "do good" with the ethical obligation to "do no harm" provides principled justification for program designers to expect mediators to work for free.
This, of course, harms the solo practitioner who can seldom afford to provide the same scale of pro bono services that larger or richer offices can handle. Perhpas more importantly, it constitutes a continuing harm on the entire mediation field by demeaning the value of its practitioners' services.
This confusion also perhaps helps fuel some of the intolerance of other forms of practice that Diane writes about here.
The JAMS standards that you link to are similar but not identical to the standards of conduct promulgated by numerous other organizations and professional associations for mediators. As a practitioner in Massachusetts, I adhere to a combination of several standards that apply to my work.
In brief, they include self-determination by parties; impartiality of the neutral; avoidance of conflicts of interest; competence of the neutral; confidentiality; responsibility for the quality of the process; truthfulness in advertising and solicitation; accuracy of information regarding fees and other charges; and, the advancement of mediation practice.
Responsibility to Improve the Profession
That last duty I'd like to underscore, since it's one that I increasingly see mediators ignore or, worse, spurn. It calls upon mediators to advance the practice of mediation by, among other things, fostering diversity, mentoring new mediators, and -- here's the important one:
A mediator should demonstrate respect for differing points of view within the field, seek to learn from other mediators and work together with other mediators to improve the profession and better serve people in conflict.
To me that means not only respecting the various models of mediation practice that abound, but to resist the temptation to label some mediators as superior or inferior to other mediators on the basis of practice area or profession of origin. We've got to stop putting each other down, folks.
Uniform Rules of Dispute Resolution
I also mediate within the Massachusetts courts which require neutrals to observe the Uniform Rules on Dispute Resolution. Rule 9 of the Uniform Rules spells out a mediator's ethical duties which include impartiality; freedom from conflicts of interest; informed consent; disclosure of fees; confidentiality; truthfulness in advertising and solicitation; responsibility to non-participating third parties (children in a divorce case, for example, or the public and public safety in a dispute involving a public construction project); and, requirements for withdrawal.
Some points to note about these rules.
Rule 9(c), Informed Consent, prohibits mediators from providing legal advice and coercing the parties to settle.
I think this is critical, since the prohibition on providing legal advice underscores that the mediator's role is to facilitate negotiation and decision-making, not to serve as advocate. I also agree with its prohibition on coercion, which strips the parties of the power and the right to make their own decisions free from pressure by the mediator or the agenda of the court -- both of which may have an interest in obtaining the settlement of as many cases as possible.
This places the needs of the parties front and center, not as mere afterthought.
These rules require mediators to clarify for parties the difference between mediation and other processes such as litigation, arbitration, negotiation through lawyers, and therapy; and that they encourage parties to seek professional advice such as legal, financial, therapeutic, or marriage counseling.
A substantial number of my family mediation clients are not represented by counsel. Because it's easy for unrepresented parties to be confused about the mediator's role, I take great care to emphasize that my role is to mediate -- and that I will not be their lawyer, will not and cannot represent them, and will not provide legal advice -- and take care to explain the difference between a mediator and a lawyer. I would do this even if the Massachusetts Rules of Professional Conduct, Rule 2.4, "Lawyer Serving as Third Party Neutral", didn't require me to do it.
All of these various bodies of ethical rules and duties guide my conduct at the mediation table, Vickie.
But there's another ethical duty that I honor.
I don't think you'll find it formally recorded in our professional canon, but it's this: connect with other mediators.
I am fortunate to have a network of trusted friends and colleagues (and of course bloggers) in the mediation profession to whom I turn when an ethical dilemma confronts me. We need each other.
It's one reason why ABA Section on Dispute Resolution's Model Standards of Conduct Standard IX, Advancement of Mediation Practice, resonates so strongly with me. Not only do we benefit as individuals, but we benefit collectively when we work together to improve our practice.
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%.
Here in California, we call an "offer for judgment" a "998."
"Have you served a 998?" is a question I often ask the parties during mediation when we appear to be reaching impasse. The usual answer is "we haven't done enough discovery" or "we've been waiting for the mediation [to fail] before serving it."
As Cullum and Tuvel correctly note, it's a mistake not to use this hammer as early in the litigation as possible. I'll add to their excellent advice that it's very good to serve the offer prior to mediation -- not after.
It's ammunition I can add to the "parade of horribles" for the other side.
Apparently, there's a new decision in New Jersey called Palmer that clarifies the previously open question whether you could serve multiple offers of judgment during the course of the litigation. I must admit that I don't know the answer to the question here in California (readers?) but provide you with the Practice Tip of the Week from Cullum and Tuvel.
Nice article guys. Thanks for adding to the collective wisdom.
The Palmer decision provides tremendous guidance to both attorneys and litigants with respect to case management and strategy. For example, if an attorney has not had the opportunity to complete discovery, but has analyzed the case enough to make an informative estimate on damages, an attorney can advise his client to file and serve an offer of judgment as soon as possible to get an early trigger date for fee-shifting purposes under the Rule.
Thereafter, once discovery has concluded or been more thoroughly explored, a subsequent offer(s) can be made that is more likely to invoke a settlement.
In the alternative, a subsequent offer may have only slightly modified a prior offer, and therefore the offeror will stand a good chance of collecting fees on the earlier offer which will cover more of the offeror’s expenses because it has never exinguished in lieu of the Palmer decision.
Good strategy that should be applied for tactical advantage in any jurisdiction that permits it.
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.
. . . with the usual groveling thanks to charles fincher of lawcomix for the generous giving of permission to use his brilliant and hilarious cartoons . . . .
. . . to be fair, the final round contestants were all ridiculously well-prepared, articulate, bright, thorough and just generally the kind of young people you'd hoped would one day be in charge of the world . . .
. . . it's just that the ABA rules apparently require them to be very very very very very NICE . . . .
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."
Now its the turn of another BIG "V" LAWSUIT -- Merck's Vioxx litigation -- to benefit itself with the largest drug settlement ever but only in the event 85% of all 26,600 litigants agree to drop their cases.
Here's an except and link to the MSNBC article on the settlement:
TRENTON, N.J. - Merck & Co. said Friday it will pay $4.85 billion to end thousands of lawsuits over its painkiller Vioxx in what is believed to be the largest drug settlement ever.
The deal becomes binding only if 85 percent of all plaintiffs in about 26,600 lawsuits agree to drop their cases. It was finalized in the early morning hours after attorneys for Merck and the plaintiffs met with three of the four judges overseeing nearly all Vioxx claims.
Merck faced personal injury lawsuits representing 47,000 plaintiffs, and about 265 potential class action cases, filed by people or family members who claimed the drug proved fatal or injured its users. The agreement covers cases filed in both federal and state courts.
To qualify, claimants will have to pass three gates:
an injury gate requiring objective, medical proof of MI or ischemic stroke (as defined in the agreement),
a duration gate based on documented receipt of at least 30 VIOXX pills, and
a proximity gate requiring receipt of pills in sufficient number and proximity to the event to support a presumption of ingestion of VIOXX within 14 days before the claimed injury.
Individual cases will be examined by administrators of the resolution process to determine qualification based on objective, documented facts provided by claimants, including records sufficient for a scientific evaluation of independent risk factors.
Neither stroke claims that are hemorrhagic in nature nor transient ischemic attacks will qualify.
Law firms on the federal and state Plaintiffs' Steering Committees and firms that have tried cases in the coordinated proceedings must recommend enrollment in the program to 100 percent of their clients who allege either MI or ischemic stroke.
The parties agree to seek court orders from the four coordination judges requiring plaintiffs' attorneys to promptly register all of their VIOXX claims, whether filed or tolled, and to identify the alleged injury - in order to establish the universe of all existing claims in the United States.
Participation conditions: payment obligations under the agreement will be triggered only if, by March 1, 2008 (subject to extension by Merck), the following number of plaintiffs enroll in the settlement process
85 percent or more of all currently pending and tolled MI claims,
85 percent or more of all currently pending and tolled ischemic stroke claims
85 percent or more of all eligible claims involving a death; and
85 percent or more of all eligible claims alleging more than 12 months of use.
My question: how much of the nearly $5 billion settlement fund does Merck actually project will be paid to Plaintiffs able to jump through all three hoops and what happens to sums remaining in the fund if they are not all expended to compensate Plaintiffs?
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.
The subject of private judging and maintaining confidentiality in settlement agreements was in the news again today, this time in the Los Angeles Times article "Prying into Judicial Secrecy."
The article announces a significant new study by UCLA Law School and the Rand Corporation on the effect of private judging and confidential settlement agreements on the civil justice system.
But what really caught my attention was Tom Girardi's reported comment that he was "troubled" by a confidentiality agreement he signed 25 years ago on behalf of a boy who alleged he was molested by a Catholic priest. As the Times reported:
Girardi said he had doubts about [his] client's claims at the time [but that] when the massive pedophilia scandal in the Catholic Church came to public light, [he] said he learned that the priest had molested 17 kids.
"My confidentiality agreement probably had negative consequences" for all of these kids, Girardi acknowledged.
Both of these candid statements are both necessary and courageous. They demonstrate that even the best of us sometimes doubt our own clients' claims and that we might sometimes inadvertently harm others while doing the job we're ethically obliged to do -- "zealously representing" our clients.
The last time I saw Tom was during the Vioxx trial Judge Chaney's courtroom. I'd brought my dad down to court -- now 83 and failing physically and mentally. At the break, Girardi stopped by to shake Dad's hand and say a few generous things about his tenure as Commissioner in the downtown Superior Court. I'll never forget this kindness, particularly the memory of the tears that coursed down Dad's face to have someone of Girardi's reputation call him "Your Honor" again.
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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.
Yesterday, I promised to provide a little "pro" arbitration wisdom in response to my speaking partner's "con" since that's our ALFA Seminar topic here in beautiful Half Moon Bay.
And yet it's 4 a.m. before I realize I can't sleep because I've been mediating too long to seriously launch one side of any debate. Everything and everyone has become so much more three-dimensional, multi-layered, and textured as a result of three full-time years of ADR practice.
So let me share the first of my non-scripted thoughts on the matter.
I'm Unwilling to Prejudge the Court's, the Arbitrator's or the Jury's Biases.
If you read yesterday's post, you'll recall that several of the anti-arbitration arguments were based upon the presumption that the arbitrator will more likely than not be biased in favor of the plaintiff because:
Arbitrators have a vested interest in their case load persisting, whereas the courts are interested in purging their dockets, thus making early termination in court more likely than in arbitration.
