Law Offices of Joseph C. Markowitz

The Supreme Court and Arbitration

2012-01-16T11:36:00.000-08:00

The right to jury trial in civil cases is fundamental. It is guaranteed in the Constitution. That right is becoming increasingly illusory, however. It is easily waived, and most litigants find themselves looking for alternatives to pursuing their rights to the end. Or they find they gave away those rights from the beginning. Just what does it mean to remind people that they retain the right to sue those whom they believe have violated their interests? That is what the Supreme Court considered last week in Compucredit Corp. v. Greenwood. In that case, the Court had to interpret the meaning of a statutory mandate enacted by Congress that credit repair companies disclose that consumers maintain the right to sue the companies. The Court held, 8-1, that this requirement did not preclude the credit repair companies from mandating instead that consumers arbitrate any disputes. So consumers are being told by these companies, yes you have the right to sue us, but sorry, you have to give up that right if you want to do business with us in the first place.

As a matter of statutory interpretation, the result is understandable. That it was decided by an 8-1 vote shows that it was not difficult for most of these Justices to wrap their heads around the concept that consumers are entitled to waive even fundamental rights. That is the whole point of the Federal Arbitration Act of 1925. We have the right to sue in many other circumstances, but we waive that right all the time. And if Congress had wanted to bar credit repair companies from requiring consumers to sign arbitration agreements, there were much more direct ways of accomplishing that than simply mandating disclosure of the right to sue. One could also interpret the "right to sue" as including the right to pursue claims in arbitration, although that may be a stretch.

On the other hand, you have to sympathize with the consumer's situation in being handed a contract with a credit repair company that on the one hand clearly guarantees the right to sue the company if the consumer is dissatisfied, and on the other hand, clearly requires that he or she waive that right. I believe the legal term for such a clause is "Catch-22." Yet another example of how queasy we should feel in enforcing pre-dispute mandatory arbitration clauses that are contained in take it or leave it contracts that people are required to sign to engage in an increasing number of ordinary business transactions.

Brinker argument

2011-11-11T18:19:00.001-08:00

How Litigators Negotiate

2011-09-18T18:53:00.001-07:00

I've been working on a case lately with a corporate lawyer, and we've been trading war stories about various negotiations in which we have participated. Most of the deals that this corporate attorney negotiates are deals for buying or selling properties or companies, but he has also been involved in some negotiations to settle lawsuits. He can't believe the difference. He is astounded that a plaintiff might start off a settlement negotiation in a litigated case by demanding, say, $2 million, while the defendant offers $25,000 for the same case. He can't believe that litigators make such off the wall opening bids, and are thereby forced, if they want to settle, to make tremendous concessions from their opening numbers. To him, it all seems like a ridiculous game, and calls into question the credibility of the negotiators for both sides. Litigators, however, know that this pattern is common.

In a business negotiation, parties are probably more likely to start the negotiations closer together, and are therefore forced to move proportionately less. This makes sense when you consider that when you are buying a business or a piece of property, both sides should walk in with a pretty good idea of its value. You can look at an appraisal. You can look at a business's profit and loss statement. In a lawsuit, on the other hand, the defendant may legitimately feel that the case is worth absolutely nothing, while the plaintiff feels it is worth millions. That is because there may be a real possibility of either a defense verdict, or a multi-million dollar verdict, in the same case.

I wonder whether the culture of litigation also contributes to some of the game-playing that is so astonishing to corporate lawyers. Do parties in litigation just like to posture more? Have they developed a different style of negotiation that lends itself to making grossly overvalued demands, and paltry offers, just to mess with the minds of their adversaries? Because even though a claim in litigation might be more difficult to value than a piece of property, both sides interested in settling a lawsuit should still be able to arrive at an approximation of the probabilities of winning and losing, and a realistic range of possible outcomes. It just seems to take more work to get to that point in litigated disputes.

Of course, it would be an over-generalization to characterize all business negotiators as reasonable, and all litigators as posturers. There are plenty of people in the corporate world who approach negotiations with a lot of swagger, and who start off with wildly off-the-mark numbers to try to gain some advantage. (See my prior post on the subject of anchoring.) And there are plenty of litigators who believe in presenting a reasonable number in a settlement negotiation to let the other side know that they are very serious about their number, and they are not likely to move very much. Both approaches can work in either context. My point is more about the clash of expectations when a negotiator who favors one style meets a negotiator with the opposite style.

If you walk into a negotiation to settle a lawsuit with the expectation that both sides should start with numbers that bear some relation to reality, you may encounter frustration and delays. You might think it makes sense to offer a number that is close to the actual value of the case, and not move very much from that position. You might think that offering a number that is highly skewed in your own direction is a waste of time, and would reflect badly on your credibility. But if you do that, you run the risk that the other side perceives your initial offer or demand as something much further from the ultimate outcome than you do, and expects much more movement than you are prepared to make. To make the negotiation work in that scenario, you have to make the other side understand that your initial offer was not intended as an expression of your most optimistic forecast of the case. It has to be conveyed with the appropriate message about your intentions and seriousness. Otherwise, closing the deal may prove elusive.

Class Actions

2011-04-30T19:23:00.000-07:00

Let's say you sign a contract for a new cell phone. Maybe one reason you sign is that the phone company promises you a free phone. Your first problem is that you might not think the phone is actually free after you find out you still have to pay sales tax on the phone's value. Your next problem is that if you feel aggrieved or misled by this contract, the company requires you to arbitrate all disputes with them, and that just might not be worth the time and trouble over $30 in sales tax.

One solution might be better regulation, to determine whether the phone company has engaged in misleading conduct, and perhaps fine them or compel them to issue refunds if their conduct were found to have crossed the line. It could be argued that regulation is more efficient than forcing consumers to battle the telephone behemoths themselves. But that is not the American way. We distrust bureaucratic solutions. The American solution is the class action lawsuit, which incentivizes attorneys, with the promise of enormous fee awards, to aggregate thousands of small claims into gigantic lawsuits that generally get settled. Because they are expensive to litigate, they may act as a deterrent to improper corporate conduct, but they are generally regarded in corporate suites as a gigantic nuisance or worse. Consumers may not be as troubled because, well, who doesn't want to get one of those confusing legal notices in the mail, with the promise of a coupon or a small check down the road?

That solution ran up against a major roadblock this week, in the form of the United States Supreme Court, which held in the case of AT&T Mobility, LLC v. Concepcion, that the company's arbitration clause should be enforced. What seems notable as a matter of legal doctrine is that the Court went so far as to deprive state court systems of some of their power to develop the common law of contract, in this case the doctrine of unconscionability. If common law contract doctrine is deemed to run afoul of the Federal Arbitration Act, the California Supreme Court no longer has the power to prevent businesses from requiring arbitration of claims that could be brought as a class action. (For those who still think that this particular conservative Supreme Court favors state's rights, here is another example to show that they do not.) This case may be seen as one more battle in the ongoing war between judicial hostility to consumer arbitration clauses on the state level, and judicial favoring of arbitration on the federal level (especially the Supreme Court in recent years, as I have discussed in previous posts). So far the U.S. Supreme Court would seem to have more clout in this war, but they may go so far toward enforcement of consumer arbitration clauses that Congress will simply outlaw them altogether. In other words, if the Supreme Court is simply trying to prevent effective enforcement of consumer rights, that view seems short-sighted and likely to run up into a strong reaction.

It might be more constructive to step back and think more carefully about the problems we are trying to solve, and how to solve them. Is the real underlying problem mandatory pre-dispute arbitration? As I have argued previously, pre-dispute arbitration clauses in consumer cases are difficult to justify. On the other hand, if we view the problem more broadly, as a problem of law enforcement--whether we are talking about false advertising laws, or securities laws, or corporate codes, or labor laws--we might be looking at the problem too narrowly if we only see the options of arbitration of individual claims vs. class action lawsuits. Maybe there is a better way of enforcing the rules that now seem to call for enforcement by means of class action lawsuits. Maybe we only got to the point where consumer rights advocates think we need to outlaw arbitration because we haven't developed a better solution for protecting consumer rights than vindicating those rights in court, which in small cases, it only makes sense to do through the class action mechanism. In my proposed civil procedure rules for utopia, there is no provision for class actions. I left that out because such cumbersome, expensive litigation seems antithetical to the more streamlined procedures I was suggesting. But we can only leave the class action remedy out if we develop another more effective way of protecting the interests of masses of small claim-holders.

Risk in Litigation

2011-04-23T17:29:00.000-07:00

I have nothing substantive to add about the ups and downs of seven years of litigation in the Barbie vs. Bratz doll wars case. I'm not going to do an analysis of the legal issues in the case, even though they are somewhat interesting. All I want to do is remind people that this is the sort of thing that happens in litigation. Mattel won a $100 million judgment against its rival MGA a couple of years ago. That judgment was reversed last year, and in a new trial, MGA this week won an $89 million jury verdict against Mattel. In the same case.

Was it worth it? MGA may have won the case (of course it's not over yet), but it's brand may no longer be viable. Mattel shut down a competitor for a while, but may have to pay them more than the value to Mattel of doing that. The parties have already spent many millions of dollars litigating this case. If both sides had the option of doing the whole thing again, I have a feeling they both might decide to just not even bother to do it.

Parties to litigation, and their attorneys, should be reminded that results in any seriously contested case are a lot more difficult to predict than most of us care to admit. Here we had top notch trial attorneys on both sides. How well could they predict the outcome? Seemingly not very well. And how much can hiring the best trial attorney you can afford help in preventing loss, or insuring victory? The great trial lawyer Edward Bennett Williams guessed that hiring the best trial attorney in the world (him) might improve your odds in a case that could go either way, from 5 in 10 to 6 in 10. I think most experienced trial attorneys have enough humility to recognize that they cannot guarantee a victory in any case. Most have snatched victory from the jaws of defeat, and vice versa. Most have seen cases reversed on appeal, and most have seen trials come out differently, either for or against, than they expected. I have certainly seen all that, and in both directions. I used to think that the most valuable service I could perform for clients was to predict the results of taking a case to court. Now I lean more towards the view that the most valuable service I can perform as an attorney, is to remind clients of the costs and risks of continuing to litigate. In a case like the Barbie v. Bratz marathon, one hopes the parties would have the opportunity to understand that each of them might win $100 million or lose $100 million, and it is difficult to predict which outcome is more likely. Plus each side faced certainty of enormous legal bills, thousands of hours of distraction, and untold damage to each company's business. Parties need to compare those prospects to the deal that is on the table, and then make an informed decision about whether litigation presents a more attractive alternative.

I have nothing against trials. In fact, I love trials, and I'd like to do more of them. But people need to understand the risks and costs involved. I tell parties in mediations that I conduct, that if they still want to litigate after they have a full appreciation of the costs and risks, then God bless you. That is what the courthouse is for. Just don't walk into that casino unless you can afford to lose your stake and then some.

(also posted on my mediation blog)

Condoning Fraud?

2011-04-13T22:27:00.000-07:00

(also posted on my mediation blog)

Even if there hadn't been a movie making this whole story famous, those of us concerned with the law and mediation might still follow the saga of the lawsuit between Mark Zuckerberg and the Winklevosses with interest. Yesterday the twins were dealt a setback in their efforts to overturn a settlement they claim was fraudulently induced. Here is the Ninth Circuit opinion's description of that settlement agreement:

Affter a day of negotiations, ConnectU, Facebook and the Winklevosses signed a handwritten, one-and-a-third page “Term Sheet & Settlement Agreement” (the Settlement Agreement). The Winklevosses agreed to give up ConnectU in exchange for cash and a piece of Facebook. The parties stipulated that the Settlement Agreement was “confidential,” “binding” and “may be submitted into evidence to enforce [it].” The Settlement Agreement also purported to end all disputes between the parties.

People might be surprised to learn that this sort of thing happens in mediation. Even in a dispute worth tens of millions of dollars, the parties sometimes conclude a day of mediation with nothing but a hastily-prepared handwritten term sheet, leaving a number of items open for future clarification, and contemplating a further long form agreement. They do that because they do not want to leave the table without some documentation of the deal, otherwise the deal might fall apart. But they don't have time to think about all the details required to finish a complete agreement. In this case, where the parties scrawled out a document that was labeled both a term sheet and a settlement agreement, and that said it was both confidential as well as admissible in evidence, the agreement seems to express contradictory purposes. What happens when the parties sign such a flawed document, and never sign the final agreement they were contemplating? Two questions were decided by the panel in the Winklevoss v. Facebook case. (1) Was the handwritten agreement definite enough to be enforceable? and (2) Does the parties' agreement to maintain mediation confidentiality bar a claim to set the agreement aside based on alleged fraudulent inducement? The panel answered "yes" to both questions.

Mediation participants, and mediators, sometimes worry whether the agreements they commit to paper after a long day of negotiation will contain enough of the necessary verbiage to make them enforceable. (See my previous post on that topic.) This case illustrates a variant of that concern. Here the parties signed a document that was sufficiently vague that at least one of the parties thought (perhaps only in hindsight) that it should not be enforceable if the parties never completed a more detailed agreement. This problem is not confined to mediation. Here in Hollywood, players are used to making handshake deals, or sending quick letters confirming their participation in large projects. These short form deals omit many important points, and do not always make clear what happens if the parties fail to sign a fully-detailed, heavily-lawyered document. Both in that context, therefore, as well as the mediation context, it is a good practice to specify what happens in that event. It is not difficult to include a sentence that says that if the parties fail to complete a long form agreement, the term sheet either is, or is not, intended to be binding. (It might be enough to just label it as either a binding agreement, or as a non-binding term sheet.) There is really no excuse for not covering that point in even the briefest of documents. Parties should understand that if there is language expressing the intent that the document is intended as a binding settlement, then it probably will be held binding even if the parties fail to complete a longer agreement, and even if the term sheet has holes and ambiguities in it.

Another point mediation participants should understand, as is also illustrated by this case, is that mediation confidentiality can preclude evidence of all kinds of alleged wrongdoing that may have occurred in the context of a mediation session. The Cassel case, discussed in a previous post, shows that even claims against a party's own attorneys may be barred by mediation confidentiality. (In that state court case, it was a strict state statute that barred evidence of alleged attorney misconduct, while interestingly in this federal case, it was the parties' mediation agreement that precluded evidence of the alleged fraud.) This case, which I don't think raises quite the same troublesome questions as Cassel, holds that because of mediation confidentiality, parties may not use evidence of anything said in the course of a mediation to overturn the agreement itself. That result is not as troublesome, because it is based on a rule, similar to the parol evidence rule, that may apply in other contexts as well. And also because parties should understand that they always have the option not to close, and that if they do sign a binding agreement at the mediation, then the agreement is all they have. That means that if somebody lied to the Winklevosses to induce them to accept shares in Facebook in settlement of their claims, whether their own attorneys or their adversaries, it is tough luck for them, but they should have been aware of that.

The court is not too sympathetic to the Winklevoss twins, given their ability to obtain expert counsel and perform their own due diligence, and given the court's evident feeling that the value of the settlement may have turned out to be better than they should have expected even if allegedly crucial information had not been withheld. In other cases, however, enforcing mediation confidentiality may prevent less sophisticated parties from obtaining redress for fraud or other trickery in the course of mediation. Parties therefore may have to approach mediation as they would a game of poker. They may need to understand that the law of the jungle applies in mediation, even more so than in court, or in transactions out of court. That means you should be cautious about taking anything the other side says at face value. You may have no recourse if someone lies to you. People can bluff, and they can hide material facts. (Parties can lie and cheat in court also, but there is a record of it, and a right to appeal.) If we apply the principle of mediation confidentiality strictly, parties have little protection against fraud or abuse. That means that if you walk out of mediation without a deal, then no harm, no foul. And if you walk out of mediation with a deal, the deal is all you have. Your complaints about the process will not get you far in court. That is why, as I've argued previously, mediators should take some time and trouble to make sure the parties understand and are satisfied with whatever result they obtain in mediation.

(AFP/Getty image from Forbes website)

Rules for Utopia

2011-03-31T23:10:00.000-07:00

In an ideal world, we would have fewer and simpler rules. In that spirit, I offer the following rough draft of my proposed new rules of civil procedure. Some of these ideas might even work in the real world, and they are not as different from current practice as may first appear. As shown by the links, I have discussed many of these ideas in previous posts.

1. A case is initiated by filing a "notice of dispute."
2. The notice may be served by any means reasonably calculated to give actual notice.
3. The respondent must either (1) acknowledge there is a dispute, or (2) deny there is a dispute. This can be indicated by checking the appropriate box at the bottom of the notice of dispute form.
4. If the respondent denies there is a dispute, the parties must submit an agreed form of resolution to the court within 30 days.
5. If the respondent fails to respond, the court will require preparation of a default judgment with appropriate notice determined by the court, and an additional opportunity for the respondent to be heard.
6. If the respondent agrees that there is a dispute, the parties are required to confer prior to the first court appearance to determine an appropriate means of resolving the dispute, and submit their preferences by form.
7. After filing this preference form, the parties must appear before a facilitator to determine an appropriate means of dispute resolution. These include mediation, arbitration, and trial with or without a jury. If the parties cannot agree, the facilitator will determine the initial means of dispute resolution.
8. Parties choosing arbitration, or ordered to arbitration, have the option of making it binding or advisory.
9. Parties choosing mediation, or ordered to mediation, retain the right to trial if they are not able to resolve the dispute in mediation.
10. There will be no additional pleadings unless allowed by the court.
11. No motions of any kind will be filed except by court permission.
12. The parties must disclose all documents they intend to use at trial, and identify all witnesses. The parties may have only whatever additional discovery they can agree upon, or whatever the court allows. All discovery disputes will be resolved by mediation, except that the court of course retains the power to enforce its orders allowing additional discovery.
13. No expert witnesses are allowed except by agreement, or by court permission.
14. Parties may be required to submit a list of the factual issues in dispute, and the legal issues that must be determined by the court. The court may allow either or both parties to submit a request that the case be adjudicated without trial, which is subject to the standards formerly applicable to summary judgment motions.
15. All trials must be concluded within 5 court days, unless the court allows a longer time.
16. Appeals will also be first submitted to a facilitator, who will assist the parties with compiling the issues on appeal, determining an appropriate briefing schedule and other requirements, and recommending mediation or another procedure for resolving the appeal.

I think that about covers it. The law book publishers might not like these rules, but everyone else might appreciate being able to carry around the entire code of civil procedure on a handy card. I recognize that there are certain necessary procedures, such as injunctions and class actions, that don't fit comfortably within the spirit of these rules. I'm going to continue to ponder those issues and perhaps deal with them in a later post.

We have not moved!

2011-01-26T11:51:00.000-08:00

I apologize to anyone who has had mail addressed to me, returned to sender. This is the Post Office's mistake. We have not moved to Monrovia! What happened is that one of our sub-tenants moved out quite some time ago. After his forwarding order expired, the Post Office now returns his mail to the sender. Apparently some of the Postal Service employees can't seem to read beyond the words "Law Offices of . . ." and are sending some of my mail back to the senders also. I have made efforts to correct this problem, but it still seems to happen sometimes.

