On this episode, host Paul W. Grimm speaks with retired U.S. Magistrate Judge Beth P. Gesner about settlement of civil cases in federal court, and in particular, the magistrate judge’s role in facilitating settlement discussions. They also discuss several strategies judges can utilize to more effectively manage settlement of their cases, such as maintaining a calendar, holding everyone accountable to deadlines, memorializing agreements that are made between parties, and ensuring that key decision makers are always part of settlement discussions.
Speaker:
Hello and welcome to Order in the Court, a podcast production of the Bolch Judicial Institute of Duke Law School. Here's your host, retired federal judge and the director of the Bolch Judicial Institute, Paul Grimm.
Paul W. Grimm: Hello and welcome to Order in the Court, the podcast that focuses on practical advice about how to achieve faster, fairer and less expensive outcomes in state and federal court. I'm Paul Grimm, a retired United States district judge and the director of the Bolch Judicial Institute at Duke Law School. My guest today is my dear friend and former colleague of many years Magistrate Judge Beth Gesner, who recently retired from the United States District Court from the district of Maryland after over 24 years of service having served as the Chief Magistrate judge since 2017. Judge Gesner, Beth, welcome to Order in the Court. It's a pleasure to have you here with us today and because we are friends and we go back so long, let's just do it Beth and Paul and not try to do “Judge.” Beth, while most lawyers and judges view the United States District Courts as the trial courts, the truth is that the number of civil jury trials has steadily declined for decades.
And I think the last time that we talked about this, there were fewer than 2% of civil cases that actually go to trial in the federal courts. Now, federal courts oftentimes have a reputation for resolving a lot of civil cases on motions to dismiss and motions for summary judgment. But the truth is that the overwhelming majority of civil cases in federal court get resolved by a settlement. And that's what I want to discuss with you today. Now, you and I had the privilege of serving under our revered former chief Judge Fred Motz, and I remember him saying many times that the federal courts provided the battleground where parties would try cases and fight it out, but they had a corresponding obligation to provide the diplomatic corps where they could get their cases resolved.
It was very important for him that the court provide that function through judicial officers and that they'd be available without costs to the parties since the parties didn't have to pay to have their cases tried. In our district it was a matter of great pride to me when I was a magistrate judge and to all of our court for the entire time that we've been associated with it, that the US magistrate judges were the judges who were the diplomatic corps that handled those settlement conferences. And I'd like to talk about that process.
Could we start off by talking about an overview of the settlement conferences process was? Just an overview we'll drill down into the particulars in just a bit. Give us an overview of that process.
Hon. Beth P. Gesner: First of all, thanks for having me, and as I was thinking about our podcast today, I thought of that book, "All I really need to know I learned in Kindergarten." Well everything I know about settlement confidence I learned from Judge Grimm. Having said that, I would say I think Judge Motz had a vision that was very different from what was at the time, 25 years ago, very different from what most courts offered. His idea was to take what was a pretty modest settlement program and turn it into a robust and incredibly effective settlement platform through the use of magistrate judges. And I think his vision was to offer the judges of the court for settlement in every case in the court. And while not every case actually came to a settlement conference, many more than ever before came. And that's certainly increased as the years have gone on and word has spread.
I think the theory was that if you have judges of the court who were familiar with the law, familiar with the judges who were presiding over the case, familiar with their prior rulings in the cases, knowledge about the jury pool, that the magistrate judges were uniquely situated to help the parties try to fashion a settlement and to understand the strengths and weaknesses of the case and to help facilitate that settlement. And, of course, the magistrate judges in our district and in most districts also have a pretty large civil caseload on consent. So you could also share the experience that you had yourself so as to facilitate it.
You mentioned paid mediators. I think the difference in theory is that once a magistrate judge becomes involved in your case, if it doesn't settle at the outset, we're in it for the long run. And that may not be the case in jurisdictions where they have much greater volume of cases and mediation may be mandatory and you may get just a brief session, but rather you stay with the case. And I think most of us have the philosophy that you stay until it settles or the case goes to trial and frankly, even sometimes in a post-trial setting there may be a platform. So I think that was the theory behind it and I think what has really evolved into a very robust program certainly in our jurisdiction.
