PEPPERDINE DISPUTE
RESOLUTION LAW JOURNAL
Volume Twelve
2011-2012
EDITORIAL BOARD
Editor in Chief
BRADLEY MANCUSO
Managing Editor
BRIAN MURRAY
Literary Citations Editors
GORDON GREEN
AMBER MCCAIG
JILLIAN MORPHIS
ELIANA RAMIREZ
Lead Articles Editors
TIMOTHY LIM
DANIEL LOCKWOOD
Student Articles Editors
MEGAN PIKE
KIMBERLY WAGNER
Symposium Editor
AMY AARON
Business & Technical Editor
TREVOR NEWMAN
Faculty Advisor
PROFESSOR MAUREEN A. WESTON
SENIOR STAFF MEMBERS
MARK BRINGARDNER
BENJAMIN EINBINDER
EMILY FRANKLIN
ALYSSA GJEDSTED
JEREMIAH LIVESAY
KYLE MATOUS
CATHERINE MOORE
CAITLYN PESKIND
JOSHUA ROSENBERG
MANE SARDARYAN
CHRISTOPHER WEISS
STAFF MEMBERS
CORINNE ANDERSON
GOR AREVIAN
RAIJA CHURCHILL
STEPHEN FOLAN
TAYLOR FRIEDLANDER
KRISTINE GAMBOA
TEMPESTT GARLAND
TZIPORA GOODFRIEND
JASON GRUTTER
BENJAMIN HAMPTON
VERONICA LEONE
SARA MCKERRIHAN
JOHANNA MONON MANOUKIAN
PATRICK NICHOLS
SEAN O’NEILL
CORY OYANG
NIKITA PIERCE
NEGEEN RIVANI
JESSICA SGANGA
JASON TER AVEST
SUSAN VINCENT
PEPPERDINE UNIVERSITY
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and Ronald F. Phillips Professor of Law
Robert Popovich, B.S., M.B.T., J.D., Professor of Law
Robert J. Pushaw, B.A., J.D., James Wilson Endowed Professor of Law
Hilary S. Reed, B.A., J.D., Assistant Professor of Law
Peter Robinson, B.A., J.D., Managing Director, Straus Institute for Dispute
Resolution and Associate Professor of Law
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for Dispute Resolution, William H. Webster Chair in Dispute Resolution and
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Adjunct Faculty
The Honorable Gregory Alarcon, B.A., J.D.
Emily A. Allen, B.A., J.D.
John Allen, B.A., J.D.
Tanya Aplin, B.A., LL.B., B.C.L., D. Phil, London Program
James Azadian, BA., J.D.
Arnold Barba, B.A., J.D.
C. Richard Barnes, B.A., B.S.N.E.
Stephanie Bell, B.A., J.D.
Daniel Bishop, B.A., J.D.
Michael Blaine Brooks, B.S., M.S., Ph.D., J.D.
Merlin Camozzi, B.A., J.D.
Brent Caslin, B.A., J.D.
Robert C. Chandler, B.A., M.A., Ph.D.
Richard M. Coleman, A.B., J.D., LL.M., C.D.R.
Frederick Brian Cox, B.S., M.Div., M.D.R.
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Steve Cron, B.A., J.D.
David Cruickshank, B.A., LL.B., LL.M.
James Michael Crowe, B.A., J.D.
The Honorable John Doyle, B.A., J.D.
William Eddy, B.A., M.S.W., J.D.
Max Factor III, B.A., J.D.
Paul Fisher, B.A., J.D.
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Marc P. Goodman, B.A., M.A., J.D.
Dimtry Gorin, B.S., J.D.
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Denise Madigan, B.A., M.P.P., J.D.
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Makeen F. Makeen, LL.B, LL.M., Ph.D., London Program
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Richard Reisberg, B.A., J.D.
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Maxi Scherer, LL.B., LL.M., Ph.D., London Program
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Michael Stein, B.A., J.D.
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The Honorable Alexander Williams, B.A., LL.B.
Robert K. Wrede, B.A., J.D., LL.M.
Michael Zacharia, B.A., J.D.
Bert Zweig, A.B., J.D.
PEPPERDINE DISPUTE
RESOLUTION LAW JOURNAL
VOLUME TWELVE
NUMBER ONE
2012
Pepperdine Dispute Resolution Law Journal (ISSN 1536-3090), (USPS 540-510), Volume XII,
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PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL
Fixing the Vaccine Act’s
Structural Moral Hazard
Brandon L. Boxler*
I.
INTRODUCTION
On March 26, 2003, Rolf and Angela Hazlehurst filed a claim to recover
damages for injuries their son allegedly sustained after receiving a measles,
mumps, and rubella (MMR) vaccine.1 Four years of discovery followed,
during which counsel for the Hazlehursts requested documents and deposed
officials from three federal agencies.2 They next sought to subpoena
extensive product safety information from Merck & Company,3 and as the
trial date approached, the attorneys even considered asking a court in the
United Kingdom to unseal expert reports in a case involving similar claims
of vaccine injury.4
When the Hazlehurst case finally reached trial in October 2007,5 the
record contained 1,085 medical articles and 50 expert reports.6 Seven
experts testified for the Hazlehursts, with specialties ranging from
toxicology to gastroenterology.7 The defense responded by calling fourteen
of its own experts, including four immunologists, two child psychiatrists,
* Brandon L. Boxler is a law clerk to the Honorable Ed Carnes, U.S. Court of Appeals for the
Eleventh Circuit. He received a B.A. (magna cum laude) from the University of Richmond and a
J.D. (order of the coif) from William & Mary School of Law. The author thanks Professor Rebecca
Green for her insightful comments and feedback on an early draft of this article, Jill for her endless
support, and the staff of the Pepperdine Dispute Resolution Law Journal for their hard work
preparing this piece for publication.
1. Hazlehurst v. Sec’y of Health & Human Servs., No. 03-654V, 2009 U.S. Claims LEXIS
183, at *2 (Fed. Cl. Feb. 12, 2009).
2. Id. at *8-9. A group of attorneys known as the Petitioners’ Steering Committee
represented the Hazlehursts and coordinated proceedings for thousands of cases alleging vaccinerelated autistic disorders. Id. at *7.
3. Id. at *9-10. The discovery request sought “any research, survey, study, test or other
investigation, whether published or not, that was not conducted by Merck . . . but that Merck was
aware of, regarding the neurological and neurodevelopment human . . . health effects of the MMR
[vaccine].” Id. at *10 n.9.
4. Id. at *308.
5. Id. at *14.
6. Id. at *18.
7. Id. at *23.
1
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and an infectious disease specialist.8 It took the presiding judicial officer
sixteen months to weigh all of the evidence, and in February 2009, she
issued a two-hundred page decision denying compensation.9
The
Hazlehursts then continued to pursue their case on appeal, asking two
separate courts to reverse the adverse decision.10 Only after losing both
appeals did they finally give up.11
In many ways, the Hazlehurst case moved through the legal system like
a typical complex products liability lawsuit—the plaintiffs engaged in an
adversarial process over the course of several years that involved numerous
depositions, hundreds of documents, and dozens of experts.12 The
Hazlehursts, however, did not file a products liability lawsuit.13 Nor were
they litigating in federal district court.14
The Hazlehursts filed their claim for damages in the Vaccine Injury
Compensation Program (Vaccine Program or Program),15 a supposedly
streamlined, nonadversarial alternative dispute resolution scheme that
compensates those injured by government-recommended vaccines.16
Congress designed the Program as an informal adjudicative process that
would “work faster and with greater ease than the civil tort system.”17 But
as the Hazlehurst case demonstrates, the Program does not always achieve
those ideals.18 Claims filed in the Program often take several years to
resolve, cost tens of thousands of dollars to pursue, and eventually percolate
to traditional federal courts.19 The Program is failing to accomplish its
purpose.
This Article examines why proceedings in the Vaccine Program are
mimicking the adversarial nature of traditional tort litigation. Part I reviews
the socio-legal environment that prompted Congress to create the Program.
Part II outlines the basic structure of the Program and highlights many of its
alternative features. Part III then discusses a flaw in the statute creating the
Program that incentivizes claimants to adopt litigious and adversarial
postures—namely, that claimants have no reason to stop fighting their cases
8. Id. at *34-35.
9. Id. at *543.
10. See Hazlehurst v. Sec’y of Health & Human Servs., 604 F.3d 1343 (Fed. Cir. 2010);
Hazlehurst v. Sec’y of Health & Human Servs., 88 Fed. Cl. 473 (2009).
11. Hazlehurst, 604 F.3d at 1354.
12. See id. at 1343; Hazlehurst, 88 Fed. Cl. 473; Hazlehurst, 2009 U.S. Claims LEXIS 183.
13. Hazlehurst, 2009 U.S. Claims LEXIS 183, at *2.
14. Id.
15. 42 U.S.C. § 300aa-10 (2006).
16. See infra Part II.
17. Shalala v. Whitecotton, 514 U.S. 268, 269 (1995).
18. Hazlehurst v. Sec’y of Health & Human Servs., 604 F.3d 1343, 1354 (Fed. Cir. 2010).
19. See infra Part IV.
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because all costs that they incur while appealing an adverse decision are
reimbursable regardless of the outcome of the appeal. Part IV provides both
empirical and anecdotal evidence to illustrate why this “free appeals” design
flaw is a type of structural moral hazard that has permitted the Program to
devolve into a litigious adjudicatory process. Finally, Part V proposes
statutory amendments and other solutions that can restructure the Program
into the streamlined, efficient alternative forum for dispute resolution that
Congress intended, and it responds to potential criticisms of the proposed
solutions.
II. THE 1980S VACCINE LIABILITY CRISIS
A. Benefits and Risks of Vaccines
Vaccination against infectious diseases “has been one of the most
spectacularly effective public health initiatives this country has ever
undertaken.”20 A series of routine injections now prevents illnesses that
once injured or killed thousands of children each year.21 Before creation of
the measles immunization program in 1963, 3 to 4 million people suffered
from measles each year in the United States;22 by 2002, only 44 cases were
reported.23 Deaths caused by tetanus have also rapidly declined, falling by
99% since a vaccine against the toxin gained licensure in the 1940s.24 Other
immunization achievements include the global eradication of small pox in
197925 and the elimination of poliomyelitis from all but a few countries.26
20. H.R. REP. NO. 99-908, at 4 (1986), reprinted in 1986 U.S.C.C.A.N. 6344, 6345; see also
Fangjun Zhou, Economic Evaluation of the 7-Vaccine Routine Childhood Immunization Schedule in
the United States, 2001, 159 ARCHIVES PEDIATRICS & ADOLESCENT MED. 1136, 1136 (2005)
(“Vaccines are one of the greatest achievements of biomedical science and public health and
represent one of the most effective tools for the prevention of diseases.”).
21. Zhou, supra note 20, at 1140.
22. H. Cody Meissner, Peter M. Strebel & Walter A. Orenstein, Measles Vaccines and the
Potential for Worldwide Eradication of Measles, 114 PEDIATRICS 1065, 1065 (2004).
23. Id. at 1066. The World Health Organization recently predicted that effective international
vaccine programs could wholly eradicate measles by 2020. Press Release, World Health Org.,
Experts Assessing Measles Eradication Feasibility (July 28, 2010), available at
http://new.paho.org/hq/index.php?option=com_content&task= view&id=3282&Itemid=1926.
24. Ctrs. for Disease Control & Prevention, Tetanus Surveillance—United States, 2001-2008,
60 MORBIDITY & MORTALITY WKLY. REP. 365, 365 (2011).
25. Smallpox, World Health Org. (2001),
http://www.who.int/mediacentre/factsheets/smallpox/en/.
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In addition to their enormous public health benefits, vaccines are also
“one of the most . . . cost-effective prevention measures available.”27 By
proactively averting—instead of responsively treating—contagious illnesses,
vaccines substantially reduce medical costs.28 The United States, for
example, spent $84 million between 1967 and 1977 to eradicate smallpox.29
That investment now saves $150 million per year in domestic control
measures.30
Immunization, however, “is not always without risk.”31 Many vaccines
contain attenuated viruses, chemical preservatives, and adjuvants32 that can
cause severe adverse reactions in “a small but significant number” of
people.33 Those risks cannot be entirely eliminated even if the vaccine is
perfectly manufactured and administered.34
The discrete individual risks of vaccination are worth the overall
societal reward that comes with a comprehensive immunization program.
Although vaccines inevitably harm some people each year, widespread
immunization saves many more people—including the most vulnerable
among us—from acquiring potentially fatal illnesses.35 For that reason, all
26. Philippe Duclos et al., Global Immunization: Status, Progress, Challenges and Future, 9
(Supp. 1) BMC INT’L HEALTH & HUM. RTS. 1, 2 (2009); see also Kimberly J. Garde, Note, This Will
Only Hurt For . . . Ever: Compulsory Vaccine Laws, Injured Children, and No Redress, 3 PHOENIX
L. REV. 509, 519-21 (2010) (listing examples of how mass-vaccination efforts have reduced the
occurrence rates of communicable diseases).
27. Walter A. Orenstein et al., Financing Immunization of Adults in the United States, 82
CLINICAL PHARMACOLOGY & THERAPEUTICS 764, 764 (2007).
28. See id.
29. Chester A. Robinson & Stephen J. Sepe, Immunization Policies for the 1990s and Beyond,
in SUPPLYING VACCINES: AN ECONOMIC ANALYSIS OF CRITICAL ISSUES 29, 32 (Mark Pauly,
Chester A. Robinson, Stephen J. Sepe, Merrile Sing & Mary Kaye Willian eds., 1996).
30. Id. Another study found that routine childhood immunization saves society over $40
billion for each annual birth cohort. Zhou, supra note 20, at 1141; cf. Press Release, Ctrs. for
Disease Control & Prevention, Most U.S. Parents Are Vaccinating According to New CDC Survey
Vaccine Coverage Rates for Children Remain High (Sept. 4, 2008), available at
http://www.cdc.gov/media/pressrel/2008/r080904.htm (“[D]uring a given year . . . [v]accination
results in a total savings of $43.3 billion, including $9.9 billion in direct medical costs.”).
31. INST. OF MED., ADVERSE EFFECTS OF PERTUSSIS AND RUBELLA VACCINES 1 (Christopher
P. Howson, Cynthia J. Howe & Harvey V. Fineberg eds., 1991).
32. See generally Paul A. Offit & Rita K. Jew, Addressing Parents’ Concerns: Do Vaccines
Contain Harmful Preservatives, Adjuvants, Additives, or Residuals?, 112 PEDIATRICS 1394 (2003)
(reviewing data on the chemical composition of vaccines).
33. H.R. REP. NO. 99-908, at 4 (1986), reprinted in 1986 U.S.C.C.A.N. 6344, 6345.
34. Possible Side-Effects from Vaccines, CENTERS FOR DISEASE CONTROL & PREVENTION,
http://www.cdc.gov/vaccines/vac-gen/side-effects.htm (last modified Feb. 2, 2012) (“Any vaccine
can cause side effects. For the most part these are minor (for example, a sore arm or low-grade
fever) and go away within a few days.”).
35. A high rate of vaccination among the general population achieves herd immunity, “the
resistance of a group to attack by a disease to which a large proportion of the members are immune,
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fifty states have passed compulsory vaccination laws.36
Though
controversial, the U.S. Supreme Court upheld these statutes against
constitutional attack, reasoning that a tiny risk of harm to a subset of the
population does not “strip the legislative department of its function to care
for the public health and the public safety when endangered by epidemics of
disease.”37 In other words, mandatory vaccination laws create a social
contract:38 to enjoy the public health benefits of widespread disease
prevention, individuals must bear the small burden of enduring the risk of
vaccination.39
B. A Growing Public Health Emergency
The inherent risks of mass inoculation present the difficult question of
who should bear the costs of compensating rare and unavoidable adverse
reactions. If most vaccine injuries occur through no fault of manufacturers,
it seems unfair to burden them with liability. But it also seems unfair not to
give injured persons a viable legal remedy, especially if the government
requires them to be vaccinated.
thus lessening the likelihood of a patient with a disease coming into contact with a susceptible
individual.” John P. Fox et al., Herd Immunity: Basic Concept and Relevance to Public Health
Immunization Practices, 94 AM. J. EPIDEMIOLOGY 179, 180 (1971) (quoting DORLAND’S
ILLUSTRATED MEDICAL DICTIONARY (W.B. Saunders Co. 1965)); see also M. Brisson & W.J.
Edmunds, Economic Evaluation of Vaccination Program: The Impact of Herd-Immunity, 23 MED.
DECISION MAKING 76, 76 (2003) (stating that mass immunization “not only reduces the incidence of
disease in those immunized but also indirectly protects nonvaccinated susceptibles against
infection”); Guilherme Gonҫalves, Herd Immunity: Recent Uses in Vaccine Assessment, 7 EXPERT
REVIEWS 1493, 1493 (2008) (describing herd immunity as a process by which “[h]uman
communities defend themselves against specific infectious agents in a way that extends beyond the
simple sum of the immune status of its individuals”). See generally Paul Fine, Ken Earnes & David
L. Heymann, “Herd Immunity”: A Rough Guide, 51 CLINICAL INFECTIOUS DISEASES 911 (2011).
36. See Garde, supra note 26, at 555 app.A (collecting state mandatory vaccination laws).
37. Jacobson v. Massachusetts, 197 U.S. 11, 37 (1905); cf. Mary Beth Neraas, Comment, The
National Vaccine Injury Act of 1986: A Solution to the Vaccine Liability Crisis?, 63 WASH. L. REV.
149, 150-51 (1988) (noting that “severe reactions” are “an unavoidable cost of mass inoculation . . .
[but] the consensus of health and medical experts is that children should continue to be
immunized”).
38. Edward P. Richards, III, Evolving Viruses and Stagnant Public Health Policies: Flu, Fear,
and Free Riders, 37 A.B.A. J. LITIG. 42, 44 (2010).
39. Id.
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Before 1986, those harmed by vaccines attempted to gain compensation
in the courts, the best available legal forum at the time.40 As the number of
government-recommended vaccines increased in the 1970s and 1980s, so
too did the number of design defect, manufacturer defect, and other product
liability lawsuits against pharmaceutical companies.41 The number of suits
increased from approximately 24 in 1980 to nearly 150 in 1985,42 exposing
“a small number of manufacturers to high litigation costs and enormous
potential liabilities.”43
In response to the rising costs of defending against these claims, many
pharmaceutical companies stopped or threatened to stop producing
vaccines.44 By 1984, Lederle was the only commercial manufacturer of the
40. For an overview of the theories of recovery that plaintiffs injured by vaccines most
frequently asserted in civil court, see generally Okianer Christian Dark, Is the National Childhood
Vaccine Injury Act of 1986 the Solution for the DTP Controversy?, 19 U. TOL. L. REV. 799, 817-34
(1988).
41. See generally id.
42. Neraas, supra note 37, at 151 & n.15; see also Merrile Sing & Mary Kaye Willian,
Supplying Vaccines: An Overview of the Market and Regulatory Context, in SUPPLYING VACCINES:
AN ECONOMIC ANALYSIS OF CRITICAL ISSUES 45, 51-52 (Mark Pauly, Chester A. Robinson,
Stephen J. Sepe, Merrile Sing & Mary Kaye Willian eds., 1996) (“The number of product-liability
lawsuits filed against DTP vaccine manufacturers began to increase in 1972 (17 DTP lawsuits), and
peaked in 1985 and 1986 at 219 and 255 lawsuits, respectively . . . . As the number of lawsuits filed
against DTP vaccine manufacturers began to increase, DTP prices increased and the number of
domestic DTP manufacturers decreased.”).
43. Neraas, supra note 37, at 151; see also Derry Ridgway, No-Fault Vaccine Insurance:
Lessons from the National Vaccine Injury Compensation Program, 24 J. HEALTH POL. POL’Y & L.
59, 60-62 (1999) (noting that vaccine manufacturers were exposed to $3.5 billion in potential
liability between 1980 and 1986). The Supreme Court recently detailed one theory of why lawsuits
against manufacturers increased in the 1970s and 1980s: “[V]accines became, one might say, victims
of their own success. They had been so effective in preventing infectious diseases that the public
became much less alarmed at the threat of those diseases, and much more concerned with the risk of
injury from the vaccines themselves.” Bruesewitz v. Wyeth LLC, 131 S. Ct. 1068, 1072 (2011). In
other words, the American public became complacent with the successfulness of vaccines, which
made “it easier to forget the value of vaccines and to focus on their potential risks.” Vaccines—
Finding the Balance Between Public Safety and Personal Choice: Hearing Before the H. Comm. on
Gov’t Reform, 106th Cong. 14 (1999) (statement of Rep. Henry A. Waxman, Member, H. Comm. on
Gov’t Reform); see also Joanna B. Apolinsky & Jeffrey A. Van Detta, Rethinking Liability for
Vaccine Injury, 19 CORNELL J.L. & PUB. POL’Y 537, 550 (2010) (“[A]s the occurrence of many
historically common and very serious childhood diseases had seemingly been all but eradicated,
many people became less concerned with these diseases themselves and more concerned with the
risk of potential side effects from the vaccinations.”); E.J. Gangarosa et al., Impact of Anti-Vaccine
Movements on Pertussis Control: The Untold Story, 351 LANCET 356, 360 (1998) (“[S]uccessful
disease-control encourages complacency . . . .”).
44. Charles F. Hagan, Vaccine Compensation Schemes, 45 FOOD DRUG COSM. L.J. 477, 479
(1990); see also INST. OF MED., VACCINE SUPPLY AND INNOVATION 27-28 (1985); Sara Wexler,
Recent Case, Bruesewitz v. Wyeth: The “Unavoidable Vaccine Problem”, 6 DUKE J. CONST. L. &
PUB. POL’Y SIDEBAR 93, 98 (2011) (“In the ten years prior to [1986], the number of vaccine
manufacturers shrank from twenty-six to just four.”).
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diphtheria, tetanus, and pertussis (DTP) vaccine, and “its potential liability
was over 200 times greater than its annual sales.”45 To reduce that exposure,
the few manufacturers remaining in the market raised their prices to cover
the increasing costs of insurance premiums and the projected costs of future
litigation.46 Vaccine prices then “skyrocketed as much as 2,000 percent,”
which threatened to make immunizations prohibitively expensive.47 The
legal system’s failure to provide a suitable adjudicative process for
compensating vaccine injuries had created a public health emergency.
“Congress, faced with the prospect of an ever-shrinking vaccine supply
and the potential devastation that could result from this shortage, got
involved.”48 Recognizing that exposing vaccine manufacturers to continued
tort liability would further drive up prices and force additional suppliers out
of the market, Congress began searching for a legislative fix to the crisis.49
It had to strike a delicate balance.50 On the one hand, Congress needed to
reduce or eliminate manufacturer liability so that pharmaceutical companies
would continue to produce immunizations; on the other, it needed to provide
a legal forum to compensate those “deserving victims of vaccine-related
injuries.”51 Congress attempted to strike this balance by passing the
National Childhood Vaccine Injury Compensation Act of 1986 (Vaccine Act
or Act).52
45. Sing & Willian, supra note 42, at 52.
46. Id.
47. H.R. REP. NO. 101-247, at 509 (1989), reprinted in 1989 U.S.C.C.A.N. 1906, 2235; see
also Randall B. Keiser, Deja Vu All Over Again? The National Childhood Vaccine Injury
Compensation Act of 1986, 47 FOOD & DRUG L.J. 15, 16 (1992) (“In 1980, a single dose of the
measles, mumps, and rubella (MMR) vaccine cost $2.71 under a federal contract. In 1986, the same
dosage cost the federal government $8.47.”).
48. Elizabeth C. Scott, The National Childhood Vaccine Injury Act Turns Fifteen, 56 FOOD &
DRUG L.J. 351, 354 (2001); see also Keiser, supra note 47, at 16 (“Faced with a decreasing supply
of vaccine products, as well as a corresponding increase in their price, the federal government acted
to try to rectify the crisis situation.”).
49. O’Connell v. Shalala, 79 F.3d 170, 173 (1st Cir. 1996) (citations omitted); see also
Richards, supra note 38, at 47.
50. For a discussion of the public policy challenges of “ensuring a continuous supply of safe
and effective vaccines at prices that do not increase rapidly in real terms,” see Sing & Willian, supra
note 42, at 45-49.
51. O’Connell, 79 F.3d at 173 (citations omitted).
52. 42 U.S.C. §§ 300aa-1 to -34 (2006); see also Schafer ex rel. Schafer v. Am. Cyanamid
Co., 20 F.3d 1, 2 (1st Cir. 1994) (Breyer, J.) (“Congress passed the law after hearing testimony (1)
describing the critical need for vaccines to protect children from disease, (2) pointing out that
vaccines inevitably harm a very small number of the many millions of people who are vaccinated,
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III. THE VACCINE ACT
The Vaccine Act is a legislative tort shield that prevents those who
believe they were injured by specified immunizations from suing the
administrator or manufacturer without first filing a petition for compensation
in the Vaccine Program.53 All Program claims must be filed in the U.S.
Court of Federal Claims with the Secretary of Health and Human Services
(Secretary) listed as the named defendant.54 Attorneys from the Department
of Justice represent the Secretary in these proceedings.55
Once a petition for compensation is filed, decision makers called
“special masters” determine whether to award compensation and, if so, how
much.56 If claimants are dissatisfied with the special master’s resolution of
their claim, they may reject the judgment and file a traditional civil action,57
with some limitations.58 All awarded compensation is paid from a trust that
is funded by an excise tax levied against each dose of certain vaccines.59
The tax is justified by the theory that all children benefit from federally
and (3) expressing dissatisfaction with traditional tort law as a way of compensating those few
victims.”).
53. 42 U.S.C. § 300aa-11(a)(2)(A) (“No person may bring a civil action for damages in an
amount greater than $1,000 or in an unspecified amount against a vaccine administrator or
manufacturer in a State or Federal court for damages arising from a vaccine-related injury or death
associated with the administration of a vaccine . . . .”); see also Sing &Willian, supra note 42, at 52
(“No vaccine manufacturer, physician, or health facility can be designated a defendant.”). For an
overview of the Vaccine Act’s preemption provisions, see Nitin Shah, Note, When Injury Is
Unavoidable: The Vaccine Act’s Limited Preemption of Design Defect Claims, 96 VA. L. REV. 199,
202-08 (2010).
54. 42 U.S.C. § 300aa-11(a)(1).
55. MOLLY T. JOHNSON, CAROL E. DREW & DEAN P. MILETICH, FED. JUDICIAL CTR., USE OF
EXPERT TESTIMONY, SPECIALIZED DECISION MAKERS, AND CASE-MANAGEMENT INNOVATIONS IN
THE NATIONAL VACCINE INJURY COMPENSATION PROGRAM 4, 12 (1998).
56. 42 U.S.C. § 300aa-12(d)(3).
57. Id.
58. See, e.g., id. § 300aa-22(b)(1) (“No vaccine manufacturer shall be liable in a civil action
for damages arising from a vaccine-related injury or death . . . if the injury or death resulted from
side effects that were unavoidable even though the vaccine was properly prepared and was
accompanied by proper directions and warnings.”); id. § 300aa-22(b)(2) (creating a presumption that
vaccines are accompanied by proper directions and warnings, and setting a “clear and convincing
evidence” burden of proof for establishing lack of compliance).
59. See id. § 300aa-15(i)(2); see also 26 U.S.C. § 9510 (2006) (establishing the “Vaccine
Injury Compensation Trust Fund”); id. § 4131(d) (imposing a “75 cents per dose” tax on certain
vaccines to fund the trust). Special masters may compensate claimants for a variety of expenses,
including costs for “rehabilitation, developmental evaluation, special education, vocational training
and placement, case management services, counseling, emotional or behavioral therapy, residential
and custodial care service expenses, special equipment, related travel expenses, and facilities
determined to be reasonably necessary.” 42 U.S.C. § 300aa-15(a).
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compelled vaccination,60 so “all people, through the federal government,
hold the responsibility of providing a means of compensation for those
children that [sic] are injured.”61
A. “Alternative” Features of the Vaccine Program
Congress intended the Program to compensate vaccine-injured persons
“quickly, easily, and with certainty and generosity.”62 To accomplish those
goals, the Act includes several streamlining measures, including requiring
special masters to issue a ruling “not later than 240 days . . . after the date
the petition was filed.”63 If the special master denies compensation,
claimants may file an appeal with an Article III judge at the U.S. Court of
Federal Claims in a process that is also expedited: parties have 30 days to
file a motion for review, the Secretary has 30 days to file a response, and the
judge has 120 days to make a decision.64 Alternatively, instead of filing an
appeal, a claimant may reject the special master’s judgment and file suit in
state or federal court.65 The statute, however, strongly discourages claimants
from filing a traditional civil suit by making it difficult for plaintiffs to
prevail in tort actions against vaccine manufacturers.66
The following discussion highlights three other streamlining features of
the Act, all of which Congress included to make the Program a less
adversarial, more efficient route to compensation than traditional civil
litigation.
60. See Richards, supra note 38, at 48.
61. Hagan, supra note 44, at 480.
62. H.R. REP. NO. 99-908, at 3 (1986), reprinted in 1986 U.S.C.C.A.N. 6344, 6344; see also
H.R. REP. NO. 101-247, at 510 (1989), reprinted in 1989 U.S.C.C.A.N. 1906, 2236 (stating that the
Program was intended to be “a quick, flexible, and streamlined system”); Shalala v. Whitecotton,
514 U.S. 268, 269 (1995) (stating that the Program was “designed to work faster and with greater
ease than the civil tort system”); Katherine E. Strong, Note, Proving Causation Under the Vaccine
Injury Act: A New Approach for a New Day, 75 GEO. WASH. L. REV. 426, 441 (2007) (“Congress
intended that the Program render quick, certain, and generous determinations to petitioners.”).
63. 42 U.S.C. § 300aa-12(d)(3). A special master may suspend this 240-day requirement up to
180 days. Id. § 300aa-12(d)(3)(C). Thus, the Act theoretically limits the adjudicative process to 420
days. But cf. infra Part IV.B (discussing how long it actually takes to resolve cases filed in the
Program).
64. 42 U.S.C. § 300aa-12(e).
65. Id. § 300aa-21(a).
66. See, e.g., id. § 300aa-22(b)(2) (creating a presumption that the manufacturer exercised due
care if it complied with federal regulations); id. § 300aa-22(c) (barring liability based on failure to
warn); id. § 300aa-22(b)(1) (eliminating strict tort liability for unavoidable side effects).
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1. A No-Fault Prima Facie Case
The main way the Vaccine Act facilitates less adversarial case
adjudication is by eliminating fault from the prima facie case. Claimants
need only prove they suffered a vaccine injury; no one inquires into whether
the manufacturer or any other party was negligent.67 By removing questions
of fault from the claims-resolution process and easing claimants’ burden of
proof, the Program simplifies what would otherwise be a complex,
expensive, and lengthy discovery process.68 Congress wanted all parties in
the Program to focus on efficiently compensating victims of vaccine injuries,
not using litigation strategies to obscure relevant facts or defeat the opposing
party at all costs.69 If a vaccine harmed someone, that person should receive
compensation.
2. The Vaccine Injury Table
a. The Goal
Although it simplified the relevant inquiry in Program cases to a
relatively “straightforward proposition” by eliminating the element of fault
from the prima facie case,70 Congress recognized that proving causation is
still a heavy burden, especially because vaccines can trigger an array of
complex physiological reactions that are “hitherto unproven in medicine.”71
The Program thus further assists claimants with meeting their prima facie
67. Lowry ex rel. Lowry v. Sec’y of Health & Human Servs., 189 F.3d 1378, 1381 (Fed. Cir.
1999); see also 42 U.S.C. § 300aa-22(b)-(c); Keiser, supra note 47, at 18; Robinson & Sepe, supra
note 29, at 35; Scott, supra note 48, at 355.
68. O’Connell v. Shalala, 79 F.3d 170, 173 (1st Cir. 1996) (citations omitted); see also
Stevens v. Sec’y of Health & Human Servs., No. 99-594V, 2001 U.S. Claims LEXIS 67, at *20-21
(Fed. Cl. Mar. 30, 2001), overruled on other grounds by Althen v. Sec’y of Health & Human Servs.,
418 F.3d 1274 (Fed. Cir. 2005) (“[T]he Vaccine Program was created to reduce tort litigation against
manufacturers and administrators and to provide compensation to injured parties without requiring
the difficult proofs of individual causation, negligence, and product defectiveness. Hence, the
Program was designed as ‘no fault’ . . . .”); Neraas, supra note 37, at 164-65 (“Because the only
issues relevant to the compensation proceeding are whether the petitioner suffered a compensable
injury and, if so, the extent of compensable damages, there is no need for inquiry into the issues that
would be raised in a civil action. Consequently, the entire proceeding can be expeditiously
completed.”).
69. Cf. Betsy J. Grey, Homeland Security and Federal Relief: A Proposal for a Permanent
Compensation System for Domestic Terrorist Victims, 9 N.Y.U. J. LEGIS. & PUB. POL’Y 663, 699
(2006) [hereinafter Grey, Permanent Compensation System] (noting that Congress designed the
Program to be “a more efficient administration of damages than the traditional tort system”).
70. Zeagler v. Sec’y of Health & Human Servs., 19 Cl. Ct. 151, 153 (1989).
71. Althen, 418 F.3d at 1280.
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burden “to allow the finding of causation in a field bereft of complete and
direct proof of how vaccines affect the human body.”72 Specifically,
claimants may establish entitlement to compensation by proving that they
suffered an injury listed on the “Vaccine Injury Table” (Table or Vaccine
Table),73 a feature of the Program that one special master referred to as the
“cornerstone” of the alternative dispute resolution scheme.74
Petitioners who prove by a preponderance of the evidence that they
suffered an injury listed on the Table within the requisite post-immunization
timeframe are presumptively entitled to compensation;75 no showing of
actual causation is required.76 The burden instead shifts to the government,
which must prove that the claimant’s injury or death was “due to factors
unrelated to the administration of the vaccine described in the petition.”77 If
claimants cannot establish an “on-Table” injury, the case is not over; they
may proceed “off-Table” and prove causation-in-fact by a preponderance of
the evidence.78
Congress intended that the Table’s presumptions would significantly
streamline proceedings in the Program.79 The Federal Circuit described the
on-Table route to compensation as “easy, as far as evidentiary proof goes . . .
[because] the statute does the heavy lifting.”80 In other words, the Table
72. Id.
73. 42 U.S.C. § 300aa-14(a) (2006); see also 42 C.F.R. § 100.3 (2010) (reporting the current
version of the Table).
74. Stevens v. Sec’y of Health & Human Servs., No. 99-594V, 2001 U.S. Claims LEXIS 67,
at *21 (Fed. Cl. Mar. 30, 2001), overruled on other grounds by Althen, 418 F.3d at 1274.
75. Andreu v. Sec’y of Health & Human Servs., 569 F.3d 1367, 1374 (Fed. Cir. 2009) (“[A]
claimant who shows that he or she received a vaccination listed in the Vaccine Injury Table . . . and
suffered an injury listed in the table within a prescribed period is afforded a presumption of
causation.”); see also Gruber v. Sec’y of Health & Human Servs., 61 Fed. Cl. 674, 678 (2004).
76. Bruesewitz v. Wyeth LLC, 131 S. Ct. 1068, 1074 (2011).
77. 42 U.S.C. § 300aa-13(a)(1)(B).
78. Id. § 300aa-13(a); see also H.R. REP. NO. 99-908, at 15-19 (1986), reprinted in 1986
U.S.C.C.A.N. 6344, 6356-60 (describing the function of the Table); Shyface ex rel. Shyface v. Sec’y
of Human & Health Servs., 165 F.3d 1344, 1352 (Fed. Cir. 1999) (differentiating between “onTable” and “off-Table” claims). To establish an off-Table claim, petitioners must establish “(1) a
medical theory causally connecting the vaccination and the injury, (2) a logical sequence of cause
and effect showing that the vaccination was the reason for the injury, and (3) a showing of a
proximate temporal relationship between vaccination and injury.” Althen v. Sec’y of Health &
Human Servs., 418 F.3d 1274, 1278 (Fed. Cir. 2005).
79. Cf. Bruesewitz, 131 S. Ct. at 1073 (“Fast, informal adjudication is made possible by the
Act’s Vaccine Injury Table . . . .”).
80. Hodges v. Sec’y of Health & Human Servs., 9 F.3d 958, 961 (Fed. Cir. 1993).
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increases the probability that petitioners will receive compensation:81
“[C]lose calls regarding causation are resolved in favor of injured
claimants.”82
Here again, the statute was designed to alleviate
contentiousness between the parties by encouraging the government to
dispute only those cases that appear to be truly meritless, letting close calls
advance immediately to a determination of damages.83 Recognizing these
potential benefits of reducing litigiousness, the Government Accountability
Office described the Table as the Program’s “most important feature.”84
b. The Problem
When Congress initially drafted the Table, it recognized that a sense of
urgency to respond to the 1980s liability crisis caused it to rely on
incomplete data when identifying injuries causally related to vaccines85—
that is, some injuries that should be on the Table were not included in the
original version. To remedy those oversights,86 Congress gave the Secretary
power to modify the Table after a period for public comment.87 That
authority is two-fold: the Secretary may (1) add new vaccines to the Table
Sing & Willian, supra note 42, at 53.
Althen, 418 F.3d at 1280; see also U.S. GOV’T ACCOUNTABILITY OFFICE, VACCINE
INJURY COMPENSATION: PROGRAM CHALLENGED TO SETTLE CLAIMS QUICKLY AND EASILY 19
(1999)
[hereinafter
GAO,
VACCINE
INJURY
COMPENSATION],
available
at
http://www.gao.gov/new.items/he00008.pdf (“In establishing the vaccine injury table as a desirable
alternative for petitioners over the civil tort system, the Congress was initially willing to accept the
risk that some compensation would be provided for injuries where the role of vaccines is
uncertain.”); Compensating Vaccine Injuries: Are Reforms Needed?: Hearing Before the Subcomm.
on Criminal Justice, Drug Policy & Human Res. of the H. Comm. on Gov’t Reform, 106th Cong. 10
(1999) [hereinafter Are Reforms Needed?] (statement of Rep. Henry A. Waxman, Member, H.
Comm. on Gov’t Reform) (“There have been disputes about the science and epidemiology of
vaccine injury. We have always erred on the side of compensating children, if there was a scientific
argument that injuries were vaccine related. At least that was our intent—to err on the side of
making sure that we compensated people who were injured.”).
83. Cf. Shifflett v. Sec’y of Health & Human Servs., 30 Fed. Cl. 341, 345 (1994) (explaining
that “Congress designed the Vaccine Table Injury to be overinclusive” so that vaccine-injured
persons could receive compensation for their injuries “quickly, easily, and with certainty and
generosity” (quotation marks omitted)).
84. GAO, VACCINE INJURY COMPENSATION, supra note 82, at 5.
85. See O’Connell v. Shalala, 79 F.3d 170, 173 (1st Cir. 1996) (stating that Congress’s
delegation of power to the Secretary to amend the Table “probably reflected a congressional
consensus that the first iteration of the Table was not perfect”).
86. Id.
87. 42 U.S.C. § 300aa-14(c) (2006). This authority to modify the Table does not violate the
Presentment Clause of the U.S. Constitution because “the Vaccine Act does not authorize the
Secretary to amend or repeal portions of the Act, but rather merely grants her the power to
promulgate new regulations as contemplated in the Act.” Terran v. Sec’y of Health & Human
Servs., 195 F.3d 1302, 1312 (Fed. Cir. 1999).
81.
82.
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when the Centers for Disease Control and Prevention recommends them for
routine administration to children, and (2) modify the list of injuries,
illnesses, and conditions presumptively associated with each vaccine listed
on the Table.88
Delegating that administrative amendment power to the Secretary
reflected a congressional consensus that the Table should be regularly and
liberally amended to ensure claim adjudication in the Program remained
streamlined and simple.89 That efficiency probably would not occur if
Congress retained the amendment power for itself. Maneuvering a
technically complex bill through the legislative process is much more
difficult than passing a regulation, and without a flexible administrative
means to amend the Table in response to new medical discoveries, the
“alternative” benefits of the Table would be gradually lost over time.90 So
too would the Table’s function of “providing fair recovery for petitioners.”91
Congress thus effectively charged the Secretary with maintaining the Table
as a viable evidentiary tool that petitioners could use to establish their claims
quickly and easily without resorting to the more difficult, timely, and costly
process of establishing an off-Table claim.
Since Congress created the Vaccine Program in 1986, however, the
Secretary has rarely amended the Table. And on those rare occasions when
the Secretary does exercise the amendment authority, usually only new
vaccines are added to the Table, not new injuries. The Secretary has added
six new vaccines to the Table since 1997, but has not included any
corresponding presumptive injuries in those rulemakings.92
88. 42 U.S.C. § 300aa-14(e)(2); see also H.R. REP. NO. 99-908, at 19 (1986), reprinted in
1986 U.S.C.C.A.N. 6344, 6360-61.
89. Cf. H.R. REP. NO. 99-908, at 20, 1986 U.S.C.C.A.N. at 6361 (“As new vaccines are
developed, licensed, or required by State law, the Committee intends that the Secretary make
recommendations of modification as soon as possible.”); Betsy J. Grey, The Plague of Causation in
the National Childhood Vaccine Injury Act, 48 HARV. J. ON LEGIS. 343, 346 (2011) [hereinafter
Grey, Plague of Causation] (“Congress . . . expected that as evidence developed HHS would expand
the Table to list additional combinations of injuries and vaccines, and the need for off-Table claims
would be reduced or eliminated.”).
90. Elizabeth Breen, A One Shot Deal: The National Childhood Vaccine Injury Act, 41 WM.
& MARY L. REV. 309, 326 (1999).
91. Id. at 309.
92. See National Vaccine Injury Compensation Program: Addition of Trivalent Influenza
Vaccines to the Vaccine Injury Table, 70 Fed. Reg. 19,092 (Apr. 12, 2005) (adding trivalent
influenza vaccine to the Table); National Vaccine Injury Compensation Program: Revisions and
Additions to the Vaccine Injury Table, 67 Fed. Reg. 48,558, 48,560 (July 25, 2002) (codified at 42
C.F.R. pt. 100) (adding pneumococcal conjugate vaccine); National Vaccine Injury Compensation
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The Secretary’s failure to add new injuries to the Table has caused an
incredible shift in the type of claims filed in the Program. In the 1980s and
1990s, most claimants pursued on-Table theories of recovery, and case
proceedings thus entailed straightforward evidentiary questions.93 Today,
however, “the relevance of the Vaccine Injury Table has greatly
diminished.”94 One special master even postulated that the Secretary’s
failure to add new injuries to the Table has “flip-flopped” the percentages of
off-Table and on-Table claims: “[P]rior to the amendments 90% of cases
were Table cases, while after the amendments 90% of cases [are] actual
causation cases.”95 Most petitioners now pursue off-Table theories of
recovery, which present complex questions of actual causation without the
help of the Table’s streamlining presumptions.96
The consequences of this “flip-flop” have been dramatic. Because
proving causation in off-Table cases is more difficult than in on-Table
cases,97 more money and time is now required to resolve claims filed in the
Program,98 which means that many of the alternative features of the Program
have been diminished or lost. As the former chief special master described:
Program: Addition of Vaccines Against Rotavirus to the Program, 64 Fed. Reg. 40,517, 40,518 (July
27, 1999) (codified at 42 C.F.R. pt. 100) (adding rotavirus vaccine); National Vaccine Injury
Compensation Program (VICP): Effective Date Provisions of Coverage of Certain Vaccines to the
Vaccine Injury Table, 63 Fed. Reg. 25,777 , 25,778 (May 11, 1998) (codified at 42 C.F.R. pt. 60)
(adding hepatitis B, Hib, and varicella vaccines). The last time the Secretary added injuries to the
Table was 1997. National Vaccine Injury Compensation Program: Revisions and Additions to the
Vaccine Injury Table—II, 62 Fed. Reg. 7685 (Feb. 20, 1997) (codified at 42 C.F.R. pt. 100).
93. See Stevens v. Sec’y of Health & Human Servs., No. 99-594V, 2001 U.S. Claims LEXIS
67, at *23-25, *21 n.10 (Fed. Cl. Mar. 30, 2001), overruled on other grounds by Althen v. Sec’y of
Health & Human Servs., 418 F.3d 1274 (Fed. Cir. 2005) (stating that, before 1995, most claims filed
in the Program were Table cases, which the special masters decided “relatively quickly” because
“the Table foster[s] limited factual issues and medical testimony and rather speedy decisions”).
94. Id. at *21 n.10.
95. Id. at *25 (“[P]ractice has shown that virtually all of the cases proceed as causation-in-fact
disputes.”).
96. As one example of how complex an off-Table claim may be, consider Hargrove v.
Secretary of Health & Human Services, No. 05-0694V, 2009 U.S. Claims LEXIS 171 (Fed. Cl. Apr.
14, 2009). There, the claimant’s theory of causation was that a tetanus vaccine triggered an
“anamnestic reaction” through a process called “molecular mimicry,” during which “an invading
epitope cross-reacts with a self-protein.” Id. at *20-21 (quoting the claimant’s expert witness).
97. See Grey, Permanent Compensation System, supra note 69, at 704 (stating that proving
causation in the Program is “not a difficult problem, except in ‘off-Table’ cases”); see also GAO,
VACCINE INJURY COMPENSATION, supra note 82, at 14 (“[P]etitioners with injuries not listed on the
injury table historically have had a lower probability of being compensated than those with injuries
that were listed.”); Lainie Rutkow et al., Balancing Consumer and Industry Interests in Public
Health: The National Vaccine Injury Compensation Program and Its Influence During the Last Two
Decades, 111 PENN ST. L. REV. 681, 720 (2007) (noting that those claimants alleging on-Table
injuries are nearly three times as likely to succeed as those alleging off-Table injuries).
98. See supra notes 76-80 and accompanying text; infra notes 218-22 and accompanying text.
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[L]itigating Table cases has met Congress’s programmatic desire; that is, the special
masters handle the cases relatively quickly and render decisions with certainty. This is
mostly because the straightforward requirements of the Table foster limited factual issues
and medical testimony and rather speedy decisions. Unfortunately, litigating actual
causation cases clearly fails in this regard. . . . The cases take longer to prepare, longer to
present, and longer to decide. Even though the same vaccines and injuries are
represented in the cases, clear answers have proven elusive . . . . In short, litigating
causation cases has proven the antithesis of Congress’s desire for the Program. Instead of
speed, certainty, and fairness, costly lengthy case presentations, inconsistent outcomes,
99
and disparate treatment of similarly-situated litigants has resulted.
In sum, by adding new vaccines to the Table without adding new
injuries that enjoy a presumption of causation, nearly all petitioners now
pursue their claims on a causation-in-fact basis. The result of that
transformation has been “full blown litigation” in the Vaccine Program.100
“Clearly, that is not what Congress intended when it designed the Program
as an alternative to tort litigation.”101
3. Special Masters
A final streamlining characteristic of the Vaccine Program is the Office
of Special Masters.102 Judges of the U.S. Court of Federal Claims appoint
up to eight special masters to four-year terms.103 The special masters serve
as the initial decision makers for all petitions filed in the Program,
determining whether to compensate a claim and, if so, setting the amount of
the award.104
Because their dockets consist exclusively of Program petitions, special
masters develop expertise with the law, science, and medicine surrounding
vaccine-injury claims. Special masters are much more than ordinary fact
finders or generalist trial judges; they are judicial specialists who have the
“unique ability . . . to adjudge cases in the light of their own acquired
specialized knowledge and expertise.”105 And because of their accumulated
99. Stevens, 2001 U.S. Claims LEXIS 67, at *23-24.
100. Id. at *25.
101. Id. (emphasis in original).
102. 42 U.S.C. § 300aa-12(c)(1) (2006).
103. Id. § 300aa-12(a), (c).
104. Id. § 300aa-12(d)(3); see also supra text accompanying note 49.
105. Sword ex rel. Sword v. United States, 44 Fed. Cl. 183, 188 (1999); see also Hodges ex rel.
Hodges v. Sec’y of Health & Human Servs., 9 F.3d 958, 961 (Fed. Cir. 1993) (describing the special
masters as a “group of specialists”); JOHNSON, DREW & MILETICH, supra note 55, at 41 (noting that
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expertise, special masters are able to decide cases more expeditiously, fairly,
and “correctly,” which ultimately improves the predictability of Vaccine Act
case law and enhances claimant satisfaction with the adjudicative regime.106
The expertise of special masters also helps to explain why Congress
gave them so much control over the claims-resolution process107 and
protected their decisions with the highly deferential “abuse of discretion”
standard of review.108 The Act even permits special masters to “fit the
forum to the fuss”109 by promulgating their own rules of evidence and
procedure.110 Congress constrained the creation of those rules by stating
only that they should “provide for a less-adversarial, expeditious, and
informal proceeding for the resolution of petitions,” and “include flexible
and informal standards of admissibility of evidence.”111
Due in large part to their ability to control proceedings in the Program,
special masters “retain[ ] considerable discretion in almost every element of
the Act’s enforcement.”112 They can limit discovery, require testimony, and
special masters “develop extensive familiarity with the scientific and medical issues that recur” in
the Program, which helps them to “focus in on the critical issues in a case”).
106. Cf. Edna Sussman, Why Arbitrate? The Benefits and Savings, 81 N.Y. ST. B.A. J. 20, 20
(2009) (noting that a primary benefit of arbitration is the ability to have a case resolved by
“adjudicators with the expertise necessary to decide complex issues”). But cf. JOHNSON, DREW &
MILETICH, supra note 55, at 42-43 (reviewing some disadvantages of specialized adjudicators,
including the decision makers “think[ing] they know more than they actually do”).
107. See Davis v. Sec’y of Health & Human Servs., No. 07-451, 2010 U.S. Claims LEXIS 525,
at *29 (Fed. Cl. July 12, 2010) (“It is axiomatic that special masters in vaccine cases have great
leeway in building a record for decision.”); see also Grey, Permanent Compensation System, supra
note 69, at 702 (“The special masters of the [Vaccine Program] hold immense power over the claims
they administer.”).
108. See infra notes 123-29 and accompanying text.
109. Frank E.A. Sandler & Stephen B. Goldberg, Fitting the Forum to the Fuss: A UserFriendly Guide to Selecting an ADR Procedure, 10 NEGOTIATION J. 49 (1994) (discussing
considerations that should inform the creation of an ideal dispute resolution scheme for various types
of conflicts).
110. 42 U.S.C. § 300aa-12(d)(2) (2006); cf. Keiser, supra note 47, at 23 (“The Act gives the
special master authority to require such evidence as necessary while conducting a proceeding.”).
The Federal Rules of Evidence, therefore, do not apply to the Vaccine Program. See, e.g.,
Hazlehurst ex rel. Hazlehurst v. Sec’y of Health & Human Servs., 604 F.3d 1343, 1349 (Fed. Cir.
2010); Andreu ex rel. Andreu v. Sec’y of Health & Human Servs., 569 F.3d 1367, 1383 (Fed. Cir.
2009); see also FED. CL. R. app.B, VACCINE R. 8(b) (“In receiving evidence, the special master will
not be bound by common law or statutory rules of evidence . . . .”), available at
http://www.uscfc.uscourts.gov/sites/default/files/court_info/rules_071309_v8.pdf.
111. 42 U.S.C. § 300aa-12(d)(2).
112. Breen, supra note 90, at 328; see also Perreira v. Sec’y of Health & Human Servs., 27 Fed.
Cl. 29, 31 (1992) (“The . . . Office of Special Masters . . . [has] exceptional authority with
considerable administrative independence in decisions on claims for compensation under the
Program.”).
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demand any other information necessary to make an informed decision.113
In fact, special masters can render a decision—entered as a formal court
judgment114—without even holding a hearing on the claim.115 Congress
gave special masters that power because it was “concerned that the routine
use of hearings” to gather evidence would “produce unnecessary
formality . . . and may tend to create an adversary process rather than a nofault compensation proceeding.”116
IV. PERVERSE INCENTIVES
In many ways, the alternative features of the Vaccine Program give it
the form of arbitration: Congress intended it to be a quick, efficient, and
informal alternative to litigation where a third-party expert (the special
master) issues a binding decision without the burden of having to comply
with a variety of formal rules.117 But, much like modern-day arbitration,118
the Program struggles to achieve those benefits of alternative dispute
resolution because attorneys can still borrow strategies and tactics from
litigation, obfuscating the potential for a streamlined, efficient, and
nonadversarial claims-resolution process. As discussed below, the Vaccine
113. Erica A. Little, Note, The Role of Special Masters in Off-Table Vaccination Compensation
Cases: Assuring Flexibility over Certainty, 16 FED. CIR. B.J. 355, 362 (2007).
114. 42 U.S.C. § 300aa-12(d)(3); see also H.R. REP. NO. 101-247, at 509 (1989), reprinted in
1989 U.S.C.C.A.N. 1906, 2235.
115. The main drawback of vesting special masters with such incredible control and discretion
over the claims-resolution process is that it leads to unpredictable and conflicting case law in the
Vaccine Program, a problem that I have discussed elsewhere. See Brandon L. Boxler, Note, What to
Do with Daubert: How to Bring Standards of Reliable Scientific Evidence to the National Vaccine
Injury Compensation Program, 52 WM. & MARY L. REV. 1319, 1338-43 (2011).
116. H.R. REP. NO. 101-247, at 512-13, 1989 U.S.C.C.A.N. at 2238-39.
117. Sarah Rudolph Cole & Kristen M. Blankley, Arbitration, in THE HANDBOOK OF DISPUTE
RESOLUTION 318, 318 (Michael L. Moffitt & Robert C. Bordone eds., 2005) (defining arbitration as
“a process by which a private third-party neutral renders a binding determination of an issue in
dispute”); see also Christopher R. Drahozal & Quentin R. Wittrock, Is There a Flight from
Arbitration?, 37 HOFSTRA L. REV. 71, 77-78 (2008) (noting that parties agree to arbitration because
it “may resolve disputes more quickly and at lower cost than litigation” and “may result in better
outcomes because the decisionmakers are experts”); L. Tyrone Holt, Whither Arbitration? What Can
Be Done to Improve Arbitration and Keep Out Litigation’s Ill Effects, 7 DEPAUL BUS. & COM. L.J.
455, 463 (2009) (“Whenever a dispute requires technical knowledge, arbitration will always be
superior to the courts . . . .”).
118. See Thomas J. Stipanowich, Arbitration: The “New Litigation”, 2010 U. ILL. L. REV. 1, 28
(2010) (noting the modern trend toward “‘legalized’ arbitration,” which involves “contentious
tactics” that create conflict instead of mutually beneficial communication).
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Act does little to guard against this spillover from the traditional court
system; in fact, its structure gives claimants and their attorneys an incentive
to transform the Program into full-blown civil litigation.
This section highlights a structural flaw in the design of the Vaccine Act
that arises from the intersection of two features of the Program. The first
feature provides multiple layers of review of special master decisions, and
the second reimburses all claimants for fees and costs they incur while
prosecuting a claim that was filed in “good faith” with a “reasonable basis.”
These two statutory provisions combine to create a system of adjudication
that encourages litigious posturing, undermines the finality of special master
decisions, and erodes the alternative nature of the Program.
A. Several Layers of Appeal
Although Congress intended that special master decisions would
effectively end proceedings on a claim,119 the Vaccine Act provides for
several levels of appeal.120 Special master decisions are initially reviewable
at the U.S. Court of Federal Claims, then at the U.S. Court of Appeals for
the Federal Circuit, and eventually at the U.S. Supreme Court.121 The
Supreme Court has never expressly stated what standard of review it applies
to Vaccine Act cases,122 but the statute states that the U.S. Court of Federal
Claims may set aside special master decisions only if they are “arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with
law,”123 and the Federal Circuit also applies that standard.124 Congress
intended for the “highly deferential”125 abuse of discretion standard to make
review of special master decisions an “extraordinary event.”126 By ensuring
the rarity of reversal, the Act promotes finality and efficiency—two of the
principal benefits of alternative dispute resolution processes.127
119. See infra text accompanying notes 130-32.
120. 42 U.S.C. § 300aa-12(e) (2006).
