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Journal of Consumer Attorneys Associations for Southern California
As courtrooms disappear, Alternative Dispute Resolution moves front and center
Featured Authors:
ELEANOR BARR DA N I E L B E N - Z V I G R E G DAV I D D E R I N I N T E R V I E W: K E N N E T H F E I N B E R G BRUCE A. FRIEDMAN S A N DY G A G E JOAN B. KESSLER GAIL KILLEFER JEFFREY KRIVIS J O S E P H C . M A R KO W I T Z CAROLINE VINCENT M I C H A E L D. YO U N G
September 2013
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Contents Volume 40, Number 9, SEPTEMBER 2013
Editor-in-Chief Jeffrey Ehrlich Associate Editors Joseph Barrett, Joan Kessler, James Kristy, Beverly Pine, Norman Pine, Rahul Ravipudi, Linda Rice, Ibiere Seck, Geraldine Weiss Editors-in-Chief Emeriti Kevin Meenan, William Daniels, Steven Stevens, Christine Spagnoli, Thomas Stolpman Publisher Managing Editor Richard Neubauer Cindy Cantu rn@theadvocatemagazine.com cindy@caala.org Copy Editor Art Director Eileen Goss David Knopf Consumer Attorneys Association of Los Angeles President Treasurer Lisa Maki Ricardo Echeverria President-Elect Secretary Geoffrey Wells Michael Arias First Vice President Immediate Past President Joseph Barrett Michael Alder Second Vice President Executive Director David Ring Stuart Zanville
Board of Governors Martin Aarons, Mike Armitage, Shehnaz Bhujwala, Todd Bloomfield, John Blumberg, Michael Cohen, Scott Corwin, Jeffrey Ehrlich, Mayra Fornos, Stuart Fraenkel, Scott Glovsky, Steve Goldberg, Jeff Greenman, Christa HaggaiRamey, Genie Harrison, Arash Homampour, Neville Johnson, Bill Karns, Aimee Kirby, James Kristy, Lawrence Lallande, Anthony Luti, Shawn McCann, Minh Nguyen, Linda Fermoyle Rice, David Rosen, Jeffrey Rudman, Ibiere Seck, Douglas Silverstein, Armen Tashjian, Kathryn Trepinski, Geraldine Weiss, Jeff Westerman, Ronnivashti Whitehead, Andrew Wright, Dan Zohar Orange County Trial Lawyers Association Secretary President Geraldine Ly Scott Cooper Treasurer President-Elect Casey Johnson
B. James Pantone
Second Vice President Vincent Howard Third Vice President
Douglas Schroeder
First Vice President Ted Wacker
H. Shaina Colover
Parliamentarian Jonathan Dwork Immediate Past President Executive Director Janet Thornton
Board of Directors Melinda S. Bell, Gregory G. Brown, Anthony W. Burton, Brent W. Caldwell, Cynthia A. Craig, Jerry N. Gans, Robert B. Gibson, Paul E. Lee, Kevin G. Liebeck, Christopher E. Purcell, Solange E. Ritchie, Sarah C. Serpa, Adina T. Stern, Douglas B. Vanderpool, Janice M. Vinci, Atticus N. Wegman Periodicals postage paid at Los Angeles, California. Copyright © 2013 by the Consumer Attorneys Association of Los Angeles. All rights reserved. Reproduction in whole or in part without written permission is prohibited.
ADVOCATE (ISSN 0199-1876) is published monthly at the subscription rate of $50 for 12 issues per year by the Consumer Attorneys Association of Los Angeles, 800 West Sixth Street, #700, Los Angeles, CA 90017 (213) 487-1212 Fax (213) 487-1224 www.caala.org
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Features:
12 Put me in, coach
By counseling the parties on the best way to present their positions at different stages of the mediation, a mediator can enhance each party’s bargaining position. The danger is that the mediator orchestrates an outcome, as opposed to assisting the parties in reaching a result of their own creation. Greg David Derin
sessions: More arrows in the mediation-advocacy 28 Joint quiver
1
The authors encourage use of the joint session as a valuable tool and discuss joint-session strategies. Daniel Ben-Zvi and Caroline Vincent
40 Attorney’s fees: “The tail that wags the dog”
In public-interest litigation the prevailing party plaintiff can be awarded substantial enhanced attorneys’ fees. The author demonstrates how to get the best results in mediation with such cases. Sandy Gage
52 Let’s get the mediation brief right, shall we?
Your mediation brief probably stinks. Here’s a look at the humble mediation brief and how to write it in a way that not only helps the mediator, but advances your clients’ interests. Michael D. Young
64 74
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Interview: Kenneth Feinberg
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Crisis and opportunity
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Ken Feinberg is the premier mediator of class actions including the 9/11 funds, BP’s Hurricane Katrina fund, Agent Orange and more. His insights into class-action mediation reveal his deep commitment to making individuals feel significant in class settlements. Joan B. Kessler
The California courts’ budget crisis has eliminated the L.A. Superior Court’s ADR program, presenting an opportunity to design a more flexible and responsive mediation program; one that won’t be viewed as just a cumbersome additional step before trial. Joseph C. Markowitz
86 Mediation of insurance-coverage and bad-faith cases
Here is the evaluative approach to mediation of insurance-coverage and bad-faith cases. The author addresses the impact of critical issues such as choice of law, burden of proof and bad faith. Bruce A. Friedman
94 To caucus or not to caucus – that is the question
The author reviews a workshop led by Gary Friedman for the Mediation Panel of the U.S. District Court, Central District of California. Friedman’s presentation emphasized the benefits of working with the parties in joint session – without caucusing. Gail Killefer
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Submitting articles for publication: Check the annual editorial calendar at www.theadvocatemagazine.com to see when your legal topic would be most appropriate. Articles on time sensitive matters are welcome throughout the year, as are opinion columns, humor pieces, human-interest stories, lifestyle and personality features. Send your article as a WordPerfect or Word document attachment to e-mail: editor@theadvocatemagazine.com. Please check the website for complete editorial requirements. Reprint permission: E-mail written request to Managing Editor Cindy Cantu: cindy@caala.org
SEPTEMBER 2013
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102 114
Mediating the complex case: A primer
In complex cases, plaintiffs’ attorneys will have greater success if they understand what defendants and their insurers need in order to settle. Eleanor Barr
Guitar logic in mediation: Cowboy chords vs. jazz
The author addresses how cases are valued by insurers and what a plaintiff’s lawyer can do to elevate a case to a higher category. Jeffrey Krivis
Departments:
8
A BOUT T HIS I SSUE Alternative Dispute Resolution “Alternative” is not really “alternative” but may today be a necessity given the courts’ budget crisis.
121
Jeffrey Isaac Ehrlich
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F ROM
THE
E XECUTIVE D IRECTOR
Consumer Attorneys Association of Los Angeles
MICRA: After 37 years of injustice, change is on the horizon “Change” is the next step to adjust the MICRA cap.
Stuart Zanville
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G OVERNMENT R EL ATIONS B ULLETIN Updates from Sacramento and Washington. MICRA reform in Sacramento and tort reform in Washington.
P RESIDENT
Supreme indifference
Scott Cooper
Appellate reports and cases in brief In Zhang, the California Supreme Court clarifies many aspects of UCL practice.
THE
Orange County Trial Lawyers Association The U.S. Supreme Court issued a series of remarkably anti-consumer, anti-employee, pro-big business opinions that didn’t garner the national attention they deserve.
Joan B. Kessler
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F ROM
122 123
D IRECTORY OF A DVERTISERS C ALENDAR OF E VENTS
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F ROM
CAALA C ONNECTION C ENTER Welcoming new members who have joined CAALA THE
P RESIDENT
Consumer Attorneys Association of Los Angeles
White gloves and party manners Why aren’t there more female plaintiff-side trial lawyers?
Lisa Maki
On the cover: Main Image: Two Male White Rhinos | iStockphoto | www.thinkstockphotos.com
SEPTEMBER 2013
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About this Issue Joan B. Kessler
Associate Editor, ADR Issue
Alternative Dispute Resolution “Alternative” is no longer really “alternative,” but may be a necessity to resolve disputes given the courts’ cutbacks I think you will find this year’s ADR issue to be an outstanding collection of useful ideas. This is especially true given the many court closures, elimination of the State Court ADR program, and staff cutbacks in the court system this year. What was “alternative” may now be a necessity in resolving legal disputes.
The contributors
Gail Killefer, is the ADR Program Director for the outstanding U.S. District Court, Central District of California mediation program. In her article “To Caucus or not to caucus – That Is the question,” she describes Gary Friedman’s presentation to the USDC Mediation Panel which emphasized the benefits of working with the parties in joint session and shows how his presentation was thought-provoking and controversial. Two well regarded mediators, Daniel Ben-Zvi and Caroline Vincent, also discuss this timely issue in their article “Joint sessions: More arrows in the mediation advocacy quiver.” While private caucuses and shuttle diplomacy successfully produce settlements, the authors suggest that attorneys who also choose to advocate directly to their opposition in joint session are availing themselves of more arrows in the attorney’s quiver. Joe Markowitz is a well known trial lawyer/mediator and is President-elect of the Southern California Mediation Association. In his article, “Crisis and Opportunity,” he discusses how the California courts’ budget crisis has brought about many unpleasant changes, including elimination of the L.A. Superior Court’s ADR program. He explains how that presents an opportunity to design a more flexible and responsive mediation program and could also stimulate practitioners to consider more creative and satisfying methods of resolving clients’ disputes in and out of the courts. 8 — The Advocate Magazine
SEPTEMBER 2013
Jeffrey Krivis has been a well respected private commercial mediator since 1989 and teaches at the Straus Institute for Dispute Resolution at Pepperdine Law School. In his article “Fretboard Logic: Learning from the guitar how to value your case,” he addresses how cases are valued and what a trial lawyer can do to elevate them to a different category that produces better results. Greg Derin is a well known mediator and arbitrator in Los Angeles. In his article, “Put me in, coach,” he explains that by assisting parties in understanding the facts, their own interests and those of opposing parties, developing options, and counseling them on the best way to present their positions at different stages of the mediation, a mediator can enhance each party’s bargaining position without diminishing the power of their role in determining the outcome of the negotiation, by removing or minimizing barriers to resolution. Bruce Friedman is a well regarded up and coming neutral who had a stellar legal career. In his article, “Mediation of insurance coverage and bad faith cases,” he addresses the use of the evaluative mediation approach to the mediation of insurance coverage and bad faith cases. Sandy Gage of EnGage Mediation, has over 40 years’ experience as a Trial Lawyer, was named Trial Lawyer of the Year – CAALA, and was President of CAALA. Sandy started the Advocate & Forum Magazines. In his article, “Attorney’s fees: “the tail that wags the dog” or How to get the most out of mediation of these cases,” he shows that counsel should fully recover attorneys’ fees and demonstrates how to get the best results in mediation. Mike Young is a highly respected full-time neutral and was an adjunct professor in negotiation and mediation at USC Law School for nearly a decade. In his article, “Let’s get the mediation brief
right, shall we?”, he explores the purpose of the humble mediation brief and spells out how these papers might be written in a way that not only helps the mediator, but advances your clients’ interests and leads to better settlements. Eleanor Barr is a highly regarded mediator, named a Top 50 Neutral by the Daily Journal. In her article, “Mediating the Complex Case: A Primer for Plaintiff ’s Counsel,” she explains that when mediating complex cases, plaintiffs’ attorneys will have greater success if they understand what defendants and their insurers need in order to settle. This article focuses on how to negotiate with multiple defendants and how to address insurance issues before and during the mediation to ensure an optimal settlement. Finally, my own article is an interview of Ken Feinberg. It allows us to have an insight into the background and strategies of one of our nation’s premier mediators. Ken Feinberg, who ran the compensation fund for victims of the September 11th terror attacks, has been most recently asked to oversee a fund for victims of the Boston Marathon bombing. Joan Kessler, a full time mediator and arbitrator at ADR SERVICES, INC., received her Ph.D. in Communication, before she attended law school. She practiced law for over 25 years, was a jury consultant and taught Communications. Many of the communication strategies she taught, her extensive experience as a litigator and her training at the U.S. Army War College enhance her mediation and arbitration practice. She specializes in Employment, Real Estate, Trust/Estate, Business, Commercial, Entertainment and Insurance Cases. Ms. Kessler may be reached at: jkessler@adrservices.org or direct telephone number (310) 552-9800. Ms. Kessler is also on the American Arbitration Association Panel of Arbitrators and a member of the USDC Mediator Panel. Visit her Web site at www.joanbkessler.com.
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10 — The Advocate Magazine
SEPTEMBER 2013
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Greg David DerinConsumer Attorneys Association of Los Angeles
Put me in, coach Coaching the stages of mediation in nine innings Mickey Mantle had enormous talent. Had I not been raised in San Francisco in the 1960s, I might have believed him to be the most naturally gifted baseball player I had ever seen. But even Mantle acknowledged that coaching was the key to his skill at the plate: “My dad taught me to switchhit. He and my grandfather, who was lefthanded, pitched to me every day after school in the back yard. I batted lefty against my dad and righty against granddad.” We are each endowed with distinct capabilities and thrust into arenas in which we may achieve greater or lesser success. For litigators, however great one’s talent, the result of our efforts is often dictated by the facts, law, quality of witnesses and the unpredictable role of serendipity. While preparation and diligence can mitigate the winds of fortune, we cannot stop the gale. As I observe counsel struggle against unknown forces in mediation, I often wonder why they fight so relentlessly to control and manipulate the process – and often the mediator – rather than harness the power of the process.
First inning: Trust
Consider a fictionalized mediation session: Mickey and Joe roamed the outfield together for a major league baseball team. They had an uneasy alliance. Joe, the aging superstar, always uneasy in the public gaze, saw the twilight looming and the public’s adoration for young Mickey growing. But, nature was taking its course and his body was telling Joe that time was running out. He was also unusually cerebral for a ball player. He knew that money needed to be made while the opportunities presented themselves. He also cared deeply about the game, and while jealous, he also respected Mickey’s talent. He resolved to do what was appropriate for the future of the organization that was his legacy. Mickey and Joe went into the restaurant business together, capitalizing on their
12 — The Advocate Magazine
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huge popularity. The restaurant was a success, with patrons flocking to the establishment to see Joe and Mickey when they were in town. Then one day, Mickey had a horrible accident; he twisted his knee and tore the ligaments. Mickey was out for a season. Mickey privately blamed Joe, believing that he caught his foot on Joe’s glove, which he believed he had tossed on the outfield grass. The incident inflamed their already tense relationship. Mickey insisted on dissolving their restaurant partnership. When Joe hesitated, Mickey filed suit. Pursuant to an oral agreement, the partners had invested equally in the startup, shared profits equally, and entered the mediation not willing to meet together. Although litigators participate in mediation with increasing frequency, the level of sophistication with which many counsel interact with mediators demonstrates a lack of trust in the process and a failure to fully utilize the benefits of an impartial aid to the negotiation. Assuming the parties have selected a competent mediator, worthy of their trust, one role which they often neglect to assign is that of “negotiation coach.” I have labored many years in the litigation trenches, trying cases, handling appeals and arbitrations, engaging in the intellectual give and take of complex summary-judgment battles. I am proud of my litigation record and of the clients I have had the honor to represent. For all of the thrills, the highs and lows; I have a confession. I always believed that I had more impact in the dugout than in the courtroom. My years as a Little League coach yielded many gratifying moments. Teaching young adults the fundamentals of the game, and preparing them to achieve the best results on the field and to function under pressure, was extraordinarily rewarding. The most fulfilling aspect of coaching youth sports was helping young men and women develop their character,
and their parents to gain a better perspective. As I transitioned from active litigator to mediator and arbitrator, I often thought of my days in the dugout and the lessons learned during those halcyon Springs. And I reflected on Mickey’s backyard lessons. The sage of Yankee Stadium, Yogi Berra, once observed: “You’ve got to be very careful if you don’t know where you are going, because you might not get there.” Mediators wear many hats, often depending upon the needs or interests of the parties and the disposition and talents of the mediators: facilitator, evaluator, translator, confessor, sounding board, bearer of bad news, and generator of options. The roles played by the mediator during the course of the process will change, as the negotiation progresses. If the parties and counsel have not worked with the mediator in the past, the degree to which they will be inclined to allow the mediator to serve a particular function will be dictated by their confidence in his skills and trustworthiness. They have paid a fortune to their counsel for legal advice, why should they listen to an evaluative point of view from the mediator? Joe and Mickey have a history of personal tension, and emotional baggage may interfere with a rational discussion of the wisdom of continuing their partnership or separating on one set of economic terms or another. They may never have met the mediator before. Why should they trust him by sharing their innermost insecurities and feelings toward the other or their place in the constellation of baseball stars? Before the “coach” can gain acceptance, he must earn the right – by demonstrating that he will respect confidences, that he grasps the issues, and that he is sensitive to the same human vulnerabilities which will be the subject of discussion.
Second inning: Self-determination
A guiding principle of mediation is
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the self determination of the parties. (ABA Standards of Conduct for Mediators, Standard I.) Indeed, what separates mediation from adjudicatory processes such as trial or arbitration is the right and power of the parties, within the limits of having bargaining partners, to determine whether they can find a negotiated solution which accommodates their interests. Mediation is a facilitated negotiation, as distinct from a process in which the parties have surrendered to another the power to decide the outcome of their dispute. However, there exists a great deal of latitude within the process as to how “facilitative” or “evaluative” the parties desire a mediator to become, or how skillful the mediator may be along either of those spectra. Often unspoken is the role of the mediator as coach. The notion of “coaching” the parties and counsel during a mediation is not inherently inconsistent with a mediator’s “neutrality” or disruptive of the debate as to whether mediators are most effective when being “facilitative” or “evaluative.” No competent mediator would intentionally engage in conduct or structure a process, which fails to maximize the opportunity for the parties to achieve their individually, and mutually, identified objectives. For that reason, sophisticated mediators reject the concept that a good settlement is one in which all parties are “equally unhappy,” instead seeking a resolution which satisfies the genuine interests of all participants. But acknowledged or not, and whether the parties overtly ask for an evaluation or send the mediator into the other room to “just tell the other side they are going to lose,” the concept and execution of the mediator’s role is complicated by the requirement that a mediator not interfere with the self-determination of the parties in his role as “impartial” facilitator of the negotiation. Many parties seek not only the mediator’s unbiased and confidential perspective on the strengths and weaknesses of their positions, but advice on how to move the negotiations toward resolution. How the mediator accomplishes these nuanced assignments, invested with confidential information from each side, and without manipulating the outcome, is the subject of this article.
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Third inning: Seize the day There is a tide in the affairs of men, Which, taken at the flood, leads on to fortune; Omitted, all the voyage of their life Is bound in the shallows and in miseries ... And we must take the current when it serves, Or lose our ventures. (Shakespeare, Julius Caesar, Act IV, Scene 3) As in baseball, opportunities present themselves in litigation and victory often comes to those with the vision and skill to recognize and take advantage. Frederick Wilcox wrote that “. . . you can’t steal second base and keep your foot on first base.” Good lawyering often consists of avoiding errors and capitalizing on the chances afforded by circumstance. Negotiation affords opportunities entirely distinct from those of the battlefield – opportunities often unconstrained by the four corners of a pleading. What can a mediator, as “coach,” offer the parties? Contemporary mediations of litigated civil matters follow fairly predictable stages. The parties may choose to short cut the process in cases in which the issues and facts are simple, emotions are in check, or the parties or their attorneys merely seek the “cover” of someone assisting them as they move toward a result based upon an external “evaluation” of a single issue: monetary value in a zero sum distributive bargain. In such cases, after sharing an evaluation of the “value” of the case with both sides, and coming to understand from their reactions where the zone of possible agreement may rest, a mediator may be called upon to help the parties structure their moves to “test” how much, or how little, money needs to change hands for a deal to be achieved. After a few rounds of sparring, taking care not to kill a deal, but to assure all hands that they have achieved the best possible bargain, a settlement is concluded. But if the issues or facts are disputed or complex, or the relationships problematic, the process generally involves (1) the parties exploring the facts, sharing information and venting or “having their day in court”; (2) understanding their own
interests and those of the other parties; (3) developing potential options for resolution; (4) reaching agreement; and (5) memorializing their agreement. The role of mediators in assisting parties at each of these stages has been the subject of much discussion in the literature. A less often discussed issue is the proper role of the mediator in “coaching” the parties and counsel as they proceed through these stages.
Fourth inning: Balancing confidentiality against manipulation
The California Supreme Court recently reaffirmed the absolute confidentiality of the mediation process. (Cassel v. Superior Court (2011) 51 Cal.4th 113.) Many consider confidentiality central to the process to encourage parties candidly to communicate with their opponent or with the mediator, to facilitate disclosure of information for the purpose of improving the prospects of settlement, but which is theoretically insulated from discovery if the mediation fails. Putting aside the validity of this theory, perhaps a more vibrant rationale for confidentiality is to encourage candor in disclosure to the mediator to permit the mediator to provide a helpful “evaluation” and guidance in assessing the disclosing party’s bargaining position and negotiating strategy. Only by fully comprehending a party’s bargaining position can the mediator help that party assess its “hand” and the risks inherent in each bargaining move. Despite appearances to the contrary, mediators are not as naïve as we often appear. True, some mediators “phone it in,” dutifully carrying messages from room to room, executing the strategy devised by the parties and providing little value beyond that once afforded by the now extinct carrier pigeon. But if a mediator is to provide any value, especially possessed of insights gleaned from communication with both parties, the litigants can gain most by invoking the protections of confidentiality, risking vulnerability, and allowing the mediator to understand their true motivations, interests, strengths and weaknesses. Some parties and counsel seek very evaluative guidance from their mediators,
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especially in the context of litigated matters which appear to be zero sum (i.e., cases in which the bargaining is distributive, where assessing the “value” of a party’s claim is the primary factor in reaching a resolution). Along the spectrum from evaluative to facilitative, where a mediator assists the parties to understand their interests and develop options to satisfy the mutual interests of the litigants, a mediator utilizes many tools, including those which help the parties better understand the strengths of the parties’ positions, and thus can feel evaluative.
Fifth inning: Preparing for joint sessions
Consider the conflict between Mickey and Joe. Where then is the line between evaluation and coaching? How does a mediator, armed with confidential infor-
mation from both parties, avoid manipulating the process to an outcome determined by the mediator, rather than the parties? There is a schism within the mediation community between those who believe in using caucuses and those who believe in using joint sessions exclusively. The split is decidedly in favor of a model which employs private caucuses, with the major struggle among mediators and counsel in recent years involving whether counsel will allow their clients to participate in even a single joint session. Those mediators who advocate the exclusive use of joint sessions do so on the theory that only by limiting communications among the parties, counsel and the mediator to joint sessions can the participants avoid a scenario in which the mediator intentionally or inadvertently manipulates the process by the use of confidential information.
