ASPEN PUBLISHERS

Resolving DisputesTheory, Practice, and Law

Second Edition

Jay FolbergProfessor and Former Dean

University of San Francisco Law School

Dwight GolannProfessor

Suffolk University Law School

Thomas J. StipanowichAcademic Director, Straus Institute for Dispute Resolution and Professor

Pepperdine University School of Law

Lisa A KloppenbergProfessor and Dean

University of Dayton School of Law

KluwerLaw & Business

AUSTIN BOSTON CHICAGO NEW YORK THE NETHERLANDS

CONTENTS

Preface xxixAcknowledgments xxxi

CHAPTER 1DISPUTE RESOLUTION—WHAT IT'S ALL ABOUT 1

A. The Landscape of Disputes 2Questions 4

B. Dispute Resolution Alternatives—The Spectrum 5C. The Evolution of Dispute Resolution 7

ADR and "The Vanishing Trial": What We Know—And WhatWe Don't, Thomas J. Stipanowich 10

Our Courts, Ourselves: How the Alternative Dispute ResolutionMovement Is Reshaping Our Legal System, Deborah R.Hensler 13

Notes and Questions 14D. Matching the Process to the Dispute and Client-Centered

Counseling 161. Fit the Forum to the Fuss 162. Client-Centered Dispute Resolution Counseling 17

Lawyers as Counselors: A Client-Centered Approach, David A.Binder et al. 18

PARTI

NEGOTIATION 23

CHAPTER 2NEGOTIATION AND CONFLICT—THE BIG PICTURE 25

A. Introduction to Negotiation 25B. Conflict Is What We Make It 26

Some Wise and Mistaken Assumptions About Conflict andNegotiation, Jeffrey Z. Rubin 27

Notes and Questions 30C. The Triangle of Conflict and Negotiation 31

Problem 32Negotiation as a Healing Process, Gerald R. Williams 33Notes and Questions 36

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Contents

CHAPTER 3PERCEPTION, FAIRNESS, PSYCHOLOGICAL TRAPS, AND

EMOTIONS 39

A. The Role of Perceptions 39The War of the Roses, Warren Adler 40The Conflict Helix, R. J. Rummel 41Notes and Questions 43

B. The Impact of Fairness 44The Home-Run Ball Catch 45Perceptions of Fairness in Negotiation, Nancy A. Welsh 46Questions 49

C. Psychological Traps and Professional Objectivity 49Problem 50Top Ten Psychological Traps 50Questions 53

D. The Role of Emotions and Emotional Intelligence 53Interpersonal Dynamics: Helping Lawyers Learn the Skills, and

the Importance, of Human Relationships in the Practice of Law,Joshua D. Rosenberg 55

Questions 57

CHAPTER 4NEGOTIATOR STYLES 59

A. Competitive and Cooperative Negotiation 59Microsoft v. Stac 59

1. Competitive/Adversarial Approach 63A Primer on Competitive Bargaining, Gary Goodpaster 63Questions 66Questions 68Note: Responses to Competitive Hardball and Difficult

People 682. Cooperative Problem-Solving Approach 70

Note: Positions vs. Interests 71B. The Tension Between Creating Value and Claiming Value 73

Pros and Cons of "Getting to Yes", James J. White; andComment on White's Review, Roger Fisher 73

Questions and Note 76The Manager as Negotiator: Bargaining for Cooperation and

Competitive Gain, David A. Lax and James K. Sebenius 77Note: Differences Can Create Joint Gains 81The Limits of Integrative Bargaining, Gerald B. Wetlaufer 82Questions 85

C. Choosing an Effective Approach 85Problem 85

1. Negotiating Within Your Comfort Zone 86"/ See a Pattern Here and the Pattern Is You": Personality and

Dispute Resolution, Sheila Heen and John Richardson 88

Contents xi

Questions 912. Effectiveness and Style 913. Cooperation vs. Competitiveness—Who Decides? 93

CHAPTER 5THE NEGOTIATION DANCE—STEP BY STEP 95

A. Negotiation Stages and Approaches 95Note and Questions 96

B. Getting Ready to Negotiate 971. Preparation 98

A Positive Theory of Legal Negotiation, Russell Korobkin 982. Setting Goals 101

Bargaining for Advantage: Negotiation Strategies forReasonable People, G. Richard Shell 101

