I Don’t Always Do ADR . . .

But when I do, I vastly prefer mediation to arbitration. Here are five reasons why:

1. The Split-The-Baby Problem.

I’ve had retired judges and other neutrals tell me they don’t like presiding over arbitrations because they invariably lose a future potential client: the lawyer for the losing side. There is one thing arbitrators will try to do to temper this inevitability: they may issue a “split the baby” award, giving an allegedly aggrieved plaintiff something even if he failed to prove his case or suffered no damages. While many will argue that a small “split the baby” award is far better than a runaway jury verdict, in cases involving fee-shifting statutes, such as employment discrimination litigation, the employer who might have won outright in front of a jury is forced to pay the “prevailing” plaintiff’s attorney’s fees (in addition to the arbitrator’s fees and costs).

2. Informality Is Not Necessarily A Good Thing.

It is often thought that arbitration is preferable to a bench or jury trial because the proceedings tend to be more informal. Informality might sound good, but it can be a problem if your arbitrator decides to relax the rules of evidence (which is typically within her discretion) and your opponent’s case hinges on an item of otherwise inadmissible evidence, such as a hearsay statement.

3. No Appellate Review.

What do you do if you lose the arbitration due to a clearly erroneous ruling by the arbitrator? Don’t look to any appellate court for relief. While it is true that the Federal Arbitration Act (FAA) and other schemes may create a situation in which some appellate review is available, the circumstances and scope of review is inevitably limited compared with a state or federal appellate court.

4. Good Luck With That Summary Judgment Motion.

While it can be argued that certain courts are more or less likely to grant meritorious summary judgment motions, many will agree that obtaining summary judgment in a case pending before a private arbitrator may be the toughest sell of all. Without naming names, I suspect there are two reasons for this. First, an arbitrator who grants summary judgment is foregoing a significant income opportunity. While many first-rate neutrals are so fully booked they have no trouble filling time gaps created by a vacated arbitration hearing, this is not always the case. Second, a party who is deprived its right to a full evidentiary hearing because of a summary judgment will almost certainly feel shorted. Her lawyer is unlikely to hire the neutral again.

5. It’s Damn Costly.

Many practitioners feel as I do that arbitration is just too costly to be seriously considered as an alternative to resolving a dispute in state or federal court. In addition to the arbitrator’s hourly rate, which equals or exceeds that of most lawyers, many ADR providers tack on large administrative charges. Those of us that represent employers in employment litigation are stuck trying to explain to our clients why they must deposit, in advance, all of the arbitrator’s fees and costs.

I recognize these are pretty broad strokes. But in most instances, given the choice between a bench or jury trial and a binding arbitration, I’d prefer to stay in court and try to resolve the case through mediation.

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On Getting Through The Drama of A Lawsuit

You are a CEO reporting to an angry board.  You are a sole proprietor with the future of your business at stake.  Or you are an employee accused of discrimination or harassment, with your job and relationship at home on the line.  Lawsuits are long, drawn out, often dramatic ordeals; they exact a toll on the participants.  What follows are some ideas about how to cope with this drama and stress:

1.  Find a lawyer you trust.  This sounds obvious, but it can take some searching to find the right attorney.  He or she must be competent in your eyes, or your stress level will increase.  Equally important, your lawyer must be able to manage the stress of the suit or, again, your stress level will be worsened.

2.  Trust the lawyer you find.  Once you find the right lawyer, trust him or her.  It is rare that your lawyer will not want and expect you to be truthful with him or her, even if the facts are bad or embarrassing.  Your lawyer is in the best position to help you or your company; arm him or her with the true facts.

3.  Participate in your case.  I have found that individual clients who take an active role in their case experience a feeling of control.  It’s not illusory.  Your lawyer can only work with the tools and materials made available to him or her.  You can do quite a lot, by locating and organizing documents, educating your lawyer about the nuances of your business or the circumstances of the case.

