Friday, February 23, 2018

Takata Settlement Impacted by Bankruptcy

This week, 44 states and the District of Columbia agreed not to collect a $650-million deal to settle consumer protection claims so victims of Japanese airbag maker Takata Corp.'s faulty inflators can get a bigger piece of the company's remaining money. Takata was forced into bankruptcy last year amid lawsuits, multimillion-dollar fines and recall costs involving inflators that use explosive ammonium nitrate. The chemical propellant deteriorates over time when exposed to high heat and humidity and can then burn too fast, blowing apart its metal canister. Attorneys General for the states alleged that Takata concealed air bag issues and failed to disclose safety defects. Under this deal and a reorganization plan just approved by a federal bankruptcy judge in Delaware, Takata agreed not to represent its air bags as safe unless supported by scientific evidence, not to falsify any testing data, and to keep cooperating with automakers to make sure replacement inflators are available. It also agreed not to sell any airbags that use ammonium nitrate, unless for recall replacement parts. Some of the provisions already were included in an agreement with the National Highway Traffic Safety Administration. Takata had agreed under a DOJ plea to pay victims $125 million and to pay $850 million in restitution to automakers that bought its inflators and are stuck with recall and litigation costs. Under the restructuring plan, Takata will sell most of its non-air bag assets to a Chinese-owned rival for $1.6 billion. Reportedly, the airbag inflator problem touched off the largest automotive recall in U.S. history. Some 69 million inflators in the U.S. and another 60 million worldwide are being recalled, according to court documents and the National Highway Traffic Safety Administration. See more here-- http://lat.ms/2EO0McD

Monday, February 12, 2018

Biblical Origins of Mediation

Today, I attended a Cardozo Legal Society lunch featuring Rabbi David Kay of Congregation Ohev Shalom which just celebrated its 100th anniversary in Orlando. The topic focused on secrecy in Jewish Law or Halaka. Keeping secrets is the stuff of modern common law and is specifically directed in our own oath of attorney in Florida as keeping the secrets of clients inviolate. Given the tendency of human nature to engage in conflict, it is not surprising that mediation is rooted in the history and tradition of many lands and cultures. We find in the Old Testament that Aaron, the first priest of ancient Israel, was the older brother of Moses. While Moses was mediator between God and Aaron, Aaron served as mediator between Moses and the people. Aaron believed in keeping shalom and caused peace to reign between man and his fellow man. While the details of Aaron’s approach are not revealed in Torah or Talmud, there is reference to Aaron which appears to signal biblical legitimacy for an alternative approach to the resolution of disputes outside of the judicial system. Law today still reflects Rabbinic and Talmudic views on dispute resolution. An aggrieved individual has access to the courts and a right to application of the law by a trier of fact. There is also the ability to have a professional neutral facilitate the resolution of those disputes through private caucuses that often reveal things the other side will never learn due to confidentiality which can be crucial to self-determined outcomes at mediation. We take solace in knowing questions we face every day in the field of dispute resolution were also faced by Rabbis and Hebrew sages thousands of years ago. See more here-- http://bit.ly/2CfGiYd

Thursday, February 1, 2018

Blockchain Dispute Resolution?