121. Id.; see also JOHNSON, DREW & MILETICH, supra note 55, at 16-17 (discussing the process
of appealing special master decisions).
122. The Supreme Court has decided only one case that originated from within the Vaccine
Program, and it presented a pure question of law. Shalala v. Whitecotton, 514 U.S. 268 (1995)
(involving the procedure by which the Secretary may rebut a claimant’s prima facie case).
123. 42 U.S.C. § 300aa-12(e)(2)(B); see also Little, supra note 113, at 363-64 (2007).
124. See, e.g., Munn v. Sec’y of Health & Human Servs., 970 F.2d 863, 870 (Fed. Cir. 1992).
125. Hodges v. Sec’y of Health & Human Servs., 9 F.3d 958, 961 (Fed. Cir. 1993).
126. Piper v. Sec’y of Health & Human Servs., 29 Fed. Cl. 628, 632 (1993).
127. See, e.g., Amy J. Schmitz, “Drive-Thru” Arbitration in the Digital Age: Empowering
Consumers Through Binding ODR, 62 BAYLOR L. REV. 178, 205-06 (2010); Brian T. Burns, Note,
Freedom, Finality, and Federal Preemption: Seeking Expanded Judicial Review of Arbitration
Awards Under State Law After Hall Street, 78 FORDHAM L. REV. 1813, 1814 (2010) (noting
“arbitration’s fundamental values of efficiency, finality, and autonomy”); cf. Westvaco Corp. v.
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Indeed, because they recognize that special masters have unique
expertise to weigh the medical evidence in vaccine-injury cases, appellate
courts are especially hesitant to set aside special master decisions. The
Federal Circuit even declared that a special master’s assessments about
witness credibility and the relative persuasiveness of competing medical
theories are “virtually unchallengeable on appeal.”128 It reasoned that
Congress did not want the court to “second guess the Special Masters [sic]
fact-intensive conclusions,” so it uses a “uniquely deferential” standard of
review.129 Such respect for special master expertise “effectively ensures that
[their determinations] will not be overturned”130—a statement that has
proven true in the case law.131 In Cucuras v. Secretary of Health & Human
Services, for example, the special master held that the diphtheria, tetanus,
and pertussis vaccine cannot cause chronic encephalopathies.132 A different
case decided one year later by the same special master reached the exact
opposite conclusion.133 The U.S. Court of Federal Claims affirmed both
decisions on appeal.134
Despite this deferential posture of review, which makes overturning
special master decisions an incredibly difficult task, it is very common for
United Paperworkers Int’l Union, 171 F.3d 971, 975 (4th Cir. 1999) (“Because judicial interference
with an arbitrator’s interpretation threatens both the efficacy and finality of arbitration, judicial
review of that interpretation is highly constrained.”).
128. Lampe v. Sec’y of Health & Human Servs., 219 F.3d 1357, 1362 (Fed. Cir. 2000)
(emphasis added); see also Porter v. Sec’y of Health & Human Servs., 663 F.3d 1242, 1249 (Fed.
Cir. 2011) (“[A]s long as a special master’s finding of fact is based on evidence in the record that is
not wholly implausible, we are compelled to uphold that finding as not being arbitrary or
capricious.” (quotations and alterations omitted)); Cedillo v. Sec’y of Health & Human Servs., 617
F.3d 1328, 1338 (Fed. Cir. 2010) (“Our role is not to second guess the Special Master’s factintensive conclusions, particularly in cases in which the medical evidence of causation is in dispute.”
(quotations and citation omitted)); Hines v. Sec’y of Health & Human Servs., 940 F.2d 1518, 1528
(Fed. Cir. 1991) (“If the special master has considered the relevant evidence of record, drawn
plausible inferences and articulated a rational basis for the decision, reversible error will be
extremely difficult to demonstrate.”).
129. Hodges, 9 F.3d at 961.
130. Apolinsky & Van Detta, supra note 43, at 578; see also Hazlehurst ex rel. Hazlehurst v.
Sec’y of Health & Human Servs., 604 F.3d 1343, 1349 (Fed. Cir. 2010); Brittani Scott Miller, The
National Vaccine Injury Compensation Program: The Unavailability of Experienced Attorneys
Places Petitioners at an Institutional Disadvantage, 19 FED. CIR. B.J. 253, 261 (2009) (“[A] court
cannot reverse a decision by the special master merely because the court would have reached a
different conclusion than the special master based on the facts in the record.”).
131. See generally infra Appendix.
132. Cucuras v. Sec’y of Health & Human Servs., 26 Cl. Ct. 537, 543 (1992).
133. Estep ex rel. Estep v. Sec’y of Health & Human Servs., 28 Fed. Cl. 664, 668-69 (1993).
134. Id. at 669.
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Vaccine Program claimants to appeal denials of compensation to the U.S.
Court of Federal Claims and then appeal for a second time to the Federal
Circuit.135 That seems counterintuitive. It makes sense, however, when one
considers another feature of the Program: claimants do not pay their own
fees and costs even if they lose on appeal. Claimants thus have little
incentive to accept an adverse special master decision because they have a
right to appeal their case for free—twice.
B. Reimbursable Attorneys’ Fees and Costs
To ensure that all vaccine-injured persons have an opportunity to obtain
financial assistance,136 and to complement the no-fault nature of the
Program,137 section 15(e)(1) of the Vaccine Act provides that special masters
may award attorneys’ fees and costs “incurred in any proceeding” on a
petition for compensation.138 The statute expressly provides that these
expenses are recoverable even if the special master “does not award
compensation . . . if the special master or court determines that the petition
was brought in good faith and there was a reasonable basis for the claim for
which the petition was brought.”139
These standards of “good faith” and “reasonable basis” theoretically
limit the right of recovery, but that rarely occurs. The “good faith” standard
is subjective, and is thus a “very low” hurdle to satisfy.140 Claimants are
135. See infra notes 227-32 and accompanying text.
136. See Browning v. Sec’y of Health & Human Servs., No. 02-929V, 2010 U.S. Claims
LEXIS 761, at *16-17 (Fed. Cl. Sept. 27, 2010) (“In designing the Act, Congress sought to spare
injured persons, who often have mounting health expenses, from delays, court payments, and the
expense of attorneys’ fees. To further that end, the Vaccine Act forbade an attorney from charging a
petitioner a fee, and instead permitted the court to award reasonable attorneys’ fees and costs both to
successful and unsuccessful petitioners.”); see also Doe v. Sec’y of Health & Human Servs., 19 Cl.
Ct. 439, 443-44 (1990) (explaining that section 15(e)(1) is consistent with the purpose of the
Vaccine Act because “potential petitioners who seek compensation under the vaccine program,
including those with limited resources, should be able to obtain representation”); GAO, VACCINE
INJURY COMPENSATION, supra note 82, at 5.
137. Keiser, supra note 47, at 26.
138. 42 U.S.C. § 300aa-15(e)(1) (2006). If the special master does not award fees and costs,
“counsel are forbidden from soliciting or accepting any fee from the petitioner.” Jessen v. Sec’y of
Health & Human Servs., No. 94 1029V, 1997 U.S. Claims LEXIS 20, at *17 n.7 (Fed. Cl. Jan. 17,
1997).
139. 42 U.S.C. § 300aa-15(e)(1)(B) (emphasis added); see also Saxton v. Sec’y of Health &
Human Servs., 3 F.3d 1517, 1521 (Fed. Cir. 1993) (“If the petition for compensation is denied, the
special master may award reasonable fees and costs if the petition was brought in good faith and
upon a reasonable basis.” (quotation and citation omitted)).
140. Holmes v. Sec’y of Health & Human Servs., No. 08-185, 2011 U.S. Claims LEXIS 406, at
*5 (Fed. Cl. Feb. 28, 2011); see also Hamrick v. Sec’y of Health & Human Servs., No. 99-683V,
2007 U.S. Claims LEXIS 415, *9 (Fed. Cl. Jan. 9, 2008); Turner v. Sec’y of Health & Human
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also entitled to a presumption of good faith when they file a petition, and the
government cannot overcome that presumption without “direct evidence of
bad faith.”141 So any claimant who files a petition in the Program satisfies
the “good faith” standard unless the government can show that the claimant
knew the petition was meritless—that is, unless the government can show
that the claimant knew a vaccine did not cause the alleged injuries. That
effectively means that anyone who believes they suffered a vaccine injury
meets the good faith standard. And that effectively means that anyone who
files a claim in the Vaccine Program meets the standard. And that
effectively means there is no standard. As one special master described:
“The good faith requirement is an easy test to satisfy. In this case, Petitioner
believed that [her son] suffered a vaccine-injury, thereby satisfying the good
faith requirement.”142 Special masters have even awarded claimants fees
and costs in cases that are “a longshot attempt to recover under the vaccine
program”143 or that contain no evidence of a causal connection between
immunization and injury other than a mother’s affidavit.144
The “reasonable basis” prong of section 15(e)(1), though an objective
requirement,145 is just as easy to establish as the “good faith” prong.
“Historically, special masters have been quite generous in finding a
reasonable basis for petitioners.”146 Cases finding that a claimant did not
have a reasonable basis to file a claim are extremely rare,147 and special
Servs., No. 99-544V, 2007 U.S. Claims LEXIS 394, at *21 (Fed. Cl. Nov. 30, 2007) (“[T]he ‘good
faith’ requirement of section 15(e)(1) is a subjective standard that focuses upon whether petitioner
honestly believed he had a legitimate claim for compensation.”).
141. Grice v. Sec’y of Health & Human Servs., 36 Fed. Cl. 114, 121 (1996).
142. Browning v. Sec’y of Health & Human Servs., No. 07-453V, 2010 U.S. Claims LEXIS
765, at *24 (Fed. Cl. Sept. 27, 2010) (emphasis added); see also Arbuthnott v. Sec’y of Health &
Human Servs., No. 90-1739V, 1994 U.S. Claims LEXIS 9, at *3 (Fed. Cl. Jan. 7, 1994) (finding
petitioner brought the claim in “good faith” because the special master had “no reason to doubt that
petitioner honestly believed in the validity of her claim”).
143. Doe v. Sec’y of Health & Human Servs., 19 Cl. Ct. 439, 443 (1990).
144. Lamar v. Sec’y of Health & Human Servs., No. 99-584V, 2008 U.S. Claims LEXIS 442,
at *11-12 (Fed. Cl. July 30, 2008).
145. Turner, 2007 U.S. Claims LEXIS 394, at *6.
146. Browning, 2010 U.S. Claims LEXIS 765, at *27 (quotation and citations omitted); see also
Schueman v. Sec’y of Health & Human Servs., No. 04-693V, 2010 U.S. Claims LEXIS 639, at *10
(Fed. Cl. Aug. 11, 2010) (“Special masters have liberally interpreted the good faith and reasonable
basis requirements.”).
147. Rydzewski v. Sec’y of Health & Human Servs., No. 99-571V, 2008 U.S. Claims LEXIS
30, at *23 (Fed. Cl. Jan. 29, 2008); see also Brown v. Sec’y of Health & Human Servs., No. 99539V, 2005 U.S. Claims LEXIS 122, at *8 (Fed. Cl. Mar. 11, 2005) (“[V]ery few cases have been
denied fees and costs based upon the reasonability standard.”).
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masters admittedly construe section 15(e)(1) “liberally”148 to ensure that
attorneys will eagerly represent claimants in the Program.149
That “relaxed standard”150 for evaluating the reasonableness of bringing
a claim has become synonymous with frivolity.151 In Rydzewski,152 for
example, the special master found that a claimant lacked a reasonable basis
for filing a petition because she had no reasonable basis for believing that
she even received the purportedly harmful immunization.153 The claimant
alleged that she slipped into a coma for two days after doctors injected her
with “an experimental form of the hepatitis B vaccine that was being given
to soldiers.”154 The special master, however, was “not aware of any
experimental forms of the hepatitis B vaccine.”155 Nor did the hospital
records show that the claimant was ever in a coma.156 Other than “her own
questionable statements,” the petitioner presented no evidence to support a
finding that she received the vaccination.157
The Rydzewski standard for establishing “reasonableness” is so low that
it is essentially identical to the burden of establishing that a claim falls
within the subject matter jurisdiction of the Act. Section (11)(b) lists
requirements that determine whether someone may file a petition:
[A]ny person who has sustained a vaccine-related injury, the legal representative of such
person if such person is a minor or is disabled, or the legal representative of any person
148. Melbourne v. Sec’y of Health & Human Servs., No. 99-694V, 2007 U.S. Claims LEXIS
221, at *19 (Fed. Cl. June 22, 2007); cf. Grice v. Sec’y of Health & Human Servs., 36 Fed. Cl. 114,
121 (1996) (“[Claimants] are entitled to a presumption of good faith.”).
149. Hamrick v. Sec’y of Health & Human Servs., No. 99-683V, 2007 U.S. Claims LEXIS 415,
at *15-16 (Fed. Cl. Nov. 19, 2007) (describing why “[l]atitude in evaluating the reasonable basis for
filing a petition comports with public policy” and is consistent with Congress’s goals for the
Program); see also Jessen v. Sec’y of Health & Human Servs., No. 94-1029V, 1997 U.S. Claims
LEXIS 20, at *16 (Fed. Cl. Jan. 17, 1997) (“[I]f the special masters were to set too high a standard as
to the reasonable basis issue, and too often deny fees awards on that basis, it surely would
discourage some attorneys from even taking cases involving vaccine injuries in the first place, for it
would face such counsel with the prospect of working through a Program proceeding and then
possibly receiving no compensation whatever for that work.”).
150. Hamrick, 2007 U.S. Claims LEXIS 415, at *18.
151. E.g., Perreira v. Sec’y of Health & Human Servs., 27 Fed. Cl. 29, 35 (1992) (citing to a
discussion about “frivolous” cases from the Model Rules of Professional Conduct when explaining
why a petitioner’s request for fees and costs was denied).
152. Rydzewski v. Sec’y of Health & Human Servs., No. 99-571V, 2008 U.S. Claims LEXIS
30 (Fed. Cl. Jan. 29, 2008).
153. Id. at *13.
154. Id.
155. Id.
156. Id.
157. Id. at *11; cf. 42 U.S.C. § 300aa-12(a) (2006) (“The special master or court may not
[award compensation] based on the claims of a petitioner alone, unsubstantiated by medical records
or by medical opinion.”).
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who died as the result of the administration of a vaccine set forth in the Vaccine Injury
Table, may, if the person meets the requirements of subsection (c)(1) of this section, file a
158
petition for compensation under the [Act].
This language defines who may file a petition in the Program; therefore,
those who do not meet the requirements of section 11(c)(1) may not (or
cannot properly) file a claim.159 First among the section 11(c)(1)
requirements is proof that the injured person “received a vaccine set forth in
the Vaccine Injury Table.”160 When read in conjunction with section 11(b),
this provision establishes an a fortiori jurisdictional requirement that an
injured person prove receipt of a covered vaccine before filing a petition.161
And the standard for meeting that jurisdictional requirement seems to be
identical to the standard for filing a “reasonable basis” claim worthy of
attorneys’ fees and costs.162
The point is simply that the bar for obtaining attorneys’ fees pursuant to
section 15(e)(1) is extremely low. If special masters have jurisdiction over
the claim, which is almost always the case,163 they award fees and costs
158. 42 U.S.C. § 300aa-11(b)(1)(A) (emphasis added).
159. Cf. H.R. REP. NO. 99-908, at 13 (1986), reprinted in 1986 U.S.C.C.A.N. 6344, 6354
(stating that claimants must establish “eligibility” for compensation “before entering” the Vaccine
Program).
160. 42 U.S.C. § 300aa-11(c)(1)(A).
161. No Federal Circuit decision has expressly described the requirements of section 11(c)(1) as
jurisdictional per se, but at least one lower court has treated section 11(c)(1) as a jurisdictional
provision. In McGowan v. Secretary of Health & Human Services, 31 Fed. Cl. 734 (1994), a
claimant appealed a special master’s decision dismissing her case for failing to return to the United
States within six months after vaccination, as required by section 11(c)(1)(B)(i)(III). The McGowan
court described the issue before it as jurisdictional: “When dealing with issues of jurisdiction, as in
this case, the statute must be construed strictly, as it is a limited waiver of sovereign immunity.”
McGowan, 31 Fed. Cl. at 740; see also id. (“Only those petitioners who are eligible under the
Vaccine Act can avail themselves of the remedial nature of the Vaccine Act.”) (emphasis added).
Ultimately, the McGowan court held that the special master correctly dismissed the petition because
the claimant did not return to the United States within the meaning of section 11(c)(1)(B)(i)(III), and
thus “fail[ed] to meet the jurisdictional requirements of the Vaccine Act.” Id.
162. Cf. Brice v. Sec’y of Health & Human Servs., 358 F.3d 865, 868 (Fed. Cir. 2004) (holding
that the court must have jurisdiction over a Vaccine Act claim in order to award attorneys’ fees and
costs).
163. In Melbourne v. Secretary of Health & Human Services, No. 99-694V, 2007 U.S. Claims
LEXIS 221, at *8 (Fed. Cl. June 22, 2007), the chief special master reasoned that a claimant need
only allege that she “received a covered vaccine” to bring her case within the Vaccine Act’s
jurisdiction. With such a low standard, it is unsurprising that “[t]here are few established instances
in which this court lacks jurisdiction over petitioner’s claim and thus, lacks jurisdiction to award
attorneys’ fees and costs.” Id. at *7.
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unless the claim is “patently unreasonable,”164 brought in “bad faith,”165 or
“where truly there existed no logical basis for the claim.”166 Some special
masters even award fees when claimants do not file an immunization record
to prove they received a covered vaccine.167 Those cases are particularly
shocking considering the Act expressly provides that each petition “shall
contain . . . vaccination records associated with the vaccine allegedly
causing the injury.”168
C. The Structural Problem
Because the Vaccine Act’s generous fee shifting provision is not limited
to proceedings conducted before special masters, claimants may recover fees
and costs incurred while appealing their cases to the U.S. Court of Federal
Claims, the Federal Circuit, and the Supreme Court—even if they lose at
each forum.169
That statutory structure creates perverse incentives.
Claimants and their attorneys essentially have no reason to stop litigating
their claims. By appealing a case as far as possible, the attorney gets to bill
more hours and make more money, the client gets extra free chances at
winning the case and receiving compensation, and neither attorney nor
client incurs any risk of loss or financial cost for doing so. One could even
argue that not appealing an adverse special master decision would constitute
professional malpractice.170 If a disabled client gets another free chance to
obtain thousands of dollars in compensation, the attorney should take it,
especially if the government will pay all fees and costs for taking that
chance, regardless of the outcome.
164. Perreira v. Sec’y of Health & Human Servs., 27 Fed. Cl. 29, 33 (1992).
165. Grice v. Sec’y of Health & Human Servs., 36 Fed. Cl. 114, 121 (1996); cf. Smith v. Sec’y
of Health & Human Servs., No. 91-57V, 1992 U.S. Cl. Ct. LEXIS 400, at *6 (Cl. Ct. Aug. 13, 1992)
(denying an award of fees and costs when the petitioner did not argue that the claim was filed in
good faith).
166. Jessen v. Sec’y v. Health & Human Servs., No. 94-1029V, 1997 U.S. Claims LEXIS 20, at
*17 (Fed. Cl. Jan. 17, 1997).
167. See, e.g., Melbourne, 2007 U.S. Claims LEXIS 221, at *9.
168. 42 U.S.C. § 300aa-11(c) (2006). But see Brown v. Sec’y of Health & Human Servs., No.
99-539V, 2005 U.S. Claims LEXIS 122, at *5-6 (Fed. Cl. Mar. 11, 2005) (finding no reasonable
basis when the only documents supporting the petition were e-mails sent between the law firm and
the claimant); Di Roma v. Sec’y of Health & Human Servs., No. 90-3288V, 1993 U.S. Claims
LEXIS 317, at *5 (Cl. Ct. Nov. 18, 1993) (denying a motion for attorneys’ fees and costs when
“minimal investigation would have revealed the absence of any legal or medical support for
petitioner’s claim”); Murphy v. Sec’y of Health & Human Servs., 30 Fed. Cl. 60, 61 (1993) (finding
no reasonable basis when the medical records directly contradicted statements in the petition).
169. 42 U.S.C. § 300aa-15(e)(1).
170. Provided, of course, that a nonfrivolous argument supports the appeal.
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The Vaccine Act thus establishes a structural moral hazard. “In the
economics literature and in the law and policy debate that draws upon this
literature, ‘moral hazard’ refers to the tendency for insurance against loss to
reduce incentives to prevent or minimize the cost of loss.”171 Within the
Vaccine Program, claimants have a type of insurance (free appeals) that
reduces their incentives to minimize economic losses (the cost of litigating
and pursuing an appeal). Because the Act effectively eliminates the burdens
of appealing a meritless case, it encourages claimants to continue litigating
their claims, generating costs that they ultimately will not bear.172 The
claimant decides how much risk to take while the government—via the
Vaccine Trust Fund—bears the costs “if things go badly.”173 That situation
stands in stark contrast to traditional civil litigation, where attorneys and
clients carefully evaluate whether to appeal an unfavorable verdict because
the client bears both the risks and costs of seeking review.
Professor Michael LeRoy has argued that a similar moral hazard exists
in certain employer liability arbitration agreements.174 Many of these
agreements force employees to adjudicate their claims in binding
arbitration175 yet also provide employers with the right to seek de novo
judicial review of the arbitrator’s award.176 Thus, even if an arbitrator finds
in favor of the employee, the employer still has a second chance to avoid
“the financial consequences of its wrongdoing” because the agreement
preserves access to the courts.177 As a result, the substitute forum provision
171. Tom Baker, On the Genealogy of Moral Hazard, 75 TEX. L. REV. 237, 238-39 (1996).
172. Cf. id. at 238 (“What moral hazard means is that, if you cushion the consequences of bad
behavior, then you encourage that bad behavior.”).
173. PAUL KRUGMAN, THE RETURN OF DEPRESSION ECONOMICS AND THE CRISIS OF 2008, at
63 (2009) (defining moral hazard to be when one person decides the amount of risk to take when
another person bears all the costs of taking that risk).
174. Michael H. LeRoy, Do Courts Create Moral Hazard?: When Judges Nullify Employer
Liability in Arbitrations, 93 MINN. L. REV. 998 (2009). A compulsory arbitration agreement is a
“binding agreement between an employer and an employee to arbitrate future employment disputes.”
Marcela Noemi Siderman, Compulsory Arbitration Agreements Worth Saving: Reforming
Arbitration to Accommodate Title VII Provisions, 47 UCLA L. REV. 1885, 1891 (2000).
175. Like the Vaccine Program, arbitration typically enjoys a more informal, flexible, and lessadversarial dispute resolution process than traditional civil litigation. See generally R. Wilson
Freyermuth, Foreclosure by Arbitration?, 37 PEPP. L. REV. 459, 471-76 (2010) (describing the
process characteristics of arbitration).
176. LeRoy, supra note 174, at 1008-09.
177. Id. at 1008.
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in the employment contract is undermined and “employers have two
separate adjudications to avoid liability.”178
The “free appeals” structure of the Vaccine Program similarly
undermines its usefulness as a substitute forum. Congress intended the
Program to be the forum to resolve claims of vaccine injury. The entire
point of establishing the Program was to remove such claims from the civil
court system.179 But because claimants get a risk-free second—and third and
fourth—chance to obtain compensation by appealing to traditional federal
courts, the finality and effectiveness of the Program as a viable alternative
legal forum is undermined.
This erosion of finality is especially troublesome because it creates a
two-tiered compensation scheme, making the Program a less efficient
alternative to civil litigation, the exact opposite of what Congress
intended.180 By encouraging claimants to appeal adverse judgments, special
master decisions become merely precatory, not final, because a judge on the
U.S. Court of Federal Claims or the Federal Circuit will ultimately resolve
the case. In other words, the alternative dispute resolution process
conducted before special masters in the Program is a mere prelude to the
“real” dispute resolution process that will be conducted before federal judges
in the appellate courts. The Program, therefore, becomes a fourth step in
“the usual three instances of litigation in the ordinary courts.”181
Congress did not foresee these structural defects when it passed the Act
in 1986. Back then, it expected that review of special master decisions
would be rare and that the costs of pursuing a claim would be low.182
Adding section 15(e)(1) to the statute was thus a relatively benign tradeoff in
exchange for encouraging attorneys to help injured parties:
[Congress] has assumed that costs under a no-fault, non-adversarial system will be
significantly lower. With most evidentiary requirements specified in the legislation, with
prohibitions on traditional discovery and courtroom procedure, and with no obligations to
demonstrate negligence or product defectiveness, the costs of legal services will more
178. Id. For a critique of Professor LeRoy’s argument, see generally Lisa Blomgren Bingham
& David Henning Good, A Better Solution to Moral Hazard in Employment Arbitration: It Is Time
to Ban Predispute Binding Arbitration Clauses, 93 MINN. L. REV. HEADNOTES 1 (2009).
179. See supra Part II.
180. See supra Part II.
181. Hans Smit, Contractual Modification of the Scope of Judicial Review of Arbitral Awards,
8 AM. REV. INT’L ARB. 147, 149 (1997) (explaining why broad judicial review of arbitral awards
would undermine finality); cf. Grey, Plague of Causation, supra note 89, at 404 (warning that,
unless the Program is reformed, it “could become nothing more than a costly exercise that is a precondition for filing a tort suit, placing vaccine claimants in a worse position than they were in prior
to the [P]rogram’s enactment, since tort suits traditionally do not have antecedent administrative
procedures that must be exhausted”).
182. See supra notes 125-27 and accompanying text.
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closely approximate those incurred in such systems as the Black Lung benefits program
or workers’ compensation programs. In these systems, legal costs rarely rise above
$10,000 per case. The Committee has, therefore, assumed that legal costs may be as
183
much as $15,000 per case in the compensation Program.
Congress’s assumption has proven to be wrong. Really wrong. Not
only are the costs of pursuing a claim in the Program routinely “as much as”
$15,000, they usually total three-to-four times that amount. Due largely to
the increased adversarial nature of Program proceedings,184 resolving a claim
filed under the Act often takes several years185 and costs tens of thousands of
dollars to pursue.186 Many recent awards for fees and costs even approach—
or exceed—$100,000.187 In fiscal year 2009, petitioners whose cases went
uncompensated received an average award of $43,254 for attorneys’ fees
and costs.188 That amount was $2,000 higher than the average amount
awarded in compensated cases.189
V. EVIDENCE OF INCREASED CONTENTIOUSNESS AND MORAL HAZARD
To sum, the Vaccine Act’s “free appeals” configuration undermines the
intended expeditious, alternative nature of the Program by inviting and
encouraging claimants to continue fighting their cases as long as possible. It
183. H.R. REP. NO. 99-908, at 36 (1986), reprinted in 1986 U.S.C.C.A.N. 6344, 6377-78.
184. See infra Part IV.A.
185. See infra text accompanying notes 216-17.
186. See infra notes 76-80, 218-22 and accompanying text.
187. See, e.g., Finet v. Sec’y of Health & Human Servs., No. 03-348V, 2011 U.S. Claims
LEXIS 120, at *11 (Fed. Cl. Jan. 31, 2011) (awarding $82,327.93 for attorneys’ fees and costs);
Hibbard v. Sec’y of Health & Human Servs., No. 07-446V, 2011 U.S. Claims LEXIS 439, at *18
(Fed. Cl. Mar. 7, 2011) ($130,500); Mersburgh v. Sec’y of Health & Human Servs., No. 04-997V,
2011 U.S. Claims LEXIS 327, at *7 (Fed. Cl. Jan. 28, 2011) ($70,561.18); Browning v. Sec’y of
Health & Human Servs., No. 02-929V, 2010 U.S. Claims LEXIS 761, at *59 (Fed. Cl. Sept. 27,
2010) ($99,023.50); Nordwall v. Sec’y of Health & Human Servs., No. 05-123V, 2010 U.S. Claims
LEXIS 392, at *5 (Fed. Cl. May 26, 2010) ($82,500.00); Stewart v. Sec’y of Health & Human
Servs., No. 06-287V, 2010 U.S. Claims LEXIS 336, at *23 (Fed. Cl. May 17, 2010) ($77,036.21);
Stone v. Sec’y of Health & Human Servs., No. 04-1041V, 2010 U.S. Claims LEXIS 753, at *32
(Fed. Cl. Sept. 8, 2010) ($131,614.84); see also infra Part IV.C.
188. This figure was calculated by dividing the “Attorneys’ Fees/Costs Payments” by the
“Number of Payments to Attorneys” for dismissed cases in fiscal year 2009, according to statistics
reports posted on the website of the Department of Health and Human Services. See National
Vaccine Injury Compensation Program: Statistics Reports, HEALTH RESOURCES & SERVICES
ADMIN. (U.S. Dep’t of Health & Human Servs., Wash., D.C.), Feb. 2, 2012, at tbl.3 [hereinafter
Statistics Reports], http://www.hrsa.gov/vaccinecompensation/statisticsreports.html#Stats.
189. The average fees and costs awarded in compensated cases during fiscal year 2009 was
$41,147. See id. (using data for compensated cases).
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should come as no surprise, then, that both petitioners and the government
have become increasingly adversarial, adopting litigious postures and tactics
despite Congress’s intention to create an informal compensation system.
A. Congressional Concern
After creating the Vaccine Program, members of Congress soon realized
that they had failed to design a truly alternative adjudication process.
Claimants were “fighting everything,” racking up large bills for attorneys’
fees and costs, and filling appellate courts with vaccine cases.190 With a
near-limitless supply of “free” money to establish causation, claimants
began requesting depositions, calling expert witnesses, and moving to
exclude harmful evidence. The Program quickly became “a microcosm of
the system it was designed to replace.”191
In 1989, just three years after passing the Act, Congress declared that
participants in the Program had “maintained their traditional adversarial
litigation postures” and “virtually foreclose[d] any opportunity for
petitioners [and] respondents to proceed without litigators at their sides.”192
Claimants, for example, were pursuing “traditional rights of exclusion of
evidence” and failing to comply with many of the Act’s procedural
streamlining measures, including filing initial petitions with the statutorily
required information.193
Making matters worse, the special masters have not used their authority
to remedy the petitioners’ noncompliance with statutory mandates. Some
special masters have even expressly permitted such noncompliance by
allowing claimants to file one-page “short-form” petitions for compensation
190. Laura Mazzuca, Shot Through with Problems—A Partial Success, Vaccine Injury Fund
Faces Case Logjam, Funding Shortfalls, BUS. INS., Aug. 24, 1992 (quoting Thomas G. Wilson,
Chair of the Vaccine Litigation Group of the Association of Trial Lawyers of America).
191. Id.; see also Knudsen ex rel. Knudsen v. Sec’y of Health & Human Servs., 35 F.3d 543,
549 (Fed. Cir. 1994) (“The Vaccine Act does not contemplate full blown tort litigation in the Court
of Federal Claims.”); supra text accompanying notes 62-66.
192. H.R. REP. NO. 101-247, at 510 (1989), reprinted in 1989 U.S.C.C.A.N. 1906, 2236.
Scholars have observed a similar phenomenon in the context of arbitration, where parties seek a fast
and flexible alternative dispute resolution process but have difficulty shedding their comfort with
litigation tactics, rules, and procedures. See, e.g., Gerald F. Phillips, Is Creeping Legalism Infecting
Arbitration?, 58 DISP. RESOL. J. 37 (2003) (discussing concerns that arbitration is becoming overly
formalized); Jeffrey W. Stempel, Forgetfulness, Fuzziness, Functionality, Fairness, and Freedom in
Dispute Resolution: Serving Dispute Resolution Through Adjudication, 3 NEV. L.J. 305, 314 (2003)
(using the term “arbigation” to describe the contentious postures of parties in arbitration
proceedings); infra text accompanying note 210.
193. H.R. REP. NO. 101-247, at 510, 1989 U.S.C.C.A.N. at 2236.
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that contain no medical records.194 Those filings violate the unambiguous
language of section 11(c), which provides that all medical records “shall”
accompany claims filed in the Program.195
The government also deserves a portion of the blame. Some claimants’
attorneys, for example, have noted that “government lawyers want to defeat
every claim at all costs and for any reason.”196 As a result, “[t]here is now
no difference in the level of litigation than if the case were in state or federal
court.”197 Winning seems to have become the government’s focus, so much
so that it often “mount[s] defenses incompatible with a nofault system of
compensation.”198 An analysis of claims data by the Los Angeles Times in
2004 revealed some troubling examples:
In one case, government representatives argued that $150 a year was too much to spend
on wheelchair maintenance. They have haggled over how much to allow for replacement
shoes and braces for people with polio. Another time, they recommended rubber sheets
for the bed of an incontinent person because they were cheaper, although less
199
comfortable, than disposables costing $135 a year.
194. See, e.g., Stewart v. Sec’y of Health & Human Servs., No. 02-819V, 2003 U.S. Claims
LEXIS 275, at *13 (Fed. Cl. Sept. 3, 2003) (finding that special masters may refuse to dismiss shortform petitions and may refuse to order production of all medical records required by section 11(c)).
For an example of a short-form petition, see Filing a Pro Se Short Form Autism Petition,
SHOEMAKER
&
ASSOCIATES,
available
at
http://www.shoemakerassociates.com/potentialclients/Short_formAutismPetition.doc (last visited
Feb. 24, 2012).
195. 42 U.S.C. § 300aa-11(c) (2006) (listing what a petition for compensation “shall contain,”
including medical records and affidavits). For a discussion about why permitting short-form
petitions in the Vaccine Program could harm claimants, see generally Gordon Shemin, Comment,
Mercury Rising: The Omnibus Autism Proceeding and What Families Should Know Before Rushing
Out of Vaccine Court, 58 AM. U. L. REV. 459 (2008) (explaining that a short-form petition is not a
proper petition under section 11(c) and so claimants who do not re-file a compliant petition may fail
to satisfy the Act’s statute of limitations, thereby waiving their rights to reject an adverse special
master decision and file a lawsuit in civil court).
196. JOHNSON, DREW & MILETICH, supra note 55, at 45 (quoting an anonymous claimant’s
attorney); cf. Rachel A. Greenleaf, Why Plaintiffs Shouldn’t Have It Their Way—Revisiting
Concurrent Jurisdiction of Autism Claims Against Thimerosal Manufacturers, 21 FED. CIR. B.J. 299,
307 (2011) (“[D]espite being touted as less adversarial than traditional litigation, the U.S.
Department of Justice assigned more than a dozen veteran litigators to zealously defend the
government’s coffers.”).
197. JOHNSON, DREW & MILETICH, supra note 55, at 45.
198. H.R. REP. NO. 101-247, at 510, 1989 U.S.C.C.A.N. at 2236; cf. Sussman, supra note 106,
at 22 (“If the parties jointly seek to extend or complicate the arbitration, they may obstruct the
arbitrator’s ability to achieve efficiency goals.”).
199. Myron Levin, Vaccine Injury Claims Face Grueling Fight; Victims Increasingly View U.S.
Compensation Program as Adversarial and Tightfisted, L.A. TIMES, Nov. 29, 2004, at A1.
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These illustrations of the government’s “contentious and even stingy”200
posture are inconsistent with Congress’s goal of generously compensating
victims in an informal, nonadversarial process.201
Although claimants and the government share some of the blame for
permitting the Program to “become very adversarial,”202 the special masters
deserve most of the blame. After all, they have incredible power to control
the claims-resolution process,203 but have not used that authority to insulate
the Program from the combative tactics of civil litigation. As one extreme
example, consider Cedillo v. Secretary of Health & Human Services, a case
filed in 1998.204 The special master did not issue a ruling in the case until
2009.205 Over that 11-year period, the parties developed a record of nearly
8,000 pages, 23 expert reports, and 6 post-hearing briefs totaling 462
pages.206 As another example, consider Kolakowski v. Secretary of Health &
Human Services, which also took the special master 11 years to resolve. 207
In that timeframe, the special master held 2 separate trials in 2 separate
states.208 The Kolakowski decision denying compensation spans almost 200
pages.
The special masters need to take control of the Vaccine Program.
Congress has called for a “re-dedication of all parties to the creation of an
expeditious, non-adversarial, and fair system.”209 The impetus for such
change must come from the top down. Claimants understandably fight
zealously for their cases, and the government understandably responds in
kind. It is not understandable, however, for the special masters to allow the
parties to transform the Program into an “adversarial process [that] will
serve neither to compensate injured children nor maintain the stability of the
immunization programs of the U.S.”210
200. Scott, supra note 48, at 362.
201. H.R. REP. NO. 99-908, at 3 (1986), reprinted in 1986 U.S.C.C.A.N. 6344, 6344.
202. Levin, supra note 199, at A1 (quoting Rep. Dan Burton).
203. See supra notes 107-16 and accompanying text.
204. Cedillo v. Sec’y of Health & Human Servs., No. 98-916V, 2009 U.S. Claims LEXIS 146
(Fed. Cl. Feb. 12, 2009).
205. Id. at *42-44.
206. Id. at *46-47.
207. Kolakowski v. Sec’y of Health & Human Servs., 2010 U.S. Claims LEXIS 1035 (Fed. Cl.
Nov. 23, 2010). The Kolakowski case was filed on August 4, 1999, and decided on November 23,
2010. Id. at *2.
208. Id. at *2-3.
209. H.R. REP. NO. 101-247, at 509 (1989), reprinted in 1989 U.S.C.C.A.N. 1906, 2235; see
also id. at 513, 1989 U.S.C.C.A.N. at 2239.
210. Id. at 510, 1989 U.S.C.C.A.N. at 2236; see also id. at 513, 1989 U.S.C.C.A.N. at 2239
(“The Committee reiterates its concern that [the new amendments to the Act] not be used to re-create
an adversarial process before the Special Masters.”).
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In arbitration, it is common for arbitrators to “get swept along” with
lawyers who “retreat to tried and true litigation methods.”211 The same thing
is happening in the Program. And just as arbitrators must guard against
proceedings becoming unproductively adversarial, so too must special
masters use their authority to prevent the parties from morphing the Program
into a microcosm of the civil tort system. Such pseudo-litigation has eroded
the alternative features of the Program. In 1989, Congress described the
adversarial nature of the Program as one of the “most important . . .
fundamental problems” with the adjudicatory process.212 Over the ensuing
twenty years, the special masters have idly, meekly, and passively let things
get worse.
B. Slow Case Resolution Times
As the eleven-year disposition times of Cedillo and Kolakowski
demonstrate, case resolution within the Program is incredibly slow.213 The
Act requires special masters to issue their decisions within 240 days of a
petition’s filing,214 but they meet that deadline in only a small fraction of
cases. The Government Accountability Office reports that only 14% of
claims are resolved in 1 year or less.215 A staggering 18% took 5 years or
more to process.216
Indeed, case resolution in the Program may take longer than it would in
the traditional court system. Between 2002 and 2007, it took an average of
1,000 days (33.3 months) for special masters to resolve a vaccine petition.217
That timeframe is longer than the average disposition time for all cases filed
Holt, supra note 117, at 459.
H.R. REP. NO. 101-247, at 509, 1989 U.S.C.C.A.N. at 2235; see also JOHNSON, DREW &
MILETICH, supra note 55, at 44 (reporting that making proceedings “less adversarial and litigious”
was the most common suggestion for how to improve the Program in a survey of claimants’
attorneys, government attorneys, and special masters); Scott, supra note 48, at 363 (stating that “the
biggest problem” with the Vaccine Program is “its adversarial nature that has angered parties on
both sides and hindered recovery for injured children”).
213. Kolakowski, 2010 U.S. Claims LEXIS 1035; Cedillo v. Sec’y of Health & Human Servs.,
No. 98-916V, 2009 U.S. Claims LEXIS 146 (Fed. Cl. Feb. 12, 2009).
214. 42 U.S.C. § 300aa-12(d)(3)(A)(ii) (2006).
215. GAO, VACCINE INJURY COMPENSATION, supra note 82, at 7.
216. Id. at 8 fig.1; see also Levin, supra note 199 (“[C]ases dragging beyond five years have
become increasingly common.”).
217. Advisory Commission on Childhood Vaccines, Meeting and Conference Call Minutes,
Health Resources & Services Admin. (U.S. Dep’t of Health & Human Servs., Wash., D.C.), Mar. 78, 2007, at 18, available at ftp://ftp.hrsa.gov/vaccinecompensation/ACCVMinutesMar7-8-07.pdf.
211.
212.
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in state court (30.2 months) and only slightly shorter than the mean
disposition times for medical malpractice (38.4 months) and toxic tort cases
(35.8 months).218 It is also substantially longer than the median length of
time that it takes to arbitrate business-to-business cases (7.9 months) and
complex international disputes (12 months).219
These prolonged case disposition times have many adverse
consequences within the Program. Delays usually lead to increased
litigation costs, spoliation of evidence, and the disappointment and
frustration of those seeking compensation.220 One of Congress’s goals for
the Program—and one of the primary advantages of any alternative dispute
resolution scheme—is speedy case resolution.221 Parties in the Program do
not enjoy that benefit.
C. Increasing Fees and Costs
Given the increasingly prolonged and adversarial nature of proceedings
in the Program, one would expect that the cost of pursuing a claim has
increased over the years.222 That hypothesis is also suggested because a
greater proportion of claimants are pursuing off-Table theories of
causation,223 which require more evidence—and thus more time and effort—
to establish than their on-Table counterparts.
Data from the Program confirm this hypothesis. As Chart 1 shows, the
average fees and costs awarded in uncompensated cases substantially
outpaced inflation over the past two decades:
218. Michael Heise, Justice Delayed?: An Empirical Analysis of Civil Case Disposition Time,
50 CASE W. RES. L. REV. 813, 833 fig.1 (2000).
219. Sussman, supra note 106, at 21.
220. Heise, supra note 218, at 814-15 (discussing how delays impact the civil justice system).
221. See, e.g., Frank E.A. Sander & Lukasz Rozdeiczer, Matching Cases and Dispute
Resolution Procedures: Detailed Analysis Leading to a Mediation Centered Approach, 11 HARV.
NEGOT. L. REV. 1, 12 tbl.2 (2006) (quantifying the ability of mediation, mini-trials, summary jury
trials, early neutral case evaluation, arbitration, and adjudication to satisfy a variety of dispute
resolution goals); Sussman, supra note 106, at 20 (noting that arbitration is often preferable to
litigation because arbitration can “provide for a much speedier resolution than can be found in
court”).
222. Cf. Scott, supra note 48, at 362 (“The adversarial nature of the program undoubtedly
contributes to the cost and reduces the efficiency of the program . . . .”).
223. See supra notes 94-96 and accompanying text.
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Chart 1: Average Fees and Costs Awarded in Dismissed Cases224
The historical trend of awards in dismissed cases outpacing inflation is
particularly pronounced in recent years. In 2002, the average fees and costs
awarded was $15,593; in 2010, that amount more than doubled to
$33,683.225 These figures prove that modern-day petitioners and their
attorneys spend significantly more time and money pursuing uncompensated
claims than their predecessors did in the 1990s.226 Although the data do not
reveal exactly where these additional costs are occurring—for example, in
proceedings before special masters or appellate courts—they do show that
224. The data for the average annual fees and costs awarded are derived from statistics reports
released by the U.S. Department of Health and Human Services. See Statistics Reports, supra note
188, at tbl.3. The average award was calculated by dividing the figure for “Attorneys’ Fees/Costs
Payments” by the figure for “Number of Payments to Attorneys.” The inflation-adjusted data are
calculated by increasing the average award in 1993 by the annual rate of inflation as derived from
the Consumer Price Index released by the Bureau of Labor Statistics. See Consumer Price Index,
BUREAU LAB. STAT. (U.S. Dep’t of Labor, Wash., D.C.), Feb. 17, 2012,
ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt.
225. See Statistics Reports, supra note 188, at tbl.3; supra note 224 and accompanying text.
226. See Statistics Reports, supra note 188, at tbl.3; supra note 224 and accompanying text.
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claimants and their attorneys are fighting harder than ever to obtain
compensation in the Program.227
One might expect that if claimants have been spending more money
pursuing uncompensated cases, they likely have been spending more money
pursuing compensated cases. But that is not the case. Perhaps surprisingly,
the average amount of fees and costs awarded in compensated cases has not
outpaced inflation over the past eighteen years:
Chart 2: Average Fees and Costs Awarded in Compensated Cases228
One potential explanation for the different growth rates of awards in
uncompensated and compensated cases is that, because longer dispositions
cost more than shorter dispositions, unmeritorious claims take longer to
resolve than meritorious claims.
Thus, one might expect that
uncompensated claims take longer to resolve because petitioners more
frequently appeal uncompensated cases than the government appeals
compensated cases. In other words, claimants spend the same amount of
time and money in proceedings before special masters, but, unlike the
government, claimants continue to fight adverse special master decisions on
appeal, thereby extending the case disposition time and incurring additional
costs in uncompensated cases that they do not incur in compensated cases.
This explanation makes sense when one considers the fact that the Act’s
current structure requires the government to be more selective than
claimants when deciding which cases to appeal because the government
227. See Statistics Reports, supra note 188, at tbl.3; supra note 224 and accompanying text.
228. See Statistics Reports, supra note 188, at tbl.3 (using data for compensated cases); supra
note 224 and accompanying text.
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pays its own way for appealing a case.229 But because of the Vaccine Act’s
structural moral hazard, claimants do not pay their own way and do not
similarly evaluate the costs and risks of appealing an adverse decision.230 So
as Program proceedings become more adversarial, claimants and their
attorneys are racking up larger bills in uncompensated cases, unconcerned
with spending money to fight their cases on appeal.231 The government does
not have that luxury, and usually stops fighting a case after the special
master awards compensation, thus keeping costs in compensated cases
relatively stable and substantially lower than costs in uncompensated
cases.232
D. Lopsided Appellate Filings
Other data indicate that this explanation is correct. Between 1995 and
2011, the Federal Circuit decided seventy-five Vaccine Act cases.233 The
claimants filed seventy (ninety-three percent) of those appeals.234 Such
disparity between the claimants’ and government’s proclivity to appeal
continues even after the Federal Circuit enters judgment. After the circuit
court decided those seventy-five cases, claimants moved for a rehearing or a
rehearing en banc twelve times and filed thirteen petitions for certiorari.235
The Secretary moved for a rehearing only three times and never filed a
petition for certiorari.236
These party differences stand in stark contrast to traditional tort
litigation where plaintiffs and defendants file appeals at roughly the same
rate.237 Admittedly, some disparity normally exists when the United States
229. See What You Need to Know About the National Vaccine Injury Compensation Program
(VICP), HEALTH RESOURCES & SERVICES ADMIN. (U.S. Dep’t of Health & Human Servs., Wash.,
D.C.), Feb. 2006, at 5, available at ftp://ftp.hrsa.gov/vaccinecompensation/84521_Booklet.pdf
(explaining that the Vaccine Program pays legal costs regardless of whether a claimant prevails if
the claimant meets certain requirements).
230. See supra Part III.C.
231. See supra notes 187-89, 224-27 and accompanying text.
232. See infra notes 234-37 and accompanying text.
233. See infra Appendix.
234. See infra Appendix; cf. JOHNSON, DREW & MILETICH, supra note 55, at 23 (reporting that
claimants filed 81% of the appeals filed in the U.S. Court of Federal Claims between 1990 and
1997).
235. See infra Appendix.
236. See infra Appendix.
237. See Thomas H. Cohen, Appeals from General Civil Trials in 46 Large Counties, 20012005, BUREAU JUST. STAT. (U.S. Dep’t of Justice, Wash., D.C.), June 2006, at 4 & tbl.2, available
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is a party because the federal government is a more cautious and calculated
litigant than private parties.238 But that fact alone cannot account for such
lopsided numbers in the Vaccine Program. Here again, moral hazard best
explains the data: the government must carefully evaluate whether to risk its
limited resources filing an appeal,239 but claimants are free from such
burdens and are instead perversely incentivized to continue fighting their
unsuccessful claims for as long as possible.240
VI. SOLUTIONS
A. Add Injuries to the Vaccine Table
As described above, when the Secretary added new vaccines to the
Table without listing corresponding injuries, the percentage of off-Table
cases in the Program changed from ten to ninety percent.241 Most cases now
involve complex theories of medical causation that require more evidence,
more time, and more money to resolve than on-Table claims.242 Indeed,
“much of the slowdown in petition processing is attributed to delays granted
to petitioners who need more time to build a case, which includes
performing medical tests, determining the developmental needs of the child,
and hiring expert witnesses.”243 Those reasons for delay are not present
when claimants can establish a prima facie case simply by showing they
suffered an injury listed on the Table.244
Presumably, then, the trend will reverse if the Secretary adds new
injuries to the Table: the number of off-Table cases will decrease and
claimants will devote less time and money to establishing causation. And as
the Table’s streamlining presumptions perform the “heavy lifting” for
at http://bjs.ojp.usdoj.gov/content/pub/pdf/agctlc05.pdf (“Among tort trials appealed, plaintiffs
(53%) were slightly more likely to be appellants than defendants (47%).”).
238. Paul D. Carrington, United States Appeals in Civil Cases: A Field and Statistical Study, 11
HOUS. L. REV. 1101, 1102 (1974); see also Cohen, supra note 237, at 3 tbl.4.
239. Cf. Carrington, supra note 238, at 1102 (“[A]lmost without exception, the Justice
Department appears to approach the decisions [of whether to appeal a case] as rational ones, to be
made on the basis of careful analysis of the principles likely to control the outcome, with due regard
for judicial sentiments likely to be evoked by the particular circumstances in dispute.”).
240. See supra Part III.
241. See supra note 95 and accompanying text.
242. Cf. Miller, supra note 130, at 262-64.
243. Id. at 262-63.
244. See Althen v. Sec’y of Health & Human Servs., 418 F.3d 1274, 1290 (Fed. Cir. 2005)
(stating that “the purpose of the Vaccine Act’s preponderance standard is to allow the finding of
causation”).
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claimants,245 the parties will have fewer incentives to litigate whether
sufficient proof of causation exists. Proceedings in the Program, therefore,
will become more expeditious and less contentious.
But the government should be careful before adding new injuries to the
Table and memorializing in it a causal relationship between vaccines and
harm. Forcing the Secretary to add new injuries to the Table could
undermine the public’s confidence in the safety of vaccines. One might
argue, for example, that the Secretary has not added new injuries to the
Table because no such injuries exist—that is, the Table already contains all
adverse reactions that the scientific community recognizes as causally
related to vaccines. Thus, the Secretary did not—and should not—add new
presumptive injuries to the Table because doing so would inject junk science
onto the Table and into the adjudicatory process. Put another way, neither
the Secretary nor Congress should overstate the dangerousness of vaccines
by including injuries on the Table that do not derive from reliable scientific
evidence. Otherwise, the government could spark unwarranted public fear,
which could lead to distrust of vaccines, decreased vaccination rates, and
increased incidences of preventable diseases.246
This argument against amending the Table is persuasive, but it does not
apply in those circumstances where the government has already concluded
that vaccines cause injuries not listed on the Table; in those circumstances,
any adverse public health consequences have already passed. In 1994, for
example, the Institute of Medicine (IOM) found that “evidence favors
acceptance of a causal relationship between . . . tetanus toxoids and GuillainBarré syndrome,”247 yet the Secretary consistently declines to add that
245. Hodges v. Sec’y of Health & Human Servs., 9 F.3d 958, 961 (Fed. Cir. 1993).
246. Justice Breyer made a similar point when discussing the need for scientific accuracy in
toxic substance cases:
[A] decision wrongly granting compensation, while of immediate benefit to the plaintiff
worker, can . . . improperly force abandonment of the substance. This, if the decision is
wrong, will improperly deprive the public of what can be far more important benefits—
say those surrounding a drug that cures many while subjecting to less serious risk a few.
Stephen Breyer, The Interdependence of Science and Law, 82 JUDICATURE 24, 25 (1998); see also
Boxler, supra note 115, at 1328-34 (discussing the need for “accurate science-based jurisprudence”
because “[a]ny legal decision involving an alleged vaccine injury has the potential to produce
significant—and adverse—public health consequences”).
247. INST. OF MED., ADVERSE EVENTS ASSOCIATED WITH CHILDHOOD VACCINES: EVIDENCE
BEARING ON CAUSALITY 16 (Kathleen R. Stratton, Cynthia J. Howe & Richard B. Johnston, Jr. eds.,
1994). Guillain-Barré syndrome, also known as acute inflammatory demyelinating polyneuritis or
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condition to the Table.248 According to the Secretary, the refusal is “based to
some extent on the level of risk in compensating an inordinate number of
non-vaccine-related cases for the extremely rare vaccine-related case.”249 In
other words, the Secretary has not added Guillain-Barré syndrome to the
Table because doing so might overcompensate claimants.
That result, however, is precisely what Congress intended for the
Program.250
“Congress designed the Vaccine Table Injury to be
overinclusive . . . [and] recognized that some children whose injuries were
not vaccine-related would recover through the Table’s presumption.”251 One
of the Table’s primary functions is to ensure that special masters resolve
close cases in favor of petitioners.252 That generosity inevitably means that
some non-vaccine-related claims will benefit from the Table’s
presumptions.253 Congress intentionally sacrificed accuracy to accomplish
efficiency, tilting the legal balance slightly in favor of claimants in an effort
to achieve a streamlined case-resolution process.254 By not amending the
Table, the Secretary has moved the fulcrum.255 The balance now favors
contentiousness and formality instead of expediency and informality.256
That shift is not only improper for injuries the government’s own scientists
conclude are causally related to vaccines, it is also inconsistent with the
alternative nature the Program.257
The Secretary should therefore adopt—or Congress should legislate—a
per se rule that amends the Table when the Institute of Medicine
acknowledges a causal link between an injury and a vaccine listed on the
Table.258 This rule would remove governmentally recognized harms from
the litigious off-Table adjudicatory process and leave undisturbed the
Secretary’s discretion to add other injuries to the Table for various scientific
or policy reasons.259
postinfectious neuritis, “is characterized by the rapid onset of flaccid motor weakness with
depression of tendon reflexes and inflammatory demyelination of peripheral nerves.” Id. at 34.
248. See GAO, VACCINE INJURY COMPENSATION, supra note 82, at 15.
249. Id.
250. See supra notes 79-84 and accompanying text.
251. Shifflett v. Sec’y of Health & Human Servs., 30 Fed. Cl. 341, 345 (1994).
252. See supra note 82 and accompanying text.
253. See Are Reforms Needed?, supra note 82, at 10.
254. See GAO, VACCINE INJURY COMPENSATION, supra note 82, at 13.
255. See Are Reforms Needed?, supra note 82, at 10.
256. See id.
257. See GAO, VACCINE INJURY COMPENSATION, supra note 82, at 32.
258. Cf. Grey, Plague of Causation, supra note 89, at 408 (calling for the expanded use of
educated scientific bodies like the IOM “to provide sufficient scientific input on causation” within
the Vaccine Program).
