The Success Of The SDNY Mediation Program

The Mediation Program of the SDNY provides litigants in commercial litigation with an opportunity, generally early in their litigation, to resolve their disputes without going through the expense of full-blown discovery and the uncertainty of trial. 

As reflected in the Mediation Program’s recently released Annual Report , individual judges referred 113 cases in general civil litigation (which does not include employment and civil rights claims).  Of that number, a successful resolution in mediation came about in 60% of the cases referred, an increase from 53% in 2012.  Considering the determination with which business disputes are litigated, a 60% successful rate is a remarkable achievement. 

Local Civil Rule 83.9, effective January 1, 2014, and other actions taken by the Court, have resulted in a more flexible, streamlined operation.  For example, in 2013, mediations could be conducted in the mediator’s law office for the first time. In certain circumstances, conducting the mediation in an office, rather than at the courthouse, may result in greater convenience to the parties and their clients. It certainly makes the mediator’s job easier. 

Rebecca Price, the Mediation Supervisor, has shared with the 396 pro bono mediators in the program some of the favorable feedback she has received from program participants.  Some comments from lawyers include the following:

“I think the mediator did a great job helping me where he presented me with
alternative strategies in going back with counter offers, and why they
should be higher rather than lower. Most of the numbers I presented were
fair, but the case had some problems and though I think my client should
have been offered more money – the final number was fair, and the employer
threw in a positive recommendation, something I’d never seen before. All in
all I felt it was a fair settlement and I learned from the mediator.”

“Given that opposing side had not responded to any attempts at negotiation
over several months, this was necessary and we accomplished in 3 hours what
we could not in several months.”

“The mediator and the Mediation Program were instrumental in settling the
case, which occurred the day after the second mediation session.”

“The mediator was very gracious with her time, and patient with the
parties. She was very helpful and her efforts are appreciated.”

Mediation can be particularly effective in resolving business disputes because counsel can structure an agreement that contains important business terms that, if the case proceeded to trial, would not necessarily come to the court’s or the jury’s attention.  The resolution of a business dispute can involve crafting precise terms, particularly when the parties have had a course of dealing over a long period of time.  The very best outcome in the mediation of a commercial dispute is one that satisfactorily resolves the matter and permits the parties’ business relationship to continue. 

Lone Pine’s Impact On Pharma Products Litigation

We have written previously about the increasing acceptance by courts to entertain the use of Lone Pine orders as a case management tool. For example, in the Happyland Social Club Fire Litigation, which involved 87 wrongful death claims, the Bronx Supreme Court’s entry in 1992 of a Lone Pine order was instrumental in obtaining dismissals on behalf of defendants whose products plaintiffs could not identify as being in the club at the time of the fire.

More recently, we discussed the use of a Lone Pine order by a Colorado state court in a hydrofracking toxic tort case. In that matter, the court dismissed the claims of plaintiffs who failed to submit sworn expert affidavits establishing a causal relationship between their illnesses and hydrofracking chemicals they claimed to have been exposed to.

Increasingly, Lone Pine orders are being employed as a case management tool in pharmaceutical mass tort cases. Most recently, Judge John F. Keenan, who presides over the Merck Fosamax Products Liability MDL in the SDNY, issued a sweeping Lone Pine order on November 20, 2012.

In its Opinion and Order, the court considered whether to apply the Lone Pine order to all of the plaintiffs’ cases or merely a sub-set. In evaluating this issue, the court observed that was at least some medical or scientific evidence that Fosamax could cause osteonecrosis of the jaw (known as “ONJ”). In light of this purported evidence, the court refused to apply the Lone Pine order to those plaintiffs alleging that they suffered from ONJ.

Why did Judge Keenan enter the Lone Pine order in 2012 when he had rejected earlier efforts by Merck to enter a Lone Pine order in 2010 and 2011? In short, he had become skeptical about the bona fides of plaintiffs’ claims and the candor of Plaintiff’s Steering Committee. “Plaintiffs’ habit of dismissing cases after both parties have expended time and money on case-specific discovery demonstrates that this MDL is ripe for a Lone Pine order.”

Based upon plaintiff’s pattern of behavior, the court said it had “reason to believe that spurious or meritless cases are lurking in the some 1,000 cases on the MDL docket.” The court noted that “more than 50% of the cases set for trial had been dismissed by plaintiffs as had some 31% of cases that had been selected for discovery.

Judge Keenan has been hearing cases in the SDNY since September 1983. Having presided over trials for thirty years, he has developed good instincts in determining when judicial resources are being squandered. Although he did not come right out and state as much, he had clearly become frustrated by Plaintiff’s Steering Committee wasting the court’s time and forcing Merck’s trial counsel to jump through unnecessary hoops. 

