Dr. Roselle Wissler, Research Director, Lodestar Dispute Resolution Program and Faculty Fellow, Center for Law, Science & Innovation at Arizona State University’s Sandra Day O’Connor College of Law, recently published an article entitled Representation in Mediation: What We Know From Empirical Research, 37 Fordham Urb. L. J. 419 (2010). In her article, Dr. Wissler examines the effect of legal representation on the various stages of the mediation process. Here is the abstract: The article begins with a description of the proportion of cases in mediation involving unrepresented parties and the policies and practices regarding representation in different mediation contexts. The core of the article examines empirical research findings regarding the effect of representation on several dimensions of the mediation process, including preparation for mediation, party perceptions of the fairness of the process and pressures to settle, the extent of party “voice” and participation in mediation, and the tone of the session. In addition, the article examines the effect of representation on mediation outcomes, including the likelihood of settlement in mediation and the fairness of agreements reached. The studies find few differences consistently associated with representation, suggesting that unrepresented parties might face fewer problems in mediation, and lawyers might create fewer problems, than some claim. But the available research is too limited to be able to conclude that lawyers either play an essential role in mediation or are not needed, or that they are particularly helpful or detrimental to the mediation process. Additional findings show that how lawyers represent clients during mediation is related to parties’ assessments of mediation and settlement. The article concludes with a discussion of the additional research that is needed to inform policies and practices regarding representation in mediation. The article may be downloaded (without charge) from Social Science Research Network. We would love to hear your thoughts on the role of attorneys during the mediation process. Technorati Tags: ADR, law, mediation

Last week, the Southern District of Texas compelled arbitration in a class-wide lawsuit filed against AT&T Mobility, LLC. In Johnson v. AT&T Mobility, LLC, No. 4:09-CV-4104, (S.D. Tex., December 21, 2010), an AT&T wireless customer, Johnson, filed a class action lawsuit on behalf of himself and all similarly situated AT&T customers in the State of Texas to recover state and local sales taxes paid on monthly fees for internet services included in AT&T wireless data plans. According to Johnson, despite that Texas Tax Code § 151.325 provides a statutory exemption from sales tax on the first $25 of such monthly charges, AT&T collected, and continues to collect, sales tax on its wireless data plans. Johnson also filed claims which alleged AT&T violated the Texas Deceptive Trade Practices Act (DTPA) and sued for breach of contract, injunctive relief and damages. After a Judicial Panel on Multidistrict Litigation declined to transfer the case for consolidated pretrial proceedings, AT&T filed a motion to compel arbitration pursuant to the terms included in its Terms of Service Agreement. According to AT&T, the Terms of Service Agreement required that all disputes between the parties be arbitrated and that arbitration be conducted on an individual, rather than a class-wide, basis. Johnson did not dispute that an arbitration agreement existed, but argued instead that the agreement did not extend to the current dispute and, even if it did, the agreement was unenforceable. The court first examined the Terms of Service Agreement in order to determine whether the arbitration agreement applied to the parties’ dispute. The relevant agreement in ATTM’S Terms of Service reads: “AT&T and you agree to arbitrate all disputes and claims between us. This agreement to arbitrate is intended to be broadly interpreted. It includes, but is not limited to: claims arising out of or relating to any aspect of the relationship between us, whether based in contract tort, statute, fraud, misrepresentation or any other legal theory….” (Decl. of Richard J. Rives, Exs. 1-4, Doc. No. 18.) Thus, as the language encompasses “all disputes and claims” “arising out of” or “relating to” the agreement, the Fifth Circuit instructs that the agreement is a broad one capable of expansive reach. Plaintiff’s allegation that ATTM wrongfully collected taxes from him and from other similarly situated consumers surely arises out of or relates to an aspect of the relationship between Plaintiff, a consumer, and ATTM, a retailer and collector of sales tax. Indeed, the agreement’s language does not limit binding arbitration to disputes regarding the provision of wireless services. It specifically provides that all disputes and claims arising out of or relating to any aspect of the relationship must be arbitrated. There is no exception for the sales tax collection portion of the transaction between consumers and ATTM. Thus, the Court finds that Plaintiff’s claims arising from the alleged wrongful collection of taxes by ATTM fall within the broad language contained in all four versions of the Terms of Service to which Plaintiff agreed. The court next examined the enforceability of the arbitration agreement under Section 2 of the Federal Arbitration Act (FAA) stating “an agreement to arbitrate is valid under the FAA if it meets the requirements of the general contract law of the applicable state.” Johnson argued