New England Biz Law Update
Robert Rack’s caseload at the 6th Circuit includes appeals of bankruptcy proceedings, employment discrimination claims, business contract disputes, personal injury cases, investment fraud claims and excessive force cases.
And if Rack is successful, there won’t be a single brief filed in any of them.
For more than two decades, Rack, the 6th Circuit’s chief mediator, has been facilitating confidential settlement discussions in federal civil and bankruptcy appeals.
Once considered unsuitable for the litigious and often complex cases that reach the appellate level, mediation is now commonplace in federal and state appellate courts throughout the nation.
“Cases are settled much earlier and with less formal involvement in the judicial system,” Rack said. “It saves judges time and litigants money.”
The 6th Circuit’s mediation office processes about 1,000 appeals a year, selected from the pool of cases considered most amenable to the process. About 45 percent are resolved with no judicial involvement.
Appellate courts in 23 states have also introduced mediation programs. And all of the circuits, including the Federal Circuit, have mediation programs – many of them modeled after the 6th Circuit’s.
When Rack was hired by former 6th Circuit Chief Judge George Edwards to help pioneer appellate mediation in 1981, many attorneys were skeptical about its value.
After all, these were cases in which the parties had typically already attempted and failed to reach settlement.
“Initially, lawyers were scratching their heads, wondering what we were up to,” Rack said. “Then, gradually, especially over the last decade, mediation has become so ubiquitous in our legal system that lawyers have become very familiar with it. Today, it’s a regular part of most practitioners’ landscape.”
David Doyle, appellate mediator for Ohio’s 10th District Court of Appeals in Columbus, said attorneys who handle appeals at the state level were initially wary as well.
“I think the thought was, ‘Why would any case settle at the appellate level?’” Doyle recalled.
But the success of the 6th Circuit’s mediation program convinced judges and attorneys in Ohio’s appellate courts to consider mediation.
Since the program began in 1989, Doyle has mediated more than 4,000 cases, with an overall settlement rate of 55.6 percent.
“There’s been a change in philosophy,” Doyle said. “Most litigators have experienced mediation now, so they know what to expect. They understand the process and how mediation can be used to potentially benefit them.”
“The supply of people who are interested in mediation in the appellate level has probably reached a critical mass,” agreed Roger A. Hanson, a Williamsburg, Va.-based legal consultant who has helped design appellate ADR programs in several states, including Florida, Ohio and West Virginia.
Saving time and money
The results of many appellate ADR programs have been impressive.
“The world would be quite different without appellate mediation. This process has proven successful across state courts in providing individual cases the appropriate amount of focused attention they deserve,” Hanson said.
Doyle agreed: “Objective information indicates there are cost savings, time savings and increases in settlements and attorney satisfaction.”
According to the National Center for State Courts (NCSC) in Williamsburg, Va., appellate courts with ADR programs can expect nearly a doubling in the number of settled cases.
In addition, the NCSC reports that:
In Alabama, 54 percent of cases in the Court of Civil Appeals that were referred for mediation between Jan. 7, 2004 and July 1, 2006 settled. Forty eight percent of state Supreme Court cases referred to mediation during the same time period settled.
“I am thrilled with the results,” said Rebecca Oates, mediation administrator for the Alabama Court of Civil Appeals.
Doyle said mediation saves money not only for the court system, but also for litigants.
“If you can keep the attorneys from writing long briefs, you’re going to save the litigants money,” he said.
Talking before the next round
Unlike mediators involved in pre-trial conferences, where the parties have more direct involvement, appellate mediators typically work with lawyers arguing over technical legal issues, according to Rack.
“Here we have an environment in which a case has already been presented to a trial court, and has been decided in one party’s favor,” he said. “The court of appeals will be reviewing the trial court’s handling of the case strictly from the record.
“The advantage is that it’s a case that has been through round one. Somebody’s won, and somebody’s lost,” he said. “Before people start investing in the next round, that’s when we try to have a conversation.”
Mediators help attorneys explore settlement options by evaluating the merits of appellate issues and appraising the settlement value of a case, rather than recommending specific solutions.
“The mediator is playing the role of a coach,” Hanson explained. “They’re trying to get these people to think beyond their adversarial clashing. They’re saying, ‘Where do we go from here?’”
Rack agreed: “The mediators have zero power to affect the case in any material way. It’s really about winning cooperation and trying to build a collaborative, problem-solving approach. If our process doesn’t work for the participants, it doesn’t work.”
How it works
In the 6th Circuit, cases routinely scheduled for mediation include all non-pro se civil appeals in which no jurisdictional problems are flagged or potentially dispositive motions have been filed.
Tax and federal agency (such as Social Security or National Labor Relations Board) cases are typically excluded. Rack said government bureaucracies often lack the flexibility to negotiate or compromise for settlement. But he said his office – which has four full-time mediation positions – will mediate any non-pro se civil case if requested by the parties – including government agency cases.
Because of the 6th Circuit’s large geographic area – from the upper peninsula of Michigan to Memphis, Tenn. – most mediation is conducted by telephone conferencing.
“It seemed unfair to drag people from hundreds of miles away to simply ask them if they’re interested in a settlement,” Rack said. “It saves everyone a lot of time and money to have at least the initial conference by phone.”
But in light of attorney feedback indicating a preference for more face-to-face conferences, mediators have begun scheduling more in-person sessions, especially for cases based in Cincinnati, where the Circuit’s courthouse is located.
About a third of cases terminate after the initial conference, with the parties opting to continue the appeal process. Of those that continue negotiations, the median time to complete negotiations is seven weeks.
But Rack said there is no fixed timetable.
“We do not impose time limits,” he said. “We’ll work with people as long as they’re trying in good faith to settle. If you consider the adversarial momentum that is built up by the time a case gets into the federal appellate court, it takes a little while to slow that.
“We make the space to negotiate to a thoughtful conclusion,” he said. “We will defer the briefing as long as all parties are saying they want to keep talking.”
