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Mediation Message No. 135

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 135
“DON’T GIVE UP. DON’T EVER GIVE UP.” – JIMMY VALVANO

Intensive preparation is a sine qua non for a successful mediation. (See Mediation Messages 42 and 111 for preparation elements.) After that, it’s important that all participants, including the mediator, maintain a positive attitude throughout the mediation’s ups and downs, which will surely occur.

Mediation can produce a combination of emotions – some positive and some not so – because the process, as the discussions progress, can be both uplifting and frustrating. Regardless, it’s essential, even when a successful resolution seems far off, that the attorneys remain hopeful because negativity can lead to letdown and then failure.

Former North Carolina State Coach Jimmy Valvano’s uplifting message, “Don’t give up. Don’t ever give up,” which he made about his failing health, is both a wonderful life lesson and an appropriate mantra for mediation when nothing seems to be working. Thus, all is not lost if a party at a mediation is inflexible or has even packed up and is walking out. (I’ve hustled down to the parking area and brought a party back to the mediation and ultimate resolution.) By remaining reasonable, creative and engaged, no matter what has already occurred, good things are more likely to happen.

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, July 2017

Mediation Message No. 134

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 134
TRIAL COURTS ARE GATEKEEPERS AS TO DEFAULT APPLICATIONS

Grappo v. McMills (2017) 11 Cal.App.5th 996 sends a strong statement to both attorneys and, in particular, the trial courts that applications for default judgments must be closely scrutinized and that only appropriate claims should be approved. In Grappo, appellant Donald Grappo, representing himself, filed a complaint alleging ten causes of action, seven of which were in one paragraph, the other three ranging from two paragraphs to five. The complaint named five defendants, two entities and three individuals, none of which or whom was described or identified. Grappo did not identify himself either, or describe any claimed connection or relationship with any of the defendants. He served the complaint on Kenneth McKean, who was named in the caption but not identified in the complaint—and who, from all indications, had no relationship with Grappo. Six months later, Grappo filed a request for default against McKean and his law firm (McKean & McMills), seeking a default judgment for $9,982,308.83, with a claimed itemization of damages not found in the complaint. The clerk entered the default, but the court refused to enter judgment, entering instead an order listing specific reasons for the refusal. McKean then died, of which Grappo was aware. Two weeks later, he filed another request for default and judgment which was not mailed to anyone. This request sought a judgment for $12,012,818.88, once again with numbers found nowhere in the complaint. In the declaration portion in the default request, Grappo referred to “$60,000,” an amount in the prayer for the claimed value of personal property referred to in the eighth cause of action “belonging to some of the heirs of the Michael A. Grappo 2003 Trust.” The court entered judgment for Grappo and against McKean and McKean & McMills for $60,000, plus costs of $750.

Defendants filed a motion to vacate and set aside the default judgment. Grappo appealed from a resulting order vacating the judgment as to McKean. The appellate court affirmed the order and published its opinion “to remind trial courts that however burdened they be, they must vigilantly attend to their duty in connection with the default process, to act as gatekeeper, ensuring that only the appropriate claims get through.’” (Id. at p. 1000; internal quotations omitted.) “The court’s role in the process of entering a default judgment is a serious, substantive, and often complicated one, and it must be treated as such.” (Id. at pp. 1013-1014, citing Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 272-273.)

Grappo explained that had the trial court properly acted as a gatekeeper, the default judgment would not have been entered because, inter alia, the complaint did not identify the people or relationship of any of the people or entities named in the caption; the complaint did not comply with the pleading requirements in rule 2.112 of the California Rules of Court; Grappo was not the proper plaintiff because any alleged wrongs, if they had occurred, were against the Michael A. Grappo 2003 Trust and not Grappo; Grappo’s complaint did not state a claim for any loss of property; the claims of negligence and gross negligence were not supported by any allegations and the $60,000 awarded to Grappo was not supported by the complaint. (Id. at pp. 1013-1015.)

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, June 2017

Mediation Message No. 133

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 133
CONTACTS WITH CURRENT AND FORMER EMPLOYEES, OFFICERS, DIRECTORS AND MANAGING AGENTS

Because contacts with current and former employees and members of a company’s control group are always an important (and often misunderstood) issue in all types of litigation, I am summarizing the status of that law. (This is, by far, the longest Mediation Message I’ve ever written but once I started, I couldn’t stop.)

