Thoughts On How We Litigate, Arbitrate, and Mediate Our Most Complex Problems
BusinessLitigationTechnologyTrialUncategorized

The Cognitive Coffee Cup: Opening Argument in the Complex Commercial Trial

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by Andrew Flake In reviewing developments in week one of the Elizabeth Holmes/Theranos trial, a prosecution expected to last for over four months, I immediately thought of the preparation necessary on both sides to deliver their opening statements. Trials like Holmes-Theranos are important not only because of the public discussion they create around important social issues — in this case, the shortcomings of venture capital’s ability to separate real financial performance from performative mythmaking — but for trial lawyers, because they give us data on how robust our jury system is in dealing with high degrees of complexity and volumes…
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MediationResolutionSocial science

Mediation and the Psychology of Money, Part II

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by Andrew Flake In a prior post, I reviewed a compact and very readable book from Wall Street Journal columnist Morgan Housel, whose thesis, supported by colorful and timely examples from the world of business and commerce, is that our decisions about money are generally driven less by rational economics than by evolutionary psychology. From a business mediation and dispute resolution standpoint, it offered some rich insight. Here are a few additional examples: Not Understanding the Idea of “Enough“. What drives an already-successful individual, professionals like Bernard Madoff or Goldman board member and former McKinsey CEO Rajat Gupta, to cross…
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LitigationTechnology

Appellate Advocacy in the Zoom Era

by Andrew Flake What has changed, in this time of virtual cat-filters and huge daily dollops of professional screen time, about good appellate advocacy? Instead of standing behind a podium, in a quiet and majestic appellate courtroom, we are logging in to argue, sitting at our desk or in a conference room. Has that shifted or modified how we prepare, or how we deliver our arguments? I thought it would be interesting to not only think through the issue, but to talk to and get perspectives from both appellate lawyers and judges. Distilling what I heard, I would say this:…
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ArbitrationCross-Border DisputesSocial science

Assessing and Correcting for Implicit Bias

by Andrew Flake Especially in recent months, ADR practitioners, as professional problem-solvers who constantly evaluate and decide business and legal questions, have been examining a phenomenon that impacts all of us: implicit bias. We have been thinking about it, and discussing it, and most importantly, reflecting as a profession on how we can do better in controlling for and actively addressing it. This conversation is salutary and long-overdue. In judicial and arbitral decision-making, just as in other areas, implicit bias is a set of invisible assumptions, positive or negative, working in the psychic background to distort our views. Their power,…
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ArbitrationCase ManagementLitigation

“And If You Didn’t Hear Us the Last Time”: More Emphasis on Arbitral Award Finality

by Andrew Flake A just-issued Georgia Court of Appeals opinion underscores a message the state’s appellate courts have been sending for some time: Arbitration awards are not subject to automatic appeal. They are supposed to be, and are presumed to be, final. Despite this clear guidance, which is the same consistent one that federal courts applying the FAA have been delivering for many years, unsuccessful parties to arbitration have been going to trial courts arguing that one or more of the very narrow exceptions to arbitral finality apply, dressing up an ordinary legal appeal with the exception language, frequently in…
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ArbitrationCross-Border DisputesLitigationResolution

Location, Location, Location: Forum-Selection in International Litigation

by Andrew Flake I once spent a week arbitrating a technology dispute in Helsinki, Finland, walking through the city center to our hearing each day in gusting snow. We were there because the parties’ contract specified a Finnish seat, and among other special aspects of preparation, most of our packing involved how we’d be keeping warm! But apart from the choice of pinstripe or parka, where a dispute gets litigated or arbitrated means much more, and the Eleventh Circuit, in an investor fraud dispute, affords us a recent example. The facts of Don’t Look Media LLC v. Fly Victor Ltd…
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ArbitrationCase ManagementLitigationMediation

Phased ADR Clauses, Redux

by Andrew Flake Having discussed phased dispute resolution, a process in our contracts that moves from more informal modes of discussion to binding ones, like arbitration, let’s add some caveats. These provisions are not off-the-rack suits, to be draped over any, or every contract, or a magic conflict sponge, soaking up every puddle of discord. They need to be tailored, and they can themselves, especially if not stitched with care, give rise to additional litigation. What are some of the ways this can happen? I’d categorize them as questions of condition precedent, i.e., whether they are binding at all; questions…
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MediationSocial science