In an ironic twist, many mediators find that counsel seek to avoid types of confrontations and conflict with which they are unfamiliar, or which they feel that they cannot control. As litigators we are comfortable with the rules of the courtroom and of depositions. The mediation joint session makes many uneasy. Emotions flair in ways which may be extraordinarily productive for dispute resolution, but beyond the experience of litigators who prefer not to trust mediators to control the process. Beyond an aversion to uncontrolled conflict, counsel often prefer to either control the messages conveyed by mediators or give latitude only to those with whom they have had sufficient prior experience. In these circumstances, private caucuses provide a better format to control and communicate information and interests
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Coaching continues
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and give the mediator clues as to probable outcomes. Armed with such insights, counsel sometimes hope that the mediator can steer the negotiation toward their desired result. But without knowing the limits of the opposing parties’ authority or tolerance, the danger of a mediator as negotiating coach is apparent. In the course of preliminary private caucuses, the mediator may learn from Mickey and Joe of an underlying source of tension, and perhaps the cause of their break-up: the injury to Mickey. From Mickey’s perspective, Joe left his glove in the outfield, probably intentionally due to his jealousy, Mickey was injured, and Joe regained the limelight. Joe shared an entirely different story. It was not his glove at all. In fact, he believes Mickey twisted his knee tripping on a poorly maintained sprinkler head. It was a horrible incident.
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Joe felt so badly as the face of the team that, unbeknownst to Mickey, it was he, not the team, who had paid for all of Mickey’s rehabilitation over the course of the year. Naturally, he did double duty at the restaurant as well, since Mickey could not stand long enough to make personal appearances. Joe was a very private person, rarely speaking to the press, and was reticent to share any of this with Mickey; he empowered the mediator to do so as he felt appropriate. Instead, the mediator suggests that the parties participate in a limited joint session at which the mediator would set the agenda and direct the conversation to the parties’ understanding of certain issues, including the incident which caused the schism which has prompted their desire to separate. In private caucus, Mickey agrees, eager to tell Joe what he
thinks of him. Joe reluctantly agrees as well, after walking through with the mediator how the conversation may play out. Following the joint session, the parties reconvene in their separate rooms to reconsider their positions. Do they desire to continue in business together? If they are determined to separate, on what terms?
Sixth inning: Negotiating strategy
Coaching is founded on a bedrock of trust. Mediators must begin the process with a commitment to respect the parties’ rights of self-determination. By assisting the parties in understanding the facts, their own interests and those of opposing parties, developing options, and counseling them on the best way to present their positions at different stages of the process,
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a mediator can enhance a party’s bargaining position without diminishing the power of their role in determining the outcome of the negotiation by removing or minimizing barriers to resolution. The danger in the process lies in the possibility that the mediator may direct or orchestrate an outcome, as opposed to assisting the parties in achieving a mutually desired result of their own creation. Parties will often seek a mediator’s advice on how a proposed negotiation move will be received by an opposing party. It is here that the danger of manipulation is greatest, and the value of coaching is optimal. A mediator’s greatest tool is the question and his greatest enemy are the words, “I think.” By encouraging an understanding of alternatives and possibilities, such as a reflection on how a negotiation has proceeded, and what options
remain available, coupled with insights into social science attitudes toward certain negotiating moves, a mediator can provide valuable assistance without betraying confidential information. Often, of course, a mediator can be effective precisely because both parties want the mediator subtly to communicate negotiation strategy which is technically confidential, but which is essential to achieving a deal. Sophisticated mediators know how and when to accomplish these tasks and what cues are important. Working through the mediator in these situations also overcomes a problem known as reactive devaluation. If a party floats an idea as her own to the opposing party, it will necessarily be met with skepticism. Consider your own reactions to a proposal from opposing counsel: If they want it, something must be wrong with it!
If I can have it, I can probably get more. As mathematician Blaise Pascal observed: “We are generally more persuaded by the reasons we discover ourselves than by those given to us by others.” To overcome these barriers, mediators probe and poke about in ways which often can get a party to come up with an idea as their own, grab it as it floats from the ether, raise it as a hypothetical, or as a last resort suggest it as coming from a neutral source such as the mediator himself. By insulating parties in this way, the mediator protects all of the parties from a certain amount of risk after understanding that the proposal potentially meets their mutual objectives. In the process of raising questions and testing hypothetical reactions to a party’s proposals, a mediator also provides a
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SEPTEMBER 2013
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Coaching — continued
To
necessary reality check and helps the parties develop options responsive to interests which emerge from probing conversations. After the joint session, Mickey has reevaluated his position. While he convinced himself that Joe was responsible for
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exploring privately with each party their interests, their points of view about the relative merits of their cases, their desire to continue in business or sell to the other or third parties, the mediator may help float proposals, counsel Joe and/or Mickey on shaping offers or counter proposals throughout the balance of the mediation.
Seventh inning: Language
Among the most valuable services rendered by a mediator is providing assistance in the choice of language. When preparing parties and counsel for a joint session or meetings of groups of parties or counsel, a mediator can walk through scenarios for how the meeting will unfold, making suggestions for how an approach will be received. Recommendations for shaping a proposal, an approach, to whom it is directed and by whom it is made, what language is used, all may reflect a mediator’s sensitivity based on disclosures made in confidence earlier in the mediation. These coaching tips are designed for the benefit of both parties, to achieve greater success in communication. Having heard Mickey’s emotional statement of the facts in their initial separate session, and a different perspective from the introverted Joe, the mediator likely would ask each to reflect before the joint session on how their stories might be heard and received by their bargaining partners. The mediator’s purpose would generally not be to diffuse or minimize either party’s honest communication of their emotions. Rather, each should be thoughtful in his choice of language, and how it is received, and each should be prepared to filter what they hear as a reflection of the speaker – making sure they understand the content and not merely get distracted by the delivery.
Eighth inning: Who has the ball?
It would not be unfair to air the cynic’s concern that the mediator, at any given point, is helping one side manipulate the other, rather than assisting communication on an open playing field. The most reasonable response is that the parties generally are seeking a deal and have invested the mediator with broad authority to advance the dialog to accomplish this
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Coaching — continued goal. As long as the mediator is mindful of the parties’ whispered interests and objectives and in his “coaching” does not substitute his judgment for theirs in deciding what moves to make, their self-determination remains intact. Might they achieve a “better deal” by blind bargaining? It is possible, but the price in further litigation before such a result is achieved might be too high, and the creative opportunities lost might be too painful.
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There are those who prefer a process in which the parties work exclusively in joint session so that manipulation is minimized and communication among all parties, counsel and the mediator are entirely transparent. There are also those who favor a process in which no joint session occurs, the mediator is highly evaluative and helps direct the parties toward an end which is “fair” by some relatively objective measure that is understood reasonably to reflect the “value” of the case. Increasingly, mediation takes the form of a process in which the parties and counsel actively engage in shaping the discussion, test the options and move toward a solution which optimally meets the respective goals and interests of the parties after testing the lengths to which opponents may go in the bargaining process. The manner in which the mediator may help assist the parties in reaching their optimal solution after confidentially understanding the facts, their interests and objectives is an evolving art. Mickey Mantle might have been the best right-handed batter of all time if he had only one childhood batting instructor. But with a little more help, he became baseball’s greatest switch hitter. Greg Derin is a mediator and arbitrator in Los Angeles specializing in civil and commercial disputes, with an emphasis on entertainment and intellectual property matters. From 20042012 he assisted in teaching the Mediation Workshop at Harvard Law School’s Program on Negotiation. He is a Fellow of the Chartered Institute of Arbitrators, has been recognized as a Power Mediator by the Hollywood Reporter, and since 2006, as a SuperLawyer in ADR, Intellectual Property and Entertainment and Sports.
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Daniel Ben-Zvi
Caroline VincentConsumer Attorneys Association of Los Angeles
Joint sessions: More arrows in the mediation-advocacy quiver Joint sessions sometimes can outrun private caucuses An attorney can maximize success in mediation by using one or more types of joint-session processes during some part of the mediation. Many mediations in Los Angeles currently consist only of private caucuses, where the mediator undertakes shuttle diplomacy between rooms, and the opposing parties or their counsel never meet jointly. While this format successfully produces settlements, attorneys who also choose to advocate directly to their opposition in joint session are availing themselves of more arrows in the attorney’s quiver to achieve more favorable resolution for their clients. These attorneys have found that the use of some type of joint session is an effective way to persuade the other side to see the case their way, exchange key information, creatively explore resolutions to difficult problems, increase their client’s confidence in them, and size-up opposing attorneys, parties and experts. The positive results which can arise from joint participation include efficiencies in the process, the opportunity for persuasive advocacy, clarity of communication, and good ideas.
What is a joint session?
A joint session is a meeting facilitated by the mediator where opposing parties and/or their attorneys face each other and speak directly to each other, rather than through the mediator. Joint sessions can take different forms: • All parties and their attorneys or “all hands” (e.g.: meet & greet; persuasion; information exchange); • Only among multiple defendants or multiple plaintiffs (e.g., identify global settlement opportunities); • With attorneys only (to determine mediation process, status of case, 28 — The Advocate Magazine
SEPTEMBER 2013
From left: Renata Valree, program director for the City Attorney’s Dispute Resolution Program; Geoff Wells, President-Elect of the Consumer Attorneys Association of Los Angeles; Daniel Ben-Zvi, Chairman of Mediation Awareness Week; Joe Buscaino, Councilman of 15th District; Wendy Kramer, President of the Southern California Mediation Association; William Carter, Chief Deputy City Attorney; John Shaw, ADR Liaison of the Association of Southern California Defense Counsel.
settlement opportunities and impediments, prior settlement discussions); • With clients only, or with an attorney from one side presenting to all in opposition.
Purpose
Joint sessions are opportunities for attorneys and their clients to persuade the opposition, to discuss and explore solutions, and to efficiently deal with multiple parties. From exchanging pertinent facts, law and argument in a premediation brief given to the other side; to a pre-session private or joint-conference call with the mediator; to the mediation itself, the trial attorney throughout the mediation process is using advocacy skills to persuade the other side of the merits of the case in order to maximize the result. For plaintiffs, this typically means obtaining a satisfactory sum for
settlement. For defendants, this means minimizing the amount to be paid and cutting off future liability. Many attorneys believe their goal in mediation is to persuade the mediator, who in turn will persuade the other side of the strengths of their case and the weaknesses of the other side’s case. While this is no doubt important, the underlying goal is to persuade the other side; persuading the mediator is just one of the ways to persuade the other side. It can be more effective to directly persuade the other side through an opening statement or narrative coupled with demonstrative evidence, a PowerPoint presentation, photographs, video presentations, key documents or deposition testimony. In court, the attorney would not think of arguing and presenting indirectly.
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Imagine going to trial and instead of yourself giving the opening statement, examining the witnesses and presenting the case to the jury, you give a thirdparty attorney a synopsis of your case just before the trial and ask him to present your case to the jury. Yet sometimes that is what an attorney is allowing when they cede the entire presentation of their case to the mediator.
Historical perspective
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30 — The Advocate Magazine
SEPTEMBER 2013
For a decade or so in the 1990s, mediators and attorneys in Los Angeles often used “all hands” joint sessions for meet-and-greet, as well as presentation of opening statements by both sides. The mediator would listen to the parties and reframe and summarize their
stories and positions. The parties would then break up into private caucuses. However, over the last 10 years or more, especially in consumer cases, there has been a trend away from the use of any type of joint session, relying instead upon the private caucus. This may be due to mediator styles as well as attorney preferences and experience. Common exceptions to use of “all hands” joint sessions historically and which continue today include employment discrimination, retaliatory termination, and physical, sexual and elder abuse cases where a plaintiff is understandably too vulnerable and uncomfortable to be in dialogue or even in the same room with the alleged perpetrator. Attorney-only caucuses early in
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the day and “all hands” meet-andgreet only sessions remain in use, especially with the nudge of the mediator, to discuss the framework for the day, the Evidence Code provisions regarding presumptive inadmissibility of evidence, the role of the mediator, and the different process options (joint and private caucus sessions). The Los Angeles legal community as a whole, compared to other communities, is more reluctant to use “all hands” joint sessions. This is probably due to the large size of the legal and mediation community in contrast to smaller communities that tend to have a higher degree of collegiality among its attorneys and mediators. Attorney mediators in Nashville and Toronto, for example, report that they almost always make use of a joint session. Robert Mnookin, Director of the Harvard Negotiation Research Project, is one of many in academia who strongly favors the joint session for most mediations. Trial lawyers who use joint sessions to their benefit, as discussed in the next section, find that such sessions are worth the extra time and attention in many instances, including consumer cases.
Arrow 1: Persuasion in the joint session In addition to coming into mediation flexible and ready to negotiate, attorneys should be prepared to argue their best case. The decision to mediate does not lessen your duty to be a zealous advocate. Trial lawyers have a wide range of advocacy skills, from courtroom advocacy to mediation advocacy. They know the difference and how to tap their separate skills. They are well trained to tailor their advocacy approach depending on who their audience is. They know which talents of persuasion are needed to best influence which decision maker. Thus, their presentation varies depending on which jury, judge or arbitrator they are seeking to influence.
Similarly, in mediation, they tailor their abilities to argue and persuade to the audience at hand. Plaintiff ’s counsel in mediation is routinely seeking to influence an insurance adjuster and defense counsel. Plaintiff ’s counsel at times will not rely only on the mediator to transmit the best arguments of the facts and law of their case. Counsel will take the bull by the horns to make their most effective presentation by delivering it in person to the opposition. This effort might include giving their mediation brief to the other side before the mediation, so in-person presentation enhances the pertinent facts and law that hold together the theme of the case. As experts in advocating, they know that communication is far more than words. They agree with the generally accepted teaching that human communication is comprised of about 10 percent words, 30 percent tone and 60 percent body language. To these attorneys, it makes sense to use all senses. Rather than solely rely on transmitting their words via a mediator, they make use of their additional 90 percent capacity to persuade with tone and body language. These attorneys seize the opportunity to argue directly to the adjuster or opposing party. They are sensitive to the audience and will, as always, adjust their advocacy to be most persuasive to the particular listeners. Moreover, they realize their greatest strength often rests squarely with the plaintiff. If the plaintiff presents well, the plaintiff ’s attorney wants the opposition to see that. If the plaintiff makes a good witness who will likely be perceived by a jury or other decision maker as seriously injured and deserving of significant compensation, the plaintiff ’s attorney would reveal that to the opposition effectively so that the defense will value the case accordingly. The plaintiff ’s attorney recognizes that to an adjustor, seeing is believing.
One senior adjustor of 30 years concedes that before she authorizes maximum settlement value, she must see and hear from the plaintiff directly. These plaintiffs’ attorneys recognize other benefits in a joint session. It’s not only about their presentation. They want to watch, listen and evaluate the opposition and their counsel. Even if they come into mediation confident that they understand the opposition’s case, they realize that in a joint session they can learn more about the strengths and weaknesses of the opposition’s case, the defense counsel and the defendant. Sometimes nuances in the opposition’s presentation may be instructive, such as the way counsel prioritizes their arguments. Like joint sessions, a brief submitted in advance of mediation is another opportunity to advocate directly to the opposition. Unless there is an agreement among the attorneys to exchange briefs, attorneys generally submit confidential briefs for the mediator’s eyes only. Even where the opposition decides not to share their brief, some attorneys will confidently share their own brief in order to directly present their case to the opposition. The joint session can also be a taste of what trial will look like, even though most joint sessions last no more than an hour or two and most trials will last at least several days. During a joint session, parties can discover how difficult it is to sit quietly and listen without interrupting or reacting, as coached by the mediator, while the opposition argues its case. A joint session with the parties makes trial more real and makes the reasons to avoid the risk of trial as well as the discomfort more clear. Another benefit of a joint session can result from plaintiff witnessing their counsel advocating for them directly to the opposition. This is the essence of why plaintiff retained an attorney. When they see their attorney standing up to the opposition, they feel SEPTEMBER 2013
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protected and vindicated. When the attorney in private caucus later concedes, as prodded by the mediator, to certain weaknesses in the plaintiff ’s case, the plaintiff is generally a more receptive listener. This plaintiff, having seen his attorney in action in joint session, will not doubt that his attorney, now highlighting plaintiff ’s weak spots, is indeed his advocate. Attorneys who are reluctant to participate in a joint session with their client may be concerned that such a session would only polarize the parties and possibly even worse, end up in a fighting match. Indeed, an “all hands” joint session can allow a party the opportunity to directly or through their counsel vent anger and frustration. This is not necessarily negative for the mediation. This can help the negotiation progress because venting is often like letting air out of a balloon. Psychologists believe that what does not get expressed gets repressed. Once such emotion is expressed, the mediation can get to the real business of a negotiation no longer emotionally charged or clouded with unspoken upset. However, concerns over the possibility of such intense emotions getting out of hand are real. That is why it’s critical for an experienced mediator to minimize that possibility through pre-joint session coaching, instructions tailored to the case, and careful monitoring of the joint session. The mediator will terminate a joint session promptly if and when appropriate. A joint session should always be designed to suit the needs of the case. If the sides agree to an “all hands” joint session to present positions, before that occurs, the mediator will coach the parties on effective mediation advocacy, given the particulars of the case as well as the personalities of the participants and attorneys. The attorneys can agree to dialogue in the joint session and even questioning of each other for a
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limited time and scope (e.g., damages). The sides might simply agree to remain flexible within the joint session. The
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ing, discussion or the joint session itself. In the joint session, the mediator aims to make all participants feel they have been heard, their positions understood and that they control the process. A party seeks justice in court and arbitration, as well as in mediation. Justice, overall, means fairness in the process, what social scientists call “procedural justice.” Parties want to have a voice in a fair forum where their side of the story can be told and heard. It has been said that people are psychologically more deeply focused on how their cases are handled than whether or not they win. This should not imply that for a mediation to be considered a fair process it needs a joint session. Parties can certainly get their voices heard without a joint session, with a mediator shuttling back and forth from room to room. Nevertheless, a mediation that includes some joint process, rather than just private caucusing, tends to leave a party with a greater sense that the process was fair and just. The mutual presentation of cases in an “all hands” joint session can serve as a reality check for both sides because when all the arguments and stories are heard, the idea that one side has a slam-dunk winner and the other a slam-dunk loser evaporates. Parties begin to realize that the litigation process is going to be tedious, time consuming, expensive and risky. Reality sinks in that litigation may turn out to be a massive and futile effort. Collaborative problem solving through negotiation becomes more attractive. If an attorney is not willing to expose their client to the opposition or does not wish to take the risk of an “all hands” joint session with all parties, there is still an opportunity for that attorney to participate in a joint session. That attorney could appear in a joint session without their client to argue all or part of the case. For example, the plaintiff ’s attorney might
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provide a narrative and key documents to the defense counsel and the adjustor, either in the defense room where the defendant may or may not be present, or in the plaintiff ’s room where the plaintiff is present but the defendant is not. A joint session, in whatever form, should be held only if the attorneys and parties first agree to it because it is expected to advance the negotiation process. After all, it’s the parties’ negotiation. In mediation, the parties with their counsel’s advice will decide whether and on what terms the case will resolve. They also will decide on what process will be used, such as the joint session. The mediator, trained in the ebb and flow of negotiation, should
guide and recommend the best process for that case. Assuming the attorneys have selected the mediator out of trust in the mediator’s abilities and experience, the attorneys should give due weight to that mediator’s suggestions. The attorneys and parties should be reminded by the mediator that it is they who will decide what process will be used in the mediation, such as whether or not there is to be a joint session and if so, what kind. One mediator reportedly threatened at the outset of a mediation to terminate the mediation if counsel and the parties would not agree to start the mediation in a joint session where positions would be argued. Under pressure, they all acquiesced and the joint session, not surpris-
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ingly, was a failure and the mediation ended shortly thereafter. In joint session, attorneys can argue the merits of their case and present charts, PowerPoint presentations, day-in-the-life videos, demonstrative exhibits, precedents, verdicts and settlements, jury instructions, and much more. It is often helpful for counsel to share what they plan to do in the litigation should the case not settle in that mediation. Unlike court or arbitration, in the informal setting of mediation there are practically no rules limiting what can be used to help present and argue the case. Having all case files and key source documents available can be extremely useful. Jointly reviewing and
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discussing key e-mails, deposition testimony and legal precedents can enhance understanding. The mediator can shed light on what counsel agree upon and disagree upon and why. This can save a great deal of time and frustration that is sometimes spent in shuttle diplomacy over an item that one side values greatly but the other side does not. The mediator’s coaching before an “all hands” joint session might suggest keeping the tone positive, speaking one at a time, asking questions in an informal and collegial way, and refraining from interruptions, arguing and grandstanding. Some mediators will coach counsel and/or clients to thank the other side for coming to
mediation, or something such as “we are here to negotiate and hope that we are able to find a mutually satisfactory resolution.” Where appropriate, parties might be coached to apologize. The mediator can highlight the different ways of apologizing. For example, in family relationship disputes, a party might apologize for anything done by them that in any way created confusion, harm or upset to the other side or to simply express regret that the family is in litigation (the “non-apology” apology). Such coached comments are ice-breakers that may set a positive, problem-solving tone. Of course, it is up to the party to decide whether and how to apologize.
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SEPTEMBER 2013
Arrow 2: Using the joint session to gather or understand information At many mediations, formal discovery has either not been completed or is inadequate to address key information useful for settlement. Putting attorneys or “all hands” together to ask questions about and understand such key information can be an efficient and productive way to dialogue and explore facts, law, and solutions. Common questions for joint sessions with only attorneys include: Is there insurance, what are the limits, are they burning and what allegations are covered? Who is likely to make any payments? Are there other claims such as worker’s compensation, or liens that need be addressed? Would a settlement
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include a release of all claims and are there indemnity concerns? What settlement discussions have already occurred? Do counsel have a sense of the impediments to settlement and how they might best conduct the mediation? Would a joint session of any type be useful and productive? “All hands” joint sessions can also be used to explore or exchange information. In one case, the plaintiff was in another country during the mediation and had not yet been deposed. Multiple defendants gathered in a private caucus with the mediator and posed questions that the mediator then reviewed with the plaintiff. The mediator then asked somewhat modified questions in a joint session with “all hands” where the plaintiff participated using Skype video conferencing. Information was thus informally exchanged. A joint session, or a mediation for that matter, must not devolve into a means for one side to obtain free discovery rather than genuinely explore settlement. An attorney’s concern about this should be raised with the mediator in private prior to any joint session. One way that concern can be alleviated is by all parties agreeing to the reciprocal exchange of information or discovery.