Arbitrators' [presumed] self-interest in maintaining and expanding their own ADR practices encourages a "split the baby" mentality and reluctance to terminate the case short of a full hearing.
The "repeat" player bias will favor the Plaintiffs' bar who the arbitrator will see far more often than counsel for any particular employer.
Having spent 25+ years with attorneys, judges, mediators and arbitrators, I simply can't assume bias. A few bad apples aside, the men and women of the legal profession are among the most ethically-minded of any professional or business people I have known -- by many, many, many degrees of magnitude.
As Eric notes, I, at least have been "living on a desert island" since I was blissfully unaware of "the recent controversy involving the New England Patriots after a team official was caught videotaping opposing team defensive signals."
Though Mr. Thrifty and I both routinely toss out the sports page, what interests us is the strictly legal question addressed by Eric, i.e., whether the fine levied on the Patriots is "just" or "correct" as a matter of law. (leave it to the Wall Street Journal Law Blog to nail the most important question -- whether the fine is tax deductible, but I digress).
The National Football League fined Coach Bill Belichick $500,000 while the Patriots were ordered to pay $250,000. The league also ruled that the Patriots must forfeit a first-round draft choice next year if the team reaches the playoffs (which is highly likely) or second- and third-round selections if it fails to make the playoffs.
This is where attorneys and the rest of the thinking world part company. Ask any fifth-grader whether "peeking" at your opponent's game hand is cheating or not.
So What Does the Law Have to Do with Justice or "Fairness?" Not, unfortunately enough. This is also where many attorneys lose touch with their clients, particularly their commercial clients who are operating largely based upon social rules and conventions rather than upon legalisms.
I spent a great deal of time yesterday editing a video (my abysmal webcam and video editing skills live at Geoff Sharp's Mediation vBlog this morning do not beging to do justice to the intelligence and insight of Milan Slama, a community and business mediator who is the subject of the interview).
In the process, I "grazed" around YouTube (see my YouTube page here) to see what kinds of mediation and litigation videos people have uploaded.
I'm sorry to report that most of them are in these varieties:
the "mediate because you really don't have access to justice" variety here and here -- delay; expense; "out of control nightmare";
the angry "mediation (or litigation) doesn't work" genre -- here and here.
the crazed litigant gunman here and here (the "adversarial process -- or even a patent application -- can kill you" narrative)'
the "we're Italian; we don't believe in divorce" Tony Soprano-style here.
At Geoff Sharp's MediationvBlog however, you'll see some pretty high level discussions about both the benefits and the challenges of both mediation and litigation for attorneys, mediators, judges and, lest we forget, clients.
There are a few words on negotiation tactics and strategy there as well.
The only thing we can put our fingers on is the increase in mediation. We think all the attention put on ADR in California has made a difference in companies that are drafting contracts and including arbitration clauses.
The increase, Powell was reported as saying, was especially prevalent in the entertainment and health care industries.
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.
By a 4-3 majority, the California Supreme Court reversed an order compelling arbitration and remanded the case to the trial court with instructions to use a multi-factor test in determining the enforceability of a class action waiver. The ultimate question for the trial court is whether class-wide proceedings would be “a significantly more effective practical means of vindicating the [statutory] rights” of the employees who belong to the putative class. Parties who prefer the simplicity of one-on-one arbitration should not be overly concerned by the majority holding because this decision has no application outside of the employment context.
How many trial attorneys talk publicly about adverse jury verdicts. Not many.
Of course, in my field -- commercial litigation - not many of us can call ourselves trial attorneys with a straight face. We're litigators, which means we want and try to win before trial and reconsider our settlement posture if the light at the end of the tunnel is the train of trial.
But we're not. We take depositions, scan and code hundreds of thousands to millions of documents, fight the discovery wars, make motions on the pleadings and pin our hopes on the silver bullet summary judgment motion.
Read the entire article, but here are the bare bones that form the basis of today's good settlement advice. In this first injury trial, the paralyzed plaintiff won
an $8 million . . . verdict, [which] was reversed on appeal . . .
The [second trial resulted in] a defense verdict [which was also]reversed on appeal . . .
The [last] trial resulted in a $31 million plaintiff’s verdict.
Who tried this case three times? Trial attorneys who have, since the firm's founding in 1955, won
more than seventy-five jury verdicts in the amount of $1 million or more, including twelve jury verdicts in excess of $10 million, and two in excess of $450 million. Additionally, the law firm’s total settlements have exceeded one billion dollars.
With this and all their other substantial trial experience under their belts, these trial attorneys conclude:
[A] trial attorney should always inform his/her client that a prediction on the outcome of a jury trial is simply an educated guess, and that the client needs to be prepared for widely divergent results. There is always an element of jury uncertainty. Any time a client agrees to have his/her case tried before a jury, the client needs to understand that in some ways it is simply a game of chance.
Id. (emphasis added). Couldn't say it better myself (and yes, I did try cases to juries when I was a plaintiffs' injury lawyer in the early '80s, as well as some, but far fewer commercial trials scattered throughout the remainder of my legal career).
(right: key players with a model of Freedom Tower)
Settle in for a long and satisfying read in this stellar article that chronicles six years of litigation, mediation, negotiation and valuation in the World Trade Center case. Here's just the first paragraph and a link to the full article.
Wachtell dedicated more lawyers to helping Larry Silverstein rebuild at Ground Zero than to any other project in its history.
Rebuilding was the developer's dream-and his right, according to his lawyers from Wachtell, Lipton, Rosen & Katz. But after the towers fell, New York city and state authorities seemed to have done everything possible to elbow him out of the way, even as Silverstein ponied up $100 million a year to rent a hole in the ground. Now, at almost midnight, he was huddled in a conference room in the Park Avenue offices of the Port Authority of New York and New Jersey, the quasi-governmental agency that had leased the Twin Towers to Silverstein in July 2001. Executives from his development company and his financial backers were there with him, as were Wachtell partners Martin Lipton and Robin Panovka. Silverstein ordered two cups of coffee. He was ready to stay up all night. "Let's get this thing done," he told the group.
Because it's the beginning of the new "school" year and the beginning of many first year attorneys' first law jobs, I'm providing as much advice as possible to help ease former law students into their new professional careers.
EMPATHIC ASIDE: If you're feeling like EVERYTHING is taking you WAY too long, I share with you the fact that my own first two weeks of practice were consumed by 10-hour days drafting a simple motion to amend a complaint on the eve of trial -- a motion that, two years later, I could draft in my sleep.
Fear not. We've all been first year's and we all understand. If your superior doesn't, you might wish to remind him that though you're one of the hardest working new associates in rock 'n roll, you are doing for the first time tasks he's been doing for a lifetime.
THE GOOD ADVICE
Today I bring you good advice on writing summary judgment motions from a series of posts on that topic by a defense employment litigator, George Lenard, with the St. Louis, Missouri firm of Harris, Dowell, Fisher and Harris. The blog entry is from George's Employment Blawg and it covers the practicalities of strategically planning for, preparing, and drafting summary judgment motions.
The only thoughts I have to add to George's are deposition-related since I teach deposition skills to young lawyers once or twice a year and hence am always thinking about their questions and challenges.
The winning summary judgment motion is the foremost reason that you need to make a clear factual record containing party admissions in the depositions that you take.
too many attorneys of all levels of experience treat the deposition as purely a discovery device, thereby losing the true benefit of this "discovery" procedure, i.e., it is often your sole opportunity to obtain the admissions necessary to prevail before trial.
how do you get a clear admission? PLANNING, PLANNING, PLANNING
you need to know what you need the witness to say to prevail in the summary judgment motion before you take the deposition
you must therefore have done the necessary prep work on the summary judgment motion before taking the deposition
once you know what you need the witness to say, you must "set him up" to say it.
i.e., this is the employment agreement you signed, correct? that's your signature at the bottom, is it not? your signature indicates that you read and understood the terms of this employment agreement at the time you signed it, correct? (directing the witness' attention to the relevant clause). You were telling the truth when you signed your name there, correct? You had in fact read and understood the agreements terms, isn't that so? Turning to paragraph 6, yes, please do take all the time you need to read it. Have you read all of paragraph 6? O.K. You read and understood this paragraph when you signed the agreement, isn't that right? And this paragraph provides that, quote, employee agrees that his employment can be terminated for any or no reason at any time unquote. That's one of the terms you agreed to correct?
then, of course, you'll have to move on to the "meat" of the case, which generally requires you to counter the assertion that the "at will" provisions of the employment agreement are irrelevant because the employee was fired for whistle blowing, or left her company's employ because of a hostile environment or in respone to sexual harassment.
this, of course, is trickier and more difficult but you must plan a line of cross-examination with the goal of eliciting the admissions you need to prevail on a summary judgment motion in an extremely fact intensive area of the law.
Once again, I remind my readers that favorable negotiated settlements often depend far more upon the credible threat you present to your opponent than any of your own negotiating skills or those of your mediator. There are many techniques for successfully bargaining from a position of weakness. We will be writing about those techniques over the next few weeks. But we'd really rather see you bargaining from a position of strength, which is why we're providing these first-year tutorials on building the best factual and legal case at the earliest possible opportunity to speed your client to its probable sole litigation destination -- settlement.
C'MON, BE A REAL LAWYER: USE THE WITNESS' DOCUMENTS AGAINST HIM IN DEPOSITION
And here's more on using a witness' documents against him. This is cross-examination at its finest -- the witness either admits the damning "spin" in the "testimony" being given by the cross-examiner or he looks evasive at best, like a liar at worst. This cross-examination from one of the Vioxx trials is from the Illinois Trial Practice Blog care of this week's Blawg Review (the Labor Day Special Historical Edition).
SPEAKING OF THE VIOXX TRIALS .... my good friend and colleague Judge Victoria Chaney of the Los Angeles Complex Court who presided over the first Los Angeles Vioxx trial will be speaking with me, Judge Alexander Williams, III (full time Superior Court settlement Judge), arbitrator and mediator Jay McCauley (formerly of Paul, Hastings), the Hon. John Leo Wanger, Ret. (former U.S. Magistrate and fomer partner at Irell & Manella) and registered patent attorney and arbitrator-mediator, Les Weinstein of Sheldon Mack and the AAA here in Los Angeles on November 13 -- Settlement Techniques that Give You the Winning Edge.
