Federal Agencies Told to Use ADR Techniques to Resolve Environmental Issues

Federal agencies have yet again been directed to use Alternative Dispute Resolution (ADR) techniques to resolve disputes.  This time the Acting Director of the Office of Management and Budget and the Chair of the Council on Environmental Quality have directed relevant departments and agencies to

“increase the appropriate and effective use of third-party assisted environmental collaboration as well as environmental conflict resolution to resolve problems and conflicts that arise in the context of environmental, public lands, or natural resources issues, including matters related to energy, transportation, and water and land management. See Memorandum on Environmental Conflict Resolution.

Of course this is not the first time the White House has encouraged the use of ADR techniques in the federal government. For example, in 1998 President Clinton ordered agencies and departments to take steps to promote greater use of ADR techniques to resolve disputes and to negotiate regulations See Memorandum for Heads of Executive Department and Agencies

The memo sets out the use of ADR techniques to address environmental matters and directs federal agencies to use neutral facilitation to settle conflicts in issues related to energy, transportation and water and land management issues.

The memo applies to all executive branch agencies with regard to each agency’s enabling legislation, the National Environmental Policy Act (NEPA) and other laws aimed at managing and conserving the environment, natural resources and public lands. The complete memo is here.

Information about other relevant federal environmental ADR resources can be found at the Department of Justice web site the Department of Interior Office of Collaborative Action and Dispute Resolution web site and the EPA Conflict Prevention and Resolution Center site.

Coal King No Longer: Is Natural Gas the Long Term Solution?

This has not a good year for coal in the United States. Fifty-five coal-burning power plants haveshut down this year alone  including the Big Sandy power plant in Louisa, Kentucky

The significance of the Big Sandy plant is that it is located right in the heart of coal country; near the Appalachian Mountains, an area that has relied on coal, not only for energy, but as an economic driver for decades.

EPA regulations have forced coal companies to decide whether to pay for expensive retrofitting to their existing coal-burning electric power plants or to shut the burners down permanently. The American Electric Power company has decided to shut down both coal furnaces of Big Sandy, keeping open the possibility of retrofitting one at a later date to burn natural gas.

For most environmentally-concerned individuals this would seem like a major win. Burning coal not only emits a great deal of carbon dioxide but also other harmful pollutants like particulate matter and sulfur dioxide. Plus mining coal often involves significant environmental and human costs.

The fact that a coal plant would shut down in an area where coal is plentiful is an example of how social changes, concerns about global warming and EPA regulations are changing the energy industry. But this begs the question: what happens next?

Relying less on coal for energy means that burden going to be placed on other sources of energy. At the present one of the main sources of electrical energy is natural gas; while not renewable or devoid of emissions, it is a much cleaner option than coal. But there are ramifications to this shift to natural gas, making the environmental costs of hydraulic fracturing (fracking) an even greater concern.

If natural gas becomes relied on for more electrical energy production, natural gas companies have to find a safer way of removing it from the earth for it to be a sustainable source of energy.

The options other than natural gas to coal are clean, renewable sources of energy like wind. A decline in coal use presents a good opportunity for renewable energy, but companies still need financial and government support for these clean, renewable sources. And a much better electrical distribution system infrastructure, particularly to move electricity generated from wind and solar to customers.

Although increased use of natural gas over coal may be an encouraging trend and a step towards reducing our carbon emissions in the short term, it is pertinent to keep in mind one of the significant costs of increased use of natural gas - increased fracking - and the effects fracking will have on the environment.

Assisted by Michael Ciccarone

DOHA 2012 Climate Change Conference

The United Nations Framework Convention on Climate Change (UNFCCC) created the Conference of the Parties (COP) in order to get developed and non-developed nations to produce a plan to lower greenhouse gas (GHG) emissions and help prevent global climate change.

Despite recent events like Hurricane Sandy, Doha 2012 COP 18 saw little progress towards a lasting agreement of significant limits on GHG emissions.

