Subway Settlement

Remember "Where's the Beef?" This week, Subway finally settled a multidistrict federal class action suit that accused Subway of defrauding its customers over the length of its bread. Some say the Subway foot-long settlement is short on dough, but Subway has agreed to pay some money and put in place a number of quality-control measures to “help ensure that the bread sold to customers is either 6 or 12 inches long." Subway is requiring that monthly restaurant inspections “include a sampling of the baked bread to ensure it is at least 12 inches long.” Subway fast-food restaurants will use bread-measuring tools that ensure their so-called six-inch and foot-long sandwiches don't come up short. According to a memorandum supporting plaintiffs' unopposed motion for final approval of class action settlement, Subway's parent company, Doctor's Associates Inc., will be required to conduct monthly compliance inspections making sure that the restaurants' bread is the size as marketed. The settlement covers only injunctive relief and does not bar individuals from suing for money damages. Nine name plaintiffs could receive up to $1,000 each. The total payout, including attorney fees, won’t exceed $525,000, according to the terms of the deal. I often encourage parties to explore non-monetary settlement terms that add value to a deal and that couldn't ordinarily be enforced by a court order or eventual judgment by a prevailing party. The remedial measures apparently sunset after four years, so get your real foot-long BMT now! See details here-- http://www.wied.uscourts.gov/mdl-no-2439-re-subway-footlong-sandwich-marketing-and-sales-practices-litigation and here-- http://www.subsettlement.com

Water Wars

A settlement in an ongoing 25-year water war between Florida and Georgia has not yet been attained, but a move towards compromise was just announced. Special master, Ralph Lancaster, who was previously appointed by the U.S. Supreme Court to help resolve the dispute, said he was delighted to see both the word ‘settlement’ and the word ‘mediator’ in recent status reports, indicating a move to the formal ADR process of mediation. Lancaster already urged attorneys for each state to settle the water wars case amongst themselves, rather than risk an unsatisfactory outcome for all involved. Georgia's Governor set aside $20 million for the latest legal battle pitting Florida’s ailing oyster industry against Georgia’s right to use Chattahoochee River water across metro Atlanta. Florida states that Georgia’s overconsumption of water in the Apalachicola-Chattahoochee-Flint River Basin, which includes Lake Lanier, is creating economic hardship, particularly on the oyster industry in the Florida Panhandle region's Apalachicola Bay. Georgia also seeks to maintain full use of the Flint River and its tributaries for farmers in southwest Georgia. The rivers join at the Florida border, becoming the Apalachicola River. Crucial to Florida's seafood folks is a fresh water-salt water balance for oysters to survive in the Apalachicola Bay. While there's been no material progress on a global settlement since last summer, Georgia now reportedly believes the best way to advance the process is "to engage a mediator acceptable to both sides who can create a framework for formal in-person discussions and periodic exchanges of information specifically directed to settlement.” Florida apparently welcomed the suggestion, along with the special master. See news stories here-- http://on-ajc.com/1NcbBY7 and http://bit.ly/213eZsn

BP Settlement

Over the course of the next 18 years, British Petroleum (BP) will pay Florida $3.25 billion or more for its role in the biggest offshore spill in U.S. history. The Deepwater Horizon drilling rig in the Gulf of Mexico exploded in 2010, killing eleven men aboard and spewing crude oil from the sea floor for almost 90 days. Along with Florida, some $18.7 billion will be paid to Mississippi, Louisiana and Alabama. BP already spent $42 billion in cleanup efforts, penalties and payouts for people whose livelihoods were directly affected by the spill. For businesses and individuals, about $5 billion was paid out. The accident led to thousands of lawsuits against BP, as well as Transocean, the rig’s owner, and Halliburton, which provided contract services for the project. Last week's settlement was the largest of BP’s agreements since the spill. BP agreed in 2012 to plead guilty and pay the government $4 billion to resolve a criminal case. BP also agreed that year to pay another $525 million over allegations of understating the size of the spill. The company also reached an estimated $10.3 billion settlement with most Gulf area residents and businesses harmed by the spill who did not opt out. That deal will probably cost more because claims that haven’t been fully processed. The settlement didn’t cover banks, casinos, insurance companies and businesses or residents in large swaths of Texas and Florida. It also didn’t include shareholders or businesses blaming BP for the Obama administration’s moratorium on deep-water drilling in the Gulf following the spill. BP has increased the amount set aside to pay for the spill to $53.8 billion which may not be enough. Investors filed a securities-fraud lawsuit, claiming BP downplayed the disaster, which goes to trial next year in Texas. A class action covers investors who bought BP’s U.S. shares from a period days after the blowout. BP will ask the U.S. Court of Appeals in New Orleans this month to block them from suing as a group, which could delay the case. Investors are seeking as much as $2.5 billion, according to court filings. BP's defense seeks to deny responsibility for those damages because the U.S. government ordered and extended the drilling ban for months. See stories here-- http://bit.ly/1H5iMIs and http://bit.ly/1NLxrOg