259. See GAO, VACCINE INJURY COMPENSATION, supra note 82, at 5.
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This per se rule would also leave undisturbed the Secretary’s ability to
challenge petitions that are truly “non-vaccine related cases.”260 Even if
claimants meet their prima facie burden by demonstrating that they suffered
an on-Table injury, the government may nonetheless challenge
compensation if it concludes that the Table has helped the claimant too
much.261 The Act expressly provides that special masters should deny
compensation if the Secretary proves that an on-Table injury is “due to
factors unrelated to the administration of the vaccine.”262
Finally, the Secretary should periodically review Vaccine Act case law
to learn what types of off-Table claims special masters are compensating.263
If, for example, special masters are routinely siding with claimants alleging a
particular type of injury not listed on the Table, then the Secretary should
consider that tide of jurisprudence as strong evidence that a sufficiently
legal—not necessarily medical—causal relationship exists for the injury to
be included on the Table.264 Or, at the very least, the government should
settle those cases instead of contentiously putting claimants to their
burden.265 Indeed, many special masters routinely compensate cases
alleging a causal relationship between the tetanus vaccine and Guillain-Barré
syndrome,266 which further dictates that the Secretary should add that injury
to the Table.267
260. Id. at 17.
261. See id. at 21.
262. 42 U.S.C. § 300aa-13(a)(1)(B) (2006); see also Knudsen ex rel. Knudsen v. Sec’y of
Health & Human Servs., 35 F.3d 543, 547 (Fed. Cir. 1994).
263. See Whitney S. Waldenberg & Sarah E. Wallace, When Science Is Silent: Examining
Compensation of Vaccine-Related Injuries when Scientific Evidence of Causation Is Inconclusive, 42
WAKE FOREST L. REV. 303, 322 (2007).
264. For example, only six percent of claims alleging certain demyelinating disorders from
hepatitis B vaccine were compensated between 1995 and 2000, but since that time, over eighty
percent of such claims have been compensated, which suggests that current special masters presume
entitlement to compensation for those injuries. See id. at 321-22.
265. See id. at 305.
266. Id. at 314 n.83 (listing cases).
267. Several other special master decisions have accepted a causal relationship between
Guillain-Barré syndrome and the hepatitis B, polio, and diphtheria-pertussis-tetanus vaccines, yet the
Table does not list the condition as an adverse affect for any of the vaccines. See id.
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B. Eliminate the Moral Hazard
1. Restructuring Appellate Procedures
The perverse incentives described in Part III.C derive from the
intersection of the Act’s multiple levels of appellate review and its feeshifting provision.268 Both aspects of the statute are thus possible targets for
reform to mitigate or eliminate the moral hazard that exists in the
Program.269
To change the Act’s appellate process, Congress could restrict the
number of appeals available to a losing party. It could, for example, make
special master decisions unreviewable. But that reform creates the obvious
problems of unchecked partiality, corruption, and misconduct. Another
option is to make the U.S. Court of Federal Claims the only level of appeal.
That change would at least limit the length of the appellate review process,
thereby reducing the costs and time spent appealing special master decisions.
Congress could also change the appellate process by heightening the
standard of review applied to special master decisions, making it less likely
that a losing party will prevail on appeal and (theoretically) dissuading
petitions for review. The Federal Arbitration Act (FAA),270 for example,
encourages finality of arbitrator decisions by permitting judges to reverse a
decision for only the most egregious errors, such as evident partiality, fraud,
or corruption.271 Echoing what Congress and the Federal Circuit have said
about the finality and deference afforded to special master decisions,272
many courts interpreting the FAA emphasize that judicial review of an
arbitrator’s judgment is so “exceedingly narrow”273 that “perhaps it ought
not be called ‘review’ at all.”274
268. See Baker, supra note 171, at 238.
269. Id.
270. 9 U.S.C. §§ 1-14 (2006).
271. Id. § 10(a).
272. See supra notes 128-30 and accompanying text.
273. Kane Gas Light & Heating Co. v. Int’l Bhd. of Firemen & Oilers, Local 112, 687 F.2d
673, 675 (3d Cir. 1982).
274. Baravati v. Josephthal, Lyon & Ross, Inc., 28 F.3d 704, 706 (7th Cir. 1994); see also
United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 36 (1987) (“[C]ourts play only a
limited role when asked to review the decision of an arbitrator.”); Ario v. Underwriting Members of
Syndicate 53 at Lloyds, 618 F.3d 277, 295-96 (3d Cir. 2010); Equitable Res., Inc. v. United Steel,
Local 8-512, 621 F.3d 538, 545 (6th Cir. 2010) (“We must affirm the arbitrator’s decision even if we
believe that the arbitrator made serious, improvident or silly errors in resolving the merits of the
dispute, which allows us to vacate only the most egregious arbitral awards.” (citations and quotation
omitted)); World Bus. Paradise, Inc. v. SunTrust Bank, No. 10-13119, 2010 U.S. App. LEXIS
24254, at *2-3 (11th Cir. Nov. 23, 2010) (“The FAA presumes that arbitration awards will be
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The deference the FAA affords to arbitrator decisions is particularly
appropriate because it would undermine the federal policy of encouraging
arbitration if courts ultimately resolved the merits of arbitrated cases.275 In
other words, expanded judicial review of arbitral awards would “create
hybrid, two-step procedures that waste public and private resources and are
inconsistent with the FAA . . . goals and functions.”276
So too with the Vaccine Program. Its current structure undermines
Congress’s goal of establishing a viable alternative to litigation because
claimants can easily bypass a special master’s decision and ask an Article III
judge to decide the case.277 The Program’s institutional function is similarly
destabilized. Instead of providing a generous, swift, and nonadversarial
route to compensation, those injured by vaccines must instead suffer through
years of a costly, uncertain, and contentious appellate review process.278
These two reforms—limiting the number of appeals and heightening the
standard of review—would reduce the amount of resources spent
challenging a special master decision. Yet they both fail to address the
Program’s underlying structural moral hazard. Neither reform addresses the
perverse incentives for claimants to enter the appellate process in the first
place.279
The problem with the Program is not simply the number of courts that
review special master decisions; appellate courts serve important functions
like protecting rights and unifying the law. Nor is the problem with the
standard that courts apply when conducting their review; the current abuse
confirmed, and federal courts should defer to an arbitrator’s decision whenever possible.” (quotation
and citation omitted)). But cf. Michael H. Leroy, Are Arbitrators Above the Law? The “Manifest
Disregard of the Law” Standard, 52 B.C. L. REV. 137, 139 (2011) (suggesting that many federal
courts of appeals actually deviate from arbitral finality and “overturn a high percentage” of certain
arbitration awards).
275. Misco, 484 U.S. at 36.
276. Amy J. Schmitz, Ending a Mud Bowl: Defining Arbitration’s Finality Through Functional
Analysis, 37 GA. L. REV. 123, 181-82 (2002); see also Kyocera Corp. v. Prudential-Bache Trade
Servs., Inc., 341 F.3d 987, 998 (9th Cir. 2003) (“Broad judicial review of arbitration decisions could
well jeopardize the very benefits of arbitration, rendering informal arbitration merely a prelude to a
more cumbersome and time-consuming judicial review process.”); Tom Ginsburg, The Arbitrator as
Agent: Why Deferential Review Is Not Always Pro-Arbitration, 77 U. CHI. L. REV. 1013, 1014
(2010) (commenting that, if review of arbitrator awards is not limited, “the benefits of arbitration in
terms of speed, cost, and finality may be lost because the parties will frequently appeal arbitral
awards to the courts”).
277. Jessen v. Sec’y of Health & Human Servs., No. 94-1029V, 1997 U.S. Claims LEXIS 20, at
*16-17 (Fed. Cl. Jan. 17, 1997) (noting “the Program goal of keeping cases out of the tort system”).
278. Id. at *21.
279. See Baker, supra note 171, at 238-39.
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of discretion standard means that special master decisions are already
“virtually unchallengeable on appeal.”280 These two reforms are band aids,
not cures. They merely contain the damage caused by the Act’s structural
flaw; they do not heal the underlying ailment.
2. Amend Section 15(e)
The proper way to remedy the Act’s structural moral hazard is by
mitigating the incentives that claimants have to file an appeal. Congress
must shift some of the risks and costs of appealing a case onto claimants and
their attorneys. Those transfers would reduce moral hazard by forcing
claimants to absorb some of the pecuniary risk associated with seeking
review of a special master decision denying compensation.
The law, however, should not move to the other extreme and require
claimants to fund their own cases entirely. The Program must remain
accessible to all people suffering from vaccine injuries. Any amendment to
the Act must ensure that cost considerations do not prevent victims from
entering the Program.
The same is true of claimants’ access to the appellate courts. If a special
master decision was erroneous, then claimants should be able to obtain relief
without bearing the burden of funding an appeal. Claimants should not be
“trapped” by an adverse special master decision, which could cause
dissatisfaction within the Program and lead to manifest injustice.281 Any
statutory remedy, therefore, must protect the right of claimants to challenge
special master decisions while simultaneously eliminating the moral hazard
that permits claimants to appeal without incurring any risk of loss.
To strike this balance, the Program could reimburse claimants for the
fees and costs of pursuing an appeal only if the appeal is successful. This
reform would essentially adopt a unilateral “loser-pays” policy.282 When
claimants lose an appeal, they pay their own expenses; when they win, the
government reimburses their costs.
A pure “loser-pays” policy goes too far, however, because if indigent
claimants have a legitimate challenge to a special master’s ruling, their
willingness to pursue that argument should not be contingent upon their
280. Lampe v. Sec’y of Health & Human Servs., 219 F.3d 1357, 1362 (Fed. Cir. 2000).
281. Cf. Ginsburg, supra note 276, at 1014 (noting that, if review of arbitrator awards is too
limited, “arbitrators might deliver poor-quality decisions that undermine the attractiveness of
arbitration as a whole”).
282. For a comparison of the “American rule” cost regime, in which parties bear their own
expenses irrespective of the outcome, and the “loser-pays rule,” in which losers compensate winners
for their costs, see Susan D. Franck, Rationalizing Costs in Investment Treaty Arbitration, 88 WASH.
U. L. REV. 769, 791-95 (2011).
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attorney’s ability to forecast success. Even the best attorneys and brightest
scholars cannot always accurately predict what an appellate court will
decide,283 and very few (if any) special master decisions are certain to be
overturned on appeal.284 Nor is appellate review necessarily a bad thing. A
decision from the Federal Circuit can resolve discrepancies in the law, even
if doing so involves sustaining a decision denying compensation. The
Vaccine Act should encourage some level of appellate activity.
A better rule is to make claimants bear some—but not all—of the
financial risk of seeking review of an adverse special master decision. For
example, the Act could establish a cap on the amount of fees available for
conducting an appeal, which claimants could receive regardless of the
ultimate case disposition. A cap, however, is an inflexible and arbitrary
solution that could not respond to legitimate cost discrepancies for variations
of attorney skill, experience, or preparation.285 Nor could it provide extra
payment for unusually burdensome representation in a particularly complex
case. And caps always present the “unacceptable risk that counsel will limit
the amount of time invested in the representation in order to maximize the
return on the fixed fee.”286
The best solution, therefore, is to amend the Vaccine Act to reimburse
claimants for only half of the fees and costs expended when they pursue an
ultimately unsuccessful appeal. This rule would not apply to cases in which
the government seeks review of a special master decision—all fees and costs
incurred while defending a decision awarding compensation would be
reimbursable. This rule would also leave unchanged the fee-shifting rules
for proceedings before special masters. Thus, the amended Act would not
prevent any indigents from filing a petition for compensation in the Program
and asking a special master to pass on its merits.
To effect this change, Congress should add the following language to
section 15(e) of the Vaccine Act:
This subsection applies only to proceedings conducted before a special master. If the
special master denies compensation, petitioners shall pay half of their own reasonably
283. See generally Harry T. Edwards & Michael A. Livermore, Pitfalls of Empirical Studies
that Attempt to Understand the Factors Affecting Appellate Decisionmaking, 58 DUKE L.J. 1895
(2009) (discussing why judicial decisionmaking is such a difficult object of empirical investigation
and scholarly inquiry).
284. See supra notes 122-31 and accompanying text.
285. See American Bar Association, Guidelines for the Appointment and Performance of
Defense Counsel in Death Penalty Cases, 31 HOFSTRA L. REV. 913, 987-88 (2003).
286. Id. at 988.
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expended fees and costs for all subsequent appeals unless the final reviewing court
reverses the special master’s decision. If the special master or any reviewing court
awards compensation to a petitioner and the Secretary seeks review of that decision, this
subsection shall apply.
This amendment shifts to claimants and their attorneys some financial
burden of seeking review of a special master decision denying
compensation. If the claimant ultimately prevails on appeal, however, all
fees and costs incurred in any proceeding on the case—including appeals—
are reimbursable. If the claimant ultimately loses, then any fees and costs
incurred before a special master, and half of the fees and costs incurred on
appeal, are reimbursable.
C. Potential Objections
My proposed amendment to section 15(e) is subject to at least three
criticisms. First, that it will encourage attorney misconduct; second, that it
will backfire and actually increase the contentiousness of Program
proceedings; and third, that shifting any costs onto claimants will
disadvantage people who lack the resources to afford an attorney. This
subsection discusses and rebuts each counterargument.
1. This Will Encourage Excessive Billing
One might argue that amending the Act’s fee-shifting provision to
reimburse only half of the fees and costs incurred on appeal would create
another type of perverse incentive: encouraging attorneys to bill unnecessary
hours to guard against the possibility of “losing” half of their fees on an
unsuccessful appeal. Put another way, counsel will hedge their bets and bill
more hours than reasonably necessary to provide effective representation.
The proposed amendment, however, would leave unchanged an
important safeguard against this potential attorney misconduct: section
15(e)(1)(A), which provides that special masters may award only
“reasonable” attorneys’ fees and costs.287 A court scrutinizing an attorney’s
request for payment could thus reduce the award if it finds that the attorney
billed excessive hours or incurred unnecessary costs. Special masters
frequently reduce attorney requests for reimbursement for those exact
reasons.288 And of course, rules regulating professional conduct would
287. 42 U.S.C. § 300aa-15(e)(1)(A) (2006) (emphasis added).
288. See, e.g., Doe v. Sec’y of Health & Human Servs., 2010 U.S. Claims LEXIS 47, at *27-28
(Fed. Cl. Jan. 29, 2010) (awarding attorneys’ fees for only 22.7 hours of the requested 77.8 hours
spent producing a post-hearing brief that was “25 pages in length, more than half of which
(specifically, thirteen pages) are block quotes taken directly from the transcript”); Stone v. Sec’y of
44
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PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL
remain in effect to deter and punish any particularly egregious attorney
misbehavior.
2. This Could Backfire
Another counterargument is that, by decreasing claimants’ incentives to
appeal an adverse decision, the initial case disposition would become
excessively important. Claimants will thus dedicate even more resources to
obtain a beneficial special master decision, recognizing that they may have
to fund part of the cost of appealing an adverse decision. And by injecting
more resources into the proceedings before special masters, the parties will
inevitably seek more discovery, file more motions, and present more expert
testimony. In other words, my proposed amendment could backfire by
making Program proceedings look even more like civil litigation.
This counterargument fails because it turns the programmatic benefit of
finality on its head. Yes, the importance of special master decisions will
increase because the amendment enhances the finality of their judgments.
And yes, the amendment encourages claimants to put on their best evidence
and make their strongest arguments as soon as possible. But that is the
point, not the problem. The principal goal of amending the Act is to restore
the Program’s integrity as an alternative dispute resolution forum, which
means increasing the importance and finality of judgments issued by that
forum. Claimants undermine those goals when they circumvent the
Program, advance their strongest arguments on appeal, and ask the Federal
Circuit to resolve their case. If my proposed amendment transforms special
masters into the final arbiter of vaccine injury claims, it will be a success,
not a failure.
Regardless, it is unlikely that claimants will respond to the amendment
by spending more time and money proving their cases to special masters.
The standard of review applied to Program decisions is already very
stringent,289 and counsel within the Program certainly know that it is difficult
Health & Human Servs., No. 04-1041V, 2010 U.S. Claims LEXIS 753 at *2, *32 (Fed. Cl. Sept. 8,
2010) (awarding $131,614.84 for attorneys’ fees and costs despite petitioners request for
$157,873.86); Masias v. Sec’y of Health & Human Servs., 2010 U.S. Claims LEXIS 209, at *2 (Fed.
Cl. Apr. 14, 2010) (denying petitioner’s request for $59,072.50 in fees and awarding $25,851.40
because petitioner “sought compensation for his attorney at an unreasonably high hourly rate”);
Mueller v. Sec’y of Health & Human Servs., No. 06-775V, 2010 U.S. Claims LEXIS 403, at *17
(Fed. Cl. May 27, 2010) (reducing the amount of compensable attorney time by 52.8 hours because
the amount requested was “excessive”).
289. See supra notes 123-26 and accompanying text.
45
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to convince the U.S. Court of Federal Claims and the Federal Circuit to
reverse special master decisions.290 Claimants are thus probably not
withholding effort at the first stage of case adjudication. The potential for
increased resource expenditures during proceedings before special masters is
minimal, at most.
3. This Will Hurt Indigent Claimants
The final objection to my proposed amendment is that shifting some
financial risk of filing an appeal back onto claimants would hurt indigent
petitioners and undermine Congress’s goal of ensuring that all people have
access to legal counsel in the Program.291
Eliminating the perverse incentives for claimants to seek appellate
review, however, does not affect their ability to enter the Program in the first
place. Nor does it restrict the quality of legal representation that claimants
receive during the initial adjudicatory process because all fees and costs
incurred before special masters will remain reimbursable regardless of what
the special master decides. Plus, if a special master commits reversible
error, the amended section 15(e) does not transfer to claimants the costs of
remedying that error because the Program will still compensate fees incurred
during a successful appeal.292
It is also important to remember that even if the Act is amended as I
propose here, the Program will remain a more claimant-friendly forum than
the civil tort system where plaintiffs almost always pay their own attorneys’
fees and costs, even if they prevail.293
290. See Little, supra note 113, at 363-64 (explaining that, because the Act requires “the Court
of Federal Claims to review [special master] decisions with substantial deference, the Federal Circuit
is unlikely to provide compensation if the lower courts deny it”).
291. See supra note 134.
292. See Hines v. Sec’y of Health & Human Servs., 26 Cl. Ct. 114 (1992) (holding that the
special master had the authority to award attorneys’ fees and costs that were incurred while making
an appeal to the Court of Appeals for the Federal Circuit).
293. See Franck, supra note 282, at 792 (discussing the “American rule” for litigation-related
fees and costs); see also Jeff Holth, Comment, Civil Procedure: I Win, You Pay: Considerations of
Efficiency and Fairness in Minnesota Appellate Litigation of Attorney’s Fees—T.A. Schifsky &
Sons, Inc. v. Bahr Construction, LLC, 37 WM. MITCHELL L. REV. 267, 272-73 (2011). The Vaccine
Act’s claimant-friendly, fee-shifting regime partially explains why claimants rarely leave the
Program and file traditional civil actions, which the Act permits after claimants have been in the
Program for 420 days. See supra note 63; cf. GAO, VACCINE INJURY COMPENSATION, supra note
82, at 11 (reporting that no claimant had withdrawn a claim from the Program and filed suit in civil
court).
46
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VII. CONCLUSION
The Vaccine Act is structurally flawed. By providing claimants with
nearly unlimited sums of money to appeal adverse special master decisions,
the Program invites litigious posturing and tempts unsuccessful claimants to
continue fighting in the appellate courts. These perverse incentives
undermine the Program’s function as an effective alternative forum for
resolving disputes involving claims of vaccine injury.
When Congress passed the Vaccine Act in 1986, it made a commitment
to people who assume the risk of vaccination: if you suffer an adverse
reaction, the law will provide an informal adjudicatory process for you to
obtain compensation “quickly, easily, and with certainty and generosity.”294
The government is not upholding its end of that social compact. Over the
past twenty-five years, case dispositions in the Program have become
increasingly slow, costly, and adversarial. Instead of being an effective
alternative adjudicatory forum, the Program has morphed into a mere
precursor to civil litigation in the federal courts—the very dispute resolution
process that Congress wanted to replace.
The easiest way to restore some of the Program’s integrity as a
functional alternative to litigation is for special masters to prohibit parties
from using tactics and adopting postures that are antithetical to quick,
informal, and streamlined dispute resolution. Another easy fix is for the
Secretary of Health and Human Services to add new injuries to the Vaccine
Table, thereby moving additional claims onto a less contentious path to
compensation. The best solution, however, is for Congress to reform the
“free appeals” structure of the Program. By eliminating that source of moral
hazard, and by requiring claimants to evaluate the pecuniary risks of
appealing an adverse special master decision, proceedings in the Program
will become more final, more legitimate, and more efficient. In other words,
the Vaccine Program will begin to fulfill its purpose in the social compact.
294.
47
H.R. REP. NO. 99-908, at 3 (1986), reprinted in 1986 U.S.C.C.A.N. 6344, 6344.
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APPENDIX: VACCINE PROGRAM CASES DECIDED BY THE U.S. COURT OF
APPEALS FOR THE FEDERAL CIRCUIT, 1995-2011
Case Name
Porter v. Sec’y
of Health &
Human Servs.,
663 F.3d 1242
(Fed. Cir.
2011).
Rickett v.
Sec’y of
Health &
Human Servs.,
No. 20115038, 2011
U.S. App.
LEXIS 23126
(Fed. Cir. Nov.
18, 2011).
Lombardi v.
Sec’y of
Health &
Human Servs.,
No. 20115004, 2011
U.S. App.
LEXIS 18488
(Fed. Cir.
Sept. 6, 2011).
Cloer v. Sec’y
of Health &
Human Servs.,
No. 20095052, 2011
U.S. App.
LEXIS 16449
48
Appellant
Decision
Victor
Motion
for
Reh’g?
Governme
nt
Reversed
and
Remanded
Government
no
no
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
Cert.
Filed?
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PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL
(Fed. Cir. Aug.
5, 2011).
Hall v. Sec’y
of Health &
Human Servs.,
640 F.3d 1351
(Fed. Cir.
2011).
McCollum v.
Sec’y of
Health &
Human Servs.,
412 F. App’x
302 (Fed. Cir.
2011).
Masias v.
Sec’y of
Health &
Human Servs.,
634 F.3d 1283
(Fed. Cir.
2011).
Davis v. Sec’y
of Health &
Human Servs.,
409 F. App’x
342 (Fed. Cir.
2011).
Rodriguez v.
Sec’y of
Health &
Human Servs.,
632 F.3d 1381
(Fed. Cir.
2011).
Riggins v.
Sec’y of
Health &
Human Servs.,
49
Claimant
Affirmed
Government
no
yes
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
yes
yes
Claimant
Affirmed
Government
no
no
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No. 20105078, 2011
U.S. App.
LEXIS 162
(Fed. Cir. Jan.
4, 2011).
Broekelschen
v. Sec’y of
Health &
Human Servs.,
618 F.3d 1339
(Fed. Cir.
2010).
Cedillo v.
Sec’y of
Health &
Human Servs.,
617 F.3d 1328
(Fed. Cir.
2010).
Shaw v. Sec’y
of Health &
Human Servs.,
609 F.3d 1372
(Fed. Cir.
2010).
Hazlehurst v.
Sec’y of
Health &
Human Servs.,
604 F.3d 1343
(Fed. Cir.
2010).
Cloer v. Sec’y
of Health &
Human Servs.,
603 F.3d 1341
(Fed. Cir.
2010).
Doe v. Sec’y
of Health &
Human Servs.,
50
3/23/2012 8:14 PM
Claimant
Affirmed
Government
yes
no
Claimant
Affirmed
Government
no
no
Claimant
Reversed
Claimant
no
no
Claimant
Affirmed
Government
no
no
Claimant
Reversed
Claimant
yes
no
Claimant
Affirmed
Government
no
yes
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601 F.3d 1349
(Fed. Cir.
2010).
Wilkerson v.
Sec’y of
Health &
Human Servs.,
593 F.3d 1343
(Fed. Cir.
2010).
Moberly ex
rel. Moberly v.
Sec’y of
Health &
Human Servs.,
592 F.3d 1315
(Fed. Cir.
2010).
Andreu ex rel.
Andreu v.
Sec’y of
Health &
Human Servs.,
569 F.3d 1367
(Fed. Cir.
2009).
De Bazan v.
Sec’y of
Health &
Human Servs.,
539 F.3d 1347
(Fed. Cir.
2008).
Mojica v.
Sec’y of
Health &
Human Servs.,
287 F. App’x
103 (Fed. Cir.
51
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
yes
no
Claimant
Reversed
Claimant
no
no
Governme
nt
Reversed
Government
yes
no
Claimant
Affirmed
Government
yes
yes
(06) BOXLER (DO NOT DELETE)
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2008).
Zatuchni v.
Sec’y of
Health &
Human Servs.,
516 F.3d 1312
(Fed. Cir.
2008).
Avera v. Sec’y
of Health &
Human Servs.,
515 F.3d 1343
(Fed. Cir.
2008).
Marks v. Sec’y
of Health &
Human Servs.,
268 F. App’x
913 (Fed. Cir.
2007).
Walther v.
Sec’y of
Health &
Human Servs.,
485 F.3d 1146
(Fed. Cir.
2007).
Markovich v.
Sec’y of
Health &
Human Servs.,
477 F.3d 1353
(Fed. Cir.
2007).
Wiley v. Sec’y
of Health &
Human Servs.,
211 F. App’x
960 (Fed. Cir.
2007).
52
Governme
nt
Affirmed
Claimant
no
no
Claimant
Affirmed
in Part
and
Reversed
in Part
Split
(Mostly
Gov’t)
yes
no
Claimant
Affirmed
Government
yes
yes
Claimant
Reversed
Claimant
no
no
Claimant
Affirmed
Government
no
yes
Claimant
Affirmed
Government
no
no
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PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL
Aull v. Sec’y
of Health &
Human Servs.,
462 F.3d
1338 (Fed. Cir.
2006).
Pafford v.
Sec’y of
Health &
Human Servs.,
451 F.3d 1352
(Fed. Cir.
2006).
Capizzano v.
Sec’y of
Health &
Human Servs.,
440 F.3d
1317 (Fed. Cir.
2006).
Althen v.
Sec’y of
Health &
Human Servs.,
418 F.3d
1274 (Fed. Cir.
2005).
Baker v. Sec’y
of Health &
Human Servs.,
112 F. App’x
35 (Fed. Cir.
2004).
Guillory v.
Sec’y of
Health &
Human Servs.,
104 F. App’x
712 (Fed. Cir.
53
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
yes
yes
Claimant
Reversed
Claimant
no
no
Governme
nt
Affirmed
Claimant
no
no
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
(06) BOXLER (DO NOT DELETE)
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2004).
Mahaffey v.
Sec’y of
Health &
Human Servs.,
368 F.3d 1378
(Fed. Cir.
2004).
Brice v. Sec’y
of Health &
Human Servs.,
358 F.3d 865
(Fed. Cir.
2004).
Hebern v.
Sec’y of
Health &
Human Servs.,
81 F. App’x
333 (Fed. Cir.
2003).
Hulbert v.
Sec’y of
Health &
Human Servs.,
35 F. App’x
899 (Fed. Cir.
2002).
Turner v.
Sec’y of
Health &
Human Servs.,
268 F.3d 1334
(Fed. Cir.
2001).
Helms v.
Sec’y of
Health &
Human Servs.,
10 F. App’x
54
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
yes
no
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PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL
934 (Fed. Cir.
2001).
Chapman v.
Sec’y of
Health &
Human Servs.,
7 F. App’x 966
(Fed. Cir.
2001).
Brice v. Sec’y
of Health &
Human Servs.,
240 F.3d
1367 (Fed. Cir.
2001).
Goetz v. Sec’y
of Health &
Human Servs.,
4 F. App’x 827
(Fed. Cir.
2001).
Golub v. Sec’y
of Health &
Human Servs.,
No. 99-5161,
2000 U.S.
App. LEXIS
24858 (Fed.
Cir. Oct. 3,
2000).
Lampe v.
Sec’y of
Health &
Human Servs.,
219 F.3d 1357
(Fed. Cir.
2000).
55
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
yes
Claimant
Affirmed
Government
no
no
Claimant
Reversed
Claimant
no
no
Claimant
Affirmed
Government
no
no
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Vant Erve ex
rel. Vant Erve
v. Sec’y of
Health &
Human Servs.,
No. 99-5093,
2000 U.S.
App. LEXIS
6907 (Fed. Cir.
Apr. 18,
2000).
Jackson v.
Sec’y of
Health &
Human Servs.,
No. 00-5020,
2000 U.S.
App. LEXIS
2534 (Fed. Cir.
Feb. 1, 2000).
O’Connell v.
Sec’y of
Health &
Human Servs.,
No. 98-5134,
1999 U.S.
App. LEXIS
28427 (Fed.
Cir. Nov. 1,
1999).
Terran v.
Sec’y of
Health &
Human Servs.,
195 F.3d 1302
(Fed. Cir.
1999).
Suel v. Sec’y
of Health &
Human Servs.,
192 F.3d 981
(Fed. Cir.
56
3/23/2012 8:14 PM
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
yes
yes
Claimant
Affirmed
Government
yes
yes
Governme
nt
Affirmed
Claimant
yes
no
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PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL
1999).
Hanlon v.
Sec’y of
Health &
Human Servs.,
191 F.3d 1344
(Fed. Cir.
1999).
Lowry ex rel.
Lowry v.
Sec’y of
Health &
Human Servs.,
189 F.3d 1378
(Fed. Cir.
1999).
McGinley v.
Sec’y of
Health &
Human Servs.,
No. 98-5001,
1999 U.S.
App. LEXIS
10980 (Fed.
Cir. May 26,
1999).
Barnes v.
Sec’y of
Health &
Human Servs.,
No. 98-5050,
1999 U.S.
App. LEXIS
1095 (Fed. Cir.
Jan. 28, 1999).
Shyface v.
Sec’y of
Health &
57
Claimant
Affirmed
Government
yes
yes
Claimant
Reversed
and
Remanded
Claimant
no
no
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
Claimant
Reversed
Claimant
no
no
(06) BOXLER (DO NOT DELETE)
Human Servs.,
165 F.3d 1344
(Fed. Cir.
1999).
Haggerty ex
rel. Haggerty
v. Sec’y of
Health &
Human Servs.,
No. 98-5049,
1998 U.S.
App. LEXIS
33119 (Fed.
Cir. 1998).
Giles v. Sec’y
of Health &
Human Servs.,
No. 97-5082,
1998 U.S.
App. LEXIS
11828 (Fed.
Cir. June 5,
1998).
Robles v.
Sec’y of
Health &
Human Servs.,
No. 97-5144,
1998 U.S.
App. LEXIS
9410 (Fed. Cir.
May 7, 1998).
Snyder ex rel.
Snyder v.
Sec’y of
Health &
Human Servs.,
117 F.3d
545 (Fed. Cir.
1997).
58
3/23/2012 8:14 PM
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
Claimant
Reversed
and
Remanded
Claimant
no
no
Claimant
Affirmed
Government
no
no
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PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL
Stroud v.
Sec’y of
Health &
Human Servs.,
No. 97-5014,
1997 U.S.
App. LEXIS
11117 (Fed.
Cir. May 14,
1997).
Brown v.
Sec’y of
Health &
Human Servs.,
No. 97-5010,
1997 U.S.
App. LEXIS
7616 (Fed. Cir.
Apr. 17,
1997).
Weddel v.
Sec’y of
Health &
Human Servs.,
100 F.3d 929
(Fed. Cir.
1996).
Johnson v.
Sec’y of
Health &
Human Servs.,
No. 95-5152,
1996 U.S.
App. LEXIS
28093 (Fed.
Cir. Oct. 30,
1996).
*Black v.
Sec’y of
59
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
(06) BOXLER (DO NOT DELETE)
Health &
Human Servs.,
93 F.3d 781
(Fed. Cir.
1996).
*Black v.
Sec’y of
Health &
Human Servs.,
93 F.3d 781
(Fed. Cir.
1996).
*Black v.
Sec’y of
Health &
Human Servs.,
93 F.3d 781
(Fed. Cir.
1996).
Hervey v.
Sec’y of
Health &
Human Servs.,
88 F.3d 1001
(Fed. Cir.
1996).
Brown v.
Sec’y of
Health &
Human Servs.,
No. 96-5068,
1996 U.S.
App. LEXIS
14148 (Fed.
Cir. June 12,
1996).
Benenati v.
Sec’y of
Health &
Human Servs.,
No. 96-5015,
1996 U.S.
60
3/23/2012 8:14 PM
Claimant
Affirmed
Government
no
no
Claimant
Reversed
Claimant
no
no
Claimant
Affirmed
Government
no
yes
Claimant
Affirmed
Government
no
yes
Claimant
Affirmed
Government
no
no
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PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL
App. LEXIS
11372 (Fed.
Cir. May 17,
1996).
Whitecotton v.
Sec’y of
Health &
Human Servs.,
81 F.3d 1099
(Fed. Cir.
1996).
Salceda v.
Sec’y of
Health &
Human Servs.,
70 F.3d 608
(Fed. Cir.
1995).
Mowen v.
Sec’y of
Health &
Human Servs.,
No. 95-5040,
1995 U.S.
App. LEXIS
32279 (Fed.
Cir. Nov. 17,
1995).
McAllister v.
Sec’y of
Health &
Human Servs.,
70 F.3d 1240
(Fed. Cir.
1995).
Martin ex rel.
Martin v.
Sec’y of
Health &
61
Claimant
Affirmed
in Part,
Reversed
in Part,
and
Remanded
Split
(Mostly
Claimant)
yes
no
Claimant
Affirmed
Government
no
no
Claimant
Affirmed
Government
no
no
Claimant
Reversed
and
Remanded
Claimant
no
no
Claimant
Affirmed
Government
no
no
(06) BOXLER (DO NOT DELETE)
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Human Servs.,
62 F.3d 1403
(Fed. Cir.
1995).
Gilbert ex rel.
Gilbert v.
Sec’y of
Health &
Human Servs.,
51 F.3d
254 (Fed. Cir.
1995).
Claimant
Affirmed
Government no
no
Flowers v.
Sec’y of
Health &
Human Servs.,
49 F.3d 1558
(Fed. Cir.
1995).
Claimant
Affirmed
Government no
no
* The Black opinion was a consolidated appeal involving three cases. To
show the disposition of each case, Black has three separate entries on this
Table.
62
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Mediation Confidentiality: For
California Litigants, Why Should
Mediation Confidentiality be a
Function of the Court in Which the
Litigation is Pending?
Rebecca Callahan*
I.
OVERVIEW
In opening a mediation session, it is fairly routine for the mediator to
promise comprehensive confidentiality to the participants. 1 While there are
a number of statutes, rules, and cases that support confidentiality in
mediation,2 a certain amount of skepticism and concern exists regarding the
scope of protection that actually exists.3 The uncertainty about the nature
* Rebecca Callahan is an independent mediator and arbitrator in Newport Beach, California. Ms.
Callahan received her J.D. from the University of California, Berkeley (Boalt Hall) and her B.A.
from the University of Southern California. In 2007, she received an LL.M. in Dispute Resolution
from Pepperdine University School of Law, Straus Institute for Dispute Resolution. Ms. Callahan is
on the mediation and commercial arbitration panels of the American Arbitration Association and is
an adjunct professor at Pepperdine University School of Law where she teaches Mediation Theory
and Practice. Ms. Callahan frequently speaks and writes on various dispute resolution topics. Her
most recent publications include What to Do when Insolvency Becomes an Issue in Mediation, 14
CONFLICT MGMT. (ABA SEC. LITIG.), Issue 2, Winter/Spring 2010 (Part 1) and 14 C ONFLICT
MGMT. (ABA SEC. LITIG.), Issue 3, Summer/Fall 2010 (Part 2); Truth or Dare: California’s New
Ethics Standards for Private Arbitrators, 18 BUS. L. NEWS, Issue 1, 2008; and California’s New
Ethics Standards: A Hot Bed of Controversy and Conflicting Decisions, 5 J. AM. ARB. 295 (2006).
Ms. Callahan is a past president of The Peter M. Elliott American Inn of Court and is the current
Chair-elect of the Alternative Dispute Resolution Section of the Orange County Bar Association.
1. Indeed, in the context of an attorney–mediator’s ethical obligations, some courts have
charged attorney–mediators with the obligation to receive and preserve confidences in much the
same manner as the attorney–client privilege. See Poly Software Int’l, Inc. v. Su, 880 F. Supp. 1487
(D. Utah 1995) (law firm disqualified when one of the firm’s attorneys had served as a mediator in
the litigated matter); McKenzie Constr. v. St. Croix Storage Corp., 961 F. Supp. 857 (D.V.I. 1997).
2. See infra Part III.
3. See infra notes 5-6 and accompanying text.
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and extent of what confidentiality protections exist for things said in
mediation is especially apparent in federal court litigation disputes. 4 As
discussed below, the scope of protection available under California law is
quite broad as compared to that available under federal law which is unclear
and minimal at best.
Scholars have recognized that “as a legal matter, there is still
considerable uncertainty about the extent to which communications made
during the process of mediating a dispute are protected from disclosure in
subsequent legal proceedings.” 5 One authority has opined that “[c]urrently,
it is not an overstatement to say that no mediator or counsel in the country
can, with confidence, predict the extent to which it will be possible to
maintain the confidentiality of a mediation.”6
As discussed below, both state and federal courts recognize that a
theoretical component of mediation is confidentiality. While California has
express statutory provisions that provide for confidentiality protections, and
numerous Supreme Court of California decisions endorse those protections,
no similar protections are available under federal law.7 Therefore, the
confidentiality protections afforded California litigants with respect to
communications had in mediation may depend on whether litigation is
pending or ultimately filed in state or federal court. Because mediation is a
nonjudicial alternative to litigation in the courts, the question posed by this
article is: Why should mediation confidentiality depend upon (a) whether the
dispute has escalated to the point of litigation, and (b) whether that litigation
is pending in state or federal court?8
II. CONFIDENTIALITY AS AN INTEGRAL PART OF MEDIATION
The inclusion of confidentiality as a defining feature of mediation
comes from its theoretical underpinnings. “The salient features of mediation
4. See infra Part IV; see also D WIGHT GOLANN, MEDIATING LEGAL D ISPUTES 218-220
(2009); Dennis Sharp, The Many Faces of Mediation Confidentiality, in HANDBOOK ON MEDIATION
223-236 (2d ed. 2010).
5. See Kenneth R. Feinberg, Mediation—A Preferred Method of Dispute Resolution, 16 PEPP.
L. REV. S5, 28 (1989); Note, Protecting Confidentiality in Mediation, 98 HARV. L. REV. 441, 44647 (1984); see also Lawrence R. Freedman & Michael L. Pigroff, Confidentiality in Mediation: The
Need for Protection, 2 OHIO ST. J. ON D ISP. RESOL. 37 (1986).
6. Ellen E. Deason, Predictable Mediation Confidentiality in the U.S. Federal System, 17
OHIO ST. J. D ISP. RESOL. 239, 241 (2002).
7. See infra Part IV.
8. See discussion infra Part III (California statutory law makes communications in mediation
inadmissible as evidence in any legal proceeding); Part IV (no similar counterpart exists under
federal law). Therefore, a California litigant bears the risk that statements made or writings prepared
during mediation of a state court dispute may become admissible as evidence in a subsequent or
related federal court action.
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are an informal process, a neutral mediator without authority to command a
result, disputants who participate voluntarily and settle of their own accord,
and . . . confidentiality of mediation communications.” 9 Some have said that
confidentiality is vital to mediation because compromised negotiations often
require parties to reveal deep-seated feelings or sensitive issues or to make
admissions and concessions which would be “impossible if the parties were
constantly looking over their shoulders.”10 Problem-solving discussions are
a key part of negotiations and require the parties to provide reasons and
explanations for their proposals, assumptions, and expectations, which might
require the exchange of personal, proprietary, or otherwise confidential
information in order for these discussions to be successful. 11 Because
mediation is nonbinding and can only result in a settlement if and to the
extent that the disputants agree to a negotiated resolution, parties have
legitimate reasons for being concerned that statements made in an effort to
resolve a dispute might be used against them should a full settlement not be
achieved.12
There is general agreement that mediation is a communication process
in which the goal is a negotiated resolution of a dispute, or at least progress
towards that end, with the mediator being tasked with the job of facilitating
constructive dialogue between or among disputants. 13 The willingness of the
9. Alan Kirtley, The Mediation Privilege’s Transition from Theory to Implementation:
Designing a Mediation Privilege Standard to Protect Mediation Participants, the Process, and the
Public, 1995 J. D ISP. RESOL. 1, 6 (1995); see also JAMES J. ALFINI ET AL., MEDIATION THEORY
AND PRACTICE 205 (2d ed. 2006) (“Confidentiality is generally considered to be an essential
ingredient in mediation.”); Sharp, supra note 4, at 223 (“Confidentiality is one of the keys to the
acceptability and success of mediation among parties to a dispute.”).
10. Michael L. Prigoff, Toward Candor or Chaos: The Case of Confidentiality in Mediation,
12 SETON HALL LEGIS. J. 1, 103 (1988).
11. ALFINI, supra note 9, at 133, 205-06.
12. Sharp, supra note 4, at 225.
13. See SUZANNE MCCORKLE & MELANIE J. REESE, MEDIATION THEORY & PRACTICE 33
(2005).
Mediators listen to the disputants’ stories, allow them to vent their frustrations, validate
each person’s worth and feelings, and provide appropriate feedback. Mediators are
conduits of information. They allow parties to share information with each other and
enable parties to understand each other’s perspective. Mediators keep communication
focused on important and relevant issues. They help disputants discover and express
their own interests and goals. Mediators are links to additional expertise, data, or
resources that may be required to settle a dispute. They know the services available in
their community and assist the parties to determine if outside, objective data are required.
Mediators are boundary keepers when they frame issues, moderate emotions, and contain
the conflict within a productive range.
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parties to “open up” is critical to the mediator’s ability to engage parties in
the problem-solving and negotiation aspects of mediation. 14 As one
authority put it, “Mediation is a communication process; solving legal
problems is simply a byproduct.”15
III. CALIFORNIA’S STRICT CONFIDENTIALITY SCHEME
California favors settlement of civil disputes, as evidenced by the
enactment of Code of Civil Procedure section 1775, which states that “[t]he
peaceful resolution of disputes in a fair, timely, appropriate, and costeffective manner is an essential function of the judicial branch of state
government . . . .”16 To effectuate this policy, the state legislature has
expressly validated mediation as a process that “provides parties with a
simplified and economical procedure for obtaining prompt and equitable
resolution of their disputes and a great opportunity to participate directly in
resolving these disputes.”17 Because mediation provides a simple, quick,
and economical means of resolving disputes, and because it may also help
reduce the court system’s backlog of cases, California has recognized that
the public has an interest in protecting not only mediation participants, but
also the mediation process itself.18
A. What Qualifies as a “Mediation” for Purposes of Confidentiality
Protection?
The starting point for California’s mediation confidentiality scheme is
Evidence Code section 1115, which defines the processes that qualify for
confidentiality protection. 19 This protection extends to “mediations” and
“mediation consultations.”20 A mediation consultation is defined as “a
communication between a person and a mediator for the purpose of
initiating, considering, or reconvening a mediation or retaining the
mediator.”21 Mediation is defined as “a process in which a neutral person or
persons facilitate communication between the disputants to assist them in
Id.
14. Kirtley, supra note 9, at 6.
15. Kent L. Brown, Comment, Confidentiality in Mediation: Status and Implications, 1991 J.
DISP. RESOL. 307, 309 (1991).
16. CAL. CIV. PROC. CODE § 1775(a) (West 2011).
17. Id. § 1775(c).
18. See Rojas v. Superior Court, 93 P.3d 260, 264-65 (Cal. 2004).
19. See CAL. EVID. C ODE § 1115 (West 2011).
20. Id. § 1115(a), (c).
21. Id. § 1115(c).
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reaching a mutually acceptable agreement.” 22 The comments to section
1115 make it clear that what qualifies as a mediation is to be determined by
“the nature of a proceeding, not its label,” and that a proceeding might
qualify as a mediation for purposes of the confidentiality protections “even
though it is denominated differently.”23 The fact that a court may use the
terms “mediation” and “settlement” interchangeably when referring to the
process taking place or the fact that a judicial officer might be assigned to
preside over the talks will not transform the proceeding into a mandatory
settlement conference without a clear record that such a conference was
ordered.24 This is an important distinction because Evidence Code section
1117(b)(2) provides that the confidentiality protections afforded to
communications in mediation do not apply to communications during a
mandatory settlement conference convened pursuant to rule 3.1380 of the
California Rules of Court. 25
The Archdiocese Case is an example of how broadly courts have
construed what qualifies as a mediation for purposes of affording
confidentiality protection to facilitated settlement discussions. 26 In the
Archdiocese Case, the Roman Catholic Bishop of Los Angeles had been
named as the principal defendant in nearly 500 lawsuits based upon
allegations that various priests had committed acts of childhood sexual
molestation on the plaintiffs. 27 The court appointed a judge to facilitate
“settlement and mediation” among the parties. 28 As part of that process, the
church prepared “written summaries of its personnel and other files
concerning more than 100 priests who had been identified as molesters” and
submitted them to the settlement judge for use in his settlement and
mediation efforts.29 The church stated that it planned to release the
summaries publicly once they were completed. 30 In response, some of the
accused priests filed a motion for protective order to bar public disclosure of
22. Id. § 1115(a).
23. Id. § 1115(a) cmt. (1997).
24. See Doe 1 v. Superior Court (Archdiocese Case), 34 Cal. Rptr. 3d 248, 252 (Ct. App.
2005) (“Except where the parties have expressly agreed otherwise, appellate courts should not seize
on an occasional reference to ‘settlement’ as a means to frustrate the mediation confidentiality
statutes.”).
25. CAL. EVID. CODE § 1117 (West 2010).
26. See Archdiocese Case, 34 Cal. Rptr. 3d 248.
27. See id. at 249-50.
28. Id.
29. Id.
30. Id. at 1164.
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the written summaries. 31 In addition to privacy and privilege issues, the
priests argued that the proposed release violated the mediation
confidentiality protections afforded by the Evidence Code. 32 The trial court
denied the motion and the accused priests filed a petition for writ of mandate
to reverse the trial court’s order and stop any public disclosure of the
summaries.33 The court of appeal granted the petition, holding that
disclosure of the summaries was barred by the mediation confidentiality
privilege.34
B. What is Protected?
Confidentiality protection is provided not in the form of an evidentiary
privilege, but rather in the form of an evidence exclusion provision. 35 As
evidence in a court proceeding, Evidence Code section 1119 bars disclosure
of (a) ”anything said or any admission made for the purpose of, in the course
of, or pursuant to, a mediation or a mediation consultation”;36 (b) any writing
“prepared for the purpose of, in the course of, or pursuant to, a mediation or
a mediation consultation”;37 and (c) ”[a]ll communications, negotiations, or
settlement discussions by and between participants in the course of a
mediation or a mediation consultation . . . .”38 The Supreme Court of
California has confirmed on several occasions that “any” and “all”
provisions of section 1119 are to be interpreted quite literally and made it
clear that the scope of protection intended by the statute is unqualified, clear,
absolute,39 and is not subject to judicially crafted exceptions or limitations.40
The facts of the cases in which the Supreme Court of California has been
called upon to rule about the scope of protection afforded by section 1119
have been somewhat extreme and serve to illustrate the breadth of what will
be held as confidential if the communications—and sometimes conduct—
occurred during a mediation. 41
31. Id.
32. Id.
33. Id.
34. Id. at 1173-74.
35. See CAL. EVID. C ODE § 1119 (West 2011).
36. Id. § 1119(a) (emphasis added).
37. Id. § 1119(b) (emphasis added).
38. Id. § 1119(c) (emphasis added).
39. See, e.g., Foxgate Homeowners’ Ass’n v. Bramalea Cal., Inc., 25 P.3d 1117, 1126 (Cal.
2001); Rojas v. Superior Court, 93 P.3d 260, 207 (Cal. 2004); Fair v. Bakhtiari, 147 P.3d 653, 65859 (Cal. 2006).
40. See, e.g., Simmons v. Ghaderi, 187 P.3d 934, 945-46 (Cal. 2008); Cassel v. Superior
Court, 244 P.3d 1080, 1087-88 (Cal. 2011).
41. See infra Parts III.B.1–4.
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1. Foxgate Decision (2001)
In 2001, the Supreme Court of California first addressed this issue in
Foxgate.42 This case discusses party conduct and statements made during
mediation with respect to one party’s nonparticipation—rather than the
exchange of information or offers during the course of a mediation. 43 The
case concerned a construction defect claim for a sixty-five-unit
condominium complex. 44 A special master appointed by the superior court
to mediate and rule on discovery motions ordered the parties to mediation,
and the court’s notice instructed that the parties were required to bring their
experts and claims representatives. 45 Five days of mediation were
reserved.46 On the first day of mediation, plaintiff’s attorney appeared with
nine experts, while defendants’ attorney arrived late and with zero experts
because, he believed, due to his knowledge in the field of construction defect
litigation, he did not need experts to engage in discourse with plaintiff’s
experts.47 After the morning of the first mediation session, the mediator
cancelled the subsequent mediation sessions because he concluded they
could not proceed without defense experts. 48 Plaintiff then moved for
sanctions against defendants and their attorney for failure to participate in
good faith in a court-ordered mediation and to comply with the order to
mediate.49
Plaintiff’s motion for sanctions concluded with a
recommendation that defendants and their counsel should be ordered to
reimburse the plaintiff for expenses incurred in the mediation. 50 Also
attached to the sanctions motion was a declaration by plaintiff’s counsel
reciting statements made by defendants’ counsel during the mediation. 51
The mediator also filed a report “recommend[ing] . . . that [defendants and
42. See Foxgate, 25 P.3d 1117.
43. Id. at 1119-20.
44. Id. at 1120.
45. Id.
46. Id.
47. Id.
48. Id.
49. Id. The sanctions sought reflected the cost to plaintiff from counsel’s preparation for the
sessions, the charge of plaintiff’s nine experts for preparation and appearance at the mediation
session, and the payments to the mediator which was no longer refundable. Id. Plaintiff’s
memorandum of points and authorities and declaration of counsel in support of the motion for
sanctions recited a series of actions by Bramalea and Stevenson, that plaintiff asserted, reflected a
pattern of tactics pursued in bad faith and solely intended to cause unnecessary delay. Id.
50. Id.
51. Id.
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their attorney] be ordered to reimburse all parties for expenses incurred as a
result of the cancelled . . . mediation sessions.”52 In granting the sanctions
motion, the trial court considered the mediator’s report and the declaration
of plaintiff’s counsel regarding what occurred during the mediation over
defendants’ objection. 53
The court of appeal reversed the trial court’s sanction order and
remanded the matter back to the trial court to make specific findings
regarding the conduct or circumstances justifying the sanctions order.54 The
court of appeal rejected defendants’ argument that the mediator was barred
by Evidence Code section 1121 from making a report to the court that
commented on party conduct during the mediation, reasoning that the
confidentiality mandated by Evidence Code section 1119 should be balanced
against the policy recognizing that, unless the parties and their attorneys
participate in good faith in mediation, there is little to protect. 55 The
Supreme Court of California affirmed the court of appeal’s reversal of the
sanctions order, but held that if, on remand, the plaintiff elected to pursue a
sanctions motion, no evidence of communications made during the
mediation could be admitted or considered. 56 In this regard, the supreme
court specifically rejected the notion that there is any need for judicial
construction of Evidence Code sections 1119 or 1121, or that a judicially
crafted exception to mediation confidentiality was necessary.57 The court
reasoned that “[t]he statutes are clear. Section 1119 prohibits any person,
mediator and participants alike, from revealing any written or oral
communication made during a mediation.”58 The supreme court noted,
however, that while Evidence Code section 1121 prohibits the mediator from
advising the court about conduct during a mediation, it does not prohibit a
party from so advising the court. 59
52. Id. at 1121.
53. Id. at 1122.
54. Id.
55. Id. at 1125.
56. Id.
57. Id. at 1125-26.
58. Id. at 1126.
59. Id. The supreme court specifically held that a mediator may not reveal communications
made during a mediation and that there are no exceptions to the statutory limits on the content of a
mediator’s report as provided by Evidence Code section 1121. Id.
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2. Rojas Decision (2004)
In 2004, the Supreme Court of California next addressed this issue
Rojas.60 This case involved the confidentiality of information developed and
prepared for use in mediation. 61 Rojas also involves construction defect
claims in which the owner of the apartment complex complained that the
water leakage due to the construction defects had produced toxic molds on
the property requiring its complete demolition. 62 The court in Rojas issued a
case management order which provided that evidence of anything said and
any document prepared for the purpose of, in the course of, or pursuant to
any mediation would be privileged pursuant to Evidence Code section 1119
and not admissible as evidence at trial.63 The litigation between the owner
and the contractors who built the complex was settled through mediation. 64
Following the settlement, several hundred tenants sued the owner and
builder for damages resulting from health problems alleged to be the result
of the mold infestation. 65 In discovery, the tenants sought to compel
production of the materials developed and prepared for use in the earlier
owner–builder mediation. 66 The tenants argued that this discovery should be
ordered because there was no other evidence of the condition of the building
before its demolition and repair.67 The trial court denied the motion under
Evidence Code section 1119 because the materials sought were created in
connection with the mediation in the earlier case. 68 On appeal, the court of
appeal reversed, finding that “section 1119 does ‘not protect pure evidence,’
but protects only ‘the substance of mediation . . . .’”69 The Supreme Court
of California then reversed and held that: (a) the mediation privilege for
“writings” covered witness statements, analysis of raw test data, and
photographs prepared during the mediation; (b) the mediation privilege was
not subject to a “good cause” exception; and (c) the evidence exclusion
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
71
See Rojas v. Superior Court, 93 P.3d 260, 262 (Cal. 2004).
Id.
Id.
Id.
Id.
Id.
Id. at 262-63.
Id. at 263.
Id.
Id.
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provisions operated as a bar to discovery of such communications and
materials.70 The court reasoned:
In Foxgate, we stated that “[t]o carry out the purpose of encouraging mediation by
ensuring confidentiality, [our] statutory scheme . . . unqualifiedly bars disclosure of”
specified communications and writings associated with a mediation “absent an express
statutory exception.” We also found that the “judicially crafted exception” to section
1119 there at issue was “not necessary either to carry out the legislative intent or to avoid
71
an absurd result.” We reach the same conclusion here . . . .
3. Simmons Decision (2008)
In 2008, the Supreme Court of California next addressed this issue in
Simmons.72 This case involved a “gaming” tactic that one party used against
the other during negotiations had in a mediation. 73 Simmons involves
wrongful death and medical malpractice claims against a doctor brought by
the patient’s mother and son. 74 The parties went to mediation. 75 Before
beginning settlement negotiations, the defendant doctor executed a standard
consent-to-settlement agreement which authorized her insurance claims
specialist to negotiate on her behalf up to a defined settlement value capped
at $125,000.76 Plaintiffs and their counsel then engaged in settlement
discussions with the claims specialist and defense attorney hired by the
insurance company, while the defendant doctor and her personal attorney
waited in another room. 77 At some point during these negotiations, the
insurance company offered $125,000 and plaintiffs orally accepted the
offer.78 The settlement terms were then stated in a term sheet document for
the parties to sign before leaving the mediation. 79 At this juncture, the
defendant doctor revoked the settlement authorization she had given to her
insurance claims specialist and refused to sign the term sheet
memorandum.80 Plaintiffs then amended their complaint to add a cause of
action for breach of contract, alleging that the defendant doctor had breached
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
72
Id.
Id. at 271 (internal citation omitted).
Simmons v. Ghanderi, 187 P.3d 934, 936 (Cal. 2008).
Id. at 936.
Id.
Id. at 937.
Id.
Id.
Id.
Id.
Id.