Arrow 3: Pre-mediation conference call A pre-mediation conference call with all counsel can be used to identify needed participants, physical or other means of participation, documents that would be useful to exchange, among other issues. Process design calls can help manage multiple parties and layers of representatives, especially where a physical meeting of everyone at one time is not possible.
Arrow 4: Party-to-party communications
Sessions designed for clients to speak directly with each other are
common in certain disputes, such as family trust and estate disputes or family business matters. Many commercial disputes also lend themselves to this format. Mediators skilled in these types of sessions coach the parties how to vent, actively listen to each other, brainstorm ideas for resolution and work on viable solutions through mutual dialogue. Attorneys might be coached to allow their clients to speak. Attorneys are guided to serve more as advisors than as spokespersons for their clients. In some cases, clients choose to speak to each other without lawyers, allowing the mediator to enhance the opportunity for emotional healing, change of attitude, problem solving and closure
Arrow 5: Settlement drafting
Once the parties have reached agreement, a settlement drafting session with all counsel can be a useful way to draft settlement agreement language. Language can be worked out and drafted while everyone is together. This is particularly useful when there are several detailed terms and the parties are still together to work out sticking points in the fine print of their settlement terms. Drafting together with lawyers first can reduce the number of changes requested by clients and can make the process more efficient.
Conclusion
From exchanging briefs before the mediation, to joint pre-conference calls, bringing the case files and source evidence, to meet-and-greets and presentations to the opposition; attorneys can maximize their results in mediation using all of the arrows in their quivers of mediation advocacy to persuade the other side. How often do you say (or hear the other side say): “they should know my case, I gave them everything.” You, in fact, may have given them hundreds of documents and evidence but they are rarely packaged in a persuasive way that gets your message clearly across. The varied forms of joint sessions
are opportunities to ensure, by the way you personally package and present it, that every decision maker in the other room is aware of how your case is going to play out at trial. As noted earlier, words make up only about 10 percent of communication. In a caucus-only mediation, the attorneys are transmitting words to each other via the mediator. Joint sessions allow counsel and/or their clients to use the other 90 percent of communication skills to persuade the other side. Tone and body language together with words employ three of the five senses: sight, hearing, and touch (shaking hands) and even our sixth sense, intuition. Depending on the case, it can make a lot of sense to use most of our senses in mediation through effective presentation in joint sessions. Willingness to engage in a joint session sends a message of confidence to the opposition and attorneys who demonstrate their ability to take their case to trial tend to get better results at mediation. Daniel Ben-Zvi is a mediator, neutral evaluator and arbitrator with ADR Services, Inc. Mr. Ben-Zvi is a “Distinguished Fellow” with the International Academy of Mediators. He is co-author of the book, Inside the Minds – ADR. He is one of 32 “Power Mediators” [Hollywood Reporter]. Admitted to 5 State Bars, Mr. Ben-Zvi draws on his 20 years as a multi-state trial lawyer in mediating wideranging disputes. Caroline C. Vincent is an attorney mediator, neutral evaluator and arbitrator with ADR Services, Inc. in Los Angeles and Orange County. She specializes in employment, personal injury, probate/elder abuse, insurance, professional liability and complex business and real estate disputes, including class and mass actions. She is a 1978 graduate of the USC Gould School of Law where she served on Law Review. SEPTEMBER 2013
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Sanford Gage
Attorney’s fees: “The tail that wags the dog” How to get the most out of mediation of these cases The “American Rule” regarding attorney’s fees is: absent a contract, an applicable statute, a finding that the losing party acted in bad faith or other exceptional circumstances, each side bears its own attorney’s fees.
Award of attorney’s fees
But the increasing number of discrimination, consumer protection, whistle blower, private attorney general, elder abuse and other federal and California statutes and case law authorizing the recovery of attorneys’ fees by the prevailing party has greatly expanded. Most of these statutes are not reciprocal. With the exception of the anti-SLAPP statute, most provide for recovery of attorney’s fees only by the prevailing plaintiff. Moreover, the appellate courts have recognized the importance of awarding enhanced fees to compensate for the inherent risk in taking those socially desirable but difficult matters to trial. Accordingly, the successful party may be awarded a multiplier, thus increasing the fee award. It is the purpose of this article to point the way to attorneys handling these cases to achieving more successful results in mediation.
The tail that wags the dog
Because attorney fees often can outstrip the basic recovery, it has prompted one appellate jurist to wryly quip that “All too often attorney fees become the tail that wags the dog in litigation.”
Wag the dog
Where the contract, law, or statute mandates or authorizes the recovery of attorney’s fees by the prevailing party, they should not be treated as a “throw away” at the end of the settlement discussion. This is particularly true when they represent the larger part of the potential recovery. Accordingly, the first step to securing an adequate recovery is to document the basis for the claim of fees. You should indicate whether it is discretionary or mandatory and whether it
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applies only to one side of the litigation or equally on behalf of both parties.
Timing your mediation
In cases where a party has the potential for the recovery of attorney’s fees, give thought to when you should schedule a mediation. Consider the urgency of your clients’ needs compared to the necessity to conduct discovery. Will sunk costs sink a delayed mediation or will discovery demonstrate liability? How likely is it that you will prevail and be reimbursed for your time? Or is liability so doubtful that sooner is better? Are there any motions pending that might affect the valuation? What is the availability of your mediator and your opponent? As a general rule, all other things being equal, sooner is better.
Overall strategy for settlement at mediation
It has been my experience that as many as 90 percent or more of mediated cases settle at the first session or shortly thereafter. This fact is of singular importance. This means that it is likely that your case will resolve at the first meeting. Accordingly, what can you do to maximize the outcome at that initial session in cases that allow for the recovery of attorney’s fees? This is my suggestion. I believe that these cases call for preparation of a comprehensive brief. Not only should your brief demonstrate liability but also it should document support for a substantial award of attorney’s fees. The amount of attorney’s fees reasonably incurred to the date of the meeting should be set forth in the mediation brief. The brief then should be sent to the defendant well in advance of the mediation date. Why? This is why. What is the one potential item of damages that your opponent does not have? Your claim for attorney’s fees! By providing your opponent with this additional information, you give them the opportunity to increase the valuation placed on your case. For a plaintiff, sending your adversary the brief allows the claims department, risk manager,
government entity, or self-insured defendant the opportunity to increase their evaluation of your case prior to the time you meet for mediation. Caution: The figures provided should be real and not fanciful numbers and should be documented behind the scenes. Too often attorneys simply show up at mediation and attempt to provide an informal estimate of the time spent or the rate they believe should apply. That is not persuasive to defense counsel or claims personnel.
Applicable principles
• The prevailing plaintiff is entitled to an award of attorneys’ fees Generally the types of cases that provide for the award of attorney’s fees are difficult and heavily contested. Moreover, it is not unusual that not all claims advocated are proven. However, the plaintiff need not prevail on all claims or causes of action. A plaintiff is the prevailing party if he or she succeeds on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit. The U.S. Supreme Court has stated: “Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee. Normally, this will encompass all hours reasonably expended on the litigation, and indeed in some cases of exceptional success an enhanced award may be justified. In these circumstances the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit.” (Hensley v. Eckerhart, (1983) 461 U.S. 424, 436.) • Attorney fee awards should be fully compensatory California law is in accord with the Hensley decision and holds that prevailing plaintiffs are entitled to compensation for all hours reasonably spent, including those necessary to establish and defend the fee claim. In order to be effective in accomplishing the legislative purpose of assuring the availability of counsel to bring
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meritorious actions, the goal of an award of attorney fees is to fix a fee at the fair market value for the particular action. Fee awards should be fully compensatory. • The lodestar approach is the starting point to assessing attorney’s fees The lodestar is the reasonable value which attorneys of like skill and experience would typically be entitled to receive for comparable legal services in the community. The “adjusted lodestar” method is the proper method for calculating an award of attorney’s fees in California under state or federal law unless the statute authorizing the award expressly provides otherwise. Under the lodestar method, a reasonable attorney’s fee is determined by first multiplying the number of hours reasonably spent by reasonable hourly rates (i.e. the lodestar), then adjusting that figure to reflect other factors such as contingent risk, novelty and difficulty, delay in payment, results obtained and
public policies served. (Serrano v. Priest (1977) 20 Cal.3d 25, 48.) • Document your fee claim In determining a reasonable rate for the attorney’s services, courts usually consider: (1) the prevailing rate charged by attorneys of similar skill and experience for comparable legal services in the community; (2) the nature of the work performed; and (3) the attorney’s customary billing rates. • It is an abuse of discretion to reduce attorney fees without substantial reasons In the landmark case of Moreno v. City of Sacramento (9th Cir. 2008) 534 F.3d 1106, the jury awarded plaintiff $717,000 compensatory and punitive damages for violation of his civil rights and the destruction of his property. The plaintiff ’s lawyer requested fees of $704,858.07. The trial judge cut the request approximately 40 percent, to $428,053. In doing so, the trial
judge refused to award more than $300 per hour – the same rate he had been awarding to successful attorneys over the past 10 years – despite evidence that a higher rate was warranted. In reversing the trial judge, Judge Kozinski, wrote that: “The district court’s function is to award fees that reflect economic conditions in the district; it is not to “hold the line” at a particular rate, or to resist a rate because it would be a “big step.” If the lodestar leads to an hourly rate that is higher than past practice, the court must award that rate without regard to any contrary practice.” (Ibid.) • Fees can be given a haircut and trimmed by 10 percent Moreno also articulated a bright-line rule for when the onus is on the trial court to provide an explanation of its reasoning for cutting an award as follows: “… the district court can impose a small reduction, no
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greater than 10 percent, a “haircut” – based on its exercise of discretion and without a more specific explanation.” (Id. at 1107.) While the trial court has discretion to make a reduction greater than 10 percent, “…we cannot sustain a cut that substantial unless the district court articulates its reasoning with more specificity.” The court further explained: “If opposing counsel cannot come up with specific reasons for reducing the fee request that the district court finds persuasive, it should normally grant the award in full, or with no more than a haircut.” (Id. at 1116.)
Substantiate your fees
• Consider bringing your [redacted] time records or other documentation to mediation The best way to get paid the full measure of your claim for fees if the matter proceeds to trial is to keep meticulous time records that will be presented to the
court by the successful plaintiff attorney. Case law establishes that verified time statements of the attorneys, as officers of the court, are entitled to a presumption of credence in the absence of a clear indication the records are erroneous. Contemporaneous time records are considered more reliable than reconstructed ones and when presented in declaration form are presumed to be correct. There should be backup regarding the appropriate measure of attorney’s fees. These records can be brought to the mediation and shown in confidence to the mediator who can then serve as your advocate concerning the time spent, the appropriate rate and the total amount sought. Likewise, if there are other confidential issues, they can be presented separately to your mediator and not disclosed to the other parties. It might also be helpful to estimate how much more time will be required to
complete discovery and try the case if it is not settled at mediation. That time estimate provides the basis to indicate how substantial the future attorney’s fees might be, thus dramatically increasing the risk of future costs to the defendant, over and above the actual damages in the case. • Don’t be put off by defense arguments regarding staffing decisions California courts have recognized that multiple counsel are permissible and often advisable when the demands of the case warrant more than one attorney. In such cases, some duplication of work is both expected and compensable. It is primarily up to the law firm to ascertain how to staff a case. It is not a sound argument to contend that other firms would have used a less skilled attorney, rather than the lead counsel, to perform certain tasks such as document review. The law is clear that the “trial court
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may not set the fee based on speculation as to how other firms would have staffed the case.” • Case law supports awarding a multiplier in public-interest cases Not all public interest statutes favor the plaintiff, but similar principles apply where the prevailing party is the defendant. Ketchum v. Moses (2001) 24 Cal.4th 1122, involved a special motion to strike a so-called Strategic Lawsuit Against Public Participation (a SLAPP suit) brought pursuant to section 425.16 (c) of the Code of Civil Procedure, which provides for mandatory fees for any defendant who brings a successful anti-SLAPP motion. The trial court granted the motion and awarded an initial lodestar fee of $70,106 to the prevailing defendant and granted a 200 percent enhancement based on contingent risk and the exceptional quality of the legal services provided. In a SLAPP suit, it is the defendant who can benefit from the expectation of an award of attorney fees and use that fact to negotiate at mediation. Although returning the Ketchum case for further proceedings, the California Supreme Court stated: “Under our precedent, the unadorned lodestar reflects the general local hourly rate for a fee-bearing case; it does not include any compensation for contingent risk, extraordinary skill, or any other factors a trial court may consider under Serrano III. The adjustment to the Lode Star Figure, e.g., to provide a fee enhancement reflecting the risk that the attorney will not receive payment if the suit does not succeed, constitutes earned compensation; unlike a windfall, it is neither expected nor fortuitous. Rather, it is intended to approximate market-level compensation for such services, which typically includes a premium for the risk of nonpayment, or delay in payment of attorney’s fees.” (Id. at p. 1123.) • The contingent nature of recovery warrants a multiplier As our Supreme Court explained in Ketchum “A contingent fee contract, since it involves a gamble on the result, may properly provide for a larger compensation than would otherwise be reasonable. The purpose of a fee enhancement, or multiplier, for contingent risk is to bring the financial incentives for attorneys enforcing important constitutional rights, such as those protected under the anti-SLAPP
provision, into line with incentives that they have to undertake claims for which they are paid on a fee-for-services basis. (Id. at 1123.) The economic rationale for fee enhancement in contingency cases has been explained as follows: “A contingent fee must be higher than a flat fee for the same legal services paid as they are performed. The contingent fee compensates the lawyer not only for the legal services he or she renders but for the loan of those services. The implicit interest rate on such a loan is higher because the risk of default (the loss of the case, which cancels the debt of the client to the lawyer) is much higher than that of conventional loans. A lawyer who both bears the risk of not being paid and provides legal services is not receiving the fair market value of his or her work if the lawyer is paid only for the second of these functions.” (Id.) “If he is paid no more, competent counsel will be reluctant to accept fee award cases.” (Citing Leubsdorf, The Contingency Factor in Attorney Fees Awards (1981) 90 Yale L. J. 473, 480) Such fee enhancements are intended to compensate for the risk of loss generally in contingency cases as a class. In cases involving enforcement of constitutional rights, but little or no damages, such fee enhancements may make such cases economically feasible to competent private attorneys.” (Weeks v. Baker & McKenzie (1998) 63 Cal.App.4th 1128, 1172.) The lodestar method is intended to mirror the legal marketplace. In the legal marketplace, as the California courts repeatedly have recognized, an attorney whose compensation is dependent on success – who takes a significant risk – should and does expect a higher fee than an attorney who is paid a market rate as the case goes along, win or lose. Because a contingent fee contract involves a gamble on result, it may properly provide for larger compensation than otherwise would be reasonable. Factors other cases have considered include riskiness, difficulty or contingent nature of litigation; affirming multiplier because case was a relatively complex matter where success was not assured and where appellants fought the case at every turn. • Cases upholding multipliers Attorneys should be familiar with cases in which substantial fees have been
awarded against the losing party and then enhanced by applying a multiplier. In Crommie v. Public Utilities Comm (N.D. CA. 1994) 840 F. Supp. 719, plaintiffs’ counsel were awarded $724,380 in fees calculated upon a multiplier of 2.0, based on the difficulty of the questions involved, the skill displayed in presenting them, the extent to which the nature of litigation precluded employment by the attorneys, the contingent nature of the fee award, and to give an enticement to counsel to undertake difficult cases in the public interest. The 2.0 multiplier of fees was affirmed sub nom in Mangold v. California Public Utilities Comm. (9th Cir. 1995) 67 F. 3d 1470, 1479. In Bernardi v. Yeutter (9th Cir. Cal. 1991) 951 F. 2d 971, a civil rights class action, the magistrate recommended a fee of over $600,000, but the district court substantially cut it to slightly over $100,000. The Ninth Circuit granted a multiplier of 2.0. It concluded that a 2.0 multiplier was required in the San Francisco market to ensure that counsel will accept civil rights contingency fee cases. Accordingly, they increased the district court’s attorneys’ fee award to $225,531.60. Bouman v. Block (9th Cir. Cal. 1991) 940 F. 2d 1211, cert. denied, Block v. Bowman, 502 U.S. 1005, was a class action alleging sex discrimination against the Los Angeles Sheriff ’s Department. The trial judge granted a multiplier of 1.3. On appeal the court concluded that the evidence indicated that it would be very difficult to secure attorneys to take such cases without a greater multiplier and remanded it to the trial judge to consider a factor of 2.0 in light of evidence of the market conditions in Los Angeles. In Downey Cares v. Downey Community Development Comm. (1987) 196 Cal.App.3d 983, plaintiff brought suit acting as a “private attorney general.” pursuant to Government Code section 91003, the Political Reform Act. The appellate court affirmed the trial judge who had awarded a multiplier of 1.5. • The trial court must consider a multiplier in appropriate cases In Greene v. Dillingham Construction, N.A. Inc. (2002) 101 Cal.App.4th 418, plaintiff was awarded $490,000 for SEPTEMBER 2013
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emotional distress damages in an FEHA case. Attorney fees of $1,095,794.55 were awarded. However, the appellate court held that it was error for the trial court to refuse even to consider a multiplier for the risk
involved. Accordingly, the fee award was remanded to the trial judge with directions to consider whether to apply an additional fee enhancement for contingent risk factors.
• California courts have consistently upheld substantial awards of attorneys’ fees in public-policy cases In Vo v. Las Virgenes Mun. Water Dist., (2000) 79 Cal.App.4th 440, the jury found that the defendant was liable for harassment based on race, awarding the plaintiff $40,000 in compensatory damages, an amount later reduced to $37,500 by stipulation. The trial court then awarded the plaintiff $470,000 in attorney fees. Despite the fact that the fee award was more than 10 times greater than the plaintiff ’s damages, the court concluded that the fee was justified because the defendant took a rigid non-settlement posture, and because the award served the FEHA’s objectives of exposing and deterring discrimination. In Harman v. City and County of San Francisco (2007) 158 Cal.App.4th 407, compensatory damages of $30,300 were awarded pursuant to 42 U.S.C. § 1983, and after the third appeal, the Court of Appeal upheld the trial court award of over $1.1 million in attorneys’ fees under 42 U.S.C. § 1988: “On the face the award seems unreasonable. But we find no basis for this Court to reject the findings made by the court below.” In Flannery v. Prentice (2001) 26 Cal.4th 572, a fair employment and housing acts case, the trial court awarded approximately $1 million in fees after jury returned verdict in favor of plaintiff for $250,000. • Consider arguing that a multiplier of the lodestar is warranted in your case Another way to increase your recovery at mediation is to point out that the trial judge has discretion to award a multiplier to your claim for fees. Indeed, case law supports an enhancement when the litigation is extremely difficult or contentious or liability is problematic. In other words, the more your opponent argues against liability, and the harder he/she fights, the better argument you have for an increased award of fees in the event you prevail at the time of trial! • The reciprocal nature of the award of attorney fees in contract cases The negotiation situation is entirely different where a contractual provision is relied upon. California Civil Code section
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1717 grants the right to an award of attorney’s fees to the prevailing party where a contract so provides. The California Supreme Court has held that fees must be
awarded to the prevailing party. However, as the code section is reciprocal in operation, it is not necessarily the plaintiff that enjoys an enhanced award. Accordingly,
the mediation dynamics are entirely different from the type of matters that are the focus of this article. In contract provision cases effective bargaining is far more dependent upon predicting the outcome of the trial than otherwise is the case. • Cases that remind the parties to settle at mediation In Deane Gardenhome Assn. v. Denktas (1993) 13 Cal.App.4th 1394, the HOA advised homeowners the color they painted their house violated the CC&R’s and they would have to repaint at a cost of $1,500. Plaintiffs refused and prevailed in litigation. Appellate court ordered payment of $15,000 for attorney’s fees per Civil Code section 1717. In the more recent homeowners’ case of Ritter & Ritter, Inc. v. The Churchill Condominium Assn. (2008) 166 Cal.App.4th 103 the plaintiffs recovered $4,620 economic damages to their unit, having been found 25 percent at fault. Their attorney was awarded $531,159 fees. The defendant had claimed it was the prevailing party and had sought to recover its fees of $775,000, which were denied. Conclusion
The availability of attorney’s fees should never be overlooked, and can be used to the plaintiff ’s advantage in negotiating a settlement. As the cases and material illustrate, the cost of litigation is greatly increased when the losing party has to pay two sets of lawyers. Hopefully the suggestions contained herein will go a long way towards improving your results at mediation. Sanford M. Gage of EnGage Mediation, has over 40 years’ experience as a Trial Lawyer and was named Trial Lawyer of the Year – CAALA, was President of CAALA and of CAOC. He is Co-author of Matthew Bender’s “Insurance Bad Faith Litigation.” He has participated in more than 40 appellate decisions and served as lecturer and author of over 200 legal articles. SandyGage started the Advocate & Forum Magazines and is designated “A Trailblazer of the Law” and one of the top 10 attorneys in Los Angeles by L.A. Magazine.
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Michael D. Young
Let’s get the mediation brief right, shall we? How a “crying baby” can reveal a mediation solution I don’t want to say that every mediation brief stinks…but seriously, every mediation brief stinks. I don’t blame the lawyers, of course. After all, why blame the people who hire you when it’s so much easier to blame our legal education. Hey, Professor Dumbledore, how come you didn’t have a course entitled “Mediation Brief Writing That’s Actually Useful?” I’d have taken it (pass/no pass of course, just in case). The fact is, lawyers today present their trusty mediators with a 25-page recycled summary judgment motion, exhibits included, with a dashing new caption page entitled “Confidential Mediation Brief;” or they submit a three-page recitation of the most elemental facts. Regardless, these fine examples of legal prose end with a promise that the party is here to negotiate in good faith despite how worthless and frivolous the opponent’s case happens to be (and the opponent himself is for that matter), and will either (a) magnanimously waive costs in exchange for a dismissal, or (b) accept full damages, (but discount punitives), as the case may be. Very helpful. Still, while this may be better than nothing (sometimes), can’t we do better? Isn’t there a way to draft mediation brief that lives up to its resplendent name, i.e., one that addresses mediation, and is brief? The answer is YES! Where do we start? Well, as my mother’s uncle so famously wrote back in 1959, let’s start at the very beginning, a very good place to start (Oscar Hammerstein II, “The Sound of Music”). And in the mediation brief writing world, the beginning is with this basic question: What is the purpose of the mediation brief?