Iranian Settlement Negotiations

Talks began today in Vienna regarding final settlement on Tehran's disputed nuclear program. Though the parties have indicated a deal may prove difficult, the Iranian negotiators were reported to have stated that if all sides enter the talks with the political will, positive results may be reached in time. Iran's Supreme Leader Ayatollah Ali Khamenei, however, who has final say in nuclear matters, was pessimistic about the prospects of a long-term deal. U.S. government officials similarly downplayed expectations in what was described as a complicated, difficult and lengthy process. This meeting is the first since the United States, Russia, China, France, Britain and Germany struck an interim accord with Iran last fall to scale back nuclear work in return for some sanctions relief. The issues for the permanent agreement include the level of Iran's ongoing enrichment of uranium, underground enrichment facilities and reactors, and inspection of military complexes where the IAEA suspects activities related to weapons development occurred. A final deal would define the permissible scope of an Iranian nuclear program and resolve concerns that Tehran is seeking the capability to build an atomic bomb. Iran, of course, denies having any such goal and wants the complete removal economic sanctions. See stories here-- http://reut.rs/1mr7muc and http://bbc.in/1gQ2vgj

Bracket Madness

As it's the season of NCAA basketball brackets, I thought I'd take a moment during March Madness and explore bracketing-- in mediation, that is. Bracketing can be a useful tool in breaking through a stale negotiation. Mediation usually begins with offers intended to send messages to each side, but which are frequently unrealistic in a given dispute. Offers in the early rounds typically remain outside the range of numbers likely to lead to ultimate resolution. Parties can then fall into a pattern of mirroring small incremental movements, until the dance stalls in frustration. While not appropriate for every session, Mediators may effectively pull brackets from their toolbox at this juncture. Because bracketed numbers re-frame the bargaining, parties begin to see the negotiation anew. Settlement becomes a Cinderella team in the tourney. During this process, even exploring potential agreement encourages the parties that the other side still intends to make a good faith effort to strike a deal. Resolution can sometimes remain out of reach until the parties find their way to bargaining bracketed by what each perceives as reasonable numbers. Plaintiffs and defendants might similarly argue just how far each has moved from its initial, often pie in the sky position. However, movement toward a number that is realistic has a better chance to settle the matter. Mediators try to keep conversations with the parties and their counsel going, pushing nuances and nuggets of the case, while identifying underlying interests. As a result, information about the respective risks then drives a numerical range within which settlement can most likely occur. Though parties may propose this strategy, it is better if the mediator introduces the concept of bracketing as a neutral and then caucuses to a conditional range, eventually finding common ground. With a win-win, you get a result superior to 63 of the teams in the tournament!

Moses or Solomon?

