Settlement Conference Techniques: Caucus Do’S and Don’Ts

Settlement Conference Techniques: Caucus Do’s and Don’ts by Morton Denlow A settlement conference can be divided into a judge confronts during the caucus phase and three distinct phases: 1) joint initial session; 2) suggests steps a judge should take to further a separate caucus with each party; and 3) joint settlement agreement. concluding phase.1 The caucus phase is the most challenging and the most important. This THE INITIAL CAUCUS is when the judge meets separately with each party to explore their underlying concerns, to Prior to the settlement conference, the parties discuss the merits of the dispute, to develop exchange written settlement proposals in the settlement options, and to obtain the next form of an itemization of damages, a written settlement proposal for presentation to the other settlement demand supported by a brief side. During the caucus the judge must exercise statement of reasons from the plaintiff, judgment and develop strategies to move the followed by a written offer and brief statement case towards settlement. In the caucus, the of reasons from the defendant.2 Copies of the judge engages each party in confidential letters are submitted to me in advance of the discussions to determine their settlement goals settlement conference. and evaluate whether and how those goals can be achieved. Oftentimes, the merits of the case In order to underscore the importance of the recede into the background while other settlement process, I conduct the initial joint concerns such as the emotional and financial session at one of the counsel tables in the stress of the litigation process come to the courtroom. I explain the process and request forefront. This article reviews common issues each side to make an opening statement during *A version of this article has been accepted for publication in the Spring 2010 issue of the Judges Journal of the American Bar Association. Reprinted with permission. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. the initial joint session. In the large majority of me in confidence of a willingness to later move cases, a resolution revolves principally around to $70,000, I will communicate the $100,000 how much money the defendant will pay to the proposal to defendant, but I will not disclose plaintiff, and if that is the case, I will begin to the $70,000 number until the plaintiff caucus promptly after the parties’ opening authorizes me to do so. presentations. If there are multiple issues at play, I normally stay in the joint session until I conduct the caucus in chambers at my all of the issues have been identified and an conference table. This provides a more relaxed attempt has been made to together resolve at venue for discussion, while at the same time least some of the issues. Before breaking, I ask reinforcing my judicial background and the parties if they have any further questions experience. When I take the plaintiff’s about how we are going to proceed. representatives back to chambers, I instruct the defendants to remain in the courtroom and to At the conclusion of the joint session, I select think seriously about what has been discussed one of the parties to come to my chambers for and to be prepared to come in and negotiate the initial caucus. I generally meet with the when they are called into my chambers after the plaintiff’s side first because I expect the plaintiff returns to the courtroom. plaintiff to make the next move in the negotiations. I invite and expect counsel and I begin the caucus phase with open-ended their clients to actively participate in the questions in order to encourage the plaintiff and caucus. It is important for the client to develop counsel to express what is on their minds. The trust and confidence in me and in the process. types of open-ended questions I use to begin the By being a full and active participant in the caucus include: “How can I help you today?”; caucus, the client develops a better “What do you hope to accomplish today?”; understanding of the issues and alternatives to “How do you feel about going through the be confronted, and I am able to directly hear the litigation process?”; and “Are there things you client’s concerns and objectives. It is therefore want to tell me that were not discussed in the critical that a client with full negotiating joint session?” These questions often bring authority3 be present, otherwise, the caucus responses that reveal the clients’ underlying phase may be a waste of time. In the caucus concerns. “I can’t take the stress”; “I cannot phase, it is my role to obtain and communicate afford to litigate this case”; and “I just want to a party’s new proposal to the other side and to put this behind me” are among the responses I preserve as confidential, information they do frequently hear. not wish to disclose. This creates the expectation for parties that they can confide in Open-ended questions encourage parties to me and that I will help analyze and transmit express what is on their minds and important to their new settlement proposals. The caucus them. My goal is to elicit the concerns that provides an opportunity to engage in candid drive the dispute and to identify the conversations separately with each side and to impediments to settlement. It is not unusual for gather information they may not be prepared to the merits of the litigation to play a secondary share with the other side. For example, if a role. For example, a plaintiff in an employment plaintiff asks me to communicate a reduced discrimination case who has found another job monetary demand of $100,000, but also informs may be motivated by a desire for closure in 2 order to move on with her life. For some, a because the attorneys have lived with the case, health concern, an immediate financial need or they are in a better position to analyze it and a desire to relocate out-of-town may be their develop initial settlement ranges. Second, if I motivating factor in seeking a settlement. For evaluate the case early on and put forth a most plaintiffs, the financial consequences are settlement recommendation or settlement range, key. Plaintiffs want to know how much their I may be perceived as biased towards one side. case is worth and how soon they can see the This will hurt my ability to be effective in money. Helping parties analyze the financial settling the case. Third, the likely jury outcome implications of proceeding with litigation as is only one factor, and often not the most compared to settlement plays a big part in the important, in settling a case. Because less than caucus discussions. Every case is unique and two percent of federal civil cases now go to the use of open-ended questions enables the trial, possible trial outcomes are less significant judge to learn what is important to the parties. than they were in years past. The initial caucus is also an opportunity to Settlement outcomes in other similar cases are understand who controls the settlement much more significant.5 Other considerations, decision—the client, the attorney, or some such as a party’s tolerance for risk, the desire other family member or corporate officer. Most for closure and certainty, and the cost of clients rely heavily upon their attorneys in litigation, often play the determining role. For framing acceptable proposals. Some clients example, in Section 1983 civil rights cases place full reliance upon their attorneys; others involving claims of police misconduct, make their own decisions. The caucus creates defendant municipalities are often motivated to the opportunity to hear from each party settle because of the cost of defense and the regarding what terms will be required to time away from official duties by their achieve a settlement. employees in discovery and trial. In other cases, particularly employment cases, plaintiffs may Some judges use the caucus to explore in great be motivated to settle because they are not detail the legal and factual basis of each parties’ emotionally prepared to withstand the pressures claims and defenses, with pointed questions of the trial process and they desire closure to directed at the evidence the party expects to move on with their lives. Defendants in produce, the legal hurdles to be confronted, and employment cases are generally concerned with a prediction of likely jury outcomes.4 The court the cost of defense and possible adverse then develops a recommendation or a publicity. settlement range that becomes the focus of the settlement conference. This merits-based I spend most of my time listening during the approach can be effective in those cases where initial caucus. This is a perfect opportunity for the parties are seeking an evaluation and the client to express his feelings regarding the recommendation from the court. This approach litigation, his concerns, and how the litigation places the judge, rather than the parties, at the is affecting him, his family, his business and his center of the process. future. For many clients who were reluctant to express themselves during the joint session, the I prefer to stay away from a point-by-point caucus provides them with the opportunity to analysis of the merits for several reasons. First, have their “day in court,” to “tell it to the 3 judge,” and to have their grievances heard by 4) confidentiality; 5) creative resolution the judge.

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