If anyone who has sent me mail, has had it returned to them, please re-send it, if possible with a copy of the first returned envelope, suitable for use as evidence in my ongoing dispute with the Post Office. I apologize again for any inconvenience this problem has caused.

Our address is still:

Law Offices of Joseph C. Markowitz
444 S. Flower St., Suite 1750
Los Angeles, CA 90071

Federal Rules Revisions

2010-12-11T10:18:00.000-08:00

Changes to Rule 26 and Rule 56 took effect this month. The main change in Rule 26 is to expand the scope of expert preparation materials that are considered protected work product, and therefore not discoverable. Only "facts and data" considered by the expert are discoverable. Arguably this change could impede cross-examination of experts, or limit a party's ability to obtain discovery of information that would be useful in attacking the opposing party's expert opinion. On the other hand, the change enhances parties' ability to search for and prepare their own experts for trial, without fear that drafts and notes will be discoverable. In other words, if I am understanding the import of this change correctly, a trial lawyer no longer needs to tell their expert to be careful what they write down, because most of those notes will now be considered protected work product. So, a victory for the ability to prepare for trial, and a defeat for the open exchange of information.

Rule 56 (summary judgment) has been revised to conform the rule's language to common practice. It has been common for parties to file motions for "partial summary judgment," even though the rule was not originally written with such a motion in mind. Instead, the rule merely contemplated that if the case was not dismissed on summary judgment, certain facts established by a summary judgment could be deemed established at trial. Now the rule expressly allows that particular claims or defenses can be eliminated by means of a summary judgment motion. There is still a tension between this practice, now enshrined in the text of the rule itself, and the original concept of the Federal Rules of Civil Procedure to eliminate forms of action and demurrers. The rules still allow pleadings to be amended even after trial to conform to the proof, so as to allow relief on any available legal theory based on the facts established at trial. But if "causes of action" (a terminology that was supposed to be eliminated by the Federal Rules), have been eliminated by prior Rule 12 or Rule 56 motions, potentially relief could be denied to a party that has established the necessary facts justifying relief. I understand the desire of parties and the court, to streamline cases for trial. On the other hand, summary judgment procedure has become so cumbersome that I'm not sure the trade-off is worth it.

(Stephen Dunn photo from Hartford Courant)

The Litigation Funnel

2010-11-07T23:34:00.000-08:00

(excerpted from a post on my mediation blog)

In a talk I heard yesterday at the Southern California Mediation Association annual conference, Lee Jay Berman used the metaphor of a funnel to describe how how the legal system squeezes the issues involved in conflicts to the shape of a dried-out hamburger patty, so that most of the concerns of the participants in the dispute get left out of the process. So one could think of the legal system as a kind of meat grinder. And the mediator has the job of putting some flavor back into the squeezed-out meat, and adding some new ingredients to the mix.

This concept resonated with me since as a practicing trial attorney I have often found myself listening to clients providing endless streams of information, most of which seems to have no use in a potential or actual lawsuit. To draft a complaint for a client, I need to hear the client tell me the whole story, which clients often want to do in great detail, but I then need to weed out about 90% of what they are telling me in order to fit what remains into recognized legal pigeonholes. Then the other side might attack the complaint and succeed in removing or narrowing some of those claims, and the necessities of trial preparation may require the case to be simplified even further. Lawyers and judges tend to think this is a useful process, because it folds a messy story into a tidy package that can be processed by the legal system. And when they bring a case to mediation, attorneys may underestimate the work that remains to accomplish a settlement. They often think that they have the dispute narrowed down so well that all the mediator needs to do is push the parties toward a point that lies somewhere in between the well-defined positions of each side.

Why on earth then, would a mediator want to explode their carefully-prepared packages, or as Lee Jay put it yesterday, to put back in some of the juice and extraneous ingredients that have been removed by the funnel? One reason is that parties may never find that point of resolution until they have had a chance to express and address the concerns that still matter to them. The legal system may have deemed those concerns extraneous, but often it is all those things that the clients want to tell their lawyers in their initial meeting that caused the dispute in the first place. (See my prior post on underlying causes.) If the parties could have resolved the case without putting all that juice back in, they probably would not need a mediator.

So while trial lawyers may sometimes get frustrated seeing their careful work blown to bits by mediators, they need to understand that mediators sometimes get frustrated by being expected to remain within the confines of the neat little boxes that litigation creates.

(Clip art licensed from the Clip Art Gallery on DiscoverySchool.com)

Who Won?

2010-09-30T10:56:00.000-07:00

(reprinted from my mediation blog)

Now that another one of those trials of the century that Los Angeles seems to enjoy about once a decade has concluded (I'm talking about the McCourt divorce trial of course), everyone wants to know who won. Technically, since the judge has not ruled yet, and still has 90 days to issue a decision, there is no winner yet. The real answer is that neither side won, or perhaps that it doesn't really matter all that much which side prevails on the legal issue before the court: that issue being the meaning and enforceability of a document purporting to grant Frank McCourt sole ownership of the Dodgers.

How can I be so cynical as to suggest that it doesn't matter who wins? First, because there may be a number of ways for the judge in this case to split the difference so that neither side comes out the clear victor. Second, because of appeals. The parties have the ability to continue to litigate this case for years to come, regardless of which side wins at trial. But it is not clear that the business of baseball has time to wait for the results of all those appeals. Therefore, there will be pressure to resolve the ownership issue long before the legal process is finally concluded. Third, because of the parties' financial situation. Even if Frank retains ownership of the Dodgers, his other financial obligations, including of course to his ex-wife, may compel him to sell the team. If they are forced into joint custody over the boys in blue, sale becomes even more likely.

So what did the trial accomplish? I am not an expert on the legal issues--I only know what I read in the papers--but the main effect of the trial seems to have been to publicly humiliate both parties and tarnish their reputations. T.J. Simers summed it up in the LA Times sports pages (the Dodgers' season is long over, so all Dodgers fans can do is watch the trial) this morning:

"Frank's lawyers successfully drove home the point that Jamie is just not credible. Jamie's lawyers successfully drove home the point that Frank is just not credible. They've got that right."

Court-watchers have concluded that Jamie probably came out ahead at trial. That may be because Frank started out with what appeared to be a stronger legal position, while Jamie had the always difficult burden of proving that the document at issue was not enforceable or did not mean what it was thought to mean. She seems to have succeeded at least in muddying the waters considerably, and could succeed in getting the agreement tossed out entirely. Frank's case, on the other hand, might have been as strong as it ever was before the first word of testimony was uttered at trial, and if he loses, he may still be able to fall back on his interpretation of the documents and argue that nothing that was said at trial means anything.

How often does this sort of thing happen in real life? A lot more often than people think. Clients who approach me with a problem that potentially needs to be resolved in court are generally preoccupied with the merits of the dispute. Who is right and who is wrong? Which side's position going to stand up at trial? My answers to those questions are usually filled with contingencies, and then I have to throw in some practical questions. How is the other side likely to approach a potential lawsuit? How much is at stake as compared to the amount that the case will cost to litigate? Once we start talking about those questions, the issue of who is right and who is wrong starts to recede in importance. I'm not saying that the merits of a case do not matter. The strength of each side's position is what drives the dispute, and often determines the value of the ultimate resolution, whether by settlement or verdict. What I'm saying is that procedural concerns are just as important as the merits, and also that trials do not always reach a nice, neat conclusion that vindicates the position of of side or the other.

I have tried cases in which one side prevailed and the other side walked away either empty-handed (if the plaintiff loses) or faced with the prospect of a large payment (if the defendant loses). But I have also tried cases in which the outcome of the trial did not seem to accomplish very much at all. That can happen where the plaintiff wins the empty victory of an unenforceable judgment, or where the amount the plaintiff wins was less than the cost of litigation, or where the defendant prevails at what he considers an excessive cost, or where the result of trial is essentially a draw.

What will happen next in the McCourt case? They are going to mediation again of course, the only place where they can reach a result better for both sides than the alternative of endless litigation.

(LA Times photo)

Language and Law

2010-08-29T21:52:00.000-07:00

An article in the New York Times Magazine today by linguist Guy Deutscher, raised some interesting questions about how language can affect the way we think--not in the discredited Orwellian way that limitations in a language's vocabulary can limit the ideas we can conceive of, but rather in the sense that the grammatical structure of different languages can force speakers of one language to think about things that speakers of another language need not always consider. For example, an English speaker who tells someone he had dinner with his neighbor need not identify the neighbor's sex. Other languages do not permit speakers to maintain such discretion. On the other hand, Chinese speakers need not identify whether the dinner occurred in the past, present or future. English speakers also do not identify inanimate objects as male or female, while speakers of European languages must think of all objects in gender terms.

Perhaps languages can even change the way our brain operates: The language of an Australian aboriginal tribe requires speakers to identify spatial relationships by compass directions, e.g., east or west instead of left or right, which supposedly gives its speakers a highly developed innate inner compass.

In a city as diverse as Los Angeles, lawyers often find ourselves needing to interpret speakers whose first language is Spanish or Korean or Farsi or a number of others. These described differences in the way such speakers describe and therefore think about the world make me wonder whether important information sometimes gets omitted or lost in translation, or whether we might sometimes make inferences from a speaker's translated words that would not be justified in their original language.

But to me the most interesting example Deutscher gave of how language can affect the way we describe and think about the world was the Matses language in Peru, which requires speakers to identify how they came upon the knowledge they are imparting. They cannot make a statement about an event without describing whether they personally witnessed it or heard about it or whether they inferred it from circumstantial evidence. This example made me wonder whether lawyers would have an easier time examining a witness in the Matses language, or whether it would be more difficult for a witness speaking that language to make up a story on the witness stand. (I also often wish the talking heads on the tv news would take the trouble to tell us how they happen to know some of the stuff they are spouting, or whether they are just making it up.) It is one of a trial lawyer's basic challenges to probe the basis of a witness's knowledge. Is the witness speculating? Was the witness in a good position to view what they claim they saw? Is the witness making an improper inference based on what they did see or hear? It might be helpful if our language required the kind of evidentiary precision that we sometimes have to work hard to obtain.

(still from the film Lost In Translation)

Expedited Jury Trials

2010-08-26T16:59:00.000-07:00

The California State Legislature this week approved a bill allowing for simplified jury trials, if the parties consent to such a procedure. (The bill is now awaiting the governor's signature.) To utilize this procedure, parties would have to agree to a reduced number of jurors, a limited number of peremptory challenges, a very limited (3 hours per side) amount of time to present their case, a "high low" minimum and cap on the jury award, and strictly limited ability to file appeals and post-trial motions.

This sounds like a noble experiment in attempting to reduce the cost of jury trials, but I wonder how often such a procedure would be used. I think a lot of lawyers will be leery of entrusting their client's fate to a jury without the protections of post-trial motions and appeals. I also think that since most of the litigation costs that deter parties from taking cases to trial are incurred prior to trial, shaving the costs of trial might not very much alter the parties' calculations that determine whether or not to try the case. Still, for cases where both sides really want their fate determined by a jury, but who want to reduce the substantial costs of jury selection, number of trial days, motions and appeals, this idea could represent a viable option. I am generally in favor of reducing impediments and costs that prevent cases from getting to trial. This bill could provide one way to getting to that result.

(photo from BBC program, The Verdict)

Costs of Summary Judgment

2010-07-20T23:23:00.000-07:00

A recent California Court of Appeal case, Reeves v. MV Transportation, provides an illustration of the extent that current summary judgment doctrine operates to supplant the trial process. The plaintiff in Reeves was a 56 year old attorney (I can identify with this guy already), who was not granted an interview for a staff attorney position with MV Transportation. Instead MV hired a 40 year old whom Reeves contended was less qualified. No question that a prima facie case of age discrimination was thereby established. In such a situation, the employer must identify a non-discriminatory reason for its hiring decision, and the employee must show that the asserted reason is pretextual. It has always been a little unclear how this burden-shifting process is actually supposed to proceed at trial, but nowadays, it increasingly plays out in the context of a summary judgment motion filed by the employer. In that context, it becomes the employee's burden to show enough inconsistencies or implausibilities in the employer's declarations or deposition testimony as to allow the court to determine whether a potential fact finder could discredit the employer's asserted reasons for its hiring decision.

It is important to keep in mind that, unless an employer actually admits that it acted for discriminatory reasons (which is not usual), employees in discrimination cases always bear the burden of proving that the employer's claimed justifications for its conduct should not be accepted by the fact finder. The fact finder has the difficult job of looking behind the employer's explanations to discern its true motives. Juries happen to be pretty good at this. Summary judgment, on the other hand, does not seem to be as well-designed a tool for this purpose. For one reason, the court has no opportunity to assess the demeanor of the witness who is proffering the employer's stated reasons for its decision, and is not allowed to consider such factors in ruling on a summary judgment motion in any event. Instead the courts require the party opposing summary judgment in effect to accept the employer's testimony, and to introduce evidence or find enough inconsistencies in the record, to allow the court a basis for questioning it. In other words, while juries can and do discredit witness testimony in their entirety for no better reason than their assessment of the witness's manner or delivery, the court in ruling on summary judgment demands additional proof before discrediting such testimony. That allows for the possibility that cases can be lost on summary judgment that could have been won at trial. All of this is not to say that the court reached an incorrect result in this case as compared to the result that may have been reached at trial. A jury in this case could well have concluded that plaintiff's qualifications were not superior, or that the employer did not act for discriminatory reasons. But the jury never go that chance in the Reeves case, because the court found the alleged inconsistencies in the record insufficient to question the employer's explanations.

My concern is whether summary judgment is an efficient or appropriate tool to resolve such delicate issues as motivation in discrimination cases. Courts can justify the increased use of summary judgment in these circumstances as a way of weeding weak cases out of the system, and saving the court the time and trouble of holding trials. Defendants justify filing such motions on the ground that they may result in dismissal or at least in narrowing the issues for trial, without incurring the cost and risk of trial. But the courts and the parties filing summary judgment motions may not always fully consider the cost of the motions themselves. Often they are so voluminous, and require so much evidentiary preparation and court time that they may not save much in comparison with trial. And the cost of trial is not necessarily the relevant basis of comparison. In most cases, if summary judgment is denied, the case is still not going to trial. Instead, the case is usually going to get settled. In addition to over-valuing the potential risk of trial (which allows parties filing summary judgment motions to rationalize the enormous expenditure of the motion itself), courts and the parties filing summary judgment motions also do not always factor in the cost of an appeal, which adds many thousands of dollars of attorneys' fees, and years of delay and uncertainty. They also do not factor the cost imposed on the party who is being denied his day in court, and his opportunity to obtain some compensation for his injuries. A party such as the plaintiff in the Reeves case suffers his first perceived injustice when he is passed over in favor of a younger, perhaps-less qualified candidate. Then he suffers a second perceived injustice when he is denied the opportunity to challenge this employment decision in court. Thus summary judgment may generate considerable dissatisfaction with the system.

I have represented both employers and employees in discrimination cases, and I do not make these points to advocate a rule that is more favorable to one side or the other. My point is that current summary judgment doctrine, which in discrimination cases appears to favor the employer, may actually impose some serious costs on the employer, in the form of the summary judgment motion itself, and the resultant appeal. Those costs could in some cases exceed the costs of trial or settlement. Yet employers often do not take these costs into consideration because of the allure of possible dismissal of troublesome cases. From the employee's point of view, current summary judgment doctrine presents a formidable potential obstacle in every case, and one that increases the plaintiff's frustration with the system. If I were put in charge of reforming the Code of Civil Procedure, my goal would be to simplify the process of getting to trial, while at the same time encouraging settlements, and reducing wasteful discovery and motion practice. Our current heavy reliance on summary judgment to dispose of cases, as illustrated in a case like the Reeves case, does not seem to serve these ends.

(Thanks to California Labor & Employment Law Blog for bringing this case to my attention.)

Arbitrability Up to the Arbitrator

2010-06-22T11:50:00.000-07:00

Antonio Jackson sued his employer for discrimination in federal district court in Nevada, but the court granted the employer's motion to compel arbitration and dismissed the case. The Ninth Circuit reversed in part, holding that the trial court was obligated to determine whether the arbitration agreement was unconscionable as Jackson claimed, rather than leaving that determination up to the arbitrator. Yesterday, the U.S. Supreme Court, in a 5-4 ruling in Rent-a-Center, West, Inc. v. Jackson held that the district court was correct to enforce an arbitration clause that plainly granted the arbitrator exclusive authority to resolve any disputes about whether the arbitration agreement itself was enforceable.

No question that the arbitration agreement in this case clearly left the determination of arbitrability up to the arbitrator. But Jackson claimed the arbitration agreement itself was a contract of adhesion, meaning he was compelled to sign it as a condition of employment, and that he had no appreciation of its meaning at the time. He also claimed that the arbitration agreement was substantively unfair, and should therefore be unenforceable, because it required the parties to arbitrate claims that employees typically bring (e.g., his claim of discrimination), while allowing the parties access to court for claims that employers typically bring (intellectual property and unfair competition claims). (I successfully challenged a similar arbitration clause on behalf of an employee in Abramson v. Juniper Networks, although that case arose in California state courts.)

Is it fair to bind the employee to a provision requiring that the enforceability of the arbitration agreement itself should be determined by the arbitrator, in the face of the employee's claims that the entire contract is unconscionable and unenforceable? The Supreme Court decided that the employee could be compelled to submit to the arbitrator's determination of whether the arbitration agreement itself was valid. What that means as a practical matter is that the employee may still be required to advance the substantial filing and hearing fee for the arbitration (which was another one of the employee's challenges to the fairness of being required to arbitrate), and may even be required to present his entire case on the merits to the arbitrator, before ever receiving a determination from the arbitrator himself as to whether he entered into a valid agreement to arbitrate the dispute. In addition, the arbitrator's decision on that issue would not be reviewable by any court except on the very narrow grounds available for challenges to arbitration decisions on the merits. So the Court's decision either precludes the employee from obtaining any remedy at all for the claimed discrimination (if he cannot afford his share of the filing and hearing fees), or it may require him to arbitrate his claims before he can find out whether he was required to submit them to arbitration.

The dissent, written by the retiring Justice Stevens, called the majority's reasoning "fantastic," and Stevens did not mean that in a good way. I am not going to labor through that reasoning here, but would only raise the question whether we should be comfortable in general with entrusting arbitrators with threshold questions in which the arbitrator himself has a vested interest in the outcome. It seems to me that such a rule is bound to make people more distrustful of arbitration, and to lend fuel to efforts in Congress to abolish mandatory, pre-dispute arbitration agreements altogether in consumer cases.

(photo from Mises Institute website)

Who is an Employer?