Before present Rule of Professional Conduct 2-100, there was Rule 7-103 which stated “A member of the State Bar shall not communicate directly or indirectly with a party whom he knows to be represented by counsel upon a subject of controversy, without the express consent of such counsel. This rule shall not apply to communications with a public officer, board, committee or body.” Rule 7-103 prohibited all contacts with current employees. (Mills Land & Water Co. v. Golden West Refining Co. (1986) 186 Cal.App.3d 116; Bobele v. Superior Court (1988) 199 Cal.App.3d 708, 713-714.)

Existing Rule 2-100 provides: “(A) While representing a client, a member shall not communicate directly or indirectly about the subject of the representation with a party the member knows to be represented by another lawyer in the matter, unless the member has the consent of the other lawyer. [¶] (B) For purposes of this rule, a ‘party’ includes: [¶] (1) An officer, director, or managing agent of a corporation or association, and a partner or managing agent of a partnership; or [¶] (2) An association member or an employee of an association, corporation, or partnership, if the subject of the communication is any act or omission of such person in connection with the matter which may be binding upon or imputed to the organization for purposes of civil or criminal liability or whose statement may constitute an admission on the part of the organization.”

“Control group” and “managing agent” defined (see 2-100(B)(1)): A control group consists of “ ‘ “officers and agents … responsible for directing [the company's] actions in response to legal advice.” ’ ” (Bobele v. Superior Court, supra, at p. 712.) A managing agent is “An employee that “exercise[s] substantial discretionary authority over significant aspects of a corporation’s business.” (White v. Ultramar (1999) 21 Cal.4th 563, 577 [definition for punitive damages purposes]; Snider v. Superior Court (2003) 113 Cal.App.4th 1187, 1208-1209 [White’s definition applies to Rule 2-100(B)(1) and is consistent with the control group definition in Bobele].)

Rule 2-100(B)(2)’s “binding” statement language: “(P)aragraph (B)(2) focuses on the subject matter of the communication and arguably applies to employees outside of an organization’s control group if the subject matter of the conversation is the employee’s act or failure to act in connection with the matter at issue, and that act or failure to act could bind the organization, be imputed to it, or if the employee’s statement could constitute an admission against the organization.” (Snider v. Superior Court, supra, at pp. 1202-1203; italics in original.) The “may constitute an admission on the part of the organization” category “only applies to ‘high-ranking executives and spokespersons’ with the authority to speak on behalf of the organization.” (Id. at p. 1209; the same standard applies to authorized admissions as an exception to the hearsay rule in Evidence Code sec. 1222. (O’Mary v. Mitsubishi Electronics America, Inc. (1997) 59 Cal.App.4th 563, 572; accord, Snider v. Superior Court, supra, at p. 1203.)

Rule 2-100 regarding contacts with current members: “[R]ule 2-100 permits opposing counsel to initiate ex parte contacts with … present employees (other than officers, directors or managing agents) who are not separately represented, so long as the communication does not involve the employee’s act or failure to act in connection with the matter which may bind the corporation, be imputed to it, or constitute an admission of the corporation for purposes of establishing liability.” (Triple A Machine Shop, Inc. v. State of California (1989) 213 Cal.App.3d 131,140, 143.) La Jolla Cove Motel & Hotel Apartments, Inc. v. Superior Court (2004) 121 Cal.App.4th 773, 788-789 holds that rule 2-100 allows attorneys to contact directors for a represented corporation where the director’s separate counsel had consented to the contact although the corporation’s counsel had not. (Id. at pp. 776-777, 784.) La Jolla Cove Motel, however, does not allow contacts “in most situations” with “a director of a corporation” “by opposing counsel without the permission of corporate counsel. It is only in the situation where the director has retained separate counsel that rule 2-100 allows ex parte contact upon consent of that counsel.” (Id. at p. 789.)