Human Nature and Mediation: A Focused Review of “The Psychology of Money”

by Andrew Flake I always appreciate a good book recommendation, and received one the other week in The Psychology of Money: Timeless lessons on wealth, greed, and happiness. In a compact format, author Morgan Housel, a Wall Street Journal columnist, looks at some of the ways that we all relate to money, sharing the insight that what drives these decisions are, more often than the pure rationalism of the economist, the more fluid principles of the psychologist. In considering the book’s insights, neatly packaged in twenty short and very readable chapters, I was, of course, also thinking of what they…
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BusinessCase ManagementMediation

If Honeybees Could Mediate: Benefits of Phased Dispute Resolution

by Andrew Flake I took a field trip last weekend, visiting the gardens of a friend and experienced beekeeper. During a tour of the grounds, I watched in fascination as she tended to honeybees in the hundreds of thousands. They were calm that day, and remarkably, despite our proximity, none of the swarm appeared to care much that we were there. My friend explained that bees have moods, or more properly, modes, and can move quickly from one to the other, usually triggered and organized by scent. But had anyone been stung, that stinger would have released a pheromone, attracting…
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ArbitrationLitigationTechnologyTrial

Delivering a Compelling Closing in the Complex Business Dispute

by Andrew Flake In complex litigation, we are continually distilling the simple from the complex, assessing multiple and often nuanced legal arguments, assessing hundreds of exhibits, sifting through the details of company work. With our closing, we set the capstone on this work, so it is important to make that time count. How can we craft a summation that is memorable and effective, one that will lead to only a good trial result, but to a win that is sustainable on appeal? Let’s begin with understanding the audience, the decisionmaker for the dispute. Although there are some principles common to…
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ArbitrationCross-Border Disputes

The Halliburton Decision, Part II: Considering the Contours of Arbitrator Disclosure

by Andrew Flake In a prior post, we looked at the lead up to the U.K. Supreme Court’s Halliburton opinion, an important decision that enters the thicket of disclosure practices, and emerges having cleared an open path. It involved a Chubb-selected arbitrator who did not disclose his related and contemporaneous participation in other, related references. As we saw, the justices framed the duty as one founded on concerns of not only actual, but unconscious bias, a duty rooted in English law and shaped by international practice. I expect that Halliburton will be cited frequently and looked to by parties, courts,…
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ArbitrationTechnology

Dotting the i’s (and Sealing the Envelope) In Arbitration-Award Challenges

by Andrew Flake The Federal Arbitration Act is oriented toward encouraging arbitration and upholding arbitral awards. And just as the substantive bases to challenge an award are narrow, so too are the procedural requirements strict. The Eleventh Circuit reminds us of that in an April 1, 2021 opinion, O’Neal Constructors, LLC v. DRT America, LLC, involving a motion to vacate filed on time but served too late. The underlying facts are not important, except that the arbitrators awarded seven-figure damages and more than $650,000 in attorney’s fees to O’Neal. With that award delivered in January, DRT had three-months under 9…
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ArbitrationCross-Border Disputes

The Halliburton Decision: UK Supreme Court Incorporates International Best Practices for Arbitrator Disclosure

by Andrew Flake As the use of international arbitration expands, so does the need for consistency in its rules and practices, and confidence in its ability to ensure absolute impartiality. That is so for both advocates and arbitrators. So I read with high interest the opinion of the UK’s Supreme Court in Halliburton Co. v. Chubb, which discusses in depth the issue of arbitrator disclosure under English law. Since England-seated arbitrations are so common in international commercial transactions, the opinion would be important enough to merit attention. But its importance ranges beyond English law: the Court authored the opinion with…
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Arbitration

ICDR 2021: The Role of the Tribunal Secretary

A new Article in the updated ICDR Rules introduces what for many common law lawyers and domestic arbitrators is a curious character: the tribunal secretary. A tribunal secretary, much more common in the realm of international arbitration, is a junior associate who assists the tribunal in limited, non-decisionmaking roles. Exactly what those roles are, however, is and has been the subject of much discussion. Generally, there is consensus that a tribunal secretary can provide administrative assistance–and especially in larger and more complex arbitrations, there is certainly value and efficiency in having those tasks handled at a lower billing rate. Although…
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ArbitrationCross-Border DisputesLitigation