2010-05-29T13:47:00.000-07:00

The California Supreme Court last week decided Martinez v. Combs, which clarified the definition of "employer" under California labor law. Plaintiffs were seasonal agricultural workers who had been hired by a strawberry farming company, now bankrupt. Lacking a remedy for their wage and hour claims against the owner, plaintiffs also named as defendants the merchants through which the growers sold their strawberries. Plaintiffs contended that these merchants could be deemed their "employers" because they advanced payments for Munoz's strawberries, and because they "supervised" the plaintiffs to the extent that they sent representatives to the fields to inspect the crops and to instruct the workers in how they should be packed. (slip opin. at 5-6)

Although the Court upheld the findings of the lower court that these merchants did not exercise sufficient control over the plaintiffs to qualify as their employer, because they were not responsible for the hiring and firing decisions, in the course of doing so the California Supreme Court made clear that it would pay deference to the definitions in the applicable Industrial Welfare Commission's (IWC) wage orders. (Defendants had argued, in reliance on a prior California Supreme Court decision in Reynolds v. Bement, 36 Cal.4th 1075 (2005), that "employer" should be defined by common law.) In the case of agricultural workers, wage order 14 defines "employ" as "to engage, suffer, or permit to work," and "employer" as a person who "employs or exercises control over the wages, hours, or working conditions of any person." In this case, the defendants were found not to have engaged or suffered or permitted the plaintiffs to work, because Munoz had exclusive control over hiring and firing decisions, and the defendants had no power to prevent the plaintiffs from working. (slip opin. at 43)

While the decision went against the employees in this case, the Court's analysis could in different circumstances permit a broader definition of employer than that established by common law, because of the Court's deference to the IWC definitions. Therefore even greater attention must be paid to the definitions in the applicable wage orders in order to ascertain the potential responsibility of the parties who exercise control over employees' activities.

(photo from Typar Landscape Products website)

Economical Litigation

2010-04-16T19:02:00.000-07:00

At a conference this week at Pepperdine, Daniel Winslow, a Boston attorney, and the International Institute for Conflict Prevention & Resolution unveiled a model agreement aimed at controlling litigation costs. The draft agreement includes a mandatory pre-litigation dispute resolution clause, as well as limits on the amount of discovery that can be taken in a commercial dispute, depending on the amount in controversy.

I find the idea of conducting litigation efficiently to be something of an oxymoron, akin to the idea of conducting war efficiently. As I've said before, the best way to conduct litigation efficiently is not to litigate, just as the best way to conduct war efficiently is to try diplomacy first. Once you are involved in a lawsuit, the primary goal is not to make life easy and pleasant for the other side. The goal in a lawsuit--indeed the attorney's ethical imperative--is to win. Nevertheless, pre-dispute agreements aimed at controlling costs seem an admirable idea. If they operate to save parties from self-destructive and unnecessary expenses, they are serving a useful purpose. Like any set of rules, however, they may incentivize parties to try to achieve the maximum bang for the buck under the rules, rather than actually to reduce the time and effort expended in a lawsuit. For example, if you can only serve four interrogatories, a litigator's instinct would be to draft those interrogatories as broadly as possible. If parties can only take a limited number of depositions, they may be tempted to seek the maximum they are allowed under the rules. Such rules also present the opposing party with a new opportunity to argue that the rules are being violated or abused.

Another approach might be to simplify and reduce the number of rules, with the goal of creating fewer tangential issues for parties to argue about. Since the great revision and simplification of the Federal Rules of Civil Procedure in 1938, rules and their interpretation have seemed only to become more cumbersome and complicated. A thorough housecleaning of the rules is long overdue, and efforts such as the one discussed this week may represent a step in that direction.

(illustration from about 1540 of trial by combat in Germany: I wonder if the lawyers of that time sat around thinking of ways to conduct litigation more efficiently.)

Copyright Registration: conditional, not jurisdictional

2010-03-03T16:12:00.000-08:00

On Tuesday, the Supreme Court handed down yet another decision that may be mainly of interest to civil procedure aficionados such as myself. But since it deals with an issue that causes some confusion in copyright cases, and also because it has some bearing on whether such global agreements in the electronic publishing field can move forward, it probably deserves some attention. In Reed Elsevier, Inc. v. Muchnick, the District Court had approved the settlement of a class action resolving a dispute between authors and online publishers. (not to be confused with the Google book settlement, which is a different case) The named plaintiffs in the case had all registered their copyrights in at least one article that was reproduced electronically without their permission. The class also included, however, a number of authors who had never registered their works. Because of these class members' failure to comply with the requirement of Section 411(a) of the Copyright Act that no civil action for copyright infringement may be brought without registration of the copyright, the Second Circuit Court of Appeal on it s own motion refused to approve the settlement of claims of those authors of unregistered works. (It is interesting that although these authors objected to certain terms of the settlement, none of the parties to the case objected to the courts' ability to hear and determine the case.)

Under these unusual circumstances, the Supreme Court held that although Section 411(a) creates a condition to an infringement action, that requirement is not jurisdictional. That means the court had the power to determine the claims of authors of unregistered works, even though these authors had not satisfied what appears to be an essential condition of bringing suit. This result can be justified as a matter of statutory construction. It can also be justified as a practical resolution of a dispute that all of the parties wanted the federal courts to resolve. Does it make a difference for a copyright-holder considering an infringement action whether the registration requirement is jurisdictional or is just a condition of filing suit? Probably not, unless the copyright holder can figure out some other way to piggy-back his infringement claims into a federal court action, as the non-registering authors did in this case.

As for what Muchnick thinks of the case named after him, go here.

Supreme Court rejects "place of operations" test.

2010-02-23T15:37:00.000-08:00

Today the U.S. Supreme Court decided Hertz Corp. v. Friend, 9-0, which overrules the Ninth Circuit's decision that Hertz Corporation should be deemed a citizen of the State of California because its California operations are larger than those of any other state. (My commentary on the Ninth Circuit case is here.) Since I saw some commentary elsewhere wondering whether this is another example of the corporatist federal courts once again making it more difficult for the little guy to sue, I feel the need to point out that this decision has limited impact, and does not seem based on any intent to prevent people from suing corporations. (Otherwise the case would likely not have been decided by a 9-0 margin.)

All the decision does do is allow corporations like Hertz to remove cases to federal court even in states where the bulk of their operations are found. Every corporation is deemed a citizen of at most two states, its place of incorporation and its principal place of business. Now it is clear that principal place of business is the place where the corporation's activities are directed, and not necessarily the place where the bulk of those activities are conducted. That might seem unfair in some cases, but it does seem to accord with the common sense view of what a corporate headquarters is. This case does not change the fact that those are the only two states where corporations cannot remove state law-based cases brought by citizens of those states. Corporations could, both before and after this decision, remove diversity cases in the other 48 or 49 (depending on whether a corporation is headquartered in the same state as it is incorporated) states. The Hertz decision only impairs the ability of plaintiffs in states where corporations maintain their largest share of operations--which might have been deemed the corporate headquarters under the Ninth Circuit's rejected test--to maintain their actions in state court.

So while Hertz gets to remove cases in California to federal court, and thus escapes the terrible fate of being forced to defend actions by California citizens in California state courts, Hertz will still have to face the citizens of New Jersey in state court, since no diversity of citizenship will be present in cases brought in New Jersey, where Hertz maintains what the federal courts now must uniformly define as its principal place of business. Since I spend a lot of time practicing in the California state courts, and have a lot of respect for California state judges, I can't say that Hertz will really be better off trading the Golden State's courts for the state courts of the Garden State. Or is it possible that Hertz took this case all the way up to the Supreme Court merely to establish its pride in its New Jersey headquarters?

(photo of Hertz headquarters in Park Ridge, New Jersey, from American Companies.com)

Pages

2010-02-15T19:58:00.000-08:00

It has taken me years, but I finally have this website functioning more or less the way I have been envisioning it for some time. That is because Blogger finally allows you to set up pages that allow bloggers to post static messages such as "About Me," "Contact," etc. These are perfect for setting up pages for biographical information, and information about various practice areas. Of course I could have changed a while ago to a more sophisticated blogging platform, but Blogger has the advantage of being pretty easy to use. There were also some work-arounds I could have tried, but never did. I waited until Blogger set it up for me. So even though I don't know much about the programming necessary to set up a website--my 14 year old kid probably knows more HTML code than I do--I have been able through trial and error and experience to figure out how to create a pretty decent-looking site, if I do say so myself. So thank you Google and Blogger.

Comments, and especially compliments, are welcome. The site could probably still use a little tweaking here and there.

Office for Rent

2010-02-02T15:49:00.000-08:00

We have a large window office available in our four lawyer suite. It is a prime location right across the street from the downtown LA public library. On the 17th floor of a prestigious, Class A office building. Large shared conference room, kitchen and storage available. Use of copier, postage meter, internet, phone service (VOIP service available), and secretarial services at cost. Furnished (as shown in picture below) or empty. You would be sharing space with three talented and very amiable attorneys. Rent is negotiable. Please forward this post to anyone you know who may be interested (just click on the little envelope below the picture).

Shortened Time Period to File Wage and Hour Claims Unenforceable

2010-02-02T11:04:00.000-08:00

In Pellegrino v. Robert Half International, Inc., the Fourth District Court of Appeal in California affirmed summary judgment in the employees' favor, holding that a provision in the parties' employment agreements requiring that any claims be brought within six months of termination of employment, was unenforceable as to plaintiffs' statutory claims. Building on prior cases holding that Labor Code provisions governing wages and hours are unwaivable, the Court of Appeal determined that it would contravene public policy to deny these employees a remedy for unpaid wages. It could be argued that Section 17200 itself sets an arbitrary cut-off date for wage and hour claims that has nothing to do with any public policies in the Labor Code, but since the limitations period under the unfair business practices statute is longer than the periods in the Labor Code, presumably that could not violate any public policies regarding the payment of required wages.

The Court also affirmed a finding after trial that the plaintiffs in this case, who were account executives at a temporary employment agency, had been improperly mis-classified as exempt.

Finally, in another interesting discussion, the Court of Appeal found that defendant had not been denied the right to jury trial by the court's decision to try the equitable issues under Business and Professions Code Section 17200, which included the classification issues, to the court. (The parties' stipulation regarding the amount of damages applicable to each employee's claim made trial of any legal issues unnecessary.)

Corporate Free Speech

2010-01-21T19:51:00.000-08:00

Today the United States Supreme Court decided the long-awaited case of Citizens United v. FEC, overruling established precedent to declare unconstitutional statutory restrictions on the ability of corporations to pay for political advertisements. Back when most free speech cases were about obscenity or civil rights or anti-war protests, the more liberal members of the Court tended to take an expansive view of the First Amendment, while the more conservative members generally supported restrictions on speech. So today, when the five most conservative members of the Court are extolling the virtues of free speech as protected by the Fist Amendment, you have to wonder whether this case is primarily about free speech.

The Court conflated the issue of free speech with the issue of the money that is spent to air political advertising. Restrictions on corporate spending for political advertisements could have been distinguished from restrictions on speech itself, by treating them as "time, place and manner" restrictions, for example. Instead the Court justified allowing corporations virtually unlimited ability to pay for campaign commercials by invoking the values behind the First Amendment.

The Court also conflated the rights of corporate "persons" with the rights of natural persons. There are good reasons for treating corporations as persons under the law. The whole point of forming a corporation is to create an entity that is separate and distinct from any real person, so that the corporation's owners are not generally liable for the corporation's actions. At the same time, it may be necessary for the law to have adopted the legal fiction of corporate personhood in order to hold corporations legally accountable for their actions. But it seems inconsistent with that vision of treating a corporation as a distinct legal entity to at the same time treat the corporation as a collection or association of individuals expressing ideas protected by the First Amendment. Even though a corporation may be owned by human beings, directed by human beings, and may employ human beings, the corporation is still distinct from any human being. Therefore, such fictional persons, while they do have rights and responsibilities, need not have exactly the same rights as human beings. Corporations are legal creations of the state. If they are to be considered as being "endowed by their Creator with certain inalienable rights," their Creator is still a different creator than the one who created human beings. It would not even make sense to grant certain human rights to corporations, such as the right to vote (mentioned in the dissent), or the right to marry. As Justice Stevens stated in dissent:

[C]orporations have no consciences, no beliefs, no feelings, no thoughts, no desires. . . . [T]hey are not themselves members of "We the People" by whom and for whom our Constitution was established.

Instead of treating corporations as disfavored persons, however, as Justice Stevens and the other dissenters advocated, the Supreme Court invoked the values behind the First Amendment to support a vision in which all interests groups can freely participate, limited only by their imaginations and their wallets. It may be worrisome to imagine a world in which the networks are flooded with corporate political advertising, and candidates appear to be sponsored by corporations, but that is the wide-open world the Supreme Court now envisions, in which the best remedy for potentially harmful or misleading speech may be the opportunity to present more speech.

Of one thing we can be certain. This decision opens the door to a lot of new and interesting legal questions, such as whether Congress can devise new restrictions on campaign expenditures without amending the Constitution; whether Congress or the states can re-define what it means to be a corporation so as to limit corporations' ability to participate in electioneering; whether other remedies (e.g., derivative suits, defamation suits) can be pursued against corporations that spend excessively on campaign-related advertising. If government is forced to exit the field, that may leave it up to private parties to fight these and other issues out in the legislatures, the courts and other places.

(photo by pccapitalist from photobucket)

The Cousin Vinny Syndrome

2010-01-19T00:27:00.000-08:00

This weekend I found myself judging two rounds of college-level mock trial competition. I was quite impressed with the level of preparation and dedication these students showed, and how well these pre-law students knew the rules of evidence, and knew how to conduct themselves in the mock courtroom. But what really surprised me was the level of theatricality these students put into their witness characterizations. Each of the trials I judged had two witnesses in the car business, and three out of four of these car experts seemed to model their performance on Marisa Tomei's Oscar-winning role in My Cousin Vinny, right down to the mannerisms and heavy Brooklyn accent. I can't blame these students for being influenced by this performance. This is one of my favorite trial movies also, and a lot of trial lawyers will say the same. There are a lot of things this movie can actually teach aspiring trial attorneys. For example, any trial lawyer could benefit from studying the cross-examinations of the three eyewitnesses, especially Vinny's brilliant questioning of the guy who claimed to have cooked his grits in five minutes. And the friendly relationship between prosecution and defense counsel, even while both were going all out to win, should be a model for many lawyers today.

Nevertheless, I felt the need to remind these students after the competition that real life trials are quite different from trials on tv and the movies, and that since in real life witnesses usually try to tone down their colorful personalities, these mock trial witnesses might come across more believably if they toned down their performances a bit. But the students understood something that a lot of trial lawyers sometimes forget: trials are a form of theatre, and jurors, who are conditioned by television and movies, appreciate some entertainment value in the presentation of evidence. Even if a witness's or attorney's personality and mannerisms seem distracting from the issue the party needs to prove, an entertaining witness or attorney can still make parts of the trial memorable, and juries may be favorably disposed toward the party who provides a modicum of enjoyment in the course of sitting through what feels to the jury like an overly lengthy, dry and sometimes dull process. So while the students perhaps need to learn to tone it down, they reminded me that sometimes you also have to think about spicing it up.

Punitive Damages in California

2009-12-14T17:22:00.000-08:00

In Roby v. McKesson Corp., the California Supreme Court held that under the facts of that case, the ratio of punitive damages to compensatory damages should not exceed one-to-one. The Court referenced guidelines set forth in the United States Supreme Court case of State Farm v. Campbell, 538 U.S. 408, 425 (2003), suggesting that in cases where the reprehensibility of the defendant's conduct is relatively low, while compensatory damages are relatively high, the due process clause may limit punitive damages to the amount of the compensatory damages.

That may now be the "rule" in California, a rule that should lend some predictability to the enforceability of punitive damages awards. Only in cases where the defendant's conduct was unusually egregious, and the plaintiff's compensatory damages relatively low, would plaintiffs now expect the courts to enforce punitive damages awards in excess of this one-to-one ratio.

Truth and Fiction

2009-12-01T23:25:00.000-08:00

People of the Book, by Geraldine Brooks, tells the imagined story of the Sarajevo Haggadah, an actual illuminated manuscript from the Middle Ages that has miraculously survived to this day, and which was dramatically re-discovered at the end of the Bosnian civil war. Each clue that the fictional archivist finds in the book reveals part of its history. Each chapter allows the reader to reach further back in time. Each crisis in the book's survival corresponds to an historical crisis, from the Inquisition to the Holocaust to the siege of Sarajevo.

I did not think about the book's relevance to a trial lawyer's view of the world until after I finished it. But now it occurs to me that a lot of what we trial lawyers do is similar to the method and story of this novel. We pore over documents in detail--letters, contracts, hospital records, financial records, whatever--searching for every clue that might help or harm a client's case. We choose the clues that seem most relevant. Since judges or juries have no direct knowledge of the events at issue in a case, they must base their decisions on documentary evidence only, or witness's recollections of past events. Sometimes witnesses are not even permitted, or are not available, to testify to the meaning of a document. Therefore we must suggest for the fact finder an imagined narrative to give meaning to the documentary evidence. That imagined narrative must seem true, and it must accord with all the known facts, but the contrasting explanations that we and the opposing counsel and the fact-finder are creating might still be described as fictions, not much different from the world created by a novelist with a similar attention to detail and history. That is because an imagined narrative may be easier for the jury to accept than the messy, non-sensical reality of what we are describing. Or as Mark Twain supposedly said, "the difference between fiction and non-fiction is that fiction must be absolutely believable."

Of course we lawyers may not create characters out of whole cloth, as fiction writers are permitted to do, but we can sometimes suggest actions that might have been taken by unknown characters, and we frequently have to ascribe motivations to actions that can only be discerned by making inferences from the known facts. We have evidentiary rules that make it objectionable to ask a witness to testify as to what the witness thinks was going on in someone else's mind, but we ask the fact finder to engage in this kind of exercise all the time. If the issue in the case is whether a party committed fraud, or engaged in discrimination, for examples, each side asks the jury to draw a different set of inferences from the same facts, and the jury often constructs yet a third version of what somebody might have been thinking that more closely accords with their view of the truth.

To take an even more speculative example, I spent several years of my life trying a series of employment discrimination cases, in which the main issue in each case was whether the plaintiff would have applied to become an insurance agent had the company been more open to the recruitment of female agents. In other words, in each of these cases, we had to imagine a fictional world and then try to determine how the real person before us would have acted in that imaginary world. A writer of historical fiction also tries to imagine how either real historical figures or fictional characters would act in the world of the historical novel the writer is creating. In both situations, we are always endeavoring to get as close as we can to the truth, but we may have to use our imaginations to get there.

(page from the Sarajevo Haggadah from Geraldine Brooks's website)

Dealing with "Frivolous" Lawsuits

2009-11-12T10:55:00.000-08:00

Congress is currently considering legislation that would reverse the Supreme Court's decisions in Iqbal and Twombley, discussed here previously. These decisions have significantly raised the standard for pleading a viable complaint in federal court, and enhanced the power of judges to dismiss cases that do not appear plausible, before allowing any discovery or further proceedings to occur. One danger of these Supreme Court decisions is that they have already led to increased wasteful motion practice in early stages of lawsuits. Another is that they have caused the dismissal of cases that could actually be viable after further discovery and investigation.

