The use of ADR involving local governments: the perspective of the New York City Corporation Counsel.

• Author: Cardozo, Michael A.

PRELIMINARY REMARKS

Before I begin I want to say just a few words about the man for whom this Dispute Resolution Center is named, John Feerick. I have known John for many years in a variety of contexts, as a friend, as a chair of numerous committees, as an arbitrator, and as a mediator. I succeeded him as chair of one committee, the Fund for Modern Courts, and I was fortunate enough to be the extraordinary beneficiary of another committee he headed, the Nominating Committee of the City Bar Association. I have tried cases before John in his role as an arbitrator, including a case involving one of John's few mistakes, the Latrell Sprewell--choking the coach--NBA matter. (1) But I have prevailed in other arbitrations before John, including one argued in the New York Court of Appeals earlier this week--living proof that he usually calls them right. And for two years I worked with John as he served as one of three Special Masters in the McCain homeless family rights litigation. (2)

Based on my long acquaintance with John I can say without fear of contradiction that not only does he excel, with the exception of the Sprewell case, in whatever he does, but if John, in his low key but very effective way of speaking, says "I think you should do X, Y or Z," the person to whom his comments are directed inevitably tries very hard to do as John suggests. As Linda Gibbs, the Deputy Mayor for Health and Human Services and the former Commissioner of the Department of Homeless Services, said from this podium just a few weeks ago at the dedication ceremonies for the John Feerick Center, "While I hated to compromise, when John made a suggestion I found it very hard to say no." "He taught me," Linda said, "how to compromise for the greater good."

Fordham Law School, and all of New York City, is very fortunate to have John Feerick spearhead this Center, and certainly this Symposium is an auspicious beginning for the work the Center will do.

INTRODUCTION

I want to advance my central thesis at the outset: alternative dispute resolution can sometimes be a very useful and powerful tool in resolving social problems in which local governments find themselves. But ADR is not the answer to resolving much of the litigation involving disputes over governmental policy. In fact, serious adverse social consequences can result from the too frequent demand that some form of alternate dispute resolution--rather than the courts--be used to resolve a particular controversy.

Generally, there are three different types of governmental disputes potentially susceptible to ADR treatment.

To the first category--money disputes between the City and a claimant or group of plaintiffs--I give a blinking green light to the use of ADR. To the second category--land use and environmental controversies involving the City and citizens claiming to be aggrieved by a particular zoning, environmental, or development decision--I give a blinking red light. The final category, to which I will devote most of my attention this morning, involves claims by a particular group of people, usually an advocacy group on behalf of the poor, that a specific social policy being pursued or not pursued by the government is somehow illegal. And to that category of cases I post a yellow light.

MONEY DISPUTES

The first topic I will discuss will be the hundreds if not thousands of damages suits any local government, and certainly New York City, faces every year. While such cases are not the focus of this Symposium, briefly discussing when ADR should be used to resolve such cases offers some guidance on when and how ADR can be used to resolve social policy disputes, which is our primary focus today.

Each year New York City faces over 8,000 damages suits. These cases result in the City, and therefore City taxpayers, paying on average more than $515 million a year in judgments and settlements, although the good news is that the number has been somewhat declining in recent years. This is a tremendous amount of money; in fact, it reflects approximately three percent of the discretionary portion of New York City's entire budget. (3) Therefore, every effort must be made to ensure that payments are being made only to those who have in fact been damaged by improper City action, that those injured are being compensated only for the amount of their injuries and not more, and at the same time that those injured by wrongful City action are in fact being fairly compensated.

The damages cases faced by the City range from minor sidewalk slip-and-falls to multi-million dollar medical malpractice claims, to discrimination litigations and suits under federal civil rights statutes challenging the legality of a particular governmental action, usually involving the police or correction departments. While these are primarily individual damages suits they also include larger tort claims, such as health claims arising from 9/11, (4) the deaths and serious injuries resulting from the Staten Island Ferry disaster, (5) or class action discrimination suits, including one that Ken Feinberg helped to resolve.

Frequently disputes of this type, like comparable cases in the private sector, can and should be resolved through alternate dispute resolution. But, and I underscore the "but," this is not always true. There are two very important considerations in damages suits involving the government that are not always present in private sector disputes, considerations that often point to rejecting alternate dispute resolution mechanisms as a means for resolving the case.

First, if every would-be plaintiff is under the impression--and too many in fact are--that if she sues the City, no matter how weak the case, the courts will force the City to use alternative dispute resolution to settle for some amount of money, the taxpayer will unfairly suffer. A government must make crystal clear that it is not a deep pocket waiting to be picked. This is all the more true when the volume of litigation faced by the City is recognized. New York City is a party to over twenty percent of all civil litigation in the state courts in the five boroughs and to approximately twenty to thirty percent of all civil cases in the Southern District of New York. And in federal cases the City is often facing an additional demand for attorney's fees authorized by many federal statutes. Thus, when the City takes a "no-settle" position because the case is particularly egregious in its lack of merit, or a plaintiff with an arguably valid claim insists upon inflated damages, the City will not (and I submit should not) be asked to go to some form of ADR--usually mediation--and resolve the case for a few dollars simply because the City will otherwise incur litigation costs.

Unlike many private litigants, for whom settling the occasional damages suit will be less expensive than litigating, for the City to resolve meritless disputes for even a relatively minor amount is wrong and expensive. Mediators and courts, which see a token settlement via ADR as a useful means to clear their crowded dockets, should not ask the City to engage in such tactics. To do otherwise would result in an increase, not a decrease, in litigation, and would cost the taxpayer still more money.

In evaluating whether the City should use some form of mediation to resolve damages cases, a second important variable that is not always present in a private sector dispute is the needed preparation time. Effective ADR generally requires the attorneys on each side to become familiar with the facts of the particular case. Given the volume of City damages suits--approximately fifty tort cases are sent to trial every week--and the need for both the Corporation Counsel's Office and the Comptroller's Office to approve any settlement, the City simply cannot afford the time to prepare to resolve through ADR even a fraction of such cases. Many of those cases settle just before, or during, trial. It is simply not cost effective for the City to spend time preparing to resolve a $25,000 case through ADR--particularly a labor intensive summary jury trial as some have suggested--when the odds are overwhelming that such a case will be resolved anyway.

Those caveats aside, ADR in government damages litigations, especially as some form of mediation, may be an effective process. Over the last ten years, the City, by using court-mandated mediation in the typical tort case, has been able to resolve meritorious claims more quickly and less expensively, and to reduce its backlog of pending cases by half. In the larger damages cases, ADR may also be an effective tool, as highlighted by a recent successful pilot program the City engaged in involving major medical malpractice cases. (6)

I hasten to add that this does not mean that every major damages case in which a governmental entity finds itself should be resolved by ADR. For example, there may be critical issues of law that first need to be resolved. If...