Questions 1043. Negotiation Preparation Checklists 104

Note: Computer-Assisted Preparation 105C. Initial Interaction 106

1. Trust and Rapport 106Terry Waite: A Study in Authenticity, Robert Benjamin 107Question and Note 108

D. Exchanging and Refining Information 1081. Listening and Questioning 109

A Woman's Guide to Successful Negotiating, Lee E. Miller andJessica Miller 110

Questions 1132. Managing Information 114

Negotiation: Theory and Practice, Melissa L. Nelken 114E. The Timing of Demands and Offers 117

Legal Negotiation, Gerald R. Williams and Charles Craver 118Negotiation Genius, Deepax Malhotra and Max H. Bazerman 121A Civil Action, Jonathan Harr 125Questions and Note 127

F. Bargaining 1271. Managing Concessions 128

Planning and Executing an Effective Concession Strategy,Theron O'Connor 128

Problem 1 1312. Value-Creating Trades and Brainstorming 131

Beyond Winning: Negotiating to Create Value in Deals andDisputes, Robert H. Mnookin, Scott R. Peppet, andAndrew S. Tulumello 131

Question 1343. Multiparty Bargaining—Coalitions and Holdouts 134

The Lawyers: Class of '69, John M. Poswall 136G. Moving Toward Closure 137

1. The Role of Power and Commitment 137Negotiating Power: Getting and Using Influence, Roger Fisher 138

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Note and Questions 144Note: Irrational Threats, Absolute Commitments, and

Perception of Power 1442. Deadlines and Final Offers 146

Civil Warrior: Memoirs of a Civil Rights Attorney, Guy T.Saperstein 147

Note: The Effect of Scarcity and Deadlines 1483. Decision Tree Analysis 149

Decision Trees—Made Easy, Richard Birke 150Note: The Problem with Risk Analysis and Decision Trees 154Questions 155

H. Impasse or Agreement 1551. Apologies 156

Notes and Questions 1572. Splitting the Difference and Dealing with Impasse 158

Bargaining for Advantage: Negotiation Strategies for ReasonablePeople, G. Richard Shell 158

Questions 1613. Logrolling and Packaging 1614. Agree to Disagree: Contingent Agreements 162

Contingent Agreements: Agreeing to Disagree About the Future,Michael Moffitt 163

Problem 2 166I. Finalizing and Writing the Agreement 166

Effective Legal Negotiation and Settlement, Charles B. Craver 167Note: Structured Settlements, Ratification, and Single Text

Agreements 171Questions 172

CHAPTER 6GENDER, CULTURE, AND RACE 173

A. Moving Beyond Gender Stereotypes 173The Shadow Negotiation: How Women Can Master the Hidden

Agendas That Determine Bargaining Success, DeborahM. Kolb and Judith Williams 174

Gender: An (Un)Useful Category of Prescriptive NegotiationAnalysis, Amy Cohen 179

Questions 181B. Cultural Differences, or Why the World Is Not Boring 182

Caveats for Cross-Border Negotiations, James K. Sebenius 183Note: Research on Culture and Negotiation 187Questions 189

C. Is Race a Factor in Negotiations? 189Race and Negotiation Performance: Does Race Predict Success as a

Negotiator?, Charles B. Craver 190Questions 193

Contents xiii

CHAPTER 7THE ETHICAL NEGOTIATOR 195

A. Deception vs. Disclosure 195Ethics in Settlement Negotiations: Foreword, Patrick E. Longan 197Questions 200

B. Client Control vs. Lawyer Integrity (Conflicts of Interest) 201Questions 202The Moral Compass of the American Lawyer, Richard Zitrin

and Carol M. Langford 203Questions 204Problem 1 204Beyond Winning: Negotiating to Create Value in Deals and

Disputes, Robert H. Mnookin, Scott R. Peppett, andAndrew S. Tulumello 206

Fee Arrangements and Negotiation, Herbert M. Kritzer 208Questions 209

C. Good Faith vs. Threats, Exposure, and Coercion 210When David Meets Goliath: Dealing with Power Differentials in

Negotiations, Robert S. Adler and Elliot M. Silverstein 211Questions 214Problem 2 215