You'll have to get up early for this one -- it's scheduled from 8:45-10:00 a.m. on October 3 -- but we promise you a lively debate and fresh perspectives on an issue that might make corporate and litigation counsel want to rip those arbitration clauses out of their and their clients' employment agreements. Then again, you might just decide to rewrite those ADR Clauses altogether so that you get the best possible dispute resolution mechanism for your and your clients' work-force.
Either way, the time is ripe for reconsidering and revising the way in which you and your clients handle disputes with their employees.
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!
Robert Shaprio, one of the members of O.J. Simpson's "Dream Team" has settled a whistle-blower wrongful termination case on his law firm's behalf with his former secretary who claimed she was fired for exposing wrongful billing practices.
[Shapiro had earlier been dismissed from the lawsuit and was not, therefore, an individual party to the resolution].
Lawyers for James and the Christensen law firm appeared before Los Angeles Superior Court Judge John Shepard Wiley Monday, saying both sides agreed to all terms and that the defense will prepare the final document for signatures.
Wiley said he was pleased to hear of the agreement in principle. "To try this case would have been nasty," Wiley said. "Neither side would have had a pleasant experience." The judge said the settlement avoids the uncertainty James and the Christensen law firm would have faced had the case gone to a jury, which was scheduled for trial Sept. 11. He urged the lawyers to put the settlement in final form soon before any last minute disagreements develop.
"Let's get this in the can," Wiley said.
Outside the courtroom, James' lawyer, Patricio T. Barrera, said the terms are confidential and therefore his client, who was present in court, cannot comment.
For the business, rather than a strictly legal, analysis of the recent Ninth Circuit and other California rulings on the unconscionability of consumer arbitration clauses, see the excerpt and link to Business Week's article on the issue below.
Read almost any cell-phone contract and you'll discover that the longest passage deals with dispute resolution. While seemingly important matters like billing get only one paragraph, Verizon Wireless devotes six paragraphs to dispute resolution. At AT&T (T), the dispute section takes up 10 fat paragraphs and states: "You agree that, by entering into this Agreement, you and AT&T are each waiving the right to a trial by jury or to participate in a class action."
The small print keeps expanding in response to an influx of court cases—at least 10 of them in California over the past few years—questioning a wireless carrier's right to block consumers from suing or filing class-action claims. In late June a California appeals court reaffirmed a lower court's order that (T-Mobile USA) could not enforce a clause requiring arbitration of disputes with customers. And on Aug. 17, the U.S. Court of Appeals for the Ninth Circuit in California ruled that AT&T's prohibition against subscribers banding together in class actions, "is unconscionable, and, thus, unenforceable."
(left: a mother and child reunion outside the L.A. County Jail)
The last time you heard news from the Los Angeles County Jail, it had to do with Paris Hilton's claustrophobia. Today, we bring you less sizzling but perhaps more important news from our local jail cells.
(below: Dustin Hoffman puzzling over his jury in Grisham's Runaway Jury - directed by Gary FlederMemorable movie quote:You think your average juror is King Solomon? No, he's a roofer with a mortgage. He wants to go home and sit in his Barcalounger and let the cable TV wash over him. And this man doesn't give a single, solitary droplet of shit about truth, justice or your American way)
Concurring Opinions covers juror blogs today by, among other things, quoting a foreman's juror blog as follows.
Today was the last day of jury duty. I served as foreman of the jury. By the end of the case I thoroughly disliked the defending attorney. He had abused, postured and bullied his way through the entire trial, and had treated the witnesses for the prosecution, who were solid citizens doing their jobs, with disrespect and contempt. I was concerned that his histrionics were going to affect some of the less sophisticated among the jury to the degree that it would be hard to reach a decision on matters that were more or less clear. Just prior to the closing statements I decided to see what effect I might be able to have on the outcome given the limited set of tools available to me...
[I] . . . paid special attention to the participation of an elderly woman of color who felt out of place among so many white men, and a quiet Hispanic man who had also been swayed by the theater of the defense. Within an hour we had a conviction on both counts, and on all of the sub clauses of the counts. At the end of it we all felt that we had done the right thing, which I think we did.
I have either rarely, or perhaps never attempted such a conscious manipulation of my presentation of self as an adult. The fact that nobody knew me was an asset.
Of course, if you've attended as many jury focus groups as you've tried cases to a jury, you already know this. Know what? Just how unpredictable and uncontrollable that 12-headed creature the jury can be.
I don't mean to bury the lede (I'll make this the subject of a full post later) but I was talking to an old friend and jury consultant, Chris St. Hilaire of Jury Impact today (both of whom I highly recommend) about the dwindling jury trial and the use of professionally prepared mediation presentations and mediation focus groups.
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.
Friday the thirteenth was (temporary) bad luck for Canadian consumers. I say temporary because Ontario and Quebec have forbidden mandatory arbitration clauses and class action waivers. The Canadian Supreme Court in the two cases discussed below held that in the cases before it those statutes could not be applied retroactively.
Ironically, when the Dell and Rogers cases are placed in a larger social context, the public’s interest in securing the class action as a vital aspect of the public justice system could hardly have been rendered clearer. The Rogers case received much less of the court’s attention, having been carried through on Dell’s slipstream; however it is the features of Rogers’ mandatory arbitration/class action waivers on its consumer contracts that highlight the hollowness of off-the-bench judicial laments about access to justice for ordinary Canadians.
Both cases turned on the sublimely procedural question of whether an arbitrator or a Quebec superior court judge should have first kick at the can in deciding whether a mandatory arbitration clause on a consumer contract was enforceable or not. Such clauses preclude consumers from pursuing corporations in any kind of court action, including class action.
In both Ontario and Quebec the question has been rendered moot by amendments to consumer protection legislation which prohibit such clauses, underlining the public order aspect of the class action.
Read the rest of the article here (emphasis added).
Ascertaining All of the Terms and Conditions of Your Cell Phone Service
(I'm using Sprint as an example only because the question posed to me related to Sprint -- I'm assuming most cell phone service agreements are the same, or at least substantially similar)
Because a reader asked, I learned today that the Sprint Cell Phone Service Agreement contains an arbitration provision.
How did I gain this valuable knowledge? Read on.
A Trip to the Grocery Store
On my way to the grocery store this morning , I drove by a Sprint outlet. So I stopped, ran in, and had the following conversation with the Sprint representative.
"Can I get a copy of Sprint's service contract?"
"You know, the terms and conditions of the Sprint cell phone service plan."
"Uhhhhhhhhhhhhhh -- you mean the, uh, Plan Brochure?"
"Does it have all of the plans' terms in it?"
"You know, the FINE PRINT? the contract? the parties' agreement if I sign up for service."
Smiling, "sure," she replies, handing me the brochure and graciously validating my parking ticket (the one with the waiver of the car park's legal responsibilities to me or my car printed on the back in 3-point type).
Now that I've Read ALL the fine print in the Sprint brochure, I can tell ou that there is nary a mention, hint, suggestion or covert reference to "dispute resolution" or court or jury trials or arbitration.
Nothing, Nada, Nichts.
I Should Have Gone On-line in the First Place to Find the Sprint "Terms and Conditions" of Service
At the very bottom (left hand corner) of Sprint's Plan Page you will find a link titled "Terms and Conditions."
Your Agreement with Sprint Solutions, Inc. . . . includes terms of your service plan . . . and the most recent Sprint Nextel Terms and Conditions of Service . . . carefully read these all terms which include, among other things, a MANDATORY ARBITRATION of disputes provision.
The dispute resolution clauses are at the end of the Terms and Conditions (T&C's). They provide as follows:
(For non-lawyers, an "adhesion" contractis one you didn't really agree to because, for instance, it came as an insert with your monthly cell-phone or credit card bill or appears on the back of the ticket you pull when you enter your local mall's parking lot. It's an asymmetrical contract. The party imposing the agreement on you has all of the power and you have none. Take it or leave it. That's an adhesion contract and it's not necessarily -- in fact is often not -- invalid).
That said, it appears that most cell phone contracts contain a clause permitting you to terminate your service before the expiration date without a cancellation fee (a real boon if you want to change plans!)
You may generally do so "in response to a materially adverse change [the cell phone company] makes to the Agreement . . . (Sprint Contract language). The imposition of an arbitration provision that wasn't part of the contract when you sign it would be a material adverse change (I'm actually willing to go out on a limb here and say that's my actual legal opinion).
Sprint requires you to provide it with notice of cancellation within thirty days of their notice to you of the change (as I suspect all the other cell phone services do). So if you want to take advantage of this, you'd have to begin reading those inserts that come with your cell phone and credit card bills.
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."
My friend was good enough to reduce his jury experience to writing. I provide it here for you without commentary.
I was chosen for jury duty while working for a Bank in corporate communications in San Francisco's financial district. So I arrived at the courthouse in a suit and tie and probably looked and sounded pretty conservative.
I was chosen as one of the twelve jurors to decide a personal injury lawsuit. The plaintiff was a wiry little black guy suing a big shipping corporation. A restraining rope had snapped while he was loading cargo onto a ship at the docks somewhere along the Bay early one morning. It caused him to slip and fall and badly hurt his hip.
On the witness stand, the Plaintiff revealed that he and his fellow workers were in the habit of taking a few healthy nips from a bottle of liquor as they drove to their 6 A.M. shifts. It seemed that he and his fellows were generally somewhat drunk nearly every morning as work began.
The defense attorney made it pretty clear that though the snapping of this important rope hadn't been the Plaintiff's fault, that he wouldn't have injured himself, wouldn't have fallen at all, if he'd been sober.
The jurors were almost all white and most were staunchly middle class. During deliberations, two of the jurors harangued the rest of us about the contempt they held for anyone who got drunk in the morning. A couple of other jurors were really down on the guy and talked about him as if he were just dirt.
Now, I know it isn't cool to drink the way he did, and I wasn't a long-haired kid anymore, learning to play the blues and romanticizing the Black experience as I had during my days at Berkeley in the sixties. But I couldn't help empathizing with the guy.
Just as you’re asking yourself, “If a high-powered law firm can’t draft an enforceable arbitration provision for its own contracts, then who can?” comes Gatton v. T-Mobile USA, Inc., case no. A112082 (June 22, 2007), in which the arbitration provision in T-Mobile’s customer agreement gets similar treatment in California state court. The First District Court of Appeal holds that T-Mobile’s arbitration provision in its customer agreements is unenforceable because of the minimal degree of procedural unconscionability arising from its adhesive nature and the “high degree of unconscionability arising from the class action waiver.”