In all the craze surrounding blockchain technology, it seems a means of automating dispute resolution processes so that parties could benefit from a platform using smart contracts has emerged. Reportedly, Kleros, a decentralized organization powered by the foundation of Ethereum blockchain could manage a decision protocol supporting a multipurpose system custom deployed into smart contract code to arbitrate disputes. Smart contracts built to integrate with Kleros would give parties with conflicts over terms of off-chain contract fulfillment an opportunity to have impartial jurors from across the globe weigh evidence, vote, and select a resolution to be carried out by the contract. Supposedly, evidence is kept private via a hash and asymmetrical encryption in order to protect the sensitive information of the users and provide a proof to the blockchain without revealing the data. Deciders must stake a native token to the platform, pinakion, which makes them eligible to vote on active disputes. Staking more pinakion increases the chances that a juror might be selected. Pinakions act as a metric of reputation and are a key to the Schelling game theoretical model driving the voting mechanism for jurors. The voting system works by having the jurors analyze the evidence of the case and commit their votes by submitting a hash of their vote and a secret value. The Kleros smart contract verifies values revealed and votes committed are unchangeable nor revealed in the application layer to other jurors or parties to prevent influencing the votes of other jurors. Under the system, jurors are to be compensated by fee schedules relative to the various parameters to be hammered into the smart contracts governing, so that both parties will be responsible for making a deposit which will cover the fee. In the case of appeals, the party who covers the fee will be decided by the arbitrable smart contract. The system is not designed to limit appeals, however each appeal increases the number of jurors necessary to conclude the case and thus causes the fee schedule to rise with each additional juror. In theory, although it would become expensive, someone could continue to appeal a case indefinitely, although the costs would ostensively outweigh the benefits. Kleros CEO, Federico Ast, gave an example at a recent TedX talk involving an airline passenger filing a complaint against an airline and two days later being emailed that a jury has ruled for issuing a free ticket. While this looks like another example of automation, he says the human element in this smart-contract resolution protocol is the key to the future of the justice system because it leverages the dynamics of the ancient Greek legal system, which used regular citizens instead of professional court officials. See more here-- http://bit.ly/2nmN8GP and http://bit.ly/2EtxmBo

Friday, January 19, 2018

Water Wars Reach U.S. Supreme Court

This month, attorneys for Florida and Georgia appeared for oral argument before the U.S. Supreme Court in an original jurisdiction case previously tried before an assigned Special Master back in 2016. A ruling in the decades-long "Water Wars" case came in the form of a recommendation favoring Georgia following the filing of post-trial briefs of each state. Florida seeks to limit Georgia’s water consumption from the Apalachicola-Chattahoochee-Flint River Basin, including Lake Lanier, to 1992 levels and to get reparations for alleged economic and environmental harm to Apalachicola's oyster fisheries from drought. The dispute focuses on the river basin which drains almost 20,000 square miles in western Georgia, eastern Alabama and the Florida Panhandle. The Chattahoochee and Flint rivers meet at the Georgia-Florida border to form the Apalachicola, which flows into the bay and the Gulf of Mexico beyond. Special Master, Ralph I. Lancaster, Jr., had strongly advised the states to settle out of court rather than live with a costly decision neither will like. The states mediated the case and even had a post-trial mediation. Florida still seeks a cap on consumption that would alleviate past damage allegedly caused by Georgia. The Sunshine State reportedly gleaned a ray of hope from the high court proceedings. “It’s common sense that that water, if left unattended, would flow down stream,” a testifying riverkeeper in Florida said, a sentiment that appeared to resonate with some of the justices. Justice Elena Kagan acknowledged that Florida had “common sense” on its side. “Can we agree that a cap at the very least would prevent the situation in Florida from getting worse?” Justice Ruth Bader Ginsburg asked. Chief Justice John Roberts also weighed in when confronted with the role of the Army Corps of Engineers, “It seems to me it's asking an awful lot of Florida to have to say: We know that the Corps is going to change things the way it benefits us.” A final ruling may not come for months. See more in stories here-- https://usat.ly/2rlbS6J and http://fxn.ws/2Dj8n5j