Twombley and Iqbal, combined with prior Supreme Court decisions embracing the use of summary judgment to increase the courts' power to dismiss lawsuits prior to trial, represent a trend to provide the judiciary with tools for dealing with meritless lawsuits that clog the courts for no useful purpose. Should Congress decide to overrule these decisions, Congress will no doubt be criticized for caving in to the trial lawyers' lobbies and bending over backwards to help the "little guy" attack American business unfairly.

The question that perhaps should be asked instead is whether we can design better tools to deal with meritless lawsuits than tightened pleading standards and more liberal use of summary judgment. The problem with heightened pleading standards is that they encourage even more motions to dismiss, the majority of which are still going to be denied. So, ironically, efforts to curtail frivolous plaintiffs' suits could lead to wasteful motion practice on defendants' part. The other problem is making it easier for courts to dismiss cases without a trial raises the potential for throwing out cases that could actually be won at trial. The same problems exist at the summary judgment stage. Summary judgments are expensive, complicated motions that use up a lot of the litigants' time as well as the court's time. Many of those motions are denied also, and many are filed at least in part to wear down the other side. Summary judgment also has the potential for dismissing cases that could have been won at trial.

Perhaps it would make sense to study simplified discovery and trial procedures, or early evaluation procedures, or even some sort of counseling for litigants who insist on proceeding with cases that are not likely to result in a recovery that exceeds their cost. The courts' and the parties' desire to weed frivolous cases out of the system is a legitimate one. But when the courts or the Congress try to bend the rules to accommodate that desire, they may be denying other parties the right to test their claims in court, and may be adding procedures that increase costs in many cases. It might be better to recognize the rights of litigants to proceed with difficult cases, but to allow those cases to proceed in a way that will not break the back of the court system.

Hard Cases Create Hard Times for Arbitration.

2009-10-07T16:07:00.000-07:00

Senator Al Franken succeeded in getting his first piece of legislation passed, an amendment to a defense appropriations bill that would prohibit defense contractors from requiring employees to submit to mandatory arbitration. The amendment was prompted by the case of Jamie Leigh Jones, who has been attempting to sue Haliburton and KBR over claims that she was raped and held against her will by co-workers. The amendment passed overwhelmingly, with only 30 Senators opposed.

What is interesting is the use of a compelling story--who could vote against giving an alleged rape victim her day in court?--to accomplish a broader purpose. Because the bill goes beyond assault cases to also preclude mandatory arbitration of discrimination claims, clauses that Congress and especially the federal courts have generally upheld for years. Therefore this bill might be viewed as part of a broader trend away from arbitration of workplace and other consumer disputes. (See my previous posts on this topic here and here).

Boilerplate Discovery Objections

2009-09-25T15:35:00.000-07:00

It is common practice, at least in California, for parties to serve written objections to nearly every interrogatory and document demand to which they respond. Notwithstanding those objections, parties frequently provide answers to the objected-to interrogatories, and produce some documents in response to objected-to document requests. The problem then is that the requesting party is never certain whether he has received complete answers or all responsive documents, without either litigating over the objections, or making follow-up inquiries.

Sadly, there are actually sound reasons for this convoluted practice. By making blanket objections, even ridiculous objections, parties may avoid possible sanctions for failing to provide full answers or responsive documents. Parties also gain some control over their responses by essentially telling the other side that they are only getting what the producing party deigns to produce out of the goodness of its heart. Responding parties also may believe there is a benefit to the confusion they create by objecting and answering at the same time. This tactic forces the demanding party to follow up with additional requests or motions to chase ever-diminishing returns, and could even avoid the disclosure of information that could be damaging to the producing party.

Where the courts seem to draw the line, however, is when the objecting party actually withholds or substantially delays producing obviously relevant information that the demanding party is making reasonable efforts to obtain, or where the objecting party appears to be playing games with the meet and confer process. I came across one such case thanks to the blog California Appellate Report which has a note describing Clement v. Alegre. In that case, the Court of Appeal upheld sanctions against a party that not only asserted the usual boilerplate interrogatory objections, but also appeared to be playing unacceptable discovery games. In particular, this party had objected to the term "economic damages," and only provided information relative to a very narrow definition of the term, instead of the customary, and statutorily-defined meaning. The court found the contention that this term was ambiguous to be "preposterous," and upheld an award of sanctions of more than $6000. A nice citation to throw at someone who appears to be obstructing the discovery process.

Constitutional Rights for High Schoolers

2009-09-20T00:42:00.000-07:00

This week I volunteered for the first time to participate in a program the Los Angeles County Bar Association has been running for seven years, called Dialogues on Freedom, in which lawyers and judges lead class discussions in public high schools about constitutional rights. The hypothetical situations presented to the students deal with issues that could affect them personally, and that at the same time raise constitutional issues implicating practically every amendment in the Bill of Rights. This year the hypothetical dealt with enhanced police powers that the hypothetical city counsel was thinking of putting into place to deal with suspected gang activity.

The students at Lincoln High School, where I was assigned, were a lot more energized than I expected about these issues. I was also surprised that the majority of them seemed to take the civil libertarian side of most of these issues. Every time we suggested such measures as imposing a curfew, searching students' backpacks, censoring violent television shows, or even gun control, we were met with cries that the council was attempting to impose a police state. Given that a lot of these students understand that they are themselves at risk from potential gang activity, it was heartening to know that many of them still demanded that the police have at least reasonable suspicions before depriving them of their rights.

Federal Rules Counter-Revolution

2009-08-17T09:36:00.000-07:00

A report issued this spring by the American College of Trial Lawyers Task Force on Discovery and the Institute for the Advancement of the American Legal System, made a number of recommendations that would reverse many of the most basic reforms of the Federal Rules of Civil Procedure. These include replacing notice pleading with fact-based pleading, a change that the Supreme Court is already well on its way to imposing (see this post); more flexibility in the rules for different kinds of cases; new summary adjudication procedures; and substantial limitations on discovery, which the authors themselves call their most "radical proposal."

To appreciate the change in direction that these recommendations would represent, it is useful to remember the thinking behind the Federal Rules of Civil Procedure when they were adopted back in the 1930's. One idea was to replace archaic and complicated pleading rules, that caused much litigation, with modern, simplified pleading rules. The concepts of causes of action and demurrers would be abolished. Technical pleading requirements would be abandoned in favor of allowing short statements of the claim that were merely intended to give the defendant notice of what the case was about. As these concepts have evolved over the years, however, outmoded pleading concepts seem have crept back into practice. Demurrers may have been abolished, but 12(b)(6) motions as to individual claims are allowed, and courts have also permitted motions for "partial summary judgment," which do not appear in the rules, as another means of reviving the function of the abolished demurrer. Short and plain statements of the claim have gotten longer and more convoluted, and the courts now expect substantially more than notice pleading. The ACTL and IAALS report would wholly abandon the original idea of the Federal Rules to simplify the early stages of litigation, in favor of even more beefed-up pleading requirements presumably designed to weed out weak cases at the pleading stage, instead of opening them up to expensive discovery proceedings.

As to discovery, the original idea of the Federal Rules, that discovery should be essentially open-ended, was also supposed to simplify prior practice and make it more fair. If all conceivably relevant information were made discoverable, that was supposed to eliminate battles over discovery, and encourage parties to share information freely. As practically everyone recognizes, discovery has not worked out that way at all. Particularly with the advent of electronic data, almost everyone would agree that the process is too expensive, too contentious, and too time-consuming, well beyond the useful purposes of exchanging information that is needed for trial. This report is correct to focus on curtailing the abuse and expense of discovery, and its central concept of proportionality in discovery is an important concept. I question, however, whether the report's more detailed recommendations on limiting discovery will truly serve the purpose of curtailing wasteful discovery, or whether they will provide new opportunities for battling over new issues. The report makes 11 pages of recommendations on discovery, demonstrating that its own proposed solutions may generate as much complexity as the current system. I agree with the ideas of proportionality and limitations on discovery, but instead of such detailed limitations, I would rather see a drastic simplification of the discovery rules. My proposal, discussed in an earlier post, would eliminate all rules on discovery with a single rule saying something like: "Parties are permitted only such discovery as they may obtain by agreement, or as the court allows." The idea would be to encourage negotiated solutions to discovery issues, and to replace the motion to compel with more simplified requests to the court to allow reasonable additional discovery.

In general, I would prefer to see reform take more of the shape of the original Federal Rules: a dramatic simplification and streamlining of the rules of procedure, designed to reduce the unnecessary issues that parties often litigate about. After 70 years of cluttering up the original Federal Rules with more and more complicated and arcane procedures, it is probably a good idea to try to start fresh.

Consumer Arbitration on the Way Out

2009-08-14T12:54:00.000-07:00

Another sign that consumer arbitration clauses are going the way of the dinosaur came from Bank of America, which has decided to remove pre-dispute arbitration clauses from its credit card agreements. The bank states that the decision was made in response to customer resistance to arbitration. In addition, the decision follows in the wake of regulatory pressures on some of the organizations conducting these arbitrations.

I outlined some of the problems with pre-dispute arbitration agreements in a previous post, which became the basis for an article published in the ABA's Conflict Management Newsletter in the Spring of 2008. Essentially, I argued that the only benefit to pre-dispute arbitration agreements in consumer cases is to save money for the company requiring the clause. Consumers who have a dispute do not benefit by waiving their rights in advance, because the parties can still agree to arbitration after the dispute arises. While courts, especially federal courts, have been generally favorable toward enforcing arbitration agreements, there has been a backlash against such agreements from consumers, as well as from Congress and state regulators, based on the perception that arbitration is an unfair and unfavorable forum for consumers.

Evidently, Bank of America made the calculation that it will increase its goodwill with customers, and avoid potential problems with regulators, at the risk of facing the occasional lawsuit.

Is blogging advertising?

2009-08-06T14:06:00.000-07:00

Some comfort for attorneys who might be worried that their blogs could be deemed to be advertising and therefore subject to bar association rules and the like, came from the New York Court of Appeals last month. In Stern v. Bluestone, New York's highest court ruled that a lawyer who fax-distributed copies of a flyer he called the Attorney Malpractice Report, did not run afoul of the federal statute against distributing unsolicited advertising by fax. The court held that these faxes constituted "information messages" and not advertising, even though they contained the sender's contact information, and even though the sender specialized in attorney malpractice actions.

Although not directly concerned with blogging, and not interpreting legal advertising rules, and although only applicable in New York state, this decision has been viewed (by bloggers naturally), and also in an ABA Litigation News article, as applicable to legal bloggers.

Blogging Tips and Tricks

2009-07-31T11:57:00.000-07:00

I started this blog 4 1/2 years ago, a time when blogging was not nearly so widespread as it is now. After all that time, I'm wondering if I have any useful advice to pass on to other prospective legal bloggers. It has taken me a long time to hit my stride as a blogger (actually, I'm not sure I have even hit it yet); I wonder if I can save others some time. My answer to my own question is probably not. Everyone has to approach this in their own way, and decide for themselves if it is worthwhile. I cannot tell anyone how to do it. I can only give some of my own experiences. So here goes, in the ever-popular Q and A format:

Q: Is blogging a useful marketing tool?
A: I would say the jury is still out on that for me. I set up this blog instead of a traditional law firm website, because I find traditional websites fairly useless. I still would not say that the blog drives a lot of potential clients to my door. What it does do is to allow a potential client to find out more about me, both in terms of checking out my credentials and expertise, and in terms of finding out whether my style and interests are compatible with those of someone who might want to retain my services. A blog allows people much greater opportunity to gain some insight into you as a person than a traditional website.

Q: Does blogging provide a useful forum for the exchange of ideas?
A: Yes, but it has taken a long time to build up enough readership to get any feedback from blogging. I originally thought that this blog might be a good place to try out some of my ideas on reforming the code of civil procedure, and similar legal issues, and I do post stuff like that sometimes, but I get very limited feedback. What blogging actually does is to force you to think through your own ideas. It's more of a diary than a dialogue, though it can be both.

Q: Is it important that a blog have a theme?
A: I have decided it is absolutely critical. The problem with this particular blog that you are now reading is that it does not have a well-defined theme. I have decided that that is why it has taken me so long to become any good at blogging, and I am still working on better defining the purpose of this blog. The way that I finally started to get better at blogging was actually to start another blog. I started blogging about politics on the Obama campaign website in late 2007, and developed a voice and a point of view on that site. Then I started my own blog on politics in the fall of 2008, which started with that well-developed point of view. It's called hope and change, and its purpose to be relentlessly positive about changes that are occurring in this country. I write about things that I am passionate about, and I always try to keep my posts in line with the theme and tone of voice of that blog. As a result, that blog is much more active than this one. I have made 93 posts on my politics blog in less than a year, while this one only has 44 posts after more than 4 years. (For a couple of years, this blog went almost completely moribund, because I couldn't figure out what to do with it.) But starting that second blog helped me make this one more active and effective. Where I really went overboard was starting yet a third blog just a few months ago, to discuss mediation, which I did because I thought it was a good idea to separate my discussions of my mediation practice from those of my litigation practice. That blog, called Mediation's Place, also has a well-defined theme and a point of view. Therefore my newest blog is in some ways also more successful than my original blog.

Q: How often should you post to your blog?
A: I have read that quantity is more important than quality, and I think, sadly, that that might be true, but I am somewhat resistant to the idea of just posting a lot of quick links to other people's stuff, or random offhand notes that are not well-written or well thought-out. It is probably true that the more you post, the more traffic you drive to your site, but then you have to wonder whether your only object is to drive a lot of traffic to your site. If your object is to help yourself develop your own ideas and style, and to help people who want to find out more about you, then maybe you shouldn't care about how many people actually read your blog. But of course we all care about that too, so I guess I would advise trying to post regularly.

Q: How else do you drive traffic to your blog?
A: Besides posting regularly and having something interesting to say, it is also helpful to post comments on other people's blogs, and link back to your blog. Bloggers form a large community, and spend a lot of time talking to each other. Listing your blog in blog directories also seems to be of some use.

Q: What do you blog about?
A: Anything that interests me. If you're not interested in the subject, and you don't have anything particularly compelling to say about it, what's the point? But I do think that whatever I am posting about should always fit in somehow with the theme of the blog. Maybe if you're The Huffington Post, you can get away with talking about anything in the world, and you can fit in multiple points of view. But even the Huffington Post has a guiding spirit, albeit a fairly eclectic one. If you're not as well known as Arianna Huffington, then I don't think you can expect anyone to read your blog regularly unless they can expect to see postings on a particular subject matter, or from a certain perspective. Because I have three blogs, it is now easier to find a place to put a posting on whatever I might be thinking about, but I still try to make it fit in somehow with the theme and purpose of the blog.

Q: How do you strike a balance between the personal and the professional?
A: I do that by having one personal blog and two professional blogs. But even on the professional blogs, it is sometimes difficult to decide how casual or personal to make my postings. Of course I have certain standards of professionalism, and I want to make my postings on legal issues authoritative and erudite. But at the same time I recognize that I am not writing law review articles here. Also, I do think it's permissible, even desirable, to let your personality show through even on a professional site. On the other hand, you aren't likely to see any family pictures on this site. That kind of stuff is for facebook.

Q: Do you ever revise your posts?
A: I know there are some journalists who try to adhere to standards similar to those used by newspapers and magazines. Once it appears in print, it is somehow a matter of record, and revisions should be shown as such. I do not feel bound by such constraints, and I revise previous posts whenever I think of something I want to change, or see a way to improve the writing. This post, for example, I have already edited twice to add several more questions and answers, including this one.

Card Check without Card Check

2009-07-20T14:33:00.000-07:00

It now appears that the version of the Employee Free Choice Act that is likely to pass Congress will not include its most controversial provision, which would have made it possible to certify a union without an election. The bill will, however, contain a number of provisions that will make it substantially easier for unions to organize. They will be able to call elections on very short notice, perhaps as little as five days, if they collect a sufficient number of cards. They will obtain access to the employer's property to campaign. And employers may be prohibited from requiring employees to attend meetings at which the company presents its reasons for opposing a union.

While many who have been pushing for card check legislation will be disappointed, it appears that union advocates recognize that these are substantial changes, that should provide lots of opportunities for unions to organize. At the same time, employers preserve the principle of the secret ballot, and many of the perceived dangers of the original version of card check legislation are avoided.

Corporations and Diversity Jurisdiction

2009-07-15T10:29:00.000-07:00

Last month the U.S. Supreme Court granted certiorari in Friend v. Hertz Corporation, in which the Ninth Circuit had affirmed the remand of a class action case against Hertz for lack of diversity jurisdiction, applying the circuit's "place of operations" test. For a company like Hertz, what that means is that even though their executive offices and place of incorporation are elsewhere, they are still being deemed a citizen of California simply because they have more employees and operations in California than any other state. Hertz argues in its petition for certiorari first that the Supreme Court should resolve a split in the Circuits as to how to define a corporation's citizenship based on such potentially conflicting formulations as "nerve center" or "place of operations," and second that it is unfair not to take California's huge population into account in applying whatever test the Supreme Court approves. In other words, national corporations like Hertz are likely to have more employees and operations in California than any other state, merely because that is required to serve California's much larger population than any other state, not because their operations are actually directed from California.

Looking at the narrow issue of how to define a corporation's principal place of business, Hertz's argument does seem to have some appeal. But perhaps this case will prompt a re-examination of the broader question of the reasons for diversity jurisdiction in the first place. Diversity jurisdiction is justified to allow an out-of-state person (including corporations of course) to avoid the prejudice that might exist in the state court system by removing a case to federal court, which is supposedly above such parochial concerns. In practice diversity jurisdiction is rarely invoked for that reason. In fact, I can only recall one case in nearly 30 years of practice where I sought out a federal forum because I was seriously concerned about the prejudice that might have affected the result in state court. More often, the federal forum is preferred for other reasons, such as different procedural rules, supposedly greater attention to complex legal issues, or advantages that might accrue from a more suburban jury. In the Hertz case, the Ninth Circuit mentioned the policy considerations behind diversity jurisdiction, noting that because of its extensive California operations, "Hertz is not in jeopardy of being mistreated in California courts."

So while on the one hand it may seem unfair to make national corporations like Hertz citizens of California, when they can seek the perceived advantages of federal court in most other states, on the other hand it is not obvious that they are prejudiced by being required to defend cases by California citizens in California state courts. It will be interesting to see how the U.S. Supreme Court resolves this issue.

Wage and Hour Class Actions

2009-06-29T17:47:00.000-07:00

The California Supreme Court today clarified several issues under the unfair competition, or unfair business practices statute (Business and Professions Code Section 17200 et seq.), and under the Labor Code Private Attorneys General Act (Labor Code Section 2698 et seq.)("PAGA"), two commonly used statutes for pursuing alleged wage and hour violations. In the Arias v. Superior Court case, the Court held that purported representative actions brought under the unfair business practices statute must satisfy class action requirements, basing this holding on an analysis of the language and intent of Proposition 64, which tightened the standing requirements under this statute. (The concurring opinion points out some of the quirky features of Section 382 of the Code of Civil Procedure, which actually pre-dates modern class action practice, but concedes that viewing Proposition 64's reference to Section 382 more broadly than as a requirement that representative unfair business practices cases must satisfy class action rules may make little practical difference.)

