EARLY NEUTRAL EVALUATION: Can a Stitch In Time Save Nine? – Part Two
Conclusion to a two part Blog on Experiments by the US District Courts, in both the Southern and Northern Districts of California, with a type of Alternative Dispute Resolution procedure called Early Neutral Evaluation (ENE).
This is the conclusion of the blog, EARLY NEUTRAL EVALUATION: Can a Stitch In Time Save Nine? See here for Part 1. This blog considers the Early Neutral Evaluation rules of the United States District Court, Northern District of California. In this part two the EDRM Metrics Model is considered, so is the all important Rule 1 FRCP. Other jurisdictions that have adopted ENE rules are mentioned in this part before the blog concludes with the dangerous, but interesting task of mixing idioms, Stitch in Time and of Whole Cloth. I will prove that the Whole Cloth idiom is a clear favorite in the law and conclude with one-sentence quotes from some of the more interesting cases that bench slap lawyers and other judges with this time honored insult.
ENE Session Procedures
United States District Court, Northern District of California, Rule 5-11 specifies the procedures to be followed in a ENE Session. Here we get to the meat of the process. It is what I would expect and looks well thought out. ENE Rule 5-11:
(a) Components of ENE Session. The Evaluator shall:
(1) Permit each party (through counsel or otherwise), orally and through documents or other media, to present its claims or defenses and to describe the principal evidence on which they are based;
(2) Help the parties identify areas of agreement and, where feasible, enter stipulations;
(3) Assess the relative strengths and weaknesses of the parties’ contentions and evidence, and explain carefully the reasoning that supports these assessments;
(4) Estimate, where feasible, the likelihood of liability and the dollar range of damages;
(5) Help the parties devise a plan for sharing the important information and/or conducting the key discovery that will equip them as expeditiously as possible to enter meaningful settlement discussions or to position the case for disposition by other means;
(6) Help the parties assess litigation costs realistically;
(7) If the parties are interested, help them, through private caucusing or otherwise, explore the possibility of settling the case; and
(8) Determine whether some form of follow up to the session would contribute to the case development process or to settlement.
(b) Process Rules. The session shall be informal. Rules of evidence shall not apply. There shall be no formal examination or cross-examination of witnesses and no recording of the presentations or discussion shall be made.
(c) Evaluation and Settlement Discussions. If all parties agree, they may proceed to discuss settlement after the evaluation has been written but before it is presented. The evaluation must be presented orally on demand by any party. Copies of the written evaluation may be provided to the parties at the discretion of the Evaluator. The parties also may agree to discuss settlement after the evaluation has been presented.
EDRM Metrics Model
I hope the ENE and attorneys involved have the expertise required to analyze and control discovery costs, since that is the primary activity in litigation. If so, these ENE Sessions could be of tremendous benefits to achieving the just, speedy and inexpensive goals of Rule 1, Federal Rules of Civil Procedure.
The analysis of the attorneys and Experts leading the ENE Sessions would benefit significantly by using the EDRM’s Metrics Model. It helps guide the measurements, the metrics, needed to manage the costs and time required for discovery and other complex litigation tasks. The EDRM Metrics Model shown here provides a good tool to improve the dynamics of a ENE Session. The experts should at least have some passing familiarity with the analytics and planning activities involved, especially the seven outside elements identifying the tasks of discovery: Custodians, Systems, Media, Status, Formats, Q&A, and Activities.
Additional Rules and Practices
Moving on, Rule 5-12 governs confidentiality, Rule 5-13 addresses follow up with the Evaluator, typically last minute attempts to settle (after the parties have cooled off, and seen their attorney fee bills), and Rule 5-14 Certification of Session. In that final certification “the Evaluator must report to the ADR Unit: the date of the session, whether any follow up is scheduled, and whether the case settled in whole or in part.”
The next rules, after rule five in the Northern Districts ADR rules, govern mediation. The ENE local ADR rules are completely separate.
Also interesting to see that in the McCormack v. Sterling Jewelers Inc., case in the Southern District the Magistrate appointed himself as the Evaluator. The judge also specified that the required ENE sessions were to be by video conference. McCormack v. Sterling Jewelers Inc., No. 22-cv-00525-AJB-BGS, 2022 U.S. Dist. LEXIS 106345 (S.D. Cal. June 14, 2022). I assume this is a common practice in both Northern and Southern Districts. By the way, I should mention that in the Northern District, Early Neutral Evaluation procedures and rules have been in effect since 1989. See eg.: EEOC v. Sears, Roebuck, & Co., No. C-89-0928 TEH, 1989 U.S. Dist. LEXIS 14298 (N.D. Cal. Aug. 18, 1989). It is just their use that has been ramped up recently.