D. Ethics Reform and New Forms of Practice 2161. Reform Proposals and Guidelines 2162. Collaborative Law, Cooperative Practice, and Mindfulness 216

Mindfulness in the Law and ADR: Can Saints Negotiate?,Scott R. Peppet 220

Questions 222

CHAPTER 8THE LAW OF NEGOTIATION 223

A. How Law Impacts Negotiation 223B. Offers of Settlement and Fee Shifting 225

1. The American Approach 225Harmful Intent, Baine Kerr 226Question 227

2. Rule 68 and Its Expansion 227Questions 229

3. Does FRCP 68 Create More Risk Taking RatherThan Less? 230

Problem 1 230C. Mary Carter Agreements 231D. Common Law Limits—Fraud, Misrepresentation, Duress, and

Mistake 232The Law of Bargaining, Russell Korobkin, Michael Moffitt,

and Nancy Welsh 233Problem 2 235

E. Negotiation Malpractice 235

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Ziegelheim v. Apollo 237Questions 240Post-Settlement Malpractice: Undoing the Done Deal, Lynn A.

Epstein 241Concluding Note 244

PART II

MEDIATION 247

CHAPTER 9MEDIATION—THE BIG PICTURE 249

A. Introduction 2491. The Process of Mediation 249

a. What Is Mediation? 249b. What Do Mediators Do? 250c. What Is the Structure of Mediation? 250

2. The Value of Mediation 252a. Viewpoints of Lawyers 252b. Business Perspectives 256

House Calls, Ashby Jones 256Questions and Notes 258

c. Is It Right for Every Dispute? Is It Fair? 258Questions 259

3. Examples of Mediation in Action 259a. Death of a Student 259

Questions 262b. United States et al. v. Microsoft Corporation 262

Unfinished Business: Another Look at the Microsoft Mediation:Lessons for the Civil Litigation, James Laflin and RobertWerth 262

How We Mediated the Microsoft Case, Eric Green andJonathan Marks 264

Questions 265c. Mediating as an Interested Party 266

Mediating the Deal: How to Maximize Value by Enlisting aNeutral's Help at and Around the Bargaining Table,Stephen B. Goldberg 266

Questions 2674. The Evolution of Legal Mediation 267

B. Goals and Mediator Styles 2691. Goals for the Process 269

a. Resolve a Legal Claim on the Best Possible Monetary Terms 270b. Develop a Broad, Interest-Based Resolution 270c. Repair the Parties'Relationship 271d. Change the Parties' Perspectives 272

Contents xv

e. Choices Among Goals 272Question 274

2. Mediator Styles 274a. Classifying Styles 274

Retiring and Replacing the Grid of Mediator Orientations,Leonard L. Riskin 274

Question 277b. Do Mediators Have a Single Style? 277

Questions 2783. Mediative Approaches and Techniques 279

a. Commercial Mediation 279A Basic Commercial Strategy 280Questions 288

b. No-Caucus Approaches 288Challenging Conflict: Mediation Through Understanding, Gary

Friedman and Jack Himmelstein 288Questions 293

c. All-Caucus Mediation 293Separating Opponents Key to JAMS Neutral's Success,

Pam Smith 293Questions 294Problem 1 294

4. Is There More to Mediation Than Technique? 295Bringing Peace into the Room: The Personal Qualities of the

Mediator and Their Impact on the Mediation, Daniel Bowlingand David Hoffman 295

Questions 297

CHAPTER 10A DEEPER LOOK INTO THE PROCESS 299

Further Investigation into the Secrets of Successful and UnsuccessfulMediators, Stephen B. Goldberg and Margaret L. Shaw 299A. Process Skills 301

1. Listening 301Undaunted Courage, Stephen E. Ambrose 301Questions 302The Benefits ofEmpathic Listening, Richard Salem 303Problem 1 305

2. Reframing 305Refraining, Ken Bryant and Dana L. Curtis 306

3. Identifying Interests 3094. Managing Positional Bargaining 312

B. Emotional Issues and Cognitive Forces 3141. Strong Feelings 314

Questions 317Note: Apology in Mediation 318Questions 318

2. Personal Issues in Dealing with Emotion 319

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Question 3203. Cognitive Forces 321

a. Selective Perception 321b. Optimistic Overconfidence 323c. Reactive Devaluation 325d. Loss Aversion 326