No major progress has been made with regard to any of the issues. One of the focal points of this year’s conference has been extending the Kyoto Protocol commitments, which are set to expire at the end of this year. Doha 2012 punted by simply extending Kyoto. The real issue with Kyoto though is how to track and enforce the commitment of different countries. And how to find an equitable solution that will satisfy all stakeholders.

While extending Kyoto is a necessary action, it certainly does not solve our global warming problems. For one, the Kyoto only applied to developed nations, so China, Brazil and India were not a part of any emission reduction agreements. With these nations rapidly industrializing, it is crucial to involve them in some kind of GHG emissions reduction pact. One way is for developed countries to lead with ambitious reduction goals, with the United States participating; something that has not happened up to this point.

Arab countries’ involvement is also critical and many hoped that holding COP 18 in Qatar would help encourage Arab nations to become more involved in climate negotiations. Unfortunately, few Arab nations seem interested. With many of these countries sitting on vast oil reserves with significant solar potential, they have failed to set any targets for solar energy use.

In a recent interview, the U.N. Secretary General said that developed nations should assume most of the responsibility in fighting climate change as historically developed nations have caused the most damage.  While many would not disagree with this assertion, it does not bring the parties closer to an agreement. 

Obviously developed nations are most responsible for our current dilemma. However, developing nations like China, Brazil and India are rapidly industrializing and are now will certainly in the future be a major source of GHG emissions and contribute significantly to global warming. The solution has to involve everyone.  

Assisted by Michael Ciccarone

Wayne State Law School Environmental Law Clinic Director Gaining Recognition

Nick Schroeck is executive director of the Great Lakes Environmental Law Center and teaches at the Wayne State University Law School Environmental Law Clinic.  A 2007 graduate of Wayne State University law school, Nick is receiving recognition for his many accomplishments in environmental law.  Good for Nick and good for Wayne State Law School, my alma mater.

Nick has worked on a wide range of environmental issues and often appears in the media to help educate the public about environmental issues.  He has been involved in many of the recent environmental law issues in the Great Lakes area.

Nick often appears in the media speaking about high profile issues such as how to keep Asian carp out of the Great Lakes and hydraulic fracturing.  Good to see Wayne State Law School taking a leadership role in the public discourse about the environment. 

The NHL Negotiations: Clients Move the Puck Toward a Settlement

The NHL players and owners finally appear to be making progress towards a collective bargaining agreement. Although no formal agreement, public reports indicate that the two sides are having meaningful and productive discussions around many of the critical issues. You might be surprised, though, that this was not thanks to Gary Bettman or Donald Fehr, the lead negotiators for management and the union respectively.

The latest set of meetings was held between six owners and eighteen players – that is between the actual clients and the real parties-in-interest. This, in an effort to build trust and find common ground and perhaps to demonstrate that the players were united. This could be the necessary breakthrough and has appeared to help the parties build some common understandings and develop some of the trust necessary to settle the dispute.

Trust, here as in other negotiated settlement, is the sine qua non of settlement. If the two sides do not trust each other, getting a deal done is going to be very difficult. Meeting without Fehr and Bettman may have given each side enough of an unfiltered understanding of the other side’s needs and interests; enough, in other words, for each party to sense that it understood the other party’s true interests and where that party could – and could not – move. This understanding can give each party a sense of control over the process and remove the public gesturing and posturing from the equation.

There is no agreement yet, but the talks are ongoing; which is half the battle. Hopefully, the ongoing talks and the development of trust will result in a settlement.

At this point, a settlement, almost at any settlement, will benefit the stakeholders, especially those stakeholders not at the table and avoid the train wreck of the loss of an entire season.

The National Hockey League Negotiations: Will Mediation Make a Difference?

As the NHL lockout reaches its 10^th week, it is hard from the outside to see any progress. Both the All-Star game and the Winter Classic have been cancelled and the two sides seem just as far apart as they were three months ago.

