Bill Gates at TED 2009

At TED 2009, the Technology Entertainment Design conference, Bill Gates delivered a speech on the scourge of malaria, an important global problem the Bill and Melinda Gates Foundation has been addressing since Gates retired from day-to-day operations at Microsoft.

During Gates’ presentation, he proceeded to release a handful of mosquitoes into the air, joking that there was no reason that only poor people should get malaria. These mosquitoes obviously didn’t carry the disease, though the surprise move drew more than a few nervous laughs from the 1,300 in attendance.

There is little doubt that anyone in the room will forget the point of Gates’ presentation after at least briefly feeling the vulnerability of those living in countries where mosquitos do carry the disease.

Consider making your next presentation even more memorable by finding ways to get the attention of the audience and communicating the point of the presentation at a visceral level.  The audience is bound to leave with a lasting impression and your message is more likely to have a viral effect.

In the recent edition of the Journal of Dispute Resolution, Magistrate Judge Wayne Brazil writes about how “spiritual fatigue” can affect seasoned mediators. His thesis is that staying centered emotionally and behaviorally in core purposes and principles of mediation can lower the level of psychic strain that this work can impose on mediators and can serve as a significant source of renewable professional energy.

He identifies the following areas to consider:

1. Denial - one source of fatigue is the fear of admitting that it exists, since we are in a position of being a “force” for good;

2.  Repetition of Process - Our energy might no longer be stimulated by the challenges of mastering new mediator skills as the novelty has worn off and boredom sets in;

3. The Psychic Strain of Being at the Center of the Vortex - the relentless and intense psychic demands that remaining at the center o the mediation process can impose on us. He suggests that we stop seeing ourselves at the center;

4.  Infection by the Parties’ Fatigue - our fatigue might by a product of the fatigue felt by the parties, particularly repeat players to the process;

5.  Exaggerated Expectations of the Parties to the Process - we may be artificially sapping our own energy by expecting too much of the parties and lawyers, as well as the process;

6.  Exaggerated Expectations of Ourselves - we sometimes exaggerate our ability, our contribution, and our responsibility;

7. Sources of Sustaining Energy - Being transparent about ourselves and the process, actively soliciting the participation of the parties and lawyers in decisions about how to structure their cases, and what steps to take at important junctures in the proceedings;

8. Accessing the Energy that is in the Values and Purposes that Animate our Commitment to this Work - we need to reconnect with three animating truths about our work: (1) the process we use and the spirit of the work is important; (2) the vast majority of the people we serve respect and are grateful for what we do and believe they have benefitted from the process we have hosted; (3) our work does in fact teach listening, acknowledging and engaging communication and fostering connections.

This is the technique suggested by John DeGroote of Settlement Perspectives which is used as a quick, confidential method to determine proximity of settlement positions. While the technique is situational and can vary with each case, generally speaking each party submits its best offer in confidence to the neutral third party (”the confidential listener”), who informs the parties whether their proposals are within a negotiable range. Generally, and absent specific authorization from the proposer, the confidential listener does not relay one side’s confidential proposal to the other.

The parties will normally agree in advance that if the sums overlap, with the plaintiff citing the lower figure, they will settle at a level that splits the difference. If the cited figures are within a specified range of each other, e.g. ten percent, the parties may direct the neutral to so inform them and help them narrow the gap. If the figures are not within the set range, the parties may repeat the process, or the confidential listener can make a mediator’s proposal.

Here is a form agreement offered by the CPR International Institute for Conflict Prevention and Resolution:

AGREEMENT made    , 2009

between XXX  of  XXX

represented by  XXX   and of

epresented by XXX.

A dispute has arisen between the parties. The parties have agreed to attempt to resolve their dispute through the private process described in this agreement.

Accordingly, the parties agree as follows:

1.    THE NEUTRAL LISTENING PROCESS

      1.1.  Selection. The Neutral Listener shall be _______________ who has agreed to serve and whose compensation has been agreed upon by the parties and the Neutral Listener.