C. Merits-Based Barriers 3281. Responses to Lack of Information 3282. Intermediate Techniques 3303. Evaluation of the Likely Outcome in Adjudication 331

a. Should Mediators Evaluate? 332The Top Ten Reasons Why Mediators Should Not Evaluate,

Lela P. Love 332Merits Barriers: Evaluation and Decision Analysis, Marjorie

Corman Aaron 333Questions 336

b. If a Mediator Does Evaluate, How Should It Be Done? 337Final Report, American Bar Association Task Force on

Improving Mediation Quality 338Questions 339To Evaluate or Facilitate? Parties' Perceptions of Mediation

Affected by Mediator Style, Roselle P. Wissler 339Questions 340Problem 2 341Note: Issues for Advocates 342

CHAPTER 11REPRESENTING CLIENTS: PREPARATION 345

A. An Overview1. Identify Your Goals

QuestionsProblem 1

2. An Overview of Strategya. Commercial Mediation Processes

QuestionsTwenty Common Errors in Mediation Advocacy, Tom Arnold

b. Problem-Solving ApproachesMediation Representation: Advocating in a Problem-Solving

Process, Harold AbramsonB. Entering the Process

1. Should You Mediate?2. If So, When?3. Initiating the Process

C. Structuring the Mediation1. Select the Right Mediator

Questions2. Ensure the Presence of Necessary Participants

346346346346347347347348353

353354354354356357357358359

Contents xvii

Navigating Relationships: The Invisible Barriers to Resolution,Bennett G. Picker 360

Questions 3623. Draft an Agreement to Mediate 3624. Influence the Format 3625. Deal with the Special Issues of Court-Mandated Mediation 363

D. Preparing to Mediate 3641. Develop a Negotiating Plan 365

a. A Competitive Viewpoint 365Advocacy in Mediation: A Dozen Suggestions, Robert M. Smith 365

b. A Problem-Solving Approach 367Mediation Representation: Advocating in a Problem-Solving

Process, Harold Abramson 367Questions 368

2. Exchange Information 368a. Exchanging Data with the Other Party 368

Questions 369b. Educating the Mediator 369

Questions 3713. Preparing the Client 371

Client Preparation for Mediation, Thomas Arnold 372Questions 375

CHAPTER 12REPRESENTING CLIENTS: DURING THE PROCESS 377

A. Joint Meetings 3771. The Opening Session 377

a. Should You Have an Opening Session? 377Question 378

b. What Is Special About the Opening Session? 379c. What Is Your Goal? 379d. How to Present the Opening for Maximum Effect 380

Question 383e. How to Take Advantage of the Mediator's Presence 384

2. Other Joint Formats 385B. Caucusing 386

1. Early Caucuses 387a. Exchange Information and Arguments 388

Problem 1 391b. Initiate Bargaining 39]

2. Later Caucuses 393a. Bargaining 394

Problem 2 396Question 396Questions 398

b. Impasse-Breaking Techniques 398Questions 404

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CHAPTER 13SPECIFIC APPLICATIONS 407

A. Family Disputes 4071. What Is Unique About Family Mediation? 4072. Policy Issues 4093. An Alternative Process: Transformative Mediation 412

Transformative Mediation Principles and Practices inDivorce Mediation, Robert A. Baruch Bush and SallyGanong Pope 412

Questions 414B. Employment Cases 415

Employment Disputes, Carol A. Wittenberg, SusanT. Mackenzie, and Margaret L. Shaw 415

Questions 420C. Public and Environmental Controversies 420

Convening, Chris Carlson 421Questions 423

D. Intellectual Property Disputes 424High Tech and Intellectual Property Disputes, Technology

Mediation Services 424Questions 425

E. Criminal Matters 4261. Victim-Offender Cases 426

Questions 426Personalizing Crime: Mediation Produces Restorative Justice for

Victims and Offenders, Marty Price 426Questions 429

F. Deal Mediation 429Contract Formation in Imperfect Markets: Should We Use

Mediators in Deals?, Scott R. Peppet 430Microsoft and Yahoo: Where Were the Mediators ? They Help