I’m going to go out on a limb and say that T-Mobile probably had pretty good lawyers draft its agreement, and that the lawyers who drafted the provision for O’Melveny were no slouches, either. Who will fall next?
Once again, the trial courts are trying to mess up mediation confidentiality by judicially creating (legislating?) exceptions to the confidentiality statutes. When faced with a public policy that competes with California's strong public policy favoring mediation confidentiality, the trial courts too often seem to tip the balance the wrong way by inventing unwritten exceptions to the law. Luckily, in the recently-penned decision in Wimsatt v. Superior Court (Kausch) (Cal. App. No. B196903), the appellate court fixed things up...although it was clearly not happy about it.
Wimsatt involves a legal malpractice action against a prominent plaintiff's personal injury firm. In the trial court, the former client and malpractice plaintiff claimed that the law firm "breached its fiduciary duty by significantly lowering [the client's] settlement demand without his knowledge or consent." The client claimed he first learned of this fact from the confidential mediation brief that was provided to the mediator. You can see the public policy conflict already, can't you?
In the malpractice action, the client reasonably enough wants to obtain and introduce the smoking gun mediation brief, the one on which his entire case rests. However, as California practitioners should know by now, there is a slight problem with the plaintiff's wish: Evidence Code Sections 1115 et seq., and in particular Section 1119. California is serious, and rightfully so, about protecting the very cornerstone of mediation -- confidentiality. Under Section 1119, no mediation communications, including mediation briefs, are admissible in court. This has been reaffirmed time and time again by the Supreme Court (go reread Foxgate and Rojas if you don't believe me).
So what happened in the Wimsatt case? According to the opinion, in the underlying personal injury lawsuit, the client's lawyer made a comment to the personal injury defense counsel that it might be more appropriate to discuss settlement in the $1.5 million range rather than the $3.5 million range they had been discussing before. Because of this comment, claimed the client, he was forced to settle his personal injury case at mediation for an amount that was much less than the case was worth. Despite agreeing to the mediated settlement, the client brought a malpractice claim against his attorneys claiming he could have done better if only....
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
Aside from arbitral inefficiencies caused by lawyers doing what lawyers do (discovery and pre-trial motion practice) we suspect that a lot of the dissatisfaction comes not from arbitration as a method to resolve disputes, but from ill-advised pre-dispute boiler-plate arbitration provisions that prevent those who are handling the dispute from altering the way in which it is resolved.
We favor post-dispute arbitration agreements in which the parties can resolve the problems created by the skeletel provisions found in most contracts. Post-dispute arbitration contracts can:
provide for the type and extent of discovery and pre-trial practice necessary for the type of dispute that has arisen under the parties' agreement -- a dispute the contract's drafters may well have been unable to predict;
provide for the composition of the arbitration panel best suited for the dispute, a single arbitrator with specialty industry knowledge, for example, or a three-arbitrator panel with two party and one neutral arbitrator, or any other combination or permutation that the parties' needs and creativity can give rise to;
provide for an appellate process if the parties are afraid of a "runaway" arbitrator who provides neither rationale decision-making authority nor decisions tempered by the realities with which the parties must deal;
place limitations on -- or expand -- available remedies, including all equitable relief otherwise available in a court of law; and,
just about any other provision the parties' needs makes sensible and efficient.
Here's the good thing about both mediation and arbitration. If the parties can sit down together and craft the best way to resolve their dispute (and a mediator might help with this process) they can make the law fit their needs rather than trying to put the square peg of their conflict into the round hole of local, state, national or international procedures.
And if you could use a contract drafting tune-up, do check out AdamsDrafting. I'd say it's the best, but I believe it's the only web site devoted to clarity in the drafting of contracts. Had Ken Adams existed a generation before I went to law school, I could likely have done something better with at least 5 years of my life when I was litigating this burning insurance coverage question -- does sudden mean quick or only unexpected -- upon which hundreds of millions if not billions of dollars of coverage for environmental clean-up rested.
Finally, we've seen a great draft of Eric Van Ginkel's article on this topic for intellectual property disputes that will appear soon in the IP ADR Blog. Keep a lookout for it.
Here in California, and I suspect in many other states, the Court cannot sanction "bad faith" negotiations because all of the parties' communications at a mediation are confidential.
I've often had attorneys ask me, however, whether they can bring to the Court's attention the fact that a claims adjuster, for instance, did not "show" at the mediation. Can't they seek sanctions for that "bad faith" they ask.
This is the question the Ky Law Blog asks and answers today under Louisiana law as interpreted in a nonpublished appellate opinion, Sullivan v. Anderson. In that case, writes attorney and blogger Michael Stevens,
the defendant's attorney . . . arranged for the date, time, location, and mediator and notifed the pro se litigant who did nothing.
[A]ffirming [the trial court] . . . a Jefferson Circuit Court . . . held that although a party was not obligated to attend the "agreed" upon mediation, he was obligated to notify the other side he would not attend so as not to waste the mediator's time. . . [The appellate court opined]
We agree with [the pro per plaintiff] Sullivan and the trial court that Sullivan was not obligated to attend the mediation since it was not ordered by the court. However, [defense counsel] did not have any reason to know that the parties had not agreed on mediation since Sullivan did not inform her that he did not agree to the arranged mediator and mediation date. [*]
A Kentucky court “may invoke its inherent power to impose attorney's fees and related expenses on a party as a sanction for bad faith conduct, regardless of the existence of statutory authority or remedial rules.” (citations omitted).
The Parade of "Bad Faith" Mediation Horribles
Mr. Stevens justifiably marches out the following parade of horribles that this opinion could lead to, such as awards of sanctions when:
the insurance defense lawyer shows up at mediation without the adjuster or the insured and rel[ies] upon the adjuster's attendance by telephone[;]
the adjuster in attendance . . . not hav[ing] settlement authority extending to the policy limits[;]
the adjuster ha[ving] to leave early[; and,]
the adjuster with higher authority [not being] available by phone, or . . . delays in contacting the adjuster by telephone[.]
Are Sanctions Available in California for "Bad Faith" Mediation Practices?
Because Evidence Code section 1120 expressly exempts any "agreement to mediate a dispute" from the protections of section 1119, a California court could presumably sanction a party for failing to appear at an agreed upon (or court ordered) mediation.
Moreoever, a party''s mediation conduct, such as a defendant's failure to bring a claims adjuster or the plaintiff's attorneys failure to bring his client, would not likely subject either party to sanctions.
Section 1119(c) prohibits a party from disclosing "[a]ll . . . negotiations . . by and between the participants in the course of a mediation or a mediation consultation." Interpreting this section broadly and strictly as our Supreme Court requires would likely result in the denial of sanctions because the choice of individuals to represent party interests is an integral part of the "negotiation" between the parties. **
Finally, section 1119(a) most certainly forecloses an award of sanctions based upon offers made or not made during -- or authority possessed or not possessed at -- a mediation. Those facts could only be learned as a result of something "said . . . for the purpose of, in the course of, or pursuant to a mediation" and therefore fall squarely within section 1119(a).
** We find this one of the strangest and most illogical formulations we've heard from any appellate court anytime, anywhere -- a dangerous one at that -- and contrary to the law of contracts. Since when does an agreement exist when party A proposes X to party B, who does not respond? Since when is an agreement formed when party B neither accepts nor rejects it?
*** The American Heritage Dictionary (2000) defines the verb "to negotiate" to mean and include, inter alia, "[t]o arrange or settle by discussion and mutual agreement: negotiate a contract."
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.
When it comes to employment arbitration agreements, it seems like the more bases you try to cover, the less likely a Court is to enforce them.
Even the highly respected Los Angeles-based international law firm of O'Melveny & Myers has proved itself unable to draft an employment arbitration agreement that satisfies California's procedural and substantive conscionability requirements.
Just today, the Ninth Circuit Court of Appeal in Davis v. O'Melveny & Myers held that the law firm's attempt to impose an arbitration agreement upon existing employees with a three-month notice period was both procedurally and substantively unconscionable. (For a criticism of the opinion, click here).
In finding that O'Melveny's attempted imposition of the agreement on its employees was procedurally unconscionable, the Court stressed the firm's "overwhelming bargaining power" and the "take-it-or-leave-it" basis upon which the agreement was proffered. Although the Court distinguished provisions that might permit an employee to negotiate a different deal, given its characterization of O'Melveny's bargaining power, we don't imagine this Court would have read such a clause as anything other than illusory.
As the Ninth Circuit stressed, however, a procedurally unconscionable agreement must be "analyzed in proportion to evidence of substantive unconscionability." It thereupon went on to find four provisions substantively unconscionable: the “notice,” confidentiality and, “business justification” provisions, as well as the limitation on initiation of administrative actions.
The challenged notice provision required the aggrieved employee to "give . . . notice of a Claim [within the year it arose] along with a demand for mediation" or it would be "lost forever." Quoting Richards v. CH2M Hill, Inc., the Court held this provision substantively unconscionable because it would deprive the employee of the right to assert the "continuing violation doctrine available in FEHA suits" a benefit that flows only to the employer.
The challenged confidentiality provision -- prohibiting mention of the mediation or arbitration "to anyone not directly involved" - was also found to be unduly favorable O'Melveny. As the Court explained:
Such restrictions would prevent an employee from contacting other employees to assist in litigating (or arbitrating) an employee’s case. An inability to mention even the existence of a claim to current or former O’Melveny employees would handicap if not stifle an employee’s ability to investigate and engage in discovery. The restrictions would also place O’Melveny “in a far superior legal posture” by preventing plaintiffs from accessing precedent while allowing O’Melveny to learn how to negotiate and litigate its contracts in the future. Id. Strict confidentiality of all “pleadings, papers, orders, hearings, trials, or awards in the arbitration” could also prevent others from building cases. . . It might even chill enforcement of Cal. Labor Code § 232.5, which forbids employers from keeping employees from disclosing certain “working conditions” and from retaliating against employees who do so.
The challenged exemption for alleged breaches of confidentiality was also found to be unenforceable. "As written," held the Court, the provision permitting a "non-mutual exception allowing [O'Melveny] a judicial remedy to protect confidential information" was “one-sided and thus substantively unconscionable.”
