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TBA Dispute Resolution Section
December 2002 Newsletter
The Newsletter for Conflict Resolution Neutrals and Attorneys
Published by the Dispute Resolution Section of the Tennessee Bar Association
NOTE: Unless otherwise noted, this Newsletter may be freely redistributed. We request an acknowledgement that "This Newsletter [Article] was previously published in the Dispute Resolution Section's [Month and Year of Publication] Newsletter. Reprinted with permission of the Tennessee Bar Association." Contributions of articles, comments, and suggestions are solicited.
In this issue
• Review: How ADR Works – A New Treatise from BNA
• Mediator Testifies in Motion to Enforce Mediation Settlement Agreement, Tennessee Court of Appeals Affirms Enforceability
• Rutgers Publishes On-Line ADR Journal – two decisions
• Howsam v. Dean Witter Reynolds, U. S. Sup. Ct.
• Allstate v. Suarez, Fla. Sup. Ct.
• Joe Manuel’s Latest On-Line CLE on UMA
• Newsweek Article Promotes Mediation
• Maryland Court Addresses Award of Arbitration Fees and Expenses and Attorney’s Fees in Employment Case
• ADRWorld Reports: 7th Circuit Refuses New Cause of Action Against Arbitration Providers
• ABA Section of Dispute Resolution’s Annual Spring Conference
HOW ADR WORKS
BNA Books has just published How ADR Works, a treatise sponsored by the ABA Section of Labor and Employment Law, and edited by Norman Brand. With contributions from some of the leading employment and labor law arbitrators and mediators and advocates in the country, this book should be in the law libraries and the contents in the minds of those who represent clients that are or might be involved in employment and labor law cases. It is also essential reading for neutrals that wish to practice, or to improve their practice in such cases. I’ve provided ordering information at the end of this article. A 15% percent discount is available if you order from BNA’s website.
One of the principal values of this book is that its articles are not rehashes of received wisdom, but rather thoughtful pieces that will expand the pie for advocates and neutrals alike.
Here’s a summary of the contents, along with some of my comments:
I. How Advocates Start the Process – including chapters on informing the client of ADR options (now required in several jurisdictions and advisable in others), counseling potential claimants and defendants, and notes by Editor Brand on arbitrator and mediator ethics and on the economics of pre-dispute employment arbitration agreements, including advice to plaintiff’s and defendant’s lawyers on the factors to consider in evaluating arbitration agreements and using mediation where there are such agreements. In his thoughtful piece on counseling potential claimants, Paul Tobias estimates that half of all plaintiffs who go to trial do so against the recommendation of their lawyer.
II. Mediation. This Part includes chapters by several authors on how mediators operate, and Brand’s note on choosing a mediator.
It also includes chapters on how mediators view their role. While I felt that there was a bit too much emphasis on "caucusing" – I prefer to use the term "private session" – there are some valuable insights into what to do during the caucus to help your client, and, from the perspective of the mediator, to help the parties to resolve the problem. Near and dear to me is Brand’s final note on What You Can Learn from Mediators, especially the item on Pages 263-265: Do You Really Need a Mediator? He points out four practices that mediators use that counsel could adapt to help them increase the chances of settling their cases without using a mediator. I would have liked to see a footnote referring to Prof. Baruch-Bush’s article, "What Do We Need a Mediator For?": Mediation’s ‘Value-Added’ for Negotiators, 12 Ohio St. J. on Disp. Resol. 1 (1996).
The third section of Part II on Mediation provides insights into how advocates prepare themselves and their clients, whether plaintiffs, defendants, or union lawyers, for mediation. A key piece of advice to plaintiffs’ lawyers is not to put out "a large round number" to corporate defendants, not least because it may create unreasonable expectancies on the part of the plaintiff. I recall a case that settled quickly because the plaintiff’s attorney had prepared the client by providing him with a reasonable range of probable outcome. I recall another case where the attorney failed to do so, and the mediation nearly failed because the attorney wanted to win at all costs. The client’s revised expectancies prevailed because he wanted to end the dispute, but you can imagine his unhappiness with his attorney. In his concluding note, Brand makes the point that mediation is not about winning, but about ending a dispute.
The next section provides perspectives on advocacy in mediation, and this is first-class advice. Randolph Freking writes about how to advocate to/educate the client, opposing counsel, and the mediator. Paul McDonough’s defense attorney perspective addresses how to deal with opening statements, both plaintiff’s and defendant’s. His picture of the out-of-control plaintiff’s attorney or plaintiff is sometimes realistic, and provides some justification for Lew Conner’s practice of not allowing joint session openings. My general practice, unless I know in advance what might occur to terminate the mediation before it really begins, is to use joint session openings. McDonough also provides considerations in formulating settlement proposals. Brand’s summing up note includes information on the mediator’s tools for helping to quantify the value of settlement. He uses "risk-adjusted present value." I like Cooley’s fair settlement value formula, and I use range of probable outcome calculations to estimate the credible offer range. Whatever the technique, this is an important consideration, and I endorse Brand’s caution: Have the mediator, not the plaintiff, bring up the litigation costs-to-go factor.