      1.2.  Submission of Settlement Proposals.

      1.3.  Role of the Neutral Listener. The Neutral Listener will promptly review the settlement proposals submitted by each party and thereupon will inform the parties whether their settlement offers are:

       substantially similar or overlap, or

       within a range which the Neutral Listener considers negotiable.

2.    CONFIDENTIALITY

      2.1.  Confidentiality of Settlement Proposals. Unless the parties otherwise agree, the Neutral Listener shall not disclose the settlement positions revealed by the parties, nor will the Neutral Listener reveal the basis for his/her determination that settlement negotiations should or should not commence.

      2.2.  Confidentiality of Settlement Process. The Neutral Listening process is a compromise negotiation for purposes of the Federal Rules of Evidence and state rules of evidence. The substance of this process shall be kept confidential by all parties and the Neutral Listener. The Neutral Listener shall be disqualified as a witness, consultant or expert in any pending or future action relating to the subject matter of the settlement effort, including those between persons not parties to the settlement effort.

IN WITNESS WHEREOF, the parties by their attorneys have executed this agreement as of the date first above written.

The U.S. Equal Employment Opportunity Commission (EEOC) and Cracker Barrel Old Country Store, Inc. have signed a Universal Agreement to Mediate (UAM) to resolve workplace disputes prior to an EEOC investigation or potential litigation.

One of the EEOC’s key efforts has been to expand mediation, thus far entering into 178 national and regional UAMs with private sector employers, including several Fortune 500 companies.

Additionally, EEOC district offices have entered into approximately 1,275 mediation agreements with employers at the local levels within their respective jurisdictions. Under the EEOC’s National Mediation Program, more than 110,000 charges of employment discrimination have been mediated.

Under the terms of the UAM, all eligible charges of discrimination filed with the EEOC Miami District Office in the State of Florida in which Cracker Barrel Old Country Store is named as an employer/respondent will be referred to the EEOC’s mediation unit, as appropriate.

Established in 1969, Cracker Barrel operates 582 company-owned locations in 41 states.

In Rael v. Davis, 166 Cal. App. 4th 1608, the California Court of Appeal considered the following issue: Is the waiver of confidentiality provision in a settlement agreement enforceable even if the agreement was not signed by all the settling parties? The Court answered the question in the negative and concluded that the trial court correctly held that the term of the agreement waiving confidentiality never took effect because one of the parties to the settlement had not signed it. The Court further held that as a result, the agreement was inadmissible and therefore, unenforceable in whole or in part.

Check out Jeff’s latest article in The Plaintiff’s Magazine entitled, Setting the Stage of Negotiation.

This story  is for you if: 
• You show up to mediation and have never discussed settlement numbers with the defense;
• The defense has not revealed to you their assessment of liability and damages; or
• You are often disappointed at the defendant’s inability to settle in a reasonable range at the first mediation.

CLASS ACTION SETTLEMENT TOSSED OUT
By Greg Katz
Daily Journal Staff Writer
LOS ANGELES - The other shoe dropped last week when a state appellate panel published an opinion that nixed a mediated class action settlement between Foot Locker and employees.

Facing claims that the company did not reimburse employees for buying their required work uniforms or their time spent undergoing security checks, and denied employees meal and rest breaks, Foot Locker and the class’ counsel reached a deal in mediation with San Francisco neutral Mark S. Rudy.

San Francisco County Superior Court Judge Richard A. Kramer approved the settlement in October 2007.

But three class members challenged the $2 million settlement, which would have left $1.3 million for 16,900 potential class members after administrative costs and $500,000 in attorney fees. The objecting class members claimed that Kramer didn’t see enough evidence to determine whether the settlement was “fair and reasonable” in light of the risks of going to trial, noting that no formal discovery had been conducted on meal rest break claims, which were a later addition to the complaint.

Both class’ counsel and Foot Locker told the trial court that they exchanged information in mediation that supported the settlement, but couldn’t show it to the judge due to confidentiality. Noting the state’s mediation confidentiality statutes, Kramer signed off on the settlement.

