Agenda for 13th Class

1. Agenda for 13th Class • Admin • Name plates • Handouts • Slides • Lunch tomorrow (Friday), 12-1 (Rm. 106) • Review • Appeal • German Procedure (continued) • Settlement • ADR

2. Assignment for Next Class I • 1995 exam question • Pay attention to genre -- appellate opinion (not memo to partner) • Can’t write “court will probably…,” but need to resolve each issue • Need to explain at end whether you affirm, reverse, remand • Affirm. Lower court judgment stands • Reverse. Appellate court changes lower court judgment • Remand. Appellate court sends case for resolution back to lower court with instructions on what to do differently • Reverse and remand. • Pay particular attention to the appellate review issues • For each issue, consider • Who can appeal? • Was issue waived? • Standard of review • If error, was error harmless? • Of course, also pay attention to other issues -- Discovery, amendment…

3. Assignment for Next Class II • Writing Assignments from 1995 exam question • WG1 & WG2. Jan 1994 • WG3. April 1994 • WG4. January 1995 • WG5. Feb 1995 • WG6. March 1995 • WG7. April 1995 • For each of these issues, remember to discuss (where relevant) appellate review issues • (WG1-7). What is the ultimate decision?: • Affirm? • Reverse? • If remand, what issues does trial court need to resolve? • If new trial, which defendants should be parties to new trial and which issues and causes of action are to be litigated?

4. Review of Appeals • Can only appeal to change judgment • Need not cross-appeal to defend judgment on different grounds than used by trial court • Final judgment rule • Can only appeal when case is really over • Waiver • Can only appeal issues properly raised and presented in trial court • Harmless error • Appellate court only reverses if error really made a difference • Standards of review • De novo – 12(b)(6), SJ, JMOL and other legal issues • Clear error – findings of fact in bench trials and other contexts • Abuse of discretion – when court has discretion • Amendment, sanctions, new trial, and nearly all discovery issues

5. Langbein, “German Advantage…” • 1) Are you convinced that German civil procedure is better than American civil procedure? Why or why not? • 2) What aspects, if any, of German civil procedure do you think are superior to American civil procedure? Could we adopt them without changing other aspects of our procedure? • 3) What aspects of American procedure do you think are superior to German civil procedure? Could they adopt them without changing other aspects of their procedure? • 4) Do you think that US courts would need a larger or smaller number of judges if we were to adopt German civil procedure ? • 5) Do you think a bad judge has a bigger negative effect in Germany or the U.S.? • 6) Europeans are generally willing to pay higher taxes to fund higher quality public services. Can that help explain why Germany and the U.S. have different systems of civil procedure?

6. Review of German Procedure • Control of sequence • Discovery • Witnesses • Experts • Appellate review • Judicial career

7. Intro to Settlement I • Most cases settle • Roughly 2/3rds of filed cases settle • Some cases settle even before complaint filed • Roughly 5% go to trial • Roughly 20% dismissed (Rule 12) or terminated by summary judgment • Roughly 10% other – default judgment, plaintiff failed to prosecute, referred to arbitration, etc. • Settlement is contract by which plaintiff dismisses case in return for something valuable from the defendant • Usually money • Can be almost anything – job, house, letter of recommendation, apology • Often non-monetary terms -- Confidentiality/secrecy, return of discovery documents, payment of costs • Economic analysis of settlement • Settlement is attractive to parties because it enables them to save on the cost of litigation • Settlements is sometimes not possible, because parties are sometimes too optimistic about trial outcomes • Settlement is sometimes not reached, if the parties are too stubborn (strategic) in their negotiations

8. Intro to Settlement II • Economic analysis of settlement • Settlement attractive to parties because saves on litigation costs • Total litigation costs often equal net amount plaintiff recovers • Suppose plaintiff wins $90,000 • Usually pays one third to lawyer. • So plaintiff’s lawyer gets $30,000 • So plaintiff nets $60,0000 = $90,000 - $30,000 • Defendant usually pays lawyers roughly same amount: $30,000 • So lawyers get $60,000 ($30,000 + $30,000) and plaintiff gets $60,0000 • Defendant pays $120,000 = $90,000 + $30,000 • If settle early, parties can both be better off • E.g. Defendant settles with plaintiff for $80,000 • Of course, depends in part on how much parties have already invested in litigation

9. Intro to Settlement III • Economic analysis of settlement (cont.) • Settlement possible if it makes both sides better off than trial • Need to calculate outcome if case did not settle • Easy if trial outcome known with certainty • Plaintiff. Judgment minus lawyers fees. 90K -30K=60K • Defendant. Judgment plus lawyer’s fees. 90K+30K=120K • So any settlement amount between 60K and 120K would make both parties better off • Of course, may fail to settle because of hard bargaining • If trial outcome uncertain, need to calculate expected value • Expected value = probability that plaintiff will prevail x judgment amount if plaintiff prevails • Suppose 50% probability that plaintiff will get 100K • Plaintiff better off with settlement greater than: • (50% x 100K) – 30K = 50K – 30K = 20K • Defendant better off with settlement less than: • (50% x 100K) + 30K = 50K + 30K = 80K • So any settlement between 20K and 80K would make both parties better off • Of course, lots of simplifying assumptions….

10. Settlement • Settlement Problems

11. Intro ADR • ADR = Alternative Disputes Resolution • Mediation. Settlement negotiations with assistance from neutral person • Mediator does not have power to imposed settlement • Used with increasing frequency • More when prepare for mock mediation on November 4 • Arbitration. Adjudication by private judge • Settlement is sometimes classified as ADR

12. Arbitration I • Adjudication by private judge under rules agreed to by parties • Must be agreed to by parties • Pre-dispute. In contract, before dispute arises • After dispute arises • Arbitration is legally binding • Party that agreed to arbitration and then changes its mind can be compelled to arbitrate • Court will dismiss case • Arbitrator can enter equivalent of default judgment • Arbitration awards are enforceable in court • Arbitration awards are not generally appealable • Arbitration may be through established organizations (non-profit or for profit) • American Arbitration Association, JAMS • Organizations have panels of arbitrators and set rules

13. Arbitration II • Parties to arbitration generally have control over who arbitrators are • Either agree on arbitrators in advance • Or agree to procedure for selecting arbitrator • E.g. Start with list and each side strikes those like least, etc. • Procedure may be set out in organization rules (AAA or JAMS) or may be negotiated by parties • Often arbitrators are retired judges, but can be anyone • E.g. Writers Guild has writers as arbitrators • Parties to arbitration generally have control over procedures • AAA and JAMS have rules that can choose • Or can set out own rules • E.g. Writers Guild. Everything in writing, no oral hearing or testimony

14. Arbitration III • Arbitration is controversial • Especially in consumer contracts • Where business may put arbitration clause in form contract stipulating defendant friendly arbitrators and procedures (e.g. no class actions) • Federal law promotes arbitration • Federal American Arbitration Act is interpreted to require states to enforce arbitration agreements, except in rare circumstances • Agreement was unconscionable or otherwise defective under ordinary state law contract principles (e.g. fraud, duress), or • Procedure violative of due process (e.g. biased judges) • Very hard to prove, even though probably often true, because business generally chooses arbitration procedures, including rules for selection of arbitrators • Businesses are “repeat players” • So arbitration providers have incentive to please business, otherwise business will choose other arbitration provider in future.