Former employees, including managerial, under rule 2-100, can be contacted: “Plaintiffs may inquire about relevant facts but not about any privileged communications concerning those facts.” (Bobele v. Superior Court, supra, at pp. 714-715 [rule 7-103 analysis]; see also Nalian Truck Lines, Inc. v. Nakano Warehouse & Transportation Corp. (1992) 6 Cal.App.4th 1256, 1259 (Rule 2-100 permits communications with a former member of the corporation’s “control group”) and Continental Insurance Co. v. Superior Court (1995) 32 Cal.App.4th 94, 118-119 (Nalian’s reasoning applicable to both rule 2-100(B)(1) and (2).) Mills Land & Water Co. v. Golden West Refining Co., supra, at p. 128 discouraged contacts with former company directors because they could possess potentially privileged information about the pending litigation but has been distinguished by La Jolla Cove Motel & Hotel Apartments, Inc. v. Superior Court, supra, at pp. 788-789 because Mills Land relied upon former rule 7-103, which imposed a blanket prohibition against contacts with any constituents of a business or corporation.

Policy allowing former employees to be interviewed: Former employees are sometimes the best available source of information regarding unprivileged events (State Farm & Casualty Co. v. Superior Court (1997) 54 Cal.App.4th 625, 638) and they may be reluctant to speak if they could only do so in the presence of the entity’s attorney. (G-1 Holdings, Inc. v. Baron & Budd (S.D. N.Y. 2001) 199 FRD 529, 533.)

Rule 2-100 should be interpreted narrowly: “(R)ule 2-100 must be interpreted narrowly because a rule whose violation could result in disqualification and possible disciplinary action should be narrowly construed when it impinges upon a lawyer’s duty of zealous representation.” (Continental Ins. Co. v. Superior Court (1995) 32 Cal.App.4th 94, 119.)

Consequences for violation of rule 2-100: “(T)he corporate attorney-client privilege extends not only to communications between corporate counsel and members of the control group, but also to communications with middle and low level corporate employees.” (Upjohn Co. v. United States (1981) 449 U.S. 383, 390.) “Rule 2-100 does not define the scope of the attorney-client privilege; rather, it bars ex parte communications with opposing parties regardless of whether the information sought, obtained or conveyed is privileged from disclosure.” (Triple A Machine Shop, Inc. v. State of California, supra, at pp. 140-141.) Violation of the privilege by an improper ex parte communication may lead to disqualification, exclusion of the evidence or other appropriate measures to achieve justice and ameliorate the effect of improper conduct. (Snider v. Superior Court, supra, at p. 1212.) The improper ex parte communication requires an intention to violate rule 2-100 “or any other standard of ethical conduct.” (Jorgensen v. Taco Bell Corp. (1996) 50 Cal.App.4th 1398, 1404; Snider v. Superior Court, supra, at p. 1215 [actual knowledge required before an attorney violates rule 2-100].) A failure to conduct discovery or communicate with opposing counsel where counsel has reason to believe that an employee of a represented organization might be covered by rule 2-100 may constitute circumstantial evidence of actual knowledge that the employee came within rule 2-100. (Id. at pp. 1215-1216.)

Obligations of counsel regarding contacts with a current member of an entity: “(T)o avoid potential violations of the attorney-client privilege, an attorney contacting an employee of a represented organization should question the employee at the beginning of the conversation, before discussing substantive matters, about the employee’s status at that organization, whether the employee is represented by counsel, and whether the employee has spoken to the organization’s counsel concerning the matter at issue. If a question arises concerning whether the employee would be covered by rule 2-100 or is in possession of privileged information, the communication should be terminated.” (Id. at p. 1213.)

Warning letters about possibly improper contacts with current members of an entity: “Once a dispute arises that could lead to litigation, it is also incumbent upon an organization and its counsel to take proactive measures to protect against disclosure of privileged information by informing employees and/or opposing counsel their position concerning communications between employees and opposing counsel.” (Ibid.) Warning letters may be sent before the filing of a lawsuit. (Jorgensen v. Taco Bell Corp., supra, at p. 1403.) The organization may also instruct its employees to contact them before speaking to opposing counsel. (Snider v. Superior Court, supra, at p. 1212.) The entity, however, may not “bring former employees back into the fold for purposes of a lawsuit merely because there is a risk that the former employee might disclose unfavorable facts.” (Bobele v. Superior Court, supra, at p. 713.)

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, May 2017

Mediation Message No. 132

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 132
NEGOTIATION PHASES OR PROCESSES AT MEDIATION

The types of negotiation tools used at mediations go through stages. This Mediation Message examines each of those processes in the order that they usually occur.