Finally, the Court held that the agreement's preclusion of employee complaints to agencies charged with the well-being of California's citizens such as the Department of Labor, was contrary to public policy and therefore substantively unconscionable as a matter of law.
There you have it. One of the best law firms in the country was unable to draft an employment arbitration agreement that could pass public policy muster.
Brought to us by Tracey Broderick, the blog's mission is to bring you people's stories about their personal encounters with the justice system. As Tracey explains:
In this case is a blog of personal stories about the American legal system. If you’ve gone through a divorce or served on a jury, you have a story. If you’ve served time or argued in court, you have a story. Any personal experience with the law can be a story. These stories show when the law does and doesn’t work; how it angers and inspires us. They describe the law and what it means to us all living our modern lives here in our country. This blog brings these stories together so we can hear each other.
I edit the stories. Some are sent to me; some are drawn from interviews with people who want to talk in person. I keep each story as true as possible to the words and voice of each person. If you have a story for the blog, please let me know–I love to help people be heard.
This blog should be required reading for anyone interested in justice issues -- attorneys, law professors, local, state and federal government officials, probation officers, therapists, social workers, arbitrators, mediators, police, sheriffs, bailiffs, judges, court reporters (the stenographers of raw American conflict), students of the criminal and civil justice systems, law students, activists, preachers, teachers, spouses, people who would like to be spouses, people who are tired of being spouses, parents, and children over the age of consent . . . . . gee, I think that means everyone.
Let me rephrase. This blog should be required reading for everyone. It's a small but powerful exercise in little "d" democracy. The kind that grows from the ground up. Not the kind that is brought to you by foreign lands at the point of a gun.
And following Tracey's example, I too will henceforth give credit to the myriad flickr photographers whose photos I use more than once a grateful day of my year.
I listened to This American Life's broadcast on the detainees at Guantanamo for the first time this week and have this to say.
The last time I was this shocked by American injustice was in my childhood, sitting in my parents' living room watching black & white TV broadcasts of police taking fire hoses and attack dogs to peaceful demonstrators in Mississippi.
Really. And there have been a lot of shocking events since then.
I'm providing you with a link to that This American Life episode below, after providing you with the following excerpt from Chris Suellentrop's New York Times Blog The Opinionator on the same subject.
House Democrats have not “hesitated to pick fights with the administration over such issues as whether the hiring and firing of U.S. attorneys was properly managed, or whether Karl Rove and Condoleezza Rice can be compelled to testify about their actions as presidential advisers,” the Post editorial notes.
“Why not fight for the right of habeas corpus? Maybe because it’s not really a priority for the Democrats, after all.”
Click here for This American Life's Peabody Award Winning Broadcast Habeaus Schmabeus -- MUST LISTENING for anyone interested in restoring the rule of law in the United States and having a rat's chance in %$^#@ of of holding our heads high (or least above ground level) in the international human rights community again.
The big news in the arbitration world this week is the request made to the S.E.C. by Senators Leahy and Feingold to ban the mandatory arbitration of claims made by customers against their brokers. An excerpt from the New York Times article Dear S.E.C., Reconsider Arbitration, with a link below.
ARGUING that it is wrong to force investors into arbitration when resolving disputes with their brokers, two prominent United States senators have asked the Securities and Exchange Commission to ban the Wall Street practice of requiring customers to sign away their rights to bring their grievances to court.
Last Friday, Patrick J. Leahy, the Vermont Democrat who heads the Senate Judiciary Committee, and Russell D. Feingold, the Wisconsin Democrat and a committee member, wrote to Christopher Cox, the S.E.C. chairman, asking that it ban mandatory arbitration “in fulfillment of its statutory duty to protect individual investors.”
Arbitration is fine for straightforward disputes involving modest claims, the senators said. But for many investors, the courts are preferable. Arbitration not only lacks a court-supervised discovery process, they wrote, it does not require panelists to follow rules of evidence or provide written opinions justifying their decisions.
We've been following the case of Simmons v. Ghaderi since the opinion appeared in October of last year. The case went up to the California Supreme Court for review in December '06. The issue, as defined by Dr. Ghaderi is:
whether there can be an enforceable settlement agreement when all evidence upon which it is based is inadmissible under the mediation statutes.
As our previous commentary on this case indicates, we believe this accurately states the matter at issue and the source of the lower court's error. That commentary, along with a mediation analysis using the Simmons' facts as a hypothetical, can be found here, here and here.
Once upon a time (at least 20 years ago) a Superior Court Judge confided in me that if s/he were overwhelmed with work and facing a calendar call, s/he would read the reply brief only "because it contained all the arguments."
This did considerably alter my briefing habits.
Here the Reply covers most of the arguments in the Opening Brief and the responses to the Opposition, which I haven't seen. If anyone wants to send it along to me, I'll post it too.
This excerpt was of the most interest to me & the most surprising:
The jury trial is a distinctively American tradition in a cultural sense, too. Almost all civil jury trials in the world take place here, and 90 percent of the criminal ones. But that tradition, which Prof. Paul Butler of George Washington University calls "as fundamental a part of our culture as jazz or rock 'n' roll," is dying.
Why go to court when you can settle cheaply, quickly and fairly elsewhere?
THE Bank of Credit and Commerce International's lawsuit against the Bank of England lasted 13 years and cost some £lO0m ($196m) in legal fees. The Bank of England's governor disgustedly described it as "the most expensive fishing exercise in history". The presiding judge, Mr. Justice Tomlinson, called it a "farce".
Had the parties agreed to mediation it would have taken probably a day and cost just a few thousand pounds. According to the London-based Centre for Effective Dis¬pute Resolution (CEDR), one of Europe's biggest mediation bodies, of the 3,000 or so commercial disputes that are subjected to mediation in London every year around 70-80 % reach a settlement within one or two days, with a further 10-15% settling a few weeks later.
Litigation used to be the natural way of settling disputes, especially in advanced countries. Then clogged courts and ever costlier lawsuits made arbitration look bet¬ter, especially in cross-border commercial disputes. But it often proves no cheaper, fairer or even quicker.
In America, from filing a complaint to arbitration decision takes, on average, 16.7 months. So out-of court alternative dispute resolution (ADR) procedures, such as mediation, are now in vogue. The late Sir Michael Kerr, former president of the London Court of Interna¬tional Arbitration, was a leading convert.
"In the same way’s I have had my mind changed about litigation in favor of arbitration, my long devotion to arbitration is now being eroded," he said.
Thank you to our friend Alicia Freundlich, a Straus LL.M candidate, for passing along this case summary copied verbatim from the Newsletter of the Business Law Section of the State Bar of California.
(right) More serious balloon popping by the ever popular Charles Fincher of LawComix.com, who every so graciously lets me use these fabulous lawyer cartoons for free. Do support him by paying cold hard cash for a signed copy, or better yet, a custom-made print for your favorite partner, judge, client, administrator, legal assistant, or associate.
COURT UPHOLDS ARBITRATOR’S ABILITY TO USE “MULTIPLE INCREMENTAL OR SUCCESSIVE AWARD PROCESS” AS A MEANS OF FINALLY DECIDING ALL ISSUES
This case arose from a dispute between the sons of a decedent and his second wife over distribution of the estate. The dispute was arbitrated and the arbitrator issued an award on March 1, 2004 concerning most of the issues in controversy. Among other things, he ruled that the wife had a 75% interest in the decedent’s home and that the sons had a 25% interest, which should be distributed to them because the wife was still living in the home.. The arbitrator indicated that the home was valued at $575,000 based on a November 2003 appraisal which covered the home and some other assets. He ruled that the appraisal would be the basis for distribution “unless the trustee determines that changes will be needed…if…in light of new developments since [November 2003], a somewhat different distribution of assets would benefit the estate” and he offered to work with the trustee to ”review any questions he may have concerning the orders and findings made by the arbitrator”.
The wife died one week after the award was issued. The wife’s niece, her successor in interest, successfully moved to confirm the award and that decision was affirmed on appeal in an unpublished decision. While the appeal was pending, the trustee petitioned the arbitrator for instructions on several issues, including whether to value the home as of the time of the award or as of the time of the distribution of the estate assets. In October 2005, the arbitrator issued a second award in which he, inter alia, valued the home at $1,050,000. Because this would lead to a larger distribution to the sons, the wife’s niece opposed confirmation of the award on the ground that this was a correction or amendment of the original award and thus beyond the arbitrator’s power because it occurred long after the time allowed to correct or amend.
The trial court confirmed the award, the niece appealed, and the Court of Appeal affirmed. It ruled that the arbitrator, by allowing for an opportunity by the trustee to amend the valuation, plainly left the matter of the value of the home up for future consideration if the trustee determined that changes were needed.
Note: It can sometimes be difficult for a party to discern whether an arbitrator is correcting an award, amending it, or issuing an incremental or successive award and that is what happened in this case. Code of Civil Procedure 1284 provides that a party must apply to the arbitrator for correction of an award no later than ten days after service of a signed copy of the award on the applicant, other parties must object within ten days after the application is delivered or mailed to them, and the arbitrator must issue any corrected award not later than thirty days after service of a signed copy of the award on the applicant.
But, in Delaney v. Dahl, 99 Cal App 4th 647, 659 (2002), the Court of Appeal held that an arbitrator may amend the award at any time prior to confirmation of the award so long as the amendment is consistent with other findings on the merits of the controversy and does not cause demonstrable prejudice to the interests of a party. And in Hightower v Superior Court, 86 Cal App 4th 1415, 1431 (2001), the Court of Appeal affirmed an arbitrator’s ability to use “a multiple incremental or successive award process as a means, in an appropriate case, of finally deciding all submitted issues”.
The year's must-read California Litigation Journal article is Justice Ignazio Ruvolo's "It's Time to Re-examine the State of Civil Litigation in California." You have to be a member to read the issue on-line (here Crisis in the Courts?) but if you're not, find a friend who is and steal her copy.
Justice Ruvolo begins his concise history of the state of California's courts by suggesting that "if your bar number has fewer than six digits, then you doubtlessly witnessed firsthand the crisis that was the progenitor of the current state of civil litigation in California."
He not only proceeds to swiftly chronicle the way we got to mega-firms, six-figure first year associate salaries, and partner-free-agency, but also to question whether the Courts are doing the public a disservice by continuing to provide ADR services. A few thought-provoking excerpts below:
If the courts intend to stay in the ADR business for all time, some complain that they are not now competing with private ADR very successfully. One reason for this non-competitiveness is inadequate funding . . . . [C]ourts cannot afford to provide uniform training for mediators or to pay for mediation services and must rely on voluntary panels which compete with fee-generating private ADR for the time of neutrals. Some believe that the courts must necessarily impose a level of procedural uniformity for court-sponsored ADR that is inimical to the creativity and flexibility that is at the heart of successful mediation.