The purpose of the humble mediation brief Too many of you fancy-pants trial lawyers see the mediation brief as an opportunity to persuade your mediator. You like to focus on the legal claims, which is not surprising considering you
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are representing your clients in a court of law and you spent all that time in law school learning the law…or at least where the law is stored. (In the good old days, it was stored in books…. Uh, I mean, that’s what I’m told by those old guys.) These ferocious litigators see mediation as another court process, only with nicer neutrals, friendlier staff…and food. Hence, the purpose of a mediation brief for the trial warriors is to convince the mediator, like the judge, that trial victory is inevitable! As Al Davis would say…just win, baby! There’s a disconnect here, however. As you know only too well, mediation is not a win/lose process – in mediation everyone wins (no, I don’t subscribe to that fallacy that a successful mediation is when all parties leave a little bit unhappy. But that’s a topic for another article). And further, the mediator is not a judge (not anymore, anyway, Your Honor (Ret.)). Since we make no substantive decisions, providing us with an advocacy piece designed to convince us that the case is strong and has no holes accomplishes … what, exactly? On the other end of the spectrum are the attorneys – perhaps even you? – who either go through the motions just to show the client that they filed something, or use the mediation brief to inform (barely). They take the word “brief ” too literally, providing your energetic mediator with three entire pages of the highest-level recitations of the essential facts, combined with short summaries of the basic legal principles (concluding, of course, with the obligatory, “We are here in good faith”). But if this is all a brief needs to accomplish, why bother writing anything at all? Just give the mediator a call! (Yes, you can do that. And you should, unless the mediator beats you to it and calls you first.) A personal phone call will certainly provide both the attorney and the mediator with a bonding moment, while allowing the attorney to inform the mediator (and persuade, for that matter).
But while persuasion and information may be fine ingredients of a modern mediation brief…they don’t go far enough. Let’s back up one more time (and then I promise, we’ll go forward and actually learn something about the mediation brief). As we all know, there are many ways to resolve a dispute (I settled a landuse dispute with the flip of a coin. Yes, alcohol was involved.) The only dispute resolution process that is compulsory and doesn’t involve guns is, of course, the well worn state-sanctioned legal process, that long tortuous, bumpy, and expensive path to trial. This path is a predictable one, filled with depositions, written discovery, discovery disputes, summary judgments and other dispositive or limiting motions, experts, costs, fees, juries, judges and appeals, not to mention stress, pressure and interference with everyday work and life. It’s not the prettiest forward-looking path, but at least it is a future that will – eventually – result in a final resolution, a winner (the lawyers, and sometimes even one of the clients) and a loser. With a little help, the parties can usually understand and appreciate what that future will be like, and what it will cost to get there. In mediation, by contrast, the parties are all looking to create a warm, fuzzy path to an alternative future that looks brighter and smells rosier than the dank path they are currently on. They are looking to identify impediments on that new path, craft detours around them, and generally work together (yes, even a distributive negotiation is a process the parties do together) to see if they can invent a new future that they both like better. The mediator is right there in the middle of this exploration, helping the parties to investigate and analyze their options, and to then compare those options to the less-thancuddly future they currently face (the BATNA analysis for you Getting To Yes fans).
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So shouldn’t the mediation brief be designed to help the mediator help the parties in this quest for a better future? Shouldn’t it provide the mediator with the information and tools he needs to help the parties identify and explore meaningful alternatives, recognize and overcome obstacles, and appreciate the BATNA? In other words, rather than focus on the law or the facts or the legal arguments, the mediation brief should instead be aimed at helping the mediator help the clients obtain the best settlement – or at least the best settlement proposal – possible through the mediation process. In short, it should help us do our thing. Give us what we need
So to write a better mediation brief, simply give the mediator what she needs
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to do her thing. And what, you ask, is that? First, the mediator needs to understand “the problem.” Second, she needs to appreciate “the solution.” (Oh, is that all?) What’s the problem? Let’s start with the problem. What is it? No, it’s not the legal case that will ultimately be tried to the judge or jury. Rather, for mediation purposes, the problem is whatever it is that is keeping these two parties from finding a resolution to that legal case. Stated another way, every dispute is, as a matter of definition, at an impasse. If there is no impasse, nothing is stopping the parties from settling the case and heading to the local pub to celebrate. (Try flipping a coin while you are there.) Find the impasse, and you are on your way to crafting a resolution. This search for the
cause of the impasse – the driver of the dispute – is the ultimate treasure hunt for your diligent mediator. If he can discover what is really preventing the parties from coming together, he can then move to step two: Helping the parties around it. What am I talking about? Take this quiz: Q: How do you stop a baby from crying? Feed it? Burp it? Rock it? Distract it? Give it medicine? Change its diapers? A: It depends. Don’t you first need to know what is causing the tears? Is he hungry, tired, bored, sick…or stinky? Once you figure out the cause of the tears, the solution becomes much easier to find. (Unless you’re like the author, in which case the solution is the same no matter what: “Here you go, dear.”) The clients want the tears to stop; the mediator is (a) trying to figure out
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the cause of the tears, so he can (b) help the clients find a meaningful solution. A mediation brief that simply says the baby is crying is a step in the right direction… but a better brief would note that the baby hasn’t been fed in a while. Take this employment case, for example: The plaintiff is a woman with substantial hearing loss who can read lips well, works hard, and has succeeded in the business world without having to rely on sign-language interpreters. Indeed, she refuses to assert her loss of hearing as a disability and insists on making it on her own without help or accommodation, despite efforts by the employer to provide her with assistance. After a few years, this employee is terminated after some important customers complained about difficulties in communicating with her, and she had a number of documented attendance problems. A lawsuit ensues. Why hasn’t this case settled? What is the obstacle preventing the dispute from resolving now? There could be any number of obstacles. Identifying them is the first step in approaching mediation, and will guide the brief writing. For instance, the driver of this dispute (the cause of the impasse) could be: • Financial (“I am a small employer with very little cash flow and no insurance;” or “I don’t care what this case is worth, I need $100,000 to save my house from foreclosure”); • Emotional (“I was dating my former boss, and he broke up with me for that tart in accounting”); • Attorney ego (“I’m better than my opposing counsel…and I’m going to prove it”); • Client inattention (“the defendant is in merger talks and can’t focus on this dispute at the moment”); • Business realities (“my cash flow is seasonal – and this ain’t the season”); • Informational (“the defendant claims it has 10 customers who have complained over the last three months alone, but it’s keeping their identity a secret”); • Legal (“the law’s not clear about the employer’s obligations under these circumstances”); • You or your firm (“I need trial experience;” or “I’ve been too busy to focus on this case”);
• Unrealistic client expectations (“I deserve $1 billion for the emotional distress they caused me”); • Opposing attorney or client (“That shady defense firm needs to bill this case longer”). So to get back to the question, what does the mediator need in order to understand the problem? He needs to find this driver, this underlying cause of the impasse. Until he can help the parties figure out why the baby is crying, the search for a solution is simply futile. How can the mediation brief help? The mediation brief should help the mediator in this quest. It should allow the mediator to peek behind the curtain to see what is really going on. It should tell her what the relationship is like between opposing counsel. What about the relationship between attorney and client on each side? Perhaps more telling, what is the relationship of the two parties? What did it used to be? Why is the plaintiff suing? Why is the defendant fighting as hard as he is? What is the plaintiff doing now, and how are her finances? What are the defendant’s finances? Is insurance involved? What is the carrier’s position? You will need to be insightful. You will need to be objective. You will need to be part psychologist and part sleuth. Dr. “Sherlock” Phil so to speak. You will need to speak with your client in person and with compassion, to dig deep, well below the surface, to find out what is really going on here. And then stick that in your mediation brief. The brief should look at the drivers identified above and help the mediator figure out which, if any, apply. Help your mediator understand the true dynamics of the dispute. Explore the solution Which leads to the second item the mediator needs in order to help the parties find that elusive better future (where birds are singing and unicorns run free): the solution. Understanding that the baby is hungry is a great first step. We no longer need to consider medicine, diapers, toys, etc. All we have to figure out now is how to feed the ear-piercing little princess. In the employment example above, assume the plaintiff did have a consensual
relationship with her former work colleague which went sour after that little tart in accounting was hired. The driver of this dispute may have nothing to do with the ADA and reasonable accommodations and everything to do with a certain amount of residual personal animus. Or assume the plaintiff really was proud and determined not to let her loss of hearing in any way interfere with her success in the business world. The dispute in this case may have more to do with pride and an inability to acknowledge that a little help might be called for rather than with any discrimination by the defendant. Or maybe the plaintiff just needs money to make rent for the next six months while she looks for another job. A resolution to each case will depend on understanding these underlying dynamics. What does all of this have to do with writing a killer mediation brief? Harken back to your negotiation training days and channel your inner-Fisher & Ury (of Getting To Yes fame) where identifying underlying interests was the key to happiness. The brief should tell the mediator what is going on. What does the client want? What is she concerned about? What are her desires and needs? What does she think would be her ideal resolution (other than “$1 billion” or “dismissal with prejudice”)? After all, the parties have the inside track in knowing what they want and need. You’ll have some good ideas as well. The brief should share those ideas with the mediator. The killer mediation brief
Put this all together, and a good mediation brief for most legal disputes could be drafted in about seven pages, and would cover the following: 1.) A short description of the case and the key legal and factual issues: This should not be long or detailed – certainly not a summary judgment rehash; just enough to introduce the dispute and give the mediator an idea of what the client’s existing future path looks like, that ugly road to the six or 12 well intentioned knuckleheads and the sometimes brilliant, oft-times unpredictable jurist. 2.) The status of the litigation: Where in the litigation process is the case? What is SEPTEMBER 2013
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the status of depositions and other discovery? What’s the summary judgment story? When is trial? Again, this helps the mediator (and the client) better understand
what the client has in store for himself if the case doesn’t settle. 3.) A summary of settlement discussions to date, if any: Who said what and what
was the response? Include each party’s last settlement position. 4.) Roadblock to settlement: Now we get to the good stuff, the stuff that will lead to the development of possible alternate futures. Explain the cause of the current impasse, or the actual driver of the dispute. Address the questions set out in the “How Can The Mediation Brief Help” section above. Include something perhaps a little more introspective than “the current roadblock to settlement is the opposing attorney’s asinine legal theories and his client’s fantastical expectations” (though that could be a fine start). 5.) Search for solutions: Describe any dynamics that might be impacting a resolution. Are there any important views, beliefs, desires or secret needs of the parties? What might a settlement look like? Granted, this might be the hardest to discern for the advocate, but it might also be the most valuable for the mediator and the client. Confidential…or not. Or both.
Now if you’ve made it this far, you are probably thinking “a brief like this is so confidential, I may not even share it with my law partner, let alone my opposing counsel.” So is this the death knell of mutually exchanged mediation briefs? As we say in Latin: Itnay Dependsay. Or for the less edified, it depends on the purpose of the brief and the cause of the impasse. For instance, if part of the impasse is the opposition’s perceived failure to appreciate the strength of the legal case, then exchanging polite briefs (seriously, polite briefs!) that outline the legal case, provide some legal cites, and explain the damages analysis, can be extremely helpful. Indeed, there is nothing wrong with using the mediation brief to educate the opposing party on these issues. Even if the impasse is the defendant’s lack of finances, this might be information that the defendant wants the plaintiff to have before the mediation in order to avoid surprise. In these cases, the brief should be informative, non-inflammatory, and shared. On the other hand, if the impasse (and hence a focus of the brief) is on how
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“difficult” the opposing party or attorney is, or what the client’s secret need is for resolving the case, or even how unrealistic the client herself is, then a confidential brief sounds pretty good. After all, the goal of the brief is to assist the mediator, not inflame the opposing party or sell out your client. And if it makes sense, write two briefs – one to be shared…and one with the good stuff. Items (1) – (3) above can probably be shared in most cases. Items (4) and (5), well, probably not. Conclusion
We are all in the dispute resolution business. Trial is a fine way to resolve some disputes, and the legal briefs filed in court should be written to support that process. Your side should win, the other side should lose, and here’s why….
Mediation is about creating alternative futures that your client will like better than the path to trial. It’s a process of exploration, experimentation, and discovery. It’s about identifying and satisfying needs and desires. It’s bringing to life the words of the immortal philosopher who at age 102 is still singing in concert: “You can’t always get what you want; but if you try sometimes well you just might find, you get what you need.” The mediation brief is an opportunity to help the client find that better future – to help her get what she needs. It’s a writing that should be designed to help the mediator (a) identify the underlying causes of the impasse, and (b) the elements impacting the search for a solution. Convincing the mediator that you will win at trial is fine…but if that’s all your brief says, you are missing a golden opportuni-
ty to help your client get the most out of the mediation process, and may hide a beneficial resolution that is begging to break free. Michael D. Young is a full time neutral with Judicate West in California, focusing on employment, intellectual property, and other complex civil matters. He is a Distinguished Fellow with the International Academy of Mediators, and was an adjunct professor in negotiation and mediation at USC Law School for nearly a decade. He welcomes your comments at Mike@MikeYoungMediation.com, or join the conversation at http:// www.MikeYoungMediation.com/ask-a-mediator.
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About this Issue Joan B. Kessler
Associate Editor, ADR Issue
Interview: Kenneth Feinberg The government’s go-to guy for arbitrating victims’ funds tries to treat individuals with empathy and not as assembly-line cogs Kenneth Feinberg was designated by the Obama Administration and British Petroleum (BP) to serve as Administrator, Gulf Coast Claims Facility. He served as the Special Master for TARP Feinberg Executive Compensation, and served as the Special Master of the Federal September 11th Victim Compensation Fund. He was also one of three arbitrators selected to determine the fair market value of the original Zapruder film of the Kennedy assassination and was one of two arbitrators selected to determine the allocation of legal fees in the Holocaust slave labor litigation. Mr. Feinberg was designated “Lawyer of the Year” by the National Law Journal. He is listed in “The 100 Most Influential Lawyers in America.” Mr. Feinberg has a BA from the University of Massachusetts and a JD from NYU. He is the managing partner of Feinberg Rozen, LLP. He was a Law Clerk for Chief Judge Stanley H. Fuld; and Administrative Assistant to Senator Edward M. Kennedy. On a cold Washington, D.C., afternoon in March when flights were being delayed or cancelled due to a threat of a snowstorm, it was warm and cozy in Ken Feinberg’s D.C. law office. Ken Feinberg has mediated settlements of the 9/11 Victim Compensation Fund, Agent Orange claims, asbestos claims, and many other major disputes. Operatic music played in the background and walls were covered with articles, pictures and tributes to a world-class mediator – a truly remarkable man and a fascinating interview. JK: What is it in your family background that led you to this career? KF: It’s hard to pinpoint any one event. I grew up in a middle-class environment, in a blue collar town in Brockton, 64 — The Advocate Magazine
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Massachusetts, in the early 1960s, when a fierce son of Massachusetts was President of the United States and I think my Jewish upbringing, in a time when optimism reigned supreme, you know after World War II, when a small, vibrant Jewish community in Brockton believed in the communitarian effort to help one another. We can all succeed as a group, if you put your mind and your body to the task. And I always think that, that upbringing in Brockton infused in me (1) an interest in public service (2) a desire to reach out and help the underdog, the less fortunate, the 8 ball, behind the 8 ball victim, and (3) I think, to do it in a communitarian way, that we have an obligation as a society, not as individuals alone, to come to the help of our fellow citizens. And all of that was part of that upbringing in Brockton after World War II and to the late 1960s. JK: Ken, when you say help others as a communitarian, what do you mean by that? KF: I think that government, at the local, state, and federal level does have an important role to play. I think the churches and the synagogues have an important role to play. Charity is an important facet of this. I think that we have an obligation, as best we can, as individuals as well as members of society, to reach out and help others less fortunate. JK: Like it takes a village? KF: Like it takes a village. JK: How did you prepare for this extraordinary career as a mediator? KF: You don’t prepare for a career like mine. You really don’t. You go to college and you go to law school. You never plan for this. And what you learn is you can’t plan. The best laid plans get skewed by events, by circumstance and that’s what
happened to me. I never planned this career. I never planned in college or law school to be a mediator or a dispute resolver. Events overtook my plan. JK: How did you get your first big mediation? I know you discuss this in your book, Who Gets What: Fair Compensation after Tragedy and Financial Upheaval, which was very interesting. KF: The first big mediation I ever did was Agent Orange, involving Vietnam veterans in 1984. Almost 30 years ago, when a federal district judge, who’s still sitting in Brooklyn, Jack Weinstein, asked me to be a very public mediator in the Agent Orange class action involving Vietnam veterans. JK: What do you think it was that Judge Weinstein saw about you? KF: We had clerked for the same judge, 30 years apart. I had known Judge Weinstein, every year when the clerks met to celebrate the courtship. And he saw my previous experience as Chief of Staff to Senator Ted Kennedy as a big plus in my credibility and political contacts in Washington. And he thought that the Vietnam Veterans would benefit from that and he called on me to participate. JK: What training did you have in Alternative Dispute Resolution, if any? KF: None, no training. They didn’t even teach ADR at NYU Law School in the 1960s. It wasn’t even a clinical program. It wasn’t on anybody’s radar screen. This was a practice that I developed really on my own. JK: Can you describe, Ken, what are some of the skills that you use; you’re a personable fellow, I’m sure you use that to your benefit.
Feinberg continues
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Feinberg — continued
KF: I think I’m asked all the time, what are the characteristics of an effective mediator, in my case, competence, you have to understand the issues. There’s no substitute for immersing yourself in the issues, competence. Creativity, finding different ways to get to yes. Hand in glove with creativity is flexibility. Avoid rigidity, always look at how the other person sees it. Try and fashion some grey areas that combine objectives sought by the litigants. Doggedness, do not lose optimism. Be prepared to hunker down and stay at it until we get to yes. Those are some of the characteristics
mediation process? I know you talk about proximity to trial date, or maybe during a trial? KF: What’s very important is that the parties understand when they will begin the mediation and when it will end. Timing is critical. You’re more likely to be successful in a mediation if there is a trial date looming, where you lose control of your own destiny, you see. And I’ve also found that mediations are usually successful in the last two or three hours when there’s an agreed upon deadline about to be met. It’s either, settlement, or it’s over. And very often the mediation participants wait until the “laaast” minute until they think this is the “laaast” chance and then they reach a settlement.
JK: And when you say understanding the issues, is listening an important part of that? KF: Empathy and listening are very important. Put yourself in the other guy’s shoes. How does she see it, how does he see it? What does she think of the strengths and weaknesses of the case? What does he think of the strengths and weaknesses of the case? I think it’s very important to empathize with both sides in a complex dispute.
thirds of all the applications came in, in the last 60 days. But the fund existed for 33 months. For 33 months, and twothirds of the applications came in the last 60 days when people realized they couldn’t hesitate any longer. That by statute, the program was about to expire. JK: You talk in your book about putting a purse together when you have a variety of defendants, and you are trying to get money from various defendants and get these parties to put a purse together. What techniques do you use to get people to pitch in? KF: Well one thing you don’t do is, what I learned the hard way, you don’t put all contributors in a room at the same time because, as you know better than most, when you put everybody in the room together, everybody counts other people’s money. It’s not just about how much will it take to settle, it’s also about allocation. Who pays what of that settlement pot? I found that, a very important technique is to meet separately with each contributor and discuss on the merits a formula, transparent formula, anybody can see it, that can translate into what each contributor should get.
JK: It’s interesting you say that because a lot of times I’ll tell people I have to leave at a certain time and people say “don’t say that; go as long as it takes”, but I like to put a deadline, it sounds like you are saying that. KF: I agree, when you have a deadline, you accelerate the likelihood of success by getting the parties to negotiate under the threat of the clock. And I find that that’s very successful. In the 9/11 Victim Compensation Fund, Joan, over two-
JK: What about the timing, Ken, of the mediation, how does that impact the
Feinberg continues
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Feinberg — continued JK: When you say a “transparent formula,” Ken, are you talking about in the early stages of putting a purse together, do you let people know? KF: Well, in Agent Orange there were eight chemical companies. Let’s look at a formula that is based on volume of sales, Part One, coupled with the amount of Dioxin that you included in your preparation of the herbicide. So it’s not only quantity and volume, it’s also quality of poison. How much of that volume included Dioxin, the chemical that was essential to the success of the herbicide? And everybody, “Here is the formula.” Now you got to apply the formula to your own statistics and data concerning sales. But, there it is, for everybody to see and now I’ll meet privately with each party. Full transparency on the formula, private confidential information about data of each individual company. In Agent Orange, that worked. In 9/11 the statute creating the fund, mentioned the formula. It was right there in the statute. In BP we published, in the BP oil spill, we published the formula. Here’s the formula we’re going to be using to calculate damages. Everybody sees it. Now apply it to your own confidential statistics and data. It worked. JK: But, you still like to work with people individually to put pressure on them and to encourage them? KF: Encourage them and explain, you know, why contribution is better than the uncertain alternatives, yes. JK: It’s not just alternatives, you are showing them a downside risk? KF: It’s the downside risk of litigation more than anything. JK: How do you convince those people they have a downside risk? KF: It’s not hard to convince them of the downside; it’s much more difficult to convince them to participate in the known risk that is the fund. JK: What do you mean by that? KF: The devil you know: “Look Ken. You don’t have to tell us about the downside
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Feinberg — continued
risk of litigation, we live that every day. But what we don’t know is what are the risks associated with participating in your program? It’s a unique program, it’s creative, it’s new, and we don’t have a track
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SEPTEMBER 2013
JK: How do you do it? How many people do you have here? KF: Myself and one other. We pick our mediations very, very carefully. We have part-time people and when we do these big cases, involving 9/11, or BP, you know, not the small individual cases, but the large class actions, and the large claims, we subcontract out to claims companies, accountants, and law firms. We staff up these big cases. JK: With the mass cases, you talk about that in your book, how do you settle large cases and avoid an “assembly line” feel? KF: That is very, very difficult. On the one hand, justice delayed is justice denied. You cannot in a mass case simply anticipate trying the cases one at a time. You can’t. So you’ve got to come up with an efficient way to settle the aggregate. JK: How do you do that? KF: That’s not hard, you meet with the company and the lawyers, class-action lawyers, and you work out an aggregate settlement. 100 million, 200 million, 50 million, whatever it is. Now, you’ve got the aggregate part, the defendants are gone, how do you treat each individual class member, or each individual claimant so that it’s not assembly-line
Feinberg continues
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Feinberg — continued justice? Judge Weinstein in Brooklyn has taken the lead in this through education, hearings, individual hearings, if he can do it, as he did in 9/11. Town hall meetings, where you invite people to come, a gathering to understand a case. Those are some of the steps you try and take to democratize the process to avoid assembly line justice. It’s very difficult. JK: How do you make the individuals feel satisfied in such large matters? KF: Very, very difficult. The best way I’ve learned over the years is by giving each individual claimant, these individuals, an opportunity to be heard. Do not underestimate the power and persuasion of giving people the right, giving them a voice. Either collectively, in large town hall type meetings, or in private confidential meetings with a mediator where you listen to them, empathize with them, explain to them what you can do and can’t do. It’s very hard. But this is an area, Joan, the tension between aggregated justice, mass settlements, and individualized tailored treatment, not assembly line cog in a machine, is very important tension and it’s got to be dealt with. Joan Kessler, a full time mediator and arbitrator at ADR SERVICES, INC., received her Ph.D. in Communication, before she attended law school. She practiced law for over 25 years, was a jury consultant and taught Communications. Many of the communication strategies she taught, her extensive experience as a litigator and her training at the U.S. Army War College enhance her mediation and arbitration practice. She specializes in Employment, Real Estate, Trust/Estate, Business, Commercial, Entertainment and Insurance Cases. Ms. Kessler may be reached at: jkessler@adrservices.org or direct telephone number (310) 552-9800. Ms. Kessler is also on the American Arbitration Association Panel of Arbitrators and a member of the USDC Mediator Panel. Visit her Web site at www.joanbkessler.com.