ENE and Rule 1
I applaud the efforts of the Northern and Southern California courts to experiment with creative approaches to effectuate the goal of Rule 1, Federal Rules of Civil Procedure. This may be our most important rule in the federal system and bears repetition:
Rule 1. Scope and Purpose
These rules govern the procedure in all civil actions and proceedings in the United States district courts, except as stated in Rule 81. They should be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.
Just, speedy, and inexpensive, that should always be our goal in litigation. Again also see: 23 U.S.C., Chapter 23, Civil justice expense and delay reduction plans (§§ 471 — 482).
Other Courts and ENE
Other courts and Bar Associations, including the Federal Rules Committee, may well want to copy the complete and well written Northern Districts ENE Rules. It looks like a very good set of rules to me, but I would want to hear what parties and attorneys using the rules in California think about them. Feel free to leave attributed or anonymous comments below.
In theory, it all looks good. Individual parties outside of California or other courts with ENE local rules could always stipulate to it. I expect that most judges in any jurisdiction would Adopt, Order and Approve such a procedure. For an appropriate Order, again see McCormack v. Sterling Jewelers Inc., No. 22-cv-00525-AJB-BGS, 2022 U.S. Dist. LEXIS 106345 (S.D. Cal. June 14, 2022).
Of course, also see Rule 5, cited and quoted above for the United States District Court for the Northern District of California. Also, in the Southern District, see Rule 16.1., as well as local judge rules, including those of Magistrate Judge Bernard G. Skomal in the McCormack case. They are called Chambers Rules and the ENE provisions are found in Section II at pages 2-3. The Central District of California ADR programs do not appear to have an ENE program, just mediation.
The Eastern District Court has what they call a Voluntary Dispute Resolution Program (VDRP). They do not appears to have specific rules for mediation, much less Early Neutral Evaluation, just some general encouragement shown below that mentions ENE (emphasis added):
It is the Court’s intention that the VDRP shall allow the participants to take advantage of a wide variety of alternative dispute resolution methods. These methods may include, but are not limited to, mediation, negotiation, early neutral evaluation and settlement facilitation. The specific method or methods employed will be determined by the Neutral and the parties.
I know that a few other courts around the country have different types of early neutral evaluation, including the always progressive Minnesota. Minnesota’s State Supreme Court Rule 114 defines ENE as:
“…a forum in which attorneys present the core of the dispute to a neutral evaluator in the presence of the parties. This occurs after the case is filed but before discovery is conducted. The neutral then gives an assessment of the strengths and weaknesses of the case. If settlement does not result, the neutral helps narrow the dispute and suggests guidelines for managing discovery.”
Also see (and this is by not an exhaustive, nor properly cited list, so, as always, do your own due diligence): Ohio Fed. Dist. Ct. (N.D.), Civ. LR 16.5; Local Rules of Practice of the United States District Court for the District of Nevada, Part II, Civil Practice, Part II LR II 16-6, Early Neutral Evaluation; U.S. Dist. Ct. (Vt.) LR 16.1; South Carolina State & Federal Court Rules 14-16, SC ADR; E.D. Mo. L.R. 6.01; WD Penn.; Rule 4.8 of the ADR Policies and Procedures; D.C.COLO.LCivR 16.6(a).
If your court, state or federal, has adopted detailed rules for a Early Neutral Evaluation program, please let me know. I’m especially interested in what practitioners and litigants think of it after having gone through the process a few times. Send me an email or leave a comment below.
What Happens if a Stitch in Time Reveals a Case Made Out of Whole Cloth?
My linguistic curiosity, which I assume most lawyers have, forces me to examine the mixed idioms of stitch in time and whole cloth. They go together seamlessly don’t you think? (Sorry, could not resist.)
