By Mike Schless and Don Philbin The “Loser Pays” Legislation that passed the 82nd Legislature and became effective September 1, 2011 did not contain the highly controversial loser pay provision of earlier drafts, but did direct the Texas Supreme Court to adopt rule revisions, one of which could impact ADR practice in smaller cases. Among other things, HB 274 required the Supreme Court to adopt rules to promote the “prompt, efficient, and cost-effective resolution of civil actions” in which the amount in controversy, inclusive of attorney’s fees does not exceed $100,000. Tex. Gov’t Code §22.004(h). The Supreme Court appointed a Task Force for Rules in Expedited Actions.[1] The central issue in Task Force deliberations became whether the Expedited Rules would be mandatory, voluntary, or a hybrid. The Texas Trial Lawyers Association (TTLA), the Texas Association of Defense Council (TADC), and the Texas Chapter of the American Board of Trial Lawyers (TEX-ABOTA) (an association of trial lawyers representing plaintiffs and defendants) aligned to recommend a purely voluntary rule. In doing so, they also recommended that the voluntary rule prohibit trial judges from ordering ADR procedures when the parties elect to proceed under the expedited process. A dozen current and former leaders of Association of Attorney Mediators (AA-M), the State Bar of Texas ADR Section, and the Supreme Court Advisory Committee on Court-Annexed Mediation responded by urging that this language not be included in the rule. The Task Force issued its Final Report on January 25, 2012. The report unanimously adopted the TTLA/TADC/TEX-ABOTA position with helpful changes after carefully considering various communications from ADR practitioners extolling the efficiencies of ADR procedures and emphasizing the State’s longstanding public policy in favor of ADR initiatives and made helpful revisions as a result: Alternative Dispute Resolution. Unless the parties have agreed to engage in alternative dispute resolution or are required to do so by contract, the court must not – by order or local rule – require the parties to engage in alternative dispute resolution. The submissions and Task Force deliberations were heard by the Supreme Court Rules Advisory Committee (SCAC) on January 27, 2012. Four representatives of the ADR-provider community attended that meeting.[2] Most of the discussion continued to turn on the issue of whether the rule should be mandatory or voluntary. A non-binding straw poll was taken, and by a margin of nearly two to one, the SCAC favored a voluntary rule. So, assuming no change in the Task Force recommended language regarding ADR, and further assuming that the rule remains voluntary, there should be minimal impact on ADR users in Texas. Users will still have a choice. If they wish to use an ADR process, they can simply opt out of the expedited trial procedure. Conversely, if they choose the expedited procedure, they can still avail themselves of an ADR procedure if the other parties agree or if a contract requires it. Even if the rule is mandatory, and both parties agree, there can still be an ADR procedure. If one party desires an ADR procedure, even though the other party does not, a party could potentially avoid the application of the mandatory rule by pleading out of it. There are several ways to do that under the current proposal. The impact will likely be in cases where all parties plead within the rule and one party wants to use an ADR procedure but there is no agreement to do so. In such cases, Texas might have the anomalous situation in which a statute[3] authorizes a judge to order an ADR procedure, but a Supreme Court rule prevents the judge from doing so. For the DRCs and others who mediate cases within the ambit of HB 274 in district and county courts, a mandatory rule could significantly impact the availability of mediation services when fewer than all of the parties want both an expedited trial process and an ADR process. The issue is now in the hands of the Texas Supreme Court. [1] Misc. Docket Nos. 11-9193, dated September 26, 2011, and 11-9201, dated October 5, 2011. [2] Suzanne Mann Duvall (AA-M President, past ADR Section Chair, Supreme Court Advisory Committee on Court-Annexed Mediation); Susan Schultz (ADR Section past Chair); Don Philbin (ADR Section Council member); and Mike Schless (past AA-M President, past ADR Section Chair, Supreme Court Advisory Committee on Court-Annexed Mediation). [3] Tex. Civ. Prac. & Rem. Code §154.021. This article is derivative of longer piece prepared for the State Bar of Texas ADR Section Newsletter. It is published with permission. Don Philbin is an AV-rated attorney-mediator, negotiation consultant and trainer, and arbitrator. He has resolved disputes and crafted deals for more than two decades as a business and commercial litigator, general counsel, and president of communications and technology-related companies. Don holds a Masters of Law degree from Pepperdine‘s top-ranked Straus Institute for Dispute Resolution, where he is now an adjunct professor, has trained and published at Harvard’s Program on Negotiation, is an elected Fellow of the International Academy of Mediators and the American College of Civil Trial Mediators, a member of the Texas Academy of Distinguished Neutrals, and was one of the first U.S. mediators certified under the international standards established by the International Mediation Institute. He has mediated hundreds of individual and class matters in a wide variety of substantive areas and serves as a neutral on several panels, including CPR’s Panels of Distinguished Neutrals. Don has published widely in the field, is Chair of the ABA Dispute Resolution Section‘s Negotiation Committee, and a member of the ADR Section Council of the State Bar of Texas. Mr. Philbin is listed in THE BEST LAWYERS IN AMERICA, TEXAS SUPER LAWYERS, and THE BEST LAWYERS IN SAN ANTONIO. His firm is listed in the inaugural edition of U.S. News and Best Lawyers “Best Law Firm” survey and the BAR REGISTER OF PREEMINENT LAWYERS.