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Joseph C. Markowitz
Crisis and opportunity Crisis in the courts: making a virtue out of necessity Crisis grips the California court system. In Los Angeles County, budget cutbacks have forced the courts to do away with court reporters, reduce clerical staff, close 10 courthouses, and assign personalinjury cases to a master trial calendar system. At a time when ADR might be considered one of the solutions for relieving the increased burdens on the civil trial courts that these changes will impose, the Superior Court in Los Angeles instead took the surprising step of closing its entire court-connected ADR program. Everyone affected by the court system will have to adjust to increased delays and reduced services, and no one can predict when, if ever, the system will return to “normal.” It might be comforting to think that as the economy improves, we will eventually enjoy business as usual. That seems unlikely, however, as the taxpayers’ acceptance of reduced funding for public services is starting to have the look of a permanent condition. And even if we could return to a semblance of the way things were, we might not choose to go back. It would be a shame to miss the opportunity to re-examine whether business as usual would best serve the profession’s, as well as the public’s, needs. In other words, as long as the system is broken, we might as well think about how we would design an ideal justice system, rather than simply hope that we can get back the far-fromperfect system we used to have.
A perfect justice system
So even though we probably can’t achieve it, and we might not be able to afford it, let’s think about what a perfect justice system might look like. Ideally, wouldn’t we want the courthouse to function as a place where parties in conflict are treated with dignity and respect, where they have an opportunity to tell their stories, and more importantly, where their complaints are actually heard, and where they can expect to find a fair resolution of their disputes at a reasonable
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cost? Under the best of circumstances, how often does the justice system live up to those ideals? Our trial courts allow fewer and fewer cases to proceed to a full hearing, and the available substitute procedures for that full hearing – depositions, disposition by motion, and settlement – often leave parties feeling unsatisfied. Even when access to the courts is assured, litigation is still too expensive, and the adversarial process is often so painful for the parties involved that it can exacerbate rather than resolve conflict. While this system can sometimes be lucrative for the attorneys, the cost of justice is often so high that it defeats even the legitimate purpose of getting lawyers paid for their services. And if lawyers are left with dissatisfied clients at the end, they end up frustrated even in the cases where they are adequately compensated. The rise of ADR, particularly mediation, was supposed to cure many of these ills. But mediation does not operate to everyone’s satisfaction either. Parties are not always sure what to expect from that process. The development of accepted standards and practices is still in its infancy. Mediation still means a lot of different things to different people. And parties to mediation, just as in court, do not always feel they are treated with respect, that they have the opportunity to tell their stories and be heard, or that they are given the sense that their dispute has been resolved in a fair manner, all of which they have a right to expect from any system of dispute resolution. Instead, they may feel they have negotiated away their rights just to avoid the costs of trial, or the possibility of an unfair result in a flawed court system.
Some ADR problems
The L.A. Superior Court developed one of the largest ADR programs in the world, one that processed thousands of cases with fairly good results. Still, it suffered from certain inflexibilities and limitations. The court sent most cases, as a
default option, to randomly-assigned mediators, of varying levels of experience. Because parties were operating under a certain level of compulsion, and did not always respect the process, ADR referrals were often viewed as a cumbersome additional step, rather than as a time- and money-saving way of resolving some or all of the issues in the case. And because these randomly assigned mediators were not paid for the first three hours of service, the program bred resentment among mediators who devoted a fair amount of time to obtaining the training and experience necessary to serve on the panel. I have frequently heard the complaint from volunteer mediators, especially when the amount in controversy is substantial, that they should not be the only professionals in the room who are not getting paid, particularly when they are rendering a service that could actually save the parties substantial costs and risks. (I have made that complaint myself as a member of that panel.) The program was designed by the court tended to serve, primarily, the needs of the court. And because that program was designed by judges and lawyers, it was also replete with rules and it operated under the threat of sanctions. The court program contained detailed rules governing appointment to the court panels, rules governing the assignment of cases, rules requiring completion of mediation by specified dates, and consequences for the failure to abide by these rules. To a great extent, the court program was a one-shot, one-size-fits-all mediation service. When cases did not settle after court-ordered mediation, parties were left to their own devices, or ordered back to another court program, most commonly mandatory settlement conferences with a judge who had no connection, and little time to deal with the case. Without a court-assisted mediation program, the court is going to be even more dependent on MSCs, as well as in need of private services to which cases can be referred.
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Crisis — continued The court program also limited parties’ choices, particularly if they selected the default option of the random select panel. That saved parties the trouble of haggling over the selection of a mediator, but deprived them of the ability to select a mediator appropriate to their case. Still, while a lot of people, including a lot of mediators, loved to hate the court ADR program, most seemed to appreciate its substantial accomplishments. In particular, the court program provided a highly valuable service for relatively smaller dollar amount cases in which the parties have difficulty justifying the cost of a private mediator. The demise of this valuable program will leave a gaping hole.
SCMA: Select a Mediator Program
The unexpected closing of the L.A. Superior Court ADR program has presented the organization of which I am president-elect, the Southern California Mediation Association, with the opportunity to contribute new solutions. Our task is to help SCMA members continue to find opportunities to practice mediation, as well as to assist overburdened courts in reducing backlogs, and help parties in litigation obtain an expeditious and fair resolution of conflict. We also want to help lawyers resolve cases that have become burdensome for both the lawyers and their clients. Even though we do not have all the resources of the former court program, we want to maintain its positive features, and improve on some of its negative aspects described above. This is called making a virtue out of necessity. To accomplish these lofty goals requires re-thinking the elements necessary to make a mediation program attractive to litigants, attorneys and the court, as well as to make it work better for mediators. It requires reconciliation of potentially conflicting interests, something that mediators are supposed to be good at. It also requires consideration of marketing, administration, and cost. The project will involve breaking some old rules, and making some new ones.
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SCMA has developed a new Select a Mediator program designed by mediators, not by the court, although we also try to address the needs of the court. Such a mediator-designed program ought to reflect the values of mediation. A system designed by mediators should be voluntary, meaning that parties should not be coerced or compelled to participate. Such a system should also be flexible, meaning that parties and mediators should have the ability to design a process that meets the needs of each case. A flexible process, for example, might start with a telephone conference call with the mediator, and perhaps involve a series of meetings, rather than be expected to limit itself to a one-time, one-day or three-hour event. A system designed by mediators should be participatory, meaning that it should allow parties to control the conduct and outcome of that process themselves. The parties should be able to choose their mediator, and decide how much they are willing to pay. Participants can specify the criteria they think are important, e.g., whether they want a mediator with subject-matter expertise, whether they want a lawyer, judge or nonlawyer mediator, whether they need a mediator with substantial experience, and how much they are willing to pay. A vol-
untary, flexible and participatory system would then assist the parties in selecting a mediator that satisfies their desired criteria. Such a system will also allow mediators more leeway in determining their own rates and procedures.
Mediation referral system
A mediation referral system designed by mediators should operate with a minimum of rules. It should be helpful. It should be friendly. It should be easy to use. It should serve the needs of a number of divergent types of users and providers of mediation services. The SCMA program starts with an improved searchable directory of mediators on SCMA’s Web site. Only SCMA members are entitled to a listing in that directory. SCMA members are almost by definition committed to continuing their education, and to building a professional organization. In addition, those members who seek listing in SCMA’s directory must certify that they have taken at least a 40-hour course in mediation or the equivalent, or were already members of the court panel. In that way, SCMA can assure users a similar or greater level of quality of mediation services as compared to the existing court panels. Until the SCMA directory proves its value, and at least through the end of
2013, there will be no additional fees to members for listing in the directory, and no administrative fees are being charged to users of this service. I repeat: At least initially, we are making the SCMA Select a Mediator Program a free service, both for our members and for users. The SCMA program allows both users and mediators much greater flexibility in setting the cost of mediation services. Parties will not have to choose between a three-hour free service in which mediators are randomly assigned, and a service that allowed users to select a mediator, but set a fixed $150/hour rate for the first three hours. Instead, users should be able to obtain a much larger range of services and costs. SCMA will not require any of its members to work for free or at reduced rates. On the other hand, SCMA will not prevent any members from offering services for free or at whatever rates they choose. We expect that there will be a sizable number of members willing to offer services at very reasonable rates, particularly for smaller-value cases. In addition, we are considering offering a special reduced-rate program for appropriate cases. Note that the SCMA program corresponds to some extent to the “random
Crisis continues
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select” and “party select” panels to which litigants are accustomed. However, the SCMA directory is organized in the opposite way as the court’s panels. The court program used the “random select” threehour free mediation as the default option. SCMA’s program uses the market-rate panel as the default option, but that panel offers a wide range of fee structures, set by individual mediators. Users can search our directory by geographical area, by area of law specialty, and by rate range. In addition, members of the panels list additional biographical and background information about their experiences and approaches to mediation, enabling users to choose an appropriate mediator in all cases. To maintain quality and satisfaction with the program, we are forming a committee to review any complaints attorneys or parties may have about mediation ses-
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sions conducted by SCMA panel members. We must do that in a way that maintains the confidentiality of the initial mediation sessions. Because we believe in mediation, the SCMA complaint system will probably rely heavily on more mediation to resolve any disputes. The SCMA program is not going to solve all of the problems the courts are experiencing, but it should at least reassure current users of the court panels that they will still be able to find mediation services at reasonable cost. As for resolving all the other problems of the courts, and the legal profession itself, I can only offer a few ideas.
Crisis and opportunity in the legal profession
The current crisis goes well beyond the court system, affecting the legal pro-
fession in general. It’s not only the continued sluggish economy, but also changes brought about by technology, the outsourcing and automation of legal research and routine document preparation, and broader electronic availability of legal information, forms and advice. All these innovations have reduced the demand for legal services performed in the old-fashioned way by human lawyers. As a result, recent law school graduates are having difficulty finding jobs; many law firms are shrinking; career satisfaction is as low as ever. Surveys report high levels of stress among lawyers, and disturbingly high levels of depression, suicide, alcoholism, and other symptoms of dissatisfaction. Some of this stress is undoubtedly caused by the economics of a changing legal market; but a lot of dissatisfaction existed even while
Crisis continues
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Crisis — continued the legal market was strong. That suggests there is something about the whole adversarial system of justice itself that is unhealthy for practitioners and participants. To remain competitive, to remain relevant, to remain useful, to maintain our sanity, a lot of us are re-thinking the way we practice law. Before we even have to contemplate the larger changes in the legal profession, and the defects in our justice system, our local courts’ budget problems are already requiring us to change the way we do business. To keep the system functioning necessitates adjustments in trial and pretrial practice. I heard Judge Buckley speak at a CAALA-sponsored event recently on the budget crisis in the courts. The judge made clear that the system will grind to a crawl unless lawyers reduce their need for judicial services. That means lawyers need to file fewer motions and to resolve more disputes without seeking court intervention. It means the “aggressive” style of litigation that I learned at my first law firm job in the 1980s is a style the courts can no longer afford. But it’s not only the courts that are forcing changes in litigation practice. Clients are also demanding that we produce results more efficiently, and that we offer more creative approaches to conflict resolution. What I’m suggesting is that all practitioners should consider incorporating ideas from the alternative dispute resolution community. Indeed, we almost have to do that to adjust to the diminished availability of the court system, and to the demands of clients in a more competitive atmosphere. That means adopting more collaborative, problem-solving approaches to resolving legal disputes. Instead of filing a complaint, set up a meeting with an adversary. Instead of filing a motion to compel discovery, participate in a genuine give-and-take session to obtain agreement on information that parties need to exchange. Instead of taking an adversarial approach to every problem, try to maintain cooperative relationships with opposing counsel.
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Crisis — continued
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Video Conferencing Does this mean all of us are becoming mediators? To an extent, but vigorous advocacy will also retain an important role. Is a more collaborative approach consistent with the ethical duty to represent a client zealously? Yes, because what clients want is a resolution of their disputes. Clients are not generally clamoring to spend lots of money on litigation so that they can perpetuate conflict. Is a more cooperative approach to practice good for business? Hopefully yes, because all signs are telling us that the traditional approach is just too expensive, too painful and too unhealthy for both lawyers and clients. [Author’s note: The title of this piece is borrowed from the title of the upcoming SCMA fall conference to be held at Pepperdine Law School in Malibu on
November 2, 2013, which will explore the expanding applicability of mediation processes, and will include a track of programs geared toward advocates.] Joseph C. Markowitz is a trial lawyer/mediator with an office in downtown Los Angeles. He is a 1979 honors graduate of the University of Chicago Law School. He represents both plaintiffs and defendants in employment law, intellectual property, and numerous other kinds of commercial cases. With more than 15 years of mediation experience, he has served on the mediation panels of the Los Angeles County Superior Court, the Central District of California, and the Central District Bankruptcy Court, and is currently the VicePresident of the Southern California Mediation Association. He also writes a leading mediation blog, called “Mediation’s Place,” which can be found at www.mediate-la.com.
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Bruce A. Friedman
Mediation of insurance-coverage and bad-faith cases The evaluative mediation approach to insurance-coverage and bad-faith cases While every mediation is challenging, there are three unique aspects of the insurance coverage and bad-faith mediation which the parties and mediator must thoroughly analyze and address: the policy, the cases construing the policy, and the rules applicable to the interpretation of the policy. In my experience, the mediation of these issues should be conducted using an evaluative mediation approach that requires the parties and the mediator to address the strengths and weaknesses of the case, with the mediator weighing in on his or her opinion as to the possible outcomes of the case.
Consider choice-of-law issues
There are three generally accepted styles of mediation: evaluative, facilitative, and transformative. While the facilitative and transformative mediation approaches have a good deal to offer and aspects of them are certainly useful to the mediation of any dispute, I have found that the evaluative approach is what attorneys and their clients expect and is the approach that works best in resolving insurance coverage and bad-faith disputes. Why? The “Principled Negotiation.” By “Principled Negotiation,” I mean a negotiation where the settlement figure is based on provable damages and reflects the strengths and weaknesses of the case and the risks presented by the facts, law and legal process. A principled negotiation is not a discussion based simply on what the plaintiff wants or what the defendant will pay. When it comes to the numbers, the recoverable damages are the starting point and the ability to recover those damages is the focal point of the mediation. Applying this evaluative approach to an insurance coverage and bad-faith case requires that counsel educate the mediator on several issues; including the policy provisions that are at issue in the case, how the policy has been construed by the courts, and the rules applicable to the interpretation and construction of the policy. The parties should provide the
Choice-of-law issues may have a significant impact on the interpretation of the policy and should be addressed in the mediation brief and discussed in the mediation. Is the policy to be interpreted under California law because the underlying case or loss, in a first-party context, is in California? Or under the law of the state of residence of the insured, which the courts generally consider to be the state where the policy was issued? In California, for example, if an issue in the case is notice of claim or suit, California has a notice-prejudice rule that requires that the insurer prove that it has been substantially prejudiced by the late notice. Other states may enforce the notice provision of the policy without regard to prejudice to the insurer. Another example could involve the issue of waiver of coverage defenses. The California Supreme Court has adopted a rule that the insurer does not waive coverage defenses not mentioned in the initial denial or reservation of rights letter. Other states have a more policyholderfriendly rule that provides that coverage defenses are waived if not specifically raised by the insurer at the outset of the claim. Other issues, such as the standard for rescission of an insurance policy or the application of an exclusion for a known loss, differ from state to state. In California, the trend is to apply an objective standard to the insured’s state of
The evaluative approach
86 — The Advocate Magazine
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mediator with a copy of the policy and the cases supporting their position regarding coverage under the policy. More than almost any other type of case, the outcome of an insurance-coverage case is based on the court’s interpretation of the insurance policy based on precedent. In the case of an ambiguous policy provision, the court must make an initial determination as to the issue of ambiguity and if the policy is determined to be ambiguous, the jury is called upon to decide what the policy means.
mind; whereas other states use a subjective standard that focuses on the individual insured involved in the case (rather than the reasonable insured standard used in connection with the objective standard). Another issue affected by choice of law may be whether the underlying conduct of the insured involved an intentional act excluded by the policy. The recent trend among the California Courts of Appeal is to determine whether or not the conduct is inherently dangerous and likely to cause injury whether or not the insured actually intended the injury to occur. Other states may view this issue based on the subjective intent of the insured finding coverage notwithstanding the conduct of the insured. In the context of constructiondefect cases, the law differs substantially from state to state. Some states have concluded that construction defect is a commercial contract risk assumed by the contractor and not insured under a general liability policy. Others reach the opposite conclusion that property damage caused by negligent construction is covered. When it comes to bad-faith claims, choice-of-law issues may be critical to the maintenance of the claim. In third-party cases, California law subjects an insurer to a bad-faith claim if it does not settle a case notwithstanding the existence of coverage issues. But many other states do not have this rule. Some states do not recognize a tort claim for breach of the implied covenant of good faith and fair dealing (bad faith), and treat the insurance contract like any other commercial agreement allowing only contract and not tort or punitive damages.
Argue the burden of proof
There are also different burdens of proof as to the coverage grant in the policy, the exclusions, and the bad-faith claim. These varying burdens of proof need to be addressed in the mediation. The policyholder generally has the burden of proof to establish that the risk is covered under the
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coverage grant of the policy. The insurer bears the burden of proof with respect to the applicability of exclusions. This shifting burden of proof may have a significant impact on the coverage analysis in a duty-to-defend context. Here, if the insurer is relying on an exclusion, it must be able to demonstrate that there is no possibility that the claim may fall outside of the exclusion. If it cannot do so based on a summary-judgment standard, the insurer must defend the case. The insurer may sue for declaratory relief as to whether or not the claim is excluded, but if the coverage lawsuit involves issues subject to determination in the underlying case, the declaratory-relief action may be subject to a stay. When it comes to the bad-faith claim, the preponderance-of-evidence standard of proof applies to the issue of breach of the implied covenant of good faith and fair dealing, but a clear-and-convincing standard applies to the imposition of punitive damages. These varying standards of proof are important to the discussion of the merits of the case and may have a significant impact on the outcome of the case. The parties and the mediator should address them in the mediation and make sure the parties understand their effect on the case and its possible outcome.
The mediator’s role and challenges It is the mediator’s responsibility to review the policy, read the cases construing it, and understand the rules of construction applicable to the coverage determination. To be effective, the mediator should be prepared to ask questions of counsel about the issues and outcome of the case in the event that the policy is interpreted in a different manner than the party is advocating or if the court determines that the policy does not apply at all. It is also possible that the policy may be read in a manner different than either party contends, and the mediator should be able to recognize that scenario and address it with the parties. It is very important for the policyholder to have counsel who is sophisticated in the construction and litigation of insurance-coverage issues. The insurer’s counsel will undoubtedly be a coverage lawyer who is hired on a routine basis to advise and litigate coverage issues on behalf of insurance companies. Therefore, the policyholder needs the same level of expertise to keep the playing field level. If the policyholder is not represented by sophisticated counsel, the mediator’s job is much more challenging as the mediator is required to explain insurance law and policy interpretation to
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counsel, who may not appreciate the subtleties of the policy language. This difference in the level of sophistication may also extend to the policyholder who may be dealing with his first and only insurance-coverage case (whether it is an individual or corporate insured). The case may be a very emotional one for the insured. It may involve a life, disability, medical or hospitalization policy, the outcome of which may have a very significant impact on the insured’s life. The claim may involve the destruction of the insured’s home or interruption of his business operations affecting the very stability of the insured’s life. These situations present a challenge to the mediator who must get the insured to overcome the emotional aspects of the case and focus on coverage under the policy. It is important to first let a party have their say and express how the case is affecting their life. The mediator needs to empathize with the insured and create an atmosphere where the insured feels comfortable in expressing his emotions. In the end, however, the mediator has to level with the insured and explain the coverage issues and possible outcome of the case in a sympathetic but honest manner.
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The insurance company representatives present another challenge to the mediator. They do this work for a living. They have a lot of experience with the type of claim that is presented by the case. In the insurer’s caucus room, the mediator’s challenge is to overcome the attitude that the adjuster and counsel have heard all the arguments before and, therefore, do not have the patience to work through the issues that are specific to the case in mediation. Here, the emotional impact of the case on the insured is often a useful tool for the mediator to bring up with the insurer and its counsel. It may not have a direct effect on the coverage issues, as opposed to the bad-faith claim, but it is important for the insurer to appreciate that the emotional content of the case has to be overcome in order to reach a settlement.