Paul W. Grimm: I think that hearing you say that reminded me of just how singular that approach was at the time that we first started it and that actually became a model that was used in many courts throughout the country. And when I would go to conferences and talk to magistrate judges from other districts, it seems like they also had that same experience that was rather unusual back at the time we started. How would a case get selected? Would the parties ask for it? Would the district judge mandate it? How would that occur?
Hon. Beth P. Gesner: Well, there's certainly individual differences among the trial judges. Basically, the referral to a magistrate judge can happen at any point during the process. At the outset of the case, one of the things Judge Motz did was incorporate into our court's standard scheduling order, a deadline for the parties to let the court know whether or not they wanted the case to be referred for settlement. So just as you'd have deadlines for disclosures and discovery deadline and the like, you would have a date that you would have to report back to the judges to whether or not you would agree to settlement and you might at that point ask for settlement. You might want it early, you might want it later. It might be dependent upon the progress of the case and whether you needed to have discovery or motions to be decided. So, you have that first step.
And then, of course, at any time the parties can come and ask the trial judge to refer it for settlement and certainly those familiar who practice in our court know that they can do that at any time. Also, the trial judge can at any point refer it to a magistrate judge. It's supposed to be a voluntary process. I think we've all had a few where perhaps a few arms were twisted to get the folks to come to the table and frankly some of those have actually settled. Having said that, I think that the best and most productive settlement conferences are ones that everybody is engaged in and think the time is right to have those settlement discussions.
But basically, it can come in at any stage and obviously the form it takes and the nature of your discussion with the parties is going to differ greatly if you're in at the very outset of the case before discovery versus pre trial motions resolved and pending trial. But it really can come in at any time and as I said, once you start that dialogue, the magistrate judge sticks with it. So if somebody comes in early and the time wasn't right, then you continue that dialogue and figure out when is going to be the right time.
Paul W. Grimm: I think that that is so important when you look at the costs associated with civil litigation. I think I read when I was on the civil rules committee that 70% or more of all the costs associated with civil litigation are during the pre-trial discovery portion. I mean obviously the costs associated with the motion to dismiss early on and with summary judgment. But the discovery process which can go on and all the way up until the trial amounts to most of the cost and oftentimes the parties will want that early settlement as you mentioned, to kind of get in there and see if they had limited resources they'd rather spend the money trying to settle the case than to exhaust it in the litigation and then there's nothing left at the end to try to settle.
Whereas at other times, maybe one side felt that they had a compelling dispositive motion and they needed to get beyond that in order to do it. And it was that flexibility, I think that was partly a reason why the process was so successful. However, it comes to be sent to a magistrate judge, it was done through a referral order. Share with us how the process unfolds from there. The magistrate judge gets from CMECF [ Case Management Electronic Case Files system] an order from the district judge saying, referred to this magistrate judge for a settlement conference and mediation, take it from there and walk us through the steps.
Hon. Beth P. Gesner: Sure, the practice may differ slightly depending on the magistrate judge to whom it's assigned, but I think for the most part we have a uniform letter that we send out as well as a uniform approach. Once you get that referral, the first matter that you need to address is when to have the conference. The ideal referral order will indicate what the parties have already agreed upon as to when the conference is held. And that's pretty rare, frankly. And frankly that might be the first dispute. You have to resolve is when do the parties want a conference? And if you just ask them that jointly, you might get two very divergent views and then you have your first dispute you have to resolve, which of course is not the greatest platform to start settlement discussions.
But [you] always try to figure out when the time is right. Do the parties need to do a certain amount of discovery? Do they need to file a motion and talk to them about that? If they said they need to file a motion, I always try to talk them out of it because part of the goal here is to save judicial resources of the trial judge. And so, if you can get them in before they file lengthy motions that are going to take a tremendous amount of judicial resources to resolve, all the better. So, once you figure out when to schedule it, you schedule it accordingly. Some of my colleagues work very hard with the lawyers to find a date. I've had pretty good luck by picking a date and giving it to them once I determine what the timeframe is. That works in about 95% of the cases. If they have a conflict or think the timing is not right, they'll let me know. And then once the date is selected, we send our standard settlement conference letter that lays the ground rules and asks for ex-parte letters that assist us in preparing for those conferences.