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an oral agreement to settle at $125,000.81 At trial, the defendant doctor
asserted that Evidence Code section 1119 precluded plaintiffs from proving
the existence of an oral agreement and objected to the admissibility of the
consent-to-settle agreement, the term sheet memorandum, and other
evidence offered with respect to the events at the mediation—including a
declaration by the mediator.82 The trial court overruled defendant’s
objections and found that plaintiffs and defendant’s agent—the claims
specialist—had entered into a valid and enforceable oral contract before
defendant withdrew her consent. 83 The trial court ordered specific
performance and entered judgment in favor of plaintiffs for $125,000.84 The
defendant doctor appealed.85
On appeal, the court of appeal affirmed the judgment, finding that a
valid oral agreement had been reached during the mediation. 86 The court of
appeal found that during pretrial motions, both defendant and plaintiffs had
presented evidence of the occurrences at the mediation and defendant had
failed to object to plaintiffs’ proffered evidence with respect to such
motions.87 Accordingly, the court of appeal found that the defendant doctor
was estopped from asserting mediation confidentiality at trial to bar
admission of the mediation evidence.88 The Supreme Court of California
disagreed and reversed, holding that the court of appeal had improperly
relied on the doctrine of estoppel to create a judicial exception to the
statutory requirements of mediation confidentiality as provided by Evidence
Code section 1119.89 Here, the court reasoned:
Both the clear language of the mediation statutes and our prior rulings support the
preclusion of an implied waiver exception. The legislature chose to promote mediation
by ensuring confidentiality rather than adopt a scheme to ensure good behavior in the
mediation and litigation process.
The mediation statutes provide clear and
90
comprehensive rules reflecting that policy choice.
81.
82.
83.
84.
85.
86.
87.
88.
89.
90.
73
Id. at 938.
Id.
Id.
Id.
Id.
Id.
Id.
Id.
Id. at 936.
Id. at 946.
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4. Cassel Decision (2011)
The fourth and most recent Supreme Court of California case regarding
this issue was the 2011 decision in Cassel.91 This case involved private
attorney–client conversations during the course of a mediation. 92 Prior to
attending the mediation, Michael Cassel met with his attorneys from
Wasserman, Comden, Casselman & Pearson to discuss mediation strategy
and, at that time, agreed that Cassel would accept no less than $2 million
from defendant to settle the lawsuit. 93 After several hours of mediation,
Cassel was told that defendant would pay no more than $1.25 million. 94
Although Cassel felt tired, hungry, and ill, his attorneys insisted that Cassel
remain until the mediation was concluded and pressed him to accept the
offer, telling him that he was “greedy” to insist on more. 95 At one point,
Cassel left to have dinner and consult with his family. 96 His attorneys called
and insisted that he return to the mediation, at which time they threatened to
abandon him at the imminently pending trial, misrepresented certain
significant terms of the proposed settlement, and falsely assured him they
could and would negotiate a side deal that would recoup the deficits in the
settlement.97 They also falsely stated that they would waive or discount a
large portion of the $188,000 legal bill if he accepted the settlement offer. 98
Finally, at midnight, after fourteen hours of mediation, when he was
exhausted and unable to think clearly, Cassel’s attorneys presented him with
a written draft settlement agreement and evaded his questions about its
complicated terms.99 Believing he had no other choice, Cassel signed the
agreement.100 After settling the business litigation dispute, Cassel then sued
his attorneys for malpractice, breach of fiduciary duty, fraud, and breach of
contract.101 Prior to trial in the malpractice action, Cassel’s attorneys moved
to exclude all evidence of any discussions they had with plaintiff
immediately preceding and during the mediation concerning settlement
strategies and the attorneys’ efforts to persuade plaintiff to reach a settlement
91.
92.
93.
94.
95.
96.
97.
98.
99.
100.
101.
74
Cassel v. Superior Court, 244 P.3d 1080 (Cal. 2011).
Id. at 1083-84.
Id. at 1085.
Id.
Id.
Id.
Id.
Id.
Id.
Id.
Id.
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in the mediation. 102 The trial granted the attorneys’ motion excluding the
evidence of their mediation communications with their client. 103
On appeal, the court of appeal reversed the decision. 104 The court of
appeal reasoned that the mediation confidentiality statutes were intended to
prevent damaging use against a mediation disputant of tactics employed,
positions taken, or confidences exchanged in the mediation, and were not
intended to protect attorneys from malpractice claims by their own clients
based on advice and other communications made by counsel. 105 The court of
appeal concluded that an attorney sued for malpractice cannot use mediation
confidentiality as a shield to exclude damaging evidence of private attorney–
client conversations during the mediation. 106 On further appeal, the Supreme
Court of California reversed, finding that the mediation confidentiality
statutes must be strictly applied and do not permit judicially created
exceptions or limitations even where competing public policies may be
affected.107 The court reasoned:
Here, as in Foxgate, Rojas, Fair, and Simmons, the plain language of the mediation
confidentiality statutes controls our result. . . . Section 1119, subdivision (a), extends to
oral communications made for the purpose of or pursuant to a mediation, not just to oral
communications made in the course of the mediation.
The obvious purpose of the expanded language is to ensure that the statutory protection
extends beyond discussions carried out directly between opposing parties to the dispute,
or with the mediator . . . . All oral or written communications are covered, if they are
made “for the purpose of” or “pursuant to” a mediation. It follows that, absent an express
statutory exception, all discussions conducted in preparation for a mediation, as well as
all mediation-related communications that take place during the mediation itself, are
protected from disclosure. Plainly, such communications include those between a
mediation disputant and his or her own counsel, even if these do not occur in the presence
108
of the mediator or other disputants.
The Cassel decision has been highly criticized from a legal ethics and
legal malpractice standpoint for giving attorneys a free pass for “settlement
102. Id. at 1083.
103. Id.
104. Id.
105. Id. at 1084.
106. Id. at 1085.
107. Id. at 1087.
108. Id. at 1090-91 (internal citations omitted); c.f. Porter v. Wyner, 107 Cal. Rptr. 3d 653 (Ct.
App. 2010) (statements made between plaintiff’s attorney and defendant’s attorney purportedly
causing plaintiff to lower his settlement demand were not protected from discovery in plaintiff’s
subsequent legal malpractice action because there was no evidence that the statements were made for
the purpose of or pursuant to a mediation).
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malpractice” if it occurs in the context of mediation. 109 Nevertheless, the
Cassel decision demonstrates just how broadly the scope of the mediation
confidentiality statutes will be construed by the Supreme Court of California
because of the unqualified language of the statute. As with the earlier cases,
the supreme court has stated that it is up to the legislature, not the courts, to
define the contours of mediation confidentiality and acceptable and
nonacceptable conduct in mediation. 110
C. Special Rules Related to Mediators
Evidence Code section 1121 provides that unless the parties agree
otherwise, the court may not consider any “report, assessment, evaluation,
recommendation or finding of any kind” by a mediator concerning a
mediation, the only report a mediator may make is one that simply states
whether an agreement was reached. 111 The comments to section 1121
explain that the rationale behind this statutory provision is aimed at making
sure a mediator will “not be able to influence the result of a mediation or
adjudication by reporting or threatening to report to the decision maker on
the merits of the dispute or reasons why mediation failed to resolve it.”112
The companion to section 1121 is Evidence Code section 703.5, which
declares that a mediator shall be incompetent to testify as to any statement,
conduct, decision, or ruling occurring in or in conjunction with a mediation
that she conducted.113
The broad prohibition against mediators making a report of any kind to
the court—beyond the statement that a settlement was or was not reached—
does not prohibit a party from advising the court about conduct during the
mediation that might warrant sanctions. 114 In Foxgate, plaintiff attached a
report by the mediator and a declaration by plaintiff’s counsel reciting
statements made during the mediation session, which the Supreme Court of
California found was prohibited by Evidence Code sections 1119 and
109. Robert K. Sall, Ethical Concerns Regarding Mediation Confidentiality and the
Implications of Cassel, ORANGE COUNTY LAWYER, Apr. 2011, at 42-45; Diane Karpman, High
Court Holds Lawyers are Not Accountable for Misconduct During Mediation, CALIFORNIA BAR
JOURNAL (Feb. 2011),
http://www.calbarjournal.com/February2011/Attorneydiscipline/EthicsByte.aspx.
110. In this regard, the supreme court noted that when the mediation confidentiality statutes
apply, they are unqualified absent express statutory exception and must be applied “in strict
accordance with their plain terms.” Cassel, 244 P.3d at 1087.
111. CAL. EVID. CODE § 1121 (West 2011).
112. Id. § 1121 cmt. (1997).
113. Id. § 703.5.
114. Foxgate Homeowners’ Ass’n v. Bramalea Cal., Inc., 25 P.3d 1117, 1128 (Cal. 2001).
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1121.115 However, the supreme court noted that to the extent the declaration
of plaintiff’s counsel stated that the mediator had ordered the parties to be
present with their experts, there was no violation because “neither section
1119 nor section 1121 prohibits a party from revealing or reporting to the
court about noncommunicative conduct, including violation of the orders of
a mediator or the court during the mediation.” 116 In 2008, the California
Court of Appeal for the Third District relied on Foxgate to find that the
failure to have all persons or representatives attend court-ordered
mediation—as required by local rules—was “conduct that a party, but not a
mediator, may report to the court as a basis for monetary sanctions.” 117
Similarly, in 2010, the California Court of Appeal for the Second District
upheld an order imposing sanctions for the unauthorized failure of a party to
attend a court-ordered mediation.118
D. Special Rules Related to Written Settlement Agreements Reached in
Mediation
While the ultimate goal in mediation is for the parties to reach
agreement on terms to resolve their dispute, a written settlement agreement
or term sheet memorandum prepared with respect to the settlement is a
writing prepared during the course of mediation and, as such, is entitled to
exclusionary protection under Evidence Code section 1119.119 Pursuant to
section 1123, such writings shall not be inadmissible or protected from
disclosure if any of the following conditions are satisfied:
(a) The agreement provides that it is admissible or subject to disclosure, or words to that
120
effect.
121
(b) The agreement provides that it is enforceable or binding or words to that effect.
122
(c) All parties to the agreement expressly agree in writing . . . to its disclosure.
(d) The agreement is used to show fraud, duress, or illegality that is relevant to an issue
123
in dispute.
115. Id.
116. Id. at 1128 n.14.
117. Campagnone v. Enjoyable Pools & Spas Serv. & Repairs, Inc., 77 Cal. Rptr. 3d 551, 555
(Ct. App. 2008). The court of appeal went on to note, however, that reporting on anything more than
a party’s non-attendance might violate the confidentiality rules. Id.
118. See Ellerbee v. County of L.A., 114 Cal. Rptr. 3d 756, 763 (Ct. App. 2010).
119. See CAL. EVID. CODE § 1119 (West 2011).
120. Id. § 1123(a).
121. Id. § 1123(b).
122. Id. § 1123(c).
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In 2006, the Supreme Court of California had occasion to construe the
application of Evidence Code section 1123 and interpreted it quite strictly
and literally.124 In Fair, the parties to a civil dispute mediated their disputes
over the course of a two-day period.125 At the end of the second day,
plaintiff’s counsel drafted a handwritten memorandum which set forth the
settlement terms the parties had agreed to, including an arbitration clause for
any and all future disputes that might arise between the parties. 126
Postmediation, the parties exchanged formal settlement agreements, but
were ultimately unable to reach agreement on the terms for a final written
settlement agreement. 127 Plaintiff then demanded arbitration under the
arbitration clause included in the term sheet memorandum. 128 Defendant
rejected the demand and contended that the term sheet memorandum was
inadmissible under Evidence Code section 1119(b) because it represented a
writing prepared in the course of a mediation. 129 Plaintiff then moved to
compel arbitration pursuant to the term sheet memorandum. 130 Defendant
opposed the motion and objected to the admission of the term sheet
memorandum and parts of plaintiff’s counsel’s declaration which referred to
discussions at the mediation under Evidence Code section 1119. 131 The trial
court sustained defendant’s objection and excluded the term sheet and
portions of plaintiff’s counsel’s declaration under section 1119 on the
grounds that the declaration failed to meet the requirements of Evidence
Code section 1123.132
On appeal, the court of appeal reversed, holding that the inclusion of the
provision providing for any and all disputes to be submitted to arbitration
could only mean that the parties intended the term sheet to be enforceable
and binding.133 On further appeal to the Supreme Court of California, the
court reversed and held that the court of appeal had erred by concluding that
the inclusion of an arbitration clause satisfied the requirements of Evidence
Code section 1123(b).134 The supreme court noted that, although the
legislature had not provided the courts with a “bright line” rule regarding
123.
124.
125.
126.
127.
128.
129.
130.
131.
132.
133.
134.
78
Id. § 1123(d).
See Fair v. Bakhtiari, 147 P.3d 653, 654 (Cal. 2006).
Id. at 655.
Id. at 654-55.
Id.
Id.
Id.
Id.
Id. at 194.
Id.
Id.
Id. at 197-98.
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what would qualify as “words to that effect” as a substitute for an express
statement that the agreement was intended to be enforceable and binding, “a
narrow interpretation of this clause is required.” 135
The phrase “words to that effect” . . . refers to language that conveys a general meaning
or import, in this instance the meanings of “enforceable or binding.” Under section
1123(b), the use of such language will exempt a written settlement agreement from the
general rule that documents prepared during mediation are inadmissible in future
proceedings. The Legislature’s goal was to allow parties to express their intent to be
bound in words they were likely to use, rather than requiring a legalistic formulation.
The Legislature also meant to clarify the rules governing admissibility and reduce the
likelihood that parties would overlook those rules. To meet these objectives, we must
balance the requirements of flexibility and clarity, without eroding the confidentiality that
136
is “essential to effective mediation.”
The supreme court concluded that in order to fit within the exception to
confidentiality provided by Evidence Code section 1123(b), a settlement
agreement must include a statement that is intended to be “enforceable” or
“binding.”137
E. Special Rules Related to Oral Settlement Agreements Reached in
Mediation
California Evidence Code section 1123(c) provides that an oral
settlement agreement may be admissible if it satisfies the requirements of
section 1118.138 Pursuant to Evidence Code section 1118, an oral agreement
made in accordance with section 1118 must satisfy all of the following
conditions:
(a) The oral agreement is recorded by a court reporter or reliable means of audio
139
recording.
(b) The terms of the oral agreement are recited on the record in the presence of the
parties and the mediator, and the parties express on the record that they agree to the terms
140
so recited.
(c) The parties to the oral agreement expressly state on the record that the agreement is
141
enforceable or binding . . . .
135. Id. at 197.
136. Id. (internal citations omitted) (citing Foxgate Homeowners’ Ass’n v. Bramalea Cal., Inc.,
25 P.3d 1117, 1126 (Cal. 2001); Rojas v. Superior Court, 93 P.3d 260, 265 (Cal. 2004)).
137. Fair v. Bakhtiari, 147 P.3d 653, 660 (Cal. 2006).
138. CAL. EVID. CODE § 1123(c) (West 2011).
139. Id. § 1118(a).
140. Id. § 1118(b).
141. Id. § 1118(c).
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(d) The recording is reduced to writing and the writing is signed by the parties within 72
142
hours after it is recorded.
IV. THE NONPRIVILEGED AND UNDERPROTECTED STATUS OF MEDIATION
CONFIDENTIALITY UNDER FEDERAL LAW
A. Federal Rules of Evidence 408
The starting place for understanding the federal perspective on
mediation confidentiality is the common law rule that (a) the public is
entitled to every person’s evidence, and (b) testimonial privileges are
disfavored.143 There is no federal statute, rule of procedure, or rule of
evidence that expressly recognizes or provides confidentiality protection for
communications during or in connection with a mediation. The only express
protection for settlement discussions is provided by Rule 408 of the Federal
Rules of Evidence, which makes “conduct or statements made in
compromise negotiations regarding the claim” inadmissible to prove
liability.144 Thus, Rule 408 provides an admission standard for proof offered
at trial to prove liability or invalidity of a claim and speaks in terms of
relevancy. Its purpose is “to encourage the compromise and settlement of
existing disputes”145 so as to avoid “the chilling effect” that potential
disclosure might have on a party’s willingness to make a compromise offer
for fear of jeopardizing its case or defense if the matter is not settled.146
It is important to note that, by its terms, Rule 408(a) applies only to the
admissibility of evidence at trial and does not apply to discovery of
settlement negotiations or settlement terms. 147 On this issue, the courts are
split as to whether Rule 408 precludes discovery. 148 Moreover, Rule 408(b)
expressly provides that exclusion is not required if the “offer and
compromise” evidence is offered for a purpose that is not expressly
142. Id. § 1118(d).
143. See Jaffe v. Redmond, 518 U.S. 1, 7 (1996).
144. FED. R. EVID. 408(b)(1)–(2).
145. Josephs v. Pac. Bell, 443 F.3d 1050, 1064 (9th Cir. 2006).
146. Molina v. Lexmark Int’l, Inc., No. CV 08-04796 MMM (FMx), 2008 WL 4447678, at
*11-12 (C.D. Cal. Sept. 30, 2008).
147. See FED. R. EVID. 408(a).
148. Compare Bottaro v. Hatton Assocs., 96 F.R.D. 158, 160 (E.D.N.Y. 1982) (barring
discovery of settlement terms), with Bennett v. La Pere, 112 F.R.D. 136, 139-40 (D.R.I. 1986)
(allowing discovery of settlement discussions), and NAACP Legal Def. & Educ. Fund, Inc. v. U.S.
Dep’t of Justice, 612 F. Supp. 1143, 1146 (D.D.C. 1985) (allowing discovery if information is
relevant to other issues in the pending action).
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prohibited by Rule 408(a).149 Among the “permitted uses” delineated in
Rule 408(b) are evidence of settlement and compromise negotiations offered
(1) to prove bias or prejudice on the part of a witness; (2) to prove that an
alleged wrong was committed during the negotiations (e.g., libel, assault,
unfair labor practice, etc.); (3) to negate a claim of undue delay; or (4) to
prove obstruction of a criminal investigation or prosecution. 150 Additionally,
a number of courts, including the Ninth Circuit, have concluded that Rule
408 does not make settlement offers inadmissible in the removal context
where such offers represent evidence of the amount in controversy for the
purpose of establishing the date on which such information was first made
available to the defendant and thus started the thirty-day time period for
removing a state court action to federal court. 151 Numerous district court
decisions have used the settlement letter to establish the amount in
controversy.152
In sum, Rule 408 is keenly focused on offers of compromise and
negotiations involved in making, accepting, or rejecting such offers. As
such, Rule 408 appears not to provide protection of any sort for
prenegotiation communications or exchanges of information that parties
might have with or through a mediator, even though the goal of those
discussions is to open settlement dialogue. 153
149. FED. R. EVID. 408(b).
150. Id.
151. See, Babasa v. LensCrafters, Inc., 498 F.3d 972 (9th Cir. 2007) (holding that a letter sent
by plaintiffs estimating the amount alleged put defendant on notice of the amount in controversy);
Cohn v. Petsmart, Inc., 281 F.3d 837 (9th Cir. 2002) (“A settlement letter is relevant evidence of the
amount in controversy if it appears to reflect a reasonable estimate of the plaintiff’s claim.”).
152. See Munoz v. J.C. Penny Corp., No. CV09-0833 ODW (JTLx), 2009 WL 975846 (C.D.
Cal. Apr. 9, 2009) (settlement proposal letter was admissible to establish that the jurisdictional
amount in controversy had been met for purposes of removing the case to federal court); see also
Ray v. Am. Airlines, Inc., No. 08-5025, 2008 WL 3992644, *4 (W.D. Ark. Aug. 22, 2008)
(settlement letter used to establish the amount in controversy); Haydel v. State Farm Mut. Auto. Ins.
Co., No. CIVA 07-939-C, 2008 WL 2781472, *8, n.8 (M.D. La. July 10, 2008); Finnegan v.
Wendy’s Int’l, Inc., No. 2:08-cv-185, 2008 WL 2078068, *3 (S.D. Ohio May 13, 2008); Sulit v.
Slep-Tone Entm’t, No. C06-00045 MJJ, 2007 WL 4169762, *3, n.1 (N.D. Cal. Nov. 20, 2007);
Turner v. Baker, No. 05-3298-CV-S-SWH, 2005 WL 3132325, *3 (W.D. Mo. Nov. 22, 2005);
LaPree v. Prudential Fin., 385 F. Supp. 2d 839, 849, n.9 (S.D. Iowa Aug. 17, 2005).
153. See FED. R. EVID. 408.
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B. Federal Rules of Evidence 501
The only other source of confidentiality protection in federal cases is
Rule 501 of the Federal Rules of Evidence. 154 Rule 501 empowers the
holder of a recognized privilege to use the legal process to prevent others
from disclosing protected communications. 155 It also vests the holder with
the right to refuse to produce otherwise relevant evidence. 156 What qualifies
as a “recognized privilege” is not detailed in Rule 501.157 In federal question
cases under 28 U.S.C. § 1331, the extent to which a privilege exists is
governed by federal common law158 and may not be augmented by local
court rules.159 In diversity cases under 28 U.S.C. § 1332, where state law
provides the rule of decision, the existence of a privilege is a matter of
applicable state law.160 To date, there are only two cases in the Central
154. See FED. R. EVID. 501.
155. Id.
156. Id.
157. Id.
158. Id. See also Religious Tech. Ctr. v. Wollersheim, 971 F.2d 364, 367, n.10 (9th Cir. 1992).
Rule 501 raises a difficult question regarding which law shall apply in federal question cases with
pendent state law claims. In the Ninth Circuit, that question has been resolved so that the law of
privilege is governed by federal common law. See id. at n.10 (court refused to apply California
litigation privilege in copyright action with pendent state law claims); Folb v. Motion Picture Indus.
Pension & Health Plans, 16 F. Supp. 2d 1164, 1169-70 (C.D. Cal. 1998) (stating that the federal
common law of privileges governs both federal and pendent state law claims in federal question
cases); see also Hancock v. Hobbs, 967 F.2d 462, 467 (11th Cir. 1992) (per curiam) (the federal law
of privilege is paramount in federal question cases even if the witness testimony is relevant to a
pendent state law count which may be controlled by a contrary state law privilege); Hancock v.
Dodson, 958 F.2d 1367, 1373 (6th Cir. 1992) (holding that the federal law of privilege is paramount
to federal question cases).
159. See Facebook, Inc. v. Pac. Nw. Software, Inc., 640 F.3d 1034, 1040-41 (9th Cir. 2011) (“A
local rule, like any court order, can impose a duty of confidentiality as to any aspect of litigation,
including mediation. . . . But privileges are created by federal common law.”) In Facebook, the
Winklevosses sought to avoid enforcement of the settlement agreement between ConnectU and
Facebook which was negotiated and entered into during a private mediation. Id. at 1040. The
Winklevosses proffered evidence of what was and was not said during the mediation. Id. The
District Court for the Northern District of California excluded this evidence under its local rule that
protected such communications as “confidential information,” which the court read as creating a
“privilege” for “evidence regarding the details of the parties’ negotiations in their mediation.” Id. at
1040. While the Ninth Circuit found that the district court’s reason for excluding the evidence was
wrong, it concluded that the court was nevertheless correct in excluding the proffered evidence
because the parties had engaged with a private mediator and had signed an express written
confidentiality agreement before the mediation commenced. Id. at 1041. Accordingly, the Ninth
Circuit held that the confidentiality agreement signed by the Winklevosses precluded them from
introducing “any evidence of what Facebook said, or did not say, during the mediation.” Id.
160. FED. R. EVID. 501. See also Olam v. Cong. Mortg. Co., 68 F. Supp. 2d 1110, 1124-25
(N.D. Cal. 1999). That being said, federal law governs whether a case exceeds the amount in
controversy requirement. See Molina v. Lexmark Int’l, Inc., No. CV 08-04796 MMM (FMx), 2008
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District of California that have recognized a federal mediation privilege to
protect communications made in conjunction with a formal mediation
proceeding: the 1998 reported decision of District Judge Paez in Folb v.
Motion Picture Industry Pension & Health Plans 161 and the 2008 unreported
decision of District Judge Morrow in Molina v. Lexmark International,
Inc.162
1. Folb Decision (1998)
In Folb, a former employee complained that he had been terminated by
his employer in retaliation for whistle-blowing.163 The employer responded
that Folb was terminated because he had sexually harassed a fellow
employee named Vasquez.164 The employer and Vasquez had previously
participated in mediation in an attempt to settle Vasquez’s claims against the
company arising from Folb’s alleged harassment. 165 Folb then sought to
compel production of the mediation briefs and “related correspondence
regarding settlement negotiations” between his former employer and
Vasquez.166 Folb argued that these documents would reveal that, during
mediation, his former employer had taken the position that Folb had not
harassed Vasquez.167 The court held that Folb was entitled to discovery
regarding settlement negotiations conducted after mediation, but concluded
that a federal common law mediation privilege protected the mediation
briefs from discovery.168 The trial judge stated that the privilege applied
only to “communications between parties who agreed in writing to
participate in a confidential mediation with a neutral third party.” 169 This
WL 4447678, at *6 (C.D. Cal. Sept. 30, 2008) (citing Horton v. Liberty Mut. Ins. Co., 367 U.S. 348,
352 (1961)).
161. Folb v. Motion Picture Indus. Pension & Health Plans, 16 F. Supp. 2d 1164 (C.D. Cal.
1998).
162. Molina v. Lexmark Int’l, Inc., No. CV 08-04796 MMM (FMx), 2008 WL 4447678 (C.D.
Cal. Sept. 30, 2008).
163. Folb, 16 F. Supp. 2d at 1166.
164. Id.
165. Id. at 1167.
166. Id.
167. Id. at 1168.
168. Id. at 1167.
169. Id. at 1180. As to any other details concerning the federal mediation privilege, the trial
judge simply observed that “the contours of such a federal privilege [will have] to be fleshed out
over time.” Id. at 1179. In this regard, the trial court stressed that its recognition of a federal
mediation privilege was limited to the factual context, namely, a situation in which a third party who
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left open the question of whether a “mediation” or “settlement proceeding”
conducted as part of a federal court’s alternative dispute resolution (ADR)
program would qualify for protection without a written mediation and
confidentiality agreement between the parties.170 While such a distinction
would not be available under California law due to the broad interpretation
as to what qualifies as a mediation for purposes of confidentiality, 171 the
Ninth Circuit’s decision in Facebook and the district court’s decisions in
Molina and Folb suggest that the extent to which confidentiality protections
are available in federal court matters may depend on (a) the label used to
describe the parties’ facilitated settlement efforts, (b) who is seeking to
disclose or compel disclosure, and (c) the purpose or use of the
information.172
2. Molina Decision (2008)
In Molina, Ron Molina filed a class action against his former employer,
Lexmark International, in state court in August 2005. 173 In July 2008, two
weeks before trial, Lexmark removed the case to federal court. 174 Lexmark
asserted that the court had jurisdiction under the Class Action Fairness Act
(CAFA)—specifically 28 U.S.C. § 1332(d)—which grants district courts
original jurisdiction over any civil action in which the amount in controversy
exceeds $5 million and any member of a class of plaintiffs is a citizen of a
state different from any defendant. 175 Lexmark claimed that it first became
did not participate in the mediation was seeking discovery of mediation-related communications of
the parties who did participate. Id. at 1180.
On the facts presented here, the Court concludes that communications to the mediator and
communications between parties during the mediation are protected. In addition,
communications in preparation for and during the course of a mediation with a neutral
must be protected. Subsequent negotiations between the parties, however, are not
protected even if they include information initially disclosed in the mediation.
Id.
170. See id.
171. See supra Part III.A.
172. See supra note 160; discussion infra Part IV.B.2. With regard to the label given to the
facilitated settlement effort, there are several district court decisions where courts have denied
confidentiality protection because the communications at issue did not occur in a “formal
mediation.” See, e.g., EEOC v. Albion River Inn, Inc., No. C 06-05356 SI, 2007 WL 2560718, *2
(N.D. Cal. Sept. 4, 2007); Cal. Serv. Emps. Health & Welfare Trust Fund v. Advance Bldg. Maint.,
No. C06-3078 CW (BZ), 2007 WL 2669823, *1 (N.D. Cal., Sept. 7, 2007).
173. Molina v. Lexmark Int’l, Inc., No. CV 08-04796 MMM (FMx), 2008 WL 4447678, at *1
(C.D. Cal. Sept. 30, 2008).
174. Id.
175. Id.
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aware that the amount in controversy exceeded $5 million in July 2008 when
it received a summary of damages prepared by Molina’s expert witness as
part of the pretrial exchange. 176 Molina filed a motion for remand, arguing
that Lexmark’s removal application was untimely because Lexmark had
been put on notice of the amount in controversy two years earlier when class
counsel shared a damages analysis during a mediation.177
The timing of removal is governed by 28 U.S.C. § 1446(b) and provides
that a defendant has thirty days to file a notice of removal once he learns that
an action is removable. 178 This thirty-day period begins to run from the
defendant’s receipt of the initial pleading only when the pleading reveals, on
its face, the facts necessary for federal court jurisdiction—in Molina it was
the amount in controversy. 179 However, when the amount in controversy is
not clear on the face of the initial pleading, the thirty-day period for removal
does not begin to run until the defendant receives a copy of an amended
pleading, motion, order, or “other paper” from which it can be determined
that the case is removable. 180 The court in Molina duly noted that a
document reflecting a settlement demand in excess of the jurisdictional
minimum constitutes an “other paper” sufficient to provide notice that a case
is removable.181
The “other paper” at issue in Molina was a damages analysis prepared
by Molina’s expert which was shared during the May 2006 mediation.182
Lexmark denied receiving a copy of the damages analysis 183 and argued that,
even if it had, the federal common law mediation privilege articulated in
Folb prohibited the use of information exchanged during mediation for any
purpose.184 Alternatively, Lexmark argued that because federal court
jurisdiction was based on diversity, California’s mediation confidentiality
176. Id.
177. Id.
178. Id. at *4.
179. See Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 690-91 (9th Cir. 1997) (Ninth
Circuit joined “sister circuits” in their interpretation that 28 U.S.C. § 1446 begins to run from the
defendant’s receipt of the initial pleading when the facts reveal federal jurisdiction is necessary).
180. See Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1250 (9th Cir. 2006).
181. Molina, 2008 WL 4447678, at *4 (citing Babasa v. LensCrafters, Inc., 498 F.3d 972, 97475 (9th Cir. 2007) (settlement letter exchanged between counsel); Ambriz v. Luxury Imps. of
Sacramento Inc., No. C 08-01004 JSW, 2008 WL 1994880, *2 (N.D. Cal. May 5, 2008) (settlement
demand letter); Krajca v. Southland Corp., 206 F. Supp. 2d 1079, 1081-82 (D. Nev. 2002)
(settlement letter)).
182. Molina, 2008 WL 4447678, at *17.
183. Id. at *2.
184. Id. at *6.
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protections should apply—under California law, the information exchanged
was clearly protected because it was developed for and used during the
course of mediation. 185 The court rejected this latter argument because a
case that exceeds the amount in controversy requirement for federal court
jurisdiction is governed by federal law and, as such, federal privilege law
controls.186
After going through a very thorough analysis of mediation
confidentiality, the court in Molina also rejected Lexmark’s argument that
the information exchanged during the May 2006 mediation was privileged as
a matter of federal common law. 187 Looking at the decision in Folb, the
court noted that while the contours of the privilege recognized in that case
were unclear,188 the holding was expressly limited to the factual context
before the Folb court, namely, a situation in which a third party who did not
participate in the mediation was seeking discovery of mediation-related
communications for use in a different legal proceeding. 189 In this context,
the court in Molina found that the issue presented in Folb was whether a
privilege shielded mediation discussions from discovery by third parties.190
The situation presented in Molina involved communications during a
mediation between disputants’ counsel regarding the amount in controversy
and raised the issue of whether a duty of confidentiality existed between the
parties that required them to keep their mediation discussions confidential.191
The court reasoned that a duty of confidentiality was distinguishable and
different from a privilege. 192
This distinction between evidentiary privilege and confidentiality helps
clarify the issue in the present case. Although “confidentiality” and
“privilege” are often used interchangeably in discussions of mediation, the
terms refer to two distinct concepts. “Confidentiality” refers to a duty to
keep information secret, while “privilege” refers to protection of information
from compelled disclosure. Communications are confidential when the
freedom of the parties to disclose them voluntarily is limited; they are
185. Id.
186. Id. (citing Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 352 (1961)). See also
LensCrafters, 498 F.3d at 974-75 (state privilege law did not apply in determining whether a
settlement letter sent in preparation for mediation was privileged and therefore not an “other
paper”); Breed v. U.S. Dist. Court, 542 F.2d 1114, 1115 (9th Cir. 1976) (when a question of federal
law is at issue, state law as to privileges may provide a useful referent, but is not controlling).
187. Molina, 2008 WL 4447678, at *7.
188. Id. at *8 (“[T]he contours of such a federal privilege [will have] to be fleshed out over
time.”).
189. Id.
190. Id. at *11.
191. Id. at *10-11 (internal citations omitted).
192. Id.
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privileged when the ability of third parties to compel disclosure of them, or
testimony regarding them, is limited. Distinguishing between these concepts
in the mediation context is sometimes difficult because the relationship
between the parties to a mediation is different than the type of fiduciary
relationship that typically gives rise to an evidentiary privilege or duty of
confidentiality . . . .193
The court in Molina determined that although Lexmark argued
“mediation privilege,” it was really seeking to invoke a “duty of
confidentiality” to prevent other parties to the mediation from disclosing
mediation communications voluntarily. 194 Because of the distinction
between a privilege and a duty of confidentiality, the court reasoned that
Rule 408 of the Federal Rules of Evidence provided a better reference point
for analyzing Lexmark’s confidentiality claim than did Folb.195 Similar to
the general discussion contained in Section 4(A) of this Article, the Molina
court ruled that Rule 408 does not make settlement offers inadmissible in the
removal context for purposes of establishing evidence in the amount of
controversy and, in this case, the date such information was first
communicated to the defendant. 196 In so ruling, the court noted that “parties
to a mediation generally have a duty to keep their discussions confidential,”
but concluded that this duty does not prevent use of mediation discussions
for the limited purpose of establishing the amount in controversy for
purposes of determining whether federal court jurisdiction properly exists. 197
[U]se of settlement offers as evidence of the amount in controversy has not hindered Rule
408’s goal of encouraging open and honest discussion during negotiation. This makes
sense; concern that one’s adversary will use statements during negotiation as proof of
liability or wrongdoing, not concern that it will use them as proof of the amount is
198
controversy, is the primary obstacle to forthright negotiation discussions.
3. Ninth Circuit Decisions Which Have Avoided the Issue
On at least three occasions, the Ninth Circuit has had the opportunity to
say something definitive on whether a federal mediation privilege will be
193. Id. at *10 (citing Scott H. Hughes, The Uniform Mediation Act: To the Spoiled Go the
Privileges, 85 MARQ. L. REV. 9, 25-34 (2001)).
194. Molina, 2008 WL 4447678, at *11.
195. Id.
196. Id. at *12.
197. Id.
198. Id. at *13.
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recognized in this circuit. 199 However, in all cases, it has avoided the issue!
In Dusek, a 2005 decision, the issue concerned the propriety of the
magistrate judge’s orders quashing notices of depositions and subpoenas
aimed at discovery regarding settlement negotiations in related class actions
that were settled.200 The Ninth Circuit found that because the appealing
party failed to make the requisite foundational showing that class counsel in
the settled matters had an actual or potential conflict of interest, it “need not
address whether the Ninth Circuit should recognize a federal mediation
privilege and, if so, whether it applies here.”201
In Lenscrafters, a 2007 decision, the issue was more squarely raised.202
In this case, counsel for the plaintiff class sent a letter to counsel for the
employer in preparation for an upcoming mediation. 203 The mediation did
not end in a settlement. 204 The employer then removed the action to federal
court and the plaintiff class filed a motion for remand to the state court. 205
The issue was whether the settlement letter was sufficient to put the
employer on notice that the amount in controversy exceeded federal class
action diversity jurisdiction requirements so as to support removal from state
to federal court and start the thirty-day clock running with respect to the time
in which the employer could file a notice of removal. 206 In opposing the
remand motion filed by the plaintiff class, the employer objected to the
settlement letter as evidence of notice, arguing that it was privileged under
Evidence Code section 1119. 207 The Ninth Circuit found that the
confidentiality protections provided under state law were not applicable
because federal law governs the determination of whether a case exceeds the
amount in controversy necessary for a diversity action to proceed in federal
court.208 As such, federal privilege law applied. 209 As to the existence of
any federal mediation privilege, the Ninth Circuit found that because the
employer had failed to raise that argument before the district court or in his
appellate briefs, the employer waived his right to raise the issue. 210
199. Facebook, Inc. v. Pac. Nw. Software, Inc., 640 F.3d 1034 (9th Cir. 2011); Babasa v.
LensCrafters, Inc., 498 F.3d 972 (9th Cir. 2007); Dusek v. Mattel, Inc., 141 F. App’x 586 (9th Cir.
2005).
200. Dusek, 141 F. App’x at 586.
201. Id.
202. LensCrafters, 498 F.3d at 973-74.
203. Id. at 974.
204. Id.
205. Id.
206. Id.
207. Id.
208. Id. at 974-75.
209. Id.
210. Id. at 975 n.1.
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In Facebook, a 2011 decision, The Facebook, Inc. sought to enforce a
settlement reached during a private mediation with ConnectU, an entity
owned by the Winklevoss twins. 211 The Winklevosses sought to avoid
enforcement of the settlement agreement between ConnectU and Facebook
on the grounds that Facebook had misled them about the value of its shares
given during an exchange in which Facebook acquired all of ConnectU’s
shares.212 In support of their action to rescind the settlement, the
Winklevosses proffered evidence of what was said and not said during the
mediation.213 The District Court for the Northern District of California
excluded this evidence under its local rule that protected such
communications as “confidential information,” which the court read as
creating a “privilege” for “evidence regarding the details of the parties’
negotiations in their mediation.” 214 While the Ninth Circuit found that the
district court’s reason for excluding the evidence was wrong, it concluded
that the court was nevertheless correct in excluding the proffered evidence
because the parties had engaged a private mediator and had signed an
express, written confidentiality agreement before the mediation
commenced.215 Accordingly, the Ninth Circuit held that the confidentiality
agreement signed by the Winklevosses precluded them from introducing
“any evidence of what Facebook said or did not say during the
mediation.”216 It is important to note that while the Ninth Circuit held that
privileges are created by federal common law and cannot be augmented by
local court rules, it also recognized that “[a] local rule, like any court order,
can impose a duty of confidentiality as to any aspect of litigation, including
mediation.”217
Consequently, there is nothing in Rule 501 that recognizes a federal
mediation privilege. 218 In fact, there is nothing in Rule 501 that specifically
recognizes any privilege.219 Privileges are matters for the federal courts to
211. Facebook, Inc. v. Pac. Nw. Software, Inc., 640 F.3d 1034, 1038 (9th Cir. 2011).
212. Id.
213. Id. at 1040.
214. Id.
215. Id. at 1041.
216. Id.
217. Id. (emphasis added).
218. FED. R. EVID. 501.
219. As discussed in Folb, Congress manifested an affirmative intention not to freeze the law of
privilege and to provide the courts with the flexibility to develop rules of privilege on a case-by-case
basis and leave the door open for change. Folb v. Motion Picture Indus. Pension & Health Plans, 16
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define based upon considerations of public policy and may change over
time.220 Whether a privilege should exist is determined by asking whether
the need for the privilege is clear and whether the contours of the privilege
are evident so that it is appropriate for the courts to craft it in common law
fashion.221 As the district court noted in Folb, in addition to the theoretical
underpinnings of the mediation process and the long recognized policy of
favoring and encouraging settlement, in assessing a proposed privilege, a
federal court should examine whether a consistent body of state law exists
when adopting or recognizing a privilege. 222 With regard to mediation, the
district court noted that “every state in the Union, with the exception of
Delaware, has adopted a mediation privilege of one type or another.”223
Thus, it would appear that a federal mediation privilege of some sort will
eventually be recognized. 224 However, as matters stand today, that
protection does not exist. 225
4. Olam Decision (1999)226
In 1999, one year after Judge Paez’s decision in Folb, Judge Brazil in
the District Court for the Northern District of California rendered an
important decision on mediation confidentiality that has added to the
confusion in this area.227 In Olam, a borrower sued her lender for alleged
violation of the Truth in Lending Act, in addition to asserting other federal
and state law claims.228 A mediation was conducted as part of the court’s
ADR program before a member of the court’s staff. 229 A settlement was
reached and the parties signed a memorandum of understanding which
summarized the terms of settlement. 230 Thereafter, the parties attempted to
memorialize the agreement in the form of a formal settlement agreement and
request for dismissal of the lawsuit. 231 Those efforts failed. 232 Defendant
F. Supp.
(1980)).
220.
221.
222.
223.
224.
225.
226.
227.
228.
229.
230.
231.
232.
90
2d 1164, 1170-71 (C.D. Cal. 1998) (quoting Trammel v. United States, 445 U.S. 40, 47
Folb, 16 F. Supp. 2d at 1171.
In re Grand Jury, 103 F.3d 1140, 1154 (3d Cir. 1997).
Folb, 16 F. Supp. 2d at 1178.
Id. at 1179.
Id. at 1179-80.
Id.
Olam v. Cong. Mortg. Co., 68 F. Supp. 2d 1110 (N.D. Cal. 1999).
Id. at 1110.
Id, at 1115.
Id. at 1116.
Id. at 1117.
Id.
Id.
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then filed a motion seeking to enforce the original settlement as set forth in
the memorandum of understanding and to enter judgment thereon. 233
Plaintiff opposed the motion on two grounds: first, that the
memorandum of understanding was unconscionable and second, that she
was subjected to undue influence and coercion in the manner in which the
mediation was conducted. 234 In support of this latter objection, plaintiff
alleged that she was left alone in a room all day and into the early hours of
the following day while all of the mediation participants conversed in a
nearby room.235 She further claimed that: (1) she did not understand the
mediation process; (2) she felt pressured to sign the memorandum of
understanding; (3) her physical and emotional distress rendered her unduly
susceptible to being pressured; and (4) she signed the memorandum of
understanding against her will, without reading or understanding its terms. 236
Defendants raised the issue of mediation confidentiality, which
prompted Judge Brazil to analyze whether that issue was to be decided as a
matter of federal or state law.237 Judge Brazil concluded that California rule
applied because the civil proceeding before the court was defendants’
motion to enforce the settlement agreement. 238 In such a proceeding, the
court reasoned, the only issue is whether an enforceable contract exists and
such a substantive question must be decided by state law because there is no
general federal law of contracts. 239 While the court concluded that
California law concerning mediation confidentiality governed whether, and
to what extent, communications and conduct occurring during the mediation
were protected from disclosure or subsequent evidentiary use, the court also
held that it was not subject to a “procedural straight jacket” and was thus
free to define its own procedure for applying California law so long as the
court’s procedure caused “no greater harm to substantive privilege interests
than California courts would be prepared to cause.” 240
Judge Brazil spent a considerable amount of time reviewing California’s
mediation statutes, including the “mediator’s privilege” against giving
testimony provided by Evidence Code section 703.5 and the broad mediation
233.
234.
235.
236.
237.
238.
239.
240.
91
Id.
Id. at 1118.
Id.
Id.
Id. at 1119.
Id.
Id. at 1121.
Id. at 1126.
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confidentiality protections provided by Evidence Code section 1119.241
However, after this review, Judge Brazil concluded that the court could
compel the mediator to testify because that was the most reliable evidence
considering the conflicting testimonies of plaintiff and defendant. 242 Judge
Brazil also reasoned that, the fact that the parties and their attorneys signed a
memorandum of understanding at the end of the mediation, California
courts—and thus him—were permitted to consider, in the context of a
hearing to determine enforceability, whether to admit evidence regarding
what was said and done during the mediation itself. 243 In determining
whether, under California law, the district court should compel the mediator
to testify despite the statutory prohibitions set forth in the aforementioned
Evidence Code sections, Judge Brazil relied on the 1998 court of appeal
decision in Rinaker v. Superior Court as standing for the broad proposition
that a mediator can be required to submit to in camera examination by a
judge and can be compelled to testify if, after in camera consideration of
what the mediator’s testimony would be, the trial judge determines that the
mediator’s testimony “might well promote significantly the public interest in
preventing perjury and the defendant’s fundamental right to a fair judicial
process.” 244 While the trial court in Rinaker did require the mediator to
testify, the factual context of that case was unique and some would argue
that the holding was limited to those special factual circumstances. 245
In Rinaker, juveniles were charged with committing vandalism—a
crime that could result in incarceration in a juvenile facility, and thus denial
of liberty.246 The victim filed a civil harassment action and a mediation was
conducted.247 During the mediation, the victim admitted that he had not
actually seen who threw the rocks at his car.248 However, at trial in the
criminal matter, the victim testified to the contrary during direct
examination.249 The minors then sought to compel the mediator’s testimony
241. Id. at 1127-28.
242. Id. at 1127.
243. Id. at 1131. Judge Brazil placed great significance on the written memorandum and stated
that “[i]f there were no signed writing, and the alleged contract was oral, California law would not
permit courts to use evidence from the mediation itself to determine whether an enforceable
agreement had been reached.” Id.
244. Id. (citing Rinaker v. Superior Court, 62 Cal. App. 4th 155 (Ct. App. 1998)).
245. See Foxgate Homeowners’ Ass’n v. Bramalea Cal., Inc., 25 P.3d 1117 (Cal. 2001) (“[T]he
only California case upholding admission, over objection, of statements made during mediation in
which no statutory exception to confidentiality applied, was Rinaker v. Superior Court . . . .”).
246. Rinaker, 62 Cal. App. 4th at 161-62.
247. Id. at 162.
248. Id.
249. Id. at 162, 169.
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to impeach the victim’s testimony in the delinquency proceedings;250
however, the trial court denied the motion. 251 The court of appeal reversed,
holding that the confidentiality provisions of Evidence Code section 1119
must yield when necessary to ensure the minors’ constitutional right to
effective cross examination and impeachment of an adverse witness in a
juvenile delinquency proceeding. 252 The court reasoned that neither the
witness nor the mediator had a reasonable expectation of privacy regarding
inconsistent statements made during the mediation because it has long been
established that, when balanced against the competing goals of preventing
perjury and preserving the integrity of the truth-seeking process of a juvenile
delinquency proceeding, the interest in promoting settlements must yield to
the minors’ constitutional right to effective impeachment.253
The Supreme Court of California precedent discussed above did not
exist at the time Olam was decided.254 Such precedent clearly states that it is
not for the courts to craft judicial exceptions to the broad confidentiality
protections which have been provided by statute. 255 Essentially, what Judge
Brazil did was craft a judicial exception. 256 One can only wonder if Judge
Brazil would have decided this case differently in the face of the Foxgate,
Rojas, Simmons and Cassel decisions if presented with the Olam facts today.
V. CONCLUDING THOUGHTS REGARDING MEDIATION CONFIDENTIALITY
There are several noteworthy “take aways” from the foregoing
comparison of the confidentiality protections available to California litigants
depending on whether they are in state or federal court. First, the
importance of confidentiality as a defining feature and essential ingredient of
mediation seems to exist under both state and federal law. 257 However, the
scope of protection each system is willing to allow appears to represent the
brightest line of demarcation between California’s state and federal courts.
Both are oriented towards “fairness of process,” but have a different
250. Id. at 162.
251. Id. at 161.
252. Id. at 160-61.
253. Id.
254. Compare Cassel v. Superior Court, 244 P.3d 1080, 1090 (Cal. 2011), with Olam v. Cong.
Mortg. Co., 68 F. Supp. 2d 1110 (N.D. Cal. 1999).
255. Cassel, 244 P.3d at 1088.
256. Olam, 68 F. Supp. 2d at 1110.
257. See supra Part III (discussing California’s strict confidentiality scheme); supra Part IV
(discussing the nonprivileged status of mediation confidentiality under federal law).
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emphasis. California courts focus on the process by making it clear what
protection shall be afforded when disputants utilize mediation in an effort to
resolve their differences. 258 Additionally, California courts have made it
clear that the scope of protection shall be broadly construed because the
legislature chose to enact a statute detailing exceptions to confidentiality that
are quite narrow. 259 Through the Facebook and Molina decisions, the focus
appears to be on the participants.260 Both cases suggest that federal courts
could “tolerate” a duty of confidentiality between or among the participants
in a mediation, provided there are exceptions which would allow the court to
step in to redress any abuses (e.g. fraud, duress, coercion, or some other
outcome that would constitute a miscarriage of justice). 261
A second “take away” is that while California’s confidentiality
protections have been stated in the form of an evidence exclusion provision,
California courts have construed this provision more like a privilege held by
all participants which operates as a bar to compelling disclosure, discovery,
or testimony without everyone’s consent. While the Folb and Molina
decisions acknowledged that confidentiality is an important and integral part
of the mediation process, in neither case was the court willing to stake out a
general rule for broad application. 262 Instead, both decisions ultimately
258. CAL. EVID. CODE § 1115(c) (defining the processes that qualify for confidentiality
protections).
259. Doe 1 v. Superior Court (Archdiocese Case), 34 Cal. Rptr. 3d 248 (Ct. App. 2005).
260. See Molina v. Lexmark Int’l, Inc., No. CV 08-04796 MMM (FMx), 2008 WL 4447678
(C.D. Cal. Sept. 30, 2008); Facebook, Inc. v. Pac. Nw. Software, Inc., 640 F.3d 1034 (9th Cir. 2011).
261. See Molina, 2008 WL 4447678; Facebook, 640 F.3d 1034. The recently revised Local
Rules of the United States District Court for the Central District of California provide an example of
such qualified tolerance:
[T]his Court, the mediator, all counsel and parties, and any other persons attending the
mediation shall treat as “confidential information” the contents of the written mediation
statements, any documents prepared for the purpose of, in the course of, or pursuant to
the mediation, anything that happened or was said relating to the subject matter of the
case in mediation, any position taken, and any view of the merits of the case expressed by
any participant in connection with any mediation. “Confidential information” shall not
be: (1) disclosed to anyone not involved in the litigation; [or] (2) disclosed to the
assigned judges . . . .
C.D. Cal. R. 16-15.8(a). But see C.D. Cal. R. 16-15.9 (allowing any judge or magistrate to dispense
with the foregoing confidentiality protections “as the judge, in his or her discretion, determines to be
appropriate”).
262. See Folb v. Motion Picture Indus. Pension & Health Plans, 16 F. Supp. 2d 1164, (C.D. Cal.
1998); Molina, 2008 WL 4447678, at *16. See also discussion supra Parts IV.B.1–2.
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concluded that whether, when, and to what degree confidentiality protection
is available will depend on the facts of the case. 263
A third “take away” is that Facebook presented the Ninth Circuit with
an opportunity to recognize a “duty of confidentiality” based upon the
northern district’s local rule. The Ninth Circuit did not need to mention the
local rule because the mediation at issue was not conducted through the
court’s ADR program. However, since the court did mention the rule, it
could have affirmed the lower court’s exclusion of evidence based upon a
finding of a duty of confidentiality since the underlying dispute was the
subject of litigation venued in the northern district. 264 Recognizing such a
duty of confidentiality based upon the court’s policies and treatment per its
local rules may have only been dicta in the context of the case before the
court, but it nevertheless would have advanced the ball in terms of
validating—at the federal level—the notion that some level of
confidentiality protection should be afforded communications during a
mediation, especially for mediations conducted through the federal court’s
ADR program.265
A fourth “take away” from the Facebook decision is that parties to a
mediation pending in federal court, or related to an existing or future federal
court action, should execute a written confidentiality agreement covering
anything the mediation participants might say or do during the course or in
furtherance of the mediation. This makes sense considering the Ninth
Circuit precluded the Winklevosses from introducing “any evidence of what
Facebook said, or did not say, during the mediation” because they had
signed a confidentiality agreement with respect to the mediation. 266 Such
agreements, however, are only contracts and therefore bind only those
persons who are parties to the agreement. This means third-party litigants
263. See Folb, 16 F. Supp. 2d 1164; Molina, 2008 WL 447678, at *14. See also discussion
supra Parts IV.B.1, IV.B.2.
264. See Facebook, 640 F.3d at 1036.
265. Under the Alternative Dispute Resolution Act of 1998, 28 U.S.C. §§ 651-52, all federal
courts are required to provide civil litigants with at least one ADR process, including but not limited
to mediation. 28 U.S.C. § 652(a). In connection with these programs, the district courts must adopt
local rules that provide for the confidentiality of the ADR process and “prohibit disclosure of
confidential dispute resolution communications.” 28 U.S.C. § 652(d). As such, the Ninth Circuit
would not have been stepping out on much of a limb by validating the confidentiality protections
provided under the northern district’s local rule. See 28 U.S.C. § 652(d) (requiring that district
courts must adopt local rules that prohibit disclosure of confidential dispute resolution
communications).
266. Facebook, 640 F.3d at 1040.
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are not bound and can nevertheless seek to compel disclosure by the
mediation participants by service of a subpoena.
A final “take away” is that confidentiality is an essential and integral
part of mediation. It encourages the exchange of information between the
parties and promotes problem-solving and interest-based negotiations, which
can yield more durable settlements. Doubts about the existence or scope of
confidentiality protections cannot help but lead to less sharing, less
willingness to develop information for use in mediation, less work in joint
sessions, more work in private caucuses, and more indirect communications
through the mediator so as to preserve deniability. As this area of the law
continues to develop, it will require a balancing of interests between
mediation participants, courts charged with overseeing these disputes, thirdparty litigants, and the public.
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The Five-Tool Mediator:
Game Theory,
Baseball Practices, and
Southpaw Scouting
Michael N. Widener*
I. INTRODUCTION
Not everyone can share the fortunes of the departed mega-negotiator
Richard Holbrooke.1 Most of us never will possess the Ambassador’s size,
genius, charisma, boundless energy, and relentlessness.2 Genetics, not
conditioning, determine most of such traits.3 For the remainder, the crucible
of childhood and adolescence, wildly beyond the control of youth, will
* The author is counsel to Bonnett, Fairbourn, Friedman & Balint, P.C.; Associate Faculty at the
School of Business, University of Phoenix; and, helpless to hit or throw a curve ball, works indoors.
This essay is for Newton F. Widener, Jr., my first batterymate.
1. Holbrooke, former United Nations Ambassador (1999-2001), was America’s special
representative to Afghanistan and Pakistan in the Obama State Department from January, 2009 until
his death in December, 2010 and was described by President George H.W. Bush as “the most
persistent advocate I’ve ever run into.” Roger Cohen, Op-Ed., The Mother of Friendships Lost, N.Y.
TIMES, July 10, 2008, http://www.nytimes.com/2008/07/10/opinion/10cohen.html. His greatest
achievement in consensus building was brokering the 1995 Dayton Peace Accords that resolved the
political and humanitarian crisis in Bosnia. Id. Holbrooke expressed his belief in the power of
negotiations to bring peace and prosperity in a politically disintegrating world by way of an
“improvisation on a theme” style of diplomacy. Id. International diplomacy is a special category of
multiparty negotiations; Holbrooke’s would not have succeeded at Dayton had the United States
armed forces not been active in destabilizing the confidence of Slobodan Milosevic in his control of
his land base. See Robert A. Pape, The True Worth of Air Power, FOREIGN AFF., Mar.-Apr. 2004, at
122-23.
2. Holbrooke’s 6’2”, barrel-chested frame was imposing and contributed, with his boundless
energy, to his dominance in bargaining encounters. See Michael Elliott, Remembering Ambassador
Richard Holbrooke, TIME, Dec. 14, 2010, available at
http://www.time.com/time/nation/article/0,8599,2036847,00.html.
3. See WAYNE WEITEN, PSYCHOLOGY: THEMES AND VARIATIONS 283 (2010) (discussing the
unquestionably inherited nature of height). A high energy level, like intelligence, is a combination
of nature and nurture. See id. The trait of intelligence remains the subject of scholarly controversy,
recent scholarship acknowledges that intelligence is a property of human nature that is subject to
environmental influences. See id. at 283-84.