4.  Manage your anger, fear or frustration.  The stress of being the target of a lawsuit is not dissimilar from other traumatic or stressful events.  Experts coach those going through a divorce or enduring a tragedy to use exercise or relaxation techniques, like meditation, to manage the stress.  Think of a lawsuit in the same way.  One caveat:  bear in mind that communications with someone other than a spouse or lawyer about the details of the case can be “discovered” and potentially used against you if you say something damaging.  Consult with your lawyer before speaking in any detail about your case with someone who is not your spouse.

5.  Try not to direct your anger or frustration at your loved ones.  This will only make it worse and potentially cause damage that can be permanent.

6.  Try not to direct your anger at your lawyer.  Don’t kill the messenger.  In most instances, your lawyer is doing the best he or she can to protect your interests.

7.  Brace for the long haul, but know it will come to an end.  The cliché, “this, too, shall pass,” is true.  Every lawsuit will come to an end, and there will be an opportunity for closure and new beginnings.

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Why You Want A “Managerial” Judge

In the last post I talked about the concept of a “managerial” judge.  Some have suggested that having an overly involved or controlling judge may not be a good thing.  Having litigated several cases before micro-managing judges over the years, I’ve come to believe that, in most instances, my clients will tend to benefit from our case being assigned to a judge who employs “hands-on supervision of cases from the outset, using various procedural tools to speed the process of dispute resolution.”  Here’s why.

First, parties and lawyers involved in a civil dispute need someone to take charge and crack a whip.  Picture, if you will, a giant sandbox filled with sand toys.  In each corner there is a 3 year-old who is told by his/her parent to “do whatever it takes, but be courteous” to capture all of the sand toys.  The ensuing exchange among the toddlers–admonition to “be courteous” notwithstanding–would soon turn ugly.  This is what many lawsuits turn into, despite the involvement of lawyers who are reputed to be educated, ethically duty bound professionals.  Without a strong, hands-on judge, a dispute over the breach of a contract will too often turn into the equivalent of a toddler sandbox fight.  Even with a strong judge lawsuits frequently devolve into bare knuckle brawls.  (I still have bruises.)

Second, I find that hands-on, managerial judges tend to be more consistent in their rulings than judges with a more laissez-faire style.  It is much easier to plan and execute strategy when you know how your judge typically handles a particular issue.  Managerial judges often issue their own set of rules regarding how they want pretrial matters handled.  Get these rules and follow them religiously!  You will likely remain in pretty good stead with the judge.  In fact, following a managerial judge’s rules is a great way to gain an advantage over a disorganized opponent who fails to strictly follow the rules.

Finally, managerial judges tend to put a lot of energy toward settling cases.  A laissez-faire judge will allow a case to take its own course and the parties to enter settlement negotiations whenever they feel the timing is right.  This is almost always in the days or weeks just before trial.  The problem with this approach, and the reason a managerial judge is better in my view, is that parties can save a lot of fees and costs if they are forced to explore settlement earlier.   Also, when cases settle earlier it helps free the clogged courts.  This, in turn, allows other cases to get to trial (or otherwise resolve) sooner, which gives judges freedom to give more individualized attention to their dockets.

Make no mistake, appearing before managerial judges can be difficult.  They develop and impose their view of how the case should progress and the parties go along for the ride.  On balance, however, I think there are benefits to a heavy-handed judge which outweigh the difficulties, and I’d pick one over a hands-off, laissez-faire judge any day.

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What Is A “Managerial” Judge?

In the course of researching a question about judicial discretion, I recently came across an article discussing “managerial” judges.  The author, quoted below, argued that managerial judges are dangerous and something which should be discouraged, if possible.  Is this fair?

The term “managerial” judge was reputedly coined in a 1982 Harvard Law Review article by Judith Resnick, entitled, ironically, Managerial Judges.  She used the term to describe a judge who employs “hands-on supervision of cases from the outset, using various procedural tools to speed the process of dispute resolution and encourage settlement.”   Thornburg, “The Managerial Judge Goes To Trial,” 44 U. Rich. L. Rev. 1261 (2010) (citing Resnick’s article).