Distributive or marketplace bargaining – In most instances, mediations start with distributive or marketplace bargaining, in other words, the parties exchange single numbers, a process very similar to how people buy houses and cars. Generally, the plaintiff makes the first move, although the defendant, for strategic reasons, may go first. (See Mediation Message no. 14 which discusses the pros and cons regarding who should make the first move.) There is no set number of demands and offers before integrative or market place bargaining loses its effectiveness; it occurs when the exchanges cease to produce significant movement. For example, if the plaintiff’s opening demand is $425,000, the defendant responds with a $5,000 offer, the plaintiff answers with $410,000 and the defendant next offers $7,500, it should be obvious to everyone that distributive-marketplace bargaining has run its course.

Integrative bargaining – Distributive bargaining is competitive and concerned with distributing something (generally money) whereas the parties in integrative bargaining are trying to make more out of what is at issue and discuss the process as equals, which is not the situation with distributive bargaining. Integrative bargaining may be more useful in partnership and marital dissolutions.

Brackets – Brackets are most often the next method used when marketplace bargaining ceases to be effective. They invigorate the negotiations, provide some insight into a party’s thinking and allow the parties to make bigger moves without compromising their respective credibility because the brackets are conditional or amorphous, since a party is indicating it will move only if the other side is also willing to move. (See Mediation Message no. 80 for an in-depth discussion of brackets.) Brackets, however, rarely lead to settlement by themselves, so the parties may return to distributive or marketplace bargaining after the financial divide has become smaller.
Where are you or what is your authority? – This question is not an existential inquiry. Instead, at some point in the mediation (especially, the bracketing process), it may become obvious to the mediator that a party is disinclined to make meaningful or significant moves. When that occurs, the mediator should attempt to find out, with an absolute promise of confidentiality, what that party is attempting to achieve. This discussion may reveal that the party has limited authority or sees the value of the case much differently than does the opposing party. If it’s an “authority” issue and cannot be resolved immediately by a telephone call, the options are either to recess the mediation or have the mediator make a proposal (see below), which is kept open so that the party with the “authority” problem has an opportunity to resolve it.

Wouldya-Couldya – After lengthy negotiations have taken place and with some sense of how the parties value their respective cases, the mediator, on his own, “floats” a settlement term to one side or, alternatively, asks that same party what it is trying to settle the case for. The mediator then may discuss with the disclosing party the term’s reasonableness or probability of success. (This process is always undertaken with the promise of absolute confidentiality.) If the mediator believes the suggested settling term is achievable, he may, at an appropriate moment and without any telegraphing, discuss that term with the opposing side. The subject is dropped if it does not produce a favorable response. However, if there is some comparability between the “wish lists” for the two sides, the mediator will then attempt to narrow the divide between the two positions until unanimity (and a settlement) is achieved.

“Split the baby” – This tactic simply has the mediator suggesting that the pending demand and offer be equally divided. It works best when the parties have been negotiating for a while and the difference between the demand and offer is relatively small, although larger amounts are susceptible to this device. It also can be a corollary to or work in conjunction with “wouldya-couldya.”

Take it or leave it – One of the parties, either because of limitations on its authority to settle the matter or out of frustration, tells the mediator it wants to make a “take it or leave it” demand or offer. The mediator should warn that party that it has to “walk” or promptly leave the mediation if the demand or offer is not accepted because to continue negotiating after a rejection demeans the offeror’s credibility. Obviously, this tactic is used sparingly since it is drastic and often rejected.

Best and final – This negotiating step often occurs after an impasse in negotiations and, unlike “take it or leave it,” allows for further negotiations because it is not absolutely final. It is used when one party believes the only way to resolve the conflict is to have the mediator make a proposal.

Baseball – Like baseball arbitration, the parties submit their respective settlement terms (usually financial numbers) to the mediator. The mediator must pick one of the two submitted terms and may not offer an alternative. This method is rarely used because it is totally unpredictable.