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determine one’s capacity to galvanize others, forging consensus.4 No matter
how insightful a writer may be, no text—by itself—transmutes its reader
into an indomitable, force-of-nature-charged neutral. For non-Holbrookian
types, improvement in one’s capacity to broker accords can be enhanced
through adopting certain attitudes characteristic of the Five-Tool Mediator.5
Consider the technique utilized by most mediators in the ordinary
course: The contestants were one of America’s largest cities and an office
building owner whose procedural due process rights were unmistakably
violated by the municipality, although his damages were of questionable
During the mediation session, the mediator diligently
calculation.6
performed customary tasks, urging serious assessment of litigation risk;
commenting upon the causes of action, defenses, and claims of damages;
conveying settlement proposals back and forth; and affording each party his
candid assessment of the strengths and weaknesses of their respective
4. As a boy, Winston Leonard Spencer Churchill adored his mother who, being a busy wife
and hostess, had little time for him. PAUL JOHNSON, CHURCHILL, 8 (2009). Churchill regarded his
father with fear and awe; the latter, a brilliant scholar, found Winston to be a disappointment, so also
made little time for him. Id. at 9. A chubby youth, Winston performed poorly in school; he talked
with a lisp and stuttered. Id at 1, 9. Winston’s searing ambition likely arose from his desire to win
and maintain his absent parents’ approval. Id. at 109-37. In time, parental distancing turned him
into one of the most influential persons in modern British history, galvanizing a nation and its allies
with his tough, tenacious leadership as Prime Minister during the Second World War. Id. At the age
of 78, he won the Nobel Prize for Literature in 1953. Id. at 151. Churchill allegedly was lefthanded, but he held his brush in his right hand while painting. Id. at 158. A second poor student,
distanced from his parents and a contemporary of Churchill’s, was Hitler, another galvanizing figure
in European history.
5. The author uses the expression “mediator” throughout as a shorthand generic expression
for those engaged in the processes of conciliation and other forms of facilitation toward consensus
building. A discussion of varieties of facilitative dispute resolution is available in Deborah R.
Hensler, Our Courts, Ourselves: How the Alternative Dispute Resolution Movement Is Re-Shaping
Our Legal System, 108 PENN ST. L. REV. 165, 185-90 (2003). In baseball parlance, for position
players, the five tools are (1) hitting for average—lots of times on base—, (2) hitting for power—
causing other runners to score runs—, (3) running speed, (4) arm strength, and (5) fielding ability.
See MICHAEL M. LEWIS, MONEYBALL: THE ART OF WINNING AN UNFAIR GAME 3 (2003). Pitchers
are regarded as having but three “tools”: arm strength, command—the ability to throw
consistently—of some number of different pitches, and overall control—the ability consistently to
throw where the catcher “targets” the pitch to go by the batter. See Richard Wolfe, Patrick M.
Wright & Dennis L. Smart, Radical HRM Innovation and Competitive Advantage: The Moneyball
Story, 45 HUMAN RESOURCE MANAGEMENT 111, 115 (2006). Five-tool position players include
household names like Willie Mays, Ken Griffey Jr., Barry Bonds, and Alex Rodriguez, the latter still
playing for the New York Yankees. See Mark Bonavita, Baseball’s Five Tools, BEST IN THE GAME
ATHLETICS, LLC., Mar. 31, 1999, available at http://www.bestinthegame.net/library/baseballs-5tools; Albert Chen, Shin-Soo Choo, That’s Who, SPORTS ILLUSTRATED, Apr. 25, 2011, at 64.
6. This dispute eventually settled without the mediator’s participation in the ultimate
discussions, and is based on litigation in the United States District Court for the District of Arizona.
See Smith v. City of Phoenix, CV-10-638-PHX-GMS (D. Ariz. 2010). The author served as
mediator in the initial settlement conference.
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positions, including federal constitutional and ancillary state claims and
defenses.7 The parties offered a few grudging concessions but fewer overt
admissions of weakness in their respective positions.8 Indeed, the parties
moved more than halfway closer to settlement—measured by demand and
counteroffer—than when they began their session; still, at its close, no
settlement resulted.9 Instead, the parties departed with the mediator’s final
estimation of “what it would take to resolve the matter.” Was this
mediator’s performance worthy of his compensation? To what extent did
the parties and their counsel share responsibility for the collective failure to
achieve a resolution? Does the foregoing scenario resonate with your
experience of facilitation?
This article encourages mediators to become inciters and advocates for
an outcome that solves problems, irrespective of the amount in controversy
and the initial “gap” between offers and counteroffers of settlement. This is
not a “how to” article discussing facilitators’ tasks in settlement
negotiations; instead, the reader should focus more on the mediator’s role in
the process, advancing the value proposition in negotiations. The initial
phase in reordering the thoughts of the mediator is to understand the binaryoppositions thought tendencies of the parties and their legal representatives;
likely, all have attitudes that require retooling.10
This article does not propose that mediators become group therapists,
but instead urges them to relentlessly explore (1) the essence of each party’s
intentions and purpose within the controversy, and (2) a range of satisfactory
outcomes from the perspective of each party. Once that is accomplished, the
second, “incitement,” phase may commence. In this phase, three transitions
must occur.11 First, the concept of “wounding” must fade into the
background while the concept of amelioration—the path most proximate to
making each party whole—assumes the foreground.12 During the first
transition of the incitement phase, the warriors—those for whom the
encounter’s savagery matters equally with the outcome—must be disarmed
7. See id.
8. See id.
9. See id.
10. See Carrie Menkel-Meadow, When Litigation is Not the Only Way: Consensus Building
and Mediation As Public Interest Lawyering, 10 WASH. U. J.L. & POL’Y 37, 50-51 (2002)
[hereinafter Menkel-Meadow, Consensus Building].
11. See JULIE MACFARLANE, THE NEW LAWYER: HOW SETTLEMENT IS TRANSFORMING THE
PRACTICE OF LAW ix-xii, 11-12, 86-87 (2008).
12. See id.
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and converted into fellow seekers of imaginative solutions to the joint
problems to be resolved.13 This requires foremost that the mediators alter
the mind-set of the adversaries from the “binary thinking”14 realm.
The second transition of the incitement phase takes each party’s belief
that a “win” is the ultimate goal, and converts this into an understanding that
there is a problem to be solved, at the lowest possible cost, and in the most
expeditious manner feasible.15 Additionally, parties need to understand that
such an outcome is as close to victory as may be realizable. This transition
requires moving from pragmatic to imaginative thinking about a
controversy’s resolution. A realistic perspective in a controversy, while
helpful, is not all-sufficient to achieving a resolution in many cases unless a
third-party adjudicator intervenes and directs the dispute’s outcome. The
pragmatist negotiator’s perspective, that the dispute is a transaction whose
terms have been written down but not yet agreed to, will not guide the
parties down the path to resolution.16 The appropriate perspective sees the
dispute resolution environment as a white board, the problem set forth at the
top, with the resolution schematic remaining to be written.17 Here, every
possible solution is available for capture, evaluation, and incorporation into
an overall problem resolution.18 The third transition of the incitement phase
relates to trust—learning to accept evidence of trust extended by the other
disputant and to extend indications of trust without expectation of
reciprocity from the adversary.19
13. See id.
14. See infra Part III.A. Computers use binary code; thus, the “brain” within the central
processing unit recognizes only two states: “on” or “off.” See The Journey Inside, Explore the
Curriculum, Digital Information, Lesson 1: What is Binary Code?, INTEL,
http://www97.intel.com/en/TheJourneyInside/ExploretheCurriculum/EC_DigitalInformation/DILess
on1/ (last visited Mar. 1, 2012). Switches are arranged along Boolean guidelines, so that these two
states establish circuits performing logical and mathematical operations. See Binary—So Simple a
Computer Can Do It, KERRYR.NET, http://www.kerryr.net/pioneers/binary.htm (last visited Mar. 1,
2012). In neuropsychological terms, the human brain’s left hemisphere functions to naturally
dichotomize, devising an “either/or” view of the world. See IAIN MCGILCHRIST, THE MASTER AND
HIS EMISSARY: THE DIVIDED BRAIN AND THE MAKING OF THE WESTERN WORLD 137, 139 (2009)
[hereinafter MCGILCHRIST, THE DIVIDED BRAIN].
15. Carrie Menkel-Meadow, Toward Another View of Legal Negotiation: The Structure of
Problem Solving, 31 UCLA L. REV. 754, 764-68 (1984) [hereinafter Menkel-Meadow, Structure of
Problem Solving].
16. This effectively recapitulates “adversarial negotiation,” a tendency that inhibits creativity
in solution discovery, as well summarized by Professor Menkel-Meadow. See id. at 775-78.
17. Conceptualizing the negotiation process as a brainstorming, problem-solving session
enables the discovery of unanticipated solutions. See id. at 819, 821-22.
18. Cf. id. at 772-75.
19. See, e.g., COLIN F. CAMERER, BEHAVIORAL GAME THEORY: EXPERIMENTS IN STRATEGIC
INTERACTION, 83-100 (2003).
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Adopting these attitudes will set the facilitator on the path to becoming a
Five-Tool Mediator. This article is not just valuable for mediators, but
offers a lens through which to evaluate the talents of a prospective facilitator
or to gauge a current facilitator’s ongoing performance.
Section II of this article delves briefly into the influence professional
baseball has had on the American culture and the lessons it teaches for use in
facilitative processes in developing collaborative strategies. The remainder
of the article describes the five tools of effective mediators.
II. MEDIATOR LESSONS FROM PROFESSIONAL BASEBALL
OPERATIONS
Professional baseball has a hold over a large portion of America’s
collective psyche, its storied narrative20 and fascinating personalities richly
texturing each phase of the national pastime. Perhaps to the dismay of
idealists, professional baseball’s off-field environment resonates with
controversy and friction between and among: owners,21 owners and
players,22 owners and managers,23 owners and unions,24 managers and
umpires, managers and players,25 players and umpires,26 and players and
society at large.27
20. Certainly the most exhaustive non-print media treatment of the pastime is Ken Burns’
series first produced for the Public Broadcasting System and aired initially in 1994, with a
supplemental two part series called “The Tenth Inning” first broadcast in 2010. Baseball: A Film by
Ken Burns (PBS television broadcast 1994) [hereinafter Burns], available at
http://www.pbs.org/kenburns/baseball/. Recently, one of the fine American baseball writers
reflected on the infusion of the game in American culture. See Joe Posnanski, Loving Baseball:
What Keeps the Grand Game Great? SPORTS ILLUSTRATED, July 25, 2011, at 50.
21. See, e.g., ALBERT T. POWERS, THE BUSINESS OF BASEBALL 124, 221 (2003) (Bill Veek’s
marketing of on-field promotions frowned on by other owners).
22. Feuds between experienced players and owners arise during contract negotiations with the
players’ union, during salary arbitration—when it does proceed—, or via agents like Scott Boras.
See, e.g., Ben McGrath, The Extortionist, THE NEW YORKER, Oct. 29, 2007,
http://www.nypost.com/p/sports/yankees/feuding_reggie_billy_push_885fHmgu7td4RetHQ3hfmO.
23. Kayla Webley, Hiring and Firing Billy Martin, TIME, July 13, 2010, available at
http://www.time.com/time/specials/packages/article/0,28804,2003503_2003501_2003497,00.html.
24. See, e.g., POWERS, supra note 21, at 189-91, 280-82 (discussing owners’ lockout of
players); Ross Newhan, Umpires’ Union Adds Its Complaint to Mix, L.A. TIMES, Dec. 23, 1994
(explaining that bargaining sessions between owners and the umpires’ union were unsuccessful and
umpires’ lockout was threatened as of January 1, 1995).
25. See, e.g., Dick Schaap, Feuding Reggie, Billy Push Steinbrenner to the Brink, N.Y. POST,
July 16, 2010,
http://www.nypost.com/p/sports/yankees/feuding_reggie_billy_push_885fHmgu7td4RetHQ3hfmO.
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In addition to its controversy, professional baseball, suffused with
tradition, has a history of hidebound resistance to evolution.28 Consider, for
instance, the “outlaw” brand29 applied to innovators of the game who
suggested professional baseball was entertainment, such as Bill Veeck,
former owner of the Chicago White Sox,30 or Charles O. Finley, former
owner of the Oakland Athletics.31 Any fan can recall the outcry
accompanying changes such as adding new franchises,32 moving
franchises,33 ball and bat “juicing,”34 raising and lowering of the pitching
mound,35 and even the abandonment of mid-calf hosiery in favor of long
pants.36 Likely, three of the most controversial rule changes in modern
professional baseball history are, the designated hitter,37 the addition of
teams to the postseason playoffs leading to the World Series,38 and the
26. See, e.g., Steve Wulf, The Spit Hits the Fan, TIME, June 24, 2001, available at
http://www.time.com/time/magazine/article/0,9171,134797,00.html.
27. Some players are gifted with the capacity to alienate millions. Consider the cases of Pete
Rose, late of the Cincinnati Reds; Manny Ramirez, late of the Boston Red Sox and Los Angeles
Dodgers—playing in 2011 with the Tampa Bay Rays—; or Barry Bonds, late of the San Francisco
Giants. Congressional investigations into baseball’s tolerance for substance abuse in 2005 and 2008
resulted from the public outcry over the behavior of players in uncertain numbers. See Lewie Pollis,
Barry Bonds, Pete Rose and the Most Polarizing Figures in MLB Teams’ Histories, BLEACHER
REPORT (June 7, 2011), http://bleacherreport.com/articles/725895-mlb-pete-rose-barry-bonds-andthe-most-polarizing-figures-in-teams-histories#/articles/725895-mlb-pete-rose-barry-bonds-and-themost-polarizing-figures-in-teams-histories.
28. See Wolfe, Wright & Smart, supra note 5, at 115-16 (since Major League Baseball is
tradition-bound, characterized by deep respect for convention and precedent, it has not changed
much and is not prone to radical innovation; in short, the institution tends to reinforce the status
quo).
29. ANDREW S. ZIMBALIST, BASEBALL AND BILLIONS: A PROBING LOOK INSIDE THE BIG
BUSINESS OF OUR NATIONAL PASTIME 125 (1994) [hereinafter ZIMBALIST, BASEBALL AND
BILLIONS].
30. See BILL VEECK & ED LINN, VEECK—AS IN WRECK: THE AUTOBIOGRAPHY OF BILL
VEECK 40-41, 105, 118-20, 126, 387 (1962).
31. See G. MICHAEL GREEN & ROGER D. LAUNIUS, CHARLIE FINLEY: THE OUTRAGEOUS STORY
OF BASEBALL’S SUPER SHOWMAN 48 (2010).
32. POWERS, supra note 21, at 143-48, 336-40.
33. Id. at 124-31.
34. Id. at 123, 222-24. See JASON TURBOW & MICHAEL DUCA, THE BASEBALL CODES:
BEANBALLS, SIGN STEALING, & BENCH-CLEARING BRAWLS: THE UNWRITTEN RULES OF
AMERICA’S PASTIME 187-91, 199-205 (2010).
35. WILLIAM F. MCNEIL, THE EVOLUTION OF PITCHING IN MAJOR LEAGUE BASEBALL 1-2,
121-22 (2006).
36. See POWERS, supra note 21, at 215, 221 (explaining that uniforms said to “look like
pajamas”).
37. Id. at 222-24; see also GERALD W. SCULLY, THE BUSINESS OF MAJOR LEAGUE BASEBALL
65-66, 202 n.21 (1989).
38. POWERS, supra note 21, at 253, 281.
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banning fallout accompanying discovery of performance-enhancing drugs.39
Albeit a traditions-based institution, social crises and cultural trends affect
Major League Baseball (MLB)—including the clubs’ ownership groups—no
differently than other institutions of more recent vintages.40
Though the financial stakes of ownership and player compensation
packages are astronomical,41 and some subset of the participants seem
perpetually at odds, neither the stakes nor the controversies have cast the
participants in rigid behavior patterns. Indeed, some of the most creative
problem-solving episodes in American business history have occurred
within the confines of professional baseball, involving such issues as player
contractual arrangements,42 trades among clubs attempting to improve team
skill level, the image of the team as a representative of its home, or the
39. See, e.g., Paul D. Staudohar, Performance-Enhancing Drugs in Baseball, 56 LAB. L.J. 139
(2005); JASON PORTERFIELD, MAJOR LEAGUE BASEBALL: THE GREAT STEROID SCANDAL 6-15
(2009). Of course, the three true “revolutions” in the modern game of baseball were: (1) racial
integration in the 1940s, see SCULLY supra note 37, at 172-74; (2) the introduction of free agency in
the 1980s, id. at 37; and (3) the introduction of sabermetric measures—which are a system of
mathematical models to evaluate a player’s potential that marked a departure of seismic magnitude
from the convention of applying lifetimes of scouting experience and observational instinct—to
player evaluations. Brent C. Estes & N. Anna Shaheen, Determinants of Value and Productivity in a
Complex Labor Market: How Sabermetrics and Statistical Innovation Changed the Business of
Professional Baseball, 2 BUS. STUD. J. (SPECIAL ISSUE) 27, 31, 43-45 (2010), available at
http://www.alliedacademies.org/Publications/Papers/BSJ%20Vol%202%20SI%20No%201%202010
%20p%2027-48.pdf (last viewed Mar. 2, 2012). These phenomena were reactions to, or reflections
of, contemporary social conditions, not “manufactured” changes by the stakeholders to innovate the
sport. See also Burns, supra note 20. Ken Burns weaves the history of baseball into the social and
economic trends of America’s legacy in his PBS documentary on the game. Id. He recounts the
Negro Leagues that provided separate and unequal opportunities for African-Americans, primarily in
the 1920s through the 1940s. Id. As America changed, so did baseball. See id. In September 1945,
five months after assuming office, President Harry S. Truman began the process of integrating the
army; only a month later, Brooklyn Dodgers’ General Manager Branch Rickey signed Jackie
Robinson to a professional contract. See id.
40. For example, mass media reinforces culturally accepted notions about members of racial
and ethnic groups, and baseball players are among those imprinted by the media with performancesuitable “traits.” See, e.g., David C. Ogden, The Welcome Theory: An Explanation for the
Decreasing Number of African Americans in Baseball, NINTH ANN. CONF. POCPWI, Nov. 15, 2004,
at 52-53.
41. See e.g., POWERS, supra note 21, at 264-68, 317 (television revenues); id. at 269-71 (team
payrolls); id. at 276-77 (franchise values); see also ANDREW ZIMBALIST, MAY THE BEST TEAM WIN:
BASEBALL ECONOMICS AND PUBLIC POLICY 55-74 (2003) [hereinafter ZIMBALIST, BASEBALL
ECONOMICS] (team profitability).
42. One illustration of such arrangements is player deferred compensation, especially in longterm contracts. See ZIMBALIST, BASEBALL ECONOMICS, supra note 41, at 113; see generally infra
Part IV (describing the maneuvers in professional baseball).
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economic viability of the franchise.43 The ability to transform a leisure
activity’s competitive business model into a billion-dollar industry44 renders
settlement of complex conflicts a value-added proposition. A highly
contentious and publicly exposed institution, like Major League Baseball,
has bred creative problem solving via negotiating processes.
Mediators may be assured that the thorniest controversies are penetrable
to solution if properly framed45 and flexibly approached.46 The following
describes approaches to that exercise; as well as, for the public, suggestions
for evaluating mediator candidates beyond considering their backgrounds in
the facilitation field. There are four fundamental tools in addition to the
essential tool of understanding the need to transform binary predisposition,47
informing the thinking of the best mediators. Proper mediator attitudes
increase the likelihood of better outcomes in resolving a dispute’s
underlying problems.48 These tools are traits the big-league mediator should
feature in her game.
III. FIRST MEDIATOR TOOL: DEFLECTS BINARY OUTLOOKS ON A
CONTROVERSY
A. Transitioning from Binary Thinking
A discussion of binary thinking begins with the thinking mechanism
itself, the brain. The brain is segmented into two halves, the so-called “right
brain” and “left brain,”49 each possessing unique qualities that, in some
43. Baseball has often been the pioneering sport when it comes to innovation and change in
labor relations. See Paul Staudohar & Pedro Garcia-del-Barrio, Have We Seen the Last of Baseball’s
Labor Wars?, No. 0835 IASE CONF. PAPERS, June 2008. Besides having the first players’ union, it
was the first sport to introduce a strong, confrontational labor leader in Marvin Miller. See id. It
was the first to have grievance arbitration. See id. Baseball made a major breakthrough in the form
of player free agency. See id. It was the first to have a major work stoppage that interrupted the
regular season. See id. Its pension system has always been on the cutting edge of professional
sports. See id. Baseball is moving away from the conflict model toward a cooperative approach in
which the interests of labor and management are joined. See id.
44. See ZIMBALIST, BASEBALL ECONOMICS, supra note 41, at 55-74 (discussing franchises
value rankings).
45. See Menkel-Meadow, Structure of Problem Solving, supra note 15, at 803-13, 840.
46. See id. at 815-29.
47. See infra Part III.A.
48. See Dean G. Pruitt & Steven A. Lewis, The Psychology of Integrative Bargaining, in
NEGOTIATIONS: SOCIAL PSYCHOLOGICAL PERSPECTIVES 161, 169-70 (Daniel Druckman ed., 1977).
49. See Graham B. Strong, The Lawyer’s Left Hand: Nonanalytical Thought in the Practice of
Law, 69 U. COLO. L. REV. 759 (1998). Strong’s work, while related to the ways of lawyerly thought,
is eclipsed in comprehensiveness of description of hemispheric specializations by the work of
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measure, would be wasted were it not for the collaborative activities of the
other hemisphere.50
Understanding human brain function highlights the contrast in two
perspectives: One views conflict as a binary process of reductionism and
analysis on the one hand, and the second sees conflict as problem-solving
exercise requiring a holistic approach to achieve a resolution.51 Professor
Graham Strong has explained, comprehensively, how brain function affects
the lawyer’s worldview.52 The brain’s two hemispheres are joined together
by a massive nerve fiber band, but are essentially identical in size and
form.53 In function, they serve dissimilar yet harmonious purposes.54 The
left hemisphere, sometimes called the left brain (supporting the view that the
brain is two organs instead of a single organ), enables humans to divide
spatial relationships between objects, rotate images in the mind, discern
patterns in what appears to be a random array, and generate an image of a
whole object from fragmented parts.55
By contrast, the right hemisphere, or right brain, while vital to
perception, is more abstruse in its cognitive value-added.56 Essentially, its
function is critical in perceiving emotional nuances,57 in constructing a
McGilchrist. See MCGILCHRIST, THE DIVIDED BRAIN, supra note 14, at 137, 139. The two
hemispheres are not distinguished by what they do so much as by how they proceed with
functioning, and the human brain is a mechanism that McGilchrist acknowledges is “a single,
integrated, highly dynamic system.” Id. at 34.
50. See Strong, supra note 49, at 764-74.
51. Id. at 773.
52. Id. at 759-60.
53. Id. at 764.
54. See id. at 764-74.
55. Id. at 771. The right hemisphere sees the whole before it is broken into parts; thus, its
holistic processing is not based on summing those parts. Iain McGilchrist, Reciprocal Organization
of the Cerebral Hemispheres, 12 DIALOGUES IN CLINICAL NEUROSCIENCE 503-15 (2010)
[hereinafter McGilchrist, Reciprocal Organization], available at
http://www.lifespanlearn.org/documents/2011Handouts/McGilchrist/McGilchrist_2%202.pdf. That
hemisphere’s understanding is based on complex pattern recognition as well, enabling holistic, or
Gestalt, perception; here, truth corresponds with something other than itself. Id. See also
MCGILCHRIST, THE DIVIDED BRAIN, supra note 14, at 4, 46, 193; MICHAEL SHERMER, THE
BELIEVING BRAIN: FROM GHOSTS AND GODS TO POLITICS AND CONSPIRACIES 5, 72, 120-27, 206
(2011) (explaining that the human brain, especially the right hemisphere, is hard-wired to detect
patterns, even from meaningless data).
56. Strong, supra note 49, at 669.
57. Id. at 775. This feature is of considerable weight for those who hold that emotions are
vital components of decisions and choices, to be factored into the weighing of gains and losses that
lead to accepting or rejecting offers. See LEN FISHER, ROCK, PAPER SCISSORS: GAME THEORY IN
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plausible and coherent narrative—and receiving the brain’s messages—, and
“in the creative generation of hypotheses in the legal problem-solving
process.”58 While the left brain is arguably of greater utility in one’s scoring
well on the Law School Admission Test, however, especially in the logical
reasoning and “games” sections, achieving a superior score without the input
of the right brain is exceedingly unlikely. The right brain’s creative
generation of hypotheses for solving puzzles is key to their solution in the
allotted time. While the left brain may predominate in couching an
argument that leads to dismissing an opposing party’s claims on the
narrowest conceivable procedural grounds, that capacity alone does not
guarantee ultimate resolution of the conflict environment.
Additionally, the left brain is the portion that achieves reduction of
phenomena, such as an array of facts or available arguments.59 In “high
gear,” the left brain atomizes such phenomena into what Professor MenkelMeadow describes as definable, binary categories that admit of no interstitial
alternatives except “null sets.”60 Parties in conflict see such strict
dichotomies as fact versus law, plaintiffs versus defendants, Republicans
versus Democrats, conservatives versus liberals, and so forth.61 Taken to
ultimate lengths, one encounters the Manichean axis of good versus evil, and
more pragmatically, the dichotomy of justice versus injustice.62 In this
binary environment, parties determine whether to implement reconciliation
or accommodation through either negotiation or adjudication according to
how they understand the opposing position asserted by the adversary.63
Identifying duality in opposition is the common manifestation of a
binary thought process.64 Because humans tend to organize the real world
by segregating ideas, forces, and parties into categories and camps, there is a
EVERYDAY LIFE 123-24 (2008). Fisher’s work is a basic primer on the essential principles of game
theory that every person, earnestly engaged in facilitation whose practice requires a working
knowledge of predicting outcomes, should read—essentially, all persons paid for being the neutral in
facilitative processes. Game theory is the interdisciplinary study of human behavior focusing on
rational choices of strategies and treating direct interactions between and among individuals as if it
were a game with known rules and payoffs and in which all participants are trying to win. ROGER A.
MCCAIN, GAME THEORY: A NONTECHNICAL INTRODUCTION TO THE ANALYSIS OF STRATEGY 19
(rev. ed. 2010).
58. Strong, supra note 49, at 775.
59. Id. at 771.
60. See Menkel-Meadow, Consensus Building, supra note 10, at 37, 39.
61. Id. at 50.
62. Id. at 39.
63. See id. at 39.
64. See id. at 39 (“There are two kinds of people in the world—those who divide things into
two—and those who don’t.”).
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corollary tendency to polarize.65 This fact, in combination with reduction of
concepts into the most elementary issues, leads to the habit66 of focusing
upon the most narrow point and ignoring the perspective and appreciation of
the entire landscape of a dispute.67 With this thought process, one loses the
capacity to integrate connected issues into an amalgam, defining a problem
susceptible to solution.68
This inclination to atomize is prevalent among litigation attorneys.69
Consequently, parties poised in diametric opposition entails the convenient
separation into camps of win or lose, minority and majority rules, litigate or
settle, the whole pie or a defense verdict.70 Civil lawsuits and criminal
prosecutions, however, are rarely binary-outcome events.71 The decision to
participate in a joint solution of a problem is infused with the vagaries of
predicting (1) future events, (2) whether the facts and decision points have
See generally id.
See Margaret S. Herrman, Conclusion, in THE BLACKWELL HANDBOOK OF MEDIATION:
BRIDGING THEORY, RESEARCH AND PRACTICE 421, 424 (Margaret S. Herrman ed., 2006) (referring
to the “reductionistic comforts of binary thinking”). McGilchrist acknowledges the left brain’s
special capacity to focus on isolated pieces of information. See MCGILCHRIST, THE DIVIDED BRAIN,
supra note 14, at 4. He equates reductionism to disengagement, causing left-hemispheric “vision” to
make people feel powerful and the reductionist “knowingly superior.” Id. at 424.
67. See, e.g., Menkel-Meadow, Structure of Problem Solving, supra note 15, at 784-89
(assuming that only one issue exists enables a person’s neglect of other issues or needs of the
remaining parties).
68. See id. at 788-89.
69. I was engaged in a real property transaction in the mid-2000s with a Harvard Law graduate
who, determined to prove himself the smartest person in the room, ground every legal or business
issue he debated to powder in the hope of finding the winning argument in the dust of minutiae. The
deal died, in large measure due to his efforts to have his camp’s position on each issue prevail and to
the psychological weariness he promoted in every side’s negotiators. I believe this to be a product of
his relative inexperience in negotiation as much as his submission to left hemispheric function.
McGilchrist observes that left-hemisphere thinking is essentially decontextualized; consequently,
there is a tendency toward inflexible focus upon the internal logic of a situation, ignoring what
experience teaches in the overall circumstances. MCGILCHRIST, THE DIVIDED BRAIN, supra note 14,
at 50. See also McGilchrist, Reciprocal Organization, supra note 55, at 325. The opposing party’s
counsel had little sense of the flow of the negotiation, having transformed the discussion process—in
his “mind”—into a series of static points or moments, see MCGILCHRIST, THE DIVIDED BRAIN,
supra note 14, at 139; see McGilchrist, Reciprocal Organization, supra note 55, at 326, rather than
into an endeavor to reach a cooperative solution in which the parties commit themselves to a
coordinated choice of strategies, see MCCAIN, supra note 57, at 51, 54.
70. See Menkel-Meadow, Consensus Building, supra note 10, at 39.
71. Id. at 40, 43.
65.
66.
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been correctly communicated to the principals, (3) the principals’ own biases
and perceptions, and (4) predictions of the opposing side.72
If facilitative processes are viewed as binary, then counsel representing
the parties typically will think in terms of the need to listen to the other
parties, to process and understand the “other side’s” information, and then to
determine if “allowing my client to be persuaded through negotiation” or
“moving the matter through adjudication” is the preferable course.73
Professor Menkel-Meadow notes, hearing out the other stakeholders is
falsely reductionist because some problems are not susceptible to identifying
“winners” and “losers” at the conclusion of the conflict resolution vehicle.74
The binary thought process fails to recognize that frequently grades, or
degrees of correctness of views and percentages of outcome achievement,
are part of any problem-solving process.75 Outcome achievement that is
most productive is solution-based, not merely “assessment and dissection”
based.76 Defending the narrowest of positions on atomized issues diverts the
parties from satisfactory problem solving.
72. See Peter B. Friedman, Losing $500 Million Was a Legal Win: Outcomes and Predictions
From a Lawyer’s Point-of-View, RULING IMAGINATION: LAW AND CREATIVITY BLOG (June 11,
2010), http://blogs.geniocity.com/friedman/2010/06/losing-500-million-was-a-legal-win-outcomesand-predictions-from-a-lawyers-point-of-view/. Dealing with such vagaries lies within the realm of
right-hemispheric function, dealing with real world phenomena—as opposed to abstractions—,
observing each thing in its context, in a qualifying relationship with its surroundings.
MCGILCHRIST, THE DIVIDED BRAIN, supra note 14, at 49-50.
73. See Menkel-Meadow, Consensus Building, supra note 10, at 39.
74. Id. at 40. The exercise of consensus building as joint problem solving requires, initially,
refocusing the parties from the articulation of a personal grievance—the foe “screwed me”; the foe
“deserved nothing different”—to the identification by each party, camp, or stakeholder of a problem.
This centers the parties in resolving problems as contrasted with wounding. First, therefore, the
mediator must compel the foes to identify a problem without reference to the actions or purposes of
the other side. For instance, viewing the hypothetical in Part I, see supra pp. 98-99, the property
owner must be guided to say, “My problem is that I cannot achieve the return on my investment [in a
lot that was zoned commercially] if the property cannot be used for some commercial purpose”;
while the municipality must be guided to say, “Our problem is that if we permit a parcel situated in
the middle of a residential area to be used commercially, there is no consistency in the zoning
ordinance’s application, and neighborhood disruption and public mistrust results.” The second step
is for the mediator to synthesize the articulated self-interested problems into a joint problem lending
itself to a mutually acceptable, if not—to any foe—completely satisfying, solution. In this instance,
one plausible solution was the granting of certain zoning adjustment relief that would have permitted
a non-permanent, quasi-commercial use of the parcel (in some jurisdictions known as a “home
occupation”) while retaining the property’s residential zoning.
75. PAUL F. WILSON, LARRY D. DELL & GAYLORD F. ANDERSON, ROOT CAUSE ANALYSIS: A
TOOL FOR TOTAL QUALITY MANAGEMENT 56, 89-90 (Jeanine L. Lau & Mary Beth Niles
eds.,1993).
76. See, e.g., Menkel-Meadow, Structure of Problem Solving, supra note 15, at 790 (illustrates
an assessment strategy based on a “what the court might do at trial” risk-assessment). See also
Friedman, supra note 72, for an illustration of how the “loser” can win a significant victory in
litigation. Exxon won its litigation with the government by paying more than $507.5 million in
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B. Surmounting the Barrier of Pragmatism: Destabilization and Game
Theory
Collaborative processes gain momentum when threats of legal action or
other imminent crises to the stability of the existing order—such as natural
calamities or regime change77—are taken seriously by opposing
stakeholders.78 In the legal realm, these are referred to by some scholars as
“legal destabilization rights.”79 Fear of the consequences of forthcoming
regulatory implementation causing an unwanted change in business
conditions80 is an illustration of events promoting the proper “crisis”
mentality bringing stakeholders together to bargain.
Historically, professional baseball management has invoked three such
destabilization rights. The first is the threat of contraction in the number of
major league teams, attempted in both 2001 and 2006.81 On November 6,
2001, the owners voted to eliminate two MLB teams, alleging that
contraction—from thirty to twenty-eight teams—would materially help the
finances of the remaining teams.82 The timing of the vote suggested,
punitive damages, because the amount originally awarded against the corporation was $5 billion. Id.
The notion that Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008), represented a final
pronouncement of defeat for the oil conglomerate misses the critical point of victory; rather, it
established that maritime law’s upper limit for punitive damages is a 1:1 ratio to the awarded
compensatory damages. Id. This represented a far greater triumph for the entire oil industry than
the value of the damages paid by Exxon. Id.
77. Altering an unsatisfactory status quo via pursuit of destabilizing goals is one tenet of
recent American foreign policy. See Stephen Sestanovich, American Maximalism, NAT’L. INT., Mar.
1, 2005, at 13, 20-21.
78. See Charles F. Sabel & William H. Simon, Destabilization Rights: How Public Law
Litigation Succeeds, 117 HARV. L. REV. 1016, 1020 (2004).
79. See id. at 1016.
80. See Carrie Menkel-Meadow, Getting to “Let’s Talk”: Comments on Collaborative
Environmental Dispute Resolution Processes, 8 NEV. L.J. 835, 843 (2008) [hereinafter MenkelMeadow, Getting to “Let’s Talk”].
81. See John T. Wolohan, Major League Baseball Contraction and Antitrust Law, 10 VILL.
SPORTS & ENT. L.J. 5, 5 (2003). The year 2006 was a significant time because the Basic Agreement
with the Major League Baseball Players Association expired after the 2006 season; that agreement
contained a provision that obligated the players not to contest the contraction by no more than two
teams, so long as the decision about the nature of the contraction was communicated by July 1, 2006.
See Scott R. Rosner, The History and Business of Contraction in Major League Baseball, 8 STAN.
J.L. BUS. & FIN. 265, 266 (2003).
82. See Wolohan, supra note 81, at 5. That this threat was destabilizing to many is suggested
by the outpouring of legal scholarship on the subject of contraction following the announcement,
including the Symposium in Volume 10 of Villanova’s Sports and Entertainment Law Journal to
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however, a different motivation by the owners. The initial intention may
have been to weaken the players’ union, while further attempting to compel
cities to reconsider demands by the owners that there be municipal subsidies
of baseball stadiums.83 The second destabilizing tactic is the threat of a
player lockout.84 Finally, the third tactic is threatening franchise relocation
in an effort to exact larger public subsidies from city governments and
taxpayers.85
Mediators not backed by governments have little power to bring about
credible threats of material destabilization.86 They lack the power to
introduce “urgency triggers,” to contemplate immediate joint problem
solving—with a few exceptions. One strategy that may bear fruit, by
analogy, is urging the disputants to proceed with “baseball arbitration,” or
final-offer arbitration as it is called in the dispute resolution practitioner
community.87 Salary arbitration is one element of the Basic Agreement
between the owners and the players’ union that mandates final-offer
arbitration for players who complete three years of league service in Major
League Baseball.88 Final-offer arbitration has the ability to deter entrenched
positions on either side.89 Usually, the specter of possible failure compels
which Professor Wolohan contributed his paper. See generally id. The contraction was
controversial in many circumstances. See POWERS, supra note 21, at 308-10.
83. ZIMBALIST, BASEBALL AND BILLIONS, supra note 29, at 136-40.
84. Of course, this threat is a double-edged sword because the players’ union also can threaten
a strike. Between 1972 and 1994-95, every round of negotiations between the owners and players
produced either a strike or a lockout. See Paul D. Staudohar, Baseball Negotiations: A New
Agreement, MONTHLY LAB. REV., Dec. 2002, at 15-16.
85. See ZIMBALIST, BASEBALL ECONOMICS, supra note 41, 124.
86. Cf. Charles F. Sabel & William H. Simon, Destabilization Rights: How Public Law
Litigation Succeeds, 117 HARA. L. REV. 1015, 1054, 1056 (2004) (once parties to a dispute have
joined issues in litigation, only a limited range of interventions—whether an injunction or
damages—are available to establish a “mandate” for resolution and those are outside the province of
the mediator in private civil litigation).
87. See Amy Lok, Final-Offer Arbitration, 10 ADR BULL., no. 4, 2008 at 1-2, available at
http://epublications.bond.edu.au/cgi/viewcontent.cgi?article=1431&context=adr&seiredir=1&referer=http%3A%2F%2Fscholar.google.com%2Fscholar%3Fhl%3Den%26q%3DAmy%2
BLok%2Bfinal%2Boffer%26btnG%3DSearch%26as_sdt%3D1%252C3%26as_ylo%3D%26as_vis
%3D0#search=%22Amy%20Lok%20final%20offer%22.
88. See Basic Agreement art. VI, § F(1) (2007-2011), available at
http://mlbplayers.mlb.com/pa/pdf/cba_english.pdf (agreement between the American League of
Professional Baseball Clubs, National League of Professional Baseball Clubs, and Major League
Baseball Players Association). For background on the use of final offer arbitration in baseball, see
ZIMBALIST, BASEBALL AND BILLIONS, supra note 29, at 82-83; SCULLY, supra note 37, at 161-65.
89. See Lok, supra note 87, at 1. Baseball’s arbitration system is designed to encourage
negotiation between the parties, and the system has had that effect. See David J. Faurot & Stephen
McAllister, Salary Arbitration and Pre-Arbitration Negotiation in Major League Baseball, 45
INDUS. & LAB. REL. REV. 697, 701 (1992). The baseball arbitrator has only twenty-four hours to
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the parties to take their positions to a level of analysis characteristic of most
early term and even mid-term dispute evaluations.90 Recent player contract
negotiations suggest that owners, in an effort to avoid a hearing, continue to
make players progressively more lucrative offers in the days and hours
closely preceding the time of the hearing.91
If the mediator encourages a swift resolution, coupled with the certainty
of exposure, the parties in all likelihood will move instead toward more
realistic positions in joint problem solving. Pushing for final-offer
arbitration motivates negotiation-type processes; under the threat of
destabilization, stakeholders are forced to at least consider whether they
actually believe the positions they are asserting in a more quantitative, less
emotional way.92
Mediators will seldom have destabilization as a “weapon” against binary
thinking; however, a less stressful approach is applying a select number of
principles of game theory to these parties’ polarized positions. The mediator
must prevent the foes from escalating the conflict by directing them from a
choose one of the offers made for the player’s salary, and the club and player have only one hour
apiece to present evidence, creating a high-stakes urgency for the hearing itself. See id. at 698-99.
90. See SCOTT R. ROSNER & KENNETH L. SHROPSHIRE, THE BUSINESS OF SPORTS 376 (2d ed.
2011) (salary arbitration typically increases player compensation above its prior level and results in
more realistic offers being produced).
91. See Ken Peters, Ethier, Dodgers Reach Agreement, AZCENTRAL.COM (Feb. 17, 2009, 1:41
PM), http://www.azcentral.com/sport/diamondbacks/cactus/articles/2009/02/17/20090217spt-ethierdodgers-reach-agreemeent (club and player delayed the time of the arbitration hearing so the sides
could continue to negotiate in the antechamber of the hearing room). One theory often repeated for
the owners’ conduct in last minute contract concessions is that salary arbitration is a process with
great likelihood for spoiling the atmosphere on the team because the owner’s representatives must
argue to the arbitrator in detail about the inferior value of the player, implicitly denigrating the
talent—inherent worth—of the player. See id. Ironically, this form of dispute resolution is binary in
that the neutral party accepts only one of the two opinions of value without adopting a middle
ground. See supra Part III. In January 2012, the sides again avoided arbitration by ageing to a oneyear, $10.95 million contract after he was paid $9.25 million in 2011. See Andre Ethier Re-Signs
with Los Angeles Dodgers for One-Year, $10.95 Million Deal, AZCENTRAL.COM (Jan. 17, 2012 1:12
PM), http://www.azcentral.com/sports/diamondbacks/articles/2012/01/17/20120117andre-ethier-resigns-los-angeles-dodgers-one-year-million-deal.html.
92. A more mathematical assessment, based on Nash bargaining solutions premised on a Nash
Equilibrium, is found in Faurot & McAllister, supra note 89, at 701-04. The authors conclude that
for best results, the player should reveal risk-neutral preferences when bargaining will yield the Nash
Solution based on the revealed preferences. Id. at 710. The Nash Solution posits that where any
finite resource is to be divided, rational participants will choose a division of the resource that
maximizes the product of their utility functions. See FISHER, supra note 57, at 120.
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posture of “tit-for-tat,”93 a conditional cooperative strategy based on threat
of reprisal, toward a more broadly cooperative “I’ll scratch your back if you
do likewise” duality based on reciprocity of good will.94 Game theory95
affords insights into the evolution of cooperation, but in the process, it issues
two challenges to the facilitative process participants. The first is how the
participants can reach coordinated agreements.96 The second is devising a
means to compel coordinating persons to remain loyal, cooperative members
of the group, while sticking to their agreements.97
The dilemma of non-cooperating persons can be summarized by
assessing the Nash equilibrium.98 This equilibrium is the consequence of
93. See FISHER, supra note 57, at 155-83. A player using a tit-for-tat strategy initially
cooperates with the other player and thereafter copies the strategy that second player uses on a prior
move in an “alternating turns” mode. ROBERT AXELROD, THE EVOLUTION OF COOPERATION 36-39,
113-20, 136-37 (1984). Thus, a player cooperates and continues to do so as long as there is
reciprocity from the other player. Id. The tit-for-tat strategist thus is never the first to “defect,” but
the player will respond to defection with a counter defection. Id. The ultimate expression of tit-fortat in baseball is known as pitcher retaliation. See TURBOW & DUCA, supra note 34, at 97-131; Nick
Piecoro, MLB Suspends Arizona Diamondbacks Manager Kirk Gibson, Reliever Esmerling Vasquez,
ARIZONA REPUBLIC, June 7, 2011,
http://www.azcentral.com/sports/diamondbacks/articles/2011/06/07/20110607arizonadiamondbacks-manager-kirk-gibson-reliever-esmerling-vasquez-suspended.html#ixzz1OnJ2ELyx.
94. See FISHER, supra note 57, at 9.
95. Game theory is felicitously defined as a scientific “guide to decision making that gives us
pointers to what is really going on,” by “imposing logical discipline on the stories we tell.” See id. at
122.
96. See id. at 31.
97. See id. at 23, 60.
98. See id. at 23-29. Consider the following baseball illustration of applied game theory
involving the classic duel between a pitcher and base runner over advancing from first to second or
second to third base by “stealing” the base—beating the application to the runner of a “tag” by the
fielder of the ball. The base runner presses for advantage, attempting to distract the pitcher with a
“lead” off the base, like a sideways-scuttling crab darting out of and back into his hole. The pitcher,
Catfish, changes his delivery to the stretch and demonstrates his best pick-off moves, forcing the
runner to dive back to first. The base runner, Maury, has two alternative strategies: to run or to
remain on base. The pitcher has two choices: to throw to first—in attempt to pick the runner off—or
not. Of course neither does exclusively one or the other all the time. They randomize their actions
to keep the opponent guessing. In fact, some baseball statisticians hold that pitchers and runners
have randomized their play such that the probability of the runner reaching second is exactly
balanced in the case the runner attempts to steal or not. Otherwise, the pitcher or the runner is not
playing optimally. Imagine if the probability of reaching second were higher if Maury did not
attempt to steal. Here, his best play is to not attempt to steal because it maximizes his chance of
reaching second. Knowing that, Catfish’s best play is not to try to pick him off—which runs the risk
of throwing the ball away, letting Maury reach second with ease. But if Catfish is not going to
attempt a pickoff, Maury should attempt to steal. But if Catfish knows Maury will attempt to steal,
he will try to pick him off, and so anticipation reciprocates. This is not equilibrium. A similar
argument assumes that the probability of reaching second is higher if the runner attempts to steal. In
game theory terms, there is no pure strategy solution (that is, Nash equilibrium) for either player.
Neither Maury nor Catfish can do just one thing all the time, and neither can assume the other will
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two sides having selected a strategy that neither side can then deviate from
without ending up in a less desirable position.99 So long as both sides act
only to advance their own interests, the Nash equilibrium continues to trap
the parties. If a negotiated resolution is not of Nash equilibrium, one or both
sides can improve their position by breaking the cooperative agreement—
sometimes called “defecting” or “cheating.” However, when a negotiated
agreement is of Nash equilibrium, both sides will lose their advantage if they
decide to defect.100 The mediator who applies game theory must persuade
each side that the perceived incentive to defect—the possibility of doing
better by breaking the cooperative agreement—has been eliminated.101 So
persuaded, the parties will behave in a manner such that the negotiated
settlement will last.
do one thing all the time. Both must play a mixed strategy of randomizing between the two
alternatives. It is illogical for the optimal random mixes of the two players over their respective
strategies to give rise to a probability of success for one choice higher than the probability of success
for another. Once you make such an assumption, you get caught in the loop of indecision. Such is a
fundamental truth in game theory. The probable payoff for each of the pure strategies—attempt to
steal, not attempt to steal; make a pickoff throw, no pickoff throw—that are mixed together by a
player must be equal. The probability Maury will reach second if he attempts to steal must equal the
probability he will reach second if he does not attempt a steal. However, that does not mean Catfish
should ignore Maury, which would be equivalent to Catfish playing the pure strategy of not making
any pickoff throws to first. We know from above that a pure strategy cannot be optimal. The only
way optimal (Nash equilibrium) play is achieved is if Catfish plays the mixed strategy that all
pitchers play—throw to first base with some frequency strictly greater than zero and strictly less than
one. See Austin Frakt, The Game (Theory) Within the Game, THE INCIDENTAL ECONOMIST (Aug.
24, 2009, 4:00 AM), http://theincidentaleconomist.com/wordpress/the-game-theory-within-thegame/.
99. See FISHER, supra note 57, at 18. The Nash equilibrium posits that each participant will
select a strategy that is optimal for participation given the fact that other “players” are doing
likewise. John F. Nash, The Bargaining Problem, 18 ECONOMETRICA 155, 155-62 (1950). Of
course, game theory’s fundamental assumption is that decision makers are rational actors pursuing
their respective self interests with the expectation that the other actors are similarly motivated. See
AXELROD, supra note 93, at vii.
100. FISHER, supra note 57, at 29.
101. Id. at 83.
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IV. SECOND MEDIATOR TOOL: TRANSFORMS ZERO-SUMMING
INTO JOINT PROBLEM-SOLVING
A. Converts Parties’ Perspectives from Winning and Losing
Mediators must get the parties past their tendencies to interpret the
world in binary oppositions. This can be accomplished by illustrating to the
parties that participating in the dispute problem-solving process does not
mean solely choosing between cooperating and “going for broke” in an
adjudication proceeding. Additionally, the facilitator must minimize the
tendency to see issues as limited in number or as reducible to finite, discreet
parts. Instead, the facilitator presents a vision of complementary desires that
allows the parties to share resources and opportunities.102 Moving forward,
the facilitator understands that more trades between or among the
stakeholders allows more solutions to emerge.103 Moreover, the facilitator
must minimize the narrow view that parties are battling over thereby
preventing a joint resolution.104
To encourage abandonment of win-lose binary perspectives as well as
the “win-win” bias, the facilitator must provide an accurate description of
how joint problem solving may produce “better than” outcomes.105 In this
regard, the apt analogy is the trade of MLB players in which a deal makes
sense for both teams rather than one side getting the better of the other.106
Indeed, an arm’s length trade is not a zero-sum operation.107 J.C. Bradbury,
a leading baseball economist, discourages the view that one team bests the
other in each player trade: “Rather than trying to identify winners and losers,
it’s best to first try to understand why the trade happened. . . . Most times I
find that deals make sense for both sides, as economic theory predicts.
Mistakes happen, but as a general rule, all parties to trades are winners.”108
See Menkel-Meadow, Getting to “Let’s Talk”, supra note 80, at 849.
See Menkel-Meadow, Consensus Building, supra note 10, at 43.
See id. at 48-49.
See Menkel-Meadow, Getting to “Let’s Talk”, supra note 80, at 839-40.
See generally J.C. BRADBURY, HOT STOVE ECONOMICS: UNDERSTANDING BASEBALL’S
SECOND SEASON (2011).
107. See id. at 18.
108. BRADBURY, supra note 106, at 19. Bradbury’s observation is a reasoned summary of how,
if team’s managements cooperate and communicate their intentions with each other, each trading
“partner” has the potential to improve its lot in the long run. Id. See also AXELROD, supra note 93,
at 122-23.
102.
103.
104.
105.
106.
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B. Persuades the Stakeholders to Communicate and to Coordinate Their
Strategies
Mutual benefit is a reasonable expectation for parties in transaction
negotiations. In dispute negotiations, a more realistic expectation may
simply be to improve communication between the parties in negotiations.109
The mediator’s task is persuading the stakeholders that ongoing
communication and coordination of strategies will produce greater
satisfaction and a fairer outcome; additionally, such a process heightens the
likelihood of voluntary compliance with the final agreement.110
Communication is key to negotiating coordinated strategies.111
However, to enable constituent members to coordinate strategies, the
communication must be directed toward establishing coalitions.112 When
strategies are coordinated among stakeholders, potential cooperative
solutions rise to the surface of the negotiations.113 If the adversaries can
arrive at a cooperative solution, any nonconstant sum game is convertible to
a win-win scenario.114 In the Pareto optimal state,115 a solution, or series of
solutions, to a conflict can be derived by the negotiating parties and
facilitator, thereby rendering each party as well off as possible without
109. See Menkel-Meadow, Consensus Building, supra note 10, at 42-43.
110. See id. at 53.
111. See FISHER, supra note 57, at 75.
112. See id. at 113. A dominant strategy equilibrium, where each participant in the game has a
dominant strategy, is a noncooperative equilibrium in which no player coordinates his choice of
strategies; instead, participants commit themselves to a coordinated choice of strategies whereby,
those chosen strategies constitute a cooperative equilibrium. MCCAIN, supra note 57, at 54-56.
113. See FISHER, supra note 57, at 113. See also MCCAIN, supra note 57, at 51, 54.
114. See FISHER, supra note 57, at 113.
115. Pareto efficiency is named for Vilfredo Pareto, an Italian economist who studied economic
efficiency and income distribution. See Guido Calabresi, The Pointlessness of Pareto: Carrying
Coase Further, 100 YALE L.J. 1211, 1215 n.14 (1991). Pareto posited that a different allocation of
resources among a set of individuals that makes at least one individual better off without making any
other individual worse off is called a Pareto Improvement; and, Pareto optimality—or efficiency—is
the state where no further Pareto Improvements are possible. Id. at 1211, 1216-17, 1234-35. “Better
off” means being put in a preferred position to the one just previously occupied by an individual. Id.
And “not worse off” allows for the compensation for a loss while retaining an efficiency gain to be
realized by others, although it is theorized by economists that the party “not worse off” is not fully
compensated for their loss at times. Id. One of Pareto’s chief critics as applied to the realm of legal
disputes is Guido Calabresi, who rejects the notion of Pareto optimality. Id.
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inflicting unnecessary harm to the other disputants.116 Pareto optimization is
the economists’ way of describing the ideal state following the parties’ joint
implementation of strategies for minimally effective cooperation.117
Minimally effective cooperation is efficient when there is no alternative
arrangement of strategies allowing one or more persons to be better off in
their particular circumstances without the other parties’ circumstances
worsening.118
V. THIRD MEDIATOR TOOL: NEUTRALIZES NAY-SAYERS AND
ENGENDERS STAKEHOLDER TRUST
A. Sometimes You Have to Run the Bum
Two of the most winningest managers in Major League Baseball history
are Earl Weaver119 and Bobby Cox.120 Likely not a coincidence, these
passionate leaders were also the managers most frequently ejected from
games.121 This no doubt stemmed from a passion for their team’s advantage
in the game overcoming their reason at some moment. Therefore, when the
umpires—charged with keeping order and forward momentum—sensed that
having them continue in their managerial roles would be unproductive, the
only solution was an early managerial exit where their protests and negative
attitudes could not stymie the contest’s progress.122 The productivity of the
belligerent’s participation, in this context, had ceased.
Similarly, mediators are occasionally confronted by parties who neither
seek a solution to a joint problem nor respect the problem-solving method,
but instead remain stuck in a binary state or adopt a posture solely for the
116. Id. at 1216-17. See also HOWARD RAIFFA, THE ART AND SCIENCE OF NEGOTIATION 139
(1982).
117. See FISHER, supra note 57, at 117.
118. See id.
119. See SCULLY, supra note 37, at 189-90.
120. See ED RANDALL, BASEBALL FOR THE UTTERLY CONFUSED 97 (2010); SCULLY, supra
note 37, at 189-90.
121. RANDALL, supra note 120, at 217.
122. Of course, umpires have egos and upper limits to their tolerance for verbal and other
abuse, and sometimes they have bad days. Even so, umpires are trained to give players and
managers certain latitude, so long as their conduct does not indicate an intention to disrupt the
proceedings with childlike acting out. The fans are at the game to witness the acts of the players and
managers, even their antics, as opposed to those of the mediator, a fact worth recalling by the
umpires. See Crooked Umpires?, BASEBALL FEVER (last visited Nov. 16, 2011),
http://www.baseball-fever.com/archive/index.php/t-56683.html.
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purpose of wounding their opponents.123 Agreed mediation may suggest a
joint desire for problem solving; however, an agenda by one stakeholder’s
representative may preclude finding a solution.124 If that individual, like an
enraged baseball manager, is so incensed by perceived injustice or genuinely
believes himself the control party or the “smartest person in the room,” the
interests of the stakeholders may best be served by excluding that individual
from the proceedings.125 The mediator, contemplating such action, needs to
understand the purpose of that individual’s participation, especially whether
that individual—whom I call, for convenience, the “consigliere”—is the
fundamental decision maker for that stakeholder.126 If the mediator does not
have such authority, he will need acquiescence in “running” or ejecting the
consigliere, unless the consigliere is a milquetoast, cowed by the mediator’s
strength of personality.127
Running the consigliere is a delicate art indeed. The decision maker
may erroneously believe that his consigliere is valuable, either as a “bad
cop” or “trusted advisor.”128 Perhaps the decision maker believes the
consigliere influences the results of the problem-solving discussions because
opponents perceive him as formidable, a menacing force that refuses to
capitulate to the other stakeholder’s demands.129 Perhaps the decision maker
genuinely relies on the views of the consigliere or believes him to have
particular expertise in the subject matter of the dispute.130 However, if the
mediator is too insistent on excluding the consigliere from deliberations, the
mediator’s intentions may be read as reflecting bias, negatively impacting
problem-solving momentum.131 But if the mediator’s instinct is that
123. See WILSON, DELL & ANDERSON, supra note 75, at 55; see generally THE NEGOTIATOR’S
FIELDBOOK: THE DESK REFERENCE FOR THE EXPERIENCED NEGOTIATOR (Andrea Kupfer Schneider
& Christopher Honeyman eds., 2006) [hereinafter THE NEGOTIATOR’S FIELDBOOK].