the arbitration agreement was both procedurally and substantively unconscionable under Texas law. According to the court, Johnson offered no evidence to support his contention that the agreement was procedurally unconscionable and no evidence existed in the record to support his claim. Johnson argued the agreement was rendered substantively unconscionable by the Texas Supreme Court’s holding in In re Poly-America, L.P., 262 S.W. 3d 337, No. 04-1049 (Tex. Aug. 29, 2008). In declaring Poly-America inapposite, the court stated, Plaintiff reads this holding broadly, essentially arguing that an agreement to waive any statutory right will not be enforced if it interferes with the deterrent purpose of a statutory scheme. The court, however, held that the elimination of the substantive rights and remedies available to plaintiffs under the Worker’s Compensation Act impermissibly undermined the goals of the statute such that the agreement was rendered substantively unconscionable. Notwithstanding that the [DTPA] expressly contemplates the availability of class-wide relief, Texas courts, as well as other courts interpreting Texas law, have consistently held that class actions are procedural devices, and do not implicate substantive rights. The court next dismissed Johnson’s argument that the agreement was so one-sided as to render it substantively unconscionable despite that Johnson would be bound by an arbitrator’s adverse decision and AT&T could still pursue a claim against the state comptroller in the event of an unfavorable decision by stating, The Court is persuaded, however, that the disparity in available review is not a function of the arbitration agreement itself, but of Texas state law, which provides ATTM recourse against the comptroller in the event it is ordered to issue a refund to Plaintiff. Johnson also argued that the arbitration agreement was rendered unenforceable by state law. According to the court, however, both Texas Civil Practice and Remedies Code § 171.002 and the Uniformity Clause of the Texas Constitution, Article VIII, Section 1, to the extent it “requires a judicial forum for all tax-related disputes, notwithstanding otherwise valid private agreements to arbitrate,” were preempted by the FAA. Finally, Johnson argued that enforcement of the arbitration agreement would violate the Due Process and Equal Protection Clauses of the Fourteenth Amendment to the United States Constitution. Although Johnson alleged that AT&T acted as the state’s collection agent, his Due Process and Equal Protection arguments failed since no state action occurred, Because a retailer is a private actor, Plaintiff’s Due Process and Equal Protection claims do not meet the threshold requirement that the alleged injury be the product of state action. Plaintiff’s attempt to circumvent this deficiency by casting his argument in terms of the State’s actions also fails because the State is not responsible for the conduct about which Plaintiff complains-the fact that he is forced to arbitrate his claims against ATTM. After holding […]

John Lande, Director of the LLM Program in Dispute Resolution and Isidor Loeb Professor at the University of Missouri School of Law, recently published a useful article entitled Helping Lawyers Help Clients Make Good Decisions About Dispute Resolution, 17 Dispute Resolution Magazine 14, (Fall 2010). In the article, Professor Lande “suggests a strategy to help lawyers counsel clients in choosing dispute resolution options.” Here is the abstract: Lawyers face a great challenge in advising clients about what dispute resolution (DR) process to use. There are many DR processes and people are developing new variations all the time. The choice of process can have a huge impact on the parties. Thus it is important for lawyers to give clients good advice about the choice of process, though this is easier said than done. This article suggests that local and subject-area legal practice communities use dispute systems design strategies to help lawyers counsel clients in choosing DR options. These strategies could include development of protocols for lawyers to assess DR options with convenient checklists, educational materials for clients, and trainings. These strategies can include rules requiring lawyers to advise clients about DR options, but lawyers can easily circumvent these rules, which are not likely to be effective unless they are part of a comprehensive strategy. The article may be downloaded here (without charge) from Social Science Research Network. Professor Lande’s article was also selected to appear in the March 2011 issue of GPSolo Magazine as a part of the “Best of ABA Sections” compilation. What are your thoughts? Technorati Tags: ADR, law, arbitration