Of perhaps greater concern is the growing view that ADR-related activities by the trial courts are diverting money and resources away from the judiciary's core role: that of providing adjudicative processes to litigants . . .
Since ADR has truly become part of the legal system's culture, perhaps then the courts could safely leave ADR largely to the private sector. If the judiciary limits its role in ADR it will have the associated benefit of freeing judicial resources needed to shore up the court's adjudicative services. Case management, as it relates to ADR, might focus on locating those cases in the civil justice system that are suited for non-traditional resolution but which lack the financial resources to employ ADR. These are the cases that should be the beneficiaries of court-sponsored ADR.
This is taken straight from the Met News. I will read this case and provide my analysis at the beginning of the coming week.
Where it was discovered after arbitration that the judge who granted order compelling arbitration had, prior to granting such order, engaged in discussions concerning possible employment as a dispute resolution neutral, it was proper to disqualify judge who granted the order compelling arbitration and vacate that order, but it was premature to vacate arbitration award. Where order compelling arbitration is void because judge was disqualified from granting it but is not set aside until after arbitration is concluded, award may stand if newly assigned judge makes a de novo determination that the parties were contractually bound to arbitrate, that acts of disqualified judge did not taint the arbitration, and that no other grounds exist to vacate the award.
To make a successful duress defense the proponent must establish that a wrongful threat by the adverse party deprived the proponent of free choice, resulting in an unfair agreement benefiting the adverse party. As with other contractual defenses, the standard is quite difficult to meet in a mediation context. A mediation party was successful in claiming duress in only one of the thirty-six opinions [reported during the prior five year period].
That as many as seven of the thirty-six cases reviewed were directed at alleged mediator coercion is troubling, particularly in light of Magistrate Brazil's opinion in Olam v. Congress Mortgage Co. * which makes pursuing any claim of duress or undue influence seem a foolhardy mission. As Coben and Thompson note, although the plaintiff in Olam
was sixty-five years old, suffered from high blood pressure, headaches and abdominal pains, and testified that she was in pain, weak and dizzy, and that she was pressured by her lawyer, the defendants and their counsel, the court found that this agreement obtained at 1:00 A.M. after fifteen hours of mediation was not obtained by undue influence.
Coben and Thompson revisited the issue of duress under the rubric of mediator misconduct, citing ten opinions where a party charged the mediator with exerting undue pressure to obtain agreement. Most of these charges will look familiar to lawyers, who might ask themselves what they look like to the man or woman on the street:
the gist of the complaint in several cases was the mediator's recitation of a list of "horribles" that the parties would suffer if they did not settle and had to experience the dreaded civil trial (called "reality-testing" by the authors)
one claim was based upon the alleged coercive statement by the mediator that if the party "didn't sign the agreement [he] would ruin [the mediator's] record of being always able to settle the case."
another claim (this one successful) was based upon the mediator's alleged threat "to tell the judge that she was the cause of the settlement failure, speculat[ion] that the court would rule against her, and [pr]offered opinions about the potential legal costs[, as well as] how refusing to settle would affect her pensions.
We are bound to see more claims of mediator misconduct, duress and coercion. The problem is clear. We'll discuss potential solutions in future posts.
* Note that the District Court's order requiring the mediator to testify would likely not stand up under the current law in California. See In re Marriage of Kieturakis (2006) 138 Cal.App.4th 56.
PANAMA CITY, Florida — The millionaire founder of the Girls Gone Wild video empire was charged with bribing a jail guard for a bottle of water and having prescription sleeping pills in his cell, authorities said.
When he learned of the new charges Thursday, Joe Francis waived his right to a bond hearing for the contempt of court charge that had led to his being jailed. Francis cried as his mother blew him a kiss while he was led from a federal court room back to his cell.
"I didn't do anything," he told his parents as he was led away, The News Herald of Panama City reported.
Francis, 34, makes an estimated $29 million a year from the "Girls Gone Wild" videos, which show young women exposing their breasts and being shown in other sexually provocative situations.
On Thursday, he was charged with bribing a public servant, three counts of possessing a controlled substance and five counts of introducing contraband -- cash and drugs -- into a detention facility. The charges are third-degree felonies punishable by up to five years in prison.
Francis offered a jail guard $100 for a bottled water Wednesday evening, court records said. When the guard refused, Francis showed him $500, investigators said. Inmates are not allowed to have cash in the jail.
The president of Mantra Films Inc., which produces the "Girls Gone Wild" videos, was arrested Thursday for supplying Francis with the pills and cash, Bay County Sheriff's Office spokeswoman Ruth Sasser said. Scott Barbour was charged with introduction of contraband into a detention facility. He was scheduled to have a first appearance Friday.
Appellate opinions concerning the enforceability of mediated settlement agreements are coming fast and furious.
If you haven't prepared your form term sheets and memoranda of understanding by now, you might end up litigating the settlement whose purpose it was to stop the litigation.
Oh the irony!
Today's case Irvine v. Regents of University of California (4th Dist. 2007) was decided on a narrow procedural ground, leaving at large the questions of fraud, duress and mistake alleged by the Plaintiff as a bar to enforcement of her mediated settlement agreement.
The narrow issue here was whether a party could be excused from meeting the deadlines imposed by California Rule of Court 3.1385 simply by asserting that the challegned settlement agreement was uneforceable.
The Irvine Court, reversing the trial court's Rule 3.1385 dismissal, answered the question in the affirmative, explaining:
The only decision before the court at a rule 3.1385 hearing is whether to dismiss the case or restore it to the civil active list. By alleging a dispute over whether the parties reached a binding settlement, plaintiff demonstrated good cause to restore the case to the civil active list. In reaching this conclusion, we have not considered whether any of plaintiff's contentions have merit.
If you want your agreements to be durable take the time to read the case law, check the statutory provisions and, yes, even read the Rules, like 3.1385 here, which requires that an action be dismissed within 45 days after the Court receives notice of settlement unless good cause is shown why the case should not be dismissed.
In October of last year, defendant Joe (Girls Gone Wild) Francis was ordered to private mediation in a Florida civil action. That mediation, to say the least, went badly.
Florida's mediation confidentiality protections apparently include an exception for threats of physical violence. It was this exception upon which Plaintiffs relied in telling the following tale out of mediation "school."
Francis [arrived at the mediation] wearing sweat shorts, a backwards baseball cap, and was barefoot. He was playing [with an] electronic device. As [plaintiffs' counsel] began his presentation, Francis put his bare, dirty feet up on the table, facing plaintiffs' counsel.
[Plaintiffs' counsel] said four words, "Plaintiffs were minor girls," when Francis barked, "are the girls minors now?" Continuing, [Plaintiffs' counsel] said, "plaintiffs are minor girls who were severely harmed by Defendant."
Francis then erupted. "Don't expect to get a fucking dime -- not one fucking dime!" This was Francis' mantra which he repeated, about fifteen times, during his tantrum that ensued. "I hold the purse strings. I will not settle this case, at all. I am only here because the court is making me be here!"
As plaintiffs' attorneys were leaving, Francis' threats escalated. "We will bury you and your clients!" Francis threatened. As [Plaintiffs' counsel] walk[ed] out of the room, Francis got up and faced off with [him] . . . bark[ing], "I'm going to ruin you, your clients, and all of your ambulance chasing partners!"
Francis' aggressive move and threats to "bury" and "ruin" [Plaintiffs' counsel] were clearly an assault . . . intended to . . . prevent the mediation from ever beginning. As a result of Francis' assault . . . no mediation as to Francis as an individual defendant ever occurred.
Francis then made the only offer he was to make that day. "Suck my dick," Francis shouted repeatedly, as plaintiffs' counsel left the mediation room.
Plaintiffs sought an order from the court requiring Francis to behave civilly and pay sanctions.
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.
Yesterday's ruling in Levitz v. the Warlocks is important to practitioners primarily as a reminder that an "agreement in principle" may not be an agreement at all; and, if the parties do reach a "conditional settlement" whose terms won't be performed within 45 days after agreement is reached:
they must file a notice of conditional settlement with the Court;
the notice must specify the date by which dismissal is to be filed; and,
the plaintiff must serve and file a request for dismissal within 45 days after the date that the notice specifies for performance.
If the plaintiff does not file the required request for dismissal within the 45 day period, the Court "must dismiss the entire case unless good cause is shown why the case should not be dismissed.” Id. citing Cal. Rules of Court, rule 225(c) -- now Rule 3.185.
We do not expect to see many cases similar to Levitz where both plaintiff and defendants sought to re-schedule the matter for trial after they failed to reach an agreement "relating to complex rights relating to royalties and publishing in the music business," despite everyone's best efforts to do so.
The lesson here is more for judges than for lawyers. The record (detailed in the extended entry below) chronicles the events causing the trial court's justifiable frustration with predictions by counsel that settlement was "only a day away."
Nevertheless, the Court of Appeal stressed that the trial court is not authorized by any Rule of Court or other authority, to dismiss an action as a sanction for the parties' failure to explain why their settlement negotiations failed to bear fruit.
The appellate court explained its reversal of the trial court's dismissal as follows:
In their first communication with the court about their tentative settlement, the parties notified it they had a settlement “in principle,” meaning they had yet to fix its exact terms. A settlement with open material terms is not a “conditional settlement” [and therefore not subject to Rule 225 - now 3.185].
To the contrary, it is not a settlement at all because, like all contracts, it is not binding until the settling parties agree on all its material terms. (citation omitted). . . . A “conditional settlement” . . . involves a complete meeting of the minds but with some portion of it requiring more than 45 days for its performance.
Because the parties never entered into a binding settlement, rule 225 [now 3.185] did not apply. The court thus acted beyond its authority when it relied on [that rule] and we therefore reverse the dismissal and order the action’s reinstatement. "
Id. (emphasis added).
The appellate court concludes its opinion by warning that a dismissal could never be ordered as a sanction against both parties because it harms only one -- the plaintiff.
For the full text of the case, see Levitz v. The Warlocks - 2007 SOS 1195 and for the case chronology leading to the trial court's decision, see the extended entry below.