The final section on mediation talks about mediating class actions from plaintiff’s attorney, management attorney, and mediator perspectives. Since I don’t have experience in mediating class action cases, I am not able to comment on this material. However, it appears to me to be essential reading for both first-time and experienced class action mediators and attorneys.
III. Arbitration. This Part includes five sections as well.
First, a retired judge writes about employment arbitration. While his material includes California-specific matters, he provides sound advice, e. g., on handling motions in limine and items to cover in a prehearing conference. Another writes about labor arbitration. I was particularly interested in his discussion of his approach to burden of proof and standard of proof issues. Brand sums up with a discussion of the trend toward judicializing arbitration, and the California developments that may ultimately impact other states as well.
In the second section, How Arbitrators Decide Cases, two arbitrators provide their views. One describes the biases that he feels are always present, and how to test them against the objective facts. This is important reading for the advocate. Brand wraps up with a note on choosing an arbitrator.
The third section shows how arbitrators run their hearings and what they expect from counsel for the parties. Again, Brand captures it all with a concluding note on streamlining the process. He writes: "Arbitrators sell curable ignorance."
The fourth section provides advice on preparing for arbitration, again from plaintiff’s, defendant’s and union lawyer’s perspectives. An advocate could prepare a valuable checklist from this material.
The final section provides some 75 pages on representing the client in arbitration.
At this point, the reader has read about 800 pages of thoughtful, candid, and useful advice. A recommendation: Do not skim a chapter because it is written by a defense attorney and you are a plaintiff’s attorney, or because it’s written by a union lawyer. You will gain something from each chapter.
IV. Drafting Issues
This Part includes two sections, one on drafting ADR Programs and Agreements and the other on drafting settlement agreements. James Adler cautions management against "being a pig" and shows how to achieve fairness in a company’s ADR program. Evan Spelfogel provides checklists for drafting ADR agreements in employment applications and in employee handbooks and forms for pre-and post-dispute ADR agreements. Both chapters are reasonably current on the case law that has resulted in certain predispute agreements being found unenforceable. Wayne Outten provides a plaintiff lawyer’s view on drafting settlement agreements. I believe that this chapter is mistitled. In this chapter he writes about how an employee’s attorney should negotiate and draft predispute arrangements in employment contracts, since they do not normally have input into the predispute agreements applicable to employees at will. This information really helps only in the sense of creating the groundwork for good settlement agreements. Incidentally, you may remember – or can access on the TBA website – "Outten’s Admonitions or Top Ten Ways for Employers to Avoid Lawsuits" – in the March 2002 issue of this newsletter.
Two chapters follow, one suggesting innovative ADR provisions in collective bargaining agreements. Julius Mel Reich writes a cautionary chapter, "Should Unions Risk Breaching Their Duty of Fair Representation by Agreeing That Members Must Arbitrate Statutory Claims Against Employers?"
Then Lewis Maltby provides a reasoned response, based in part on data from the AAA study and on data from his Columbia study, to those who maintain that resolving employment disputes by arbitration is second-class justice for employees. One reason why it’s not is the infrequency of summary judgment in arbitration as contrasted with the fairly frequent granting of summary judgment in court actions. His data shows that employees received 45% of aggregate demand in arbitration as contrasted with 7 _ % in litigation. His well-taken point is not to force arbitration unfairly, but rather to shape arbitration in the interests of justice rather than condemning it outright.
In the second section of Part IV, we find Outten’s other article, correctly titled: Negotiating and Drafting Settlement Agreements: The Perspective of Employees’ Counsel. He also addresses the special issues of severance agreements. Darrell Gay provides the defense/management view. Rather than present canned terms, he provides for each clause a checklist of what the clause should include, and sample clauses.
V. The final 100 or so pages provides appendices with sample forms, including a sample letter preparing a client for mediation, and a sample form agreement for employer-initiated dispute resolution plans. While valuable, I believe the appendices could be strengthened by drawing more directly on the contents of the preceding articles.
How ADR Works (1,166 pages, Order #1253, $155 plus tax, shipping, and handling) from BNA Books, P. O. Box 7814, Edison, NJ 08818-7814, telephone orders 1-800-960-1220, fax orders 1-732-346-1624, or e-mail to books@bna.com. The online catalog is at www.bnabooks.com. NOTE: A 15% discount is available when ordering from the website.
