Court-ordered mediation often fails to deliver

By John Roemer

Daily Journal Staff Writer

Chief Judge Alex Kozinski was steamed when his colleagues on an en banc panel at the 9th U.S. Circuit Court of Appeals voted 10-1 against him and ordered mediation in a gun rights case.

Gun show promoters Russell and Sallie Nordyke and their litigation foes at Alameda County's general counsel's office had shown "obvious distaste" for trying to settle their dispute outside the courtroom, so why force them to do so, Kozinski wrote in an angry diatribe dissenting from the April mediation order.

His words resonated strongly for many who view judge-ordered mediation as an imposition, an insult to litigators and an affront to the court system.

"We overstep our authority by forcing the parties to spend time and money engaging in a mediation charade," Kozinski wrote. "Our job is to decide the case, and do so promptly."

But as slashed budgets shrink courtroom resources, demand is rising for all forms of alternative dispute resolution. And judges aren't giving up on out-of-court resolutions. Before an overworked U.S. District Judge William Alsup of San Francisco allowed Oracle Corp.'s mammoth copyright and patent infringement lawsuit against Google Inc. to go forward in the courtroom, he ordered the parties to bring chief executives Larry Ellison of Oracle and Larry Page of Google to a mediation session with a magistrate judge. It proved fruitless.

U.S. District Judge Lucy H. Koh of San Jose in April prodded Apple Inc. and Samsung Electronics Co. Ltd. to try to settle their patent infringement lawsuit, again ordering the chief executives and general counsel of both companies to attend. In a dispute involving 50 different complaints worldwide, the odds of success appeared slim. Indeed, no deal was reached.

In 2008, the normally even-tempered U.S. District Judge Ronald M. Whyte told the parties in another patent infringement case that their refusal to settle was "insane." He added, "The parties are nuts to continue forward, spending hundreds of thousands of dollars with no end in sight."

Mandatory settlement conferences are built into judicial calendars. The 9th Circuit sends every appellant and appellee a mediation questionnaire as soon as an appeal is filed. Long before cases reach judges, the circuit's nine full-time mediators have evaluated the issues and advised the court whether they may be candidates for early settlement. The mediators help resolve about 1,000 cases each year; each mediator saves the cost of three circuit judges.

But those well-established systems are fixed points on the docket, applicable to every case. Lawyers anticipate them and assess their cases' likelihood of out-of-court settlement.

It is when judges stall a case in progress and ship it off for mediation that hackles rise. In the gun show case, it was almost unheard of for an en banc panel to send to mediation contentious litigation that had been before the court for more than a decade.

"This delay serves no useful purpose," Kozinski protested, "it only makes us look foolish. I want no part of it." Nordyke v. King, 2012 DJDAR 4350.

As it happened, the gun show mediation failed and the en banc panel was required to decide the case, as Kozinski had foreseen. The parties' positions had long been frozen. The Nordykes contended the county's ordinance made it impossible for them to hold gun shows. The county said its ordinance contained an exception that did allow gun shows, albeit with safety restrictions.

The lawyers involved were too politic to object to the mediation order, but they showed little enthusiasm at the time. "I'm an officer of the court and I'm staring at an order," said Donald E. J. Kilmer Jr., representing the Nordykes. "We'll participate in good faith."

Sayre Weaver, the county's outside counsel from Richards Watson & Gershon PC, said, "We will be willing to mediate, though I don't know how productive it will be."

A circuit mediator conducted the mandated negotiation by teleconference. Weaver contended the other side doomed the effort. "If the Nordykes had been interested in complying with the exception, then we could have had a successful mediation," she said. Kilmer ascribed the hangup to the lack of a documented offer from the county. "We reached an impasse," he said. "And I like mediation. I'm a mediation maven."

Kozinski himself has come down on both sides of the debate. Last August, following oral argument in a military veterans' rights case, he told the litigators, "Counsel, get a sandwich and work together. I see good faith on both sides here." He said he'd delay submission of the case for at least a week while the lawyers conferred. That effort too was unavailing and the court ultimately decided it lacked jurisdiction to decide the case. Veterans for Common Sense v. Shinseki, 08-16728.

Kozinski declined to comment specifically on the Nordyke and Veterans for Common Sense cases while they are ongoing. In an email he added, "In general, however, I believe mediation can be useful where the parties show an interest in mediation, but it's a waste of time when they don't."

A veteran mediator who makes a living settling cases argued that mediation ought to be an option for the parties to seize or ignore on their own, depending on their lawyers' independent analyses of the case.

"As courts get more crowded, the judges' interest is to turf cases out of the system," said Jeffrey G. Kichaven of Jeff Kichaven Commercial Mediation. "But everyone has a constitutional right to a jury trial. Do courts coerce people to give up that right by ordering settlement talks or mediation?"

If so, Kichaven said, judges are presuming they are in a better position than the lawyers to size up how a case should proceed. "But lawyers have a fiduciary obligation to clients, while judges are just trying to clear their dockets. It really goes to the liberty interest of clients' right to independent counsel."

Kichaven pointed out that judges don't order lawyers to make summary judgment motions or to hire expert witnesses or to take depositions. "Judges should know that the best way to get cases settled it to set a firm trial date," he said.

In the state courts, Presiding Justice J. Anthony Kline of the 1st District Court of Appeal's Division 2 called alternative dispute resolution "The Dark Side" in a 2003 speech, and he has amplified his critique since. He singled out mediation as less fair procedurally than trials and ineffective when the parties are antagonistic.

Kline went further in an interview last month. "We need mediation. We need to settle cases," he said. "I'm not blind to that reality. The system would collapse without ADR. I sign orders to compel arbitration all the time. But it has gotten out of hand in this state."

The notion that ADR is quicker and cheaper is not true, Kline said, adding that studies show litigants on balance are happier with adjudicators than with mediators. But the real problem, he said, is that a parallel structure of private arbitrators and mediators distorts the public justice system.

"Able judges do leave the bench to make more money," Kline said, "but more insidious is that the prospect of being a private judge can corrupt state court judges in their present job."

He gave the example of a senior judge two years from retirement in a suburban county who baffled colleagues by asking for a family law assignment, until they realized that the big local cases were divorces. The judge learned a little family law and got friendly with the family law bar, Kline said. Next, he retired and set up as a divorce mediator, commanding huge fees.

Ominously, he said, these developments have created a growing belief among lawyers that the desire of sitting judges for future ADR careers warps their public decision-making.

In an insurance case where a plaintiff is suing an underwriter for bad faith and seeking punitive damages, for example, lawyers may suspect the judge will seek a post-bench job as a neutral. Insurance companies are major customers of ADR firms, Kline said, so plaintiffs' lawyers may wonder whether the judge will be unwilling to rule against an industry from which he or she will soon be soliciting business.

"Abuses in the system become part of the culture," Kline said. "That's going on all over the state, and lawyers are questioning the objectivity of senior judges looking for ADR jobs."

Staff writer Craig Anderson contributed to this story.

href="mailto:
john_roemer@dailyjournal.com">
john_roemer@dailyjournal.com

<!-- Court-ordered mediation often fails to deliver Compelling unwilling parties to negotiate is a costly time waste, some say -->