The bad-faith claim
The bad-faith element of the claim presents another set of challenges to the parties and the mediator. Since there is no bad-faith claim absent coverage, if the coverage analysis favors the insurer or is a close call, the bad-faith claim will not play a major role in the mediation. Under these circumstances, the challenge to the mediator is to explain this to the insured and to further explain that the payment of punitive damages is not considered by the insurer to be part of the insured risk and that such payment takes the approval of upper management. Mediators may find it helpful to explain to the insured that the claims rep-
resentative present at the mediation is not the same claims’ person that denied their claim. Most insurers assign the file to a separate adjustor when there is a bad-faith claim in order to get a new set of eyes on the claim and to avoid the situation where the first adjustor is trying to prove that his or her coverage decision was right. On the other hand, there is no question that the experienced policyholder counsel with a track record of success with respect to obtaining punitive-damage awards will have a significant impact on the discussion of the bad-faith issue and enhance the likelihood of the insurer paying more than the covered claim. In order to prove the bad-faith claim, policyholder counsel must show that the insurer’s coverage decision was unreasonable. Generally, this requires showing that the insurer’s decision was not only wrong, but that a reasonable insurer under similar circumstances would not have denied the claim. A determination that the denial was unreasonable will permit the recovery of emotional-distress damages and attorney’s fees incurred to prove the coverage as opposed to establishing the bad-faith claim. Punitive damages are only recoverable if the conduct of the insured was oppressive, malicious, or fraudulent – which must be established by clear and convincing evidence. Not an easy standard by any means. If the standard is met, then the question becomes the extent of punitive damages
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d that the trier of fact, usually a jury, may award. The U.S. Supreme Court has limited these damages to a multiple of no more than nine times the compensatory damages, in most cases. As a result, the wealth of the insurer and the punitive nature of the damages have largely been rendered irrelevant. Bad-faith claims are not limited to the coverage decision, but may arise out of the manner in which the insurer handled the claim. In the third-party context, there may be a bad-faith claim for failure of the insurer to settle the underlying case within the limits of the policy. Generally, this requires that the insurer have had the opportunity to settle the underlying case within the limits of the policy, which means that there had to have been a settlement demand within the policy limits and a reasonable amount of time for the insurer to accept it. Although the courts have applied a badfaith standard to this decision (was it reasonable or not?), and insurers often rely on defense counsel’s analysis of the case as not presenting a policy-limits exposure, in reality it is very difficult for an insurer to avoid the fact that the jury in the underlying case determined that the plaintiff was entitled to a judgment in excess of limits. In the context of claims involving policies insuring professionals and directors
and officers, bad-faith claims often arise because the policies have burning limits of liability, meaning that defense costs erode the policy limits. If a substantial amount of the policy limits have been spent on the defense, not leaving sufficient amount in the policy to settle the case, the insurer is exposed to a bad-faith claim that it mishandled the defense of the case and exposed the insured to a judgment in excess of the remaining limits. In opposition to bad-faith claims, insurers generally argue either that there is no coverage, and therefore, no bad faith, or that the issue of coverage is a close call and the law does not impose bad-faith liability on the insurer because the coverage position is reasonable. Insurers may also raise the advice of counsel defense to the imposition of punitive damages, arguing that the insurer relied on advice of counsel in denying coverage for the claim. If established, the insurer may avoid punitive damages, but simply relying on the advice of counsel is not the end of the analysis. The insurer must show that the reliance was reasonable, which may be challenged by the policyholder and will leave the determination to the jury. If the jury determines that the insurer, in fact, relied on the advice of counsel, that the advice was reasonable and based on a thorough investigation of the facts and
analysis of the policy, and that it was reasonable for the insurer to rely on counsel’s advice, then the policyholder is likely to lose the bad-faith issue and will be precluded from seeking punitive damages. Ultimately, it is the mediator’s job to understand and explain the strengths and weaknesses of the case in order to create reasonable expectations with respect to the outcome of the case. The mediator must work to provide the parties with a rational opportunity to settle their dispute in order to reach the goal of a successful mediation. Bruce A. Friedman is a neutral at ADR Services, Inc. After 37 years of trial and litigation experience in the fields of insurance coverage and bad faith, professional liability, real estate, securities and consumer class actions and business cases, he joined ADR Services in 2011. Each year since 2004, he has been named to the Best Lawyers in America, Chambers, and Super Lawyers lists in the fields of insurance, business, and “bet the company” litigation. He has a top ten plaintiff ’s verdict in a bad faith case arising out of the Northridge earthquake and in 2012 he was named the best insurance lawyer in Los Angeles by Best Lawyers in America.
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To caucus or not to caucus – that is the question A mediation model in which the parties work in a joint session without caucusing In July 2012, Gary J. Friedman of the Center for Understanding in Conflict (Mill Valley, California), presented “To caucus or not to caucus” at an advanced mediation training for the Mediation Panel of the U.S. District Court, Central District of California. In this interactive training, Mr. Friedman demonstrated the benefits of working with the parties in joint session. Friedman has developed a model of mediation in which the parties work in a joint session – without caucusing – in order to gain a fuller understanding of the dispute directly from one another and actively participate in the resolution of their differences. He has used this model in over a thousand mediations in the last two decades in the areas of intellectual property, real estate, corporate, personnel, partnership formations and dissolutions – topics with which the panel mediators are familiar. Friedman’s use of the joint session and his reluctance to “caucus” – or to meet separately with one side and its lawyer – was thought-provoking and controversial. The response of the audience was as varied as the backgrounds and expertise of the panel themselves.
The audience
Each year, the U.S. District Court for the Central District of California hosts an advanced mediation training for the attorney mediators who volunteer to serve on the Court Mediation Panel. The panel consists of experienced attorney mediators. They view the Court’s annual training as an opportunity not only to learn about cutting edge topics in mediation, but as an enjoyable day spent with interesting colleagues. The Central District’s Mediation Panel consists of nearly 200 attorneys with a wide variety of practices. Some panel members are full-time neutrals; some are full-time litigators with mediation training and experience; and some combine a litigation and mediation practice.
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Some panel members have a solo practice; others are members of small, medium or large firms; or they work under the umbrella of a mediation provider such as JAMS or ADR Services. For cases assigned by the Court’s ADR Program, all panel mediators volunteer their preparation time and the first three hours of a mediation session. To be appointed to the Mediation Panel by the Court, attorneys must meet strict qualification standards: they must be a member in good standing of the Bar of U.S. District Court, Central District of California; they must have at least 10 years legal practice experience; they must have substantial experience with or knowledge of civil litigation in federal court; and they must possess significant expertise in one or more designated areas of law. The panel includes attorneys with substantive experience in 22 areas of law. Panel mediators must also complete a court-conducted or court-approved training course in mediation. From this diverse talent pool, 60 panel mediators participated in the training “To caucus or not to caucus.”
Theory underlying the “understandingbased” model
Friedman’s approach to mediation is focused on the parties and their understanding of the conflict. In the understanding-based approach to mediation, the parties stay in joint session and work through the conflict to reach a resolution. This approach gives the parties and the lawyers an opportunity to truly “hear” the other side. It also gives the parties more control and more responsibility for the decision-making that takes place – and for finding a resolution. To prepare for the training, Friedman asked the participants to read a chapter in his book, written with Jack Himmelstein and published with the ABA and Harvard’s Program on Negotiation,
Challenging Conflict, Mediation through Understanding. The chapter, entitled “Love, Death, and Money: To Caucus or Not to Caucus,” offers an example of a mediation using the “understanding-based” model – and a lawyer’s typical resistance to that model. At the start of the mediation described in the chapter, a lawyer to one of the parties resisted the mediator’s preference to stay in joint session. She wanted the mediator to meet separately with her and her client and for the mediator to give them, in confidence, his opinion as to what would happen if the case proceeded in court. She was also concerned that once the parties began discussing a monetary settlement, the other party would leave in anger. She hoped the mediator would facilitate the negotiation by shuttling between the two parties.
Caucus model
Many lawyers are – and most of the participants at the start of the training were – more comfortable with the caucus model, in which the mediator shuttles back and forth between rooms, meeting with the parties separately. The mediator can confidentially discuss the strengths and weaknesses of the case. This approach allows the mediator to build rapport with each side and to coach each side in the negotiation. Keeping the parties separated also relieves everyone of the discomfort of conflict. Friedman pointed out that this traditional adversarial setting draws the focus away from the parties and gives authority to the mediator. The mediator becomes the person most knowledgeable about the conflict because he or she has solicited information from each side and communicated selectively to the other. The mediator will often predict a realistic settlement range or number and work towards bringing each side to that number, possibly manipulating the parties – or making the
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parties feel manipulated – to move them to the mediator’s number. The presentation
Friedman led the audience through the five stages of the understanding-based model of mediation: 1) contracting; 2) defining the problem; 3) working through the conflict; 4) developing and evaluating options; and 5) concluding agreement. He then used role-play techniques to engage the audience and demonstrate the principles he described. At the beginning of the training, Friedman stood in a large paneled room at the center top of a horseshoe formation of chairs. As he talked and solicited responses from the audience, he wrote on a large pad, taping finished pages to the front wall. For the role play, which involved a tense relationship between a U.S. manufacturer of a medical device and its distributor in India, the audience moved their chairs into smaller groups composed of one mediator, two lawyers and two clients. The scripts for the role plays shared common facts but each included unique facts supporting the individual character’s perspective of the dispute.
The audience was very much “with” Friedman while listening to the need for a contracting phase – engaging the parties, negotiating the ground rules of the mediation, explaining the process and clarifying the roles of the participants in the mediation. Friedman explained that in the second stage of the mediation, defining the problem, he would first turn to the lawyers and ask them to explain the legal aspects of the case. After the lawyers explained their legal positions, he asked the parties to explain their personal interest in the dispute and how the dispute arose. Throughout, Friedman “looped” the speaker, meaning that he actively confirmed his understanding of what the speaker said. The speaker responded affirmatively or clarified or restated his or her statements. In discussing the third stage of mediation, “working through the conflict,” some participants in the audience grew increasingly skeptical and resistant when they realized that the mediator in their role play was not going to break into separate caucuses. They resisted raising difficult issues in a joint session, issues they were more comfortable discussing in caucus.
As the role-play groups experienced difficulties, Friedman asked participants to step forward to the center of the room to replay their experience in a fish bowl setting. As they repeated their dialogue, Friedman coached them, modeled a different approach and encouraged them to experiment with techniques designed to reach a deeper understanding between the parties. As the afternoon went on, the pushback became more spirited. When Friedman suggested that the mediator in the role play ask each lawyer to explain in joint session the risks of going forward with his or her case, it became clear that this technique was foreign to the experience of most of the mediators. Some mediators began to grill him, pressing for an admission that certain issues can only be productively discussed in caucus. In some instances, the comments were downright hostile. Friedman had stepped into the lion’s den – but, from all appearances, he relished the challenge. Friedman persevered, demonstrating at each stage of a mediation how the parties and lawyers could be kept in one room and work through the conflict. For some, seeing how Mr. Friedman worked
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created several “aha” moments. They were moved by watching a mediator work with the parties to deepen their understanding of a dispute and, as a result, shifting the way the parties viewed each other and the conflict – a transformative experience. The feedback after the training was mostly positive. Those mediators who were skeptical of the “understandingbased” model appreciated and enjoyed the engaged, spirited, and provocative conversation. Those who were not sold on the techniques found them interesting. Even those mediators who were at times hostile to Friedman’s approach appreciated his refusal to take offense, his humor, and his passion for his topic. One participant reflected after the training that lawyers often tell mediators how they want a mediation session conducted – and that the caucus format is the customary process. In this process, the lawyers seem to believe they have greater control over the conversation and work to get the mediator “on their side.” This participant said many commercial mediators are concerned about adopting an approach which alienates lawyers – whom they perceive as their clients. And the panel members with litigation practices resisted a technique they believed to be unrealistic or that could compromise their cases. Based on e-mails received from participants after the training, some accepted the idea that the “understanding-based” model could work for cases that involved relationship-oriented disputes. But they could not see themselves using a joint session in a case involving distributive bargaining, especially when the defendant is an insurance adjuster rather than an aggrieved individual.
Benefits of the joint session
So, what are the benefits of the joint session? Friedman’s model views the parties working through conflict together as an end in itself. The joint session shifts the authority to the parties: they know what the mediator knows, which gives them more control over the process. The parties must participate in the discussion and take responsibility for the resolution. Friedman
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I silently thanked Mr. Friedman this week while mediating an interpleader action involving individuals with competing claims to life insurance proceeds. After reading the court file and meeting with the parties, I “knew” how the funds should be allocated. But, thinking of Friedman’s model, I did not separate the parties in order to suggest “my” number in caucus. Instead, I kept the parties together and had them share their stories about the deceased, their relationship to him, and how they viewed the life insurance policy. After two hours of discussion, some of which was emotional and uncomfortable, one party blurted out the allocation that she considered fair – and, as it so happened, it was “my” number. The other party nodded her head in agreement; the case settled. By taking the time to work through the conflict with each other, the parties reached the allocation in a manner that gave them more certainty, more satisfaction, and an opportunity to reconcile with one another. The mediation took extra time, but it was worth it.
SEPTEMBER 2013
At the very least, the debate among the Central District’s Panel Mediators during last summer’s advanced mediation training was stimulating and interesting. Friedman offered a new approach to mediation with insights and new techniques. He made some converts; others were not sold on his techniques but found the material interesting. Most participants at least tried to imagine drawing on the new techniques and adapting them to future mediations. The responses to Friedman’s presentation were varied, thoughtful, and interesting – just like the Central District’s Mediation Panel itself. Gail Killefer is the ADR Program Director for the U.S. District Court, Central District of California. Before joining the Court in August 2010, she had a private law and mediation practice in San Francisco. She served as an Assistant United States Attorney in San Francisco from 1989 to 2001. Before 1989, 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. She received a B.A. from Stanford University and a J.D. from Vermont Law School.
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Mediating the complex case: A primer for plaintiff’s counsel Aside from the settlement, a multitude of issues must be resolved “Simplicity does not precede complexity but follows it.” Alan Perlis How complex cases settle often seems like a mystery. Once a settlement is reached – particularly if it is perceived as fair by all parties – we quickly embrace the result and accept it easily. The settlement – once perceived as an insurmountable mountain – becomes an obvious and inevitable resolution of the dispute. But beneath the simplicity of the settlement lies resolution of a multitude of complex issues and disputes, such as: • Multiple defendants disputing with the plaintiffs; • A plethora of cross-claims by both plaintiffs and defendants for indemnity, vicarious liability, and comparative fault; and • Insurance carriers denying coverage and fighting with each other over allocation. This list is a mere sampling of the knottiness that arises in complex cases. How can this gnarly mess be untangled and ultimately resolved to a monetary amount and other non-monetary terms? This is where input from plaintiff ’s counsel can make the difference. The earlier that plaintiff ’s counsel understands and anticipates the complex issues underlying the case, the greater likelihood that the case will reach settlement. How do plaintiffs’ attorneys learn of these issues? They need to put themselves in the shoes of every participant who is necessary to reach settlement, and explore their underlying interests and the potential obstacles that they need to overcome to settle. The questions are simple: Who is going to contribute to the settlement and what do they need in order to settle?
Multiple defendants
Negotiating a settlement with multiple defendants can be challenging. Is liability among the defendants joint-andseveral or separate? Is there a vicariousliability relationship between certain
102 — The Advocate Magazine
defendants? Do they have contractual or equitable indemnity or contribution claims against each other? The answers to these questions may determine whether you will enter into partial settlements with some defendants or whether you need to settle with all defendants. If the settling defendant can obtain a good-faith settlement determination, then settling separately is often the way to go and will motivate other defendants to settle separately as well. But not all defendants are able to settle separately, because there may be claims against them by other parties that will not be barred even if the court determines a good-faith settlement under Code of Civil Procedure section 877.6. Although section 877.6 bars claims for equitable indemnity and contribution, it does not bar contractual indemnity and vicarious liability, and therefore, these claims often encourage parties toward a global settlement.
Negotiation strategies
Global vs. separate demands Should you make a global demand to all defendants or separate demands to each defendant? The answer generally depends on the type of damages sought, and whether the defendants are able to negotiate together effectively. The initial inclination for plaintiff ’s counsel is to make a global demand and then let the defendants decide their separate contributions in order to make their first global counter offer. Cooperative defendants are more capable of responding to a global demand, but it’s rare to find defendants willing to work cooperatively for the entire duration of the negotiation. Global demands can, however, be useful especially when the plaintiff ’s damages consist of fixed and easily identifiable damages, such as costs to repair or to remediate property, or the present value of a lifetime medical-care plan. Defendants are generally reluctant to negotiate globally if it means they are simply agreeing to a
SEPTEMBER 2013
percentage of a future, presently unquantifiable amount. Global demand If there is a quantifiable damage claim, the plaintiff may want to consider making a global demand and allowing the defendants to work out their own allocation. One way to help defendants have a meaningful joint discussion on their respective contributions is to ask them to participate in a confidential allocation exercise. In this exercise, each defendant allocates 100 percent of the liability to the other defendants, but not itself. If the case involves complex discovery or expert evaluation, it’s useful for the parties to have completed sufficient discovery and then participate in a joint session so they can make their best case and correct inaccurate perceptions of relative fault. A joint session gives everyone the most complete information, and allows the parties to challenge each other on facts and law. After the joint sessions, the mediator can facilitate a dialogue in which the parties collectively agree on the most critical allocation factors; each defendant then uses those factors as a guide in the allocation exercise. This informal voting process can be an effective way to get the allocation dialogue going. The defendants then give their allocation assessment to the mediator in confidence. The mediator adds up each defendant’s allocation assessment and takes the average. (See Figure 1 on page 106) The mediator then reports back the averaged allocation percentages. Because the defendants participated in the allocation exercise, they are more likely to find the results credible. In fact, the averaged allocation is often used as the template for settlement. The allocation exercise also creates transparency and provides the mediator with persuasive power with defendants who are unwilling to bear their full share.
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Separate demands Lack of trust among the defendants can make it difficult for them to make meaningful collective counter-offers to the plaintiff. If the defense group can’t negotiate collectively, they will sometimes ask the plaintiff for a separate demand for each of them. Providing separate demands is usually the quickest and easiest way to move the negotiation forward. In this circumstance, the sum of all the separate demands will usually be greater than a single global demand, but once the negotiations move forward, the plaintiff can progressively move lower with each defendant as the amount of settlement money becomes increasingly clear. Even when plaintiffs negotiate separately with the defendants, they can condition their moves upon reaching a global settlement with all of the defendants. This strategy creates momentum to settle the whole case and can be effective in persuading recalcitrant defendants to join in the settlement.
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Who knew that as advocates for consumer rights, you would also need to become well-versed in insurance law? Effective plaintiffs’ attorneys understand fundamental insurance-coverage issues, as well as the practical realities of negotiating with insurance companies. Yet, I still hear some plaintiffs’ counsel say to me “I don’t care about insurance or where the money comes from, I just want them to pay it.” Putting your head in the sand about the coverage status of the insured defendant can be devastating if you’re trying to reach a settlement. In order to understand how these issues may affect the settlement negotiations in your case, it’s best to be sure that you do the following tasks. This list may be a reminder of the basics to the experienced counsel, but it may also be a revelation to the uninitiated. • 1. Be careful that you don’t create a coverage issue in your pleadings. • 2. Ask for the complete policies, the declaration pages, and all communications between the insured defendant and the
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Complex — continued
insurance companies regarding acceptance or equivocation of coverage, including reservation of rights, non-waiver notice, denial of coverage and unconditional acknowledgement of coverage letters (although these are rare!). From these documents, you will learn (1) the types of damages and loss the policy covers and the types that are excluded; (2) the aggregate and per occurrence policy limits; (3) whether or not the insured’s defense costs are being depleted from the policy limits (sometimes called a wasting or burning policy); and (4) whether there are multiple policies that are applicable to your client’s case. • 3. Give sufficient information early on to your opposing counsel to ensure that the carrier sets an adequate reserve for the case. Reserves are established based upon an evaluation of “loss exposure” and
“expense exposure.” The more PARTIES information your opposing 1 counsel can share with the car2 rier regarding potential expo3 sure, the more realistic the 4 reserve number will be. 5 • 4. Make an effective policylimit demand outside of mediation. Since mediation comTotal munications are governed by Divide by confidentiality, any policy-limit number of demand must be made outside parties of the mediation process to be effective. • 5. Ask to speak directly to the defendant’s insurance carriers and to the defendant’s coverage counsel to get their respective perspectives on how, if at all, coverage issues may affect a negotiated settlement. Mediation is an opportune time to learn what’s really hap-
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Figure 1 pening on the insurance front (pre-mediation is even a better time). • 6. If there is a fundamental coverage issue that is preventing the carriers from cooperating, consider whether it makes sense to stay the litigation pending resolution of the issue. Often, plaintiffs are initially thrilled when they learn that the insured defendant has multiple insurance policies, but if there is a lot of money at stake, plaintiffs may find that insurance companies are less willing to pay a settlement and more willing to fight coverage issues with the insured and contribution issues with each other. As an example, last year insurance companies were waiting for the California Supreme Court’s decision in State of California v. Continental Insurance Company (2012) 55 Cal.4th 186, and settling environmental matters where the insured had multiple carriers became a challenge until the decision came down. The issue in Continental was how to allocate the indemnity obligations of multiple insurers for clean-up costs at the Stringfellow site. The trial court held that each insurer was liable for the total amount of the loss, subject to its own policy limits, but only for a single policy period. In other words, the insured could not “stack” policy periods to recover more than one policy’s limits. The consequence of the trial court’s decision was that Continental owed nothing, because the State had already recovered $120 million – far more than the $48 million permissible under the trial court’s analysis of the policies.
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However, the Court of Appeal reversed and the Supreme Court affirmed, holding that not only could policy periods be stacked, but also that the insurers were required to pay all sums for property damage up to their respective policy limits, if any of the continuous damage took place during the policy period. Until the Supreme Court rendered a decision, insurers were reluctant to voluntarily agree on allocation because too much was at stake. But once the court ruled that the “all sums” standard and policy stacking applied, the carriers were able to negotiate a settlement. If there is a fundamental issue preventing insurers from negotiating, see if the parties will stay the litigation until the issue is resolved.
Conclusion
“Never confuse your adversary with your enemy.” Chinese General Sun Tzu
Negotiating a complex case requires preparation, patience and insight. Counsel for both the plaintiff and the defendant need to balance their roles during the negotiation and exhibit just the right amount of advocacy and problem-solving skills. I sometimes hear both plaintiff and defense counsel call their opposing party the “dark side.” But the irony is that when negotiating a settlement, you are sometimes on the same side of the table with the perceived “dark side.” Never confuse your adversary with your enemy – and this is especially true when negotiating with your opposing party. Settlement has the uncanny feature of creating unexpected alliances – at least for the purpose of creating closure of the litigation. When you really understand the needs and interests of those with whom you seek settlement, you are able to explore all options to
find the optimal outcome for your client. [Author’s note: I wish to express my appreciation to my friend and colleague, Denise Madigan, for her contribution to this article.] Eleanor Barr, who mediates with PMA Dispute Resolution, began litigating complex matters 24 years ago. For nearly 15 years, she has been mediating complex, multi-party cases primarily in employment, toxic tort, environmental, personal injury, real estate and business matters. She enjoys managing tough negotiations and is known for her sense of fairness and tenacious commitment to reaching settlement. Ms. Barr has been named a Top 50 Neutral by the Daily Journal and has been selected as a Southern California Super Lawyer and a Best Lawyer in America.