124. See generally THE NEGOTIATOR’S FIELDBOOK, supra note 123.
125. See generally id.
126. See generally id.
127. See generally id.
128. See David F. Sally & Kathleen M. O’Connor, Negotiating in Teams, in THE
NEGOTIATOR’S FIELDBOOK: THE DESK REFERENCE FOR THE EXPERIENCED NEGOTIATOR 547, 54950 (Andrea Kupfer Schneider & Christopher Honeyman eds., 2006) (discussing the good cop/bad
cop tactic).
129. See generally THE NEGOTIATOR’S FIELDBOOK, supra note 123.
130. See generally id.
131. See Roy J. Lewicki, Trust and Distrust, in THE NEGOTIATOR’S FIELDBOOK: THE DESK
REFERENCE FOR THE EXPERIENCED NEGOTIATOR 191, 191-99 (Andrea Kupfer Schneider &
Christopher Honeyman eds., 2006).
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progress is essentially being stymied by continuing involvement of the
consigliere, there is little to lose by recommending either the consigliere take
his leave or, alternatively, the consigliere be assigned another task—for
example, modeling some settlement scenarios or mining additional facts—
that requires his separation from immediate participation in the
conference.132
The obstreperous lawyer for a stakeholder presents a difficult quandary
for the mediator.133 A lawyer may not be acclimated to the environment of
collaborative conversations directed toward problem solving, and therefore
may lack faith in the process.134 The mediator must accept that an
innovative approach to problem solving threatens those having a vested
interest in maintaining the status quo, and that vested interest may run so
deep as to override technical rationality.135 The mediator’s innovative
approach may be perceived as a threat to the lawyer’s traditional skill set and
even the job security of the well-seasoned lawyer used to the fact-finding
process of discovery and trial cross-examination.136 Further, a lawyer with a
competitive personality may feel superior to the mediator based on
132. The author during one negotiation ordered a representative of his own client to be silent
and to remain so for the balance of the meeting and stared down the representative, challenging him
to defy his directive. The client’s representative broke off the mutual stare, sulking instead in a
corner of the conference room. The decision maker for the other camp was sufficiently impressed
by the fact that an opposing camp member recognized the negative inputs of his opponents’
consigliere that he became convinced of the other representatives’ sincere intentions to resolve
problems. This confidence building enabled a settlement in principle to be reached in under ten
minutes following the author’s confrontation with the consigliere. Every person in the room reached
the judgment that the consigliere was determined to keep the pot stirred and productive negotiations
stymied. Decision makers who are experienced in business matters know their personnel and what
each contributes to problem-solving processes; however, at times they simply have to be reminded
of these persons’ capacities. Likewise, the mediator has to be careful to differentiate between a
party’s intention to make trouble and inability to articulate his point. This is not so difficult a
diagnosis, scientists estimate that over ninety percent of communication between humans is
nonverbal—whether through body language, vocal intonation, or otherwise. MCGILCHRIST, THE
DIVIDED BRAIN, supra note 14, at 106. Verbal and physical explosions occurring in negotiations
may be the consigliere’s expressions of a desire to dominate the proceedings by aggressive
manipulation where reason will be unavailing.
133. See generally THE NEGOTIATOR’S FIELDBOOK, supra note 123.
134. See Gale Miller & Robert Dingwall, When the Play’s in the Wrong Theater, in THE
NEGOTIATOR’S FIELDBOOK: THE DESK REFERENCE FOR THE EXPERIENCED NEGOTIATOR 47, 53
(Andrea Kupfer Schneider & Christopher Honeyman eds., 2006). The authors note that attorneys
can create impediments to conflict resolution by insisting that clients conform to the attorneys’
preferred orientation, citing the work of sociologist Joseph Hopper. Id. (citing Joseph Hopper,
Contested Selves in Divorce Proceedings, in INSTITUTIONAL SELVES: TROUBLED IDENTITIES IN A
POSTMODERN WORLD, 127, 127-41 (Jaber F. Gubrium & James A. Holstein eds., 2001).
135. See Wolfe, Wright & Smart, supra note 5, at 115.
136. Cf. Wolfe, Wright & Smart, supra note 5, at 115-16.
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experience in practice;137 command of the dispute’s immediate facts; or
another, less relevant criterion. The lawyer may feel she has an equal or
more valid notion of what just resolution of the joint problem entails.
However, while this may be a legitimate posture for the lawyer, having such
a view is very different from actually employing game-playing maneuvers to
block any problem-solving result.138
A variety of approaches are useful in these conditions. First, it is
necessary for the mediator to address the principals at least as intently as
their advocates, reflecting the appropriate deference to the real decision
makers.139 Therefore, it is beneficial to remind counsel, clearly bent on
blocking progress, that further retarding a resolution when the principal has
expressed a desire to settle is a breach of the lawyer’s ethical obligations.140
Respectfully driving this point home to recalcitrant counsel may lubricate
the facilitative process. Another technique for disarming obstreperous
counsel is for the mediator to subtly make the point that he is willing to
share ownership of proffered solutions but not authorship of them; thus, the
solutions presented are not subject to revocation by counsel without the prior
direct input of his principal’s leadership.141 Finally, the mediator may need
to remind counsel that, while “wounding” the adversary is well suited to a
criminal justice process, the ambition of mediation is to resolve a jointlyowned problem by addressing a need of some immediacy.
137. It is fairly common in the first hour of the facilitative process for the seasoned advocate to
advise the assembly that he has years of experience in litigating matters of the type subject to the
facilitation. See Robert H. Mnookian, Why Negotiations Fail: An Exploration of Barriers to the
Resolution of Conflict, 8 OHIO ST. J. ON DISP. RESOL. 235, 242 (1993) (Professor Robert Mnookian
would characterize this circumstance as a form of a “principal/agent problem,” a misalignment of the
incentives of the agent with the principal’s interests).
138. See Christopher Honeyman, Understanding Mediators, in THE NEGOTIATOR’S
FIELDBOOK: THE DESK REFERENCE FOR THE EXPERIENCED NEGOTIATOR 581, 589 (Andrea Kupfer
Schneider & Christopher Honeyman eds., 2006).
139. Cf. HILARY ASTOR & C.M. CHINKIN, DISPUTE RESOLUTION IN AUSTRALIA 99 (1992)
(failure to engage real decision makers in the mediation talks may jeopardize the results).
140. See, e.g., ABA/BNA LAWYERS’ MANUAL ON PROF’L CONDUCT §41:910 (2010) (cases
discussing Ethical Rule 1.2, the lawyer’s obligation to abide by client’s decision whether to settle a
matter).
141. The distinction between ownership and authorship is illustrated in DWIGHT GOLANN,
MEDIATING LEGAL DISPUTES: EFFECTIVE STRATEGIES FOR NEUTRALS AND ADVOCATES 240 (2009).
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B. Engaging Parties in Trust Building
Game theorists suggest that human nature causes people to adopt a riskdominant strategy142 rather than a payoff-dominant strategy where the
ultimate reward drives the person to maximize that reward.143 To optimize
the reward, however, members of a camp—especially in multiparty
disputes—must first change their beliefs about what their foes may
attempt.144 The whole challenge to cooperation requires: (1) a change in
belief, (2) causing a group to change this belief in a coordinated manner, and
(3) persuading those “new believers” to adhere immutably to their beliefs.145
Inevitably, some semblance of trust becomes imperative in the payoffdominant strategy.146 Genuine trust among adversaries is scarce.147 In its
place, game theorists advise using credible commitment as a totem.148
Credible commitment requires each party to commit to a cooperative
agreement in a fashion that engenders belief in the commitment even if there
is inherent mistrust between the co-makers of the agreement.149 Game
theorists suggest two fundamental means by which a party may demonstrate
credible commitment without underlying trust.150 The parties in either
instance will limit their options to defect from the cooperative agreement in
an overt and transparent manner.151 One possibility includes changing the
reward structure so that it becomes too costly for parties to back out later.152
Another method entails restructuring the party’s future options, thereby
effectively eliminating alternatives so that agreed-upon cooperation cannot
142. “Risk-dominant” describes a strategy designed to achieve a Nash equilibrium that
implicates the least risk to the strategist. See FISHER, supra note 57, at 88. In risk-dominant
strategies, the “winning” position is for parties to defect from or “cheat” under the agreement
reached. See MCCAIN, supra note 57, at 51-52. A “dominant strategy” generally refers to one
dominating all other strategies for a particular player in the game, because it is the best response to
any strategy that the other player(s) may choose. Id.
143. See FISHER, supra note 57, at 88. Here, the Nash equilibrium and winning position
implicate joint cooperation. Id.
144. See id. at 89.
145. Id.
146. Id. at 133.
147. See, e.g., AARON M. HOFFMAN, BUILDING TRUST: OVERCOMING SUSPICION IN
INTERNATIONAL CONFLICT 2, 139 (James N. Rosenau & Russell Stone eds., 2006) (barriers to
trusting relationships among rivals are high).
148. FISHER, supra note 57, at 136.
149. Id.
150. Id. at 136-37.
151. See id. at 7, 137, 196.
152. Id. at 137. For example, a party can place itself in a position where its reputation will be
damaged. See id. at 137, 196.
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later be reneged.153 Additionally, a party may also gain trust by showing
altruism and generosity toward the foe without any accompanying
expectation of reciprocity.154 Game theorists hold that the circle of trust is
best entered into by offering trust without expecting it in return.155
VI. FOURTH MEDIATOR TOOL: INCITES MAXIMUM OPTIONS FOR
TRADES
Consensus-seeking negotiations tend to focus on identifying and
addressing the vital, underlying needs of the stakeholders; whereas, the
adversarial viewpoint tends to entrench parties in arguments and “position
statements.”156 This difference is reflected by the inclination of stakeholders
to search for additional resources or new concepts for problem solving as
opposed to focusing on the adversarial division of limited available
resources.157 Therefore, the stakeholders—who may consist of parties to an
adjudicative action as well as “real parties in interest” immediately affected
by an adjudicative result—will raise a number of related issues in search of a
resolution.158 That is a positive circumstance because, as game theory
suggests, more issues increase the likelihood of greater satisfaction in
outcomes due to the fact that more complementary trades are possible.159
Complementary desires are met by the possibility of complementary trades,
thereby promoting multiple solutions by which to share resources so as to
meet the vital interests of the highest number of stakeholders.160
The successful mediator encourages stakeholders to articulate their
complementary desires, identify linkages between what initially appears—
prior to the application of the left-brain abductive skill sets—to be irrelevant
153. Id. at 137, 196. See also id. at 140-42 (describing means of cutting off one’s “escape
routes”).
154. Id. at 142.
155. Id. at 151. Thus, the risk–reward analysis is losing out to an untrustworthy foe versus
gaining reciprocal trust. One’s vital interests can be compromised if trust is misplaced. See Yan Ki
Bonnie Cheng, Power and Trust in Negotiation and Decision-Making: A Critical Evaluation, HARV.
NEGOT. L. REV. (Sept. 1, 2009), available at http://www.hnlr.org/?p=207.
156. See Menkel-Meadow, Consensus Building, supra note 10, at 41-43.
157. Id. at 43; see also Cheng, supra note 155 (explaining that trust offers “integrative
potential,” supporting collaborative efforts to “expand the pie”).
158. See Menkel-Meadow, Consensus Building, supra note 10, at 43.
159. See id. at 43.
160. This is an expression of George Homans’ theory of complementary needs. See id. at 43
(citing GEORGE C. HOMANS, SOCIAL BEHAVIOR: ITS ELEMENTARY FORMS (1974).).
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and disconnected issues, and recognize mutual interdependence in the
process of consensus building.161 In this environment, creative solutions can
surface as viable alternatives for concrete applications.162 Professional
baseball provides a helpful illustration of certain complementarities between
organizations and how resources can be shared.163
A. The Multiparty Trade: Engaging Outside Parties’ Assets
The essence of baseball player trading is the continual fluidity of the
personnel marketplace.164 As one baseball commentator notes—comparing
the trading market in players to the securities market—adaptability of a
team, seeking to improve its human capital, to the roiling marketplace is the
key to satisfying outcomes.165 Baseball trades involving three teams date
back to the 1950s but became commonplace in the 1990s when the era of
inflated player contracts and agonizing salary arbitration created an incentive
for teams to jettison players with unaffordable contracts.166 In order to
soften the affect of absorbing contract costs, among other reasons, two teams
desiring to exchange assets to improve overall player quality will involve a
third team to help share the overall transaction costs.167
Initially, in order to improve the value of a team’s roster, its vital
interests and needs are identified by the team’s management.168 Of course,
each team’s core assets cannot be sacrificed, while the other team’s assets
alone may not meet the vital interests of the initiating team.169
Consequently, the two teams that envision a bargain look for solutions by
engaging a third team.170 For instance, when one team attempts to offload a
player’s substantially high salary, in order for such a deal to be
consummated, involvement of a third team, which has the ability to absorb
the salary of the “expensive player,” enables the initial two teams to
161. See Menkel-Meadow, Getting to “Let’s Talk”, supra note 80, at 849.
162. Id. at 849.
163. See infra Part VI.A–D.
164. See SCULLY, supra note 37, at 182-90.
165. See LEWIS, supra note 5, at 190-91, 212.
166. See SCOTT BARZILLA, THE STATE OF BASEBALL MANAGEMENT: DECISION-MAKING IN
THE BEST AND WORST TEAMS 1993-2003, 31-32, 74-75, 169, 207, 231 (2004) (explaining that since
free agency, many trades are informed less by value of new players added to the team than desire to
“offload” salaries of nonessential players).
167. See id. at 31-32.
168. See SCULLY, supra note 37, at 182, 186.
169. See FISHER, supra note 57, at 184-87.
170. See id.
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complete their transaction by exchanging with team three less costly players
and using their contracts as the medium of exchange.171
Looking for solutions outside the immediate parties’ control may make
solving a joint problem achievable by including third party participation.172
This actually is a familiar approach in a variety of legal settlement
postures.173 In some personal injury cases, the individual plaintiff may be
unable to reach a settlement with the defendant without his medical
lienholders reducing their claims for payment.174 All elements of a
settlement may not reside exclusively in compensation from the direct
adversary; thus, third parties may need to be included in the problem-solving
conversation.175 In the non-party-at-fault circumstances, instead of plaintiff
and defendant sharing the binary thought-grounded conviction that they are
each liable only to a particular degree, the parties accept that others may
bear a certain degree of responsibility for which their assets may enable
reaching a joint resolution.176
Reference to cash or other “standard” forms of compensation is at times
short sighted. Returning to the aforementioned City versus office building
owner meditation hypothetical,177 the office building owner’s property was
rezoned with insufficient notice. While the insufficiency of the notice would
ultimately prove to be of minimal substance—the City could have noticed
the hearing properly and ultimately have taken identical rezoning action—,
the parties failed in their negotiations to address the possibility that the City
could agree to certain zoning adjustments permitting the owner to use the
building commercially without incurring a “spot-zoning” dilemma.
Consider another illustration involving a surveyor who commits a substantial
error in a subdivision survey. The owners discover that improvements of
five neighbors within the six-lot subdivision are constructed across property
boundaries, resulting in abundant, mutual encroachments. The binary
thought process requires claims against the affected title insurance
underwriters, the surveyor’s errors and omissions carrier, the residential
BARZILLA, supra note 166, at 31-32.
FISHER, supra note 57, at 184-87.
Id.
See Bill Daniels, On Dealing with Lien Claimants, CAALA LAS VEGAS CONVENTION
SYLLABUS, Sept. 2001, available at http://www.billdanielslaw.com/docs/On-Dealing-with-LienClaimants.htm.
175. Id.
176. Id.
177. See supra pp. 98-99.
171.
172.
173.
174.
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contractors, and the lot owners. In litigating fault and compensatory
damages, the risk of destroying goodwill in the neighborhood via suits and
countersuits for trespass, quiet title, damages for improvements’ restoration,
and loss of investment value looms large. The left-handed facilitator instead
engages these parties, including the municipality’s development branch, in a
conversation to re-plot the subdivision so that neighbors can swap pieces of
their lots, while maintaining roughly equal lot square footages; obtain the
needed relief from the municipality, such as building setbacks’ variances;
and obtain appropriate reinsurance of title from the various title policy
issuers—in the process resurrecting the neighborhood’s development and
emotional health. In a variety of circumstances, allowing many trades
among multiple parties is an improvement over limiting the number of
trades, a fact borne out in research178 as well as in real life.179
B. The Player to be Named Later and Other Deferred Compensation
Major League Baseball teams often postpone the final terms of a player
trade in order to better assess personnel needed for improvement—or what
assets possessed by the other team are most marketable in order to improve
those weakest positions—and to better judge the other team’s talent before
finalizing the deal.180 In structuring a “player to be named later” exchange,
teams generally agree on a list of five to ten players from which the team’s
final selection will be made.181 Conventionally, players to be named later
are too “new” to professional baseball to assess their talent at maturity.182
Two rules govern player to be named later transactions: the deal must close
within six months and the player must change leagues—which is why most
players to be named later are minor leaguers.183 In truth, the player to be
named later, in the majority of cases, turns out to be of no special
178. See, e.g., Christopher Bruce & Jeremy Clark, The Efficiency of Direct Public Involvement
in Environmental Policymaking: An Experimental Test, 45 ENVTL. & RESOURCE ECON. 157, 172
(2010).
179. See Menkel-Meadow, Getting to “Let’s Talk”, supra note 80, at 850 (describing political
leaders engaging multiple parties in alternative solutions through multiparty consensus building
processes).
180. See Rob Neyer, Transactions Primer, ESPN (Sept. 8, 1999),
http://sports.espn.go.com/espn/print?id=46397&type=story; What Is a Player to Be Named Later?,
SLATE.COM (Aug. 3, 2000, 5:12 PM),
http://www.slate.com/articles/news_and_politics/explainer/2000/08/what_is_a_player_to_be_named
_later.html.
181. See What Is a Player to Be Named Later?, supra note 180; BRADBURY, supra note 106, at
155.
182. Id.
183. Id.at 154.
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consequence to the team “owed” the player.184 Thus, the recipient usually
designates the player to be named later for assignment185 or places him on
waivers186 without ever optioning that player to its minor league team
affiliate for development or seasoning.187 This circumstance illustrates the
reality that for any supposed “Pareto Improvement,” some “losers” are never
fully compensated, thereby supporting the potential Pareto criterion
underlying Kaldor-Hicks efficiency.188 These admittedly are not idealized
conditions leading to a Pareto-efficient outcome. Periodically, trades
involving a player to be named later results in a “thrown in,” but ultimately
contributing big-league player,189 or these trades result in an in-lieu payment
184. Id.
185. Meaning, the team has ten days to trade the player, outright the contract—and if not
claimed by another team, enabling the player to become a free agent—, or simply release the player
from his contract. FRED CLAIRE & STEVE SPRINGER, FRED CLAIRE: MY 30 YEARS IN DODGER BLUE
189 (2004). See also LEWIS, supra note 5, at 214.
186. Waivers are a way to move players after the annual trading deadline about two months
before the regular season ends. See RANDALL, supra note 120, at 25-26. When a player is placed on
waivers, other teams in reverse order of the standings—first within the original team’s league, then
the other league—have an opportunity to claim the waived player. Id. If no one asserts a claim, the
player has “cleared waivers” and can be traded anywhere. Id. But if a claim is asserted, there are
three possibilities: (1) the team placing the player on waivers can pull him off the list, no longer
making him available to trade for that season; (2) the team can work out a trade and send the player
to the team that “claimed” the player; or (3) the waiving team can let the claiming team take his
services and his contract. Id.
187. The practice of “optioning” exists where a major league club sells a player’s contract—and
the right to his services—to the minor league team, reserving an option to repurchase his contract at
a stipulated price; however, there are limits on the number of times this opportunity can be elected
by the major league team. Rob Neyer, Transactions Primer, ESPN (Sept. 8, 2007),
http://assets.espn.go.com/mlb/s/transanctionsprimer.html. If a player is on the forty-man roster and
not the active twenty-five-man roster for any part of more than three seasons—in which he spent
twenty or more total days of service in the minors—, he is out of options and may not be assigned to
the minors without first clearing waivers. Id. However, if a player has less than five years of
professional experience, he may be optioned to the minors in a fourth season without being subject
to waivers. Id.
188. The notion of Kaldor-Hicks efficiency does not entail winners actually compensating
losers. Jules L. Coleman, Efficiency, Exchange, and Auction: Philosophic Aspects of the Economic
Approach to Law, 68 CALIF. L. REV. 221, 239 (1980). Therefore, a redistribution of resources is
said to be Kaldor-Hicks efficient if, and only if, it is a “possible” Pareto-superior redistribution of
resources. Id. Guido Calabresi takes exception to the views of Kaldor-Hicks. Calabresi, supra note
115, at 1221-27.
189. Jeremy Bonderman, Scott Podsednik, Coco Crisp, Moisés Alou, Jason Schmidt, and David
Ortiz are primary illustrations of players to be named later that “made good” in the major leagues.
See, e.g., Kara Richey, MLB Trade Deadline: David Ortiz and the Best Players to Be Named Later,
BLEACHER REPORT (Aug. 1, 2011), http://bleacherreport.com/articles/786418-mlb-trades-davidortiz-and-the-best-players-to-be-named-later.
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of cash to the team owed the “forthcoming” player, therefore, the convention
survives despite the team owed the player rarely being appropriately
compensated.190
The primary lesson to be derived from the player to be named later
convention, is that some elements of a problem’s solution can be postponed
thereby reaching settlement of sufficiently satisfying magnitude without
knowing all final details of the accord. The broad outline of settlement, not
the minutiae, is what matters, particularly when time is essential in reaching
a joint solution in problem solving. The Five-Tool Mediator cannot allow
insistence on a global understanding, where every last detail is cemented to
the satisfaction of every stakeholder, to stymie agreement on a joint solution.
The parties can agree later on complete specifics following the point where
the exchange of remaining values is relatively inconsequential. In such a
scenario, the circumstances resemble the clubs’ low mutual expectations for
the future value of the player to be named later.191
C. Designating a Player for Assignment
Designation for assignment is a way to release a player from the team’s
future payroll.192 Designation leaves open the possibility that another team
will claim that player—absorbing his accompanying compensation—freeing
the releasing team’s cash for its remaining financial obligations.193
Maximization of trades requires the view that what appears initially merely
as “salary offloading,” is in fact, an opportunity to achieve numerous other
objectives of the assignment-designating team. These objectives include (1)
reducing payroll to remain within salary cap regulations, and avoiding the
“luxury tax” imposed on teams with payrolls well exceeding the balance of
the league’s clubs; (2) addressing roster weaknesses by adding a player to
increase its talent pool; (3) affording another franchise roster player an
opportunity to play in the everyday lineup of a club, thereby maximizing his
utility when that option may not have been available prior to the designated
190. Conventional wisdom says that the later named player does not often have a productive
major league career. See BRADBURY, supra note 106, at 155.
191. But see John H. Wade, Crossing the Last Gap, in THE NEGOTIATOR’S FIELDBOOK: THE
DESK REFERENCE FOR THE EXPERIENCED NEGOTIATOR 467, 467-74 (Andrea Kupfer Schneider &
Christopher Honeyman eds., 2006). Wade reminds the reader that the devil resides within the finest
of details, and that circumstances may render what ordinarily would be “parking lot issues” into core
stumbling blocks to problem solving. Id.
192. This release is subject to Article IX of the Basic Agreement, which calls for formulaic
termination pay for the year of the designation for assignment. See Basic Agreement, supra note 88,
at art. IX.
193. LEWIS, supra note 5, at 214.
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player’s assignment; and (4) achieving greater balance between a team’s
expenses against revenues, irrespective of salary cap limits.194 A key lesson
here for mediators is that one party’s liabilities present opportunities—not
necessarily as a limited-sum proposition but a win-win condition instead—
and that essentially the greater the quantity of mediums introduced into the
assets exchange process, the greater the likelihood that all circumstances
improve. The mediator must emphasize to the stakeholders that asset value
can be derived from one party’s apparent liabilities, and that oppositional or
complementary “trades” can satisfy a party’s vital needs in the process of
meeting the essential needs of another party, thereby expanding ways of
sharing.195
D. Split-Pool Revenue Sharing
As Major League Baseball owners became aware of market forces
accompanying the demographic structures of team locations, a split-pool
revenue sharing system was devised to assist the smaller market teams.196
Each franchise today is “taxed” 34% on the local revenue of the stadiumgenerated proceeds—such as gate revenue and concession sales—net of
stadium expenses—and excluding non-stadium based income such as
income generated by media broadcast contracts, which constitute about 40%
of Major League Baseball’s overall revenues.197 These tax receipts are
pooled and shared equally among all thirty teams, but the lower-revenuegenerating teams—that is, lower than the league’s net arithmetic mean—
receive shares of a second pool that is funded by “richer” teams.198
Economists acknowledge that revenue sharing has little if any effect on the
distribution of talent within Major League Baseball.199 Such sharing does
increase the profits of small-market franchises, although its impact on the
194. See Jeff Aberle, MLB Transactions Part Three: Waivers and DFA, PURPLEROW.COM
(Feb. 19, 2009, 4:30 PM), http://www.purplerow.com/2009/2/19/762532/mlb-transactions-part-thre.
195. See Menkel-Meadow, Consensus Building, supra note 10, at 43.
196. See ZIMBALIST, BASEBALL ECONOMICS, supra note 41, at 50.
197. See Staudohar, supra note 84, at 16-18.
198. See id. at 21.
199. Helmut Dietl, Markus Lang & Alexander Rathke, The Combined Effect of Salary
Restrictions and Revenue Sharing in Sports Leagues 9-11 (Inst. for Strategy & Bus. Econ. Univ. of
Zurich, Working Paper No. 102, 2010), available at
http://www.isu.uzh.ch/static/ISU_WPS/102_ISU_full.pdf. Presumably, the wealthier franchises
simply “outbid” their poorer brothers for the talent of free agent players on the open market.
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profits of large-market clubs is less clear.200 Revenue sharing is an effective
tool for cross-subsidization201 as well as providing a vehicle for parity of
player talent across Major League Baseball.202 This illustration from Major
League Baseball operations provide important lessons to mediators when
communicating to parties, such as: (1) that survival of the stakeholders as a
group in an interdependent system has greater value than optimal prosperity
of fewer than all the stakeholders, and (2) that cross-subsidization is
intuitively virtuous—in addition to having the benefit of enhancing trust
creation—even if there is no competitive justification for subsidizing weaker
stakeholders. The de facto receivership over the Los Angeles Dodgers
franchise, impressed on club owner Frank McCourt by Commissioner Bud
Selig on April 20, 2011, well illustrates this reality.203
200. Id. at 5-7.
201. Id. at 25.
202. See Joel G. Maxcy, Progressive Revenue Sharing in MLB: The Effect on Player Transfers
13, 24-26 (N. Am. Ass’n of Sports Economists, Working Paper No. 07-28, 2007) available at
http://college.holycross.edu/RePEc/spe/Maxcy_Transfers2.pdf (concluding that low revenuegenerating clubs react to increased sharing incentives to divest themselves of talent, so that no
reinvestment of revenue sharing funds in purchasing current major league player talent occurs).
Supporters of revenue sharing contend that the investment by the lower revenue-generating teams
occurs through the franchises’ minor league farm systems, producing more talent over a longer
duration. Id. at 14.
203. “I have taken this action because of my deep concern regarding the finances and
operations of the Dodgers to protect the best interests of the club,” Selig announced on April 20,
2011, in explaining his decision to take over operation of the Dodgers. John M. Curtis, LA Dodgers
Driven into Receivership, LA CITY BUZZ, Apr. 22, 2011, http://www.examiner.com/city-buzz-inlos-angeles/la-dodgers-driven-into-receivership. Appointing a trustee is unprecedented in Major
League Baseball history. Id. By contrast, Commissioner Selig did not remove Texas Rangers’
owner Tom Hicks before seeking new ownership for that franchise; instead, it eventually sold out of
a bankruptcy to a new ownership group in 2010. Id. The Commissioner has such authority pursuant
to the Major League Constitution art. II, § 3 (owner conduct “deemed by the Commissioner not to be
in the best interests of Baseball” authorizes him to suspend or remove any owner or take such other
actions as he deems appropriate) and art. VI, § 2 (the Clubs “on behalf of their owners . . . severally
agree to be finally and unappealably bound by actions of the Commissioner . . . taken or reached
pursuant to the provisions of this Constitution” and waive their rights of recourse to the courts). The
Darwinian approach in this circumstance might have been for the other franchise owners to withhold
support from the Commissioner’s decision and to wait for the opportunity to cherry-pick players
from the Dodgers through bankruptcy. This opportunity may be presented by the Dodgers’
bankruptcy filed June 27, 2011. See In re Los Angeles Dodgers LLC, No. 11-12010 (Bankr. D. Del.
2011). Given the size of the Dodgers’ fan base and its marketplace, together with revenue sharing,
such an approach by the other owners would be shortsighted indeed.
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VII. FIFTH MEDIATOR TOOL: CONSTRUCTS A RESONANT
SOLUTION NARRATIVE
This mediator tool is not synonymous with “selling a settlement.” The
capacity to construct a resonant narrative predates full knowledge of those
terms under which a problem will be resolved. The result of proper
construction of the narrative is that the parties’ representatives are able to
envision themes leading to a settlement framework. If the parties can
visualize a platform by which problem solving can occur, they will join the
conversation in a contributing fashion. The following is an explanation of
the key characteristics of the resonant settlement narrative.
First, the narrative must be plausible, facilitating the parties’ recognition
of a rational solution204 to a problem that is affordable, achievable, and
transparent.205 Second, the narrative must be coherent, describing to the
parties a solution that is global and, as nearly as possible at the outset,
comprehensive.206 Disputants may identify pathways to achieve most of
their vital interests without dashing the fundamental expectations of the
other stakeholders.207 Key ingredients of the coherent narrative are (1) a
description of a process that is both mutually advantageous and leads to a
fair outcome, such as the equitable division of resources and responsibilities,
and (2) suggestions of a platform for how the resolution will be implemented
and, throughout its continuation, enforced.208
Lastly, the narrative must describe the sustainable nature of the
agreement by addressing the solution’s lasting nature, at least in its key
elements—subject to some non-essential alterations following a threshold
period beyond the facilitation process.209 Sustainability may feature
penalties to be assessed—or bonds to be forfeited—for defecting from the
204. Strong, supra note 49, at 791-95. For mediators, this requires the imaginative reasoning
process sometimes referred to as “abduction” (a term first coined by Charles Sanders Peirce),
enabling perception of hypotheses that are not immediately apparent. Id. at 791-92. Here, scattered
data is abductively, through the process of pattern recognition, grasped as a whole; thus, enabling
subsequent data to be pieced together into the expanding composite picture. Id. at 793-95. This
task, then, is performed by largely nonanalytical thought processes. Id. at 795.
205. Id. at 791-95.
206. Professor Strong summarizes the capacity of the right hemisphere to generate “the
complete whole from incomplete or rearranged fragments.” Id. at 771.
207. See, FISHER, supra note 57, at 197.
208. Id.
209. See Mary Parker Follett, Constructive Conflict, in DYNAMIC ADMINISTRATION: THE
COLLECTED PAPERS OF MARY PARKER FOLLETT 30, 36 (Henry C. Metcalf & L. Urwick eds., 1941).
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agreement or incentives for ongoing cooperation,210 appointing a third party
to maintain the cooperative environment,211 and ongoing encounters
requiring future interactions between the former foes.212
The resonant narrative appeals to the subconscious mind of those who
escaped a wounded childhood. In a healthy family structure, the parents—or
other leaders—construct a narrative of the family unit in which each member
gains a sense of belonging and comprehends his or her role, unthreatened by
others within and outside the family circle.213 In the same way that a
resonant narrative within a family builds a child’s self-confidence, a
common vision of a solution to a joint problem, woven by the mediator,
addresses the fundamental rational desires of each stakeholder.214 While the
successful settlement narrative requires the element of sustainability, this is
quite different than the notion of finality.215 There are two key distinctions
between these elements. First, the sustainable narrative is not, when initially
articulated by the mediator, sufficiently detailed to satisfy any longing for a
comprehensive solution that ends the need for any decision making.216 As
used here, sustainability does not bypass hard work necessary to achieve
final settlement.217 An effective narrative stirs the imaginations of the
stakeholders’ representatives, enabling genuine, good-faith participation in
bargaining.218 This creative force, giving momentum to the parties’
210. See, e.g., FISHER, supra note 57, at 197 (explaining that using side payments, such as
money, social, or emotional awards can help sustain your coalition).
211. Id. at 184-85. These elements may include the parties’ agreement to trust the enforcement
authority of the third party, allowing the third party to hold a performance bond or to dispense
liquidated damages to compensate for defection from a portion of the agreement. Id. at 184-85, 196.
But see id. (explaining that benelovent authority, relying on external authority, can be ineffective
because of third parties own self-interest and craze for power).
212. Game theorists conclude that obligations to interact in the future nearly always enhance
cooperation under an agreement. Id. at 196.
213. Jennifer G. Bohanek, Kelly A. Marin, Robyn Fivush & Marshall P. Duke, Family
Narrative Interaction and Children’s Sense of Self, 45 FAM. PROCESS 39, 48 (2006) (explaining that
because children’s perspectives are validated and integrated in this environment, their self-esteem is
high).
214. See JOHN WINSLADE & GERALD MONK, PRACTICING NARRATIVE MEDIATION:
LOOSENING THE GRIP OF CONFLICT 10, 18, 146-48 (2008).
215. Follett, supra note 209, at 32 (discussing that a step of integration is necessary, see, e.g.,
id., a compromise doesn’t really resolve the problem; rather, an integrated solution “means that a
solution has been found in which both desires have a place that neither side had to sacrifice
anything”).
216. Id. at 41 (describing integration as a long process in which there are many steps such as
uncovering the real conflict and identifying the demands of both sides in order to break them down).
217. Id. at 36 (concluding that only full integration brings about sustainability to conflicts).
218. Professor Strong notes that the right brain plays a vital role both in receiving and
conveying information in the form of a narrative and in the creative generation of hypotheses—
”what if we”—in the legal problem-solving process. Strong, supra note 49, at 775. Here, the
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“invention,” is a foundation principle of an integrative solution to a joint
problem first espoused by Mary Parker Follett in the 1930s.219 Second, any
comprehensive solution to a complex, multiparty conflict likely will require
“re-trading” at a later juncture—without implying treachery on the part of
the mediator or any stakeholder.220
Few immutable solutions persist in the fluid environment of modern life,
outside forces which have little reason—if conscious—to endorse
permanence will affect the initial settlement scenario.221 Re-envisioning the
global solution may be advantageous to all stakeholders, even before certain
elements are implemented.222 However, this circumstance does not indicate
a failure to anticipate future events—some sudden, others unpredictable.223
If the mediator engages the parties and their counsel in problem solving, the
stakeholders’ representatives (in right hemispheric-dominant mode) will
essential skill is that of weaving seemingly unrelated ingredients underlying a solution into
coherence, or a meaningful metaphoric expression. MCGILCHRIST, THE DIVIDED BRAIN, supra note
14, at 51. The author describes a metaphor’s purpose as “to being together the whole of one thing
with the whole of another, so that each is looked at in a different light.” Id. at 117.
219. Follett, supra note 209, at 33 (“Integration involves invention, and the clever thing is to
recognize this, and not to let one’s thinking stay within the boundaries of two alternatives which are
mutually exclusive.”). Follett refers here, of course, to eschewing the binary code world of “off” and
“on” alternatives in which the left hemisphere selects the single “best” solution that fits what it
already knows and latches onto it. See MCGILCHRIST, THE DIVIDED BRAIN, supra note 14, at 41;
McGilchrist, Reciprocal Organization, supra note 55, at 324.
220. Professor Menkel-Meadow observes that the increasing use of incremental, flexible, and
contingent settlements in complex controversies which recognize that tentative solutions, following
testing and evaluation, may require renegotiation in light of the new information or changed
circumstances generated by the tests or evaluation over time. Menkel-Meadow, Getting to “Let’s
Talk”, supra note 80, at 843. Here, the left hemisphere is less efficient, as assumptions must be
revised or new material must be distinguished from older information; in contrast, the right
hemisphere keeps possible solutions “live” while alternative courses of action are investigated. See
MCGILCHRIST, THE DIVIDED BRAIN, supra note 14, at 41; McGilchrist, Reciprocal Organization,
supra note 55, at 324. McGilchrist notes that the right hemisphere is attuned to apprehending
anything new and is more capable of a “frame shift,” while the left hemisphere functions less
efficiently when initial assumptions must be revised. MCGILCHRIST, THE DIVIDED BRAIN, supra
note 14, at 40.
221. Menkel-Meadow, Getting to “Let’s Talk”, supra note 80, at 843.
222. FISHER, supra note 57, at 197 (in discussing tips for cooperation, the author describes the
benefits of global solutions).
223. See, c.f., Marcus Baram, CIA’s Mideast Surprise Recalls History of Intelligence Failures,
HUFFINGTON POST, Feb. 11, 2011, 6:35 PM,
http://www.huffingtonpost.com/2011/02/11/cias-mideast-surprise-history-offailures_n_822183.html#s239132&title=Iranian_Revolution_1979. Few if any outsiders anticipated
Tunisia or Egypt’s use of wireless technology in the spring of 2011 to map out nonviolent
revolutions prior to their commencements. Id.
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adapt their respective perceptions of vital interests to the narrative
structure.224
VIII. CONCLUSION
One old bromide describes the mediation process as the adversaries’
last, best opportunity to dictate internally-engineered outcomes of their
choosing.225 But when the realm of solution building encompasses no more
than the conventional spectrum of resolution possibilities, parties naturally
gravitate toward binary thought processes.226 Therefore, in a fault
apportionment dispute where each party is convinced that he is no more than
30% at fault for the harm caused, each may grudgingly yield a few “blame
percentage points” to avoid diverting resources to adjudication as well as the
risk of encountering imperfect fact finders. Still, each party essentially
fixates upon an upper limit to his responsibility.227 A joint resolution here
may turn on each party’s acknowledging that fault apportionment does
relatively little to resolve their mutual problems.228
The Five-Tool Mediator is not content to relay mechanical or crudelyconstructed ad hoc proposals for “incrementally-improved” agreements
between adversaries in a shuttle-diplomacy style.229 Instead, he is an
agitator, teasing out declarations of the vital interests of each disputant
stakeholder, creating an environment where maximum trades are possible,
and selecting bold goals that are optimal, albeit seemingly infeasible, at the
time they are devised.230 The Five-Tool Mediator silences voices decrying
progress in deal making and encourages the forward movement of
communications toward break-through collaboration. She also strives to
224. McGilchrist notes that the right hemisphere specializes in accepting and processing
uncertainty and ambiguity, having affinity for what is new, unknown, uncertain, and unbounded.
See MCGILCHRIST, THE DIVIDED BRAIN, supra note 14, at 40-41; McGilchrist, Reciprocal
Organization, supra note 55, at 327.
225. Hensler, supra note 5, at 182, 189-90.
226. MCGILCHRIST, THE DIVIDED BRAIN, supra note 14, at 40, 139 (explaining that the right
hemisphere has more capability to “frame-shift” and, like computers, the brain recognizes “two
binary codes of on and off”).
227. This illustrates left-brain dominance revealing its relative inflexibility. McGilchrist notes
that flexibility entails disengaging from focused attention—which persons with left hemispheric
dominance have difficulty doing—because familiarity causes the left brain to focus more intently
upon identification by parts in its attempt to know the whole, grasping what it already has broken
apart, categorized, and prioritized. MCGILCHRIST, THE DIVIDED BRAIN, supra note 14, at 40, 44-45,
49-51.
228. Id. at 40, 44-45, 49-51.
229. See Sestanovich, supra note 77, at 21.
230. Richard Holbrooke summarized his all-out strategy for achieving agreement this way:
“Better a high benchmark than a weak compromise.” Id. at 20.
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persuade each foe to trust the others or, minimally, to demonstrate credible
commitment to engender belief in the possibility of joint structuring and
adhering to an agreement.231 Ultimately, the Five-Tool Mediator constructs
a resonant narrative of problem solving to obtain the parties’ buy-in to a
global and fair solution.232 This solution discourages defection strategies
through a regimen of sanctions or rewards, including social, emotional, and
financial rewards.233
The Five-Tool Mediator uses the right-hemispheric specialization in
stored “real world” perspectives, viewing each possibility for settlement in
context within its surroundings.234 He also urges similar—although not
exclusive—non-strictly analytical faculties to be used by the adversaries,
enabling them to see the problem’s resolution by joining fragmented data
into a unified composite.235 The Five-Tool Mediator adopts a set of attitudes
designed to maximize the possibility for the creation of “better than”
outcome solutions to complex disputes.236 She is also able to recognize that
the dispute, at its root, is a shared problem that requires mutual study and
conversation about creative solution building involving equitable sharing of
finite resources.237 Disputants need counsel from such expert facilitators for
successful conciliatory processes in contentious, complex decision-making
scenarios, particularly during an impasse in negotiations.238 The Five-Tool
Mediator will dismantle blockades caused either by a party’s habit of binary
thought or his resolute refusal to engage in meaningful problem-solving
processes, while weaving vital interests of each party into a narrative luring
the imaginative faculties of the brain’s right hemisphere. Concurrently,
applying game theory in evaluating rational settlement postures—in Len
Fisher’s words, “imposing logical discipline on the stories we tell”—will
engage the mediator and the parties in a quantitative, left brain exercise
complimenting the scenario-planning right brain effort.239
231. FISHER, supra note 57, at 184-85.
232. Id. at 197.
233. Id.
234. MCGILCHRIST, THE DIVIDED BRAIN, supra note 14, at 49; McGilchrist, Reciprocal
Organization, supra note 55, at 325-26.
235. MCGILCHRIST, THE DIVIDED BRAIN, supra note 14, at 49; McGilchrist, Reciprocal
Organization, supra note 55, at 325-26.
236. Hensler, supra note 5, at 182, 189-90.
237. Follett, supra note 209, at 33.
238. Hensler, supra note 5, at 182, 189-90.
239. See JOHN C. SHAW, CORPORATE GOVERNANCE AND RISK: A SYSTEMS APPROACH 107
(2003).
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Graham v. Florida:
How the Supreme Court’s
Rationale Encourages Reform
of the Juvenile Justice System
Through Alternative Dispute
Resolution Strategies
Heather Hojnacki*
I.
INTRODUCTION
Across the nation, juvenile courts and corrections systems are littered with poorly
conceived strategies that increase crime, endanger young people and damage their future
prospects, waste billions of taxpayer dollars, and violate our deepest held principles about
equal justice under the law. These problematic practices persist even as scholars,
advocates, and hands-on juvenile justice practitioners have vastly expanded our
understanding of what works (and what doesn’t work) in combating delinquency over the
1
past 20 years, as well as how to undertake effective system reform.
On May17, 2010, the U.S. Supreme Court ruled in a 5-4 decision that
the Eighth Amendment prohibits life-without-parole sentences for juveniles
convicted of crimes other than homicide.2 Child advocates are hopeful that
new findings on juvenile brain development, which led to the holding that
juveniles were “less deserving of the most severe punishments” due to their
“lessened culpability,” will encourage a broader conversation about the
* Heather Hojnacki is a recent graduate of Pepperdine University School of Law. She served as an
editor for the Pepperdine Dispute Resolution Law Journal. Prior to law school, she earned a
bachelor’s degree in Early Childhood Development and taught elementary school. The impetus for
this article was the book No Matter How Loud I Shout by Edward Humes, as well as the children she
encountered while clerking for the Children’s Law Center of California in the Superior Court of
California, County of Los Angeles, Juvenile Division, Dependency Court.
1. Reform the Nation’s Juvenile Justice System, THE ANNIE E. CASEY FOUNDATION, 1 (Jan.
2009), http://www.aecf.org/~/media/PublicationFiles/Juvenile_Justice_issuebrief3.pdf [hereinafter
Reform the Nation’s Juvenile Justice System].
2. See Graham v. Florida, 130 S. Ct. 2011, 2034 (2010).
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effectiveness—or lack thereof—of the juvenile justice system as a whole,
and how developing research should dictate system reform.3 This article
will trace the history of the juvenile justice system up to this recent decision,
analyze Graham’s current and possible future impact, and propose a four
part alternative dispute resolution-based strategy aimed at preventing and
reducing juvenile recidivism rooted in the Graham Court’s rationale.
II. HISTORY AND BACKGROUND
A. History of the Juvenile “Justice” System
As early as 1760, when William Blackstone recorded the common law
of England, a distinction was drawn between the law’s treatment of juveniles
and adults.4 Blackstone deemed infants—those under the age of seven—too
young to fully understand their actions, and therefore incapable of forming
the intent necessary to be found guilty of a felony.5 However, children over
the age of fourteen, and those between seven and fourteen who were found
to understand the difference between right and wrong, were considered
adults and punished as such; they even received the death penalty for capital
crimes.6 During the eighteenth century, juvenile courts and reform schools
were created to separate and protect these children from adult courts and
adult prisons based on the legal doctrine of parens patriae.7 Parens patriae
“authorizes the state to substitute and enforce its judgment about what it
believes to be in the best interest of the persons who presumably are unable
3. Joan Biskupic & Martha T. Moore, Court Limits Harsh Terms for Youths, USA TODAY
(May 18, 2010), http://www.usatoday.com/news/washington/judicial/2010-05-17-supreme-courtjuvenile-sentences_N.htm. In response to the Graham opinion, Bryan Stevenson of the Equal
Justice Initiative said “‘The politics of fear and anger make it very difficult for legislatures to turn
around’ on juvenile punishments . . . . ‘I hope that this case will encourage a broader conversation
about the nature of sentencing in this country.’” Id.
4. See Dialogue on Youth and Justice, The History of Juvenile Justice, ABA DIVISION FOR
PUBLIC EDUCATION, 4 (2007), available at
http://www.americanbar.org/content/dam/aba/migrated/publiced/features/DYJfull.authcheckdam.pdf
[hereinafter History of Juvenile Justice]. This distinction was made at the point in each individual’s
development when “one could underst[an]d one’s actions.” Id.
5. Id.
6. Id.
7. See Sasha Coupet, Comment, What to Do with the Sheep in Wolf’s Clothing: The Role of
Rhetoric and Reality About Youth Offenders in the Constructive Dismantling of the Juvenile Justice
System, 148 U. PA. L. REV. 1303, 1308 (2000). The parens patriae doctrine forms the rationale for
the entire child welfare system, and provides the basis for state laws that protect, rather than punish
citizens. See id. “This concept generally refers to the role of the state as the custodian of persons
who suffer from some form of legal disability.” Id.
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to take care of themselves.”8 These entities focused on the best interests of
the child and rehabilitation rather than punishment.9
Beginning in 1966, the U.S. Supreme Court considered a number of
cases which have defined the due process rights of juveniles and appropriate
consequences for offenders.10 Although juvenile courts emphasize an
informal, nonadversarial, and flexible civil approach, these proceedings did
not afford juveniles the due process rights guaranteed under the Fifth and
Fourteenth Amendments where sentencing included a deprivation of life,
liberty, or property.11 In 1966, Kent v. United States held that where
jurisdiction is waived to a criminal court, the juvenile is entitled to a hearing
and a statement of the juvenile court’s reason for waiving jurisdiction.12 In
his opinion, Justice Fortas was concerned that in this situation, “the child
receives the worst of both worlds: that he gets neither the protections
accorded to adults nor the solicitous care and regenerative treatment
8. See id. at 1308. See also History of Juvenile Justice, supra note 4, at 5. The New York
House of Refuge was established to house juvenile offenders in 1825, and the Chicago Reform
School was established in 1855. Id. The first juvenile court was established in Cook County,
Illinois in 1899, and within twenty-five years, most states had established a juvenile court system.
Id.
9. See History of Juvenile Justice, supra note 4, at 5. Julian Mack, a judge in one of the first
juvenile courts, described the goals of the juvenile court:
The child who must be brought into court should, of course, be made to know that he is
face to face with the power of the state, but he should at the same time, and more
emphatically, be made to feel that he is the object of its care and solicitude. The ordinary
trappings of the courtroom are out of place in such hearings. The judge on a bench,
looking down upon the boy standing at the bar, can never evoke a proper sympathetic
spirit. Seated at a desk, with the child at his side, where he can on occasion put his arm
around his shoulder and draw the lad to him, the judge, while losing none of his judicial
dignity, will gain immensely in the effectiveness of his work.
Id.
10. See id. at 6. See generally Kent v. United States, 383 U.S. 541 (1966); In re Gault, 387
U.S. 1 (1967); In re Winship, 397 U.S. 358 (1970); In re McKiever, 403 U.S. 528 (1971).
11. See History of Juvenile Justice, supra note 4, at 6. Rights under the Fifth and Fourteenth
Amendments include the right to equal protection, trial by jury, freedom against self-incrimination,
and the deprivation of life, liberty, or property without due process of law. See History of America’s
Juvenile Justice System, LAWYERSHOP.COM, http://www.lawyershop.com/practice-areas/criminallaw/juvenile-law/history (last visited January 27, 2012).
12. See History of Juvenile Justice, supra note 4, at 6. In Kent, lawyers for Morris Kent, a
fourteen-year-old juvenile suffering from severe psychopathology, opposed waiver to criminal court,
but the juvenile court did not respond to the motions and, without a hearing, waived jurisdiction. See
generally Kent v. United States, 383 U.S. 541 (1996).
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postulated for children.”13 A year later, In re Gault held that juveniles are
additionally entitled to many of the other key elements of due process;
including, notice of the charges, a right to legal counsel, the right against
self-incrimination, and the right to confront and cross-examine witnesses.14
However, this opinion was not unanimous, the court was divided on whether
these due process guarantees were changing the intended nature and goals of
juvenile courts back towards the criminal trials social reformers were trying
to avoid in the first place.15 In 1970, In re Winship replaced the juvenile
court’s preponderance standard with the criminal court’s beyond a
reasonable doubt standard, although the court again was troubled with the
shift “away from the original idea of juvenile courts as benevolent and less
formal institutions equipped to deal flexibly with the unique needs of
juvenile offenders.”16 However, in 1971, McKiever v. Pennsylvania slowed
this momentum by denying juveniles the right to jury trials.17
During this time, Congress was similarly effecting change on the
juvenile justice system.18 The Juvenile Delinquency Prevention and Control
Act of 1968 provided federal funds for community programs to discourage
juvenile delinquency.19 This was replaced in 1974 by the Juvenile Justice
and Delinquency Prevention Act which focused more narrowly on
preventing delinquency, deinstitutionalizing youth in the system, and
13. History of Juvenile Justice, supra note 4, at 6.
14. See History of Juvenile Justice, supra note 4, at 7. While under a six-month probation
term for being with another minor who stole a woman’s wallet, Gerald Gault, age fifteen, was
accused of making prank calls to a neighbor. Id. at 6. Police took Gerald into custody without
notifying his parents and he received no notice of the specific charges against him until his first
hearing. Id. Although the complaining neighbor was not present, and there were no other witnesses
against him, Gerald was committed to the state’s industrial school until the age of twenty-one, even
though an adult convicted of the same crime would have received a maximum penalty of $50 fine
and two months imprisonment. Id. See generally In re Gault, 387 U.S. 1 (1967).
15. See History of Juvenile Justice, supra note 4, at 7. Justice Stewart argued that the object of
juvenile courts was not the “correction of a condition” but to find the reason for and solution to
successfully modifying the child’s behavior. Id.
16. See History of Juvenile Justice, supra note 4, at 7-8. Because the minor faced a sentence
of six years in a juvenile training school, the majority analogized this loss of liberty to adult
imprisonment, requiring due process protections. Id. However, proponents of the juvenile court
argued that the sentence was not meant to punish, but to rehabilitate, and that where a child is in
need of the court’s guidance, “winning” his or her case may not be in the child’s best interest. Id.
See generally In re Winship, 397 U.S. 358 (1970).
17. See History of Juvenile Justice, supra note 4, at 8. The Court feared that allowing trial by
jury would abolish the last significant distinction between juvenile and adult court, rendering the
entire system’s existence of no use. Id. See generally In re McKiever, 403 U.S. 528 (1971).
18. See History of America’s Juvenile Justice System, supra note 11.
19. Id.
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separating juveniles from adults in detention and correctional facilities.20
However, a sharp rise in juvenile crime rates during the late 1980s and early
1990s triggered fear and “get tough” legislation, shifting the system’s
priority from rehabilitation to public safety and victims’ rights.21 The 1974
Act was amended to include minimum detention standards and an “escape
hatch” allowing juveniles to be tried as adults for weapons violations and
violent crimes.22 Other policies created presumptions for detaining youth
pending trial, removing the protection of confidential proceedings, and
requiring juveniles to register in sex-offender databases.23
Such proposals focus on the gravity of the act and its immediate impact on the victim and
society, rather than on the inner disposition and motivations of the youthful perpetrator.
Although intention still plays some role in determining the severity of the crime,
considerations of the juvenile’s immature judgment, dysfunctional family life, low
cognitive function, poor impulse control and other factors relating directly to the minor’s
24
inner disposition are deemed irrelevant.
Although no state has abandoned rehabilitation as a goal of its juvenile
justice system, critics argue that the juvenile justice system “probably suffers
the most glaring gaps between best practice and common practice, between
what we know works and what our public systems most often do on our
behalf.”25
20. Id. Before receiving funds, each state was required to separate juvenile and adult
offenders and remove all youth from secure detention and correction facilities. Id. The Act also
created the Office of Juvenile Justice and Delinquency Prevention (OJJDP), the Runaway Youth
Program, and The National Institute for Juvenile Justice and Delinquency Prevention (NIJJDP). Id.
21. Id. Despite supposed judicial and legislative protections, the shift Justice Stewart warned
against in 1967 was coming to fruition. Id. It is important to note that the threat of and fear
surrounding juvenile violence were grossly exaggerated. Id. In a 1996 poll, 60% of respondents
believed that juveniles committed “most” crime; when in fact, 80% of arrests were of adult
offenders. See Lise A. Young, Suffer the Children, AMERICA MAGAZINE (Oct. 22, 2001), available
at http://www.americamagazine.org/content/article.cfm?article_id=1164. According to the U.S.
Census Bureau, youth crime was at its lowest rate in twenty-five years, and youth homicides were
down 68% since their peak in 1993. Id.
22. See History of America’s Juvenile Justice System, supra note 11.
23. See Kristin Henning, What’s Wrong with Victim’s Rights in Juvenile Court: Retributive
Versus Rehabilitative Systems of Justice, 97 CALIF. L. REV. 1107, 1113 (2009).
24. Young, supra note 21.
25. Reform the Nation’s Juvenile Justice System, supra note 1. See also Henning, supra note
23, at 1119.