But one recent development which should delight hockey fans and ADR professionals alike is that the owners and players have finally agreed to mediation. Both sides have agreed that ongoing negotiations will be conducted under the auspices of mediators from the Federal Mediation and Conciliation Service. 

Although this may not seem like a huge development it is a step in the right direction. The owners and players union have been negotiating for months to no avail. There is hope that with the assistance of the mediator they may begin to make some progress.

Some collective bargaining disputes are very contentious; both parties play “hardball” to get the best deal for their side. They often, as here, resort to lockouts or strikes. Both tactics are designed to put economic pressure on the other party. The problem is that such tactics force the parties into ‘win-lose’ scenarios in part because the high cost of applying economic pressure compels parties to justify the costs of the pressure to their own stakeholders by ‘winning.’

This results in both sides finding it difficult to properly assess the short- and longer-term costs associated with their hardball tactics. To justify the costs and defend their actions to their own stakeholders, the owners and players engage in positional bargaining rather than thinking creatively and seeking solutions. This may be one explanation of why mediation has a lower success rate in collective bargaining disputes than in other arenas; the recent NBA and NFL lockouts are prime examples.

But even if mediation is not successful in the NHL dispute, agreeing to mediation shows that both sides are interested in being seen by their stakeholders and the public as reasonable and willing to negotiate. It shows that the parties are aware of the costs and risks of alienating their own stakeholders. The desire to be seen as reasonable may allow space for the parties, with the assistance of a skilled mediator, to engage in a serious conversation about the issues separating them.

Both sides would be wise to keep the costs of a failure to achieve a settlement in the forefront as they enter into mediation. As the mediators most assuredly will point out many times and in different ways, the costs of not settling will be high, probably higher than the costs of a settlement and will unquestionably end in a “lose-lose” situation. 

Absent settlement, the consequences are likely to be union decertification; litigation; the loss of yet another hockey season; disaffected arena owners and local businesses, subjection to the mercy of judges and, possibly, the permanent loss of hockey’s fan base, without whom, there is no sport.

This is a situation we’ll be following closely. Hopefully both sides will see the merit of mediation and can follow the precedents set by baseball  and other collective bargaining negotiations that have benefited from mediation.

Prepared with Assistance from Michael Ciccarone

Maryland Mediation Confidentiality Act: Invoking the Magic Words

The Maryland legislature recently passed the Maryland Mediation Confidentiality Act  that took effect on October 1, 2012. It created a new subtitle 18 of Article 3, Courts and Judicial Proceedings of the Annotated Code of Maryland. 

The Act requires mediators to certify, in writing, “that the mediator has read and, consistent with state law, will abide by the Maryland Standard of Conduct for mediators…” for the confidentiality protections to apply (See Article 3-1802 (A) (2))

The provision in the Act requiring mediators to certify adherence to ethical standards means that the statutory confidentiality protections can be lost if the mediator fails to so certify, in writing.  In essence the parties, not the mediator, are punished by a mediator’s failure to invoke the magic words. They can lose the confidentially protection in the Act, often the sine qua non of mediation.

Mediators in Maryland must be aware of with this statute because it affects our practice; failure to follow the Act could result in parties losing the confidentiality provisions of the statute and expose the mediator to liability.

It is not hard to imagine that a party, having lost the confidentiality protection because of the mediator, could be pretty unhappy.  Enough to sue the mediator.

Here is a brief summary of some other important provisions of the statute.

With certain exceptions, the Act applies to cases in which the parties have agreed in writing that the Act applies or when they are required to mediate by law, except in court-referred cases under Title 17 of the Maryland Rules of Procedure.

However, the Maryland act does not apply to:

·        Maryland Court-annexed mediation conducted under Title 17 of the Maryland Rules;
·        Collective bargaining disputes;
·        Actions to enforce agreements to arbitrate under common law and the various Arbitration Acts;
·        Lien foreclosure mediation under Maryland Rule 14-209.1;
·        Certain parental matters under Maryland Rules 2-541; 2-542, 2-543, or 9-205.2;  
·        Mediation cases conducted by a judge who might rule based on the dispute; and 

·        Cases in which the parties and the mediator agree in advance in writing to exclude all or parts of mediation communication from the application of the statute.       