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From the Editor Jeffrey Isaac Ehrlich Editor-in-Chief
Appellate Reports and cases in brief Zhang clarifies many aspects of UCL practice, particularly insurance claims Zhang v. Superior Court (California Capital Ins. Co.)
(2013) __ Cal.4th __ (Cal. Supreme) Who needs to know about this case: Lawyers who litigate cases involving the Unfair Competition Law (“UCL”), Bus. & Prof. Code, § 17200, et seq., particularly in cases involving insurance claims. Why it’s important: Clarifies many aspects of UCL practice. Holds that common-law tort claims can provide a predicate for a UCL claim under the “unlawful” prong of the statute. Holds that conduct that violates an insurers’ common-
law duty of good faith and fair dealing can form the basis of a UCL claim, even if that conduct also constitutes a violation of the Unfair Insurance Practices Act (“UIPA”) (Ins. Code, § 790.03.) Hence, Moradi-Shalal v. Fireman’s Fund Ins. Co. (1988) 46 Cal.3d 287, 304, does not preclude first-party UCL claims based on common-law bad-faith claims. Clarifies that the disapproval of the “unfairness” definition that various courts had promulgated contained in its decision in CelTech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 1, 1071, was expressly limited to actions
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SEPTEMBER 2013
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between business competitors alleging anti-competitive practices, and did not apply to consumer actions under the UCL. Disapproved Textron Financial Corp. v. National Union Fire Ins. Co. (2004) 118 Cal.App.4th 1061. Synopsis: Zhang bought a CGL policy from California Capital Insurance Company (“CCIC”). She suffered a fire loss, was unhappy with how CCIC handled her claim, and filed a bad-faith action against it. Her complaint included a UCL claim, which alleged that CCIC had “engaged in unfair, deceptive, untrue, and/or misleading advertising” by promising to provide timely coverage in the event of a compensable loss, when it had no intention of paying the true value of its insureds’ covered claims. CCIC demurred, arguing that the UCL claim was barred as a matter of law by Moradi-Shalal because the conduct the claim was based on constituted a violation of Insurance Code section 790.03. The trial court sustained the demurrer. The Court of Appeal reversed. Affirmed. Moradi-Shalal held that there was no private right of action under section 790.03, and it abolished the concept of the third-party bad-faith claim based on violations of section 790.03, overruling Royal Globe Ins. Co. v. Superior Court (1979) 23 Cal.3d 880. Moradi-Shalal did not affect first-party bad-faith claims, which are based on the common-law implied covenant of good faith and fair dealing, not section 790.03. Several post-Moradi-Shalal decisions held that the UCL could not be used as a way to skirt Moradi-Shalal by converting thirdparty bad-faith claims into UCL claims. In State Farm Fire & Casualty Co. v. Superior Court (1996) 45 Cal.App.4th 1093 (State Farm), Division 3 of the Second Appellate District held that, although a UCL claim could not be predicated on a violation of section
Advocate Sept13 issue_Advocate template 2007.qxd 8/19/2013 10:14 AM Page 111
790.03, it could be supported by a common-law claim for fraud or insurance bad faith. But in Textron, Division 3 of the Fourth Appellate District disagreed with State Farm, and held that if a complaint alleged “the type of activities� barred by section 790.03, then “merely alleging these purported acts constitute unfair business practices under the unfair competition law is insufficient to overcome Moradi-Shalal.� The Textron court further held that, in light of the Supreme Court’s decision in Cel-Tech, which disapproved the definition of “unfair� business practices relied on by the State Farm court, “reliance on general common law principles to support a cause of action for unfair competition is unavailing.� The Supreme Court resolved the split between State Farm and Textron, holding that hold State Farm was consis-
tent with, and Textron inconsistent with, the Court’s prior decisions on the scope of UCL liability. The Court explained that, “Textron’s criticisms of State Farm do not withstand examination.� First, the Court noted that it expressly cautioned in Cel-Tech that its disapproval of the definition of “unfair� was limited to cases involving business competitors alleging anti-competitive practices, and did not affect the definition of “unfair� used in consumer actions under the UCL. (The Court noted that the lower courts currently relied on three different definitions of “unfair� in consumer actions, and that the issue of which one was the correct definition was not before it.) Second, the Court held that Textron’s holding that Moradi-Shalal precludes UCL claims against insurers based on allegations of bad-faith claims-handling
practices was contrary to the reasoning in the Court’s prior UCL decisions. A UCL claim does not duplicate causes of action for breach of contract or bad faith, which seek damages. Damages are unavailable in a UCL action. And a trial court has discretion under the UCL not to award equitable relief, such as restitution or an injunction. Zhang “alleges a litany of bad faith practices by California Capital, including unreasonable delays causing deterioration of her property; withholding of policy benefits; refusal to consider cost estimates; misinforming her as to the right to an appraisal; and falsely telling her mortgage holder that she did not intend to repair the property, resulting in foreclosure proceedings. These allegations are sufficient to support a claim of unlawful business practices.� In reaching this conclusion,
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Appellate — continued
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the Court acknowledges that allegations that an insurer engaged in conduct that violated the implied covenant of good faith and fair dealing is sufficient to state a claim under the UCL as “unlawful” conduct, regardless of whether or not it also qualifies as “unfair” conduct. Class Action Fairness Act; federal removal; amount in controversy: Watkins v. Vital Pharmaceutitcals, Inc. (9th Cir. 2013) __ F.3d __. Watkins filed a class action in Los Angeles Superior Court alleging that Vital had deceptively marketed its protein bars as having little or no effect on blood sugar. His complaint purported to be on behalf of “thousands of consumers throughout the United States” who had allegedly sustained “millions” in damages. Vital removed under the Class Action Fairness Act (CAFA). It relied on the allegations of the complaint about the size of the class and the damages sought, and a declaration from the company stating that its sales of the bars over the prior four years exceeded $5 million. The district court remanded, finding that the showing as to the amount in controversy was insufficient. Vital appealed. Reversed. The Court held that it had jurisdiction to review the district court’s remand order. The undisputed declaration from the company that its sales of the bars exceeded $5 million over the prior four years showed that the amount in controversy was sufficient to satisfy CAFA’s $5 million requirement. Jeffrey Isaac Ehrlich is the principal of the Ehrlich Law Firm, with offices in Encino and Claremont, California. He is a cum laude graduate of the Harvard Law School, a certified appellate specialist by the California Board of Legal Specialization, and a member of the CAALA Board of Governors. His practice emphasizes appellate support for the Southern California trial bar and insurance bad-faith litigation. He is the editor-in-chief of Advocate magazine and a contributing author of the Rutter Group’s Insurance Litigation practice guide.
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Guitar logic in mediation: Cowboy chords vs. jazz If your case valuation doesn’t match the insurer’s settlement model, perhaps you’ve let them place it in the wrong category Consider the guitar fretboard for a moment. It is a complex maze of horizontal, vertical and perpendicular dimensions to achieve sound that stretch across a thin plank of wood up to 25 inches. Its beauty lies in the ability of the player to form similar sounds anywhere on the board. It is intricate and elegant at the same time. Most average guitarists (myself included) tend to play simple cowboy chords learned around the campfire or listening to ’60s folk music. We don’t have the patience or time needed to study and comprehend the complexities of the instrument. Others prefer jazz where guitarists like Joe Pass or Wes Montgomery can play a similar sound up and down the neck of the guitar with slight changes in pitch that creates unexpected ear candy. When it comes to evaluating a litigated case, most parties to a lawsuit play cowboy chords. They are fairly predictable, easy to understand and repetitive. This is because cowboy chords can
be clearly demonstrated and categorized so that just about anyone can learn and play them. Now consider how institutional parties in litigation have defined market values of cases in strict categories depending on a host of factors that have been vetted by actuarial specialists with complex software programs. This provides a reasonable sense of predictability when evaluating damages and allows for appropriate pricing of insurance products. The process is similar to the approach used by polling specialist Nate Silver on his Five Thirty Eight Blog in the New York Times to predict the 2012 Obama landslide presidential victory when all other polling favored a different outcome. Convincingly, Silver used this approach to consistently predict with accuracy the last several presidential races based on accumulating data from all the polls and coming up with median numbers. The models used by Silver are nothing new to economics and are similar to
risk management as it applies to evaluating potential outcomes in litigated cases. The key is to include all biased elements of polling data and find a common median. This is somewhat counter-intuitive in that being overly inclusive actually provides a more accurate prediction of the outcome. To understand this, Silver considers information from all polling sources, no matter how biased, when integrating the data into his values. Based on the accumulation of this data, Silver predicts outcomes that are surprisingly accurate.
Cowboy chords
The same approach holds true in litigated cases. Insurers and many corporations have unvarnished data that provide them with settlement values based on historical criteria that is based on certain categories of disputes, including the dispute you have brought to mediation. They know their marketplace and accept information from all sources. This allows
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Logic — continued
them to quickly categorize a case and use simple economics to determine relative value. This categorization, in essence, removes the human element from the evaluation, using only objective criteria to reach a fair market value. While it might sound cold and calculated, it is notably successful for companies on a macro level to handle repetitive streams of disputes this way. In fact, it’s a huge profit center that would not work if each case were subjectively evaluated. The transaction costs alone would be staggering. The ability to categorize cases has allowed negotiators to play cowboy chords and sound like they are making music. Consumer attorneys also play cowboy chords, at least most of the time. That is why many cases settle for consistent market values. However, when a consumer attorney decides to value their case higher than the market permits, that attorney is playing jazz while their adversary is still playing cowboy chords. The decision to play the guitar up and down the neck like Joe Pass to try to create more value on a case is based partly on the ability to go to trial and partly on subjective experience. Often this subjective experience is based on gut value as opposed to strict polling data. Other
times it’s based on supreme confidence in your case. You know you have an aggrieved client, and the client deserves much more than the company is willing to offer. You conclude that the other side just doesn’t get it, and you’re prepared to take the case to the limit if the other side doesn’t get on your value train. This mindset is hugely successful when the shadows of the courthouse hang over the heads of the parties because the music of risk is playing to the ears of the decision makers. Indeed in a small portion of the cases in the civil justice system, this approach creates tremendous financial opportunities for clients. The primary impediment to this approach is that only a tiny percentage of cases ever get through the justice system to the courthouse steps. This reality of the system puts pressure on the parties to navigate a settlement into the category that tends to follow statistical formulas.
Learn how your adversary has categorized the case
Against this backdrop, parties have two basic options when trying to get more value on a case. Learn from the mediator whether the marketplace value is within striking
distance of your own criteria for settlement. If your value isn’t in the range of the usual and customary fair market value for the category of case you brought to the table, and the shadow of the courthouse is far off in the sunset, your choices may be limited. Knowing how the other side has categorized the dispute will give you a clear pathway toward settlement, but not necessarily at a financial level your gut desires. At minimum, you will give your client a definitive option of waiting until the case is closer to trial or accepting a sum that fits within the range of similar disputes. Ignoring the category your adversary has used can result in falling over the fiscal cliff of resolution with no way to turn back.
Utilize the mediator to identify what additional information is needed
Another option to consider is to discover from the mediator what it would take for the other side to re-categorize the case i.e. increase the reserves to more closely match your value. This usually involves some additional information about risk, such as the filing of a classcertification motion in a wage-and-hour case, or a report from a respected neurosurgeon in a brain injury case. That type
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SEPTEMBER 2013
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of information often allows parties to attempt to hear the music of the case as more jazz oriented than cowboy chord driven.
A few examples
In a misclassification case involving managers at a retail store, the mediator asked the plaintiffs to simply explain how they spend their day from the moment they entered the store until they clocked out. For the next 20 minutes the plaintiffs told a narrative that demonstrated unequivocally that more than 50 percent of their time was spent on non-exempt functions such as stocking shelves, cleaning floors and selling goods. This extemporaneous explanation from credible parties was the first time the employer actually heard how the evidence might be presented in court, and it enlightened them more then the deposition summaries they received. This straight-forward and obvious moment led the employer to request an adjournment of the mediation, with the acknowledgment that they needed to discuss case values with management and adjust their financial reserves on the case. The employer then requested a second session of mediation where the case settled for a value
higher than the reserve put on the case based on the garden variety category it was placed in. Note that a suggestion for a second session is code for “We hear you’re playing different chords than us, and we are open to learning your tune.” A similar thing happened in a wrongful death action where it was discovered at the mediation that the decedent was making significantly more money than the defense had learned through discovery, which clearly increased the potential verdict value. Once again, the category of the case had to be reset, and the parties were able to have the mediator negotiate a mutually acceptable “recommendation” that could be taken back to higher levels for final approval.
Conclusion
To summarize, when you arrive at a settlement meeting, the other side desperately needs to put your case (and you!) into an existing category because the bureaucratic cost of inventing a new category for every new case is impossible for the system to handle. That is why so many big value cases don’t settle until the eve of trial, when institutional decision makers have had an opportunity to rede-
fine the category and increase or lower the value. Naturally you can always refuse to be categorized, or to spend the time through mediation learning how the other side has categorized your case. You can insist that it’s unfair that companies judge cases like this, that the categories available are too constricting and that what you are trying to sell is too unique to be categorized. If you make this choice, the odds are you will be categorized anyway. Participating in the process is an important way to gather intelligence about how and why your case has been valued, and it gives you a chance to make decisions on whether to make the case a long-term project or short-term gain. Getting upset when the other side is playing cowboy chords and you’re playing jazz is not productive. You will likely be mis-categorized, which is far worse than being categorized. Jeffrey Krivis has been a private commercial mediator with First Mediation Corporation since 1989, and teaches at the Straus Institute for Dispute Resolution at Pepperdine Law School.
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SEPTEMBER 2013
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From the Executive Director Stuart Zanville
Consumer Attorneys Association of Los Angeles
MICRA: After 37 years of injustice, change is on the horizon “Change” is the next step to adjust MICRA cap I recently passed my ninth anniversary with CAALA. Nine years ago, the No. 1 source of frustration among plaintiff trial lawyers was the MICRA law and nine years later it still is. It was true for the nine years before I began working for CAALA and the nine years before that and the nine years before that. I’ll save you the math, MICRA has been the greatest injustice inflicted on California’s citizens for 37 years – longer than many CAALA members have been alive. I am not going to take the time to recite the litany of reasons why MICRA is unconscionable and so unfair. If you don’t know you’re reading the wrong magazine. But, I will say that it’s mindboggling that we are still debating MICRA 37 years after its passage. It’s even worse that California patients injured or killed as a result of preventable medical negligence have been denied access to justice or recourse for so long.
Five stages of grief
Through the years, members of the plaintiff trial bar have dealt with MICRA by applying their own “Five Stages of Grief (Denial, Anger, Bargaining, Depression and Acceptance).” But, instead of one stage following another, all five seem to apply at once.
118 — The Advocate Magazine
For the past few years, we have been stuck in the “Acceptance” stage. The prevailing opinion seems to be that “MICRA is here to stay and there’s nothing we can do about it.” Now, however, you can add a new “Stage” to the MICRA dialogue: “Change.” A few months ago CAOC along with Consumer Watchdog helped organize a coalition of medical negligence victims and family, consumer advocates and others including the California Nurses Association to reform California’s outdated cap on non-economic damages. The point was to convince lawmakers once and for all to do the right thing. The media understands the issue. A headline over Michael Hiltzik’s column in the L.A. Times on July 10 read: “Time to Fix State’s Broken Medical Malpractice Law.” In the column, Hiltzik wrote “The law has destroyed the ability of large segments of California patients to file malpractice lawsuits.” Hiltzik reported that even Barry Keene, the former California Assemblyman who sponsored the 1975 law, labels it “oppressive” and calls for its revision and is “tormented by the failure to protect the $250,000 cap from inflation.” In the column Hiltzik laid the blame for MICRA’s failure where it belongs, on the insurers, pointing out that patients and doctors have suffered. Hiltzik wrote: “There’s plenty of evidence that the only real beneficiaries of MICRA are insurers. Doctors would like to think that insurers pass MICRA savings on to them, but they’re dreaming. Last year, Insurance Commissioner Dave Jones ordered rollbacks of $52 million in ‘excessive’ malpractice premiums (for doctors).” He also writes that “researchers found that the most frequent injustice in malpractice cases involved not undeserving patients collecting payments, but the opposite, deserving patients getting
SEPTEMBER 2013
nothing. Malpractice litigation has indeed failed to serve patients and their doctors.” On July 25, George Skelton wrote in his L.A. Times column that “(Since 1975) Everything’s gone up, that is, except damage awards for pain and suffering caused by medical malpractice. You’d think this would be simple. Just adjust the 38-year-old-dollar amount for inflation.”
A chance to adjust
While many legislators are sympathetic, the deep pockets of those opposed to protecting patients have apparently prevailed in the legislature. Even with a Democratic governor and Democratic majorities in the Senate and Assembly, MICRA reform in the legislature has moved at a glacial pace, if at all. But the coalition to reform MICRA isn’t willing to go back to the “Acceptance” stage. A few weeks ago Consumer Watchdog announced it had filed a ballot measure that will in part give California’s voters a chance to adjust for inflation the cap on the value of a child’s life if he or she is killed by preventable medical negligence. The Troy and Alana Pack Patient Safety Act includes changes to California law reforming MICRA. It will also protect patients by mandating drug and alcohol testing for physicians working in hospitals and require doctors to use a state database that track’s patients’ prescription drug histories. Consumer Watchdog must collect 750,000 valid signatures to qualify the measure for the November 2014 Ballot. If you want to add “Change” to the five stages of “MICRA grief ” encourage your associates, friends, family and clients to sign the ballot measure petition so the voters of California can finally correct the injustice of MICRA. It’s time.
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The defense has an appellate department. Now, so do you. “When defense counsel threatens to appeal, just tell them you have to review the matter with your appellate department. Then call me.”
Steven B. Stevens
Certified Specialist in Appellate Law, State Bar of California Board of Legal Specialization CAALA Appellate Lawyer of the Year (2001) 28 Years as Plaintiff ’s Counsel “Steven is not only one of the finest researchers and writers, he has tried a dozen cases himself, so he understands the problems of busy trial lawyers. He gets it and gets results.” M. Lawrence Lallande, Sr.
“Steven has been a leader in reforming the law of Medi-Cal lien reimbursement. He has obtained consistent and substantial lien reductions for us.” Bruce Brusavich, Agnew & Brusavich
“Steve has done our appellate and motion work for a decade. His batting average is well over 900.”
“Steven knows how to persuade trial judges to significantly reduce Medi-Cal lien claims. He was the appellate lawyer whose cases changed the reimbursement law to benefit injured plaintiffs.” John P. Blumberg
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ABOTA Advocate Certified Specialist in Medical & Legal Malpractice, ABPLA
Medical malpractice, catastrophic personal injury, insurance bad faith, employment, Medi-Cal lien resolution and general civil litigation Certified Specialist in Medical Professional Liability Law, American Board of Professional Liability Attorneys CAALA Board of Governors / CAOC Amicus Curiae Committee Admitted to practice in California, the Ninth Circuit and the U.S. Supreme Court Hourly, Contingency and Flat Fees available
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SBStevens@TheStevensFirm.com SEPTEMBER 2013
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Sacramento Update By Eric Bailey CAOC Communications Director
On MICRA, our foes are so 1975 Greetings from the frontlines in the latest skirmish of the MICRA War. Like any good war correspondent, I will get right to the point. We’re winning. How do we know? Because our foes in the medical industrial complex are resorting to arguments that are so 1975, as in rhetoric that dates back all the way to those sorry days when they trumped up a phony “malpractice insurance crisis” and used it to convince state lawmakers and Gov. Jerry Brown to produce the Medical Injury Compensation Reform Act of 1975. Their arguments boil down to two main points: First, that if MICRA’s $250,000 cap on non-economic damages is raised to account for 37-plus years of inflation, health-care costs to the average patient will soar and ill times will befall humankind (think pestilence, locust infestations and the like). Second, fixing MICRA will prompt another 1975-style “crisis” that will wreak havoc for modern doctors, even if the average practitioner these days is less Marcus Welby and more corporate pawn. They are just so, so 1975 – and so wrong. First, on the possibility of a run-up of health-care costs, the reality is that their arguments are based on faulty reasoning that has been batted down repeatedly. The front group for our foes, the ill-named Citizens Allied for Patient Protection or CAPP, has rolled out a dusty study of dubious origins. It suggests that simply doubling the MICRA cap to $500,000 would result in $9.5 billion in additional health care costs each year in California. In short, CAPP is using the same sort of scare tactics that were foisted on lawmakers and the public in 1975. The reality is that real-life experts like Jay Angoff, who until recently served as the Obama Administration’s point man at Health and Human Services to help implement the Affordable Care Act, say the impact of health-care costs would be minimal. Angoff says the chances of a huge surge in defensive medicine are minimal. In addition, the CAPP study disregards the impact of managed care on healthcare costs. As for the return to an insurance “crisis,” such arguments stumble on a key fact: History has demonstrated that the original “crisis” was in fact nothing of the sort. Or at least it wasn’t caused simply by a boatload of malpractice lawsuits. The reality was that doctors back in 1975 were whacked by hefty rate increases because the insurance industry was suffering from bad bets in a down stock market. Instead of “fessing up” to the reality that they were gouging doctors to make 120 — The Advocate Magazine
SEPTEMBER 2013
up for the investment red ink, they created a lawsuit “crisis” that never existed – and have for the past 37-plus years harkened back as if it were gospel. What does our side have to offer in retort? Better arguments about lives damaged by health-care negligence, facts about insurance industry profligacy, polling that shows the public understands the fundamental unfairness of MICRA’s frozen cap, and a mounting feeling that the cap can’t survive intact much longer. Now here’s the big news. Consumer Watchdog and Bob Pack, an Internet entrepreneur who lost his young children to a doctor-shopping prescription drug abuser then ran afoul of MICRA trying to hold the Kaiser doctors accountable, are co-sponsoring a 2014 ballot initiative that will fix MICRA and offer up other patient protections for a public seeing too many cases of egregiously bad medicine without consequences for offending doctors. So get ready. Like any good war, our advice is to come armed. When it comes to rhetoric and reality, we’ve got the other guys outgunned.