In contrast to the voters' fairly clear tightening of the rules for unfair competition cases by means of Proposition 64, the court held that the PAGA contains no requirement that class action rules be satisfied. The Supreme Court was not troubled by employers' claims of due process violations when various individual plaintiffs attempt to obtain relief against an employer that will bind the employer in subsequent litigation but will not bind other plaintiffs pursuing similar relief. That is because, according to the Supreme Court, any plaintiff taking advantage of PAGA is proceeding as the "proxy or agent of the state's labor law enforcement agencies . . . ." (slip opin. at 16)

In a second case, Amalgamated Transit Union v. Superior Court, the California Supreme Court held that labor unions are not entitled to bring actions for alleged wage and hour violations under either the unfair competition statute or PAGA. A labor union has not suffered actual injury as a result of wage and hour violations, and is therefore disqualified under the Proposition 64 amendments to the unfair competition statute. A labor union is also not an "aggrieved employee" entitled to sue under PAGA for such violations.

Mixed Motives in Age Discrimination Cases

2009-06-19T15:18:00.000-07:00

Yesterday, the U.S. Supreme Court, in Gross v. FBL Financial Services, Inc., decided that age discrimination cases should not follow the same burden of proof analysis that the Court has applied in other kinds of discrimination cases. Specifically, in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), a case under Title VII of the Civil Rights Act of 1964, the Court had held that if an employee showed that discrimination was a motivating factor in the employer's challenged employment action, the burden of persuasion should shift to the employer to show that the employer would have taken the same action in the absence of the discriminatory motive. The Court has now held that courts should not follow this analysis in cases brought under the Age Discrimination in Employment Act, a different statute. Instead, an age discrimination plaintiff is simply required to prove that his or her age was a "but-for" cause of the challenged employment action.

Evidently the majority of the current court never cared much for the Price Waterhouse analysis, and specifically stated that it might not have adopted this analysis if the question were being considered for the first time today. (slip opin. at p. 10) Does this mean that the whole reason we now have to apply a different analysis in age discrimination cases as opposed to other discrimination cases is that Justice O'Connor has been replaced by Justice Alito? I think it does. If so, maybe we could call the appointment of Justice Alito a "but-for" cause of this latest decision.

In any case, the various burden-shifting tests developed by the Supreme Court in discrimination cases have always proved somewhat incompatible with the way cases are actually presented and understood by the trier of fact. Therefore it is probably too early to tell whether this latest explanation of the way the way burdens of persuasion are supposed to be allocated will make a large difference in practice. Further, judging from what I read in the Los Angeles Times this morning about this case, it appears likely that Congress will take action to reverse this latest Supreme Court ruling, similarly to what they did with the Lilly Ledbetter case, and clarify that age discrimination cases should be handled in a similar manner to other types of discrimination cases.

Campaign Contributions and Due Process

2009-06-08T10:17:00.000-07:00

The Supreme Court took a step toward recognizing the potentially corrupting influence of campaign contributions, by holding in Caperton v. A.T. Massey Coal Co. that due process required the recusal of an appellate judge who had benefited from approximately $3 million in expenditures by the chairman of Massey Coal Company, in aid of the judge's election campaign. Although there was no evidence that the judge had any direct or indirect stake in the outcome of the case, and although there was also no evidence that the judge's decision (he was the decisive vote in a 3-2 decision reversing a $50 million judgment against Massey), was influenced by this massive campaign assistance, the Court nevertheless held that the judge's decision not to recuse himself constituted a violation of due process.

So here is a case that seems to be crying out for redress: a guy spends $3 million to help elect a judge who then proceeds to overturn a $50 million judgment. Not only was the campaign expenditure shockingly enormous; but it actually seems to have been a small price to pay in view of the fabulous result he obtained on appeal. Even if he had no intention of obtaining such a result, and even if the judge had been completely uninfluenced by the campaign assistance, something still obviously smells wrong about this transaction. Yet the result may be very troublesome to apply, since the Court did not lay out a clear rule to tell judges when they must recuse themselves.

Instead the majority opinion (written by Justice Kennedy) merely took pains to emphasize that it was an extreme case. The opinion seems to suggest that the case should not have broad application. On the other hand, the Court has created an opening to view campaign contributions the same way that judges' direct financial interest in a case are viewed. The likely result is that any judge who has received substantial campaign assistance from one of the litigants in any case before that judge, must now seriously think about recusal.

Enforcing Releases of Mis-Classification Claims

2009-06-01T16:48:00.000-07:00

California Labor Code Section 206.5 prohibits the enforcement of releases of claims for wages due, unless payment of those wages has been made. A simplistic way of thinking about this rule is to say that you can't settle wage claims, i.e., an employer is never off the hook for paying an employee less than the wages that the employee is owed. But this section has also been held to prohibit employers from withholding compensation that is concededly due to an employee in order to obtain a settlement of additional, disputed amounts. In Chindarah v. Pick Up Stix, Inc., No. G037190 (2/26/09), however, the Fourth District Court of Appeal upheld the validity of releases settling claims of alleged mis-classification, where there was presumably a dispute as to whether the employer owed any overtime wages at all.

The case involved a proposed class action to recover overtime wages on behalf of certain managers and lead cooks employed by Pick Up Stix, who had been classified, improperly according to the plaintiffs, as exempt employees. The settling employees signed a release acknowledging that they spent more than 50% of their time performing managerial duties, and agreed not to participate in any class action by the employees who did not settle. The appeal followed a summary adjudication in favor of the employer of its cross-complaint for breach of those releases, after a number of the settling employees went ahead and joined the proposed class action despite having signed these releases.

The Court of Appeal distinguished this situation from the settlement of claims in which the employer made payment of wages concededly due to the employee conditional on settlement of other claims. The court held that this rule did not bar enforceability of the settlements, since there was a bona fide dispute as to whether overtime wages were due at all.

Classification issues are often difficult. Whether an employer may legitimately rely on exceptions for administrative or executive employees to justify treating them as exempt turns on an analysis of such issues as the nature of the employee's job duties; the extent to which that employee participates in supervision, hiring and firing of other employees; and the percentage of time that such employees spend performing executive or administrative functions. In Chindarah, the Fourth District panel approved the settlement of good faith disputes over these complicated issues. Employee advocates would probably view the decision as an opportunity to exploit workers. Employers would probably view it as an opening for the possibility of negotiating settlements of legitimate disputes with employees, instead of forcing these issues to be resolved in an adversarial manner. Since I represent both employees and employers, I would say there is some validity to both perspectives.

Constitutional Confusion in California

2009-05-27T08:47:00.000-07:00

Yesterday's ruling by the California Supreme Court in Strauss v. Horton and related cases, was about as narrow a victory for the proponents of Proposition 8 that the Court could have rendered. Although the Court upheld the validity of Proposition 8, which amends the State Constitution to read that only marriage between a man and a woman is valid or recognized in California, the Court at the same time recognized the validity of the thousands of same sex marriages performed in California between the time of the Court's decision last year finding a constitutional right to marry regardless of sexual orientation, and the voters' amendment of the Constitution last November preventing the state from recognizing a marriage between same sex couples.

More importantly, the Court decided that Prop. 8 cannot affect anybody's substantive rights at all. Therefore, all Prop. 8 did was to deny the state the power to call a same sex union a marriage (except for the thousands of same sex couples who took advantage of the Supreme Court's ruling last year). For the future, the Court held that "same-sex couples continue to enjoy the same substantive core benefits afforded by those state constitutional rights as those enjoyed by opposite-sex couples--including the constitutional right to enter into an officially recognized and protected family relationship with the person of one's choice and to raise children in that family if the couple so chooses--with the sole, albeit significant, exception that the designation of 'marriage' is, by virtue of the new state constitutional provision, now reserved for opposite-sex couples." (slip opinion at p. 92)

It is ironic that in order to save Proposition 8, the Court had to render it almost meaningless. On the other hand, if the Court had held that Proposition 8 had the fundamental effects that its opponents claimed that it had, the Court might have had to overturn Proposition 8 as an invalid attempt to revise, as opposed to amend, the Constitution.

This result is certain to cause confusion, because the law will continue to recognize the marriages of gay couples who were married last year, while gay couples who obtain civil unions this year are entitled to all of the substantive rights of married couples, except that the state cannot say that they are married. Proposition 8 is still the law in California, but all it means is that only opposite-sex couples are entitled to the designation "marriage." Same-sex couples will have to search for another name to describe a relationship that they believe is just as sweet.

Photo from amgmedia.com

Moving Further Away from Notice Pleading

2009-05-20T12:03:00.000-07:00

On Monday, the US Supreme Court made clear in Ashcroft v. Iqbal (No. 07-1015) that its new formulation of pleading standards in the Twombley case, has broad application. Arguably, the Court raised the pleading bar even higher, as the Court's opinion could be read to encourage examination of the surface plausibility of the factual allegations of the complaint, and to allow courts to reject complaints if these factual allegations are deemed too "conclusory."

The case involved civil rights claims against the Attorney General, the FBI director, and others, on behalf of a Pakistani citizen who was arrested in the United States in the wake of the September 11 attacks. Plaintiff alleged that these high-ranking officials were the "principal architect" of and "instrumental" in carrying out a policy of harsh confinement of individuals based on their ethnicity, religion or national origin. These allegations were held too conclusory to meet Twombley's "plausibility" standard. Further, the Court held that the complaint failed sufficiently to allege that the defendants had adopted a policy of separately classifying persons of high interest based on their ethnicity or religion. The Court made clear that it was not rejecting the plaintiff's allegations as unrealistic or nonsensical, only that they were too conclusory. The court justified this result based on its supposition that a legitimate dragnet could have a disparate impact on Muslims or Arabs that would not necessarily have resulted from intentional discrimination.

Perhaps the heightened level of scrutiny given to Iqbal's complaint could be explained by judicial deference to the government's law enforcement efforts in the wake of the September 11 attacks. Perhaps it merely signals that the era of indulgence given to civil rights claims dating back to the 1950's and 1960's is over. Whatever the reason, the Court's striking down of this complaint will certainly inspire even more defendants to file even more motions to dismiss all kinds of complaints for failure to state a claim.

Class Actions

2009-05-18T10:20:00.000-07:00

Today the California Supreme Court made it easier to certify class actions in unfair business practices cases. In the so-called Tobacco II cases (S147345), the Court reversed a lower court order de-certifying a class action in the wake of Proposition 64, the law that modified California's unfair business practices statute (Business & Professions Code Section 17200 et seq.) to require that the persons bringing such claims have actually been injured themselves by the alleged unfair practices. The main issue before the Supreme Court was whether all class members must comply with Proposition 64's standing requirements, or only the class representatives. Specifically, the question was whether each smoker who is eligible to remain as a member of the class must demonstrate reliance on the tobacco companies' alleged unfair practices.

The case relied on interpretation of Proposition 64 itself, holding that the initiative was only intended to limit the persons who can bring an unfair business practices claim, not to change the nature or type of relief available. Therefore, the Court held the amended statute does not preclude a class action on behalf of other persons who might not themselves be able to demonstrate compliance with the new standing requirements. So if the class of smokers who had been exposed to defendants' advertising and marketing practices was validly certified in the first place, that certification did not become invalid merely by virtue of the passage of Proposition 64.

How this decision affects the definition and certifiability of class actions in other contexts, and even in other unfair business practices cases, will probably remain a subject of continued debate. The extent to which the members of a putative class must have similar interests to one another and to the interests of the class representatives, and the extent to which a class action is a manageable way of dealing with all of the different interests of class members, must still be addressed on a case-by-case basis.

De-Politicizing the Supreme Court

2009-05-06T13:44:00.001-07:00

Before everyone on both sides of the political fence starts gearing up for potential fights over judicial appointments, it might be useful to remember that the political stakes are really not as high as people might think. I'd like to make a pitch that the political line-up of the Court is almost always less important than the intellectual and moral caliber of the individual justices, but to prove that, I first have to give a run-down on the political composition of the current Supreme Court, just to show that it is not going to change that much no matter whom President Obama appoints to fill the upcoming vacancy created by Justice Souter's announced retirement.

The current Supreme Court must be seen as a fairly conservative bunch, though less conservative than the most ardent conservatives would wish. It consists of seven Republicans and two Democrats, although this is a bit misleading, since two of the Republicans, Stevens and Souter, have always been fairly moderate and are generally lumped together with the two Democrats to comprise the "liberal wing" of the Court. There are four fairly consistent conservatives, and one Justice, Anthony Kennedy, who sometimes sides with the liberals. President Obama may have the opportunity to appoint as many as three Supreme Court justices in the next several years, but the justices who are most likely to be replaced in addition to Souter, namely Stevens and Ginsburg, are all members of the "liberal" wing. Even if Obama appoints a flaming, card-carrying radical liberal to replace one or more of these fairly liberal justices, he cannot change the ideological balance of the Court very dramatically, although having a justice more in the spirit of Douglas or Marshall or Brennan might pull the entire Court a bit to the left. The only opportunity for President Obama to change the political balance of the Supreme Court significantly would occur if either Kennedy, or one of the four reliably conservative justices (Scalia, Thomas, Roberts, Alito) were to retire.

So in the meantime, it would be a refreshing change if people were to focus more on the achievements, abilities, and the character of the appointee for the Souter seat, than on his or her political inclinations or such superficial characteristics as ethnicity or gender.

Throwing Down the Gauntlet

2009-04-13T15:38:00.000-07:00

Why does a lawsuit begin with a complaint? This procedure must have evolved from the earliest days when litigants had the option of trial by battle or trial by ordeal, and eventually were offered the more civilized form of combat known as trial by jury. That history represents a progression from the idea that disputes must be decided by God or the King or at least a higher authority such as a judge, to a recognition that people can resolve disputes among themselves. The complaint might be seen as a remnant of a more adversarial process than the one that we actually use. A lawsuit begins with a challenge. The complaint calls an opponent out to a fight; it sounds like a declaration of war. But a lawsuit rarely ends with a fight. The vast majority of cases never end up going to trial, and most cases are resolved by a negotiated agreement among the parties somewhere along the way, perhaps after they are worn out with litigation. To quote Eliot, "not with a bang but a whimper." That being true, why start the process off on the wrong foot? Why do we pretend that we are initiating a trial process when we know that most likely the case is not going to be resolved in a courtroom?

Arbitration rules are more up-to-date. In initiating arbitration, a party files a demand for arbitration, not a complaint. While such a demand is assertive, it sounds more like an invitation to a meeting where the parties' competing claims will be dealt with in a business-like way. And that is what arbitration is supposed to be in fact.

Nowadays the procedure of choice in dispute resolution is mediation, and mediation takes place in one form or another in more and more of the cases initially filed as lawsuits in court. But the procedure is tacked on as an adjunct, or alternative, to the standard, even though rare, process of resolving the case by trial. The judge and the rules encourage the parties to cooperate in the discovery process. Then the court suggests, or perhaps requires, the parties to participate in a court-sponsored or private mediation program. Cases move down the litigation track, but the court encourages most cases to fall off the track. The alternative has become the mainstream, and the trial has become an anomaly.

Would it not make more sense to initiate a court proceeding by serving one's adversary with a paper called something like a "notice of dispute," rather than a complaint? Most people's natural response to a complaint is outrage or defensiveness. The complaint provokes an adversary to fight. But a notice advising an adversary that the parties have a conflict that they have not been able to resolve, merely reminds the adversary that both parties have a common problem, and that they need assistance in solving it. So instead of filing an answer, which I once heard a judge call the most useless piece of paper filed in a case, the defendant would file a response indicating that he either agrees that the parties have a dispute, or he agrees with some or all of the claim that the plaintiff is making. Either way, the parties are already making progress in acknowledging their common problem, and beginning to deal with it.

A notice of dispute might suggest ways in which the plaintiff would be willing to resolve the dispute: a trial, if necessary; an arbitration, if the other side is willing to waive their right to a trial; or some kind of mediation procedure. The defendant would then have the option of agreeing to the plaintiff's suggested procedure, or suggesting a procedure of his own. When the parties first meet in court, in a scheduling conference not too dissimilar from what occurs now, the court would send the parties down a mediation or arbitration or litigation track.

Of course, care would have to be taken to devise rules to prevent parties from gaming that kind of system. The rules would have to cover all kinds of cases, from the ones that under current rules turn into default judgments, to the highly contested cases that demand resolution by trial. But for all of the cases in between, the courthouse should more openly function as a facilitator of the resolution of disputes, and the parties would more openly acknowledge that that is what they came to court to do.

A thorough re-thinking of the rules only begins with the complaint. After that, it would be interesting to re-think the rest of the process, including the architecture of the courthouse itself. It would be helpful to test every step of the process by asking the question whether it serves the purpose of helping to resolve the dispute. It a particular procedural step does not serve that end, we ought to have another really good reason for doing it. Such a review should also endeavor to incorporate mediation into the normal processing of cases, instead of having it take place in the hallways, or in an unused courtroom, or a mediator's private office, as if mediation were an unwelcome stepchild that does not belong in court, when in fact it is becoming the court's favorite tool to resolve cases.

Arbitration a Creature of Statute More than Contract?

2009-04-07T15:00:00.000-07:00

One of the justifications traditionally advanced in favor of arbitration is that it gives the parties to a potential dispute the freedom to select the manner in which such a dispute would be resolved. Thus, parties can choose the forum for arbitration, and can limit the issues they submit to arbitration. One of the fears that is sometimes expressed about arbitration, however, is that the parties are almost completely at the mercy of the arbitrator they have chosen. They have very limited ability to obtain review of an arbitration decision that is unsupported by the law or the evidence. So the question has arisen whether parties can creatively design a system that combines some of the features of arbitration (e.g., limited discovery and simplified procedures) with some features of the judicial process (a genuine right to appeal an arbitrator's decision that cannot be supported on the law or the facts).

Last year, the United States Supreme Court rebuffed efforts to create these kinds of hybrid agreements in Hall Street Associates, LLC v. Mattel, Inc.. The Supreme Court held that the grounds specified in the Federal Arbitration Act for overturning an arbitration award are exclusive, meaning they cannot be supplemented by contract. Therefore, even though arbitration is thought of as a private, contractual remedy, the parties may not obtain enforcement of a private contract that provides for expanded judicial review of arbitration decisions.

California has chosen to follow a somewhat different path. In Cable Connection Inc. v. DIRECT TV, Inc.
the California Supreme Court accepted the Supreme Court's invitation to allow enforcement in the state courts of an agreement providing for judicial review of the merits of an arbitration decision.

Ironies and complications now abound. On the one hand, we have the freedom to contract. On the other, we have the federal policy favoring arbitration. On the other other hand, we have the possibility that the federal refusal to enforce private agreements to create a hybrid system may dissuade some parties from pursuing arbitration at all. And finally, we have a different policy in some states, which means that the enforceability of a private agreement may depend on which court gets the first crack at deciding whether or not to enforce it.