Countries and Couples. Why Not Businesses?, David A.Hoffman 431

Questions 433G. International Mediation 433

1. Mediation Within Foreign Legal Systems 433Can Mediation Evolve into a Global Profession?, Michael

Mcllwrath 4342. Use in Cross-Border Disputes 435

Mediation in International Business, Jeswald Salacuse 435The Asian Concept of Conciliator/Arbitrator: Is It Translatable

to the Western World?, M. Scott Donahey 439Questions 441

H. Online Mediation 441Questions 442

Contents xix

CHAPTER 14COURT-CONNECTED MEDIATION

AND FAIRNESS CONCERNS 445

A. Court-Connected Mediation 445B. Issues of Program Design 446

1. What Goals Should a Program Seek to Achieve? 446Why Should Courts Offer Non-Binding ADR Services?,

Wayne D. Brazil 447Questions 448Making Deals in Court-Connected Mediation: What's Justice

Got to Do with It?, Nancy A. Welsh 448Questions 450

2. How Should Services Be Provided? 451Problem 1 452Questions 452

C. Policy Issues Regarding the Use of Mediation 4531. Should Some Cases Not Be Settled? 453

Against Settlement, Owen M. Fiss 453Questions 458ADR and the Dispossessed: Recent Books About the

Deformalization Movement, Richard Delgado 458Questions 459

2. Should Some Disputes Not Be Mediated? 459a. Issues of Gender, Ethnicity, and Culture 459

New Mexico Research Examines Impact of Gender and Ethnicityin Mediation, Michele Hermann 459

Questions 461A Red Flag: Mediator Cultural Bias in Divorce Mediation, Sina

Bahadoran 461Questions 463

b. Mandatory Mediation of Family Disputes 463Questions 464The Mediation Alternative: Process Dangers for Women, Trina

Grillo 464Questions 468

c. Domestic Violence Cases 468Mediation and Domestic Abuse, Ann L. Milne 468Questions 472A Case Example: A Student Mediates Access to Her Child 472Questions 474

CHAPTER 15THE LAW AND ETHICS OF MEDIATION 475

A. Confidentiality 475Problem 1 475Problem 2 476

1. How Important Is Confidentiality to Mediation? 477

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Frances heavy & others v. Father John J. Geoghan & others 477Questions 478A Closer Look: The Case for a Mediation Confidentiality Privilege

Still Has Not Been Made, Scott H. Hughes 479Questions 480

2. Sources of Mediation Confidentiality 481a. Rules of Evidence 481b. Privileges 482c. Confidentiality Statutes and Rules 484d. Mediation Agreements 484e. Disclosure Statutes and Rules 485

3. Examples from Practice 485a. Use of Mediation Information in Litigation 486

Rojas v. Superior Court of Los Angeles County 486Questions 487Byrd v. The State 489Questions 490Problem 3 491Problem 4 491

b. Supervisory Intrusions into the Process 492Questions 492Olam v. Congress Mortgage Co. 492Questions 496

c. Enforcement of Mediated Agreements 496Questions 497

4. Confidentiality in Caucusing 497Problem 5 497Problem 6 498

5. A Movement Toward Consistency: The Uniform Mediation Act 498B. Enforcement of Participation in Mediation 501

1. Agreements to Mediate 501Questions 502Problem 7 502

2. Mandates to Mediate 503a. Issues of Court Authority 503

Question 504b. Good-Faith Bargaining Requirements 504

Questions 505Questions 506Nick v. Morgan's Foods of Missouri, Inc. 506Questions 507Problem 8 508

3. Enforcement of Mediated Settlements 509a. The Existence of an Agreement 509b. Grounds for Invalidation 510

Questions 510Christian Cooper v. Melodie Austin 511Question 512

C. Certification 512

Contents xxi

Certification: An Idea Whose Time Has Come, James E.McGuire 514

Questions 515D. Ethics Issues for Advocates and Neutrals 515

1. Advocates in Mediation 515a. Candor Toward the Mediator 515

Problem 9 517Problem 10 518

b. Obligations to Other Parties 518Problem 11 518Problem 12 519

c. The Duty to Advise Clients About ADR 519Questions 519

2. Concerns for Mediators 519Excerpts from the Model Standards of Conduct for Mediators 521Excerpt from the Uniform Mediation Act 522Excerpt from the ABA Model Rules of Professional Conduct 523Questions 523