Mediator’s proposal – The proposal has two approaches: it either reflects the mediator’s expectation as to which settlement terms will be acceptable to everyone or, alternatively, is the mediator’s evaluation of what the case is “worth.” In the second approach, for example, the mediator might have opined that the plaintiff’s case has a substantial chance of being “defensed” at a motion or trial. In that situation, the proposal will have a lesser value than the first type that attempts to bridge the parties’ goals. Because of the potential disparity between the two types of proposals, mediators should advise the parties which approach they are using. Depending on the wishes of the parties, the proposal can be responded to immediately or kept “open” for an agreed upon period of time. Also, depending on the nature of the individual case, the proposal may reflect input from one or both parties or solely reflect the mediator’s educated guess on terms that will be acceptable to all. (See Mediation Message no. 127 for a detailed discussion of the mediator’s proposal.)

Court trial or arbitration – If the case cannot settle, the mediator may discuss with the parties their waiving a jury trial or arbitrating it, if the case does not have strong emotional appeal or holding down costs is an important consideration for both sides. If they choose arbitration, it is preferable that the parties not ask the mediator to be the arbitrator but, if they do, the mediator must, pursuant to Rule of Court 1620.7(g), inform the parties, inter alia, of the consequences of their having previously revealed confidential information to him or her.

Hi-Lo – If the case cannot settle at mediation and if it shall be tried to a court, jury or arbitrator, the mediator may suggest that the parties agree beforehand that any judgment or award shall be no greater or less than two specified amounts.

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, April 2017

Mediation Message No. 33

MICHAEL D. MARCUS’ MEDIATION MESSAGE NO. 33

BREAKING AN IMPASSE AT MEDIATION

Occasionally, during a mediation, the discussions cease being fruitful because of unrealistic expectations, a disagreement over material facts, bad timing (incomplete discovery; an impending motion for summary judgment), the failure of one side to have sufficient settlement authority or the absence of an essential party. This message discusses ways of breaking an impasse when the expectations of the parties (usually over the monetary value of the case) are far apart.

During the distributive bargaining process of repeated demands and offers, one side may dig in its heels and refuse to move any further. In such circumstances, assuming that the relevant facts and applicable law have already been fully discussed, the following approaches may be helpful:

Bracketing – In a case with a potentially high settlement value where the demands and offers of the respective parties have left them still far apart, it may be helpful to obtain an agreement from each that they change their positions to agreed upon sums. For example, if the plaintiff and defendant are “stuck,” respectively, on $500,000 and $75,000, both may consent to continue the negotiations at $375,000 and $150,000. The bracketed numbers should reflect the strengths and weaknesses of each side’s case. The downside to bracketing is that it may involve as much time as would be needed to get the parties to move to the same, acceptable numbers. Its benefit is that it provides a different dynamic to the discussions and may cause one or both parties to provide additional insight into their thought processes.

“Split the baby” – This simply involves dividing equally the amount between the last demand and offer. It works best when the difference is relatively small.

Baseball – Like baseball arbitration, the parties submit their respective numbers to the mediator. The number closest to the mediator’s valuation is accepted. This method is rarely used because it is unpredictable.

Wouldya-Couldya – After lengthy negotiations have taken place and with some sense of what the case is “worth” to the respective parties, the mediator asks one of the parties if it would settle the case for a specific amount. If the party is agreeable, the mediator “floats” the possibility of settling at that amount to the opposing side without representing that that amount is an offer.

Mediator’s proposal – This tactic requires the mediator to propose a settlement on terms (e.g., amount, number of payments) that will most probably be acceptable to all of the parties. The proposal does not reflect what the mediator believes is the value of the case. Depending on the wishes of the parties, it can be kept “open” for a short period of time or for several days.

Arbitration – The prospect of arbitrating the matter rather than trying it to a jury may be acceptable to the parties if the case does not have strong emotional appeal and holding down costs is an important consideration for both sides. Because the mediator has heard so much about the case, it is preferable that he or she not be the arbitrator. However, if the parties want to use the mediator, the mediator must, pursuant to Rule of Court 1620.7(g), inform the parties, inter alia, of the consequences of their having previously revealed confidential information.

Hi-Lo – Whether the case be tried to a jury or arbitrator, the parties agree beforehand that the judgment shall be no greater or less than two specified amounts.

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright, Michael D. Marcus, April 2006

Copies of Michael Marcus’s previous Mediation Messages and Arbitration Insights are available by e-mail request.