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B. Gearing up for Graham v. Florida
In 1989, the U.S. Supreme Court upheld the death sentence for two
juvenile murderers in Stanford v. Kentucky.26 However, sixteen years later
in 2005, the Court in Roper v. Simmons abolished the death penalty for
juvenile offenders, endorsing scientific research27 that highlighted
differences between the juvenile and adult brain and set forth the Court’s
belief that “a greater possibility exists that a minor’s character deficiencies
will be reformed.”28 Recently, in 2010, the Court reaffirmed this belief and
expanded its application outside of the death penalty context in Graham v.
Florida, barring life-without-parole sentencing in nonhomicide cases for
juveniles.29 Although these protections will guard a small percentage of the
most serious juvenile offenders from a declaration that they are incapable of
reform at the outset, it is important to apply this same research and rationale
to all juveniles in implementing preventative programs, conducting
proceedings, and determining appropriate sentences.
C. Graham v. Florida: The Facts and Procedural History
In July 2003, at the age of sixteen, Terrance Jamar Graham was arrested
for the attempted robbery of a barbeque restaurant.30 Terrance and three
other boys drove to the restaurant where Graham and one of his companions
entered through an open back door.31 Graham’s accomplice struck the
restaurant owner twice with a metal bar, causing injuries that would later
26. See generally Stanford v. Kentucky, 492 U.S. 361 (1989). See also Mark Hansen, What’s
the Matter with Kids Today, A.B.A. J. (July 1, 2010), available at
http://www.abajournal.com/magazine/article/whats_the_matter_with_kids_today/.
27. The author of What’s the Matter with Kids Today provides three examples of the types of
experiments and findings the court relied on in Graham. Hansen, supra note 26. Test subjects, aged
ten to thirty, were asked first to solve a puzzle using as few moves as possible, a measure of impulse
control. Id. Adolescents moved pieces immediately, which resulted in more moves later. Id.
Adults took more time to consider their first move and could usually solve the puzzle on their first
try. Id. Second, they were asked to decide between a small, immediate cash reward and a larger,
long term reward to measure decision-making abilities. Id. Younger subjects settled for a smaller
sum in exchange for waiting for the larger as older subjects did. Id. Finally, a computerized car
simulator was used to test effects of peer pressure. Id. Younger subjects took greater risks in the
company of friends compared to when driving alone, but older subjects kept consistent driving
patterns regardless. Id.
28. Henning, supra note 23, at 1121.
29. See Hansen, supra note 26.
30. Graham v. Florida, 130 S. Ct. 2011, 2018 (2010).
31. Id. One of the boys worked at the restaurant and had left the back door unlocked just
before closing time. Id.
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require stitches.32 The boys ran as soon as the owner started yelling at them,
without taking anything from the restaurant.33 Graham’s prosecutor elected
to charge him as an adult with first degree felony for armed robbery with
assault and second degree felony for attempted armed robbery.34 These
charges authorize a sentence of life imprisonment without the possibility of
parole.35 The trial judge withheld adjudication and sentenced Graham to
concurrent three year probation terms after reading a letter Graham wrote to
the court stating that he had learned his lesson and asking for a second
chance.36 Although he was required to serve one year of his probation
sentence in jail, he was credited for time served awaiting trial and was
released in June 2004.37
Six months later, on December 2, 2004, Graham was again arrested.38
This time, the State alleged that Graham and two accomplices knocked on
the door of Carlos Rodriguez’s house, forcibly entered the home, and held
the owner and his friend at gunpoint while they searched the home for
money.39 The State further alleged that Graham and his two friends later
attempted a second robbery, during which one of the friends was shot.40
Graham—who had borrowed his father’s car—dropped the two men off at
the hospital; but, as he was driving away, a police officer signaled for him to
pull over.41 Graham fled at high speeds and crashed into a telephone pole.42
He then attempted to flee on foot, but was soon caught by police who
subsequently found three handguns inside the car.43
32. Id.
33. Id.
34. Id. at 2018. Under Florida law, it is within the prosecutor’s discretion whether to charge
sixteen- and seventeen-year-olds as adults or juveniles for most felony crimes under then-current
section 985.227(1)(b) of the Florida Statutes. Id.
35. Id. Specifically, the armed burglary with assault or battery charge carried a maximum
penalty of life imprisonment without the possibility of parole and the attempted armed robbery
charge carried a maximum penalty of fifteen years in prison. Id.
36. Id. Terrance stated, “[T]his is my first and last time getting in trouble, . . . I’ve decided to
turn my life around. . . . I made a promise to God and myself that if I get a second chance, I’m going
to do whatever it takes to get to the [National Football League].” Id.
37. Id.
38. Id.
39. Id. at 2018-19. Both of Graham’s alleged accomplices were twenty-year-old men. Id. at
2018.
40. Id. at 2019.
41. Id.
42. Id.
43. Id.
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Graham denied any involvement in these crimes and maintained that he
did not come into contact with his two friends until after the shooting.44 He
did admit to his previous crimes when detectives asked if he had been
involved in any other robberies and also indicated that he understood he had
violated his probation conditions by fleeing from the police sergeant at the
hospital.45 After his probation officer filed an affidavit alleging his
probation violation, the court found that Graham had violated his probation
by “committing a home invasion robbery, by possessing a firearm, and by
associating with persons engaged in criminal activity.”46 Graham’s attorney
requested a sentence of five years, the Florida Department of Corrections
recommended four years, and the State asked for thirty years on the armed
burglary charge and fifteen on the attempted armed robbery count.47 The
judge sentenced Graham to the maximum authorized for adults on each
charge: life imprisonment for the armed burglary and fifteen years for the
attempted armed robbery.48 Florida abolished its parole system, therefore
Graham faced the grim reality that at the age of nineteen, he would spend the
entirety of his life behind bars.49 The judge rationalized, “[g]iven your
escalating pattern of criminal conduct, it is apparent to the Court that you
have decided that this is the way you are going to live your life and that the
only thing I can do now is to try and protect the community from your
actions.”50
Graham challenged his sentence under the Eighth Amendment, but the
motion was considered denied after the court failed to rule on it within sixty
days.51 The First District Court of Appeal affirmed Graham’s sentence as
they did not believe his sentence was grossly disproportionate to his crime.52
44. Id. Graham maintained his innocence during both the initial investigation by detectives,
and later during trial. Id.
45. Id.
46. Id. It is important to note that Graham spent about six months in custody awaiting
adjudication for the July 2003 allegations, and an additional twelve months for the December 2004
allegations. Id. at 2018-19.
47. Id. at 2019.
48. Id. at 2020. This was not the same judge that had withheld adjudication in Graham’s first
time before the court. Id. at 2019.
49. Id. at 2020.
50. Id.
51. Id. Note that this denial was not for substantive reasons, but rather that the court failed to
rule on the motion in the sixty days allowed. Id.
52. Id. The court took into consideration the seriousness of Graham’s offenses and their
violent nature, as well as the fact that Graham was seventeen at the time of the crime and nineteen at
the time of sentencing. Id.
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Further, the court concluded that Graham was incapable of rehabilitation,53
that although he “was given an unheard of probationary sentence for a
felony, . . . wrote a letter expressing his remorse and promising to refrain
from the commission of further crime, and . . . had a strong family structure
to support him,” he “rejected his second chance and chose to continue
committing crimes at an escalating pace.”54 The Florida Supreme Court
denied review, but the U.S. Supreme Court granted certiorari.55
D. Graham Reaches the U.S. Supreme Court
The Eighth Amendment provides that “[e]xcessive bail shall not be
required, nor excessive fines imposed, nor cruel and unusual punishments
inflicted.”56 Although barbaric or torturous punishment is clearly forbidden
by the cruel and unusual clause, the Court more often contemplates whether
the sentence is extreme or grossly disproportionate to the crime, given the
ever “evolving standards of decency.”57 For a term-of-years sentence, the
Court compares the gravity of the offense to the severity of the sentence.58
Where the Court deems the sentence to be grossly disproportionate, the
Court will then consider how the sentence at issue compares to other
sentences granted in the same jurisdiction as well as sentences for the same
crime in other jurisdictions.59 The Court also applies a proportionality
standard to certain categorical restrictions attached to the death penalty.60 In
Graham, the Court considered the “objective indicia of society’s standards,
as expressed in legislative enactments and state practice,” controlling
53. Id. However, researchers have found that juveniles are “particularly amenable” to change
due to their “considerable plasticity in response to environmental change,” and the “significant and
rapid change in their intellectual capabilities.” Henning, supra note 23, at 1122. “[M]ost youth will
mature out of criminal behavior between the teenage years and young adulthood.” Id. In 2005, the
Court in Roper noted that it would be inappropriate to treat a juvenile as if he were of irretrievably
deprived character. See generally Roper v. Simmons, 543 U.S. 551 (2005).
54. Graham v. Florida, 130 S. Ct. 2011, 2020 (2010) (quoting Graham v. State, 982 So. 2d 43,
52 (Fla. Dist. Ct. App. 2008)).
55. Graham, 130 S. Ct. at 2020.
56. U.S. CONST. amend. VIII (emphasis added). See also Graham, 130 S. Ct. at 2021.
57. Graham, 130 S. Ct. at 2021.
58. Id.
59. Id. at 2022. This standard does not require strict proportionality between the crime and the
punishment, but rather prohibits extreme sentences that are grossly disproportionate. Id. at 2021.
60. Id. at 2020. A categorical restriction would include prohibiting certain punishments from
certain groups, for example, those under the age of eighteen or those whose intellectual functioning
is in a low range. Id. at 2022.
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precedent, and the Court’s “understanding and interpretation of the Eighth
Amendment’s text, history, meaning, and purpose” to determine whether the
punishment violates the Constitution.61 Graham presented a novel challenge
to the Court―a categorical challenge to a term-of-years sentence—and
called into question not only his specific sentence, but a sentencing practice
applied to a range of different crimes.62 Applying the Roper analysis, the
Court looked to four factors to determine whether the practice was
constitutional: (1) national consensus expressed in both legislature and
application against the sentencing practice; (2) the Court’s own
understanding and interpretation of the Eighth Amendment’s text, history,
meaning, and purpose; (3) whether there is an effective alternative to
imposing a categorical rule; and (4) global consensus against the sentencing
practice.63 The Court concluded that the
Constitution prohibits the imposition of a life without parole sentence on a juvenile
offender who did not commit homicide. A State need not guarantee the offender eventual
release, but if it imposes a sentence of life it must provide him or her with some realistic
64
opportunity to obtain release before the end of that term.
III. ANALYSIS
In regard to the focus of this article, the most pertinent part of the U.S.
Supreme Court Graham opinion is the analysis applied to the Eighth
Amendment issue. Here, the Court cites to the research first adopted in
Roper and reinforced by more than a dozen amicus briefs presented to the
Court by legal, religious, correctional, human rights, and child advocacy
organizations.65 Justice Kennedy concludes that juveniles like Graham have
a “twice diminished moral culpability.”66 First, research in psychology and
61. Id. at 2022.
62. Id. at 2022-23.
63. Id. at 2023-34.
64. Id. at 2034. The judgment of the Florida First District Court of Appeal was reversed, and
the case was remanded for further proceedings not inconsistent with the opinion. Id.
65. See Hansen, supra note 26. The American Bar Association, Prison Fellowship Ministries,
Amnesty International, the Juvenile Law Center, educators, and members of the juvenile corrections
community filed amicus briefs in support of Graham. Id. Notably, former U.S. Senator Alan
Simpson (Wyoming)—who as a youth had set fire to an abandoned building, fired a rifle at a road
grader, and punched a police officer following a bar fight—along with other former juvenile
offenders, argued that it is “fundamentally inhumane” to give up on young offenders, and that these
youth are able to become productive members of society when given the chance. Id. A large
number of amicus briefs were filed on behalf of the state, taking the stance that it was necessary for
the state to retain the authority of life-without-parole sentences for especially dangerous juvenile
offenders, only one of which disputed the scientific research set forth in Roper. Id.
66. Graham v. Florida, 130 S. Ct. 2011, 2027 (2010).
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brain science has established fundamental differences between juvenile and
adult minds.67 Most convincing to the Court was evidence that juveniles
have a “‘lack of maturity and an underdeveloped sense of responsibility’;
they ‘are more vulnerable or susceptible to negative influences and outside
pressures, including peer pressure’; and their characters are ‘not as well
formed.’”68 The part of the brain responsible for behavior control, or
psychosocial maturity, does not “catch up” to intellectual maturity until
around age twenty-eight.69 Additionally, juveniles are more capable of
change than adults, and “it would be misguided to equate the failings of a
minor with those of an adult, for a greater possibility exists that a minor’s
character deficiencies will be reformed.”70 Second, the sentencing practice
applies only to nonhomicide crimes and therefore protects only those youth
who did not kill or intend to kill. “It follows that, when compared to an
adult murderer, a juvenile offender who did not kill or intend to kill has a
twice diminished moral culpability.”71
This ruling protects a small number of juveniles who have already
committed serious crimes. Taking this rationale into consideration, those
who have undertaken the responsibility of “parenting” these vulnerable
youths owe it to the next generation to intervene earlier in order to prevent
juveniles from entering the system and to rehabilitate them before they
arrive at the point of facing a life sentence, or worse, the death penalty.
Much research has also focused on common characteristics of these juvenile
offenders. “They are frequently from dysfunctional families with issues of
domestic violence, substance abuse, physical and/or sexual abuse; they are
often truants; and they tend to resort to violence as a means of settling
conflict.”72 Delinquent behavior occurs most often in the context of
economic depravity, chaotic home situations, and among children with poor
67. Id. at 2026 (“As petitioner’s amici point out, developments in psychology and brain
science continue to show fundamental differences between juvenile and adult minds.”).
68. Id. (quoting Roper v. Simmons, 543 U.S. 551, 569-70 (2005).
69. See Hansen, supra note 26.
70. Graham, 130 S. Ct. at 2026-27.
71. Id. at 2027. Roper barred the application of the death penalty to juveniles, but the Court
here analogizes the death penalty to a life-without-parole sentence, stating such a judgment “means
denial of hope; it means that good behavior and character improvement are immaterial; it means that
whatever the future might hold in store for the mind and spirit . . . , he will remain in prison for the
rest of his days.” Id.
72. Young, supra note 21.
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medical histories and learning disabilities.73 Psychologist Kathleen Heide
has identified fifteen variables believed to contribute to juvenile
delinquency. These variables are grouped into five main categories,
including situational factors (child abuse and neglect or the absence of
positive parental role models), societal influences (lack of leadership or
heroes, and exposure to violence within the community), resource
availability (lack of food and other necessities, as well as access to illegal
substances and guns), personality characteristics (low self-esteem; lack of
problem-solving strategies; and communication skills, and an environment
of prejudice or hatred), and the cumulative or interactive effects of the above
categories.74 In short, these children are often victims of circumstance,
poverty, and crime before they enter the juvenile justice system. Graham’s
sentencing judge notes that Graham had “quite a family structure. [He] had
a lot of people who wanted to try and help [him] get [his] life turned around
including the court system, and [he] had a judge who took the step to try and
give [him] direction through his probation order . . . .”75 What he does not
mention, however, was that Graham was born to drug addicted parents, that
he was diagnosed with attention deficit hyperactivity disorder in elementary
73. See Dorothy Ornow Lewis, Diagnostic Evaluation of the Delinquent Child: Psychiatric,
Psychological, Neurological, and Educational Components, in CHILD PSYCHIATRY AND THE LAW
139, 139, 143, 150 (Diane H. Schetky & Elissa Benedek eds., 1980). It is important to note, some
argue such behavior is as present in middle class communities, but is handled differently by parents
and law enforcement. Id.
74. See Coupet, supra note 7, at 1333-37.
75. Graham v. Florida, 130 S. Ct. 2011, 2019 (2010). The judge continued,
And I don’t know why it is that you threw your life away. . . .
But you did, and that is what is so sad . . . .
....
. . . The only thing that I can rationalize is that you decided that this is how you
were going to lead your life and that there is nothing that we can do for you. . . .
....
. . . I don’t see where any further juvenile sanctions would be appropriate. I don’t
see where any youthful offender sanctions would be appropriate. Given your
escalating pattern of criminal conduct, it is apparent to the Court that you have
decided that this is the way you are going to live your life and that the only thing I
can do now is to try and protect the community from your actions.
Id. at 2019-20.
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school, and that he began drinking alcohol at age nine and smoking
marijuana at age thirteen.76
Although the U.S. Supreme Court has only recently adopted this
research into its understanding and application of the Eighth Amendment,
those in the juvenile justice field have been working to identify intervention
strategies and program models to reduce delinquency and recidivism over
the past few decades. 77 However, only about 5% of eligible youths take part
in these programs, making such research “a waste of human capital and
money.”78
Before discussing what research has found to be the most effective
programs based on alternative dispute resolution strategies, it is helpful to
address the effectiveness of “get tough on crime” policies. First, transfer to
the adult justice system actually increases criminality, causing both a higher
recidivism rate and more serious subsequent crimes than the juvenile
jurisdiction.79 Second, the threat of serving adult time has not been effective
in deterring youth crime.80 Third, confining youth with adults is dangerous
and counterproductive, as is evidenced by the fact that the suicide rates of
minors in adult institutions is eight times that of juvenile institutions, sexual
assault is five times that of juvenile institutions, and physical attack rates are
double that of juvenile institutions.81 Finally, transfer to adult court is
costly—$100 million per year for added operating costs due to transfer
provisions.82
A study of the juvenile court system in 1967 reported that the heavy
volume of cases allowed courts to spend approximately one minute on each
case, which obviously prevented courts from taking the time necessary to
76. Id. at 2018.
77. See Peter Greenwood, Prevention and Intervention Programs for Juvenile Offenders, 18
JUV. JUST., no. 2, Fall 2008 at 185, available at
http://www.futureofchildren.org/futureofchildren/publications/docs/18_02_09.pdf.
78. Id. at 185. States often do not implement best practices due to the fact that many
policymakers are unaware of such research, or choose politics over evidence to win over constituents
who prefer tougher, albeit less effective crime reduction strategies. Id.
79. See Richard A. Mendel, Less Hype, More Help: Reducing Juvenile Crime, What Works—
and What Doesn’t, AM. YOUTH POL’Y F., 3 (June 14, 2000), available at
http://www.aypf.org/publications/mendel/index.html.
80. See id. at 41.
81. See id. at 41-42.
82. Id. at 43.
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assess each child and provide services.83 Since that time, “the volume of
cases has increased dramatically without a corresponding increase in
resources” which has created a “triage” system focusing only on the most
serious offenders.84 Many less serious cases are dismissed or treated with a
probation sentence, which are often managed by a probation officer with a
caseload too heavy to allow for adequate supervision or intervention where
necessary.85 One study found that up to 73% of referrals end with no formal
services or sanctions.86 These youths, receiving the message that they will
not be held accountable for their actions or receive services that will enable
them to interact with society in a more positive way, often accumulate a long
record of crimes.87 At best, the child’s criminal record limits future
educational and vocational opportunities; at worst, the severity of the child’s
crimes escalates until a court is forced to take notice.88 Courts were
originally authorized to intervene in juvenile cases under the parens patriae
doctrine, which pledged to act in the best interests of the child.89 After
looking at the current state of the juvenile justice system and taking into
consideration what science has taught us over the past few decades, it is
apparent we have a social, moral, and legal responsibility under the Eighth
Amendment to intervene in order to prevent and respond to juvenile offenses
in more constructive and effective ways.
83. See Edmund F. McGarrell, Restorative Justice Conferences as an Early Response to
Young Offenders, JUV. JUST. BULL. (Office of Juvenile Justice & Delinquency Prevention, Wash.,
D.C.), Aug. 2001, at 2, available at https://www.ncjrs.gov/pdffiles1/ojjdp/187769.pdf.
84. Id. at 2. Between 2000 and 2009, total federal juvenile justice funding decreased by 60%,
and the Office Of Juvenile Justice and Delinquency Prevention’s budget decreased 90%, from $6.8
million to only $700,000. See Reform the Nation’s Juvenile Justice System, supra note 1, at 2.
85. See McGarrell, supra note 83, at 2.
86. See Young, supra note 21.
87. See McGarrell, supra note 83, at 2.
88. “[A]pproximately 60 percent of youth ages 10-12 who are referred to juvenile court
subsequently return to court. For youth referred to juvenile court a second time, the odds of
returning to court again increase to more than 80 percent.” McGarrell, supra note 83. “Because
these youth typically have not committed a particularly serious or violent offense, and because
children this young usually have not accumulated a long record, they do not generally receive a great
deal of attention from juvenile justice officials.” Id.
89. See Coupet, supra note 7, at 1308-14.
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I.
IMPACT
A. The Role of Alternative Dispute Resolution in Reducing Juvenile Crime
and Creating a Generation of Peacemakers: A Four-Part Approach to
Reducing Juvenile Delinquency and Recidivism
1. Prevention
First, a proactive approach is necessary to identify and provide services
to at-risk youth before they are caught up in the delinquency system. “It is
well documented that it is more effective and less costly to prevent youths
from traveling down the path to delinquency than to attempt remediation
after the fact.”90 While there is no single approach that will prevent crime
across all populations, reducing risk factors and increasing protective factors
have been found effective in preventing the early onset of problematic
behavior.91 Abraham Maslow’s Hierarchy of Needs Theory provides that
until physiological and safety needs92 are met, children are not able to
explore or develop their need for social relationships, self-esteem, or selfactualization.93
In 2008, the U.S. Department of Health and Human Services
Administration on Children, Youth and Families reported that 10.3 out of
every 1,000 children under the age of eighteen were found to be victims of
neglect or abuse.94 Because their physiological and safety needs are not
being met, these victims lag even farther behind their peers in psychosocial
90. SNOHOMISH CNTY., JUVENILE DELINQUENCY: PREVENTION/RECIDIVISM REDUCTION 1
(2004), available at
http://www.co.snohomish.wa.us/documents/Departments/Human_Services/Community/ChildrenAff
airs/CAP_OCA_JuvenileDelinquencyReport.pdf [hereinafter SNOHOMISH REPORT]. See also
Greenwood, supra note 77, at 185 (“The most successful programs are those that prevent youth from
engaging in delinquent behaviors in the first place.”).
91. See SNOHOMISH REPORT, supra note 90, at 1.
92. Maslow’s Hierarchy of Needs, ABRAHAM-MASLOW.COM, http://www.abrahammaslow.com/m_motivation/Hierarchy_of_Needs.asp (last visited Jan. 31, 2012). Physiological
needs include air, water, food, and sleep. Id. Safety needs include living in a safe environment and,
for children, having someone to take care of them. Id.
93. See id.
94. Child Maltreatment 2008, ADMIN. FOR CHILD. & FAMILIES, ADMIN. ON CHILD., YOUTH
& FAMILIES, CHILD. BUREAU (U.S. Dep’t of Health & Human Servs., Wash., D.C.), 2010, at 23, 25,
38, available at http://www.acf.hhs.gov/programs/cb/pubs/cm08/cm08.pdf.
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development, the factor that the U.S. Supreme Court used to determine a
lessened culpability for juvenile offenders.95 Prevention programs—poverty
abatement programs, feeding programs, housing programs, home visits for
young first-time mothers, and high quality preschool programs—have all
been effective in preventing child abuse, neglect, and antisocial behavior, as
well as drug use and arrests among both parents and children.96
2. Conflict Resolution Education
Second, conflict resolution education must be implemented to enable
youths to independently and constructively resolve conflict and break the
pattern of violence. “Delinquency and violence are symptoms of a
juvenile’s inability to handle conflict constructively.”97 Deterioration in
family structure contributes to increased child neglect and abuse.98 Busy
parents assume these skills will be taught in school. But scurriculum—
which has, over time, pared down the breadth of skills taught to children to
the three R’s99 necessary for success on standardized tests—has left a void in
children’s social development. Video games, television shows, and movies
demonstrate that violence is an acceptable conflict resolution strategy.100
Although adults are often out of touch with the everyday stressors children
confront, minor affronts—teasing, taking a child’s belongings, or peer
pressure—have been found to provoke the majority of violent incidents
among middle and high school students.101 When asked the reason for their
aggressive behavior, many juveniles simply retort “I didn’t think,” while
41% of juveniles surveyed reported that they “could not control anger and
95. See Maslow’s Hierarchy of Needs, supra note 92.
96. See Greenwood, supra note 77, at 196-99.
97. Donni LeBoeuf & Robin V. Delany-Shabazz, Conflict Resolution, Delinquency, and
Violence, MEDIATE.COM, http://www.mediate.com/articles/shabazz.cfm (last visited Jan. 31, 2012).
98. See Andrea J. Sedlak & Diane D. Broadhurst, Executive Summary of the Third National
Incidence Study of Child Abuse and Neglect, CHILD WELFARE INFORMATION GATEWAY (1996),
http://www.childwelfare.gov/pubs/statsinfo/nis3.cfm (“Children of single parents were at higher risk
of physical abuse and of all types of neglect and were overrepresented among seriously injured,
moderately injured, and endangered children.”).
99. The catch phrase “three R’s” refers to the foundational skills of reading, writing, and
arithmetic.
100. See Press Release, American Psychological Association, Violent Video Games Can
Increase Aggression (Apr. 23, 2000), http://www.apa.org/news/press/releases/2000/04/videogames.aspx.
101. See Donna K. Crawford & Richard J. Bodine, Conflict Resolution Education: Preparing
Youth for the Future, 8 JUV. JUST. J. (Office of Juvenile Justice & Delinquency Prevention, Wash.,
D.C.), no. 1, June 2001, available at https://www.ncjrs.gov/html/ojjdp/jjjournal_2001_6/jj3.html.
Most incidents occur at home or school, among youth who know each other. Id.
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would fight” in conflict situations.102 The surge of school shootings over the
past decade shows a pattern: “Like other shy people, these cynically shy
people reach out to others, wanting friendship, but lack social skills . . . .
They often get rejected by their peers, feel hurt, and eventually become
cynical and want to retaliate against those who reject them.”103
Currently, most schools settle peer conflict or teacher–student conflict
with a type of arbitration―a school official intervenes and determines an
appropriate solution, and all parties are required to comply.104 Children
observe their parents assuming a similar role at home when sibling conflicts
or parent–child conflicts arise. Not only is this process coercive, which
many children reject on principle, but more importantly, it removes the
opportunity for the child to engage in and practice conflict resolution
skills.105 In contrast, when juveniles take more responsibility for their own
behavior and for resolving disputes, teachers are free to focus less on
behavior management and more on substantive education, while the
juveniles move farther along on the hierarchy of needs into selfactualization.106 Conflict resolution education provides the skills necessary
for youths to resolve disputes independently and peacefully, a skill that they
can take back to their families, communities, and future relationships, as
well as educational and employment settings.107 There are three general
approaches to conflict resolution education: process curriculum, peer
mediation, and peaceable classroom/peaceable school.108
102. Id. See also Amanda Cuda, Study: Juvenile Mediation Cuts Repeat Offenses,
NEWSTIMES.COM (Jan. 24, 2010, 11:32 PM), http://www.newstimes.com/default/article/StudyJuvenile-mediation-cuts-repeat-offenses-333715.php.
103. Kathleen Doheny, What Triggers School Shooters?, WEBMD (Aug. 20, 2007),
http://www.webmd.com/mental-health/news/20070820/what-triggers-school-shooters?print=true#.
104. See Crawford & Bodine, supra note 101.
105. See id. “Responsible behavior—the hallmark of an emotionally intelligent individual—
depends above all else on the absence of coercion. Coercive management deprives the individual of
innate motivation, self-esteem, and dignity, while cultivating fear and defensiveness.” Id.
106. See Maslow’s Hierarchy of Needs, supra note 92. After a child’s physiological and safety
needs are met, they are free to develop their social needs (friendship, belonging, and giving and
receiving love), esteem needs (recognition, social status, accomplishment, and self-respect), and
finally, self-actualization (truth, justice, wisdom, and meaning). Id.
107. See Crawford & Bodine, supra note 101.
108. Crawford & Bodine, supra note 101; LeBoeuf & Delany-Shabazz, supra note 97; U.S.
DEP’T OF EDUC., OFFICE OF JUVENILE JUSTICE & DELINQUENCY PREVENTION, CREATING SAFE
AND
DRUG-FREE SCHOOLS: AN ACTION GUIDE 73 (Sept. 1996), available at
http://www.ncjrs.gov/pdffiles/safescho.pdf [hereinafter ACTION GUIDE].
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a. Process Curriculum
The process curriculum approach requires teachers to provide direct
instruction on how to use principled negotiation to achieve goals and resolve
disputes.109 A North Carolina middle school of 700 students found that inschool suspensions decreased 42% and out-of-school suspensions decreased
97% within a single school year after implementing the Fighting Fair
Curriculum.110
The skills taught and practiced in conflict resolution education are the
same skills law students and lawyers learn from books like Getting to Yes
and Getting Past No.111 Children learn to separate people from the problem
by sharing feelings and emotions, developing better communication skills,
and exploring perceptions.112 Focusing on interests instead of positions
helps children identify compatible and conflicting interests, which allows a
wider range of more effective solutions than merely focusing on positions.113
When students learn how to focus on interests, they can then work together
to invent options for mutual gain.114 Although these proficiencies seem like
lofty goals, that professional adults still struggle with, even very young
children are able to grasp and apply the principles when they are presented
in a developmentally appropriate context—through lesson plans and
curriculum written by child development and education experts readily
available to teachers and schools.115 “School based violence prevention
programs must begin in early education to allow young students to
109. See ACTION GUIDE, supra note 108, at 72.
110. Id. at 74. The Fighting Fair Curriculum is based around a set of rules which “provide a
framework for appropriate behavior and the associated skills, such as identifying and focusing on the
problem; attacking the problem, not the person; listening with an open mind; treating a person’s
feelings with respect; and taking responsibility for one’s actions.” Crawford & Bodine, supra note
101. Teachers model, teach, coach, encourage, and finally delegate as students master these skills.
Id.
111. See Crawford & Bodine, supra note 101. See generally ROGER FISHER, WILLIAM L. URY
& BRUCE PATTON, GETTING TO YES: NEGOTIATING AGREEMENT WITHOUT GIVING IN (1992);
ROGER FISHER & WILLIAM L. URY, GETTING PAST NO: NEGOTIATING WITH DIFFICULT PEOPLE
(1991).
112. Crawford & Bodine, supra note 101.
113. Id.
114. Id.
115. Curriculum and lesson plans are widely available on the internet, including The Program
for Young Negotiators based on the Harvard Negotiation Project, and the Peace Foundation’s
Fighting Fair Curriculum. As a former teacher, I have personally witnessed the power of the Tribes
Learning Community curriculum to transform a kindergarten classroom into a better disciplined,
more caring environment, and have seen children as young as four or five talk through conflict
instead of tattling or retaliating. See TRIBES LEARNING COMMUNITY, http://tribes.com/ (last visited
Jan. 31, 2012).
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internalize a pattern of peacemaking behaviors prior to becoming
adolescents.”116
b. Peer Mediation
The peer mediation approach provides an effective transition for
students accustomed to the typical arbitration method used in most homes
and schools. In peer mediation, teachers or students refer disputes to
specially trained peer mediators.117 Student mediators are trained to listen to
both sides of an argument, offer unbiased impressions, and find workable
solutions to the parties’ problems.118 The mediation process provides a
structured way to resolve disagreements before either party resorts to
violence, ideally without either party feeling like he has to give in on his
position.119 A Las Vegas school system has implemented a school-based
mediation program for 2,500 students at one middle school and three
elementary schools.120 This program has an 86% success rate in studentmediated conflicts, fewer conflicts and fights on school grounds, and
increased mediation skills and self-esteem among students.121 Similarly, an
Albuquerque elementary school reported a 90% decrease in playground
fights after implementing the New Mexico Center for Dispute Resolution’s
Mediation in the Schools Program.122
c.
Peaceable Classroom/Peaceable School
The peaceable classroom and peaceable school approaches incorporate
conflict resolution into the daily management of the classroom, or better yet,
116. Crawford & Bodine, supra note 101.
117. See LeBoeuf & Delany-Shabazz, supra note 97. Guidance counselors, community
mediators, or other school officials process, recruit, and train students interested in being teen
mediators. Id.
118. See National Crime Prevention Council, Want to Resolve a Dispute? Try Mediation,
YOUTH IN ACTION BULL. (Office of Juvenile Justice & Delinquency Prevention, Wash., D.C.), Mar.
2000, at 2, available at https://www.ncjrs.gov/pdffiles1/ojjdp/178999.pdf.
119. See id. at 1.
120. LeBoeuf & Delany-Shabazz, supra note 97.
121. Id.
122. ACTION GUIDE, supra note 108, at 74. The article further reports that other students
within the Albuquerque school district experienced such success with peer mediation that peer
mediators “found themselves out of a job.” Id.
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the entire institution.123
The peaceable school approach integrates
cooperative learning, diversity appreciation, and effective communication
and involves every member of the school community―students, teachers,
administrators, school support staff, and parents.124 The peaceable school
approach, which incorporates all three other approaches, is most likely to
affect long-term change.125 The peaceable school approach, through the
Resolving Conflict Creatively Program, was instituted in four multiethnic
schools throughout New York City.126 This resulted in physical violence
decreasing by 71%, verbal insults and name calling decreasing by 66%, and
a “greater acceptance of differences, increased awareness and articulation of
feelings, and a spontaneous use of conflict resolution skills throughout the
day in a variety of academic and nonacademic settings.”127
3. Targeted Intervention for First Time Offenders
Third, targeted intervention for first time offenders should be utilized to
immediately show the child that crime is unacceptable and results in
consequences. Brain research experts analogize the teenage brain to a car
with a powerful gas pedal but weak brakes.128 As the Court noted in Roper
and Graham, psychosocial abilities such as impulse control, judgment,
forward thinking, and resistance to peer pressure are much less developed
than a juvenile’s cognitive abilities.129 Many juvenile crimes are the result
of this immaturity gap, which leaves many offenders, and their victims, with
no logical explanation for why they acted as they did―a “disconnect which
makes wrongdoing easier.”130 Targeting first time offenders by promptly
addressing the causes and consequences of their behavior, and providing
services or support where necessary to prevent recidivism and encouraging
positive reintegration into the community, has been found to cut repeat
offenses in half and incarceration rates by two-thirds as compared to a
123. See LeBoeuf & Delany-Shabazz, supra note 97.
124. See ACTION GUIDE, supra note 108, at 75.
125. See Crawford & Bodine, supra note 101.
126. ACTION GUIDE, supra note 108, at 75.
127. Id.
128. See Hansen, supra note 26.
129. See id. On the maturity index graph provided in this article, intellectual ability peaks at
around age sixteen, then dips and begins to rise again at about age twenty. Id. Conversely,
psychosocial maturity dips from age ten to fourteen, then steadily increases until about age thirty.
Id.
130. Cuda, supra note 102.
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control group.131 Although the judge presiding over Graham’s first trial
probably thought he was doing Graham a favor by releasing him on
probation, an important learning opportunity was missed. Additionally, like
many other offenders, Graham probably did not understand the natural
consequences of his actions―the impact on his victim, the victim’s family,
or community―and therefore saw no need for change.
4. Alternative Dispute Resolution Techniques Effective in Promoting
Restorative Justice for All Parties
Finally, innovative alternative dispute resolution techniques such as
parent–teen mediation, victim–offender mediation, and teen court should be
integrated into the juvenile justice system to promote restorative justice.
“[P]eople are generally deterred from committing crime by two informal
forms of social control: fear of social disapproval and conscience.”132 These
three techniques take advantage of and address this fact. Further, juveniles
respond particularly well to mediation when it is a voluntary process;
because, many teens feel empowered by having a choice when they are
otherwise accustomed to having no input in developing home or school rules
or punishment.133 Similarly, juveniles also appreciate the involvement of a
neutral party and the opportunity to be heard, in comparison to the
authoritarian context present in most homes and schools.134
a. Parent–Teen Mediation
Parent–teen mediations have been found to be effective in addressing
less serious status offenses135—such as truancy or curfew violations—before
the child engages in more serious criminal behavior, as is often the
131. See Young, supra note 21. Experts believe that the most effective interventions take place
shortly after the offense takes place, while the memory is still fresh for the juvenile. See Peggy L.
Chown & John H. Parham, Can We Talk? Mediation in Juvenile Criminal Cases, FBI L.
ENFORCEMENT BULL., Nov. 1995, available at http://www.lectlaw.com/files/cjs08.htm.
132. McGarrell, supra note 83, at 2. He further argues that punishment or reparation are more
effective when imposed by family members or friends compared to a legal institution. Id.
133. See Suzanne VM Petryshyn, Parent Teen Mediation—A Family Systems Perspective,
MEDIATE.COM (Dec. 2004), http://www.mediate.com/articles/petryshyn_S1.cfm#.
134. See id.
135. A status offense is a “minor’s violation of the juvenile code by doing some act that would
not be considered illegal if an adult did it, but that indicates that the minor is beyond parental
control.” BLACK’S LAW DICTIONARY 1188 (9th ed. 2009).
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pattern.136 This type of mediation is especially helpful in parent–child
conflicts because neither party has to feel like they are “giving in,” and a
neutral party can facilitate communication and model problem-solving
strategies, which is likely to generate long-term solutions.137 In addition, as
many of the factors that lead to juvenile delinquency relate to the child’s
home environment, mediators can identify and address some of these issues
in the context of the mediation instead of just addressing the juvenile’s
behavior, which is the symptom, not the source, of the problem.138
b. Victim–Offender Mediation
Victim–offender mediation forces young offenders to address the
natural consequences of their offenses. Many juveniles have established the
mindset that the system is against them―they are victims in their home lives
and bring this mentality into society generally.139 Mediation realigns the
parties and proceeds from the more abstract “offender v. state” to a more
concrete “offender v. victim,” in effect humanizing the crime.140
Implementing victim–offender mediation is especially effective for juveniles
due to the fact that they do not contemplate or understand consequences as
maturely as adults, and as the Court noted in Graham, they are more capable
of change.141 In many delinquency cases, there is no need for treatment;
instead, identification of the harm caused and a call for the development of
skills and competencies necessary for day to day functioning is the
preferable option.142 Sitting down face to face with the victim allows the
juvenile to more completely understand how the offense affected others,
giving them an opportunity to make amends, which is a much more
constructive means of resolving the conflict.143 The offender can now
envision himself or herself in a positive role in the community, which
combats the lack of foresight present at this stage of brain development.144
136. See id.
137. See id.
138. See id.
139. See Cuda, supra note 102.
140. See Deborah Kirby Forgays & Lisa DeMilio, Is Teen Court Effective for Repeat
Offenders? A Test of the Restorative Justice Approach, 49 INT’L J. OFFENDER THERAPY & COMP.
CRIMINOLOGY 107, 109 (2005).
141. See Graham v. Florida, 130 S. Ct. 2011, 2026 (2010).
142. See Jeremy Olson, Making a Case for Mediation of Juvenile Delinquency, MEDIATE.COM
(Feb. 2009), http://www.mediate.com/articles/olsonJ1.cfm.
143. See Chown & Parham, supra note 131.
144. See Forgays & DeMilio, supra note 140, at 108.
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c.
Teen Court
Teen courts have been created as a voluntary alternative to the
traditional juvenile justice system, usually reserved for young, first-time
offenders charged with less serious crimes such as shoplifting, vandalism, or
disorderly conduct.145 Teen courts are operated and administered by a
variety of different agencies, including the juvenile court or juvenile
probation department, community nonprofit organizations, and school
districts.146 Although most programs utilize an adult judge with youth filling
the roles of attorneys; jurors; clerks; and bailiffs, others use a youth judge or
a panel of youth judges in place of a jury.147 In the peer jury model, the
offender’s case is presented directly to a jury without the use of attorneys,
and the jury may directly question the defendant.148 This program takes
advantage of the juvenile’s desire for peer approval, which is a much more
powerful motivator than adult authority.149 Other potential benefits include
increased accountability for minor offenses—which would likely be
dismissed in the traditional court system—, a shorter timeline between
offense and adjudication, and valuable insight into the court system for all
participants.150 Like mediation programs, teen courts have gained popularity
due to the high rate of satisfaction for participants, although differences in
specific cases and characteristics of offenders make statistical comparisons
for the purpose of analyzing recidivism rates difficult.151 However, in most
courts studied, organizers reported a recidivism rate lower than that of the
group proceeding through traditional juvenile courts.152
145. See Chown & Parham, supra note 131. Although it is beneficial for all crimes to be
somehow addressed, the number of courts and prosecutors needed to adjudicate every juvenile case,
almost two million per year, is unrealistic. Id. Status offenses, and less serious crimes mentioned
here, account for about 13% of all juvenile cases. Id.
146. See id.
147. See id.
148. See id.
149. See Jeffrey A. Butts & Janeen Buck, Teen Courts: A Focus on Research, JUV. JUST. BULL.
(Office of Juvenile Justice & Delinquency Prevention), Oct. 2000, at 2, available at
https://www.ncjrs.gov/pdffiles1/ojjdp/183472.pdf.
150. See id. at 3.
151. See id. at 1.
152. See id. at 9.
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V. CONCLUSION
Roper v. Simmons was a monumental first step in restoring the juvenile
justice system to a constitutionally sound process in which goals and
practices are in harmony with both the system’s original intent and the
information research has revealed about the strengths and weaknesses of
these human “works in progress.” Graham v. Florida moves the system
another step in the right direction, but each of these children; their potential
future victims; and society as a whole, deserves something more. Our
current system is failing, and the consequences to all parties involved are
catastrophic on a personal, moral, and financial level. As Justice Stevens
declares in his concurring Graham opinion, “Society changes. Knowledge
accumulates. We learn, sometimes, from our mistakes.”153 As a system that
purports to care for those who cannot care for themselves and expects
participants to learn from their mistakes, we must require more of ourselves
in meeting the increasing needs of the next generation. Although it is too
late for Christopher Simmons, Terrance Graham, and the 2,500 other
juveniles serving life-without-parole sentences,154 as well as the many
victims of these and similarly disturbing and senseless crimes, the tools are
available to enable young people to break this cycle of violence, to be
productive members of society, and to develop into a generation of
peacemakers. Now is the time to use them.
153. Graham v. Florida, 130 S. Ct. 2011, 2036 (2010).
154. Biskupic & Moore, supra note 3 (“An estimated 2,500 juvenile defendants in the USA are
serving life-without-parole sentences—the vast majority for homicides.”).
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The Perfect Circle:
Arbitration’s Favors Become
Its Flaws in an Era of
Nationalization and Regulation
Kimberly R. Wagner *
INTRODUCTION
Litigation attorneys are ever alert for the word “lawsuit,” the sound of
which makes any other person cringe. The image of a wood-paneled
courtroom lorded over by a seasoned legal professional, however, has not
always had such a poor reputation; it was once associated with such glorious
ideas as “innocent until proven guilty” and “having a day in court.”
The negative connotation linked to litigation1 stems from several
entrenched and continuing problems, including high costs, the destruction of
business relationships, and the unpredictability of the results, 2 which are
present in both domestic and foreign conflicts. Additional problems arise
* Kimberly R. Wagner is a Juris Doctorate candidate at Pepperdine University School of Law and a
Masters in Dispute Resolution candidate at the Straus Institute for Dispute Resolution, 2012. She is
also a Student Articles Editor for the Pepperdine Dispute Resolution Law Journal.
1. The problems with litigation were evident even as early as the days of Abraham Lincoln,
who observed
the limitations of the legal process: crowded circuit court dockets, with court sessions in
most counties limited to a few days a year; the difficulties of procuring evidence and
witnesses; the unpredictability of local tribunals and juries; and the difficulties of
executing on a debt in the face of a determined, recalcitrant debtor.
Thomas J. Stipanowich, Lincoln’s Lessons for Lawyers, 16 DISP. RESOL. MAG., no. 2, Winter 2010,
at 18, 18 [hereinafter Lincoln’s Lessons].
2. Andrew Sagartz, Resolution of International Commercial Disputes: Surmounting Barriers
of Culture Without Going to Court, 13 O HIO ST. J. ON D ISP. RESOL. 675, 678 (1998). See also
Thomas J. Stipanowich, Arbitration: The “New Litigation,” 2010 U. I LL. L. REV. 1, 4 (2010) (“Th[e]
dramatic decrease in the trial rate may be attributed, at least in part, to business and public concerns
about the high costs and delays associated with full-blown litigation, its attendant risks and
uncertainties, and its impact on business and personal relationships.”).
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when these transactions span more than one country, forcing parties to
decide on a forum, learn foreign procedures, and pay additional costs. 3 The
impracticality of international litigation was realized after World War II in
the advent of an era characterized by global commercial cooperation. 4 The
three key issues that developed for foreign litigators were: fear of bias for
the domestic party; questionable appealability in foreign fora; and potential
lack of enforceability of a resulting judgment. 5 Consequently, international
parties sought a neutral alternative to alleviate these concerns and provide
more efficient, effective results.6
The goal of this article is to explore the evolution of international
commercial arbitration, highlighting some of its specific aspects that have
brought it under critical evaluation, and to analyze the viability of another
ADR process—mediation—overtaking it in the international arena. Part I
gives a brief background on international arbitration and explains how it has
become so prominent and respected in the global community. It also focuses
3. Sagartz, supra note 3, at 678. See also Bonnie S.C. Klotz, Practitioner’s Workshop:
Practical Aspects of International and Foreign Law Litigation, 79 AM. SOC’Y I NT’ L L. PROC. 328,
329 (1985) (quoting remarks by Eleanor M. Fox, Professor of Law, New York University School of
Law). Ironically, some of the technological advances that make international transactions possible
have contributed to the higher costs. For example, computers and the electronic transmission of
information have led to a rise in “e-discovery,” the gathering of archived information from electronic
databases and networks. Because of the massive amounts of data that is stored, expense and burden
on the parties have significantly increased, prompting a response in 2006 from the Advisory
Committee to amend the Federal Rules of Civil Procedure. Rachel Hytken, Electronic Discovery:
To What Extent Do the 2006 Amendments Satisfy Their Purposes?, 12 LEWIS & CLARK L. REV. 875
(2008).
4. Kevin T. Jacobs & Matthew G. Paulson, The Convergence of Renewed Nationalization,
Rising Commodities, and “Americanization” in International Arbitration and the Need for More
Rigorous Legal and Procedural Defenses, 43 TEX. INT’ L L.J. 359, 362 (2008).
5. Id. There was also the potential for simultaneous litigation in multiple countries regarding
the same issue, which would affect enforceability as well. Winston Stromberg, Avoiding the Full
Court Press: International Commercial Arbitration and Other Global Alternative Dispute
Resolution Processes, 40 LOY. L.A. L. REV. 1337, 1339 (2007).
6. For US attorneys, litigation as an international resolution option did not go quietly, and
arbitration was forced to look to Congress for some teeth; consequently, Congress passed the Federal
Arbitration Act.
The problems Congress faced were . . . twofold: the old common law hostility toward
arbitration, and the failure of state arbitration statutes to mandate enforcement of
arbitration agreements. To confine the scope of the Act to arbitrations sought to be
enforced in federal courts would frustrate what we believe Congress intended to be a
broad enactment appropriate in scope to meet the large problems Congress was
addressing.
Southland Corp. v. Keating, 465 U.S. 1, 14 (1984).
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on the changes that have been made to the process because of this spotlight,
as civil and common law attorneys compete to control it.
Part II hones in on the criticism that the features of arbitration which
made it popular are now hindering the process, looking to the causes of this
rapid deterioration. The author analyzes three attributed reasons for this
decline: Americanization, nationalization, and overregulation.
Part III concentrates on mediation as the new, up-and-coming possible
replacement for arbitration. This section compares the advantages of
mediation and arbitration and comments on the import of these differences,
concluding that neither is poised to supplant the other, but rather that each
should be valued for its respective purposes and in the appropriate situations.
PART I
A. International Commercial Arbitration:7 The Beginning
The demise of Greek society is attributed to many causes, but one that
has fallen by the wayside is the inability to draft compelling contracts. 8 To
prevent the onslaught of war—the ancient equivalent to litigation—clauses
were included in contracts between city-states which stated the obligation to
seek an alternative remedy for any disputes.9 One example is the Pease of
Nicias between Sparta and Athens, which required that “if there should arise
a difference between them they will remit its solution to a procedure
according to a method upon which they will come to an agreement.” 10 Any
first-year contracts student, however, could identify the vague, nonspecific
language as the literally fatal flaw; once an issue develops between parties, it
is unlikely that they will agree to anything, much less a specific method of
dispute resolution. Thus, the establishment of a solution before the problem
arises is the more prudent course. The outcome of this early recorded
7. “Arbitration is customarily defined as ‘a simple proceeding voluntarily chosen by parties
who want a dispute determined by an impartial judge of their own mutual selection, whose decision,
based on the merits of the case, they agree in advance to accept as final and binding.’” Maureen A.
Weston, Reexamining Arbitral Immunity in an Age of Mandatory and Professional Arbitration, 88
MINN. L. REV. 449, 452 (2004) (quoting MARLIN M. VOLZ & EDWARD P. GOGGIN, ELKOURI &
ELKOURI: HOW ARBITRATION WORKS 2 (5th ed. 1997).).
8. William K. Slate II, International Arbitration: Do Institutions Make a Difference?, 31
WAKE FOREST L. REV. 41, 42 (1996).
9. Id. at 41.
10. Id.
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arbitration attempt was six short years of peace before the arrangement was
broken.11
Perhaps realizing the potentially catastrophic effect of a poorly-written
agreement, the English took a more successful stab at an alternative to
litigation in the thirteenth century with their establishment of private
tribunals to govern commercial claims, 12 beginning the first western dispute
resolution systems. Following this cue, the Jay Treaty, created in 1794,
contained a commission for similar tribunals to allow British creditors to
arbitrate claims against nationals of the United States.13 Arbitration was
finally recognized as a legitimate system with the opening of the
International Court of Arbitration, operated by the International Chamber of
Commerce, in 1923.14 Its value was established in the 1950s 15 when
international litigation proved to be insufficient for the newly globalized
economy,16 and the practice gained worldwide notoriety with the
summoning of the Convention of the Recognition and Enforcement of
Foreign Arbitral Awards. 17 The “New York Convention,”18 as the
conference is fondly called, made unprecedented headway with the melding
of foreign legal systems by holding party states responsible for enforcing
arbitral awards rendered in other countries 19 and for upholding forum
selection clauses,20 a respect that is not even afforded to court judgments. 21
11. Id. at 42.
12. Stromberg, supra note 6, at 1343.
13. Id.
14. Id. at 1343-44. “When crafting arbitration agreements in the early to mid-20th century,
commercial parties and their respective counsel focused on two main issues: (1) the neutrality of the
arbitration seat and (2) the seat’s local laws affecting arbitral proceedings.” Jacobs & Paulson, supra
note 5, at 366.
15. Stromberg, supra note 6, at 1344.
16. Jacobs & Paulson, supra note 5, at 362.
17. Stromberg, supra note 6, at 1344.
18. The New York Convention was drafted based on the Geneva Convention of 1927, “which
was the primary arbitration convention in force at that time.” Brette L. Steele, Enforcing
International Commercial Mediation Agreements as Arbitral Awards Under the New York
Convention, 54 UCLA L. REV. 1385, 1392 (2007). Under its terms, this early agreement required
that a party seeking enforcement of an arbitral award had the burden of proving the finality and
viability of the award. Id. The New York Convention revolutionized this harsh requirement to open
the doors to international favor of arbitration, “plac[ing] the burden of proving these exceptions on
the party seeking to block enforcement, instead of the party defending enforcement. This marked
shift in presumption illustrates and enhances a strong policy towards recognizing and enforcing
arbitration awards.” Id. at 1393.
19. As sovereign entities, states generally expect deference to their choice of domestic
arbitration laws. However,
[s]tates which recognise international arbitration as a valid method of resolving
commercial and other disputes are usually ready to give their assistance to the arbitral
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Since the New York Convention, 146 countries have agreed to uphold
the newfound sanctity of arbitration. 22 Many of these nations have initiated
private arbitration legislation to preserve the process domestically and
prevent court interference with the implementation and outcomes of
contractual arbitration clauses. 23 As a result, “arbitration has become . . .
preferred over judicial methods of dispute resolution because the parties
have considerable freedom and flexibility with regard to choice of
arbitrators, location of arbitration, procedural rules for the arbitration, and
the substantive law that will govern the relationship and rights of the
parties.”24 Parties look to arbitration for the perceived benefits of “cost
savings, shorter resolution times, a more satisfactory process, expert
decision makers, privacy and confidentiality, and relative finality.” 25 This
dispute resolution technique, however, is increasingly coming under fire for
the same insufficiencies it was designed to solve. 26
process. . . . In return, it is to be expected that they will seek to exercise some control
over the arbitral process. Such control is usually exercised on a territorial basis-first, over
arbitrations conducted in the territory of the State concerned, and secondly, over awards
brought into the territory of the State concerned for the purpose of recognition and
enforcement.
NIGEL BLACKABY ET AL., REDFERN AND H UNTER ON INTERNATIONAL ARBITRATION 69 (5th ed.
2009).
20. Jacobs & Paulson, supra note 5, at 363.
21. Stromberg, supra note 6, at 1345. See also Steven Seidenberg, International Arbitration
Loses Its Grip: Are U.S. Lawyers to Blame?, 96 A.B.A. J. 50, 52 (2010) (“[The New York
Convention] has been an enormously successful international agreement . . . but it requires countries
to do more for arbitrations than for foreign court judgments. The New York Convention is the
engine that makes international arbitration go.” (quoting Mark W. Friedman, a partner in the New
York City office of Debevoise & Plimpton)).
22. Jacobs & Paulson, supra note 5, at 363; Cf. New York Convention Countries, NEW YORK
ARBITRATION CONVENTION, http://www.newyorkconvention.org/new-york-convention-countries
(last visited Sept. 22, 2011).
23. Jacobs & Paulson, supra note 5, at 363.
24. Id. (quoting Mark A. Buchanan, Public Policy and International Commercial Arbitration,
26 AM. BUS. L.J. 511, 512 (1988)).
25. Stipanowich, supra note 3, at 4.
26. Id. at 5 (“[T]he literature frequently focuses on various perceived shortcomings, including
unqualified arbitrators, uneven administration, difficulties with arbitrator compromise, and limited
appeal. There are, moreover, frequent complaints regarding delay and high cost.”).
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B. Evolution of Arbitration Procedures
Since its more modern beginnings, the benefits of arbitration have been
tailored to apply to many situations, which has resulted in a change of the
general process itself as it is administered in all cases.27 Two of the key
areas which have been affected are discovery and witness examination, 28
which ultimately reflect the different and changing styles of American and
foreign attorneys.
Modern international commercial arbitration has its roots in Western
Europe, primarily France and Switzerland, 29 though its history comes from
several parts of the Western World. Now, as an internationally renowned
system, arbitration is utilized and adopted by numerous legal styles and
traditions.30 Because of these differences, however, there has been a residual
clash between civil law practiced by the “Continent,” or continental Europe,
and common law as championed by the United States and the United
Kingdom31 since the practice was expanded globally.32 The term of art for
this clash has been dubbed “Americanization,” 33 because as international
arbitration was “originally a European/civil law phenomenon,” 34 any
changes made are associated with America or common law. 35
27. Id. at 11.
28. Stromberg, supra note 6, at 1363-67.
29. Elena V. Helmer, International Commercial Arbitration: Americanized, “Civilized,” or
Harmonized?, 19 OHIO ST. J. ON D ISP. RESOL. 35, 45 (2003).
30. Stromberg, supra note 6, at 1363.
31. Id. at 1362.
32. Helmer, supra note 30, at 35.
[A]n ‘academic confrontation . . . between those trained in the Anglo-Saxon legal
profession and those having a Roman law orientation’ continues to produce debates in
scholarly writings and at conferences as to how international commercial arbitrations are
to be conducted and what is the role of Anglo-American lawyers in the development of
international arbitration in general.
Id.
33. Id. The word was supposedly coined by Stephen Bond, then Secretary General of the
International Court of Arbitration, established by the International Chamber of Commerce. Id.