  

The Act also provides that signed agreements between the parties are not confidential unless the parties agree otherwise in writing. 

Section 3-1804 (B) of the Act sets our specific exceptions to the confidentiality standard. Those are:

·        A reasonable belief that the disclosure is necessary to prevent serious bodily harm or death;
·        To assert or defend against allegations of mediator misconduct or negligence or attorney professional misconduct or malpractice; or
·        To deal with allegations that, because of fraud, duress, or misrepresentation (emphasis added), a contract arising out of a mediation should be rescinded or damages should be awarded.

Finally, Section 3-1804 (C) has a general exception to the confidentiality provisions in the Act that allows a court to order mediation communications disclosed:

“…only to the extent that the court determines that the disclosure is necessary to prevent an injustice or harm to the public interest that is of sufficient magnitude in the particular case to outweigh the integrity of mediation.”

This, ‘prevent an injustice’ provision to allows the courts to act, when necessary, to protect threats to the public health, to address rare cases of potential denial of civil due process and even to protect a criminal defendant's constitutional rights. Absent such a general exception, it is possible that the statute would allow an injustice in the name of protecting mediation confidentiality. For an example of how a statute written to absolutely prohibit disclosure can result in such injustices, see my blog posts here and here 

Mediators Now Targets of Internet Scams: A Cautionary Tale

The internet is a great tool for all legal professionals, including mediators. Between the information available online and the ease in sharing information, it is almost impossible to imagine a world without the internet.

The bad news, however, is that the internet also increases the ease with which internet scammers can communicate their malice.  We all have seen how common internet scams have become. Internet scams cost businesses a great deal of money and frustration; it is essential to know what to look for to avoid these traps.

Mediators are now well enough established in business to become targets of scams.

We recently learned of a scam going around, targeting mediators in particular.

Here is a cautionary tale. 

The scam involves two alleged companies (in this particular scam, Barr Holdings and Arrow Electronics) who are alleged to be involved in a commercial dispute and request the help of a mediator. If the mediator agrees to help, a mediation contract is sent to the mediator with the signature of both company presidents. Here are the initial email exchanges, copied verbatim:

How are you today? We would like to thank you for your response to our inquiry for legal services. On behalf of Barr Holdings Limited, we are one of the UK's leading design and construction companies, specializing in the design and construction of sports stadia and arenas as well as large scale leisure, commercial, and retail projects.

However, We wish to inform you that we would be needing your mediation help to assist us with a breach of contract matter and also retrieve funds owed to our company. We ordered goods from Arrow Electronics, Inc. and was asked to make a 50% down payment for goods to be delivered to us and that we did and up till date no goods were delivered. We asked for a refund and they made a part payment and after that no other payment was made. We seek your help to help us collect these funds owed to our company amicably as we do not wish to go any further with the said transaction. We have made several attempts in the past to collect these funds which all ended negatively. We are aware that a conflict search would need to be done.

Here is the name of our supplier for your conflict check of interest-

Arrow Electronics, Inc., 7067 Columbia Gateway Drive, Suite 170 Columbia, MD 21046

Attached to this email you will find attached copy of contract, email correspondence and proof of payment for your perusal. We are prepared to pay a reasonable retainer fee for this service as soon as our board gets to review the terms of your engagement. So please have that sent to my attention via email if this is a case you are willing to handle.

What we require from you is to mediate the dispute and collect the funds peacefully without litigation [emphasis added]. We look forward to your prompt response. We wanted to also inform you that the said funds owed to us has caused a great strain on our company's operational capital and we want this issue to be resolved quickly. We would like to know a few things about your firm and also how you intend to handle this dispute

Then the mediator is sent an email claiming that the two sides have come to an agreement and one party will send a cashier’s check to the mediator to deposit and hold in trust on behalf of the other party.