a. Issues of Fairness 524Problem 13 524Problem 14 524Problem 15 525

b. Questions of Competence 526Problem 16 526

c. Repeat-Player Concerns 526Problem 17 526

d. Differences Between Attorney and Client 527Problem 18 527Problem 19 528

e. Improper Conduct by Litigants 528Problem 20 529Problem 21 529Problem 22 529

3. Combining Practice as an Advocate and a Mediator 530a. Conflicts of Interest 531

Question 531b. Role Confusion 532

Questions 532

PART III

ARBITRATION 535

CHAPTER 16ARBITRATION—THE BIG PICTURE 537

A. A Brief History of Arbitration 538

xxii Contents

B. Arbitration vs. Litigation 5401. Relative Speed and Economy 5402. Privacy and the Avoidance of Precedent 5413. Choice of Expert Decision Maker(s) 5424. Informality, Arbitral Flexibility, Finality 5425. Flexibility and Choice 5436. Fairness Concerns 544

Problem 1 544A "Suitability Screen" for Arbitration 545Questions 546

C. Arbitration vs. Negotiation and Mediation 547Question 547

D. The Many Faces of Arbitration 5471. Construction/Commercial Arbitration 548

Question 5502. Labor Arbitration Under Collective Bargaining Agreements 550

Question 5513. Arbitration of Investor/Broker Disputes 551

Questions 5524. Arbitration at the Olympics 553

Questions 5545. Writers Guild Arbitration 554

Question 5556. National Advertising Division Arbitration 555

Question 5567. Court-Connected Arbitration 556

Question 557E. The Framework of Arbitration: Contractual and Legal Standards 557

1. The Agreement to Arbitrate 5572. Arbitration Procedural Rules 5573. Arbitration Statutes 5584. International Conventions 5585. Substantive Law Applicable to the Merits of an Arbitrated

Dispute 5586. Ethics Rules 558

F. Overview of Part III 558

CHAPTER 17ARBITRATION AGREEMENTS,PROCEDURES, AND AWARDS 561

A. Introduction 561B. The Contractual Foundations of Arbitration 562

Questions 563C. Making Effective Choices Regarding Arbitration 564

1. Don't Wait Until You Are in the Middle of Negotiating toConsider and Discuss Dispute Resolution Options 564

2. Employ Arbitration as Part of a Conscientiously DevelopedProgram for Managing Conflict 565

Contents xxiii

3. Make Sure the Arbitration Procedures (and AdministeringOrganizations) You Choose Support Your Client's Goals 565

4. Choose Outside Counsel and Arbitrators on the Basis of ClientGoals 565

Questions 566D. Drafting Arbitration Agreements: Arbitration Procedures,

Arbitration Instructions 5661. Standard Institutional Procedures 5662. Panels of Arbitrators: Ethical Standards 5673. Administrative Support; Other Services 5684. Ad Hoc Arbitration vs. Arbitration Supported by an Institution 568

Problem 1 569E. Scope of the Arbitration Agreement and Other Drafting Issues 570

1. Scope of the Arbitration Agreement 5702. Other Drafting Issues 571

Drafting Arbitration Clauses: Avoiding the 7 Deadly Sins, JohnTownsend 571

Problem 2 576F. Selecting the Arbitrator(s) 577

1. Key Attributes of Arbitrators 5772. Sources of Information about Arbitrators 5783. The Number of Arbitrators 5794. Selection Processes 579

Problem 3 580G. Arbitrator Disclosure and Challenges 581

1. Institutional Procedures for Disclosure and Challenge 5812. Ethical Standards 582

Problem 4A 5823. "Party Arbitrators" on Tripartite Panels 583

Problem 4B 583H. Overview of the Arbitration Process 584

1. Stages of Arbitration 5842. Roles of Attorneys 585

Problem 5 585I. Laying the Groundwork: The Prehearing Conference 586

Questions 587J. Jurisdictional Issues 588

Question 589K. Dispositive Motions 589

Question 590L. Information Exchange and Discovery 590

Question 591M. The Hearing 592

1. General Structure of Hearings 592Questions 592

2. Confidentiality 593Problem 6 594

N. Remedies in Arbitration 596

XXIVJ

1. Provisional Remedies2. Punitive or Exemplary Damages

Questions3. Final Offer Arbitration

Questions4. Bracketed Arbitration

QuestionsO. Arbitration Awards

1. Forms of Award2. Finality of Arbitration Awards3. Private Appellate Processes

QuestionsP. Arbitration in Multistep Agreements

Problem 7Q. When an Arbitrator Wears Multiple Hats

1. Formats in Which Neutrals "Change Hats"Neutrals Deployed Several Kinds of ADR to Solve i

Copyright Dispute, Francis Flaherty2. "Med-Arb"