A federal judge ordered mediation with a magistrate judge in a lawsuit about whether the Ten Commandments can be displayed at a Virginia high school. U.S. District Judge Urbanski of Roanoke ordered the school board and the unnamed student and parent into mediation to see if a compromise can be reached over the biblical display. It's been reported that the judge suggested a deal could be made where the first four of the Ten Commandments are left off the display. This is unusual in cases of this type, which are typically all or nothing. For instance, in a pending Florida case, the Eleventh Circuit Court of Appeals recently heard arguments regarding Dixie County's Ten Commandments, where litigants are fighting over whether or not a six-ton model of the Ten Commandments in front of the county courthouse is unconstitutional and whether an anonymous plaintiff has standing in that matter. In the VA case, the judge issued a protective order allowing the parent and student involved in the case to remain anonymous during the suit which apparently came to fruition by a mutual agreement due to the threat of hostility by the community. The case involves a four-foot tall display of the Ten Commandments first hung on school walls following the Columbine school shooting in 1999. The display was taken down over a decade later by school officials, after receiving complaints, and replaced with a copy of the Declaration of Independence. In 2011, the Ten Commandments display was replaced following a backlash from parents and pastors. The display was then removed again after a month by school officials for no stated reason, prompting students to walk out of classrooms in protest. Will the tablets be split down to six, remain at ten or will there be none at all? See stories http://bit.ly/IYrWcx and http://bit.ly/JlIsaa

Baseball Mediation: Cuomo as Mets-Madoff Mediator

While his son, Andrew, celebrates obtaining a NY budget with time to spare, Mario Cuomo is coming off a victory of sorts of his own-- having successfully mediated the controversy with the Madoff trustee in time for baseball season. Originally appointed as mediator in the bankruptcy case seeking more than a billion dollars from the franchise, Cuomo got the Mets owners to pay $162 million in fictitious profits, which could be offset by their claims as victims of the massive fraud. Judge Rakoff acknowledged Cuomo's role in mediating the settlement before trial and attorneys involved said it couldn't have been done without Cuomo's help. Cuomo, now 79, still serves as of counsel for a major law firm and is listed on a register of mediators for the federal court. The former politician said he brings the negotiating skills he honed as NY governor to the task. "A mediator makes sure the process is going forward," Cuomo said. "He meets. He cajoles. He argues." See articles on the case Picard v. Katz et al., U.S. District Court, SDNY, No. 11-03605 http://es.pn/H5e2Ks and http://bit.ly/H8Z7b9

ENE - Early Neutral Evaluation

Perhaps because of the still struggling economy or the realization during the recession that the cost of litigation is not trivial, Early Neutral Evaluation (ENE) as a form of ADR has returned. This process, popular out West, is an offshoot of mediation that puts the neutral in the role enhancing direct communication between the parties about their claims and supporting evidence. ENE can provide an assessment of the merits of the case by a neutral expert in an early "reality check" for clients and lawyers. This helps to identify and clarify the central issues in dispute, assist with discovery (including E-discovery) and can streamline case management planning. A confidential exchange of factual information can help facilitate settlement discussions, once requested by the parties. A neutral with expertise in the subject matter typically hosts an informal meeting of clients and counsel. Following presentations, the evaluator identifies areas of agreement, clarifies and focuses the issues and encourages the parties to enter into any stipulation or agreement that is feasible, including settlement. The neutral case evaluator has no power to impose settlement and may not force a party to accept any proposed terms. The parties' formal discovery, disclosure and motion practice rights are fully preserved. The confidential evaluation is non-binding and is not shared with the trial court. If no settlement is reached, the case remains in litigation, but hopefully with the litigants better informed as to the risks, work still necessary and the monetary aspects of continuing on a track toward trial. A new publication from the ABA this year on ENE outlines the process - http://bit.ly/y49Y1u

There's an App for that-- Mediation

According to its developer, the PictureItSettled App helps negotiators map successful negotiation strategies, calculate moves, and graph paths to optimum settlements. The app-based software, just launched this year, is designed so litigants analyze their positions. This may not necessarily help the neutral facilitator (who may make actually better use of this as a quick reference record of negotiations). Midpoints are over-emphasized by litigants in my experience, as is bracketing as a tool, though admittedly there are times when looking at these are appropriate. By entering moves, users plot successful negotiation strategies using proprietary algorithms in the app. Currently available on the Apple iOS and Android market in a free application, the "Lite" version tracks the dollar moves in negotiations and time intervals between offers. The app then analyzes the offer history and graphs the effects of such moves on the likelihood of reaching a settlement by testing the patterns on each side. It apparently projects the expected results in measures of dollars and time commitment, which it is claimed assists parties in negotiation visualize if and when they should settle for "optimum outcome." See site: http://bit.ly/wDrU16