Electronic Discovery

2009-03-13T08:34:00.000-07:00

An article by Joseph Howie in Law Technology News argues that lawyers who do not become competent in working with electronic data may be committing malpractice. Fair enough. Since most records are now stored electronically, it is a necessity that attorneys understand how to retrieve and work with electronic databases. Furthermore, this article makes the valid point that better knowledge of how to work with computer records may actually save clients money, if it avoids duplication of effort in the form of expensive attorney time reviewing documents.

On the other hand, we can get carried away with electronic data. An industry has sprung up among computer experts who now call themselves litigation consultants, who sell their services in retrieving, coding and otherwise manipulating electronic data. These are the people who basically sponsor publications like Law Technology News. They have a vested interest in generating demand for their services, by creating the fear that unless we hire expensive computer consultants, attorneys may no longer be competent to try cases.

But let's not forget that the skills that were perfected by Cicero can still win cases, not our familiarity with the latest computer technology. I have seen power point presentations that put juries to sleep, while a good old-fashioned argument by an advocate connecting with an audience still has the power to keep people's attention. When we look at courtroom dramas in the movies or television, they keep coming back to advocates standing in front of a judge or jury making an impassioned plea on behalf of a client. Why? Because a good speech is still the most dramatic thing there is. Flashing an electronic pointer at a document on a screen cannot match this power. So electronic data is, while sometimes useful, sometimes over-rated as a visual aid.

If electronic data is not as useful as we sometimes think it is in presenting a case, then its value must lie in building a case. And I would be the first to acknowledge that we must be tenacious in obtaining the documents we need to build a case, of course including the ever-increasing amounts of electronic data. The problem, however, is that there sometimes seems to be no limit to the amount of effort we think we should spend, in asking for every possible document under the sun, in filing motions to compel the production of records that become less and less likely to contain useful information, in repeatedly reviewing, organizing and summarizing the contents of these documents, well beyond what is useful or digestible in presenting a coherent case. When it comes to documents, whether in paper or electronic form, most every case comes down to distilling a few nuggets from a mountain of garbage. So the costs of seeking and utilizing this information must be controlled.

My fear is that electronic data is going to break the back of the litigation system. We need to find some way of taming this monster, or we will have a system that can only be beaten by avoiding it altogether. In many ways, we already have that system.

Fair Use

2009-03-03T15:53:00.000-08:00

Is copyright law moving fast enough to keep up with the explosion of content on the web, and the ease with which it can be copied? An article in the ABA Journal, which is linked to the caption of this post, deals with the question of policing copyright violations pursuant to the Digital Millennium Copyright Act. The article discusses a recent California district court decision, Lenz v. Universal Music Corp, in which the the court held that before sending a takedown notice, a copyright holder has an obligation at least to consider whether the allegedly infringing material constitutes a fair use of copyrighted material. (The case involved a YouTube video of a small child dancing around with a few snippets of a Prince song playing in the background.) While it is easy enough to state the factors that a court is supposed to consider in determining whether a defense of fair use is available--including the type of use, the size of the portion used, and the effect of the use on the copyright's value (17 U.S.C. § 107)--these factors are not so predictably applied in practice. The court stated: "Undoubtedly, some evaluations of fair use will be more complicated than others. But in the majority of cases, a consideration of fair use prior to issuing a takedown notice will not be so complicated as to jeopardize a copyright owner’s ability to respond rapidly to potential infringements." I wonder how the court knows that.

The issue of fair use also comes up in the lawsuit that LA artist Shepard Fairey filed last month against the Associated Press, which claimed that his ubiquitous Barack Obama "Hope" poster infringed the copyright in a photo taken by an AP photographer. Fairey has apparently admitted that he copied the photograph, but relies on the type of use he made, as well as the alterations he made in the process of transforming the photograph into a painting, to justify a claim of fair use. I'm not willing to take a position on this case, except to say that it illustrates that the determination of the fair use defense is often a complicated, fact-intensive inquiry.

What is needed is a simpler way for copyright holders to be able to assert a good faith claim of infringement, and obtain the removal of offending works. What is also needed is a clearer mechanism for content posters to know whether they are entitled to use copyrighted works. (By the way, the illustration accompanying this post, juxtaposing the Mannie Garcia AP photo and the Fairey poster, came from the New York Times website. I say I am making a fair use of this material, but if the New York Times, or the AP, or Mannie Garcia, or Shepard Fairey has a problem with my using this illustration, please let me know and it will be removed immediately.)

Deal or No Deal

2009-02-18T12:04:00.000-08:00

The game show "Deal or No Deal" at first seems incredibly cheesy and simple-minded, but in fact can be seen as a fairly sophisticated experiment in the psychology of decision-making. In addition to serving as a psychology experiment, the show also makes a useful analogy to settlement negotiations.

There is some discussion of the show in the book How We Decide, by Jonah Lehrer. Lehrer discusses how the emotional part of the brain complicates what should be a simple rational calculation of the average value of the remaining briefcases vs. the offer by the "bank." One example went something like this: a contestant was offered about $110,000 for a briefcase which could have had a value of either $10 or $5000 or $10,000 or $500,000. The contestant rejected the offer, based on the not-entirely irrational hope (odds were 3 out of 4 in his favor) that one of the low-value briefcases would be eliminated in the next round, and the bank would then increase the offer. What was interesting was that after the next round, when the $500,000 case was sadly eliminated, the contestant could not bring himself to accept any of the bank's subsequent offers, even though the bank was offering much more than the average of the remaining cases. His mind was instead completely focused on the "loss" of $100,000 he had just suffered.

Parties do not act rationally in settlement negotiations either. They bring a lot of considerations to the table that have little to do with the actual options available to them, and these considerations must be addressed before they can make an intelligent settlement decision. Plaintiffs tend to focus on the best case scenario. They discount the cost of getting to trial, and the possibility of getting less than they feel they deserve. Defendants tend to think that any amount paid to the plaintiff is more than the plaintiff deserves. So the plaintiff might think that the amount in his "case" should be $1 million, while the defendant thinks that the amount in the case should be zero. Neither party correctly perceives the values and the odds of the other possible cases.

The process of mediation is designed to enable parties to correctly assess the probabilities of all possible outcomes, so as to enable both parties to achieve a result that is better than the costs and risks of trial. I don't agree with those mediators who say that the test of a good settlement is that it should make both sides equally unhappy. A good settlement should make the parties as happy and relieved as the game show contestant who is jumping up and down with excitement at the six figure offer made by the bank. The reason that contestant is so satisfied is that he finally understands that while his case might be worth $1 million, there is an equally good chance that his case is actually worth almost nothing. The only unsatisfying part of settling a lawsuit is that, unlike the game show, the participants in the lawsuit never get to find out what was in their case.

The Century Plaza Hotel

2009-02-12T10:19:00.000-08:00

We have reached that point in history when we must start thinking about 1960's architecture as historic. The difficulty this presents is that we also think of 1960's architecture as ugly and shoddy. Much of it was not built to last, and much of it should probably be torn down, and good riddance to it. But the 60's era still produced some memorable works. Some are monumental despite being somewhat bland (e.g., the downtown Music Center); some are fun and whimsical (coffee shops and fast food restaurants); and some spectacular in their "space age" beauty (think of the LAX Theme Building, or a number of cliff-hanging houses). I was active in representing the Los Angeles Conservancy in the fight to save the Cinerama Dome, a unique and fabulous 1960's structure, and as a result, that building is now the centerpiece of a thriving, state of the art, theatre complex.

The current owners of the Century Plaza Hotel, another iconic 1960's masterpiece, are now considering tearing it down and replacing it with two new towers. (Click on the title of this post for a link to the Los Angeles Conservancy issues page discussing the threat to this piece of history.) Designed by the same architect who designed the World Trade Center towers and LA's own twin towers across the street from the hotel, here is a building that symbolizes an era, that stands as one of the centerpieces of an important 1960's new downtown, Century City, and that hosted numerous important events, including being thought of as Ronald Reagan's "Western White House." Not only that, the structure, in contrast to much 1960's architecture, is undeniably beautiful. If we are thoughtless enough to allow this landmark to be torn down, we would be destroying yet another prominent marker of our time and place.

Fair Pay

2009-02-04T22:27:00.001-08:00

Trying to explain the significance of the Lilly Ledbetter Fair Pay Act passed by Congress this past week made me realize there must still be quite a bit of confusion out there about the meaning of this legislation. Most informed people seem to know it was passed to overturn a recent Supreme Court decision that denied a claim by a female employee that she was not paid as well as her male counterparts. Less well known is that the Supreme Court case was based on an interpretation of the statute of limitations as it applies in statutory sex discrimination cases under Title VII of the Civil Rights Act of 1964. More specifically, the issue was whether the employer's act of discrimination was the negative evaluations Lilly Ledbetter received in the past (which she had proved resulted in part from discrimination). These evaluations caused her to receive lower pay than similarly-situated men. Alternatively, the act of discrimination could be viewed as the ongoing practice of paying her less than those men, i.e., as ongoing discriminatory treatment. The Supreme Court held that it was the former, and therefore her claim was barred because it was brought outside the limitations period applicable to the act of discrimination at issue.

It is interesting that this issue was never resolved at the Supreme Court level before 2007, even though it has potentially been around since 1964. That suggests that the problem confronted by Ledbetter, while significant, does not arise that often. In Ledbetter's case, it may have arisen because her case was only allowed to proceed under Title VII instead of the Equal Pay Act, which would ordinarily provide a remedy for pay disparities based on sex. What is also interesting is that this case, even though its effect seems quite limited, became something of a cause celebre. The new Congress and the new administration made it one of their first priorities to reverse this case. That suggests that the new Congress, while interested in broader civil rights enforcement, is also interested in asserting its power and sending a sharp message to the Supreme Court. No more messing around with commonly-accepted interpretations of legislation in a way that seems to defeat their remedial purposes! The Supreme Court can now expect to be slapped down whenever that occurs again.

The end of the billable hour?

2009-01-30T13:56:00.000-08:00

The New York Times reports that the recession is causing law firms to re-think the basic business model of the billable hour. I wonder if this is really the case, but if firms truly do start to re-think the way they deliver and charge for legal services, I applaud the trend. Much has been written about the inefficiencies and perverse incentives created by what has become the standard business model. Charging by the hour penalizes efficiency, and encourages lawyers to engage in time-consuming tasks that may be of marginal benefit to the client. Coupled with the compensation structures at most law firms, which reward lawyers for racking up billable hours rather than for saving clients' money, this system seems ripe for re-examination particularly during an economic downturn when clients would like to reduce their legal expenses.

The Times piece acknowledges that there is only anecdotal evidence that law firms are actually offering alternative fee arrangements. Alternative billing arrangements have not become more prevalent in part because lawyers do not really know what their services are worth, and have little experience in estimating the total cost of a matter. In anything other than the simplest matters, many variables present themselves that make it difficult to determine in advance how much time and effort need to be put into an engagement. In my experience, clients have also shown some resistance to alternative billing arrangements. They are used to assessing the reasonableness of rates and the number of hours spent on a project, but less accustomed to evaluating the total cost of a matter.

I have always been open to alternative billing arrangements. Working on a contingent fee is often the most attractive way to proceed on a plaintiff's case, for both lawyer and client. When representing a defendant, it is more difficult to set a fee based on something other than a simple calculation of rate times hours spent. Defendants in a lawsuit rarely have an upside. They only have the cost of defense, and the cost of settlement or verdict. While a total victory for the defense can reduce the verdict cost to zero, the defendant still has to pay its own legal expenses, unless the case allows for recovery of attorneys' fees. So offering a flat fee for a defense case can be intimidating for both lawyer and client. If the case settles early, the client perceives a windfall for the lawyer. If the case proceeds all the way to trial, the lawyer may be underpaid for his work, and has less incentive to spend hours on case preparation. A realistic flat fee determined at the outset of a complicated case may be a larger number than the client is prepared to accept. Other alternatives are budgeted fees, flat monthly retainers, graduated fees for disposition of the case at various stages, and incentive fees based on the amount of the verdict or settlement. All these options are worth exploring.

Recession-Era Litigation

2009-01-21T15:03:00.000-08:00

The first thing we think about in difficult times is our continued survival--our ability to keep our businesses afloat. For many law firms, that has meant re-tooling, layoffs, cost-cutting, discounts, and whatever other measures are necessary to continue to make a living. I think we need to do more than that. To me, this seems like a good time to re-examine the way we practice, so as to help clients conduct their businesses more efficiently.

One part of that re-examination might ask whether litigation can be conducted more efficiently.
That doesn't just mean cutting billing rates, or coming up with clever alternative fee arrangements. To look at the profession that way would treat the provision of legal services as a commodity. It's not enough to sell our billable hours more cheaply, or to figure out better ways to package those hours. It's more important to find ways to solve problems for clients without using so many of those hours. For example, we know that most of the work that is done during the pre-trial phase of a case is of little use at trial. I rarely find much material in the reams of pre-trial motions that are sometimes filed that can be used at trial. I don't introduce most of the documents obtained during discovery as exhibits; and I don't cite very much of the deposition testimony. So it would seem that one way of conducting litigation more efficiently is to avoid doing work that is not going to help settle the case, or help try the case. This goal may be easier said that done, since we don't always know in advance what will prove useful later. But it is probably good to question whether the work we are doing is likely to prove beneficial if the case goes to trial. We also know that more than 90% of cases never even go to trial. So another way of conducting litigation more efficiently is to try to reach settlements sooner, before a huge amount of time and effort are put into pre-trial motions and discovery. In most cases, this time and effort does not change our view of the facts significantly. Therefore, it generally makes sense to explore settlement early.

Another part of the re-examination involves questioning whether the tools of litigation are the best means of resolving the client's problem in the first place. That means exploring other means of dispute resolution. It also means trying to work out issues that arise during a lawsuit using negotiation rather than litigation. Every disagreement with one's adversary need not turn into a pre-trial motion or an angry letter. Generally the results that can be achieved by a little give-and-take are just as good as the results that can be achieved by bringing every problem that arises in a case to the attention of the judge.

I think sometimes we lawyers are afraid to be conscious of costs, and also afraid to explore alternative means of resolving disputes, not only to preserve a way of operating that is beneficial to ourselves, but also because we are afraid of being seen as less than the most zealous possible advocate of our clients' interests. We assume that clients are going to be most impressed with a scorched earth, aggressive litigation strategy. Many clients tell us that they want such an aggressive approach, and they want to give the other side no quarter. I believe, however, it is our job to remind clients of the costs of such a strategy, and also to advise them that such a strategy does not always lead to the best result. We can do this without losing sight of the objective of achieving the best possible result for the client, and without sacrificing any of the preparation that is necessary to prepare the most effective case for our clients.

Justice

2009-01-07T08:42:00.000-08:00

If there is one federal agency crying out for reform, it is the Justice Department. Attorney General Gonzalez was forced to resign in disgrace after losing the confidence of members of Congress from both parties. The politicization of the Justice Department, brought to light by the firings of a number of U.S. Attorneys, has still not been fully investigated. And the Department's policies on torture and wiretapping may leave the greatest stain of all on the Bush Administration.

Therefore it may be appropriate that Obama's nominee Eric Holder receive careful scrutiny from the Senate. But the hostile tone of Senator Specter's remarks yesterday was still surprising. Rather than focusing on the issues of integrity, politicization, and adherence to the rule of law and the Constitution, Specter instead questioned whether Eric Holder would be sufficiently independent from the President. Perhaps some of this criticism is a reaction to the disastrous leadership of Alberto Gonzalez, but we should not allow legitimate concerns about the mistakes of past administrations to hobble future administrations that are going to be facing different issues.

Traditionally it has been considered helpful to the functioning of a coherent administration, for the Attorney General to be close to the President. The strong arm of the law, whether to enforce civil rights, or to shape antitrust policy, or to regulate securities markets, is an essential tool of any administration's ability to pursue its goals. The Attorney General must be in sync with the President on these issues. President Kennedy chose his own brother for the job. President Reagan appointed his close confidants William French Smith and Ed Meese. President Clinton, on the other hand, was saddled with an attorney general who was highly competent but never especially close to him, and as a result found himself the subject of several questionable investigations, and also never seemed fully in control of this important arm of the government.

The idea that the Justice Department should be independent of the Executive Branch of which it is a part is an idea that itself should receive scrutiny. Granted that the Executive Branch itself is not above the law, and that members of the administration must remain subject to investigation for abuses and illegalities. Granted also that the Attorney General's first loyalty must be to the Constitution and the law, not to the president. Still, the Attorney General's primary role is not to serve as a watchdog over the President who appointed him, but rather to act as an agent of the President. If we insist that the Attorney General remain wholly independent of the President, Presidents will respond by moving more of the legal functions of their office inside the White House, in the manner that the White House National Security staff has sometimes been used as a miniature State Department when the Secretary of State was viewed as too independent or ineffectual. The Cabinet should be allowed to function as a team under the direction of the President. Congress has an important role as a check on the Executive Branch, a role which it too often abdicated during the Bush administration. Congress should not be foisting that role onto the Cabinet officers themselves.

Settlement Agreement Enforceability

2008-12-24T15:06:00.000-08:00

It is a common practice in settlement agreements providing for payments over time to include a provision for entry of a stipulated judgment in the event of default, in an amount greater than the balance of the payments due. This provides an obvious incentive to make the payments that the parties have agreed upon. Many attorneys seem unaware that these provisions are probably unenforceable in California. In Greentree Financial Group, Inc. v. Execute Sports, Inc., 163 Cal.App.4th 495 (4th Dist. 2008), the court reaffirmed a fairly longstanding but somewhat obscure precedent holding that such provisions should be viewed as penalties and cannot be enforced.

I do not expect these provisions to disappear, however. When I recently mentioned to a settlement judge that these kinds of arrangements are unenforceable, he told me that he would not stop advocating them, since they still provide some incentive to perform the agreement (by the paying party), and therefore give some comfort to the receiving party, so they are still helpful to him in concluding settlements. So much for the power of the courts of appeal to affect practice.

Law and the Brain

2008-12-01T23:53:00.000-08:00

Our knowledge of how the brain works has expanded dramatically. I tried to catch up with some of this research at the conference mentioned in the post below, whose main topic was how the legal profession, specifically mediators, can make use of the latest discoveries about the brain. It is really interesting to scientists to find out which parts of the brain light up during various kinds of activity, but is it possible for lawyers deliberately to stimulate the parts that will persuade juries to think favorably about their clients? Can mediators employ techniques used by brain researchers to boost the levels of brain chemicals that are conducive to obtaining a settlement?

It is interesting, for example, to learn that research has verified that humans are more guided by their emotions than their reasoning ability, but the best trial lawyers have always known this, even if they were not aware of which parts of the brain were responding to emotional arguments and which to logic. Clarence Darrow was famous for making the jurors and spectators weep during his closing arguments. These were not appeals to logic, but to emotion.

What may be even more interesting than knowing how brains typically react, is knowing how to manipulate the way brains can respond to various stimuli. I heard a lecture by Dr. Jeffrey Schwartz, and later picked up his book The Mind and the Brain in which he talks about how we can not only direct our brains to use logic to overcome instinct, but can also expand the areas of the brain devoted to the tasks that we practice. (My terminology may not be the same as neuroscientists, but hopefully I am getting across similar ideas.) Schwartz described an experiment in which people were shown pictures of gruesome car accidents, and taught to overcome their natural inclination to react with disgust or fear. They did that by trying to look at these pictures as if they were emergency medical technicians with a job to do. When they re-evaluated the same information with these instructions, researchers, using imaging technology, could see the subjects activating higher order mental processes instead of more basic "fight or flight" responses.