On behalf of Barr Holdings Limited we have decided to retain your services after our review of your terms and attached herewith is a copy of the signed agreement. Due to your establishment as our mediator in the United States we have been able to yield a positive result.

Furthermore, we had talks with our contact and brought the possibility of mediation to his notice as we informed him of our correspondence with your service. He informed us that some Payment will be effected on or before 8th November 2012.

This is a positive breakthrough for me as this development will eventually reduce time and cost for all parties involved. However I do not intend to introduce any legal pressure unless the deadline of 8th November 2012.

Contract is breached. I do hope you understand my position as i intend to introduce litigation as a last resort.

I instructed that further correspondence including payment be made via our mediator. Please confirm name and mailing address check payments is to be made out on so we can forward it to him at once. It is also my thinking that your engagement fee be deducted as soon as funds are received by you and the balance held in trust pending further instruction.

I await your urgent acknowledgment and requested details as time is of the essence thank you.”

After the mediator receives the check – supposedly to pay a portion of the money owed that was in dispute -- the party sending the check asks the mediator to wire a portion of the funds to a creditor of the party. A wire transfer cannot be undone. Once the money is sent, it is gone.

In the scam, of course, the cashier’s check is fraudulent, and the mediator is now responsible for the money sent to the creditor. Unlike wire transfers, counterfeit cashier checks are not good until the issuing bank actually pays. So a wire transfer irrevocably removes money from the account and the fraudulent cashier’s check is not finally payable – even if the money initially appears in an account -- until after it has cleared by the issuing bank, which can take days, often longer. Thus, in the scam, the mediator is exposed to losing all of the money sent via wire transfer.  Here is the email exchange from the scammer trying to close the deal.

 How are you doing today??

Please do proceed with the swift wire transfer to our creditors as instructed yesterday. Today is the last date giving to us by our creditor to remit payment to them as promised. I Hope you understand how important this transaction mean to us because we don't want our company to be sued. if they file a law suit against us it will bring a bad reputation to our company and we will also loose our business relationship with our creditor. Due to my daughter condition am leaving the offices to know how she doing so keep me updated once the transfer is made this morning your time. I strongly believe you can handle the transaction ASAP.

Await your acknowledgment of instructions and wire confirmation slip thank you.”

This is an all-too-common situation. Mediators and attorneys must be on the lookout for scams.  Fortunately in this case the mediator sensed there was something ‘fishy’ and did not bite.  

Be careful.

Here are some signs that you might be the target of a scam

• Does the email have poor grammar, spelling errors or strange vernacular in general? A large majority of scams come from outside the U.S. and generally do not write in English very well and often use translation websites. 

• Have you received emails or heard from both sides individually? Most scams are the work of one person who usually speaks for the other side. If you are only hearing from one party, there is a good chance it is part of a scam. 

• Has it developed quickly, or have the two sides come to an agreement without your help? This is usually part of scam. Whoever is part of the scam is trying to get the money from you without you even realizing what is happening.  

• Did you receive a call from a location that does not correspond with either party? The mediator and target of this scam was receiving calls from Naples, Florida, a home to neither of the parties involved. This should be another sign that something fishy is going on.

For more information on this particular scam and for more examples of how scammers contact you, go to LawPro's Avoid A Claim blog. You can also report if you have been the target of a suspected fraud and see tips on how to prevent fraud.

Assisted by Michael Ciccarone

Maryland Court of Appeals Adopts New Rules Changing Title 17 – Alternative Dispute Resolution

On Nov. 1, 2012 the Court of Appeals of Maryland adopted a rules order including changes to Title 17, governing the provision of Alternative Dispute Resolution (ADR) services in all court ordered cases in Maryland. 

In addition, the rules order changed Title 9  Family Law, including how ADR services are provided by the Maryland courts in family cases.