Paul W. Grimm: Let's talk about that because I know that was very important to me. There were a couple of factors about it that impressed me-- that number one, it was limited in length and it talked about specific topics that would help the magistrate judge do the job. And I remember one time getting an ex parte letter that was like 40 pages long, which was I think 20 times longer than it was supposed to be. And I was so ticked that I sent it back and said, "Do it over [with]in the page limits." And I thought that the second [letter], and I had read them both, I thought the second one was better than the first to be honest with you. So can you walk us through what that letter asked for and why those things were so important to get the settlement off on the right foot?
Hon. Beth P. Gesner: So — in terms of information you're asking the lawyer for — basically you want to understand what their case is and related issues. So of course we ask for the facts that they believe they could prove if they went to trial. You ask for the major weaknesses in each side's case, both factual and legal, if there are any pending motions, dispositive motions or other motions that would have a significant impact on the settlement discussions. You ask for details with respect to that. I importantly asked for an evaluation of the maximum and minimum damages awards that you believe are likely from each lawyer's standpoint. It gives you your bookends in other words, and I always think that that's pretty critical. Because otherwise, you're talking theory unless you know exactly what's your best day, what's your worst day, and you ask for the history of the settlement discussions to-date. So again, you know what the real bookends are and then the estimate of attorney's fees and costs through litigation.
Now if it's a fee shifting case [where the plaintiff can recover reasonable attorneys fees if they prevail], then obviously what the fees are to date and what they might be are pretty important because the other side might end up having to pay those. But as you pointed out earlier, the cost associated with litigation is so substantial that if you can get people to give you a candid assessment of what their fees might be, it more often than not provides a compelling reason to try to settle the case just for costs alone. One relatively new thing we started adding a few years ago was you'd have people come in and they, defendants, would say, "Okay, well they're asking me for a hundred dollars but I don't have a hundred dollars." And then the plaintiff has no idea whether they're crying wolf or whether they actually don't have the money to pay. And that's a significant factor because if you're a plaintiff and you can get a judgment against somebody but it's not collectible, then gives a compelling reason to try to resolve the case sooner rather than later before you sink more money into it.
So the new provision that we've added to the letter in the last couple of years is, if a client is going to take the position that their financial resources impact their ability to pay a judgment or settlement, then we want a summary of the client's finances including detailed information almost like a balance sheet, cash on hand, ownership interests and properties, liens, et cetera. Now most parties who take that position won't want the other side to know all those details, at least at the outset. And so that's the beauty of an ex parte letter, they can share it with me. But if I'm going to convince a plaintiff for example, that the other guy can't pay him, I better have some pretty compelling evidence because they're not going to just say, oh, okay great, you can't pay me, as opposed to you don't want to pay me.
So at some point if there's going to be a significant diminution in what the settlement value of a case is based on someone's inability to pay, the defendant's going to have to pony up that information to the plaintiff because they're not going to take their word for it. You may be able to facilitate this discussions in the first instance by saying, as I have, “I looked at these records. I asked for the supporting information, and you're going to have a real problem collecting this judgment because all of their properties are held by tenants by the entirety, et cetera.” So that was a provision that we added that I think has helped in that number of cases where the financial ability to pay is an issue. But those are the general categories and the idea is that that lawyers will provide you information that helps you understand their case, not only to have an intelligent discussion with them, but to be able to point out potential weaknesses in the other side's case. And so that subject matter is very important to preparation for a conference.
Paul W. Grimm: I agree completely from the experience that I had, and I will say that more often than not when a party was submitting the ex parte letters, and I think it's important to stress for our listeners that these are ex parte letters. The judge sees them because the idea is to be candid with this assessment. Everybody addresses the same points, but the judge does not share that information with the other side, absent permission from the disclosing party to further the settlement. But it's important to get that. I will tell you that of all the paragraphs that we asked them to assess, the weaknesses in your case, paragraph was the one where I thought the Pinocchio factor played out more often than not when they saw that. But even though most folks might say, well, of course they're not going to disclose their weaknesses if they feel them.