Often lawyers must deal with people's emotions, either to exploit them for the purpose of pleading a client's case, or to overcome these emotions for the purpose of getting a client or adversary or fact finder to look at the facts from a more logical viewpoint. The ability to encourage people to concentrate their minds on the facts of a case from various perspectives, which is an important part of what we do at trial, seems to be a powerful tool. Science seems to back up what the most skilled practitioners have known for a long time about techniques that are persuasive.

Solution-Focused Mediation

2008-11-17T18:03:00.000-08:00

I heard a talk at the Southern California Mediation Association conference last week, by a Dutch mediator Fredrike Bannink, who described her solution-focused method of conducting mediation, which minimizes talking about the problem that caused the conflict, and instead concentrates on strategies that might work to resolve and prevent conflicts. Rather than asking the parties to argue their positions, she asks them questions like, What are your hopes? What difference would it make if the conflict could be resolved? What strategies are working for you? What would be the next steps to solving this problem?

This approach to me crystallized the difference between mediation and litigation. Litigation looks backward, and invites the parties to rehash and perhaps even exacerbate the problem that caused the conflict between them. When mediation does the same thing, it may not be a better process. But when mediation asks the parties to think about how their lives might be better without the conflict, or about what aspects of their relationship are positive, then it can truly present an alternative way of resolving a dispute.

Bannink illustrated her method by asking two of the mediators in the room to role-play a divorcing couple fighting about the usual custody and property issues. She asked the pretend husband how he would rate his relationship with his wife on a scale of 1 to 10, and he gave it a 4. Many people would react to this statement by asking about all the reasons the relationship was so bad in his mind. But Bannink asked a question that caused an audible murmur in the room, almost as if a collective light was going on in our minds. She asked: "What makes up the four?" In other words, why is it a four when it could have been a one or a two? This forced the husband to talk about feelings he had in common with his wife, such as how much they both loved their kids. Then the mediator could build on the positive aspects of the parties' relationship to attempt to create an agreement.

This method may be a bit more difficult to apply in the situation where the parties want nothing further to do with each other after the dispute ends. But even in that situation, there may be an opportunity to explore the positive aspects of the parties' past relationship that could form a basis for a future agreement.

Causes of Increased Litigation Costs

2008-11-12T10:44:00.000-08:00

Gregory Joseph published an article entitled Federal Litigation--Where Did it Go Off Track? in the Summer 2008 issue of the ABA's Litigation magazine that helpfully lists a number of reforms to the Federal Rules of Civil Procedure (and their interpretation) over the past 25 years that have had the effect (intentional or not) of substantially increasing the cost of federal litigation. These include the expansion in the applicability of Rule 11 sanctions, the increased reliance on motions for summary judgment, new opportunities to challenge the admissibility of expert testimony, new rules governing class actions, new rules governing electronic discovery, and a re-statement of Federal pleading requirements (discussed below in my post of May 23, 2007).

Mr. Joseph believes that these changes have made a federal forum more desirable for defendants, and less desirable for plaintiffs. I would agree that these changes have made federal litigation more expensive, but I think the effects are not limited to creating a federal court advantage for defendants and a disadvantage for plaintiffs.
First, the effects of these changes are not limited to federal court. State practice also tends to follow the federal rules, whether by legislative enactments, judicial interpretations, or the translation by practitioners of federal customs and practices from federal courts to state courts. Therefore the effects of increased opportunities for procedural maneuvering in federal court trickle down to the state courts, and are increasing the cost and complexity of civil litigation everywhere.

Second, I think that plaintiffs have the ability to take advantage of rule changes as well as defendants. In some cases, it may be to the plaintiff's advantage to increase the cost of litigation, and to the extent the rules enable parties to do that, parties will take advantage of those opportunities.

What we ought to consider, in dealing with the next quarter century's proposals for procedural reforms, is whether it is possible to reverse this trend. We ought to pay more attention to whether new rules or their interpretation will have the effect of either streamlining or increasing the costs of litigation, and think hard about whether the system can bear additional procedural complexity. We ought to be trying to reduce the opportunities for wasteful and unnecessary motion practice. We should be trying to reduce the cost of discovery. We should be trying to create opportunities for litigants either to settle their disputes, or to try them expeditiously.

(photo from freedigitalphotos)

Trial or Settlement

2008-08-08T10:02:00.000-07:00

A new study, reported in the New York Times today, suggests that most of the people who choose to take a case to trial rather than settle are making a mistake, since in most cases, the amount they would have received (or would have had to pay) in settlement is more favorable than what they obtained at trial. The article suggests that perhaps attorneys, who have a financial interest in continuing the case to trial, do not sufficiently encourage their clients to consider settlement rather than trial. I believe this does happen sometimes.

I have seen cases where a client rejected a settlement offer and obtained a less favorable result at trial, particularly when the costs of trial are taken into account. Since that is such a painful experience for clients, I try to advise clients as fully as possible of the costs and risks of trial versus the amount of the settlement offer. My feeling is that it is much better from a client relations point of view to be as realistic as possible about the costs and risks of trial. Being overly optimistic does not serve the client's interests, and ultimately does not serve my interests, because the client is not going to be happy about an outcome at trial that is worse than the client expects. Whether to accept a settlement offer should therefore be the client's decision, aided by his lawyer's best assessment of the amount of the proposed settlement as opposed to the costs, risks, and possible upside of trial.

There is a moment in most cases, or perhaps several moments, when the client has to choose between two problematic alternatives. At some point the plaintiff will usually be offered the choice of accepting a settlement that is less than he believes he is entitled to, or of taking a case to trial and receiving an unknown amount, perhaps nothing. From the defendant's point of view, the choice is between paying more than the defendant feels it should, or taking the risk at trial that the defendant will still have to pay more than it should, plus accumulating costs and attorneys' fees. You will never know if you have made the right choice unless you take the case all the way to trial, and in most cases you do not want to do that, because you will find out that settlement was a better alternative.

This study suggests that most people are smart to settle cases, and the vast majority of cases do settle. But I would not be so hasty to accept the conclusion that most of the people who take their cases to trial are foolish. It is only because some people are risk-averse enough to try their cases that we have enough information to value settlements for the rest of the cases.

The Burden of Proof in Age Discrimination Cases

2008-06-27T16:00:00.000-07:00

Last week the United States Supreme Court may have made it easier for plaintiffs to succeed in age discrimination cases by clarifying that the employer has the burden of persuading the fact-finder of the reasonableness of "reasonable factors other than age" justifying an employment decision that has a disparate impact on older workers. In Meacham v. Knolls Atomic Power Laboratory, No. 06-1505, the employer laid of 31 employees based on the scores on performance tests administered by supervisors. Because the scores contained a subjective element, they were identified as a factor that could have accounted for the test results' bias against older employees. (30 out of the 31 laid off employees were over 40.)

The result of the Supreme Court's decision is to place more power in the jury's hands to evaluate the reasonableness of the practice identified as having a disparate impact on older employees. In other words, if an employer takes an action having an adverse impact on older workers, it is not enough for the employer to say that that action had nothing to do with age. Rather, the employer must persuade the jury that the action was reasonable.

Law and Politics Revisited

2008-06-09T09:42:00.000-07:00

In an earlier post (Nov. 15, 2007), I compared the 2008 presidential candidates to the choice between litigation and mediation. At the time I was writing the favored candidates were Rudy Guiliani and Hillary Clinton, both candidates with a combative style. After a fairly drawn-out process, both parties have headed in a different direction, about to choose John McCain and Barack Obama. To me this indicates that the country is in more of a problem-solving mode than a fighting mode. But of course there will still be some fighting ahead.

And for all the fighting that has taken place so far, this year is absolutely tame compared with some years in the past. Last week I picked up an advance copy of Norman Mailer's Miami and the Siege of Chicago, which is being re-issued this summer by NYRB Classics. There may be nothing better out there to give some historical perspective on the campaign this year. It makes you wish there were a Norman Mailer around to write about this year's campaign.

The old era of political conventions was coming to an end in the late 1960's. But the candidates still made the rounds of the delegations trying to pick up some extra votes, and the outcome was not certain heading into the convention. Nowadays conventions are so stage-managed and choreographed they have lost most of their drama. They are infomercials for the party's candidates, really, and we will not tolerate the kind of uncertainty leading up to the convention that used to be taken for granted. We expect that the nominee will be selected by the voters, not the delegates. Not that these changes are bad necessarily, it's just interesting to be reminded how different our time is from the recent past.

Even the 1968 Republican convention allowed for some infighting. While Nixon had the nomination pretty well locked up before the convention, Rockefeller was hoping to get enough votes on the first ballot that he could turn the convention to him in a subsequent ballot. On the Democratic side, Humphrey went into the convention also with a comfortable lead, but knew that anything could happen that year. Eugene McCarthy still had enough loyal troops to cause trouble, though never enough to gain the nomination. George McGovern had just entered the race, trying to pick up all of the Bobby Kennedy delegates. A late movement was trying to draft Teddy Kennedy into the race. In Mailer's view, Lyndon Johnson sat behind the scenes the whole time, deliberately trying to split his party to preserve his legacy. And that was only the nomination fight. The real drama, with real blood flowing, of course took place on the streets outside the convention hall.

We think we have lived through an epic nomination battle this year? Compared to 1968, this was nothing.

Arbitration Agreements in Consumer Cases

2008-04-30T17:22:00.000-07:00

An extended version of my December 19, 2007 post on pre-dispute arbitration agreements (with footnotes) has been published in the newsletter of the American Bar Association Committee on Alternative Dispute Resolution for Spring 2008. Copies are available on the ABA website, but only for members of the ABA Section of Litigation, by clicking on the title above. Or email me and I would be happy to send you a copy.

Law and Movies

2008-01-04T09:51:00.000-08:00

Although no courtroom dramas like To Kill a Mockingbird or A Few Good Men, or even My Cousin Vinny are among the major movies this year, quite a few have interesting legal themes. Michael Clayton, for example, while offering a not very realistic view of a law firm "fixer," does illustrate the ethical dilemmas of representing a client which is hiding some very damaging information. Tilda Swinton, as the general counsel, takes an extreme approach to client loyalty, by actually getting involved in killing witnesses. One hopes that her fate will dissuade others from following her example. And Tom Wilkinson, as the outside lead trial lawyer, does a beautiful job of going off the deep end when he can no longer stand representing a guilty client. Of course the ethically and morally correct answer is to follow neither of these examples. There is no reason why a lawyer cannot represent a client that is not a perfect angel, and still sleep well at night. But you have to disclose the damaging information if it was requested by the other side (presumably they are competent enough to do that) and then get the best result you can for that client in light of that information. Following this simple rule should prevent most lawyers from committing murder or suicide.

Then there is Atonement, which I haven't seen yet, but that does not stop me from commenting because I did read the book. One key situation arises because of the legal system's limitations in dealing with the reliability of eyewitness testimony. The law can only examine what witnesses actually ascertain through their senses, chiefly what they see and hear. But the mental process of observing is much more complicated than the law allows. In fact, it may be impossible for the mind to process a visual image without taking other information into account. So when young Briony "knows" who the guilty party is, she knows this by constructing a series of impressions that she did not properly understand. But the law forces her to say, erroneously, that she "saw" him commit the crime, leading to a tragic result. Judges and juries are only beginning to come to terms with the unreliability of eyewitness testimony. Often, though, it is all we have to work with. Stories like Atonement help us appreciate the pitfalls.

Sweeney Todd is gruesome but well worth seeing for its gorgeous music and production. Its central drama arises from the corruption of the legal system. Look at the trail of brutal murders prompted by the actions of one unjust and corrupt judge! Finally, we have in No Country for Old Men, as good an illustration as any of an essentially lawless society. The police are either corrupt or ineffectual, and the law of the jungle prevails. In such a world, even the heartless killer, as well as the heroic self-sufficient strong man, cannot survive.

My.facebook

2008-01-03T17:04:00.000-08:00

When my seventh grade son asked me if he could have a Facebook page, I was inclined to say yes, mainly because I was pleased that he was even asking my permission. After briefly looking at the site, I also thought it seemed harmless enough. So I gave him permission, on condition that I would have access to his page. To do that, it seemed I had to sign up for a Facebook account also so I could be one of my son’s “friends.” This process took less than five minutes.

I was not too surprised to find that many of my kids’ classmates have Facebook pages, and that they use them to express all kinds of silly stuff. What did surprise me a little, however, was how slow my own generation has been to get on board. A search for my high school, college, and law school classmates yielded none of my actual friends (though one turned up subsequently). I wondered why more people my age are not trying this new networking device. Are we such old dogs that we cannot learn any new tricks?

I also wondered whether more parents shouldn’t be monitoring their children’s Internet activities more closely to discourage the kind of rude, crude and sometimes lewd behavior to which the denizens of MySpace and Facebook have been known to succumb. I know that people don’t always realize that everything they say online could become public, and I hope my own online presence will help my kids remember that. But I also wonder whether or not I am the one going overboard by snooping into their private zones. Perhaps my son’s friends will think he is uncool for allowing his dad to be his friend. I certainly never thought of my parents as my friends when I was in junior high school. And I do not want to harm my children’s popularity, as I know that is of critical importance at his age.

Thankfully, my son does not seem to mind my presence. In fact, he likes to send me messages, and invites me to play games with him. And one of his friends even invited me to be a friend. And though it is no doubt necessary for our children to have areas of privacy and the freedom to express themselves to their peers, it may be even more important to break down some of the barriers between interest group communities in both the virtual and real worlds. We need not limit our friends to those of our own age group, or who share common interests, or who belong to our classmate or workgroup community. We can reach out to others whose interests and beliefs may diverge a bit from ours. We can even try to create some bridges to our own kids.

Pre-dispute Arbitration Agreements

2007-12-19T10:01:00.000-08:00

Congress is currently considering legislation to make pre-dispute arbitration clauses unenforceable in many consumer transactions, such as employment, franchise and medical contracts. The problem with such clauses is that people do not understand the rights they are giving up at the time they sign them. Only after a dispute arises do most people take the time to consider whether they would be better off suing in court, which offers the advantages of much lower filing fees and a trial by jury, over filing an arbitration, which can offer speed and simpler procedure. Such legislation may have been prompted by federal court decisions which strongly favor the enforceability of pre-dispute arbitration clauses. These decisions contrast with the approach in California, for example, where such clauses are much more strictly scrutinized. (See my previous post on the Abramson case in which I persuaded a California Court of Appeal to throw out a one-sided arbitration clause.) The Democratic majority in Congress may now have the votes to pass what is viewed as "pro-consumer" legislation.

Opponents of such measures are always quick to point out the benefits of arbitration, mainly its streamlined procedures compared to litigation, and the resulting savings in attorneys' fees. They will tell you that only trial lawyers (like me) favor lawsuits, because lawsuits benefit trial lawyers. What these opponents never explain is the need to force consumers to agree to arbitration in advance. If arbitration is really better for all parties (consumers and business) nothing prevents both sides from agreeing to arbitration at the time the dispute arises. But consumers who have both options frequently prefer to go to court, because the filing fees are much less, and because they want a jury (if only to scare the defendant into paying a better settlement), and because they may want the right to appeal, and other rights that are lost in arbitration. The possibility of increased legal fees is often not an issue for consumers, because lawyers are willing to accept cases they perceive as worthwhile on a contingent fee basis. Businesses, on the other hand, impose arbitration clauses because they know that they are generally better off with arbitration. Businesses are afraid of runaway jury verdicts, and they believe they will save legal fees in arbitration. So let's be honest about this issue. Arbitration clauses would never exist in the form contracts that people often have to sign to open a brokerage account, or obtain a job, or have an operation, unless the businesses who draft such contracts believed they were better off with arbitration. If the consumer is also better off agreeing to arbitration, there is no need to force the consumer to sign an arbitration clause before any dispute arises, because the consumer can always agree to arbitrate later.

The real argument in favor of pre-dispute arbitration clauses is seldom made, because it is based on a more sophisticated understanding of economics, and it highlights the trade-offs that these clauses impose. The effect of a business requiring a consumer to give up the right to trial by jury is to enable the business to sell the product or service cheaper (or pocket more profit). Thus, a business which is not compelled to defend the occasional lawsuit by its employees may be able to pay higher salaries. A hospital might be able to charge less because patients have waived their right to sue the hospital. Thus, the real benefit to consumers who are forced to sign arbitration clauses is the cost savings they receive in the product or service, not the supposed benefits of arbitration in the event a dispute arises. It is seldom beneficial to give up your rights if you are planning to have a dispute. You only want to waive your right to trial by jury after you have fully considered the pros and cons of doing so, which you cannot do in advance of a dispute. Generally, only those consumers who never have a dispute will benefit if they give up their rights. So the real question is whether the sacrifice of rights for injured parties can be justified to provide a cost savings to everyone else.

Interpreting Constitutional Rights Consistently

2007-11-30T10:51:00.000-08:00

Last week the U.S. Supreme Court agreed to decide whether the Second Amendment to the Constitution grants individuals the right to own guns. When controversial issues like this head to the Supreme Court, people tend to take predictable positions based on their positions on the underlying issue at stake. If the issue is gun control, "liberals" tend to support increased restrictions on firearms, and "conservatives" tend to oppose them. Few people consider whether the Constitution protects the right to own a gun. To the extent people, or even judges, recognize that issue, they are quick to interpret the relevant Constitutional provisions in a way that supports their political position. This tendency leads to inconsistency.

Here is what I mean: In abortion cases, conservatives always ask where in the Constitution does it specify the right to an abortion, and decry the alleged tendency of liberal judges to read rights into the Constitution that are not explicitly spelled out. But if the issue is gun control, conservatives favor an expansive reading of the Second Amendment rather than a strict textual approach. Liberals are equally inconsistent in the opposite direction. They deny that the Second Amendment can be read to supply any individual rights at all, and they deny that the right to own a gun is important enough to be protected by more general Constitutional provisions of liberty. The right to an abortion, on the other hand, need not be expressly stated in the Constitution since it is so obviously fundamental.

If we were to interpret Constitutional rights in a more consistent way, we may not always get the result that comports with our political preference, but we might create more respect for the document's principles, and for the idea of the rule of law. The political beliefs of individual judges would not be wholly determinative of the result, and confirmation battles over judicial appointments might not be quite so contentious. Some people say we can arrive at more consistent results by using an "original intent" method of interpreting the Constitution. But those who espouse that method (notably Justice Scalia) are not always consistent in its application. No one who signed onto Bush v. Gore (which uses a "liberal" interpretation of voting rights and a disdain for states' rights to reach a "conservative" result), can claim to follow this method consistently. Moreover, there is much evidence from the writings of the founders of the Constitution that they themselves never intended the rights the document recognized to be interpreted based solely on the standards and practices of the eighteenth century. Rather than arguing about original intent, it would seem more productive to recognize that the same evolving methods of Constitutional interpretation should be employed regardless of whether the result comports with the political preferences of the left or the right. So liberals should perhaps recognize that many law-abiding people in this country consider gun ownership to be among the most sacred and important manifestations of their personal freedom, and that the Constitution, perhaps not clearly in the text, but in its general protections of personal liberty, does perhaps offer some protection to the right of law-abiding citizens to own a gun. By the same token, conservatives should recognize that the freedoms they espouse for economic activity and property rights might also extend to the right of individuals to read and watch what they want, and do with their bodies what they want.