This definition sounds neutral and constructive enough.  But trial lawyers who have lived with a case presided over by a managerial-style judge know they can be difficult, unpredictable and downright scary. The key to their danger lies in the phrase “using various procedural tools.”  Consider some examples.  The simplest I can think of was a judge who, seeing that the parties were disinclined to seriously discuss settlement, scheduled a lengthy trial to start on December 26th, the day after Christmas.  Other judges routinely withhold or time issuance of rulings to impose maximum leverage on one or both parties to come to the bargaining table.

When I was a first year lawyer I witnessed a California Superior Court judge order the entire legal staff of a Big Three automobile manufacturer to travel from Michigan to California to attend a settlement conference the next day because the judge felt the car maker was not being appropriately generous in settlement negotiations.  Put yourself in the shoes of the car maker’s lawyer (my boss at the time) telling our client over the courthouse pay phone (this was in the early 90s) to round-up her colleagues, pack a bag and get to the airport!

I’ve seen and heard of other judges doing radical things with discovery or the presentation of evidence, like completely rearranging the order in which the parties presented their respective cases to the jury.  This seems less calculated to pressure settlement negotiations, and more to fit the judge’s personal vision of how the case should progress.

Whatever the purpose, there is no question that, at least in Federal District Court and California civil courts (where I practice) judges possess enormous discretion to dictate, with extreme detail if they desire, how a case progresses from filing to resolution.  The question is whether judges who seize this discretion and micro-manage cases are furthering or hindering justice.

In my next post, I’ll explain why I think the parties to a lawsuit actually benefit from being assigned to a judge with a managerial style.

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What You Want To Know About Your Opposing Counsel, Part II

In addition to learning as much as I can about my opponent and the nature of his or her practice through his or her website, I also use the following resources to do more research:

4.  State Bar Information.  It’s pretty rare, but I do occasionally come up against someone who’s been disciplined, even suspended.  There are a number of reasons why a lawyer can be disciplined by the Bar, and it doesn’t always signify anything I consider relevant.  But it could, so I try to find out as much as I can.  For example, if the discipline has related to commingling client funds or failing to communicate with clients, it could mean the lawyer does not make it a priority to communicate with his or client.  This could become important later, if we get into settlement discussions and it’s critical his or her client is being kept informed of my client’s offer (or demand).  Information about Bar discipline is typically available on the State Bar website.

5.  Track record.  Does my opponent try cases?  This may not be readily apparent, but if I review the jury verdict sheets (I still use the paper kind) I can sometimes see if he or she has tried any cases in recent years and, if so, what kind of case and what was the outcome.  This information isn’t always available.  But if it is, it can be very revealing.  For example, it might show a pattern of taking meritless cases to trial and losing (or barely wining).  This becomes important when evaluating the likelihood of an actual trial later.

6.  Reported cases.  Has my opponent participated in any appeals that led to reported opinions?  Actually, Lexis and Westlaw even report cases that are not officially published, which further broadens the field.  If he or she was the sole attorney representing a party on appeal, this tells me that he or she probably has a fairly in-depth understanding of the issues and law in that kind of case.  If our new case involves the same issues, this is important information for me.

5.  Finally, I may send an email to some close colleagues and see if anyone knows or has dealt with my opponent before.  This can provide a great deal of useful insight.  One thing I’m looking for in particular is my opponent’s reputation for honesty or civility.  Is he or she someone I can trust when they promise to communicate an offer to his or her client?  Will I encounter resistance if I seek a reasonable extension or continuance?

From this information, I can generally get a decent “feel” for my opponent before I pick up the phone to call him or her and introduce myself (which I always do).  Over the years, I’ve found different information useful for different reasons.  Often, however, I know I’m going to be looking for leverage against my opponent or his or her client.  This can come from a variety of sources, including “situational leverage,” which I will discuss in future posts, such as a disinclination or financial  inability to take a case through trial.  The earlier I learn this the more I can shape my defense accordingly.

One factor to which I never give any weight, which some might find surprising: where my opponent attended law school.  I’ve encountered lawyers trained at the very best (ranked) law schools who had trouble knowing where to sign their last name, and really first rate lawyers who attended lesser ranked law schools.  I usually find experience level to be a far more telling predictor of competence in the courtroom than law school ranking.

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