34. Id. at 36.
35. Depending on the legal perspective of the discussion of “Americanization,” the speaker
may describe the phenomenon in one of two ways. First, it could mean “converting European
arbitrators to the ‘English language and to the usages of Anglo-Americans . . ., enlarg[ing] the club
[of European arbitrators] and . . . rationaliz[ing] the practice of arbitration such that it could become
offshore-U.S.-style-litigation.’” To the opposition, however, it would take on the meaning that
“‘Americanization’ or an ‘American approach’ . . . is often a code word for an unbridled and
ungentlemanly aggressivity [sic] and excess in arbitration. It can involve a strategy of ‘total
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1. Impact of Internationalization on Discovery
Discovery is one of the main areas that has been affected by common
law presence in the world of arbitration. 36 Civil law discovery, called
“disclosure,” is a process in which the attorneys from each side simply
present to the court the main documents on which their cases are based.37
Europe finds this simplicity to be a point of pride because it makes
adjudication faster, cheaper, and more confidential. 38 With the increasing
involvement of American attorneys, however, representing both American
and foreign clients in the international arena,39 the civil law tradition has
been giving way to “mass discovery routines of American-style litigation”40
because of the perception that disclosure does not allow for a full finding of
the facts relevant to the case.41
warfare,’ the excesses of U.S.-style discovery, and distended briefs and document submissions.” Id.
at 35-36.
36. Stromberg, supra note 6, at 1363.
37. Id.
38. Id.
39. See Roger P. Alford, The American Influence on International Arbitration, 19 OHIO ST. J.
ON D ISP. RESOL. 69, 80-81 (2003) (“According to a Chambers Global publication on the ‘World’s
Leading Lawyers,’ the trend in the French legal market has been the concurrent decline of the
traditional Franco-French firm, with its emphasis on individual superstars, and the rise of the AngloAmerican firm, with its emphasis on tight organizational structure and teamwork. Their survey
identifies seven of the top eight leading arbitration practices in France to be in Anglo-American law
firms.”).
40. Stromberg, supra note 6, at 1363. Compared to the narrow civil law requirement to
disclose only the documents that are key to the case, the common law discovery rules, though still
limited to an extent, appear to be quite broad.
Unless otherwise limited by court order, the scope of discovery is as follows: Parties may
obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim
or defense–including the existence, description, nature, custody, condition, and location
of persons who know of any discoverable matter. For good cause, the court may order
discovery of any matter relevant to the subject matter involved in the action. Relevant
information need not be admissible at the trial if the discovery appears reasonably
calculated to lead to the discovery of admissible evidence.
FED. R. CIV. P. 26(b)(1). Note the difference between the burdens of the rules; civil law puts the
burden of disclosure solely on the party in possession of the evidence, while common law parties
have much freer rein to not only request crucial evidence, but any evidence that may or may not lead
to crucial evidence.
41. Stromberg, supra note 6, at 1363.
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[I]n recognizing its benefits, many civil lawyers and arbitrators have begun to accept
limited means of discovery in international commercial arbitration. In doing so, limited
discovery blends the common law approach, which seeks the production of categories of
relevant documents, and individual documents, with the civil law approach, which
42
demands that the documents be identified with reasonable specificity.
Though this compromise was regarding procedure, which is usually not
codified to afford the parties greater flexibility in conducting their
arbitrations,43 the International Bar Association adopted a set of model rules
based on this formula which could be incorporated into a contractual
arbitration agreement. 44
Despite the more structured approach that institutional rules have been
developing for discovery to streamline the process, many arbitrators tend “to
be very liberal in the admission of evidence.” 45 “[A]rbitrators tend to be
reluctant to refuse admittance to evidence, and . . . tend to go along so no
one can say that justice has not been served–so the award will be rendered
more bulletproof.”46 Though it is rare for a court to overturn arbitrators for
failure to admit evidence because of the wide deference given to their
decisions, arbitrators still have an interest in the display of judiciousness
regardless of financial or temporal expense to the arbitrating parties. 47
While this may be an inherent frustration to some parties, others recognize
the caution as a necessary aspect of a thorough, satisfactory arbitration. 48 It
is important, therefore, in assessing the costs and benefits of arbitration to
consider the unique situation of each party and to recognize that a costly
inconvenience for some parties may be worth the price.49
2. Impact of Internationalization on Witness Examination
The other key difference between civil and common law practices lies
with the examination of witnesses. 50 Because international commercial
arbitration turns primarily on the interpretation of business contracts,
42. Id. at 1364.
43. Helmer, supra note 30, at 55.
44. Stromberg, supra note 6, at 1364-65.
45. Stipanowich, supra note 3, at 15.
46. Id. (quoting Telephone Interview by Thomas J. Stipanowich with David McLean,
Managing Partner, New Jersey Office, Latham &Watkins LLP (Oct. 7, 2008)).
47. Interview with Thomas J. Stipanowich, William H. Webster Chair in Dispute Resolution
and Professor of Law at Pepperdine Univ. Sch. of Law, in Malibu, Cal. (Feb. 11, 2011) [hereinafter
Stipanowich Interview].
48. Thomas J. Stipanowich, Arbitration and Choice: Taking Charge of the “New Litigation,”
7 DEPAUL BUS. & COM. LAW J. 384, 385-86 (2009).
49. Stipanowich Interview, supra note 48.
50. Stromberg, supra note 6, at 1363.
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arbitrators tend to focus more on written documents than oral testimony. 51
Civil law traditionally also tends to favor written over oral testimony, and
thus, the preference was originally adopted in the development of
international arbitration. 52 This is not to say, though, that common law
procedure did not have an impact. “Attorneys with civil law backgrounds
have come to recognize that examining witnesses, especially through crossexamination, has many benefits.”53 This realization, like that of the benefits
of the discovery process, is not codified in any rules to regulate proceedings
in the interest of maintaining the flexibility of arbitration, but the arbitrators
are given the discretion to limit the scope of examination and crossexamination.54 They also tend to participate more heavily in the crossexamination process than a typical common law judge to ensure that the
information they receive is complete and accurate. 55 To further ensure that
the memorialized record is as useful as possible, condensed summaries of
witness testimony are prepared to “promote certainty and common
understanding in the witnesses’ testimony by reconciling inconsistencies and
adding to the quality of the arbitrator’s decision-making.” 56
C. Common Law Infiltration Into Civil Law Arbitration
“Americanization” is a topic that has been much discussed for over a
decade as the United States has become a more looming presence in
international commercial arbitration after the ratification of the New York
Convention in 1970. 57 Most notable is the effect that the presence of
American attorneys on the international scene has had on procedure, as
noted by the differences in discovery and examination of witnesses; “the
continuing flow of American newcomers” brings trial tactics that are
familiar to common law practitioners 58 but overly aggressive to civil
51. Id. at 1366.
52. Id. at 1362.
53. Id. at 1366.
54. Id. at 1367.
55. Id.
56. Id.
57. Helmer, supra note 30, at 43.
58. Id. at 46. See also Alford, supra note 40, at 83 (“Whether the skills are transferable or
successful in international arbitration is not the point. With the overwhelming influence of
American law firms on the global scene, the fact that these tactics are tried is altering the atmosphere
of international commercial arbitration.”).
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practitioners.59 To understand the course of the changes that American law
is encouraging in international commercial arbitration, it is important to
trace why there are differences between civil and common law, 60 and from
where they stem. The underlying justification for legal procedures and
practices appears to generally flow from the social ethics on which they are
based. Thus, a comparison of the doctrinal ethics of civil and common law
should shed some light on the foundation for each system’s procedures and
be illustrative of where their principles diverge.
1. Civil vs. Common Law Ethics
American law students are indoctrinated with the ethical model standard
of “zealous advocacy,” which is touted as the quintessential behavior for a
practicing attorney. 61 With this high bar in mind, aspiring young graduates
apply this requirement to every aspect of legal practice, and to perform any
lesser standard reeks of potential malpractice allegations.62 As a result of
this mantra, “[c]ommon law lawyers . . . often[ ]demonstrate[ ] greater
energy and training in obtaining, analyzing[,] and arguing the facts on which
most arbitrations are won or lost.” 63 Considering this assessment by a Swiss
attorney, it seems to be no mystery why European practitioners would be
resentful of the strong litigation techniques exemplified by American
lawyers that so often tip the outcome of a case in their favor.64
By contrast, civil law systems have no such archetypal standard to
which their attorneys feel morally and professionally bound. 65 “[T]he rules
of professional conduct ‘are handed down from generation to generation as
some kind of “oral law,” uncodified and restricted to prohibitions of the
obvious conflicts of interest.’”66 Some jurisdictions do not have set
guidelines at all, but rather rely on volunteer organizations to develop a code
for the noble-minded that has only force of conscience. 67 Far from
59. Helmer, supra note 30, at 35-36.
60. Id. at 36-37 (“The whole debate of Americanization of international commercial
arbitration springs from what has been called the ‘Common Law-Civil Law Divide.’”).
61. Stipanowich, supra note 3, at 11.
62. Id. at 12.
63. Helmer, supra note 30, at 47 (quoting Nicolas C. Ulmer, A Comment on “The
‘Americanization’ of International Arbitration?,” 16 MEALEY’S I NT’ L ARB. REP. 24, 24 (2001)).
64. Helmer, supra note 30, at 47.
65. See Mary C. Daly, What Every Lawyer Needs to Know About the Civil Law System, 1998
PROF . LAW. SYMP. ISSUES 37, 46 (1998).
66. Id.
67. Id. See Rona R. Mears, Ethics and Due Diligence: A Lawyer’s Perspective on Doing
Business with Mexico, 22 ST. MARY’S L.J. 605, 609-11 (1991).
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lamenting the lack of ethical guidance, British practitioners, who follow the
same undefined principles as civil law attorneys, “th[ink] it quaint that
American lawyers fe[el] in need of legal rules for their governance, but they
recall[ ] that Americans seem[ ] to need legal rules for everything.” 68
While the import of these ethical differences may not be immediately
apparent, it does explain the impetus behind the techniques utilized by
common and civil law practitioners. Common law practitioners are more
likely to feel professionally obligated to engage in litigious techniques that
meet the standard of “zealous advocacy,” even in the context of arbitration,
because they are compelled to do so on behalf of their clients. 69 Civil law
practitioners, on the other hand, have the freedom to adapt their techniques
to what they believe is appropriate for the situation as there is no firm
standard of performance to which they will be held accountable. 70 This
conclusion suggests that the aggression of American law that is so loathed
by civil law practitioners is unlikely to subside unless the ethical standards
ingrained in the minds of American law students are amended to provide for
differences between litigious and dispute resolution situations. 71
68. Daly, supra note 66, at 46 n.29.
69. See Stipanowich Interview, supra note 47. It is important to keep in mind that the ethical
obligations of attorneys in an arbitration are not equated to the rules of litigation; zealous advocacy
does not require the Federal Rules of Civil Procedure scope of discovery to be applied to the
resolution of every dispute. Id. Rather, a client may want or be willing to have less discovery, in
which case zealous advocacy would mean finding the fastest and cheapest solution. Id. After all, in
the words of William Gladstone, “justice delayed is justice denied.” Id. Discovery as practiced in
litigation has essentially been priced out of the market to the point of impracticality and does not
need to be brought to arbitration for a lawyer to meet the standard of ethics. Id. See also THE
COLLEGE OF COMMERCIAL ARBITRATORS , PROTOCOLS FOR EXPEDITIOUS , COST-EFFECTIVE
COMMERCIAL ARBITRATION: KEY ACTION STEPS FOR BUSINESS USERS, COUNSEL, ARBITRATORS &
ARBITRATION PROVIDER I NSTITUTIONS 26 (Thomas J. Stipanowich ed., 2010) [hereinafter
PROTOCOLS].
70. See Catherine A. Rogers, Regulating International Arbitrators: A Functional Approach to
Developing Standards of Conduct, 41 STAN. J. I NT’L L. 53, 99-100 (2005) [hereinafter Regulating
Arbitrators].
[C]ivilian attorneys are assigned an obligation to be ‘independent’ from their clients. In
this role, civilian attorneys do not present their clients’ positions in their strongest, most
uncompromising form . . . . Instead, they mediate their strongest position, presenting a
pre-screened and more restrained view of their clients’ cases to the inquisitorial judge.
Id. Accordingly, civil law judges do not interpret the applicable codes and statutes, but rather simply
apply the law for the correct outcome. Id. at 100.
71. Because of the increasing formalities associated with arbitration and its supposed likeness
to litigation,
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2. Ethical Differences Applied to Arbitration
Though arbitrators are touted essentially as neutral magistrates in the
disputes over which they preside, it would be foolish to pretend that they are
immune to the influences of their national countries. 72 While this may not
be as crucial with the application of procedural rules such as scope of
discovery and format of examination, ethical considerations pervade into
every aspect of any legal proceeding. 73 However, in order to unify the
ethical values of international arbitrators, any standards that are developed
“must be linked to the values of the international arbitration system and the
procedures that reflect those values.”74 Because international arbitration is
“the only viable means for resolving international business disputes,” the
necessary inclination toward increased predictability and accountability must
be achieved, but only as governed by a set of ethical standards to which
arbitrators can be held accountable. 75
[t]he zealous advocate who jealously guards (and does not share) information, who does
not reveal adverse facts (and in some cases, adverse law) to the other side, who seeks to
maximize gain for his client, may be successful in arbitrations and some forms of minitrials and summary jury trials.
However, the zealous advocate will likely prove a failure in mediation, where creativity,
focus on the opposing sides’ interests, and a broadening, not narrowing of issues, may be
more valued skills.
Carrie Menkel-Meadow, Ethics in Alternative Dispute Resolution: New Issues, No Answers from the
Adversary Conception of Lawyers’ Responsibilities, 38 S. TEX. L. REV. 407, 427 (1997).
72. See Catherine A. Rogers, Fit and Function in Legal Ethics: Developing a Code of Conduct
for International Arbitration, 23 MICH. J. INT’L L. 341, 376 (2002) (“In the absence of articulated
norms and express enforcement mechanisms, arbitrators likely assess the conduct of attorneys based
on private–and untested–standards informed by the arbitrators’ legal and cultural backgrounds.”).
Therefore, it is impractical to expect ethical norms to “effectively be resolved on an ad hoc basis
during proceedings.” Id. at 377.
73. The different roles that the various legal systems contemplate for attorneys
reflect the larger cultural values of the societies that produce them. . . . [T]he greater
authority of civil law judges reflects . . . a greater acceptance of authority and less
tolerance for uncertainty. . . . [T]he expanded control of parties in U.S. proceedings, and
the consequent role of the U.S. attorney as strategist and lobbyist, are said to be linked to
the American commitment to individualism and an exaltation of due process over
efficiency and even fact-finding accuracy. Thus, while legal ethics are often regarded as
universal by virtue of their intimate relationship to moral philosophy, they are in fact
vitally linked to the cultural values of the systems that produced them.
Id. at 394.
74. Id. at 395.
75. Id. at 422.
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Arbitrators are equated to judges because of the significant control that
they have over parties in contractual, statutory, and other legal capacities 76
despite the fact that there are no formal minimum qualifications, including
the possession of legal training. 77 Regardless of this questionable disparity,
there is little that parties can do legally in the event of arbitrator misconduct
because of the confidentiality78 of the process.79 Additionally, “arbitration
associations ‘have an economic disincentive to enforcing their codes of
ethics. There is an inherent conflict of interest for arbitration associations:
they must enforce codes of ethics enough to preserve the good name of
arbitration, but not so much that they generate unwanted publicity and
lawsuits.’”80 This financially-motivated conundrum is mirrored for the
arbitrator as well, who must determine whether there is an ethical need to
disclose conflicts of interests81 which may result in dismissal from the case.82
76. Weston, supra note 8, at 452. Arbitrators even have the inherent power to determine their
own jurisdiction under the doctrine of competence. N IGEL BLACKABY ET AL., supra note 20, at 347.
The decision made regarding this authority is given wide deference and only results in a reversal “in
very unusual circumstances.” First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 942 (1995). See
also PacifiCare Health Sys., Inc. v. Book, 538 U.S. 401, 407 (2003) (“questions whether [the
contractual provisions] render the parties’ agreements unenforceable and whether it is for courts or
arbitrators to decide enforceability . . . the proper course is to compel arbitration.”).
77. Regulating Arbitrators, supra note 70, at 56.
78. Sometimes the process can be too confidential when the parties request, but do not receive,
an explanation for the award.
An arbitrator should be free to decide the dispute before him without fear that he will
have to explain the basis for his decision, and how he arrived at it, at some later date. If
the parties to an arbitration agreement want to know the arbitrator’s reasoning, they may
request that he include it in his award . . . . Once an arbitrator issues an award, however,
his role is complete and, like a judge or jury, he may not be required to answer questions
about why he reached a particular result.
Hoeft v. MVL Group, Inc., 343 F.3d 57, 68 (2nd Cir. 2003) (overruled on other grounds). What the
court does not mention is that unlike a judge or jury, an arbitrator is hired by the parties, and it would
seem that it would be within their rights to demand his full services for their payment, at least to the
extent of a written opinion.
79. Weston, supra note 8, at 463-64. Because of the confidential aspect of arbitration, there
are also “no guarantees of due process, discovery, appeal, or other protections that are available in
the judicial system.” Id.
80. Id. at 469.
81. Interestingly, one of the biggest key differences between civil and common law lies with
conflicts of interest.
American attorneys brought . . . practices that profoundly affect arbitrator conduct, such
as a compulsively persnickety approach to conflicts-of-interest. . . . [T]he reality and
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Thus, it has been firmly established that it is necessary to have a system
of ethics to which international arbitrators would be obligated. 83 The
process of creating such a system appears to be rather simple; “relatively
few direct conflicts appear to exist among national codes of professional
conduct.” 84 While the biggest differences appear in the approaches to ethics
in civil and common law jurisdictions, 85 even these are deemed to be
perception of U.S. conflict-of-interest standards contrast sharply with European standards
and practices, which permit the same and other close relationships to be legitimately
withheld.
Regulating Arbitrators, supra note 70, at 63. In his article, Alan Rau suggests that the current lack
of set ethical obligations leans too far toward the civil law approach:
[A]ll of the arbitrators on international panels are expected to be both impartial and
independent of the party appointing them. They may, however—without violating in any
way this theoretical obligation—quite acceptably share the nationality, or political or
economic philosophy, or “legal culture” of the nominating party—and may therefore be
supposed from the very beginning to be “sympathetic” to that party’s contentions or
“favorably disposed” to its position.
Alan Scott Rau, The Culture of American Arbitration and the Lessons of ADR, 40 TEX. INT’ L L. J.
449, 459 (2005). This assessment, however, is insultingly narrow-minded in its assumption that
simple commonality of ideology will lead to discriminatory behavior. While ADR was once
practiced with the attitude that “anyone who would engage in ADR must of necessity be a moral,
good, creative, and of course, ethical person,” the pendulum does not need to swing so far the other
direction that any familiarity with a party’s background will warrant disqualification. MenkelMeadow, supra note 71, at 408.
82. Regulating Arbitrators, supra note 70, at 71-72.
83. See Cyrus Benson, Can Professional Ethics Wait? The Need for Transparency in
International Arbitration, 3 DISP. RESOL. I NT’L 78, 78-79 (2009). A failure to develop a universal
code of arbitral ethics
can easily breed procedural unfairness in the particular case, and it matters generally
because it attacks the integrity of the system of international arbitration. [Without
practical guidance for counsel,] [t]he system of self-policing may become impossible and
there may be a gradual deterioration in the standards of legal professional conduct. The
international arbitral process would then be brought into disrepute and, once its good
reputation was lost, it could take decades to rebuild confidence.
Id. See also Menkel-Meadow, supra note 71, at 418 (“ADR now needs ‘ethics’ or standards in part
because of its successes—it is being challenged from within as well as without.”).
84. Benson, supra note 83, at 82.
85. Id.
Most common law codes of professional conduct are far more detailed in identifying
conduct to be regulated than their civil law counterparts, where lawyer conduct is
governed by general standards of integrity and good faith. Further, common law systems
of ethics incorporate a lawyer’s duty to the tribunal or court, in addition to that owed to
the client. This duty is largely unrecognised in civil law systems.
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unlikely to affect the arbitrators “in aspects that are most relevant to their
ethical obligations.”86 Therefore, the most widely-advocated method for
cultivating a system of international arbitration ethical standards is to specify
broad standards – “based on adherence to ethical, moral, and ‘good’ nonadversary principles” – that are supplemented by the principles of common
law which guide ethical legal processes. 87
From these standards, several codes could be developed which parties
would be able to adopt and adapt to their situations in the true spirit of
arbitration.88 Theoretically, the greater discretion of the parties in governing
the conduct of the arbitrators would warrant greater involvement by the
institutions, which would hopefully increase the transparency of how the
institutions are run and correct the market’s perception of them.89 While this
increased transparency would not necessarily guarantee more ethical
arbitrators or outcomes, it could enhance the legitimacy of institutional
arbitration, which depends on the appearance of impartiality on the part of
the neutrals.90 Thus, the harmonization of civil and common law traditions
in procedural arbitral practices should be applied to the ethical standards as
well to create a reliable framework to which arbitrators would be held
accountable.
PART II
A. Arbitration’s Full Circle
Tracing the path of the evolution of arbitration and investigating the
influences behind its course are vital to determine where the process is likely
Id.
86. Regulating Arbitrators, supra note 70, at 109.
87. Menkel-Meadow, supra note 71, at 451. For an example of such a set of standards, see
Benson, supra note 83, at 88-94.
88. Regulating Arbitrators, supra note 70, at 111. While parties already have the flexibility to
create and implement codes of ethics on arbitrators in their agreements to arbitrate, the idea would
be to give extra incentive to do so by making available templates to incorporate. Id. at 112. Though
not discussed by the author, the effectiveness of this new system would rely on the responsibility of
the parties’ attorneys in choosing the applicable code—a level of responsibility that has not always
been demonstrated in the world of international arbitration.
89. Id. at 111-12.
90. Id. at 118-20.
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to go and what its fate may be. When it was widely introduced as a viable
alternative to litigation in the early 1900s, advocates lauded arbitration’s key
characteristics—efficiency,91 lower expense, and finality92—as a perfect
escape. Their tune soon changed however to denounce the process for the
same shortcomings from which litigation suffered: “‘judicializ[ation],’
formal[ity], cost[ ], and time-consum[ption].”93 If this condemning view is
accurate, arbitration may be subject to the same backseat position to which it
assigned litigation when it rose to the international spotlight as an effective
dispute resolution alternative.
Arbitration was implemented globally with little critique for the first
century of its prominence; numerous institutions were established to
promote its powers, many of which saw significant growth. 94 There is no
question of its success, and at one time, as much as ninety percent of
international commercial transactions contained arbitration clauses. 95
Arbitration is accepted as an indispensable alternative to litigation and is still
much preferred in the international arena despite some concerns about its
rules and prominent fora; its value is particularly known to those who have
experienced it.96 However, disapproval of arbitration techniques is now
rampant, citing several causes including heavy American influence,
nationalization, and overregulation.
1. American Litigation: Bettering International Commercial
Arbitration?
The most blatant attempt to blame American influence for the
deterioration of arbitration comes from foreign litigators associating it with
“judicialization.”97 American attorneys are often charged with trying to
make arbitration procedures mirror those of the U.S. court system “in order
to increase its predictability, reliability, and equity.”98 The result however is
91. Though the Federal Arbitration Act came long after the introduction of arbitration, it has
actually begun to undermine the efficiency of the process it was designed to promote. Dean Witters
Reynolds, Inc. v. Byrd, 470 U.S. 213, 221 (1985) (“The preeminent concern of Congress in passing
the Act was to enforce private agreements into which the parties had entered, and that concern
requires that we rigorously enforce agreements to arbitrate, even if the result is ‘piecemeal’ litigation
. . . .”).
92. Stipanowich, supra note 3, at 8.
93. Id.
94. Stromberg, supra note 6, at 1351-52.
95. Id. at 1342-43.
96. Stipanowich Interview, supra note 48.
97. Helmer, supra note 30, at 36.
98. Id.
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said to be that those procedural changes convert arbitration into U.S.-style
The implication that Americans becoming involved in
litigation.99
international commercial arbitration is the sole cause of its downfall seems
to be a bit far-fetched. For instance, despite the fact that the process began
in Western Europe, the application of American procedures in stages such as
discovery and witness examination has had a lasting impact on arbitration
itself.100 Simply because international commercial arbitration is no longer
exclusively governed by civil law does not mean that it will automatically
suffer the same fate as the system—American litigation—which has
influenced it. Regardless of the truth of this conclusion, civil law systems
still insist on circumventing the influence of American techniques, namely
by exercising greater control over the substantive arbitral process through
increasingly detailed contract clauses. 101
Further, a certain amount of American influence in almost any industry
should be expected per past global trends. 102 One author has cited as many
as nine key trends initiated by contact with American litigation styles, none
99. Id.
100. See supra nn. 41 & 52 (indicating the willingness of civil law attorneys to incorporate
American methods of discovery and examination into arbitration procedures).
101. Rau, supra note 81, at 453-54.
In substantial transactions one is increasingly seeing a use of custom-tailored arbitration
clauses—often intended to diminish the finality of awards or to increase formality in
arbitral procedure. This is surely but one manifestation of what is often described and
decried as the “judicialization” or “legalization” or arbitration . . . . The increased
involvement . . . of American litigators in transnational arbitration also undoubtedly plays
a role; the habits—and perceived duties—of such litigators may, it is said, lead them “to
push to enlarge the limited means of appeal and therefore expand the control of the courts
over private justice.”
Id.
102. Alford, supra note 40, at 87-88. Alford draws an analogy to the film industry to imply that
American involvement in up-and-coming ideas is inevitable:
[C]inema was born in Paris on December 28, 1895 . . . . Much of the early history of film
has its roots in Europe rather than the United States. The greatest films were German, the
best editing techniques were Russian, and much of the best equipment was developed in
France. But it was the establishment in the 1920s of major Hollywood motion picture
studios . . . that led to the golden age of Hollywood. Those studios created an economic
juggernaut that assimilated the best and the brightest artists and directors from Europe . . .
. Today we all know that the United States is the dominant force in film.
Id. And so the same can be true for America’s influence in international commercial arbitration.
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of which can take credit for arbitration’s potentially deteriorating success.103
Rather, a different global trend triggered by the increasingly interconnected
economies of various nations should be examined – nationalization.104
2. The Effects of the Natural Nationalization Process
Nationalization “is part of a privatization-nationalization cycle found in
many places throughout the world.”105 It is instigated by a host of effects,
including “political ideology, foreign relations, decapitalization of the host
country, a desire for increased control and independence, market
domination, culture, and even religion.”106
The rise of government control over once-private industries began with
the growth of fossil fuel use to produce energy; the spike in demand
necessitated more resources to meet these quotas, which could only be
supplied by the government. 107 At first, the supplying countries only
required larger shares of the profits of oil-producing companies, but it was
simply a matter of time before the governments “increase[d] their roles in
the management of the oil companies’ ventures.”108 Because the countries
themselves now owned such lucrative international industries, any disputes
that arose came between their governments. 109
Though relations between countries have come a long way since the
Pease of Nicias,110 resolving international disputes is still far from perfect.
With politics involved with international commercial issues, the number of
claims has skyrocketed, as has the amount of money associated with them111
as the heads of states are perceived to be easier targets, and are connected
with far more potential parties through various contractual obligations and
bilateral investment treaties. 112 While some countries have responded more
aggressively than others,113 challenging the validity of their own contracts to
103. Alford, supra note 40. Alford lists the following influences: rise of Anglo-American law
firms, legal training, style, discovery, choice of law, venue, published precedent, language, and
institutional personnel. Id.
104. Jacobs & Paulson, supra note 5, at 375.
105. Id.
106. Id.
107. Id. at 375-76.
108. Id. at 376.
109. Id. at 381-85.
110. Slate, supra note 9, at 41-42.
111. Jacobs & Paulson, supra note 5, at 384.
112. Id.
113. Argentina was inundated with requests for arbitration after its 2001 economic crisis “that
led to its defaulting on foreign debt and the devaluation of the peso.” Id.
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prevent liability, there is no question that the myriad of defense strategies
such as expropriation and breach of contract will result in arbitration
becoming “more complicated, more costly, and less efficient.”114 If this
assertion sounds familiar, it is; it is the same claim that scholars have made
about the effect of Americanization on arbitration. 115
There are two main procedural solutions that have been proposed by
those who express concern with this trend: better delineation of legal
principles that could lead to preliminary determinations; and more efficient
techniques for discovery and disclosure tactics. 116 First, with the flood of
claims that have been brought against the governments of countries who
have nationalized prominent producers of crucial resources, it is highly
unlikely that they are all meritorious. 117 American litigation disposes of
frivolous claims through summary judgments and other preliminary
procedures; however, “[o]ne disadvantage of international arbitration is that
issues that may be dispositive of a case and appropriate for a motion to
dismiss or summary judgment in court litigation may often be considered by
arbitrators only after a full evidentiary hearing on all of the issues.”118
Recognizing this detriment, the suggested solution has been to draft
arbitration clauses to include specific language to provide for these
determinations.119 Practically speaking, it would also be prudent for arbitral
Argentina responded with a multi-layer legal defense strategy: it challenged [the
International Centre for Settlement of Investment Disputes]’s jurisdiction to hear the
disputes and argued that bilateral treaties do not supersede Argentina’s constitution,
which requires claims to be brought before Argentine courts; it proceeded to defend the
claims on their merits and asserted the doctrine of sovereign rights and the national
emergency clause in its [bilateral investment treaties] to justify its monetary policies; it
scrutinized the compliance with contractual obligations by each contractor since the
beginning of the contract and threatened termination; it challenged the validity and
enforceability of awards, including expanded review by the Federal Supreme Court of
Argentina.
Id. Though Argentina’s tactics are geared toward economic and global political survival, their
effectiveness could lead to similar defenses in other countries. This is harmful because it could draw
out the timing and cost of arbitration, particularly with the increase of claims against the
governments of the countries involved.
114. Id. at 385.
115. Id.
116. Id. at 386.
117. Id. at 384.
118. Id. at 397.
119. Id. at 398.
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institutions to consider such changes to their procedures to encourage the
practice more widely in contracts that employ their rules. 120
Second, the process of arbitral discovery has fallen victim to the
cumbersome use of expert witnesses, who may or may not contribute any
meaningful information to the cases. 121 Even the most contributive experts
impose extra costs and time on the parties to the conflict, and because of
their lack of neutrality, detract from the spirit of the arbitration process.122
Because education of the arbitrators on the central issues of the case is
necessary, it not practical to eliminate the role of experts entirely; rather, the
proposed remedy has been to increase the transparency of their technical
conclusions, and to request that they simply submit their findings with the
result to enhance the efficiency of the examination and cross-examination
stage.123
3. Overregulation: Taking Too Much Control from the Parties
Finally, while arbitration is often paraded as a model procedure that
maintains flexibility of process124 and provides a solution, the increase in
arbitral institution regulation is beginning to defeat that assertion. The clash
between the origins of international commercial arbitration in civil law and
the rising influence of American and British common law125 has necessitated
120. Currently, the International Bar Association only has a vague reference to preliminary
rulings on the issues in its Rules on the Taking of Evidence in International Commercial Arbitration:
“[E]ach Arbitral Tribunal is encouraged to identify to the Parties, as soon as it considers it to be
appropriate, the issues that it may regard as relevant to the outcome of the case, including issues
where a preliminary determination may be appropriate.” Id. at 397 (quoting IBA Rules on the
Taking of Evidence in International Commercial Arbitration pmbl. 3 (1999)).
121. Jacobs & Paulson, supra note 5, at 398.
122. Id. at 399. American litigation has come to refer fondly to this head butt of professional,
qualified witnesses as “battle of the experts,” which has led to significant debate over who exactly
falls within the description of “expert” and when their testimony is considered valid.
123. Id. “[A]dditional mandatory disclosures would promote greater neutrality, transparency,
and objectivity . . . .” Id.
Those additional mandatory disclosures, which would be established early in the
arbitration process, should include: the expert’s entire file including draft reports,
correspondence, data, documents, and notes used in the evaluation of the issues within his
or her expertise; a list of proceedings and cases in which the expert has provided
testimony in the previous five years; and if the expert’s work includes any sampling or
testing, then the expert and party must take duplicative samples and timely provide them
to the opposing party and submit the results of all samples and tests.
Id.
124. Stipanowich, supra note 3, at 1.
125. See supra note 60.
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a litany of rules and treaties to ensure that arbitration maintains its
effectiveness.126 In order for the rules themselves to maintain neutrality,
they do not reflect the legal customs or systems of the countries that provide
them, ideally to afford the greatest possible flexibility for arbitrators.127
While this is helpful in conducting the actual arbitration, the disparities
amongst the various possibilities have created problems in enforcing the
awards and how each country is to treat the credibility of the arbitration
award.128 The goal of the New York Convention was to address these
problems, but differences in the interpretation of the Convention language
have lessened the effect of this treaty.129
While the purpose of the New York Convention was to ensure the
finality of arbitral awards and protect them from the uncertainty of judicial
review, this end is ironically contrary to the ultimate idea of arbitration as a
flexible institution. Not every party that embarks on alternate dispute
resolution is seeking finality or an absolute avoidance of the courtroom. 130
Some users of arbitration wish to retain the option of a second opinion in the
event that they feel the outcome is unfair, but have no grounds on which to
overturn it; in this case, they would incorporate a judicial review
provision.131 This tool allows parties to explore the flexibility of dictating
the arbitration proceedings through the language of their contract without
committing to the finality that is usually so integral to the process. 132
126. See Stromberg, supra note 6, 1352-58. There are several global arbitral institutions that
have developed model sets of rules for parties to incorporate into arbitration clauses, including:
International Chamber of Commerce, American Arbitration Association, London Court of
International Arbitration, China International Economic and Trade Arbitration Commission, and
Hong Kong International Arbitration Centre. Id.
127. Helmer, supra note 30, at 55.
128. Kenneth F. Dunham, International Arbitration is Not Your Father’s Oldsmobile, 2005 J.
DISP. RESOL. 323, 343 (2005).
129. Id.
Procedures are left to national arbitration laws, and this problem could be remedied by
uniform procedural rules of enforcement. There is also a need for consistency among
nations in the application and interpretation of the convention. . . . Some nations such as
Canada do not consider the convention as controlling over its own laws.
Id.
130. Stipanowich Interview, supra note 48.
131. Id. See also Stipanowich, supra note 3, at 17-18.
132. See Cable Connections, Inc. v. DIRECTV, Inc., 44 Cal.4th 1334, 1355 (2008). The
California Supreme Court recently confirmed that parties can agree to wider judicial review of an
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However, the stringent requirement of the New York Convention to
recognize arbitration awards without including the courts 133 threatens to
impede on this option. 134
An additional pitfall for the suggestion of uniform, effective arbitration
rules comes from the fact that the arbitrator’s authority is dictated by the
scope of the contractual language, 135 allowing parties to create their own
process. The force and deference of arbitration clauses have improved since
arbitration has risen to prominence, upheld even in the face of allegations of
fraud or illegality. 136 The purpose for safeguarding tailored arbitration
clauses is to promote the freedom of parties to contract and to protect the
agreements that they make, but for the system to be able to handle and
process the “wide range of business disputes, including many large, complex
cases, arbitration procedures have tended to become longer and more
detailed.” 137 Thus, the goal of providing flexibility to arbitrating parties by
allowing them to devise their own procedures and choose their own forum
has in fact led to stronger and more varied regulations that have taken away
this flexibility.
The increasingly formality and rule-oriented nature of arbitration has
forced parties to seek alternative courses, still within arbitration but by
navigating around the rules. By drafting international agreements “with
greater precision and . . . intentionally choosing what law they want to
govern interpretation and enforcement of their agreement,” parties avoid the
arbitration award through a specific provision. Id. This provision will ideally state the level of
finality that the parties expect from the award, and in what circumstances it can be appealed. Id. “If
the parties constrain the arbitrators’ authority by requiring a dispute to be decided according to the
rule of law, and make plain their intention that the award is reviewable for legal error, the general
rule of limited review has been displaced by the parties’ agreement.” Id.
133. Though the California Supreme Court had the authority to uphold judicial review
provisions in Cable Connections for state arbitrations falling under its jurisdiction, the federal courts
incorporated the more stringent New York Convention requirements for judicial review in the
Federal Arbitration Act. For example, the Ninth Circuit determined that arbitrators do not “‘exceed
their powers’ . . . when they merely interpret or apply the governing law incorrectly;” rather, there
must be a “manifest disregard of law” or an irrational decision for the courts to even consider
reviewing the award. Kyocera Corp. v. Prudential-Bache Trade Services, Inc., 341 F.3d 987, 997
(9th Cir. 2003). Considering the standard that appellate courts use to review lower court decisions,
arbitral awards tend to receive far more deference than the opinions of federal judges.
134. While flexibility is important to preserve arbitration as a process, judicial review
provisions create too many difficulties for users, according to Professor Stipanowich. Business users
in particular should look to the grounds of vacatur in the Federal Arbitration Act for relief if
necessary; if more options are desired, a carefully written appellate arbitration procedure can be
adopted in the contract. Stipanowich Interview, supra note 49. See also PROTOCOLS, supra note 69,
at 38-42.
135. Dunham, supra note 129, at 328.
136. Stipanowich, supra note 3, at 10.
137. Id. at 11.
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involvement of intervening substantive law that would otherwise fill the
gaps.138 Still, it is unfortunate for parties to have to evade a process that was
designed to maximize the efficiency of the resolution of their disputes
simply because it became too entangled in its own technicalities.139
PART III
A. Mediation: The New Alternative to Arbitration
Despite the mounting concern over the effectiveness and longevity of
arbitration, it remains certain that most countries still prefer alternative
dispute resolution processes to the rigors of litigation. 140 “Many nations are
disenchanted with litigation . . . because of the significant problems
surrounding the recognition and enforcement of litigated judgments. In
addition, many nations generally mistrust the supposed neutrality of foreign
legal systems.”141 Arbitration was a natural successor to this dying system,
but now suffers from its own impracticalities, including, as noted, a
perceived American influence, more centralized national governance, and
increased arbitral institutional regulation. 142 Though arbitration was once
the favored alternative dispute resolution because of its predictable
enforcement practices,143 for some scholars, the next logical step is to
“‘make greater use of conciliation [mediation] as a pathway to the settlement
138. Regulating Arbitrators, supra note 70, at 66-67.
139. While it may seem that arbitration is essentially shooting itself in the foot with its
overregulation, it should be noted that there are certain parties practicing arbitration who welcome
the strict structure that has been created by the institutions. See Menkel-Meadow, supra note 71, at
408 (“To the extent that ADR has become institutionalized and more routine, it is now practiced by
many different people, pursuing many different goals.”).
140. Julie Barker, International Mediation—A Better Alternative for the Resolution of
Commercial Disputes: Guidelines for a U.S. Negotiator Involved in an International Commercial
Mediation with Mexicans, 19 LOY. L.A. INT’L & COMP. L.J. 1, 5-6 (1996).
141. Id. at 5.
142. In addition to the downfalls of international commercial arbitration that were the focus of
the preceding section, some other problems that have contributed to decreasing popularity are:
involvement of multiple national legal systems; expensive, lengthy, adversarial, adjudicative-type
procedures; uncontrolled result; and limited appellate review. Id. at 7.
143. Steele, supra note 19, at 1385.
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of economic and business disputes, rather than automatically taking the more
complex arbitration route to dispute settlement.’”144
Mediation is often viewed as a more conciliatory method by which to
resolve a dispute145 as compared to arbitration because its key purpose is to
facilitate an agreement between the parties146 rather than to impose one.147
As a result, there is no guarantee of an outcome, 148 but those that are forged
are thought to be more satisfying for the parties, particularly as mediation is
designed to address the “non-arbitrable” issues such as “intangible feelings,
personal interests, and emotional concerns.”149 Thus, one of the most lauded
benefits of mediation is the preservation of the business relationships in
which the parties were engaged before the dispute arose. 150
B. Exploring the “Unique Benefits” of Mediation
To evaluate whether mediation is truly an effective way to circumvent
arbitration and litigation, the merits of the processes should be directly
compared. Three of mediation’s most boastful characteristics are: the
potential creativity of the outcomes; the informality of the proceedings,
leading to a faster and cheaper result; and the ability of the parties to discuss
their positions so that they feel that their views have been considered. 151 To
assume, however, that none of these features could be achieved in arbitration
is to ignore one of arbitration’s fundamental premises – its flexibility.
Arbitrators can be creative with their awards so long as they do not overstep
144. Barker, supra note 140, at 8 (quoting Linda C. Reif, Conciliation as a Mechanism for the
Resolution of International Economic and Business Disputes, 14 FORDHAM INT’ L L.J. 578, 580-81
(1990-1991)).
145. See Int’l Chamber of Commerce, 2009 Statistical Report, DISPUTE RESOLUTION LIBRARY
(2009), available at http://www.iccdrl.com [hereinafter Statistical Report]. Mediation is one of the
International Chamber of Commerce’s token ADR processes; appropriately, the ICC’s version of
ADR stands for “Amicable Dispute Resolution,” rather than the traditional American “Alternative
Dispute Resolution.” Id. Perhaps most significantly, the ICC does not include arbitration in its
classification of ADR as America includes it in its own version. This rather telling difference
demonstrates the global disillusionment with arbitration as a non-adversarial process, though it is
still often perceived as such in the U.S. as compared with the vicious American litigation system.
146. Id. at 10.
147. Mediation has been an important technique for centuries. Abraham Lincoln used a key
neutral tactic to learn the true interests of a slandered client in order to win her an apology and save
the opponent from bankruptcy. Lincoln’s Lessons, supra note 2, at 19-20.
148. Barker, supra note 140, at 10.
149. Id. at 8.
150. Id. at 10.
151. Id. at 9.
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the bounds of their discretion. 152 Additionally, as arbitration is a creature of
contract,153 the parties have the choice of how formal the proceedings will
be, including the possibilities of making their own presentations to the
arbitrators to ensure that their feelings are considered.
Other “distinct” attributes of mediation are its wide application to any
kind of conflict and the confidentiality of the process. 154 Arbitration,
though, has never been limited to a particular type of field, and also assures
its users of the utmost confidentiality. 155 Thus, the purported advantages of
mediation over arbitration are actually common to both processes because of
their comparable flexibility that can be found in alternative dispute
resolution techniques.
While mediation shares many of its qualities with arbitration and other
ADR processes, it still retains a personality of its own. Its advocates tout the
absence of a binding decision, the ability to solve deeper, relational issues,
and increased cultural sensitivity. 156 Though these may be valuable
considerations in circumstances where the parties are willing to take the time
152. Steele, supra note 19, at 1393. According to Article V(1) of the New York Convention,
arbitration awards may be unenforceable if “(c) the arbitrator acted outside his authority.” Id. They
may similarly be invalid if “[t]he recognition or enforcement of the award would be contrary to the
public policy of that country.” Id. Though written in broad terms, these provisions are construed
rather narrowly to give arbitrators broad discretion in making their awards. Id. at 1394. Rather, the
most important limitation on arbitration awards that must be recognized is the scope of the
arbitrator’s authority, delineated by the contractual terms. See NIGEL BLACKABY ET AL., supra note
20, at 107.
An arbitration agreement confers a mandate upon an arbitral tribunal to decide any and
all of the disputes that come within the ambit of that agreement. It is important that an
arbitrator not go beyond this mandate. If he does, there is a risk that his award will be
refused recognition and enforcement under the provisions of the New York Convention.
Article V(1)(c) provides that recognition and enforcement may be refused: “If the award
deals with a difference not contemplated by or not falling within the terms of the
submission to the arbitration, or if it contains decisions on matters beyond the scope of
the submission to arbitration.”
Id. The same restriction on scope similarly applies to mediation as a fellow contractual delineation.
153. Stipanowich Interview, supra note 48.
154. Barker, supra note 140, at 9.
155. Stipanowich, supra note 3, at 4.
156. See generally Barker, supra note 140. The author discusses benefits of mediation like
control over process and outcome, but without considering that with the control comes the obligation
to agree on how to control these aspects to make mediation viable. Considering the complexity of
party interaction on the international level generally, it is questionable as to whether this approach
would be preferable.
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to engage in such therapeutic tactics, these practices are not appropriate in
the international commercial setting. Where a commercial agreement is at
stake in today’s fast-paced business world, an assured outcome is crucial,
which is one reason to value arbitration. 157 And although it would be ideal
to preserve a good business relationship where one exists, this is not always
the case, making the outcome of the dispute the most important focus, not
the parties’ personal issues; regardless, with the plethora of commercial
options that exist globally, the time sacrificed hashing out individual
differences is usually ill-spent.158 Finally, cultural sensitivity is very
important on the international level, but those who wish to put mediation at
the forefront of global ADR ignore the possibility that arbitration could
incorporate this beneficial technique. By encouraging arbitration institutions
to train their arbitrators to respond to ideological differences, arbitration
could take a page from mediation’s book in making itself a more viable
process.
C. The Practicality of Mediation as the New Arbitration
Because of the early prominence of arbitration in the international field,
it has gained more deference than mediation amongst countries that
recognize its usefulness. The New York Convention provides that its
signatories uphold foreign arbitration awards without judicial review, except
under a limited set of circumstances. 159 As a result, the treaty “plays a vital
role in the predictability of international business” because it gives a set of
guidelines that have led the way for precedential decisions on which
arbitrators can rely for consistency in their opinions. 160 Additionally, the
Convention only recognizes those awards that are “binding” on the parties to
157. “Even if mediation does not lead to a resolution, the parties are no worse off because they
may still take advantage of arbitration or litigation.” Barker, supra note 140, at 10. This assessment
is overly optimistic because it ignores the potentially disastrous consequences that delays can have in
the commercial world. The time taken to engage in a good-faith effort to mediate could cost a
company significantly more than is worth the questionable outcome of the attempt. Additionally, at
this point in the conflict, it is probable that the parties have engaged in negotiations to resolve the
issue amicably, likely with the help of sophisticated counsel, which makes successful mediation
even less likely.
158. Though preservation of party relationships is usually not a prioritized practice of
arbitration and is generally seen as a key benefit of mediation, there are arbitral techniques that focus
on future contracts. For example, interest arbitrators are “expected . . . to devise the actual contract
provisions that will bind the parties during a future term.” Rau, supra note 81, at 473. This type of
arbitration, however, is generally not chosen in the international commercial context because the
resulting contractual relationship is usually not as important as the resolution of the immediate issue.
Id.
159. Steele, supra note 19, at 1393.
160. Id. at 1394.
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it, excluding, for the most part, mediation agreements, unless they have been
Because mediation is classified as a
approved by a court.161
“noncompulsory process,” even the clauses that commit parties to its
procedures are given less force than arbitration clauses. 162
Though mediation has not overtaken arbitration in the way that
arbitration replaced litigation, 163 its value is not unknown. “Increasing
academic and professional interest in other ADR methods is, to a great
extent, a reaction to arbitration’s deteriorating technical advantages, since
161. Id. There has been much debate over the meaning of “binding” and whether it can be
extended to mediation agreements interpreted as contracts, though international legal trends suggest
that the Convention should be limited solely to arbitral awards. Id. at 1396-97. Though it would be
ideal to assume that as voluntary settlements, mediation agreements would be voluntarily carried
out, the failure to establish an enforcement mechanism would be naïve and ignorant of the realities
that often follow amicable resolutions. Id. at 1387.
162. Id. at 1399. Regarding the comparatively voluntary nature of arbitration and mediation,
“[b]oth arbitration and mediation require consent to initiate the process, but mediation participants
retain the right to terminate the process at any time. Once parties initiate arbitration, they are bound
by the arbitrator’s decision.” Id. at 1399 n.87 (citing Ellen E. Deason, Procedural Rules for
Complementary Systems of Litigation and Mediation-Worldwide, 80 NOTRE DAME L. REV. 553, 589
(2005)).
Mediation is a fundamentally different process than arbitration. . . . The decision of
whether to settle and on what terms is left to the parties. Mediation convening and due
process standards are unique because the mediator does not bear binding decision
authority. Since agreement is made by consent, parties are generally free to create value
with their settlement-for example, by developing new business relationships that were not
originally contemplated.
Steele, supra note 19, at 1399. See also NIGEL BLACKABY ET AL., supra note 20, at 341 (“An
arbitral tribunal may only validly resolve those disputes that the parties have agreed that it should
resolve. This rule is an inevitable and proper consequence of the voluntary nature of arbitration. In
consensual arbitration, the authority or competence of the arbitral tribunal comes from the agreement
of the parties; indeed, there is no other source from which it can come.”). This is a reflection of the
principle that alternative dispute resolution methods are primarily creatures of contract and only
extend as far as the parties have consented by agreement. Stipanowich Interview, supra note 47.
163. Though the number of cases filed for ADR with the ICC doubled in 2009 as compared to
the past seven years (90% of which were referred to mediation), the total came to twenty-four
compared to the record 817 arbitration cases filed. Statistical Report, supra note 146. While the
number of ADR cases has been steadily rising, so has the number of arbitration cases, indicating the
tenacious hold that arbitration retains in the world of international disputes. Unlike litigation, it
appears that its influence is unlikely to fade in the near future. But see Jacqueline M. Nolan-Haley,
Mediation: The “New Arbitration” (Fordham Law Legal Studies Research Paper No. 1713928),
available
at
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1713928&http://papers.ssrn.com/sol3/papers.cf
m?abstract_id=1713928 (suggesting that arbitration’s popularity is decreasing in favor of
mediation).
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the institution can no longer be indisputably regarded as the cheap,
expeditious, and informal mechanism it was once advertised to be.”164
Arbitration is being substantially changed by mediation; with more
mediation hearings before arbitration, cases are increasingly settled, which
reduces the need for arbitration.165
With mediation as a rising dispute resolution trend, however, the
concern is for it to truly follow the path of arbitration, and to lose its
effectiveness in the quagmire of misuse and overregulation. 166 The natural
tendency for legal procedures is for them to become rigid and reflexive
because lawyers are formal and process-oriented, and as processes grow,
they change.167 While this change may not be deliberate, it comes with the
experience of using mediation, and does not necessarily have to have a
negative effect. 168 Arbitration has evolved to be the method it is today, and
though it is no longer as fast as it once was, it is not necessarily less
efficient,169 and may even afford greater justice because of the increased
attention to procedural and substantive fairness. Thus, mediation will evolve
into its role as it rises as a choice for the resolution of international
commercial disputes.
The key issue with the contention between mediation and arbitration is
that their respective supporters tend to see them as mutually exclusive
instead of being more or less appropriate in particular types of situations.170
Rather than sharing the spotlight, they are viewed as competitors for the
164. Amr A. Shalakany, Arbitration and the Third World: A Plea for Reassessing Bias Under
the Specter of Neoliberalism, 41 HARV. I NT’ L L.J. 419, 438 (2000).
165. Stipanowich Interview, supra note 48.
166. There are two uses for arbitration that Shalakany denotes in his commentary: technical and
political. Shalakany, supra note 164, at 434. Though he readily admits that the technical uses for
arbitration have significantly devolved, he cautions the reader against underestimating the lasting
political effects of arbitration. Id.
[A]rbitration’s political advantages . . . are yet intact and growing all the more
indispensable with the current surge of foreign investments in emerging markets. The
most serious residual advantages of arbitration thus appear to be political, chief among
which is arbitration’s ability to offer a legitimating medium for the effective
disempowerment of national legislative potentials.
Id. “However, ADR advocates usually disregard arbitration’s political advantages—advantages that
both comprise and far surpass those of alternative ADR mechanisms.” Id. at 438.
167. Stipanowich Interview, supra note 48.
168. Id.
169. Id.
170. See Barker, supra note 139, at 8 (supporting an in-text quote by a Canadian law professor
who stated that mediation is the way for international commercial disputes).
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vacancy that litigation left when it was pushed aside in favor of ADR
methods.
CONCLUSION
From its very beginnings, arbitration has been developed to serve the
noble cause of keeping peace between international parties. Though the
nature of these conflicts has evolved significantly, the practice is still in use,
and has risen to a position of international notoriety for its famed cheaper,
faster, and more effective and final results. With arbitration’s more
widespread use, however, the need to adapt its benefits to more kinds of
conflicts has converted these benefits into detriments that are deplored by
champions of other forms of dispute resolution.
The start of international commercial arbitration can be found in
Western Europe, which practices primarily civil law techniques. With the
increased economic interaction between countries, disputes began to arise,
and the impracticalities of global litigation were quickly revealed. The key
problems—impracticality of enforcement, long duration, legal and cultural
barriers, amongst others—saw a solution with arbitration, and it was
developed through the attention of arbitral institutions and international
treaties.
The ratification of the New York Convention by the United States led to
an increase in American involvement, which subsequently led to accusations
of “Americanization” of the international commercial arbitration system.
Though admittedly U.S. litigation techniques have found their way into
arbitration practices, the fact that they are retained suggests that they have
had a more positive influence than not.
That arbitration proceedings are becoming lengthier, more expensive,
and more varied throughout the world has been credited to involvement by
U.S. attorneys. To assert, however, that U.S. participation has singlehandedly destroyed the effectiveness of arbitration is irresponsible,
especially given the positive impact that it has had on the two techniques
discussed; this connection even proposes the idea that if any positive
changes are to come to international commercial arbitration, perhaps they
should come from the United States.
Other factors must be taken into consideration as well, and the rise of
nationalization and overregulation of arbitration proceedings are more likely
to be the culprits. Government-led companies are susceptible to more
claims than those that are privately owned, and so are more likely to try to
tweak proceedings to protect themselves at the expense of their efficiency.
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Additionally, the application of arbitration to a wider variety of disputes
requires more specific, stringent rules, which by their very nature deprive
parties of the ability to manipulate the process.
With its notable success and domestic popularity in many countries,
including the United States, arbitration will not likely be ruled obsolete, at
least in the near future. However, its benefits in the international arena are
quickly eroding, making way for other types of dispute resolution to replace
it as it replaced litigation. It is important to recognize the fate of
international commercial arbitration, if not to revive it, then to prevent the
same deterioration of its potential successor.
Mediation has attempted to rise to the position of that successor,
claiming superficially distinguishing characteristics that are actually inherent
to the flexibility of arbitration. With its increasing attention, however,
mediation runs the risk of falling victim to its own advantages of which
arbitration has been found guilty.
Rather than try to replace arbitration, mediation should fall into its own
niche, and the value of each should be recognized for its potential. For all of
the pros and cons of the processes, arbitration is ultimately most valuable for
resolving conflicts that are time-sensitive and often routine. Mediation, on
the other hand, is beneficial in situations where relationships need to be
preserved, the disputes are less pressing, and the outcome should be more
careful and detailed in its treatment of each party. Thus, each of the
procedures is appropriate in its own context, which shifts the responsibility
to the legal community to determine what the parties’ interests are and
which method is more appropriate for the situation.
Creation through contract, using this system of assigning arbitration and
mediation, would still be effective; clauses could simply state that matters
pertaining directly to the terms of the original contract would be resolved
through arbitration, while other disputes, such as future contracts or
subsequent negotiations, could be referred to mediation.
Arbitration is already beginning to show signs of wear and tear from
misuse because it is being overly employed in too many inappropriate
situations. The key to preserving ADR processes is to use them properly, as
the rules governing each are designed to apply to the types of conflicts for
which they are designed. The beauty of their flexibility is that if there does
need to be a change made, it can be so done without detrimentally affecting
the process. The carelessness with which arbitration has been treated as it
has been flung into every conceivable contract has deteriorated the process.
By realizing this problem, the legal community can take a proactive
approach to prevent the successive decline of every ADR process when it is
brought in to replace the previous technique, starting with the prevention of
arbitration from going the way of the Greeks.
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