Questions3. "Arb-Med"

Questions

Contents

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rBM-Fujitsu603605606608608

4. The Need for Precision in Structuring Neutral Roles 608Question 609

CHAPTER 18THE LEGAL FRAMEWORK SUPPORTING

ARBITRATION 611

A. Introduction: Historical Shifts in Judicial and LegislativeSupport for Arbitration 611

B. Elements of Modern Arbitration Law 6131. The Federal Arbitration Act 613

A Quick Tour of the Federal Arbitration Act 6142. State Arbitration Laws—Another "Layer" of Arbitration Law 617

Questions 6183. What Is "Arbitration" for the Purposes of Applying Federal or

State Law? 618Questions 620

C. Arbitrability 620First Options of Chicago, Inc. v. Kaplan 621Questions 623Note: Arbitration Agreements and the "Battle of the Forms" 624Question 624

1. Procedural Questions 624Question 626Problem 1 626

Contents xxv

2. Separability (Severability) 627Prima Paint Corp. v. Flood & Conklin Mfg. Co. 628Notes and Questions 630

3. Public Policy Limitations 631Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. 631Notes and Questions 635

4. Preemption of State Law by the Federal Arbitration Act 636Southland Corp. v. Keating 637Notes and Questions 640Allied-Bruce Terminix Companies v. Dobson 642Notes and Questions 645Doctor's Associates, Inc. v. Casarotto 646Notes and Questions 647

5. Recent Decisions on Arbitrability and the Federal Arbitration Act 648Green Tree Financial Corp. v. Bazzle 649Notes and Questions 652Buckeye Check Cashing, Inc. v. Cardegna 653Notes and Questions 656

D. Other Forms of Preaward Judicial Support of ArbitrationProceedings 6571. Judicial Appointment of Arbitrators 657

Problem 2 6572. Judicial Enforcement of Arbitral Summonses and Subpoenas 658

Question 6593. Other Preaward Judicial Intervention 659

E. Judicial Treatment of Arbitral Awards 6591. Overview of Statutory Standards for Confirmation, Vacation, and

Modification 6592. Was the Award Procured by Corruption, Fraud, or Undue

Means? 6623. Was There Evident Partiality or Corruption in the Arbitrators? 663

Positive Software Solutions, Inc. v. New Century Mortgage Corp. 664Notes and Questions 673Problem 3A 673Problem 3B 674

4. Was There Arbitral Misconduct (a Failure to Postpone theHearing or Refusing to Hear Pertinent and MaterialEvidence, etc.)? 675

5. Did the Arbitrators "Exceed Their Powers"? 676David Company v.Jim Miller Construction, Inc. 676Questions 680Notes and Questions on Punitive Damages in Arbitration 681

6. Contractual Provisions Attempting to Expand or NarrowGrounds for Vacatur of Award 682

Hall Street Associates, L.L.C. v. Mattel, Inc. 682Notes and Questions 687

xxvi Contents

CHAPTER 19FAIRNESS IN ARBITRATION:

DEVELOPMENTS IN EMPLOYMENT, CONSUMER,AND "ADHESION" CONTEXTS 691

A. Introduction 691B. Pro-Consumer Dispute Resolution: State Lemon Laws and the

Magnuson-Moss Warranty Act 6931. State Lemon Laws 693

Question 6932. Magnuson-Moss Warranty Act 694

Questions 695C. Predispute Arbitration Clauses in Consumer and Employment

Contracts and Related Fairness Concerns 6951. Expansion of Predispute Binding Arbitration Agreements into

Consumer and Employment Realms 695Gilmer v. Interstate/]ohnson Lane Corp. 696Notes and Questions 699