Supreme Court Grants Cert in Servotronics Dispute; Likely to Resolve Circuit Split On Key International Arbitration Question

by Andrew Flake On March 22, the Supreme Court granted cert in the ongoing Servotronics litigation, presenting the likely opportunity for the justices to decide an ongoing and important important question for parties to international commercial arbitrations: whether or not they have a statutory means to take discovery in the United States. I have written before that cert was likely on the question, and with one more Court of Appeals joining the fray, at least four justices seem to agree. In September of last year, considering an application filed under 28 U.S.C. Section 1782 and a corresponding subpoena to Boeing,…
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ArbitrationCase ManagementCross-Border Disputes

ICDR 2021: Third-Party Funding Disclosure in Commercial Arbitration

by Andrew Flake As the market for alternative litigation financing or third-party funding (TPF) of commercial disputes has matured, more parties to commercial disputes are regularly seeking discovery of underlying funding documents. Depending upon the theory — whether a party has bias, who is the real party in interest, who is responsible for litigation or settlement decisions — courts deciding whether to order discovery have expressed mixed views. The same has been true in the international commercial arbitration realm, except that there is more consensus around the notion that, for purposes of arbitrator disclosure and conflict of interest vetting, TPF…
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ArbitrationLitigation

Sweeping for Mines: The Injunctive Relief Carve-out in Arbitration

by Andrew Flake The “injunctive relief” carve-out, which lies quietly in various forms in many arbitration agreements, is a too-often overlooked landmine. Its most frequent purpose, allowing parties to go to court for emergency relief while preserving their right to send the underlying dispute to arbitration, is benign; including the carve-out reflects the historical concern (not as often applicable now) that injunctive relief would not be available, or if available, would be inefficient to seek, from the tribunal. Thus, for example, in a trade secrets dispute, the plaintiff would secure an injunction against disclosure or further use of its secrets…
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Cross-Border Disputes

ICDR’s 2021 Rules Address Compétence-Compétence; Tension with New Restatement Continues

by Andrew Flake The International Centre for Dispute Resolution (ICDR) has updated its rules for international mediation and arbitration, effective March 1, 2021. Because ICDR has a record of thoughtfully advancing innovation in ADR, and because it continues to see a high number of new filings, it is worth practitioners’ time to be familiar with the new rule set. I want to discuss one aspect in this post that I think is significant: stronger and more direct language supporting a tribunal’s power to determine its own jurisdiction. The question here is, can the arbitrator decided arbitrability? In international arbitration, it…
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ArbitrationCross-Border DisputesLitigation

“Absolutely Incensed”: A Foreign Law Twist on Equitable Estoppel in Arbitration

by Andrew Flake A Ninth Circuit battle between two Indian incense makers over whether their case should be arbitrated has still not burned out. After one correction and remand from the U.S. Supreme Court, the Ninth Circuit considered this question: whether Indian law comes into play where two Indian parties, who signed a partnership and arbitration clause governed by Indian law, seek to bind a non-party to that agreement. In Setty v. Shrinivas Sugandhalaya (BNG) LLP (filed Jan. 20), an originally harmonious arrangement between two brothers to split the family incense business — with one fraternal business in Bangalore and…
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Case ManagementLitigationTechnologyTrial

What We Can Learn from the First All-Virtual Patent Jury Trial

by Andrew Flake After a week-long patent infringement trial in federal district court in Seattle, a civil jury hit gaming company Valve Corporation with a $4 million verdict for patent infringement. The case involved design aspects of Valve’s Steam game controller. Not an unusual result, except that this jury was selected, heard the trial and deliberated, and rendered the verdict entirely virtually, a first in the patent arena. As it happens, the Western District of Washington, where the trial took place, has pioneered virtual jury trials using the ZoomGov.com platform and done so very successfully. From the docket in the…
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MediationResolution

Mediation Principles for our National Conversation

Much of President Biden’s inaugural address sounded historically resonant American themes of unity across differences. As I watched, I thought about the work ahead for not only Congress, but all of us. In attempting to forge consensus around policy and legislative solutions–to move forward with actions to heal some of the social, economic, and health-related crises we’re confronting — a large part of our work is going to call less on traditional forensically-oriented political debate , and much more on the kind work we do as mediators. Consider how some of the principles that we apply as mediators can help…
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ArbitrationBusinessCase Management

When Does Documents-Only Arbitration Make Sense?