by Holly Hayes Marc Bard, chief innovation office in Navigant’s health care practice, and co-author of the book “Accountable Care Organizations, Your Guide to Strategy, Design, and Implementation” made six predictions about health care reform last week. The predictions are listed in the blog CommonHealth Reform and Reality and are in response to some specific changes in Massachusetts health care reform. Two predictions include: More tension in the system In today’s’ environment, for the most part, providers of care are contractually pitted against payers of care. They’re a little like dogs and cats. They’ve never gotten along terribly well for obvious reasons, and they generally didn’t mind battling each other. Now, what is being proposed in Massachusetts creates somewhat of a zero-sum game, doctor against doctor and doctors against hospitals; and that’s a less comfortable battle. And, it’s potentially going to be even less comfortable because with the ACO, there’s going to have to be more support for primary care, and if you’re operating with a fixed global payment budget, that means that the high-end providers, the high-end physicians and hospitals, are going to take the greatest haircut. That’s reality. Massachusetts medical culture will change to be more team-oriented. Eastern Massachusetts health care is physician-focused rather than system-focused. We focus on doctors, we train them, we teach them, we develop them, rather than teams. And we’re going to have to move to a much more team-oriented approach, which means we’ll have to start really valuing the role of care coordinators and other disciplines rather than putting the burden on the doctors. So I think what we’ll also see is that it’s going to affect some academic pursuits: We’re going to have to move to training more primary care doctors, and that is not something that Boston historically has focused on. In a previous post, we cited the report “Unmet Needs:Teaching Physicians to Provide Safe Patient Care” issued by the Lucian Leape Institute at the NPSF. The report concludes that “[U.S.] medical schools are not doing an adequate job of facilitating student understanding of basic knowledge and the development of skills required for the provision of safe patient care.” The report’s 12 recommendations center on three main themes: Medical schools and teaching hospitals need to create learning cultures that emphasize patient safety, model professionalism, encourage transparency, and enhance collaborative behavior. They should have zero tolerance policies for egregious disrespectful or abusive behavior. Medical schools should teach patient safety as a basic science and ensure that students develop interpersonal and communication skills through experiences working in teams with nursing, pharmacy, and other professional students. Medical schools and teaching hospitals need to launch intensive faculty development programs to enable all faculty to acquire sufficient patient safety knowledge and to develop the interpersonal skills in teamwork and collaboration that permit them to function effectively as teachers and role models for students. What are your thoughts about how we can enhance medical school training to prepare physicians for the collaboration needed for health care reform and to be partners in successful Accountable Care Organizations (ACOs)? We welcome your thoughts. Holly Hayes is a mediator at Karl Bayer, Dispute Resolution Expert where she focuses on mediation of health care disputes. Holly holds a B.A. from Southern Methodist University and a Masters in Health Administration from Duke University. She can be reached at holly@karlbayer.com.

The United States Court of Appeals for the Fifth Circuit held that an employee pension plan falls within the scope of the Railway Labor Act (“RLA”) and is subject to its mandatory arbitration procedures. In Ballew v. Cont’l Airlines, Inc., No. 11-20279, (5th Cir. Jan. 31, 2012) plaintiffs are former Continental Airlines pilots (“Retirees”) who filed a class action against Continental Airlines under ERISA § 502(a)(1)(B), alleging Continental breached the terms of Retirees’ pension plan. The district court dismissed Retirees’ claims for lack of jurisdiction, holding that the RLA applied to Retirees and that the RLA gives exclusive jurisdiction over their contract interpretation claim to the administrative resolution process. Retirees appealed. The issues presented to the Fifth Circuit are: Whether the RLA applies to Retirees as “employees.” The court concluded that the RLA applied despite the claimants’ status as retirees. The court supported its decision by citing Pennsylvania Railroad Co. v. Day, 360 U.S. 548, 79 S. Ct. 1322, 3 L. Ed. 2d 1422 (1959), “[[a]ll the considerations of legislative meaning and policy which have compelled the conclusion that an active employee must submit his claims to the Board, and may not resort to the courts in the first instance, are the same when the employee has retired and seeks compensation for work performed while he remained on active service.” Whether, despite the RLA’s exclusive arbitration procedures, Retirees may seek judicial review of adverse Retirement Board determinations. The court explained that parties to a Collective Bargaining Agreement (“CBA”) could either provide for RLA dispute resolution or could exclude certain disputes from the RLA’s mandates and provide for judicial review under ERISA, but could not provide for systems board review under the RLA followed by judicial review under ERISA. Accordingly, the Fifth Circuit affirmed the district court’s judgment. Technorati Tags: ADR, law, arbitration

According to the Baylor Lariat, Baylor University has filed a complaint (Case No. 1429318) with the National Arbitration Forum over the ownership of the domain BaylorGirls.xxx. Note that the National Arbitration Forum does not publish the cases on its website until a decision has been reached. Read more about this domain dispute here. Stay tuned.