2. Fairness in Entering into Arbitration Agreements 700Notes and Questions 701Problem 1 702Incentives and Arbitration: The Case Against Enforcement of

Executory Arbitration Agreements Between Employers andEmployees, Sarah Rudolph Cole 704

Notes and Questions 7063. Procedural and "Outcome" Fairness in Arbitration 707

D. Judicial Policing of Arbitration Agreements in Consumer andEmployment Contracts 708

Engalla v. Permanente Medical Group, Inc. 708Questions 714Note: The Use of Unconscionability Doctrine in Policing

Arbitration Agreements 715Note and Question 716Hooters of America, Inc. v. Phillips 717Note and Questions 720Cole v. Burns International Security Services 721Note on Cole v. Burns International 722Note on Class Action Waivers and Differing Judicial

Treatment 722E. Organizational and "Community" Responses to Fairness Issues:

Due Process Protocols and Standards 7231. The Employment Due Process Protocol 7232. Consumer, Health Care Due Process Protocols 7243. Impact of the Protocols: The AAA Experience 724

Note and Questions 725F. Legislative Intervention 726

1. The Revised Uniform Arbitration Act 726Questions 728

2. The California "Ethics Standards" 728

Contents x x v i i

3. Efforts in Congress; The Arbitration Fairness Act 729Looking Ahead: The Future of Employment and ConsumerDispute Resolution 730

PART IV

MIXING, MATCHING, AND MOVING FORWARD 733

CHAPTER 20MATCHING THE PROCESS TO THE DISPUTE 735

The Big Picture 735A. New "Doors" for Resolving Disputes at the Courthouse 736B. Simulating Adjudication and Stimulating Settlement: Early

Neutral Evaluation, Minitrial, Summary Jury Trial, and Non-Binding (Advisory) Arbitration 737

Descriptions of the Principal Court-Based ADR Processes,Robert J. Niemic et al. 737

Notes and Questions 741

CHAPTER 21DISPUTE RESOLUTION DESIGN:

STEPPED CLAUSES AND CONFLICTMANAGEMENT SYSTEMS 745

A. General Commitments, "Ice Breaker" Clauses 745CPR Corporate Policy Statement on Alternatives to Litigation 746Questions 746

B. Stepped Dispute Resolution Programs 7471. General Principles for Design and Implementation 747

a. Design 747Designing an Effective Dispute Resolution System, Stephen B.

Goldberg, Jeanne M. Brett, and William L. Ury 747b. Implementation 751

An Analytic Framework for Dispute Systems Design, StephanieSmith and Janet Martinez 752

2. Examples of Stepped Programs or Systems 753a. Commercial Relationships 753

Questions 754b. Employment Programs 754

How Companies Manage Employment Disputes, Peter Phillips 756Questions 760Questions 762

c. Mass Claims Programs 762One-Stop Shopping: Using ADR to Resolve Disputes and

Implement a Settlement, Kenneth R. Feinberg 763

xxviii Contents

Notes and Questions 7643. Drafting a Multistep Clause 766

Problem 767Conclusion 768

CHAPTER 22LOOKING AHEAD: OPPORTUNITIES AND

CHALLENGES IN ADR AND CONFLICTMANAGEMENT 769

A. Changing Roles, Changing Cultures 7691. Changing Views of Lawyering in the Litigation Landscape 769

ADR in A Civil Action: What Could Have Been, Hon. WayneBrazil 770

Question 7732. Changing the Corporate Culture 773

Questions 775B. Dynamic Conflict Management: New Roles for Lawyers and

Neutrals in Public and Private Settings 7751. The Creative Role of Magistrates, Special Masters, and

Government ADR Experts 7762. The Dispute Resolution Adviser 7773. Collaborative Law: Lawyers Working with Clients to Avoid

Litigation 780Notes and Questions 780

C. A New Frontier for Lawyers and Neutrals: Online DisputeResolution 781

Online Dispute Resolution, Colin Rule 781Notes and Questions 783

D. Challenges Facing Lawyers as Neutrals 783The Lawyer as Neutral, Linda R. Singer 784Questions 785

E. Transforming the Community 786Promoting Problem Solving and Peacemaking as Enduring

Values in Our Society, Hon. Janet Reno 787Conclusion 790

Table of Cases 791Index 793