That was very valuable to me because the value of having experienced U.S. judicial officers, magistrate judges with their own case loads that have presided over jury trials that know the law and someone comes in with a case and says, “Oh, I don't have any issues at all,” then that is a target for focusing on in the discussion to help the party at least even if the lawyer doesn't believe that, to understand and it's identifying risks and trying to avoid them and predicting outcomes that are likely to be a better outcome than if you go to trial that allow a case to settle. So, I think that those letters were really important and occasionally if I thought that they had shorted me, I'd ask for a supplementation. Did you ever do that?
Hon. Beth P. Gesner: Yes, I do that frequently and I think I probably either progressed, or digressed, to that the longer I did it because if you saw a deficiency in a letter or an issue that hadn't been addressed by a lawyer and then waited until the conference, they weren't always prepared to answer the questions. And of course, you don't want to have the lawyer look bad in front of his client. And so giving a heads up on something I think is very helpful. What I've also had is the situation is where one party will identify an issue and the other side hasn't even mentioned it. And I may call the party who mentioned the issue and said, "hey, can I talk to the other side about this?" Or "you've given me a summary of this, would you mind providing just that portion of your ex parte letter to the other side so they know what your position is? And we don't have to wait until the conference for me to explain it and that way we'll have the opportunity for them to prepare what the response is to that." And so I've done that with some success. Usually the party who's identifying the information is pretty willing to share at least a portion of that letter. But yeah, sometimes you get the letter, the letter that says, I have no weaknesses. Well, you already know you have an uphill battle if that's a lawyer's position. Yeah, I quite frequently, which goes in hand with me quite frequently talking to the parties in advance of the conference, talking to the lawyers that is, I hardly ever talk to the parties in advance but often talk to the lawyers because you want to tee it up as productively as you can. You want to know as much about the case as you can. And if there are gaps, I don't hesitate to ask the lawyers to supplement it.
Paul W. Grimm: One of the things that I learned through that process was that when you have a hearing and you're in court and you have a trial that is very much dominated by the lawyers, the lawyers of course, they choreograph their strategy, they assemble their facts, they do their arguments and you don't hear a whole lot from the parties unless they're called as a witness to testify. But it's different in the settlement conference because the audience that you have is you are talking to the lawyer of course, but your audience is the party. So it's essential to have a party there at the settlement conference because that's the person that has to want to settle the case if it's going to settle. Now that's easy if you have a single plaintiff, an employment discrimination case or a Federal Tort Claims Act case, it becomes a little bit more difficult if the defendant is the government or a company.
And there can be even another layer of complexity when the defendant is being defended under an insurance policy. And so the real decision maker is a claims representative from the insurance company, and I know how frustrated I would get sometimes when the defendant would send in their authorized representative who really had no authority, they were just simply some stiff in a suit who was sent there to, and whenever you tried to nail down a position, they would say, well, we have a committee that has to address this, and the committee wasn't there. And the concept was you wanted to have the party representative, and you wanted to have someone there with settlement authority. Can you help us understand what that means to have settlement authority and why it's so important to have that person present?
Hon. Beth P. Gesner: It is critical, [especially] if you're sitting there for hours talking about the strengths and weaknesses of each case. And then you have, I call it “Oz,” you have [The Wizard of] Oz some place at some remote location behind some screen who's really calling the shots, who's not there. And I have on occasion — when frustrated — said to the suit I had there, "Okay, let's get Oz on the phone because they're the ones who are actually calling the shots." So our letter does require someone with complete authority to enter into a binding settlement conference to be present. As you said, if it's an individual that's a little bit easier to call in recent years, I think that's been interpreted in different ways. And so we've basically said you have to have authority to settle the case up to the amount of the plaintiff's demand, although you may never pay that, but theoretically you need to have sole authority that you can make that decision.