Mediator Testifies in Motion to Enforce Mediation Settlement Agreement, Tennessee Court of Appeals Affirms Enforceability
In Persada v. Persada, No. E2002-00397-COA-R3-CV, the Tennessee Court of Appeals (Eastern District), on November 22, 2003 affirmed a trial court decision enforcing a divorcing couple’s mediation settlement agreement based in part on testimony of the mediator at an evidentiary hearing of wife’s motion to enforce the agreement. The agreement stated that the wife would quitclaim her interest in real property and husband would pay her $60,000 within 30 days. The mediator, perhaps not a Rule 31 listed mediator, testified that agreement was not conditional upon husband’s being able to secure financing on the property, and that both parties seemed to fully understand and acquiesce in the agreement. After discussing Harbour v. Brown, 732 S. W. 2d 598 (Tenn. 1987) and its progeny – establishing the bright line rule that a court may not enter a consent judgment based on the agreement of the parties when one of the parties has objected on the grounds that she does not agree prior to the entry of judgment. On the other hand, "this Court has consistently applied the terms of contract law to determine whether a judgment may be entered in the case, based upon the agreement."
While the trial court could not enter a consent judgment, it could, in the interests of judicial economy, elect to determine the validity of the mediated agreement.
For full text go to: http://www.tsc.state.tn.us/ click on court opinions, Court of Appeals, fourth quarter 2002 and scroll down to Persada v. Persada, and click on View.
Rutgers Publishes On-Line ADR Journal
The first issue can be found at http://pegasus.rutgers.edu/~rcrlj. Contents include:
• Howsam v. Dean Witter Reynolds, Inc., the recent U. S. Supreme Court case (12/10/02) that held that the statute of limitations issue was for the NASD arbitrator to decide. Paul Lurie from Bill Kammer also brought this to our attention.
Full text is at: http://supct.law.cornell.edu/supct/html/01-800.ZS.html.
• Allstate Insurance Company v. Suarez. Full text at:
http://www.flcourts.org/sct/sctdocs/ops/sc01-1459.pdf. The Florida Supreme Court ruled that when an insurance contract is unambiguous, it must be followed as written. The Court found that the insurance contract between Allstate and Suarez, covering Suarez for damages incurred by Hurricane Andrew, was unambiguous and called for an informal appraisal proceeding, thus Allstate’s request for use of a formal arbitration hearing was properly denied.
The Journal also includes articles of interest: An Examination of Arbitration Clauses in Consumer Contracts, The Implications of Recent Procedural Justice Research on the Evaluative-Facilitative Debate, and The Use of ADR to Resolve Intellectual Property Disputes.
Joe Manuel’s Latest On-Line CLE on UMA
TBA ADR Section member, Joe Manuel, has published his latest on-line CLE course entitled "Uniform Mediation Act." It is now available at http://www.tennbaru.com/Classrooms/Uniform/IntroUniform.htm. For information on CLE/CME credits, contact lriggs@lawyerslearn.com.
Newsweek Article Promotes Mediation
In its November 25th issue, see "My Turn: The Revolution You Won’t See on TV" by Jeff Rasley, an experienced trial lawyer, who says "it’s clear that the curtain is falling on the jury trial." He also tells how mediation has made life easier for him and his clients. Text at: http://stacks.msnbc.com/news/835994.asp.
Maryland Court Addresses Award of Arbitration Fees and Expenses and Attorney’s Fees in Employment Case
MCR Of America, Inc., D/B/A Mortgage Credit Reports, Inc. v. J. William Greene, In The Court Of Special Appeals Of Maryland, No. 1274, September Term, 2000, full text available at: http://www.courts.state.md.us/cgi-bin/indexlist.pl?court=cosa&year=2002&order=bycase&submit=Submit. The arbitrator in this case ordered the employee’s attorney to pay part of MCR’s attorney’s fees and of the arbitrator’s fees because of the attorney’s conduct during the hearing. The trial court found there was no contractual or statutory basis for awarding attorney’s fees, and the Court of Appeals affirmed. The appellate court also rejected the power of the arbitrator to sanction counsel for misconduct where she did not make explicit findings of fact on the issue.
7th Circuit Refuses New Cause of Action Against Arbitration Providers
ADRWorld reports on International Medical Group, Inc. vs. American Arbitration Association, No. 01-3270, a 7th Circuit case. It can be found at www.adrworld.com and also at http://caselaw.lp.findlaw.com/data2/circs/7th/013270p.pdf.
ABA Section of Dispute Resolution’s Annual Spring Conference
The ABA’s Spring Conference will be held in San Antonio March 20-22, 2003. It’s the Section’s 10th anniversary, and the title of the program is "Insight for Inspired Practice." See www.abanet.org/dispute for more information. Whatever you do, don’t miss the Buckhorn Saloon & Museum visit. When I was a boy in San Antonio, that was one of my favorite places to go. Of course, it was in its original location that long ago.
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If you have questions or need information about TBA's Dispute Resolution Section, you may contact: Lynn C. Pointer, Sections/Committees Coordinator, Tennessee Bar Association, 221 Fourth Avenue North. Suite 400, Nashville, TN 37219. Email: lpointer@tnbar.org
Phone: (615) 383-7421 and Fax: (615) 297-8058.
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