But 1st District Court of Appeal Justice Stuart R. Pollak wrote that, notwithstanding confidentiality privileges, the court could not determine the adequacy of the settlement without independently examining the strengths and weaknesses of the case. Kullar v. Foot Locker, 2008 DJDAR 16745 (Cal. App 1st Dist. Nov. 7, 2008).

“The court undoubtedly should give considerable weight to the competency and integrity of counsel and the involvement of a neutral mediator in assuring itself that a settlement agreement represents an arm’s length transaction entered without self-dealing or other potential misconduct,” Pollak wrote.

“While an agreement reached under these circumstances presumably will be fair to all concerned, particularly when few of the affected class members express objections, in the final analysis it is the court that bears the responsibility to ensure that the recovery represents a reasonable compromise, given the magnitude and apparent merit of the claims being released,” he added.

Pollak was joined by Justices William R. McGuiness and Martin J. Jenkins.
The ruling remanded the case to the trial court for the parties to show evidence supporting the settlement and to allow the objecting class members to request further discovery.

“Foot Locker’s payroll records, for example, if relevant to the quantification of the claims being settled, are subject to discovery and may be introduced in opposition to the settlement, even if they were disclosed to class counsel during the mediation,” Pollak wrote.

Class counsel Scott E. Cole of Scott Cole & Associates in Oakland said the next version of the settlement will contain more information. He also said he is seeking depublication of the opinion because it does not create or modify law.

“Notoriety in my cases is something that attorneys generally want, but I’m a little surprised that the court thought this was worthy of going into the books … just because it’s such a fact-intensive situation that we had,” Cole said.
The opinion was issued unpublished on Oct. 14. The court published it Friday “for good cause.”

Daniel H. Qualls of Qualls & Workman in San Francisco, who represented the objecting class members, said the case clarifies what evidence is necessary to determine whether a settlement is fair.

“All I’m saying precisely is [that] a settlement of many, many thousands of class member claims was proposed [in this case], and there was no evidence in the record of the value of the claims being settled,” Qualls said.

Foot Locker’s attorney, Tracy Thompson of Cook Roos Wilbur Thompson, and company representatives could not be reached for comment.

Mediator Mariam Zadeh of First Mediation Corp. in Encino said the case could change the way parties treat class action mediations, which sometimes happen early in the cases before discovery has been conducted on all of the claims.

“What you might end up seeing is parties coming to mediation in class action suits a little bit further down the discovery road,” she said.

If you think it’s difficult to get two opposing sides to see eye to eye, imagine a situation where you’re mediating a seventeen party case with fifty-three participants. Master mediator Michael Landrum, based in Plymouth, Minnesota, did just that. He shares his insight and provides these ten tips for taking the pressure out of complex multi-party mediations: 

1.      Convene a “Process Design Conference” among attorneys (and possibly clients) on a separate day in advance of the actual mediation session.  This approach has the advantages of (a) getting buy-in to the process (and thus a greater commitment to settlement); (b) enabling the mediator to see how each player behaves during only “process negotiations,” which is an indicator of how they will conduct themselves when the rubber meets the road and how to deal with them when the process hits potholes; and (c) functioning as a good forum for identifying “affinity groups” as referenced below.

2.      Establish caucus “schedules” for the first couple of rounds so that attorneys can plan on getting other work done during their “down time” when the mediator is meeting with other parties.  Counsel tend to be quite appreciative of this flexibility and since they were part of the process design, it builds in a sense of responsibility that they will carry out what they agreed to do. 

3.       As the process evolves, revise and post revised schedules. By the second day, the pace of the negotiations generally picks up markedly. Parties and counsel are likely to agree to stick around once the caucuses get shorter so as not to delay the progress being made. The willingness to develop an initial phase that respects counsel’s needs, helps to create their willingness to reciprocate when it is time to accelerate the process.