The rules will go into effect on January 1, 2013. The full text of a PDF file of the rules order is here. 

Title 17 begins on page 55 and Title 9 begins on page 44 of the document.  The ADR Section of the Maryland State Bar Association played a significant role in shaping much of Title 17. Anyone providing ADR services to the Circuit Courts of Maryland should be sure to review the new rule.   

Delaware Chancery Court Appeals Decision Striking Arbitration Program

I recently blogged about Delaware statute that allows Chancery Court judges to sit as private arbitrators having been found to be unconstitutional by U.S. District Court Judge Mary McLaughlin of the District of Delaware.

As the DealBook blog in the New York Times wrote, the statute was designed to “permit the Delaware Chancery Court to arbitrate private disputes confidentially without public access.” Which seems to me to be the problem with the program.

As expected, the case has been appealed to the 3^rd Circuit. The lack of transparency in this arbitration program is a significant obstacle for the appellant to overcome.  What do you think are the odds of the District Court’s decision being overturned?

To read an article that disagrees with the District Court decision and supports the private arbitration program, click here. 

Citizens United? Evaluating the 2012 Presidential Election in a "Super PAC" World

The 2012 presidential election has been the most expensive to date. The whopping $2 billion that has been spent by both campaigns can be partially attributed to the Citizens United v. the Federal Election Commission decision by the Supreme Court.

This decision, as many of you know, held that corporations and labor unions have a First Amendment right to make independent expenditures that advocate election or defeat of candidates in certain federal elections.

This has led to the creation of “Super-PACs” that can spend an unlimited about of money in federal elections. This has led to a very large increase in paid media advertising. Many believe our campaign finance system is broken.

The American Bar Association Section on Individual Rights and Responsibility is holding a panel discussion to consider the effects of Citizens United on the 2012 presidential election.  Free-speech proponents, proponents of campaign donation regulation and election law practitioners will meet to discuss the lessons learned from this election and how campaign finance has changed.  The legal ramifications of Citizens United, such as the potential effects of shareholder litigation challenging campaign expenditures, will also be discussed.

Campaign finance is a critical issue. This panel is a timely opportunity for those in the DC area to hear civil discourse about an interesting subject. It is free, unless you are requesting CLE credit, in which case it costs $25.

To register for CLE credit, email the Section at irr@americanbar.org.  For more information, contact Patrice Payne at (202) 662-1030.

Federal Agencies Directed to Use Conflict Resolution to Resolve Environmental Issues

Federal agencies have been directed yet again to use Alternative Dispute Resolution (ADR) techniques to resolve disputes.  This time the Acting Director of the Office of Management and Budget and the Chair of the Council on Environmental Quality have directed relevant departments and agencies to

“increase the appropriate and effective use of third-party assisted environmental collaboration as well as environmental conflict resolution to resolve problems and conflicts that arise in the context of environmental, public lands, or natural resources issues, including matters related to energy, transportation, and water and land management. See Memorandum on Environmental Conflict Resolution 

This is not the first time the White House has encouraged federal agencies to use ADR techniques. For example, in 1998 President Clinton ordered agencies and departments to take steps to promote greater use of ADR techniques to resolve disputes and to negotiate regulations. See Memorandum for Heads of Executive Departments and Agencies

The latest memorandum requires that agencies use ADR techniques when appropriate to develop regulations and policy, resolve land management disputes and resolve enforcement issues related to water and land management, energy and transportation issues.

The memo applies to the executive branch agencies’ enabling legislation, the National Environmental Policy Act (NEPA) and other laws aimed at managing and conserving the environment, natural resources and public lands.  The complete memo is here.

Information about some of the relevant federal environmental ADR resources can be found at the Department of Justice website the EPA Conflict Prevention and Resolution Center website and the Department of Interior Office of Collaborative Action and Dispute Resolution website.

EPA Develops a Wireless Tool to Get Water Quality Data

EPA’s Water Data Project has recently unveiled a new tool to easily access data collected pursuant to the Clean Water Act about water quality in most lakes, rivers and streams anywhere in the US.