An underutilized dispute resolution process in U.S. commercial disputes is an arbitration conducted only on the exhibits, without a final oral hearing. Such a documents-only arbitral process, much more common internationally, resembles a summary judgment process more than it does a traditional arbitration. It’s worth a thoughtful look, so let’s consider: What are the advantages of documents-only arbitration, when does it make sense to employ, and, if they are employing it, how can advocates use the process most successfully?1. Advantages of Documents-Only Arbitration: For the right dispute, the main advantages — and they are substantial compared even with a typical…
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Arbitration

Repeat Player Bias in Arbitration: Snuffleupagus or Yeti?

The topic of arbitrator bias came up recently in two completely different settings — one, a presentation by a law professor to a group of lawyers, and one, in a conversation with a non-lawyer friend, a scientist. In both cases, the question posed was: Is there a tendency for arbitrators, knowing that certain parties and law firms are repeat players and thus more likely to reappoint them, to skew decisionmaking in a self-interested way? And the answer in both cases, for the law professor and my friend, was, “Well, yes, there must be some level of bias. If parties are…
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LitigationTechnologyTrial

Federal Court Hearings and Chill? Applause for More Live Streaming

The federal courts’ policymaking body, the Judicial Conference of the United States, has just kicked off a pilot program in selected district courts to livestream the audio of certain court proceedings. Despite the concern expressed by some that a wider public audience will encourage grandstanding, I’m convinced more access means better advocacy. To understand why, we can consider Jarndynce v. Jarndyce, the fictional legal dispute from Bleak House, whose length is legendary. As Dickens memorably expresses, the lawyers simply drift in and out of the courtroom, going through procedural motions and arguing about inconsequentials, without any recollection of what began…
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BusinessLitigationTechnologyTrialUncategorized

ROSS-Westlaw Copyright Feud: Approaches to Litigation Cost Management

What options does a smaller defendant have when a larger and better-funded competitor uses litigation as a means to exert financial pressure and drain resources? This scenario is one that legal AI company ROSS Intelligence, as a result of copyright litigation filed by Westlaw Publishing and its parent, Thompson Reuters, claims to find itself in. ROSS just announced that the costs of litigation initiated by Westlaw have forced it to shut down operations, depriving the public, in ROSS’s view, of a valuable legal research tool. In a complaint filed in May of this year and just argued on a motion…
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MediationResolutionTechnology

Phoning It In: Telephonic Mediation in a Virtual World

A litigator friend of mine recently shared her frustration over being forced to mediate a case by phone. The mediation was being set up by a government agency, and the agency representative in question was not open to any alternatives, whether an in-person meeting or even online, using a video platform like Zoom or Microsoft Teams. Fearing constraints on her ability to advocate, my friend was inclined to write the process off in advance. I tried to be reassuring, asking some questions about her case. How complicated are the facts? How strained is the relationship between the parties and party…
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MediationResolution

Uniform Mediation Act Still Trekking Through the States

The steadily rising costs of litigation, and the current backlog on civil dockets, have borne out what one of the most effective American trial lawyers of an earlier generation observed: that in litigation, “the nominal winner is often a real loser – in fees, expenses, and waste of time.” Correspondingly, over the past twenty years the U.S. mediation market has matured steadily, with the pandemic, and the widespread use of video technology in online dispute resolution (ODR), now galvanizing the process. So how do we continue this momentum, and move the use of mediation to its next level in frequency,…
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Mediation

A Promising Future for the Singapore Convention and Global Mediation

I was talking with a colleague from Australian recently, a barrister and frequent mediator, about what the coming years will bring for international dispute resolution, and for mediation in particular. We agreed that in more jurisdictions across the world, mediation will continue to gain wider acceptance and to be more frequently employed by parties in private disputes — and for that matter, that it should also be used more in the government and legislative area to help tamp down and mitigate some of the severe conflicts that have emerged in our polarized era. On the commercial litigation front, a step…
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LitigationTechnology