First, it should be noted that these idioms, although both referencing sewing and fabric in some way, have very different meanings. The “Stitch it Time” idiom preaches the common wisdom of expert proactivity and the dangers of prognostication. That is why I picked it to identify this article on EARLY Neutral Evacuation. According to Webster’s Dictionary, the idiom is commonly “used to say that it is better to fix a problem when it is small than to wait and let it become a bigger problem.” Webster’s also says it is among the top 2% of word popularity. The British Phrase Finder web elaborates:
This proverbial expression was obviously meant as an incentive to the lazy. It’s especially gratifying that ‘a stitch in time saves nine’ is an anagram for ‘this is meant as incentive’!
The Anglo Saxon work ethic is being called on here. Many English proverbs encourage immediate effort as superior to putting things off until later; for example, ‘one year’s seeds, seven year’s weeds‘, ‘procrastination is the thief of time‘ and ‘the early bird catches the worm‘.
The ‘stitch in time’ notion has been current in English for a very long time and is first recorded in Thomas Fuller’s Gnomologia: A Collection of the Proverbs, Maxims and Adages That Inspired Benjamin Franklin and Poor Richard’s Almanack, 1732: “A Stitch in Time May save nine.”
Now as to the idiom concerning whole cloth. Websters defines “whole cloth” as a pure fabrication — usually used in the phrase out of whole cloth. It is in the top 5% of popular words.
According to the Grammarist website:
Out of whole cloth is an American idiom that entered the English language in the early 1800s. . . .
Out of whole cloth describes something that is untrue and has no grounding in the facts. The expression is generally used in the phrases made out of whole cloth, make out of whole cloth, makes out of whole cloth, making out of whole cloth. Whole cloth is a piece of fabric that has not been cut into pieces. The literal meaning of the term whole cloth goes back to the 1400s, but the idiomatic expressions pertaining to whole cloth first appeared in America in the early 1800s. The idea behind the meaning of the phrase out of whole cloth is that a lie is a completely new fabrication, as is a piece of whole cloth.
Perhaps because fraud is a much more likely topic of judicial consideration that proactivity, U.S. courts seem to love the “made out of whole clothe” idiom, usually as in “your argument is made out of whole cloth.” To prove my point, and show that it too is not made up out of whole cloth, according to Lexis the “Stitch in Time” idiom has been referenced in thirty different cases, whereas the “Whole Cloth” idiom has been used four-thousand, six-hundred and three times. Obviously, Whole Cloth is a clear favorite of our Judges. Here are a few representative samples of its use. Note, the recent cases where the expression is used are interesting in their own right.
- “On the newly minted undue burden test, the Chief Justice criticized it as made “out of whole cloth” instead of a product of stare decisis.” Planned Parenthood of the Heartland, Inc. v. Reynolds, No. 21-0856, 2022 Iowa Sup. LEXIS 80, at *160 (June 17, 2022) (Christensen, Chief Justice, concurring in part and dissenting in part).
- “The Supreme Court of Utah does not make pure policy out of whole cloth.” In re Sex Change of Childers-Gray, 2021 UT 13, ¶ 1, 487 P.3d 96, 99.
- “Thus, it can be argued that Defendants Yang and Wu fashioned fraudulent submissions, the stock ledger and the Form 1099, out of whole cloth.” United States v. Yang, No. 16-CR-00334-LHK, 2020 U.S. Dist. LEXIS 95702, at *53 (N.D. Cal. May 29, 2020).
- “.. the vocational expert’s numbers appeared to be spun out of whole cloth.” Gracz v. Berryhill, No. 16 cv 4099, 2017 U.S. Dist. LEXIS 55683 (N.D. Ill. Apr. 12, 2017).
- “… Tukes’s costs being less than they would have been had her arguments been drawn from whole cloth.” Tukes v. Richard, Nos. B307242, B308337, B312086, 2022 Cal. App. LEXIS 604, at *18 (Ct. App. July 12, 2022).
I suggest this last reference as to a lawyers’ arguments being made out of “whole cloth” is the most common one you will see in trial courts. It is a judicial slap as to an unsupported argument, with a hint that the argument was so bad, to the point of almost being a fraud. One has only to think of recent law suits seeking to overturn election results without any factual basis to do so. It is also a very popular idiom with appellate courts too, again used as a disparagement, but often against other judges or opinions.