The EPA Environment Justice in Action blog has a posting about the new tool How's My Waterway? 

While the database has been around a while, the new tool enables everyone to quickly and easily access the data to see the condition of their local waters in plain language.

To use the tool, go to How's My Waterway? and enter your location or allow the system to determine your location. I found that the Use My Location button took too long to load on my office computer, so I clicked on Choose a Location button and was taken to a page where I entered my zip code.

The only confusing part about the tool is that the button to actually take you to the database to see the list and maps of waterways is not nearly as prominent as the three ancillary buttons (About How’s My Waterway, Related Links and Help). 

To actually see the reports generated from the database you click on a little arrow that is not highlighted.  EPA should fix this small design problem to make clicking to the database as prominent as the other, less important buttons.  But this is a small issue. 

The reports generated from the data in map or list format load quickly. The list of waterways – at least based on a check of my neighborhood – seems complete.

This tool empowers anyone to wirelessly check on local waters anywhere in the nation quickly and easily. Think about using your smart phone and during a hike checking on the water quality of a lake or stream from the water’s edge.

This is what e-government should be all about.

Why Lawyers Have Bad Reputations

From the New York Post: Dad sues own kid in matter of ‘trust’ .

Why is it that some lawyers seem to think the courts are designed to solve every problem? Do they think suing someone – even their own children – will intimidate? Dominate? Scare? Resolve the problem?

Whatever, here is yet another story about an attorney with more bluster than brains.

As the Post put it, “This’ll make for an awkward Thanksgiving. A high-powered Manhattan lawyer has filed a $3 million libel suit — against his daughter.” 

 The daughter had the temerity to ask for an accounting of her trust fund, managed by the father. 

The merits of this case do not really matter.  Just think about this family Thanksgiving  and be grateful about your own.

According to the Post, the attorney, “who once sued a restaurant for $7 million in a dispute over a $354 tip, said he might be willing to relent” and that the family matter will be resolved. But then why did he file suit in the first place?

California Confidentiality Statute Allows Clients to be Defrauded if Done During Mediation

Does this heading get your attention?  Because it is true, even if the statute allowing this was not designed to produce this outcome.

The strict California mediation confidentiality statute allows this outcome, according to the California Court of Appeals, the second such decision upholding the absolute ban on disclosure of any information if it originated in mediation. 

In two cases with egregious facts the California courts have held that the mediation confidentiality statute means what it states – that no evidence of any statement, act or writing prepared for a mediation is admissible in any subsequent court proceeding. Period. End of story.

I’ve blogged about this before, reporting on a decision by the California Supreme Court in Cassel v.Superior Court,  in which the Court held that private communications between an attorney and client that take place during mediation are confidential – even when the client waives the attorney-client privilege and requests disclosure.

The most recent case is Hadley et al. v. The Cochran Firm Cal. Court of Appeal, 2nd Appellate Dist., 8th Div., 2012  in which the California Court of Appeals held that the statute applied even when an attorney stapled an executed signature page from a confidentiality agreement to a supposed settlement agreement to which the clients had not agreed, thereby settling the case and dismissing their claims without the clients’ authority or knowledge.  Wow, talk about alleged malpractice and fraud.

The trial court dismissed the claims in response to a motion in limine to exclude the evidence of the alleged fraud and malpractice because this all happened during a mediation. The court was apparently following precedent from the Cassel decision by the California Supreme Court and a reading of the plain language of the statute.  The appellate court upheld the decision, holding that the mediation confidentiality statute compelled such a result.

This is no way to encourage mediation or engender client confidence in the mediation process.  These decisions clearly show the dangers of unintended consequences. When the mediation community drafted and supported a statute with an absolute bar, and opposed the Uniform Mediation Act, which takes a far more nuanced approach, I am certain there was no thought given to results such as this.