Want to know what the jury might think of your case? Here, courtesy of Blawg Review # 99 and several other linked connections, is the day-by-day journal of Juror #9 in the Scooter Libby Trial.
Here's a taste of the daily journal, beginning with the first day of deliberations.
"This is a case about memory, about recollections and about words." We've heard from the fighting Irishman and weeping Wells, a gaggle of Pulitzer Prize winners, and some of the best and brightest from the CIA, State Department, FBI and office of the Vice President. The Honorable Reggie Walton has just provided us final instructions.
Deliberations in the case of the United States vs. I. Lewis "Scooter" Libby in District Court for the District of Columbia are ready to commence, when one of the jurors offers an unsolicited statement regarding the solemn task before us.
The New York Times Sunday Magazine cover story this coming week -- The Brain on the Stand -- covers a lot of territory on the use (and potential abuse) of neuroscience in the legal system.
While the scientists debate whether knowledge gleaned from sophisticated brain imagery demonstrates that our brain activity controls our behavior or simply reflects it, those of us concerned with decision making have much to learn from it.
Because my work is pretty much exclusively devoted to finding mutually beneficial resolutions to hotly contested litigation, neuroscience insights into how and why we make decisions -- and how we might make them better -- have been invaluable in my practice.
In this article, author Jeffrey Rosen describes the results of one neuroscientific experiment suggesting that dampening our emotionalreactions to the regretably common "insulting first offer" might keep us in the negotiation process long enough to let our more rational responses prevail.
'A remarkable technique called transcranial magnetic stimulation, for example, has been used to stimulate or inhibit specific regions of the brain. It can temporarily alter how we think and feel.
But subjects whose right prefrontal cortexes were suppressed by T.M.S. tended to accept the $4 offer. Although the offer still struck them as insulting, they were able to suppress their indignation and to pursue the selfishly rational conclusion that a low offer is better than nothing.
I do not cite this research to suggest that we should be satisfied with "insulting and unfair" proposals. I cite it only for the thoughtful consideration of litigants and business people everywhere.
It is perfectly 'rational" to respond to an insulting offer by rejecting it. Being alert to our tendency to allow emotions to reign in response might give us the breathing room we need to calm our clients and continue to pursue a settlement negotiations that could well lead to resolutions that are neither insulting nor unfair.
The article is invaluable reading for anyone wanting to answer the question -- what in the world could the other side be thinking? A question that can only be answered when the parties sit down together with a commitment to seeing the negotiation through.
And if you're not already on speaking terms with your amygdala, click here for a fuller (lay) explanation of its effect on decision making.
A California appeals court has opened the door to the enforcement of pre-dispute arbitration agreements between attorneys and their clients, ruling that once a client waives the right to non-binding arbitration under the state’s Mandatory Fee Arbitration Act, a court may compel binding arbitration based on the agreement of the parties.
California’s Second Appellate District rejected the notion that language in the MFAA requiring a post-dispute binding agreement to arbitrate bars enforcement of a pre-dispute binding arbitration agreement, ruling that the statutory language only prohibits enforcement of pre-dispute arbitration agreements governed by the MFAA ( Ervin, Cohen & Jessup, LLP v. Steven H. Kassel et al., No. 191761, 2/14/2007).
Remember the adage, what can go wrong, will go wrong?
We know we don't need to remind our readers of the perils of trial. And though we never advise our clients to make a bad business deal to extricate themselves from a lawsuit, we continue to recommend that they seek business solutions to business problems before throwing their fate to the winds of trials.
This morning we're commending to our readers' attention Canon's recent devastating trial loss, courtesy of Reuters.
When Canon was sued by a small, money-losing U.S. technology firm two years ago, the dispute was over a patent license that had cost the Japanese electronics giant a one-time payment of $5.6 million.
But now that the lawsuit has caused Canon to lose the license, a fresh agreement with Texas-based Nano-Proprietary could be worth millions of dollars more, lawyers said.
The court's decision (PDF) is a major setback and perhaps an embarrassment for Tokyo-based Canon, the third-biggest patent owner in the United States.
"It seems strange Canon managed to go all the way to trial and lose," said Peter Godwin, a Tokyo-based partner at law firm Herbert Smith. "Assuming they were advised they were at risk, you'd expect a company of the size of Canon to have reached a settlement before that."
Thanks to Blawgletter for reporting arbitration case law updates in Oregon with an eye for the literary as follows:
Striking down as unconscionable a ban on class actions in an "arbitration rider" to a loan agreement, the court in Vasquez-Lopez v. Beneficial Oregon, Inc., No. A125270 (Ore. Ct. App. Jan. 31, 2007), rejected the lender's argument that the ban favored neither side:
We are reminded of the observation by a character in an Anatole France novel that "the majestic equality of the laws * * * forbid[s] rich and poor alike to sleep under the bridges, to beg in the streets, and to steal their bread." Anatole France, The Red Lily, 95 (Winifred Stephens trans., Frederic Chapman Ed. 1894). Although the arbitration rider with majestic equality forbids lenders as well as borrowers from bringing class actions, the likelihood of the lender seeking to do so against its own customers is as likely as the rich seeking to sleep under bridges.
First, as a follow-up to our "Few Good Men" post yesterday (see screenplay here) we quote the quotable Mr. Sorkin again as an introduciton to the cross-examination question that launched a $246 million punitive damage award:
What possible good could come from putting Jessep on the stand?
He told Kendrick to order the Code Red.
He did?! Why didn't you say so!? That's qreat! And of course you have proof of that.
Ah, I keep forgetting: You were sick the day they taught law at law school.
You put him on the stand and you get it from him!
Yes. No problem. We get it from him.
Colonel, isn't it true that you ordered the Code Red on Santiago?
Look, we're all a little--
I'm sorry, your time's run out. What do we have for the losers, Judge? Well, for our defendants it's a lifetime at exotic Fort Levenworth. And for defense counsel Kaffee? That's right--It's-- A Court- Martial. Yes, Johnny, after falsely accusing a marine officer of conspiracy, Lt. Kaffee will have a long and prosperous career teaching typewriter maintenance at the Rocco Columbo School for Women. Thank you for playing "Should We or Should-We-Not Follow the Advice of the Galacticly Stupid".
It's hard being a trial lawyer. Very hard. So I'm not going to accuse the attorney who asked the question at the heart of the New York Times piece of being "galacticly stupid." Nor, however, am I going to charge the jury with being "inflamed by passion and prejudice." Maybe just inflamed by passion. Which is what we ask from juries, isn't it? That they get angry at injustice. With all due deliberation and based on the evidence. That they take a cold hard look at certain business practices, draw the conclusion that those practices caused the party before them to suffer unbearable injuries and then award as punitive damages an amount to "deter" that business practice.
And if the jury makes a mistake? Well, fortunately, we're only just beginning to ask that question about the more important decisions juries make every day -- whether to sentence men and women to lengthy prison sentences, or even to death, for causing injuries as severe as those suffered when products go bad.
With that, I give you the New York Times on the final question to the husband of the woman paralyzed when her Ford Explorer rolled over.
The witness was Barry Wilson, whose wife, Benetta, was paralyzed when her Ford Explorer rolled over. Mr. Wilson had cut back on his work hours to care for her. He showered her and catheterized her, and he woke several times each night to move her, to avoid bedsores.
Mr. Sonnett saw an opening, and he ended his examination with a flourish.
“The silver lining,” he said to Mr. Wilson, “to the extent that there could be one, it has brought you and Benetta and the family closer together?”
Mr. Wilson did not see the upside. “I don’t think it’s a benefit or a plus in any way,” he said.
It was the silver-lining question, an appeals court later ruled, that “may well have inflamed the passions of the jury.” In their lawsuit, the couple said Ford had made the Explorer dangerously prone to rolling over and then outfitted it with a weak roof. The jury agreed, hitting Ford twice. First, it awarded $123 million to compensate the Wilsons. Benetta Buell-Wilson had been an athletic graduate student, and now she lives in constant and increasing pain.
The lengthy cross-examination was written by the man who brought you The West Wing, Aaron Sorkin. Do not attempt this in a court of law without a screenwriter by your side.
And just in case you think you're uniquely insecure, the brilliant Mr. Sorkin, who added, "you can't handle the truth" to the small pantheon of justifiably immortal movie lines has this to say about the process of writing:
"I love writing but hate starting. The page is awfully white and it says, 'You may have fooled some of the people some of the time but those days are over, giftless. I'm not your agent and I'm not your mommy, I'm a white piece of paper, you wanna dance with me?' and I really, really don't. I'll go peaceable-like."
THE SET UP
KAFFEE Colonel, when you learned of Santiago's letter to the NIS, you had a meeting with your two senior officers, is that right?
KAFFEE The Executive Officer, Lt. Jonathan Kendrick, and the Company Commander, Captain Matthew Markinson.
KAFFEE Yes sir. Colonel, at the time of this meeting, you gave Lt. Kendrick an order, is that right?
JESSEP I told Kendrick to tell his men that Santiago wasn't to be touched.
KAFFEE And did you give an order to Captain Markinson as well?
JESSEP I ordered Markinscn to have Santiago transferred off the base immediately.
JESSEP I felt that his life might be in danger once word of the letter got out.
KAFFEE Grave danger?
JESSEP Is there another kind?
KAFFEE holds up a document from his table.
KAFFEE We have the transfer order that you and Markinson co-signed, ordering that Santiago be lifted on a flight leaving Guantanamo at six the next morning. Was that the first flight off the base?
JESSEP The six a.m. flight was the first flight off the base.
THE SEEMINGLY INNOCENT LINE OF QUESTIONING SET-UP
KAFFEE gets a document from his table.
KAFFEE (continuing) After Dawson and Downey's arrest on the night of the sixth, Santiago's barracks room was sealed off and its contents inventoried. (reading) Pairs of camouflage pants, 6 camouflage shirts, 2 pairs of boots, 1 pair of brown shoes, 1 pair of tennis shoes, 8 khaki tee- shirts, 2 belts, 1 sweater--
ROSS Please the Court, is there a question anywhere in our future?
I'm always a little surprised that parties to a pre-trial settlement conference or mediation have any expectation that they might be able to resolve a dispute of years standing in half a day, or even a single day. That they often do settle their differences in so short a time is pretty amazing when you consider the time and effort (and resulting polarization) that have gone into the litigation of that dispute.