Our beloved Supreme Court, since 1947 when the phrase was first used, really loves the “whole cloth” insult. Typically it is a bomb used in a dissent against the victorious majority of other judges in the court, not against an attorney. (Although you probably hear it often in oral arguments.) The “whole cloth” idiom has been used in at least fifty-nine different cases since 1947, typically in a dissent. Before that the justices would use other barbs in their dissents. A few opinions using whole cloth language of interest are:
- “The plurality’s equating of “in opposition to” with “targeting” is seemingly woven out of whole cloth. Borden v. United States, 141 S. Ct. 1817, 1846 n.13 (2021) (J. Kavanaugh’s dissent).
- “But those decisions created the right to abortion out of whole cloth, without a shred of support from the Constitution’s text.” June Med. Servs. L.L.C. v. Russo, 140 S. Ct. 2103, 2142 (2020) (J. Thomas dissent).
- “And, an examination of the highly reticulated immigration regime makes clear that DHS has no implicit discretion to create new classes of lawful presence or to grant relief from removal out of whole cloth.” Dep’t of Homeland Sec. v. Regents of the Univ. of Cal., 140 S. Ct. 1891, 1922 (2020) (J. Thomas).
- “Not one of the cases on which the Court relies today supports the extraordinary premise that courts can create out of whole cloth an exception to a statutory bar to relief.” McQuiggin v. Perkins, 569 U.S. 383, 404, 133 S. Ct. 1924, 1938 (2013) (Dissent J. Scalia).
- “As will be noted, the one gloss is contradicted by the facts of record and the other is of whole cloth with [***745] the “public function” argument’s excision of the religious factor. Everson v. Bd. of Educ., 330 U.S. 1, 57, 67 S. Ct. 504, 531 (1947) (Dissent J. Rutledge).
- “The Court appears intent upon creating out of whole cloth new constitutionally mandated warrant procedures carefully tailored to make eavesdrop warrants unobtainable. Berger v. New York, 388 U.S. 41, 111, 87 S. Ct. 1873, 1911 (1967) (Dissent J. Harlan).
So getting back to the question and ENE, What Happens if a Stitch in Time reveals a Case Made Out of Whole Cloth? It usually means that one side is happy and another very disappointed. The neutral has found that one or more arguments, claims or defense are spurious. It is actually a good thing to both sides, even if it is used against one of your many claims, as opposed to your whole case. Depending on the experience and wisdom of counsel, and circumstances of the case, both sides could be happy when this phrase is used. The phrase indicates the outside neutral expert thinks that parts of your case are very poor and should be dropped. A good mediator often does the same thing. That is how issues are narrowed and cases are settled.
Such input is common in ADR, or should be, even without use of the strong language of whole cloth, suggesting as it does, fraud. If I ever used that kind of inflammatory language when serving as a Special Master or Arbitrator, watch out. It means I feel pretty strongly about the point. It is more than a subtle hint that you should reconsider your argument while you still can.
It is very common for parties to make multiple alternative pleadings, causes of action, only to drop one or more of them before trial. The same applies to defenses. Everybody is concerned regarding waiver, and for that reasons, all kinds of semi-bogus pleadings are made. Why not save time and money and drop them early?
Two other popular idioms come to mind that are often used by lawyers when explaining their lengthy alternative pleadings, such as throw against a wall and see if it sticks, or run it up the flagpole and see if anyone salutes it. Who knows, you may think one or more of you arguments, claims or defenses stink, but that the judge, or an outside neutral, might buy it, might salute the flag. Long ago I used that flag salute expression quite often. You or your client did not want to waive an argument, so you kept it in. The realistic critical input of an Early Neutral Evaluation can save the parties time and money that might otherwise be wasted on borderline claims. An outside, neutral expert telling the parties that a particular claim is not going to be saluted by this judge can be very valuable input.
To close with a quick plug, ENE sounds similar to the kind of services I can provide in my role as Special Master, although that role is limited to discovery issues. Often the role is strictly adjudicative, but it can, if the parties agree, also include guided settlement discussions. I can also do that for general technology cases under my 1991 Bar certification as a Mediator of Computer Law disputes. (Bet you have not heard of that certification before.)
Can an ENE or other ADR process help the parties save 90%? If the whole case settles early, sure. But if it is just a narrowing of the discovery issues, probably not that much. Despite the old adage about a stitch in time saves nine, the savings will not be that big, not a 90% savings. Certainly not in all cases. Still, the early input of any ediscovery expert should help the parties save substantial time and money in most cases. And that, my friends, is not an argument spun from whole cloth, but rather more years of experience than I care to consider..