How COVID-Era Technology is Driving Down the Litigation Cost Curve

In order to move cases forward during the pandemic, we have accelerated technology deployment in litigation, setting up major new efficiencies for litigants. These technologies were there in some form prior to today. But widespread acceptance was missing: in a variety of litigation contexts, a bias existed in favor of in-person appearances. While that bias is still present, our recent forced experience with Zoom and other technologies – and the subsequent validation of their value – has gone a long way toward mitigating it. That is a big positive for litigation cost-control. Even after Covid-19 does not require the same…
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LitigationTrial

The Power of Theme: Epic Games Takes Aim at Apple

The lawsuit by Epic Games against Apple, challenging Apple’s strict controls on developers and the App Store’s percentage take from game revenue, shows the power of theme and coordinated message. When I read the first news accounts of the filing, they all referenced Apple’s market power and control. In Epic’s messaging, Apple is portrayed as a market behemoth — which of course it is, from a revenue standpoint — but more than that, using its power to stifle innovation and exploit the developers who depend on the App Store. Apple, in other words, is just too big and isn’t playing…
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ArbitrationBusinessCross-Border Disputes

Second Circuit Reaffirms Its View on Section 1782 and Private International Arbitration

Sharpening a split with sister circuits, the Second Circuit has now affirmed its position that private arbitral bodies are not “tribunals” under 28 U.S.C. § 1782. For the time being, then, if your dispute is in international arbitration administered by an entity like the ICC, or a regional arbitral commission, you are prevented from using Section 1782 to obtain testimony or documents located in New York or elsewhere in the Second Circuit. I suspect this will not be the case for very long: I’ve written before about the likelihood that this question reaches the Supreme Court, noting that two circuits…
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ArbitrationResolution

Maintaining Confidentiality in Arbitration

We often hear that arbitration affords a level of confidentiality that courtroom proceedings do not. While that is true to an extent, it requires some qualification: It is the parties who must, by agreement or request to the tribunal, take responsibility for avoiding disclosure. The AAA’s Commercial Rules, for example, require that the arbitrator and the AAA, not the parties themselves, maintain the privacy of arbitration (R-25). Under the UNCITRAL Arbitration Rules (Article 28.3) frequently chosen for international arbitration, the tribunal is required to conduct the arbitration hearing in camera; the rules do not speak to party disclosures. And under…
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TechnologyTrial

Virtual Patent Trial Underway in Southern District of New York

Pharma companies Ferring and Serenity began July 6 trying what should be a week-long patent case by remote video. After consultation with the court’s technician, and taking input from the parties on procedures, Chief Judge Colleen McMahon opted to utilize a secure Zoom-based video platform, instead of attempting to manage physical social distancing, to conduct the bench trial safely. In addition to attending to COVID-19 concerns, with a number of witnesses based in Europe, the approach is certainly one that saves costs. Here are some of Judge McMahon’s thoughtful comments on trial procedures, including managing exhibits with remote witnesses and…
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Arbitration

Sour Chilean Grapes and Specific Performance of Contracts In International Arbitration

  A winery investment dispute gives the Eleventh Circuit a chance to validate District Court powers in confirming arbitral awards.   In the second of two cases considering Latin American arbitration arising under the Panama Convention, the Eleventh Circuit reminds us that arbitrators have the same flexibility as courts to order a party to perform.   The arbitration involved an investor in a Chilean wine company — a financial relationship that had obviously soured — who wanted to offload its shares under a put provision in its agreement with the winery’s owners. When one of them balked, the investor, EGI,…
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Trial

How Will We Conduct Jury Trials In the Age of COVID-19?

At varying speeds, courts across the country are starting to reactivate trial calendars. This process is substantially easier for bench trials, and a number of them have already been conducted by video. The first one handled by Zoom, a five-week patent infringement trial in the Eastern District of Virginia, proceeded with few hitches. Both counsel and the court seems pleased with the process and did not observe any appreciable delay as a result of the format. I thought Judge Morgan’s comments were fascinating, in that he believed his credibility assessment during trial was actually helped, not hindered, by video. As…
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