Mediation Message No. 11

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 11

THE FAILURE TO APPEAR OR COOPERATE AT MEDIATION

It is very unusual for an attorney or party at either a consensual or court-ordered mediation not to appear at a subsequent mediation. (Message no. 7 reviewed the law and court rules which mandate that counsel, parties and individuals with settlement authority must attend mediations, unless excused.) The failure of a party or attorney to not cooperate, once present, is even more uncommon but can occur. This message discusses what the mediator or counsel may legally advise the trial court about such conduct.

The subject is governed by Evidence Code sections 1119 and 1121 and Foxgate Homeowner’ Association, Inc. v. Bramalea California, Inc. (2001) 26 Cal.4th 1. Evidence Code section 1119 states, in substance, that all oral and written communications made in a mediation are not discoverable and shall be confidential. Section 1121 provides that a court or other adjudicative body may not consider a report or any finding by a mediator, other than those authorized by law, concerning a mediation conducted by that mediator. Foxgate holds that there are no exceptions to section 1119 but, while a mediator may not report to the court about a participant’s conduct, that a party may do so.

The failure to appear at mediation by counsel, a party or a person with full authority to settle the case: Since this conduct occurred outside of the mediation, both the mediator and a party may report the non-appearance to the court. Consequently, a mediator can advise the court, in Judicial Council form ADR-100 (Statement of Agreement or Non-Agreement) about the failure of a party or counsel to appear at court-connected mediation programs authorized by Code Civ. Proc. Sections 1775 et seq. and 1730 et seq.

The failure by counsel or a party to cooperate during mediation: Foxgate applies to this situation, and only an opposing party may report such conduct. The reportable facts are limited to those that are non-communicative or, if communicative, were not for “the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation…” (Evid. Code sec. 1119(a).)

Judge Michael D. Marcus (Ret.)
ADR Services
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
310-201-0010
Copyright, Michael D. Marcus, February 2004

Mediation Message No. 53

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 53

WHY ARE WE HERE?

The sine qua non for an effective mediation, as I’ve mentioned many times, is preparation. But good faith and flexibility by the parties, although not as important, are also integral to resolving cases.

One aspect of good faith by parties in mediations is that they shall be willing to consider all reasonable options and arguments presented by the mediator. Flexibility goes hand-in-hand with good faith. In the mediation context, it means that the parties will be open to changing their minds; it is the polar opposite of rigidity.

Before the mediation, lawyers should assess their respective client’s willingness to listen to competing facts and theories and to adjust their positions accordingly. It is their obligation, if the clients are rigid, to educate them about the nature of the mediation process and to advise that resolution is not likely to happen if they are not willing to modify their positions or be willing to compromise some of their firmly held opinions.

Despite these best efforts, if a client is adamant that it is his or her way or trial and the lawyer honestly believes that this position is both deeply held and unalterable and cannot be changed by the most persuasive and evaluative mediator, it is better to not go forward with the mediation. Rather than proceed with a futile settlement effort, the attorney should strongly consider calling opposing counsel and the mediator to advise about the probable hopelessness of the mediation. (This discussion, incidentally, is privileged. See Wimsatt v. Superior Court (2007) 152 Cal.App.4th 137.) By alerting the other participants, the lawyer has preserved the integrity of the mediation process, saved opposing counsel from expending precious time and money and negated the other attorney from having to expound at the subsequently failed mediation, Why are we here?

Judge Michael D. Marcus (Ret.)

ADR Services, Inc.

1900 Avenue of the Stars, Suite 250

Los Angeles, California 90067

(310) 201-0010

Copyright Michael D. Marcus, August 2009

Please visit my website at www.marcusmediation.com for information about my mediation and arbitration background and experience. Copies of my previous Mediation Messages and Arbitration Insights are available by going to the articles link on the website.

Mediation Message No. 76

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 76

JUDGE KOZINSKI IS NOT A FAN OF MEDIATION

Ninth Circuit Chief Judge Alex Kozinski once again has established his credentials as a legal iconoclast. In Nordyke v. King (9th Cir. 2012) 676 F.3d 828 (Nordyke II), he issued a short but sharp rebuke of the en banc panel’s order that the parties mediate a long-running dispute concerning the right to bear arms.

Nordyke I involved an Alameda County ordinance prohibiting firearm’s sellers from possessing firearms on County property and at County fairgrounds. The Ninth Circuit affirmed the trial court’s dismissal of the gun sellers’ action challenging the ordinance as a violation of the Second Amendment because an ordinance exception allowed gun sales as long as the firearms were secured to prevent unauthorized use when not in the actual possession of the authorized participant. Thus, the Court reasoned, the ordinance did not violate the Second Amendment since it only minimally regulated the sale of firearms at gun shows.

