Insight into Trump Stormy Settlement Agreement

This week, porn star Stormy Daniels was on CBS's 60 minutes and since her interview, the White House reportedly isn't saying much, including declining for weeks to say whether President Trump was party to a $130,000 hush-money payment his personal lawyer, Michael Cohen, made to Daniels on the eve of the 2016 election. Cohen obtained a temporary restraining order against Daniels from a private arbitrator, a retired judge, barring her from disclosing "confidential information" related to the nondisclosure agreement. A lawsuit was filed after a multiple reports alleging that Daniels and Trump had an affair beginning in July 2006 at a celebrity golf tournament and was paid money for her to keep quiet in October 2016. While Daniels initially denied the affair, her decision to file the lawsuit confirmed her part in the affair. She and her lawyer, Michael Avenatti, even included the text of the “hush agreement” as an exhibit attached to her complaint which, interestingly, uses pseudonyms for the parties and says they wish to avoid the lime, expense, and inconvenience of potential litigation, and to resolve any and all disputes and potential legal claims between them. The case was filed in L.A. Superior Court and then removed to federal court. The first controversy likely to be taken up by the judge is whether the dispute must be handled in arbitration, where Daniels is being pursued for allegedly breaching contract by making public statements about Trump. Also at issue, is who signed the agreement on behalf of whom. Although Trump hasn't formally moved yet to compel arbitration, the mere threat has prompted Avenatti to argue depositions of Trump and Cohen each are necessary in order to collect facts that bear directly on the formation of the hush agreement. See copy of initial pleadings, including agreement as exhibit linked at bottom of story here-- https://bit.ly/2GASrNK and more on federal court proceedings linked to this report-- https://bit.ly/2IdwotF

Tune in for Open Ninth This Month

Join me March 21st for my guest appearance on Open Ninth, a first of its kind podcast hosted by Ninth Judicial Circuit Chief Judge Fred Lauten. This program features candid perspectives from judges and interviews with innovators in the legal field. These 'Conversations Beyond the Courtroom' are part of a new communications plan put in place by the Florida Supreme Court that seeks to better connect the courts with citizens. Since 2001, I've mediated lawsuits in this circuit and around the state as a certified mediator. I also served as a General Magistrate in the Civil Division, presiding over circuit cases in Orange County in 2013. In this episode, I discuss my experience as a mediator and the important role of mediation as an effective tool of alternative dispute resolution in the justice system. Be sure to listen here: http://www.ninthcircuit.org/openninth

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

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

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

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

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