4.      Identify “affinity groups” of parties with enough overlapping interests to create the potential for productive joint caucuses with all members of the group.  Also, if you’ve correctly sensed the “affinities,” an amazing amount of progress can take place while the group members interact with each other during mediator’s caucuses with other parties – i.e., you come back into the room, and the group that, collectively, was willing to put in $X as their share now presents a contribution of $X+. Once this snowball starts rolling down the hill, the contributions tend to get larger and larger as you make the rounds in succeeding caucuses.

5.      Use flip charts to develop a “Contribution (or responsibility, or both) Matrix,” i.e. what percent of the total pie does each party see for itself and the others.  After making the rounds in individual caucuses (sometimes affinity group caucuses), convene plenary sessions to present the matrix and facilitate dialogue about the results.

6.      Try to arrive at an initial consensus among all defendants as a group on what defendants “think plaintiffs should take” even if it appears to be low-ball – see below).  Again, this process provides all kinds of information about who’s cooperative, who’s not and the reaction of others.

7.      Ask individual defendants in caucus to assume for the moment or pretend, that they could get out by themselves (i.e., disregarding for the moment cross-claims, indemnification issues, etc) and ask them how much of that amount would they be willing to pay?

8.      Reconvene plenary sessions to discuss this “Anonymous Total” and lay out the following scenario:  “So, collectively, you think Plaintiff should take $____, but collectively, at this time, you’re willing to put together only an offer of $<>.  Clearly, something has to change if we’re going to get this done, right?  I now want to talk with each of you (either individually or in the by-now-established “affinity groups.”

9.      “Divide and Conquer” – Work with Plaintiffs to determine what they would be willing to take from each Defendant, and start mini-mediations within the mediation.  Depending on the law of the jurisdiction regarding release of individual defendants, work the specter of potential piecemeal settlements between Plaintiffs and individual Defendants or various affinity groups. If they unable to actually get out on their own, get tentative, hypothetical agreements between Plaintiffs and individual Defendants, that “If Plaintiff can get $X, $Y, $Z, etc. from the major players” they will expect no more than specified amounts from the bit roles.   The recalcitrant ones then begin to perceive what trial would be like if co-Defendants become witnesses for Plaintiffs, i.e., leaving them twisting slowly, slowly in the wind.  This process tends to break logjams.

10.     As an alternative, the mediator can suggest an interim funding agreement to settle with Plaintiffs for $X and then arbitrate the allocation among Defendants.

Michael Landrum has mediated more than 1800 cases in 33 states in disputes involving up to $22 million in controversy. He can be reached at mlandrum@burklandrum.com.

The California Court of Appeal in Kullar v. Foot Locker Retail, Inc. found that the trial court abused its discretion in finding the terms of the class action settlement to be fair, reasonable, and adequate where the record failed to establish what investigation counsel conducted or what information counsel reviewed on which counsel based their assessment of the strength of the class members’ claims.

The Court further found that the record lacked sufficient information for the trial court to intelligently evaluate the amount in controversy and the realistic range of outcomes of the litigation. Furthermore, the fact that the settlement was reached during mediation did not eliminate the trial court’s obligation to evaluate the terms of the settlement. If there were some relevant information that was subject to a privilege that the trial court needed to respect, other data should have been provided that would have enabled the court to make an independent assessment of the adequacy of the settlement terms.

The Court of Appeals held that just because communications made during mediation and writings prepared for use in mediation were inadmissible and not subject to compulsory production did not mean that underlying data, not otherwise privileged, was also immune from production.

We are delighted to congratulate Geoff Sharp, our friend and colleague, for being appointed LEADR Fellow for 2008 - 2010. Geoff is the first New Zealander to be appointed a LEADR Fellow. Previous LEADR Fellows have been the Honourable Tony Fitzgerald QC and Ms Joanna Kalowski. The role of Fellow is to act as an ambassador and to represent ADR to the community and to government.

LEADR Chair, Margaret Halsmith said “We know Geoff to be a person of ideas and energy. LEADR is excited by the opportunities for working closely with him to action these ideas in line with the goals of LEADR.”

For more information about Geoff and his witty and topical insights, visit his blog at at http://mediatorblahblah.blogspot.com.