On en banc review of Nordyke I, the majority in Nordyke II held that “the parties should attempt to settle this dispute by agreeing on the conditions for holding gun shows at the Alameda County fairgrounds, with the assistance of mediation. The case is referred to the Circuit Mediation Office for mediation, and its submission is deferred for 45 days or pending further order of the court.”
Kozinski dissenting, with Judge Gould concurring, stated “The parties have not asked for mediation; they have said nothing that suggests mediation would be fruitful; when asked about it in court, they displayed obvious distaste for the idea. We overstep our authority by forcing the parties to spend time and money engaging in a mediation charade. Our job is to decide the case, and do so promptly. This delay serves no useful purpose; it only makes us look foolish. I want no part of it.”

The majority’s order is an appropriate recognition of mediation’s value and, perhaps, as well, a subtle effort to sidestep a possible appeal of the Second Amendment issue to the U.S. Supreme Court, where its affirmation might be reversed. Kozinski’s dissent is notable because it reflects the distaste of a well known jurist for imposing mediation on unwilling parties.

Judge Michael D. Marcus (Ret.)

ADR Services, Inc.

1900 Avenue of the Stars, Suite 250

Los Angeles, California 90067

(310) 201-0010

Copyright Michael D. Marcus, June 2012

Please visit my website at www.marcusmediation.com for information about my mediation and arbitration background and experience. Copies of my previous Mediation Messages and Arbitration Insights are available by going to the articles link on the website.

Mediation Message No. 75

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 75

MEDIATORS’ PET PEEVES

Last month I wrote about attorneys’ pet peeves concerning mediators. This month, as promised, I’m commenting on gripes that mediators have regarding what lawyers do or don’t do at mediation.

Not filing a timely mediation brief – It is not uncommon for mediation briefs to be submitted the afternoon before or the day of the mediation. The law is a demanding companion, but the sooner mediators receive the briefs, the sooner they are read and considered and critical legal issues can be researched. Further, late briefs may be disorganized and sometimes omit essential facts, law or argument.
Not sharing mediation briefs – A majority of attorneys do not send their briefs to opposing counsel, which means that mediators must spend valuable time educating the parties about facts and laws in contention. Submitting a confidential brief when a complaint has not yet been filed makes sense but does not when discovery has been completed and trial is not far away. If you don’t want the opponent to know about facts, legal theories or argument that are best held in reserve, then put them in a separate, confidential brief for the mediator and provide the known facts and contentions in a non-confidential memorandum. At the end of the day, experience has proven there are few issues a party chooses to keep secret throughout mediation.
Not being prepared at the mediation – Before mediation begins, attorneys should know the facts and law; have interviewed their clients; form opinions about the value of their cases and submit timely and informative briefs. The failure to do so causes a fitful mediation process.
Making unreasonable demands and offers – Unreasonable demands cause unreasonable offers and vice versa; they also cause delay and stalemate. Unreasonable positions often result from a concern that a more sensible demand or offer will compromise the attorney’s bargaining position. To this, I respond poppycock. (I might use stronger language, but I’ve been told that children read these messages.). An example should suffice: Assume the first demand is $750,000 or the first offer is $5,000 when both sides know the case is worth between $75,000 and $125,000. Isn’t the plaintiff better off initially demanding $300,000 and making the next move a small one, if the responding offer is also small, instead of dropping to $710,000, $675,000 and $635,000 and so on until, in exasperation, both sides agree to brackets, which hopefully move the parties to where they should have been long before? To ask this question is to answer it.
Not having a person with authority at the mediation – The practical purpose behind California Rule of Court 3.874, subdivisions (a)(1) and (2), which requires the personal attendance of the parties, their counsel and insurance representatives at all mediation sessions, unless excused, is that resolution of the dispute is more realistic when the decision makers are present to hear about the benefits of settling and/or the downsides of going to trial.
Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, May 2012

Please visit my website at www.marcusmediation.com for information about my mediation and arbitration background and experience. Copies of my previous Mediation Messages and Arbitration Insights are available by going to the articles link on the website.