The Supreme Court of Texas has held that participation in a non-binding mediation rendered a debtor a “settling person” under Chapter 33 of the Texas Civil Practice and Remedies Code for purposes of determining proportionate liability. In MCI Sales & Serv. v. Hinton, No. 09-0048, (Tex. December 17, 2010), the owner and operator of a motorcoach rental service, Central Texas, filed for Chapter 11 bankruptcy protection after an accident in which five passengers were killed and several others were injured. Central Texas maintained a $5 million liability policy, the proceeds of which were paid into a liability fund maintained by the bankruptcy court. The crash victims filed creditor claims against Central Texas in bankruptcy court and participated in a non-binding mediation intended to apportion the proceeds of the liability fund. During mediation, each claimant was assigned a percentage of the fund. These percentages were incorporated into a plan submitted to and approved by the bankruptcy court in October 2003. Under the “Apportionment Plan,” a claimant could accept the mediator’s percentage and immediately receive that portion of the liability fund. If the claimant chose not to accept the mediator’s allocation, the claimant participated in a “Litigation Plan.” Under this plan, the claimants tried their claims to a special judge agreed to by the participants, and their recovery under this plan was capped at 110% of the mediator’s allocation. Further, the parties could agree at any time to approve a full or partial distribution to any or all participants. Central Texas’s tort liability in excess of the liability fund was discharged upon approval of its reorganization plan the following year. In June 2003, the claimants filed a lawsuit against the manufacturer of the motorcoach, Motor Coach Industries Mexico, S.A., (MCI) alleging the manufacturer of the bus should have installed seatbelts and glazed the windows of the coach with a different material. After the trial court denied MCI’s motion to join Central Texas and refused to submit a question to the jury regarding proportionate liability, a jury awarded the claimants more than $17 million. Following the lawsuit against MCI, each claimant participated in the bankruptcy court Litigation Plan and appeared before a special judge. The special judge held that the bus driver’s negligence was the proximate cause of the claimants’ injuries and awarded all but one claimant 110% of the mediator’s award. The awards were prorated due to limited funds, however, and each claimant received a sum within 2% of that awarded by the mediator. The trial court next entered a judgment which adjusted the damage awards to account for funds each claimant received under the Litigation Plan. MCI appealed and an appellate court reversed and remanded the case, but rejected MCI’s preemption argument. MCI then petitioned the Supreme Court of Texas for review of its preemption argument and the claimants cross-petitioned for a “review of the proportionate responsibility issue.” MCI argued that the jury’s award was preempted by the Federal Motor Vehicle Safety Standards 205 and 208. Federal safety regulations governing at the time the motorcoach was manufactured allowed bus manufacturers to choose between several particular types of window glaze and were silent as to whether seatbelts were required. After a lengthy review of the regulations at issue, the Supreme Court of Texas held, Because we conclude that the jury’s verdict which is grounded in this state’s common law does not present any obstacle to the accomplishment of the federal regulatory scheme’s purpose, we hold that the federal safety standards at issue do not preempt state law. Next, the Supreme Court determined whether Central Texas was a “setting person” under Chapter 33 of the Texas Civil Practice and Remedies Code. At the time of the accident, “section 33.003 required a trier of fact to determine the percentage of responsibility for each claimant, each defendant, each settling person, and each responsible third party who had been properly joined.” If a defendant’s percentage of responsibility exceeded 50%, that defendant was jointly and severally responsible for all of the damages a claimant could recover. The Supreme Court held that Central Texas was a “settling person” under the statute “and the trial court should have submitted a question to the jury concerning Central Texas’s proportionate responsibility as such.” According to the Court, We also apply Chapter 33 of the Texas Civil Practice and Remedies Code to a plan adopted by a bankruptcy court to apportion a debtor’s insurance proceeds among a group of creditors who filed claims against the bankruptcy estate. The unique plan allowed the claimants to either accept a mediated percentage of the proceeds or to litigate their claims before a special judge. Even if the claimants chose the latter course, their recovery was capped at 110% of the mediator’s award, and the claimants could agree at any time to full or partial distributions to any or all of the claimants. We must decide if this plan renders the debtor—who purchased the insurance policy funding the plan and whose further liability was discharged in bankruptcy—a settling person under Chapter 33 for purposes of determining proportionate liability. We conclude that it does. Accordingly, we affirm the court of appeals’ judgment and remand to the trial court for further proceedings consistent with this opinion. The Supreme Court of Texas held that the jury’s verdict was not preempted because it was grounded in state common law and did not present any obstacle to the accomplishment of the federal regulatory scheme’s purpose. The Court further held that Central Texas was a “settling person” for purposes of determining proportionate liability under Chapter 33 of the Texas Civil Practice and Remedies Code and remanded the case. In his dissent, Chief Justice Jefferson’s stated, I would hold that the court of appeals erred in reversing the trial court’s refusal to submit Central Texas as a “settling person.” Because the Court’s holding regarding Chapter 33 neither complies with the statute (“at the time of submission”), nor properly construes the circumstances under which [claimant] pursued his claims within the bankruptcy proceedings, I respectfully […]