Delaware Chancery Arbitration Scheme Declared Unconstitutional

I’ve taken a bit of a vacation from blogging. I’m back now. This blog is about the Delaware Chancery Court statute authorizing the Chancery court judges to sit as arbitrators. Authorizing sitting judges to serve as arbitrators and issue private decisions. Remarkable.

This was a statute so off the wall that I blogged aboutit last November

.

The system was designed to allow large corporate litigants to use the Delaware Chancery court system to litigate in secret – cases were not even docketed – and still get a decision by a judge from the Chancery court.  And to allow the judges to receive large fees as arbitrators. 

As I wrote then, the Delaware Coalition for Open Government saw the statute as unconstitutional and sued the five Chancery judges in Federal District Court challenging the scheme. The complaint argued that the statute unconstitutionally violates the First Amendment’s qualified right of access to civil and criminal trials. 

Thankfully, U.S. District Court Judge Mary McLaughlin agreed that this scheme is unconstitutional, and held on the pleadings that:

Under the Delaware law and Chancery Court rules, a sitting judge of the Chancery Court, acting pursuant to state authority, hears evidence, finds facts, and issues an enforceable order dictating the obligations of the parties. The Court concludes that the Delaware proceeding functions essentially as a non-jury trial before a Chancery Court judge. Because it is a civil trial, there is a qualified right of access and this proceeding must be open to the public. (DELAWARE COALITION FOR OPEN GOVERNMENT v. HONORABLE LEO E. STRINE, JR., et al.CA No. 1-11-1015)

While it is likely that this case will be appealed, what do you think the odds are that the Third Circuit will reverse the decision? 

Use and Benefits of Alternative Dispute Resolution

A Statistical Summary Prepared by the Department of Justice

If anyone needs statistical evidence that ADR saves money and reduces litigation, here it is. Last year the government saved over $12 million in litigation and discovery expenses, over 14,600 days of attorney time, and avoided over 1,200 months of litigation by the use of alternative dispute resolution (ADR) techniques, according to the U.S. Department of Justice. These savings were achieved primarily through the use of mediation at a cost of under $2 million. Six dollars saved for every one dollar spent is pretty good cost/benefit ratio, if you ask me.

This data is being reported by the U.S. Department of Justice Office of Dispute Resolution (ODR). The ODR was set up to develop Justice Department policy regarding the use of ADR.

These are just the government’s cost savings and, according to the ODR, are “based on detailed case reports submitted by the lead trial counsel in all cases in which a private neutral conducted an ADR process in Department litigation across the country.”

Also note that in 2011 nearly 75% of the voluntary ADR proceedings (cases in which the government and other parties agreed to ADR without being ordered by a court) were “resolved” (i.e., settled). About 50% of cases ordered into ADR, by contrast, were resolved – still a significant percentage but perhaps an indication of why voluntary ADR works so well.

This chart is pretty strong evidence of the cost-saving benefits of ADR.

Category	TOTALS
	2011	2010	2009	2008	2007
Success Rates for ADR
Voluntary ADR Proceedings	73% Resolved	80% Resolved	78% Resolved	79% Resolved	69% Resolved
Court-Ordered Proceedings	53% Resolved	46% Resolved	42% Resolved	51% Resolved	50% Resolved
Cases in Which ADR Achieved Benefits	86%	73%	83%	No Data	No Data
Quantified Benefits of ADR
Litigation or Discovery Expenses Saved	$12,185,750	$11,662,500	$5,940,287	$3,387,750	$3,001,000
Days of Attorney/Staff Time Saved	14,656 Days	12,260 Days	5,829 Days	23,010 Days	2,797 Days
Months of Litigation Avoided	1,231 Months	930 Months	849 Months	661 Months	429 Months
DOJ Support ADR
Expenditures for Mediation Services	$1,931,900	$1,547,874	$1,141,103	$1,362,320	$1,049,891
Number of Case Authorized for ADR Funding	470	718	528	522	505

Source: U.S. Department of Justice, Office of Dispute Resolution