Apart from the litany of stringent (and precedential) Lone Pine requirements imposed upon the plaintiffs to whom the order applied, the decision is helpful because it cites with approval the decisions of multiple other courts overseeing complex pharmaceutical MDLs using Lone Pine orders to streamline their dockets. The cited cases include: In re Avandia Mktg., Sales Practices and Prods. Liab. Litig., MDL No. 1871 (E.D. Pa. Nov. 15, 2010); In re Zyprexa Prods. Liab. Litig., MDL No. 1596 (E.D.N.Y. June 2, 2010); In re Bextra and Celebrex Mktg. Sales Practices and Prod. Liab. Litig., MDL No. 1699 (N.D. Cal. Aug. 1, 2008); In re Vioxx Prods. Liab. Litig., MDL No. 1657 (E.D. La. Nov. 9, 2007, July 6, 2009); In re Rezulin Prods. Liab. Litig., MDL No. 1348 (S.D.N.Y. May 9, 2005); In re Baycol Prods. Liab. Litig., MDL No. 1431 (D. Minn. Mar. 18, 2004).

In ruling on the Lone Pine application, the court rejected the Plaintiff’s Steering Committee’s suggestion that the MDL had outlived its usefulness and that the court should adopt an “exit plan” and remand all of the cases for trial rather than entertain a Lone Pine order. The court also rejected Plaintiffs’ argument that a Lone Pine order should only be entertained after a global settlement was reached.

The court reasoned that the primary purpose of Lone Pine orders is to eliminate meritless cases, which is at best only tangentially related to the status of settlement negotiations. Whether the MDL culminates in a global or partial settlement, or the remand of cases back to their home districts, the court believed that a Lone Pine order would boost efficiency under either scenario. “In the event the parties reach a settlement, the elimination of spurious claims will ensure that only plaintiffs with meritorious cases are compensated. If the MDL concludes without settlement, and cases are transferred back to their home districts, Lone Pine will ensure that the home districts receive only viable cases.”

Computers Replacing Lawyers In Reviewing Documents?

For those of us who work on document-intensive litigations, take note of Magistrate Judge Andrew J. Peck’s (SDNY.) opinion released on February 24, 2012 in Monique Da Silva Moore, et al. v. Publicis Groupe and MSL Group, Case 11 Civ. 1279 (ALC)(AJP). Judge Peck’s decision may be the first federal court opinion approving the use of computer-assisted review in place of  “eyes on” document review. Citing recent studies, Judge Peck states “while some lawyers still consider manual review to be the ‘gold standard,’  that is a myth, as statistics clearly show that computerized searches are at least as accurate, if not more so, than manual review….While this Court recognizes that computer-assisted review is not perfect, the Federal Rules of Civil Procedure do not require perfection.”

In a thoughtful guest blog on the site, (from which post the photo is reproduced here)Matthew Nelson discusses the significance  (or not) of both Judge Peck’s case and a second case in the Northen District of Illinois, the Hon. Nan R. Nolan presiding.  In that case, Kleen Products LLC v. Packaging Corporation of America et al, the plaintiffs are seeking a court order requiring defendants, among other things to use predictive coding technology in responding to their discovery requests. 

Computer assisted review, or, as it is sometimes called, predictive coding, employs the use of a sample set or “seed set” which is reviewed for responsiveness. The “seed set” can then be made available to opposing counsel to approve the responsive/non-responsive determinations made. Interestingly, at least in this case, the court noted that  “All of this review to create the seed set was done by senior attorneys (not paralegals, staff attorneys or junior associates).” The seed set is then fed into a program that creates a logic (based on the seed set determinations) and extrapolates to the universe (the negotiated set of data). Predictive coding, in essence, attempts to take the place of burdensome, expensive and time consuming document review.

As the opinion suggests, predictive coding will not work in all cases. According to Judge Peck, “What the Bar should take away from this Opinion is that computer-assisted review is an available tool and should be seriously considered for use in large-data-volume cases where it may save the producing party (or both parties) significant amounts of legal fees in document review.”  While the court discussed possible objections under the FRCP, FRE 702 and Daubert, the court did not sufficiently address what happens when one party wants to use predictive coding and the other party objects.  In the case,  to protect privileged documents that would conceivably be swept in by the computer logic, the parties entered into a clawback agreement which was entered as a court ordert. Unfortunately, in government investigations, parties do not always have the opportunity to have a court enter such an order. So, predictive coding should be used cautiously – perhaps still requiring some “eyes on” document review in handling governmental investigations. 

Predictive coding could provide substantial benefits to clients. On the other hand, law firms whose business models depend on leveraging large teams of associates and staff attorneys to conduct document review will increasingly have to explain to their clients why such costly efforts are necessary. Technology may allow medium sized firms to more effectively compete with large firms in cases with substantial discovery. In short, predictive coding makes good sense for the courts, the clients and the Bar.