As for the DC gun control ordinance case accepted by the Supreme Court, it seems to me perfectly possible for the Supreme Court to recognize that the individual right to own firearms may be deserving of some Constitutional protection, while also recognizing the right of the State to place reasonable restrictions on that right. Banning the private ownership of handguns could very well be permissible even in a world where the Constitution protects the individual's right to keep a rifle at home. I am not making a prediction as to the outcome here, but my hope is that whatever the Court decides, it will not be the usual 5-4 conservative/liberal split that only breeds more cynicism about the entire legal process.

Litigation and Politics

2007-11-15T09:14:00.000-08:00

I have always been a political junkie, but have found myself increasingly disenchanted with the tone of national political debate over the years. It seems that almost 40 years later, we are still playing out the divisive conflicts over the Vietnam war, and that, perhaps since Nixon's resignation under threat of impeachment, we have been locked in an endless cycle of payback and recrimination. In looking over the field of presidential candidates for next year's election, I ask myself which ones might have a chance of getting us beyond this vicious cycle. Unfortunately, it appears that most of the candidates on both sides feel compelled to appeal to the most rabid members of their respective bases, and therefore offer little hope of reconciliation. On the Republican side, it would appear that John McCain offers at least some chance of openness to good ideas regardless of whether they fit with his party's traditional ideology. On the Democratic side, Barack Obama is actually talking about transcending the traditional nastiness of partisan politics. But the smart money seems to be on Rudy Guiliani and Hillary Clinton right now. If those are our choices, then we are choosing divisiveness. Then we are choosing more of the same kind of politics that many people are sick of. Of course, nastiness in national politics is nothing new, and the levels of conflict today may in fact be less intense than in the earliest days of the Republic, and certainly less intense than during the Civil War period. Maybe we should expect nothing else, and hunker down for the fight.

Is such vicious conflict unavoidable? Is there something in people that needs to fight for what they believe in, and make enemies of those who disagree? It seems clear to me that the need to fight is an important part of the human character, and this is not always a bad thing. Struggle for what we believe in is what gives meaning to our lives. This is true in litigation as well as politics. People who find themselves engaged in a lawsuit often claim the most steadfast devotion to matters of principle and justice, and they often have a hard time letting go of the fight, even when it makes business sense to settle. Parties as well as attorneys get caught up in the battles of litigation. We have a natural desire to win, and to beat the other side. I should not complain about these tendencies, since they keep me in business, and I find myself attached to the battle as much as anyone. I will admit that I like to argue, and I always want to win. Otherwise I probably would not be a trial lawyer. But since most civil cases do and should settle, I often have to try to persuade clients or adversaries (or both sides when I act as a mediator) of the advantages of putting the struggle behind them. I have to explain that you don't have to agree with the other side, but you have to recognize that the other side's position does have a chance of prevailing. Moreover, it is important to recognize that sometimes overly aggressive litigation tactics have a tendency to provoke similar tactics by the opposition, leading to an increase in costs for both sides, and often making it more difficult to resolve the dispute.

In the political arena, the same principles hold. People often forget that it is not always beneficial in the long run to try to destroy the other side. Goldwater's defeat led to the Republican party's rebound. Reagan's victory gave life to an anti-nuclear movement (of which Reagan eventually became a part). Clinton's election sparked another revival of the conservative movement. And Bush's unpopularity has caused a huge drop-off in support for Republican candidates. It is not only that candidates often do the opposite of what they previously stood for (e.g., Nixon going to China), but also that they frequently provoke such a backlash that they re-energize the opposition.

If we ask which candidates seem most likely to re-vitalize the forces on the opposite end of the ideological spectrum from them, the answer would seem to be Clinton for the Democrats, and Guiliani for the Republicans. If we give in to the impulses of payback and recrimination, these are the kind of candidates we will continue to elect, and their time in office will be followed by an equally divisive reign by the opposition. It seems to me that an era of national reconciliation would be good for the country right now, if only to help us unite against common enemies, and beyond that, to begin to solve some pressing world-wide problems. To get there, we should seek out unifying rather than divisive candidates.

The Vanishing Trial

2007-10-04T09:46:00.000-07:00

A lot has been written in the legal literature in the last few years about the tremendous decline in the percentage of civil cases that go to trial. While most cases have always been resolved by settlement or by motion, the number of cases remaining for trial has in recent years appeared headed for the vanishing point. From the profession's point of view, this phenomenon raises concerns about whether trial lawyers are receiving adequate training (or whether they even deserve to be called trial lawyers). More to the point, it is fair to ask whether attorneys who rarely go to trial have an adequate appreciation of the value (or lack of value) of many of the pre-trial activities in which they zealously engage.

Should clients be concerned about the rarity of trials? In most cases, clients do not engage in lawsuits for the joy of going to trial. Instead, they are usually interested either in obtaining recompense for injury, or minimizing their exposure, depending on whether they find themselves as plaintiffs or defendants. Anyone with litigation experience knows that a trial does not necessarily produce a better outcome for either side than a negotiated settlement. So most cases should settle, once a fair assessment can be made of the relative costs and risks of continuing litigation.

The real issue for clients is the wastefulness of the entire litigation process. Parties and attorneys do a lot of things in pre-trial proceedings that are either envisioned to prepare for a trial that is not going to happen, or that they do because they don't have enough experience to know what will be useful for trial, or that they do to run up the expenses for the other side and provide them another incentive to settle. The goal should be to reduce those kinds of activities, and focus on either settling the case or trying the case. Of course it is usually helpful to achieve a better settlement if the other side knows that you will be prepared for trial, but it may not be necessary to file every possible motion, and consume endless amounts of time in discovery in order to make that point.

US Supreme Court Raises Pleading Standards

2007-05-23T16:00:00.000-07:00

While this case may appear to be of interest only to civil procedure mavens such as myself, I think it has broader implications. In the Bell Atlantic Corp. v. Twombly case issued this week, the Supreme Court took it upon itself to overrule its own long-standing precedent, Conley v. Gibson, or at least that part of Conley v. Gibson that everyone cites in response to almost every motion to dismiss a complaint I have ever seen in Federal Court. That is the rule that a complaint should not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.

Bell Atlantic is an antitrust case alleging a conspiracy to restrain trade. Such a conspiracy may be inferred from parallel behavior or other circumstantial evidence. The plaintiff in Bell Atlantic had alleged such a conspiracy, but had done so in somewhat conclusory terms. That is no longer good enough, according to the Supreme Court.

Two things are striking to me about this result. One is that the Supreme Court seems to be moving away from the premise of notice pleading that was one of the foundations of the reforms heralded by the Federal Rules of Civil Procedure. Something more than notice pleading is now clearly required. Another perhaps anomalous consequence of this decision is that the threshold pleading requirements in many cases may now be more difficult to meet than the burden of proof required at trial. In other words, a plaintiff might be allowed to prove a case to a jury based on circumstantial evidence, but some plaintiffs may never get the opportunity to hand such a case to a jury, because the complaint will not survive a motion to dismiss.

The practical result is that we will see a lot more motions to dismiss the complaint being filed in federal court after Bell Atlantic, just as we started seeing even more motions for summary judgment after the Supreme Court decisions a few years back encouraging the dismissal of claims on summary judgment.

Discovery (as we know it) should be abolished!

2007-05-11T16:45:00.000-07:00

It is our system of obtaining discovery that makes litigation so expensive. And most of it serves no purpose except to make the parties so sick of the lawsuit itself that they might be more likely to consider settlement. I think it is time to clean the house of discovery rules, in a sweeping manner, much as the Federal Rules of Civil Procedure were originally intended to simplify and streamline the litigation process. At least as pertains to discovery, those rules have not worked as intended, and many of the reforms to those rules have only further encrusted them with additional procedure, and additional opportunities to create conflict and delay. For example, sanctions provisions enacted in the 1980's were intended to reduce the need for discovery motions, but in many cases have only created an impetus for additional motions. The mandatory exchange of information at the outset of the case, an idea promulgated in the 1990's, was intended to reduce the need for a cycle of requests, responses, and motions, but has often created just a preliminary round of procedure before the good old-fashioned discovery wars start. New rules pertaining to electronic discovery, enacted in the 2000's, were intended to clarify the applicability of the rules to electronic databases, but does anyone seriously think these rules are going to reduce the cost and complexity of discovery litigation?

More radical reforms should be considered. How much worse would it be if we simply abolished all the discovery rules, and replaced them with a rule which simply states that the parties are entitled to all the discovery they agree upon, and to the extent they cannot reach agreement, they are entitled to all the discovery the court allows. Such a rule would encourage, and in fact require, the parties to work out a master discovery plan at the outset of a case. It would immediately send cases down a path of negotiation instead of litigation, thus supporting the mediation programs that are becoming the norm in most courts. To the extent one or both sides are uncooperative in exchanging information, there would still be no need for serving discovery demands, objections, meet and confer letters, and motions. These activities could all be replaced by relatively simple requests to the court, most of which could be accommodated on forms. The courts, having the experience of decades of discovery practice to guide them, could use this past experience as a guideline in deciding exactly what depositions, document requests, and interrogatories should be permitted in each case. Gamesmanship, blame and sanctions should be avoided in all but the most difficult cases. And even in those cases, the burden on the parties and the courts should be reduced by explicit recognition of the fact that the discovery you get is merely what you can agree on, or in the absence of agreement, what the court allows you to get. All of the complicated rules and procedures we have now for obtaining depositions, document request, and interrogatories, merely obscure that simple truth.

This proposal may be scary to many lawyers, but I would instead view it as liberating. Instead of spending much of our time on the drudgery of preparing requests, responses and motions, and viewing every discovery effort as an opportunity to battle with the other side, we would instead spend our time on either negotiating with the other side to resolve issues, or preparing the case for trial with a minimum of wasteful litigation activities. Maybe more cases would be tried instead of "litigated," and most cases would still be settled as they are today. Isn't that what we trial lawyers are supposed to be doing?

Fire in my "backyard"

2007-05-09T15:57:00.000-07:00

Griffith Park is the largest urban park in the US, and I am lucky enough to live within walking distance. Last night it turned into a mass of fire and smoke. I spent the evening walking around outside talking to my neighbors and hoping the wind would continue to blow away from my house. Since there was no power, I could not turn on the tv to see what was going on, so I walked to the corner where a tv news truck was parked. The news reporter had very little information himself but that didn't stop him from getting on tv and questioning some of my neighbors who also had very little information to give. He interviewed one woman on camera who talked about how long she had lived in the community and how much she liked it. The reporter asked her how scared or nervous she now was about the fire. Now there may be some truth to the idea that here was a beautiful community threatened by a big, scary fire, but from what I saw, the message the tv reporter was trying to project was exactly the opposite from what was occurring. In fact, in our daily lives, neighbors generally have little contact with one another, because we tend to stay inside and watch tv, and when we go out, we get directly into our cars, continuing to isolate ourselves. It took a fire to get people outside and talking together as a community. I met some of my neighbors for the first time, and talked to others to whom I had not spoken in months. And while the fire was scary, the truth was that the firefighters had the situation well in hand, and were doing a great job containing it. We really didn't have that much to worry about. And the park will survive. In fact, the park probably needs periodic fires to survive. It seems that television encourages us to stay "safe" inside while projecting images of a big, scary world out there. The solution is probably to watch less television.

This morning I took a couple of pictures of Los Feliz Boulevard without cars, a sight you never see on a weekday morning. It was quiet and beautiful.

LA Law

2005-07-14T12:27:00.000-07:00

Our new home. Quite a contrast to our former digs.

Fine Arts Building Lobby

2005-07-14T11:12:00.000-07:00

Here is a view of the interior of the Fine Arts Building lobby, my address for more than 10 years.

Trains and traffic update

2005-05-17T19:25:00.000-07:00

The day after my letter appeared in the Los Angeles Times, the MTA announced that instead of cutting back the number of trains during the day, they had decided to end service on some lines an hour earlier at night. Can I take credit for this change in policy?

Trains and traffic

2005-05-10T09:03:00.000-07:00

One of my pet causes being public transportation, I sent the following letter to the editor of the Los Angeles Times about planned schedule cutbacks on the Red Line subway system, which is printed in the May 10, 2005 issue.

Just when higher gas prices seem to be persuading more people to take the train, the MTA announces schedule cutbacks due to budget cuts. So when the new Orange Line starts dumping people at the North Hollywood Red Line station, they will have to wait longer for a train, and find it harder to get a seat. That can only dissuade many commuters from using these services, and freeway drivers will inevitably welcome back the cars of many who have been experimenting with public transportation.

So the small savings to be achieved by the MTA cutbacks will soon be dwarfed by the need to spend billions more on freeway construction.

The equation is really simple: fewer trains means more traffic. What we need are more trains, and less traffic.

MOVING ANNOUNCEMENT

2005-03-04T11:32:00.000-08:00

Before the end of this month, assuming all goes well with cabling, construction, and a lot of other logistical nightmares, I will be moving to 444 South Flower Street, Suite 1750, three blocks away from our current location. I will continue to be sharing space with Wen Liu, a patent lawyer. The new space is going to be great, and we are very excited about the move.

I still haven't decided if I should continue to call this site "fineartlaw," which was named in honor of the Fine Arts Building, where I have had my office for more than 10 years. I am rather attached to the name, and will miss this beautiful old building, so I will probably keep using it for sentimental reasons.

Arbitration vs. Mediation

2005-01-17T23:26:00.000-08:00

I have never been a big fan of arbitration. I have found that the supposed cost savings and speed of arbitration as compared with litigation are often illusory, and the results of arbitration are often, well, arbitrary. I am also opposed in general to pre-dispute arbitration clauses. If both parties want to arbitrate--and there are certainly cases where it is appropriate--they can always agree to do so after a dispute arises. Whatever the supposed advantages of arbitration, it seems to me hard to justify forcing a party to sign an arbitration clause in advance of a dispute. I had the chance last year to vindicate my principles in a case I won before the Sixth District Court of Appeal in California, Abramson v. Juniper Networks.

http://caselaw.lp.findlaw.com/data2/californiastatecases/h025840.pdf

In that case, the court held among other things that it was unconscionable for an employer to force employees to arbitrate all employment-related disputes, where the company "carved out" the right to sue the employee in court for violations of the employees' confidentiality obligations. In other words, if arbitration is good enough for one side, it has to be good enough for both.

Now, mediation on the other hand, I think is generally a very useful process. One reason is that even if the case does not settle after a mediation, the process gives the parties a much clearer idea of their alternatives. At the end of a day of mediation, the parties have a better sense of the costs and risks of taking their case to trial, and they also know how much they have to pay, or accept, to buy their way out of the lawsuit. Then they are free to make a decision that is in their best, perceived interests. I have frequently acted as a mediator, and also frequently represent parties in mediation. I almost always advocate giving mediation a try.

The problem with mediation is that it is only beginning to be integrated into the litigation process. At the moment, it exists as either an alternative, or as another step the courts are requiring the parties to accomplish on the road to trial. I believe a great deal more could be done to make mediation an integral part of the litigation process. Many disputes within a lawsuit, for example, could be mediated: in particular, discovery disputes. Encouraging parties to adopt a process of negotiation and settlement of such disputes puts them on the road toward settlement of the entire case, and may help achieve results that the parties are more satisfied with, even if the entire case does not settle.

The Ambassador Hotel

2004-12-14T08:40:00.000-08:00

I am representing seven organizations who are suing the Los Angeles Unified School District over the proposed demolition of the Ambassador Hotel, an historic landmark in Los Angeles, perhaps most famous for being the site of Robert Kennedy's assasination. The Ambassador is also a distinguished building architecturally, and was a catalyst for the development of the city along Wilshire Boulevard. The hotel's Cocoanut Grove nightclub featured many of the country's most important entertainers. This is probably the most important preservation battle currently being fought in the city of Los Angeles.

This conflict has sometimes been falsely portrayed in the press as between some effete preservationist organizations and the interests of needy schoolchildren. In fact, the preservationists fully support the adaptive reuse of the Ambassador Hotel as a school, and believe that preservation of the hotel will provide a better educational experience than the school board's current proposal. The conflict is actually between an inflexible school district bureaucracy, and the interests of the community as a whole. Here is the full text of a letter I wrote to the Los Angeles Downtown News, in response to a column suggesting that preservationists should give up the battle, which was published in part in its December 13 edition. The published version is here.

Dear Editor:

I represent seven different community organizations that have filed a petition challenging the adequacy of the Environmental Impact Report prepared by the LAUSD for the Ambassador Hotel site (Art Deco Society of Los Angeles, California Preservation Foundation, Hollywood Heritage, Inc., HPOZ Alliance, Korean Culture Center, Latino Urban Forum, and Mexican American Political Association). None of these petitioners opposes the construction of school facilities on the Ambassador site. Indeed, the petitioners support an alternative plan that would allow for school construction on 75% of the property, provide all the seats deemed needed by the district, and allow for construction of school facilities within the timetable already contemplated by the district.

The law does not permit the school district to proceed with a project that substantially impairs historic resources, if feasible alternatives exist that would preserve those resources. The petitioners believe such alternatives exist, and are therefore entitled to pursue legal remedies to make sure that the LAUSD complies with the law. These lawsuits may also serve the larger purpose of creating a better project than the one currently proposed by the LAUSD, that will make substantially more use of the historic resources on the site, instead of largely demolishing them, as the current plan proposes.

It is far too early to impugn the motives of those who are challenging the LAUSD's actions, as Sam Hall Kaplan's December 6 article does, by suggesting that at least some of the preservationists involved may be "self-righteous,” "supercilious," or interested in "perpetuat[ing] their petty bureaucracies." Although elsewhere in his article, Mr. Kaplan acknowledges that most of the opponents of the current project are sincere, and that he himself has supported the preservationist position, this kind of name-calling is not conducive to any kind of rational debate on the future of the Ambassador site.

Interest in preserving the Ambassador Hotel, a unique architectural treasure, as well as the site of major historical events in the life of this city and this nation, is broad-based in the community. Many people would like to see these historical assets incorporated to the greatest feasible extent in the construction of exciting new school facilities. These people are entitled to be heard and to have their views considered as expressly contemplated by this state's environmental laws. They are not required simply to accept a bad decision, much less an illegal one.

My clients do not want to wage a long, costly battle for its own sake. Nor, I assume, does the LAUSD. More importantly than trying to "win" these legal contests, all sides should be interested in obtaining a better project. That is the goal of the organizations I represent. I believe that should be the goal of everyone affected by this project.