Washington Update By Linda Lipsen CEO, American Association for Justice
A wolf in tort-reformer’s clothing To date, 23 bills containing tort reform and anti-civil justice provisions have been introduced in the 113th Congress, including the recent introduction of H.R. 2300, the “Empowering Patients First Act of 2013.” This tort reform bill, introduced by Rep. Tom Price (R-GA), establishes administrative health-care tribunals and practice guidelines that could be used to grant immunity in health care lawsuits when a practitioner was acting in compliance with such guidelines. As many of you know, last (112th) Congress, a huge priority for Republican leadership was the passage of H.R. 5, a far-reaching bill that would affect caps on damages, limits on attorneys’ fees, medical negligence law, nursing home cases, medical device and pharmaceutical cases, and bad-faith cases against health insurers. While H.R. passed weakly in the House, it went nowhere in the Senate. In the current Congress, while we have not seen H.R. 5, we have noticed that Rep. Price’s bill, H.R. 2300 looks remarkably similar. Rep. Price’s bill uses definitions of health-care liability action that overlap with those found in H.R. 5. AAJ has also noted that a large number of Republican members are signing on to this bill. AAJ will be watching this bill closely as the legislative session continues and will fight it with the same intensity as we did with H.R. 5.
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From the President Scott Cooper
Orange County Trial Lawyers Association
Supreme indifference The Court issued a series of remarkably anti-consumer, anti-employee and pro-big business opinions At the close of this past term, the U.S. Supreme Court issued a series of remarkably anti-consumer, anti-employee, pro-big business opinions that, unfortunately, didn’t garner the national attention they deserved. When it comes to the Supreme Court, the mainstream press typically concentrates on the hot-button social and political issues. This year, that focus generated front-page stories on the Court’s treatment of gay marriage, the Voting Rights Act, and affirmative action in college admissions. There were other opinions, however, that will likely have greater (and more negative) impact on the public at large. In these cases, the Court displayed an extraordinary disdain for the ability of average Americans to hold corporations accountable for wrongdoing. In many ways, the Court gave companies carte blanche to violate consumers’ and employees’ rights by stripping away these victims’ right to bring them to justice.
Class actions
First, the Court broadened its assault on class actions. This began a little over two years ago with the case of AT&T Mobility v. Concepcion (2011) 131 S.Ct. 1740, in which the Court, relying on a 1925 statute (the Federal Arbitration Act), overturned long-standing California authority disallowing adhesive consumer contracts that prohibited class actions and forced individual arbitration. This year, the Court expanded Concepcion, finding that a class-action ban must still be enforced even if would prevent the injured party from pursuing its claims entirely. In American Express Co. v. Italian Colors Restaurant (2013) 133S.Ct. 2304, a small restaurant brought a class action claiming that American Express used its monopoly power to charge excessive rates in violation of the antitrust laws. American Express asked the Court to dismiss the case based on its contract with the restaurant that required individual arbitration and banned class actions. Italian Colors presented evidence that the cost of pursuing an individual claim would greatly outstrip the maximum individual recovery, meaning the class-action ban effectively precluded any of the affected small businesses from holding American Express accountable for its anti-competitive conduct. Justice Scalia,
writing for the majority, acknowledged that the decision may have left these businesses with no way to vindicate their statutory rights, but found that this wasn’t a problem. To put it another way, as Justice Kagan did in a powerful dissent, the majority’s response was effectively, “Too darn bad.”
Generic drugs
In Mutual Pharmaceutical Co.v. Bartlett (2013) 133 S.Ct. 2466 the Court held that generic drug manufacturers are immune from liability for injuries caused by design defects in the drugs they manufacture and sell to an unsuspecting public. Karen Bartlett had taken Mutual Pharmaceutical’s generic nonsteroidal, anti-inflammatory drug, and as a result, she developed Stevens-Johnson Syndrome and toxic epidermal necrolysis. She became nearly blind and suffered burn-like lesions on 65 percent of her body. A Massachusetts jury found the drug caused her injuries and awarded her $21 million. Justice Alioto, writing for the majority, threw out the verdict, holding that Massachusetts state tort law was preempted by federal statutes that apply to generic drug manufacturers and the FDA. As Justice Sotomayor pointed out in her dissent, this de facto immunity from state design defect law eliminates a manufacturer’s incentives to discover risks and remove dangerous products from the market promptly. Further, like the small businesses in Italian Colors, “consumers injured by those products will have no recourse” when they are injured.
bar for proving retaliation claims, holding that the retaliatory motive must be the “but for” cause of the adverse employment decision (as opposed to a motivating factor). In both cases, the Court rejected the guidance of the EEOC. All of these decisions garnered the minimum five-vote majority, with the same five “conservative” justices joining in the opinions of the Court (Vance, Nassar and Mutual Pharmaceutical were 5-4 decisions, while Italian Colors was 5-3, with Justice Sotomayor not participating in the decision). This brings into stark relief the effect that just one Supreme Court appointment can have on the rights and remedies available to consumer and employees throughout the nation. The issue of Supreme Court appointments is usually not discussed much during the presidential election cycles. These recent decisions serve to remind us all just how crucial those appointments can be. They can, and often do, create the most significant and lasting legacy of a president’s term in office. Given the current makeup of the Congress, it is unlikely we will see any legislation in the near future to correct the pernicious effects of these decisions. This makes it all the more important that the next president, who will likely enjoy eight years of potential appointments, have a healthy respect for the rights of consumers and employees and make appointments accordingly.
Employees
Having shut the courthouse doors to consumers, the Court also set its sights on employees. In a pair of decisions –Vance v. Ball State (2013) 133 S.Ct. 2434 and Univ. of Texas Southwestern Medical Center v. Nassar, 133 S.Ct. 2517 – the Court severely limited the ability of employees subjected to workplace harassment and retaliation to seek redress from their employers. In Vance, the Court fashioned a very narrow definition of what qualifies as a “supervisor” whose actions can make an employer liable for the harassment (limiting it to those who can take tangible actions against the employee, such as firing, demoting or transferring). In Nassar, the Court significantly raised the SEPTEMBER 2013
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Advertiser’s Index Contents Index Advertiser’s
ADR Providers ADR Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 Carrington, R.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104 Corcoran, Tim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32 Daniels, Jack . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110 Derin, Greg David . . . . . . . . . . . . . . . . . . . . . . . . . . . .66 Fernandez, Ed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82 Fields ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 First Mediation Corp - Jeffrey Krivis . . . . . . . . . . . . . . .72 Gage, Sandy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Graver, Darryl . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .106 Jossen, Sanford Law Office . . . . . . . . . . . . . . . . . . . . . .76 Judicate West . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44 Masters & Ribakoff . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 Mehta, Steven G. Mediation . . . . . . . . . . . . . . . . . . . .30 PMA Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . .67 Rubin, Charles “Skip” . . . . . . . . . . . . . . . . . . . . . . . . . .68 Young, Mike . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76
Expert Witnesses - Technical & Damages Balian & Associates . . . . . . . . . . . . . . . . . . . . . . . . . . .92 Boster Kobayashi & Associates . . . . . . . . . . . . . . . . .101 Phillips, Fractor & Company . . . . . . . . . . . . . . . . . . .104 The TASA Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Announcements and Career Opportunities CAALA Legal Education Center . . . . . . . . . . . . . . . . .115 CAALA Membership . . . . . . . . . . . . . . . . . . . . . . . . . .113 CAALA PAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107 CAALA VEGAS Sponsors . . . . . . . . . . . . . . . . . . . . . .105
Graphics/Presentations/Video Court Graphix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121 Courtroom Presentations . . . . . . . . . . . . . . . . . . . . . . . .46 CSC Anatomy Arts . . . . . . . . . . . . . . . . . . . . . . . . . . .118 CVisualEvidence LLC . . . . . . . . . . . . . . . . . . . . . . . . . . .29 Executive Presentations . . . . . . . . . . . . . . . . . . . . . . . . . .7 High Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Juris Productions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59 Verdict Videos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
Attorneys – Appeals Bader, Donna . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100 Ehrlich Law Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107 Law Office of Herb Fox . . . . . . . . . . . . . . . . . . . . . . . .45 Pine & Pine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60 Steven B. Stevens . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119 Attorneys - Accepting Referrals Bailey Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 Banifsheh, Danesh & Javid, PC . . . . . . . . . . . . . . . .22-23 Bisnar | Chase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Cheong Denove Rowell Bennett & Karns . . . . . . . . . .103 Cook, David . . . . . . . . . . . . . . . . . . . . . . . . . . . . .116,117 Dordick Law Offices . . . . . . . . . . . . . . . . . . . . . . . .62-63 Edzant, Barry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110 Engstrom, Lipscomb & Lack . . . . . . . . . . . . . . . . . . . . . .87 Galipo, Dale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .99 Gelber, Bruce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90 Girardi | Keese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81 Greene Broillet & Wheeler . . . . . . . . . . . . . . . . . . . . . . .1 Hodes Milman Liebeck Mosier . . . . . . . . . . . . . . . . . . .50 Kesluk & Silverstein . . . . . . . . . . . . . . . . . . . . . . . . . . . .98 Khorrami Boucher Sumner Sanguinetti, LLP . . . . . . . . .21 Law Offices of Lisa Maki . . . . . . . . . . . . . . . . . . . . . . . .61 Law Office of Philip Michels . . . . . . . .Inside Back Cover Makarem & Associates . . . . . . . . . . . . . . . . . . . . . . . . .25 Manly & Stewart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 McNicholas & McNicholas . . . . . . . . . . . . . . . . . . . . . .9 Metzger Law Group . . . . . . . . . . . . . . . . . . . . . . . . . . .89 Panish Shea & Boyle . . . . . . . . . . . . . . . . . . . .Back Cover Randolph & Associates . . . . . . . . . . . . . . . . . . . . . . . . .37 Richard Harris Law Firm . . . . . . . . . . . . . . . . . . . . . . . . .4 Rizio & Nelson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 Shernoff Bidart Echeverria Bentley LLP . . . . . . . . . . . . .27 Shook & Stone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73 Taylor & Ring, LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 The Traut Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Vartazarian Law Firm . . . . . . . . . . . . . . . . . . . . . . . . . .95 Your Legal Power – Herb Michel . . . . . . . . . . . . . . . . .35
Advertiser’s Index
Court Reporters Atkinson Baker Court Reporting . . . . . . . . . . . . . . . . . .54 Jonnell Agnew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84 Kusar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97 Personal Court Reporters . . . . . . . . . . . . . . . . . . . . . . .30
Advertising
Defense Medical Exam Observation Advantage Representatives . . . . . . . . . . . . . . . . . . . .106 PRIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 Expert Witnesses – Medical Graboff, Dr. Steven . . . . . . . . . . . . . . . . . . . . . . . . . . . .42 Luckett, Karen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .108 Physician Life Care Planning . . . . . . . . . . . . . . . . . . . . .75 Roughan & Associates at LINC, Inc. . . . . . . . . . . . . . . .41
122 — The Advocate Magazine
Financial Services California Attorney Lending . . . . . . . . . . . . . . . . . . . . .111 CPT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100 EPS Settlement Group . . . . . . . . . . . . . . . . . . . . . . . . .114 Farber, Patrick (Struct. Settlements) . . .Inside Front Cover Fast Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78 Fund Capital America . . . . . . . . . . . . . . . . . . . . . . . . . .83 Lawsuit Financial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .96 RD Legal Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48 Ringler & Associates – Michael Zea . . . . . . . . . . . . . .68 Summit Structured Settlements . . . . . . . . . . . . . . . . . . .82 The James Street Group (Structured Settlements) . . . . .56
Information Service Providers West, A Thomson Reuters Business . . . . . . . . . . . . . . . .69 Insurance Programs Lawyers Mutual Insurance Company . . . . . . . . . . . . . .79 Lawyer’s Pacific Insurance . . . . . . . . . . . . . . . . . . . . . . .19 Matloff Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80 Narver Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .91 Investigators Hudson Investigations . . . . . . . . . . . . . . . . . . . . . . . . . .38 Shoreline Investigations . . . . . . . . . . . . . . . . . . . . . . . . .84 Tristar Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . .90 Legal Marketing Berbay Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . .36 Legal Nurse Consultants Cross, Kathy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112 Nutris Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65 PJ West & Associates . . . . . . . . . . . . . . . . . . . . . . . . . .72 Legal Research Quo Jure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88 Legal Support Services 4 Corners Deposition Summaries . . . . . . . . . . . . . . . . .43 USA Express Legal & Investigative Services . . . . . . . .70 Legal Technology Eye Legal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53 Medical & Dental Service Providers Buena Vista Pharmacy . . . . . . . . . . . . . . . . . . . . . . . . .85 Doctors on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Injury Institute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 Landmark Imaging . . . . . . . . . . . . . . . . . . . . . . . . . . . .24 Massihi, Allen, DPM . . . . . . . . . . . . . . . . . . . . . . . . . . .58 North Valley Eye Medical Group . . . . . . . . . . . . . . . .98 Parehjan & Vartzar Chiropractic, Inc. . . . . . . . . . . . . . .20 Power Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Total Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93 Vital Imaging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 Organizations CAOC – PAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32 Los Angeles Trial Lawyers’ Charities . . . . . . . . . . . . . . .77 Polygraph Investigations Trimarco & Associates . . . . . . . . . . . . . . . . . . . . . . . . . .51
SEPTEMBER 2013
Calendar Calendar
Consumer Attorneys Association Consumer Attorneys of Los Angeles 800 West Sixth Street,#700 Los Angeles, CA 90017 (213) 487-1212 www.caala.org
ASSOCIATION OF LOS ANGELES
CAALA Consumer Attorneys
ASSOCIATION OF LOS ANGELES
CAALA Consumer Attorneys
ASSOCIATION OF LOS ANGELES
August 29, 2013 - September CAALA 1, 2013 CAALA Vegas Convention The Wynn Las Vegas October 23, 2013 Annual Judges Evaluation Meeting 5:00pm - 9:00pm Beverly Wilshire Hotel 9500 Wilshire Blvd. Beverly Hills Board & Committee Meetings Executive Committee – CAALA Offices Downtown Los Angeles, 6:00pm Oct 3 Board of Governors – CAALA Offices Downtown Los Angeles, 6:00pm Sept 19, Oct 17 Education Committee – CAALA Offices Downtown Los Angeles, 5:00pm Sept 19, Oct 17 New Lawyers Committee - CAALA Offices Downtown Los Angeles, 6:00pm Sept 17, Oct 15
Orange County Trial Lawyers Assn. 25602 Alicia Parkway, #403 Laguna Hills, CA 92653 (949) 916-9577 www.octla.org September 8, 2013 Bench v. Bar Softball Game & Picnic Game Time 11:00am Picnic Lunch 12:30 -2:00pm Grant Howald Field & Park 3000 Fifth Avenue, Corona Del Mar October 14, 2013 Columbus Day Golf Tournament 9:00am-7:00pm EL Niguel Country Club 23700 Clubhouse Drive Laguna Niguel
Advocate Sept13 issue_Advocate template 2007.qxd 8/19/2013 10:14 AM Page 123
on
CAALA Connection Center New CAALA Members: We welcome the following new members who joined CAALA during the month of July
, 2013
Roxana Ahmadian
Matthew Erickson
Morgan Piercy
Ahmadian Luper Dagher
Law Offices of David H. Greenberg
The Ledger Law Firm
CAALA Connection Center Maria Akopyan Linda Albers
ces
The Law Office of Linda A. Albers, APLC
Andrew Bedigian
es
Dennis Belmudes Rose, Klein & Marias
Fernando Bernheim
ices
Law Offices of Fernando J. Bernheim
Richard Brenneman Brenneman Juarez & Adam, LLP
Darryl Freedman
Santo Riccobono
Law Offices of Darryl B. Freedman
Khorrami Boucher Sumner Sanguinetti, LLP
Jesse Fretwell
Ian Samson
Law Offices of Darryl B. Freedman, Inc.
Engstrom, Lipscomb & Lack
Nicholas Frontera
Jeremy Shafer J. Shafer Law
Gilbert Geilim Gilbert R. Geilim, APLC
John Shaller McMahan Law
Carlos Guzman Weitz & Luxenberg
Emily Skrdla
Trevor Hickey Law Office of Darryl B. Freedman, Inc.
Mark Smith
Tiffany Howard
Daniel Srourian
Kiesel + Larson
Attorney at Law
Offices
Eduardo Brito Law Office of Eduardo A. Brito
Assn.
c
ar
David Burton Attorney at Law
Megan Cadena Gary A. Dordick a Law Corporation
Chad Carlson Attorney at Law
Saydee Carrasco Law Offices of Phillip T. Vondra
Christina Clark Law Offices of Phillip T. Vondra
Natalie Djabourian Attorney at Law
Ari Dybnis Law Offices of Scott C. Glovsky
Ryan Ellis Ellis, Abouelsood & Karimian
Fenja Klaus
Traci Steward
Russell & Lazarus, APC
Law Office of Phillip T. Vondra
Dolores Larrabee
Paul Supple
Law Offices of Maryann P. Gallagher
Law Office of Paul C. Supple
Brian Murray
Kristopher Tayyeb
Price Law Group
Mohammad Nadim
Melissa Tsai
Gilbert R. Geilim, APLC
Attorney at Law
Marcus Natividad
Robert Uyeda
The Natividad Law Firm
Uyeda Law Office
Trey Nicolette
Stephanie Webb
Norstrom, Steele, Nicolette & Blythe
Webb Law Firm
Shazad Omar APEX LAWYERS INC.
Robert Ozeran Law Offices of Robert Ozeran SEPTEMBER 2013
The Advocate Magazine â&#x20AC;&#x201D; 123
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From the President Lisa Maki
Consumer Attorneys Association of Los Angeles
White gloves and party manners Why aren’t there more female plaintiff-side trial lawyers? I’m haunted by a book enclosed in a pale yellow cover with a stenciled image of a girl of around 12 years old wearing white gloves and a party dress. The title? Please see above. I looked it up online. It’s on sale for $1.99 but Amazon has it at full price. The introduction says “[t]his may be the first book you ever read about manners. It will tell you how to act when you are with other people – your own friends your age, or grown-ups – how to act at parties, at home, school, when you go out to dinner or to the theater, and to all the other interesting places you will be going as you grow older. It will tell you what to do and what to say to make people like you more and to make yourself more at ease at times when you might be nervous and unsure about what you are saying and doing. Good manners are simply polite, kind ways to behave with others. Manners are easy to learn, and they never change.” I took this class when I was little. When I graduated with my sister, we walked up and over a little mini-runway and curtseyed so all the parents could clap (without gloves) and take pictures of us being sweet girls. We probably went home and changed and ran around screaming and fighting, but I still know that manners are important and essential to becoming a better litigator. I just had dinner with a very good male friend. He stood up when I left the table, and when I came back he waited until I was seated. He knew how to use his utensils and where to put his napkin when he got up to use the restroom and was also kind to the waiter. For some reason we started talking about manners. He asked me if I knew why the man was supposed to walk on the area of the sidewalk closest to the street when walking with a woman. The conversation shifted…Do we lose our manners in litigation? Or as women dealing with men, or vice versa? Should women take a few pages from the man 124 — The Advocate Magazine
book to advance their careers? Or, is it ok to just be a woman, and listen. Every year the National Association of Women Lawyers publishes survey results on the status of women in big law firms. The October 2012 snapshot of that report indicates that “female flight” from Big Law starts early and accelerates over time; the only countervailing trend is in the lower status staff attorney role where women and minorities are the increasing majority. Women comprise only 15 percent of equity partners in the typical firm. It should come as no surprise that women have similar levels of success in reaching firm-wide leadership ranks. Women constitute only 20 percent of the members of a typical firm’s highest governing committee. A woman is a firmwide managing partner in only four percent of firms. In another six percent of firms there are multiple firm-wide managing partners of which at least one is a woman.1 I searched and searched but could not find similar surveys for plaintiff-side firms like ours conducted by AAJ or CAOC. What would such a survey reveal? Setting aside the dismal numbers of persons of color in our profession, why aren’t there more female plaintiff-side trial lawyers? Is it that they can’t do it? Is it because they lack the opportunity to try cases, or because they do not want to? Is it because women do not know how to “fight” or do what others do to get their cases? Is it the lack of networking opportunities and referrals, or because they do not hang out with the men (out of sight, out of mind)? Or, is it because men support each other in their practices, form rooting teams and referral circles? CAALA finally honored a woman for the first time as its Trial Lawyer of the Year, the amazing Christine Spagnoli. I am CAALA’s fourth female president. I do not believe that CAOC has ever had a female Consumer Attorney of the Year. Is
SEPTEMBER 2013
this because of the lobbying that goes on amongst the men in the selection process, or is it just that the women do not deserve it or that they do not know how to lobby to win the award? I love being a woman. And I love men, except for those who are spending an inordinate amount of time trying to legislate my private parts when there are much more pressing national issues at stake. Sure, as female trial lawyers we have a stricter dress code. But, as our superstar-litigator brothers realize, many women have three traits that they do not need to work on cultivating: Empathy, ability to listen, and lack of ego. Many women do not realize that they have such a huge edge and opportunity in what appears to be a male-dominated profession. It just takes risk. Put yourself out there, open your own firm and try some cases. Everyone in CAALA, both men and women, will support you. Of course there will be those like the former CAALA president who told me not to run for leadership because “we don’t need any women.” Ignore them. They are likely insecure and afraid you will do better than them. Instead, surround yourself with people that want to see you do well because they know that your success is their success. Finally, remember that men and juries like women. I don’t have statistics on the men part, but I have heard and believe this: “[I]f a woman advocate is seen as being more competent than expected, she will also be considered more competent than she actually is, because her perceived competence is outside of the expected range.”2
Endnotes
1 National Association of Women Lawyers-National Survey on Retention and Promotion of Women in Law Firms (October 2012). 2 Jury consultant Reiko Hasuike explained this “contrast effect” in a 2000 article in The Practical Litigator.
Ko
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JIN LEW
ELIZABETH A. HERNANDEZ
STEVEN B. STEVENS
BRADFORD S. DAVIS, M.D.
2014, President-elect Korean American Bar Association
CAALA Board of Governors
2001, CAALA Appellate Lawyer of the Year
In-house Medical Director
A new name
PHILIP MICHELS 2011, CAALA President 2003, Trial Lawyer of the Year
California’s premier medical malpractice team
OVER TEN FIGURES IN VERDICTS & SETTLEMENTS 8-Figure Verdict Cerebral Palsy 8-Figure Settlement Wrongful Death
7-Figure Verdict Brain Damage
7-Figure Verdict Spinal Cord Injury
7-Figure Settlement Baby Injury
7-Figure Arbitration Award 7-Figure Settlement Misdiagnosis Birth Injury
7-Figure Settlement Transplant
“The Law Offices of Philip Michels and Associates is one of the premier California Med Mal law firms. No stone is left unturned.”
— Michael Bidart, Shernoff Bidart Echeverria Bentley LLP “When it comes to Med Mal, there is no one better. This winning attorney has impeccable trial skills.”
— Brian J. Panish, Panish Shea & Boyle LLP 11755 Wilshire Blvd., #1300 Los Angeles, CA 90025-1540
•
310.444.1200
•
www.philmichels.com
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