Mediators and settlement judges often feel as if they're fighting the clock because the parties are impatient with the process and primed to storm out of the room if they feel the other side is not negotiating in "good faith."
Attorneys often cynically say that all we mediators do is "keep the parties in the room." I'm certain I won't be the first to acknowledge that this task is not only one of our main objectives, sometimes it's the toughest work we will do that day, making creative problem solving; "expanding the distributive bargaining pie," reality testing and re-framing the parties' options seem like child's play.
From the mediator's seat, I have one modest request for counsel and their clients -- have a little patience with the process.
More often than not, the business people need time to digest new insights, reassess their positions and perhaps even check their books and records again before making a sound business decision. None of us do the rest of us a favor by demanding that people make hard decisions under the pressure of time.
Remember that readiness to make a business decision is as emotional as any other major life decision. I have seen some business people take a day or two to mourn their losses before they are ready to accept them.
I have also seen actual tears well up in the eyes of the most hardened businessmen when they realize that trial will not save them -- that a "just outcome" (i.e."I will prevail at trial and recover all of my losses") is as unlikely as winning the lottery. This is the false promise of litigation. It keeps alive the parties' hope that they will be completely vindicated and their adversaries punished at trial.
Although all competitive business people, trial lawyers and commercial litigators have their Conan the Barbarian moments, the "pleasure" of victory -- as voiced here by California Governor Schwarzenegger -- remains a greater fantasy than the one about a body-builder from Austria ascending to high political office in the United States.
Anything's possible. But consider the likelihoods.
It's not your father's copyright law anymore . . . .
To get some sense of the upcoming legal battle and commercial strategizing, see the Online Wall Street Journal article in late '05 on Harper Collins' plans to digitize its own books here and Stanford Professor Larry Lessig's deeper legal thoughts here.
We love google. We can't help ourselves. We're temporarily trusting that it will "do no evil" just because we can't wait to see what they do next.
We have no idea what in the world is depicted in the image accompanying this post. We just liked the way it looked with Google's Moon Shot.
The Cost of a Thing is the Amount of Life Which is Required to Be
Exchanged for It, Now or in the Long Run -- Part One
When a decision-maker says, “it’s only about money,” he means that the choice to be made is purely rational and that strong emotions – feelings – will play no role in the analytic process to follow. When lawyers say a case is “only about money,” they are not only saying that emotional factors will not influence their decisions. They are often also saying that Plaintiffs’ expressions of injustice are insincere – otherwise they would not accept money in exchange for losses that cannot be reduced to monetary value such as the loss of life or emotional suffering.
Whenever any of us attempt to arrive at a monetary value for anything we buy, barter or exchange, we, like the lawyers and decision-makers above, are engaged in the process of commensuration in which qualities are transformed into quantities. In the case of a legal conflict, commensuration takes place not only in reducing physical and emotional loss into monetary values, but also by contracting the conflict itself into certain rigid categories of redressable wrongs we call “causes of action.” In both cases, the texture, context and idiosyncratic particularities of a conflict are reduced to a common metric of an actionable claim compensable in monetary damages. 
While the process of commensuration allows us to more easily grasp, represent and compare differences in an effort to “manage uncertainty, impose control, and secure legitimacy,”  we often thereby give up our recourse to “[e]veryday experience, practical reasoning, and empathic identification, [all of which] become increasingly irrelevant bases for judgment.  In simplifying matters for ease of analysis, we inevitably strip away context, ignore differences, and reduce the “relevant” facts to categories that reproduce past experience for the purpose of equating the thing to be valued with a supposedly objective metric. 
Setting the personal relational and historical account of the conflict aside, lawyers seek from their clients only those facts that will satisfy the “elements” of causes of action for negligence or other breaches of society’s civil legal standards, after which a judge or jury will be asked to value the loss suffered in the form of monetary damages .
 Henry David Thoreau, WALDEN at 44.
 Stevens, Mitchell and Espeland, Wendy Nelson, COMMENSURATION AS A SOCIAL PROCESS (1998)24 Annual Review of Sociology 313-43.
font size="2"> Id.
Id.; see also Even, William E. and Macpherson, David A. THE WAGE AND EMPLOYMENT DYNAMICS OF MINIMUM WAGE WORKERS (2003) 69 Southern Economic Journal 676 for examples of the way in which the profound differences in the labor we perform and the products that labor produce are abstracted and reduced to “manageable” categories for the purpose of determining the minimum acceptable wage that our fellows should be required to accept. A quick review of census and other statistical employment data reveals that the identical minimum wage is generally paid to the college student who passes your bag of burgers through McDonald’s take out window; the middle-aged mother of three who changes your sheets and linens at the local Holiday Inn; the retired high school chemistry teacher who tends to the needs of your elderly father at the local assisted living facility; the young actor bagging your groceries at the Bristol Farms; the Viet Nam veteran flipping burgers at an all-night Dennys; the night watchman guarding your downtown office building; the seamstress who embroiders designs on the back pockets of your $200 jeans; and, the cashier calculating the cost a 5,000 mile tune-up for your new BMW.
The Supreme Court has defined the issue before it in Simmons v. Ghaderi after its December 20, 2006, grant of review as follows:
This case presents the following issue: In an action to determine whether a valid oral settlement agreement was formed during mediation, was one party estopped to claim confidentiality for the mediation proceedings (Evid. Code, sections 1115-1124) because she had voluntarily declared the facts to be true, stipulated that she did not dispute them, submitted evidence of them, and litigated their effect for more than a year?
See our own previous commentary on this case here, here and here.
The California Court of Appeal for the Fourth District held in Jeld-Wen v. Superior Court today that parties may not be ordered to attend and pay for the private mediation of complex litigation.
After a thorough review of the law applicable to the appointment (and pay) of referees for the purpose of settlement conferences and discovery disputes, the Fourth District held
While trial courts may try to cajole the parties in complex actions into stipulating to private mediation (see Super. Ct. San Diego County, Local Rules, rule 2.3.7), they cannot be forced or coerced over the threat of sanctions into attending and paying for private mediation as this is antithetical to the entire concept of mediation. In any event, we suspect that in a large majority of complex cases most parties will agree to private mediation; as such, we foresee no apocalyptic consequences from this decision.
The case is worth reading for its coverage of the differences between mandatory settlement conferences and mediation, as well as the scope of the Court's authority to require the parties to pay a retired judge or mediator for the proceedings.
Most attorneys do not like to begin their mediated negotiations with a joint session and neither do many mediators. The reason most often given is everyone's desire to avoid a polarizing set of zealously adversarial presentations.
Work done by our neighborhood neuroscientists, however, suggests that avoiding joint sessions may deprive us of the "small talk" necessary to put the parties into a collaborative, even generous mood.
Recent research confirms that the miserly not only spend more time thinking about money than their more generous peers, they are also more socially withdrawn. Although Dickens nailed the personality type on the head when he created the friendless and miserly Scrooge, it seems that all of us are anti-social and penny-pinching when focusing primarily upon money.
The confirming research? Recruiting the usual cadre of beleaguered undergraduates, scientists at the University of Minnesota found that when students have their minds on money, they tend to be both selfish and withdrawn. Those who were "primed" by money imagery before being asked to engage in (or imagine) solitary, group or "helping" activities
waited nearly 70% longer to seek help than those who[se attention was not directed to money]; spent only half as much time . . . assisting other[s] . . . [and] preferred working alone even if sharing the task with a co-worker resulted in substantially less work.
The young people whose attention was focused on money also
chose solitary leisure activities . . . preferring a private cooking lesson, for instance, over a dinner for four [and] when asked to set up two chairs for a get-to-know-you chat with another volunteer, . . . placed the chairs further apart than subjects [whose attention had been directed to non-monetary themes].
These findings, concluded the researchers, suggest that thinking of money puts people in a frame of mind in which they don’t want to depend on others and don’t want others to depend on them. (see Thinking About Money from Neuromarketing here).
I was thinking immodestly about what a great deal my own mediation fees were the other day. A deposition transcript alone, I was thinking, must cost only a little less than my half day fee. Casting about the internet for a good source on the cost of a deposition, I ran across attorney-mediator Thomas A. Cohen's article, Anatomy of a Lawsuit, which he has graciously given me permission to re-print for you here.
Even the most savvy business executive could benefit from reading this step-by-step guide to the great American pass time, litigation.
ANATOMY OF A LAWSUIT
by Thomas A. Cohen
So. You want your piece of the American dream. You want to do the dance sensation that is sweeping the nation. You want your ship to come in. In short, you want to file a lawsuit. Here’s what you can expect: the steps involved, the costs, and the likely result.
We will assume that you have cleared the first hurdles: you are aggrieved; the law can furnish relief; and there appears to be some reasonable chance of winning and collecting the judgment. We will also assume that you can assert jurisdiction over the defendant in either State or Federal court.
A lawsuit begins when your attorney drafts a complaint. This is a written pleading which identifies the legal and factual contentions involved, and sets forth what a party proposes to prove at trial so that his opponent will know what contentions he must be prepared to meet. The complexity of the complaint varies with the complexity of the issues to be tried. At the simplest level, certain disputes are so run of the mill that a Judicial Council form complaint may be filled out by checking certain boxes and filling in a few sentences of narrative. For example, a form complaint may be used for the collection of a written promissory note. In contrast, a class action alleging that Hollywood studios have conspired to deprive writers of profits from feature films (an actual pending suit) requires significant detail covering many pages.
The complaint is filed with the court and then served with a summons on the defendant. The filing fee in California Superior Court is $185; in federal court it is $120. The summons and complaint generally must be served by personal delivery to the defendant. Simple local service of process costs from $25 to $50. A summons is a one page form which is completed and signed by the attorney, and filed with the court. When properly served, it requires the defendant to file a written response within a given number of days. In California a defendant has 30 days to file a written response. Failure to file a response results in a default judgment against the defendant. If unchallenged, this default judgment is as valid as a jury verdict. Thus, the penalty for failing to respond to a lawsuit can be severe, and it is the rare solvent defendant who ignores a properly served complaint.
Generally, a defendant responds to a complaint with a pleading called an answer. This document, which must be filed with the court, can often be very simple. While not available in all cases, a general denial of all allegations will often suffice. Each defendant must pay a filing fee in the same amount as the plaintiff’s fee. The defendant is not limited to filing an answer. Instead, or in addition, he may file a motion to dismiss/demurrer, or a cross complaint/counterclaim. Different terms are used in state and federal court, but the essence of the pleading is the same.