Sunday, January 14, 2018

SCOTUS Denies Cert on 5th DCA Ruling Against Arb

The U.S. Supreme Court declined last week to review an appellate ruling by Florida's Fifth District Court of Appeal (5th DCA) that found a patient arbitration agreement unenforceable because it ran afoul of state law, despite the health care provider’s warnings that the ruling could render other health care arbitration agreements here unenforceable. The U.S. Supreme Court refused to grant Kindred Hospital East LLC's certiorari petition, just the latest in a series of long-running battles over the enforceability of health care arbitration agreements. Kindred asked the U.S. Supreme Court to review the state appeals court’s refusal to force the arbitration of medical malpractice claims, saying the decision violates the Federal Arbitration Act. The fundamental dispute lies between state courts and the high court over the scope of the Federal Arbitration Act, as both sides in the dispute argue in their briefs. Kindred asserted if the ruling below was permitted to stand, every contractual agreement to arbitrate healthcare disputes in Florida would be unenforceable. The underlying Plaintiff had sued Kindred and several doctors for medical malpractice in state court after she suffered unspecified injuries during a 2012 stay at an Ocala hospital, a move Kindred argued was prohibited by an arbitration agreement signed by both parties. Florida's 5th DCA sided with the Plaintiff in the summer of 2016 and overturned a trial court’s ruling that compelled the parties to go to arbitration, per the terms of the contract. The appeals court found that the arbitration agreement was invalid because it selectively incorporated provisions from Florida’s own Medical Malpractice Act (MMA) that were favorable to Kindred and left out provisions favorable to patients. Specifically, public policy prohibits the enforcement of an arbitration provision that incorporates some, but not all, of the MMA's arbitration provisions. See more here-- http://bit.ly/2mw6Nmf and http://bit.ly/2EG8ipq and http://bit.ly/2FDvSoj

Saturday, January 6, 2018

FLABAR ADR Section Meeting 1/17/18 in Orlando!

Happy New Year from Orlando Mediator! Please join us as our Executive Council of The Florida Bar Alternative Dispute Resolution (ADR) Section convenes in Orlando during the bar's mid-year winter meeting. Founded some eight years ago, around the time I started this blog, the ADR Section was designed to provide a forum for lawyers and attorney-mediators interested in alternative dispute resolution and a place to share common interests, ideas and concepts. It is not for non-lawyer mediators. The ADR Section regularly puts on continuing legal education (CLE) programs, as well as provides advocacy in rule changes, legislation and commentary to the Supreme Court of Florida when dealing with proposed amendments in all forms of alternative dispute resolution. Any member in good standing of The Florida Bar interested in the purpose of our section is eligible for membership upon application and payment of the ADR Section’s annual dues (which are just $35) and can be added to your regular bar dues at the time of renewal. Any member who ceases to be a member of The Florida Bar in good standing shall no longer be a member of the ADR Section under its by-laws. Hope to see you at the Hilton Double Tree Orlando this month as we debate our position regarding important legislation that has been introduced for the next session which I discussed on this blog last month! More information on our meeting and the section can be found here-- http://fladr.org/events/the-florida-bar-winter-meeting-and-adr-executive-council-meeting/

Thursday, December 28, 2017

R.J. Reynolds to keep paying millions in FL Settlement

A Florida judge enforced a landmark settlement deal and ordered R.J. Reynolds to continue paying the state millions of dollars in tobacco settlement money, despite selling off major brands. The ruling comes nearly a year after Florida's Attorney General sued the tobacco company and Imperial Tobacco Group, a London-based company that took over North Carolina-based Reynolds American Inc. Reportedly, the A.G. said payments will ensure Florida's historic tobacco settlement is honored and the state receives the money it is owed. Florida was already owed $45 million when the suit was filed and could lose $30 million a year going forward. The judge found that until R.J. Reynolds has its obligation to pay Florida transferred to Imperial Tobacco Group, it must continue to pay. R.J. Reynolds and other large tobacco companies were part of a 1997 multibillion-dollar settlement with Florida to compensate the state for treating sick smokers. However, the company since sold cigarette brands Kool, Winston, Salem and Maverick to Britain's Imperial Tobacco Group, with neither company continued to make payments to the state. Pushed by then-Governor Lawton Chiles, Florida was one of the first states in the U.S. to seek damages from tobacco companies. The state's initial lawsuit sought reimbursement for Medicaid costs in the past and the future and contended that tobacco companies had engaged in unlawful actions and misleading advertising. Last year, the state was projected to receive more than $350 million from the settlement. See full story here-- http://bit.ly/2E79gvs