Now, as you said, there are some practical problems when you have public entities. So for example, we get a lot of cases with the state of Maryland or the local municipalities, the counties, the city, and I think we're all pretty familiar with that process. And so there's a provision in the process by which they approve a settlement. You can't bring the whole settlement committee in, you're not going to bring the mayor in, you're not going to bring the CFO of a county in, although sometimes they show up for the very significant cases. What we have [is a] provision in our letter that if you want an exception to that, then you need to let the court know, send a letter in advance and get permission. And I'll often make sure that they've gotten the permission of the other side. So for example, you might have the chair of the settlement committee of the city of Baltimore appear at your conference, but not the entire committee and they will have vetted the case pretty significantly before they get there.
So if you need more money, you may not get it at that moment, but you've teed it up again to go back and ask for more. But the insurance representatives are a chronic problem. Do you have a person there who really has full authority? When I get the letters in, I also request that they tell me in advance who's coming, what their position is, what their role is, and my judicial assistant prepares a list of that for me and I will then follow up with them if I don't think I have the right person, I'll follow up with the lawyer and say, "okay, who is this person? Do they have full authority? If not, who else do you need?" I think that one of the beauties of Zoom[settlements] is that that's made that a little bit easier, but that's critical to the process. We demand it. It doesn't always happen. You have to do what you can to ensure that you have the right people in the room and that you don't get to the end of a productive detailed discussion and have the people say, okay, let me go home and think about it because you lose your traction. I mean sometimes that's appropriate, but sometimes once they leave the room, you lose the juice that you've gotten so far by working with them all day.
Paul W. Grimm: Judge Gesner, I'm smiling, recalling something that happened when I was a district judge. I never really lost my muscle memory from my settlement days as a magistrate judge but having that person with authority and letting the sides know that they had skin in the game and that they had to invest the time in it rather than just send the proxy. I one time had a case when I was down in Greenbelt. It was a small claims case filed in the Maryland District Court where an employee had been injured and had been prescribed six weeks of physical therapy and had the six weeks of physical therapy and the insurance carrier for the employer, the health insurance carrier, only paid for three weeks. This employee said, well, I want three week’s worth. He filed a small claims court case, it was under $5,000. The defendant promptly removed it to federal court, a sub $5,000 claim because it was covered by ERISA,.
So it was a federal statutory claim. They had a right to remove it. I had an initial planning call. The lawyer was a lawyer from a big firm in Baltimore and I had the individual plaintiff on the phone who was, "what am I doing here? Who are these people?" And I said, "listen, let me tell you what's going to happen here. This is a Maryland small claims court case that you have removed to federal court and you want this case resolved in federal court and that's fine. You have a right to do that and I'm going to resolve it, but that's going to involve my time and the time of this plaintiff. And so here's what's going to happen. We're not going to have any proceedings in this case until after we've had a settlement conference and I'm going to conduct a settlement conference and I'm going to order that your CEO personally appear for that settlement conference and physically be here for that settlement conference.
And I think that you might want to have a little conversation with him about the time value of money and whether or not having this case in federal court if it's so important to be in federal court that it takes up my time, that it's going to take their time as well. So why don't you get back to me and tell me, well, who it is and the name of your chief executive officer and when we can have that conference" I said to the plaintiff, "would you be willing to negotiate to try to maybe see if we can get a res..." "Yeah, yeah. All I want is my $1,500" and I never heard back from the case. [It] resolved, so sometimes subtlety was not necessary, but the notion that you had to have someone invested in the process, I think it's very important to have share with our listeners that the world kind of changed with the pandemic.
You were chief magistrate judge during that time and we were both together on our infamous pandemic planning committee where we had meetings, initially it seemed like every day, to try and figure out how to move forward and the professionalism and the skill and the dedication of our magistrate judges never shone through as brightly as it did with their ability to keep the preliminary criminal matters going and the settlement conferences. I remember a phone call Beth where people were talking about this thing called Zoom and I had never heard of Zoom and we were talking about, well, we only have one Zoom license but we got to get six and it took weeks to get them and I had never heard of Zoom and it seems remarkable that a person today could ever admit that, but I do it. Tell us about how the settlement conferences changed during the pandemic with Zoom and how that actually changed the process pretty significantly for how settlements conferences could be done post pandemic.
Hon. Beth P. Gesner: Well, if we're confessing, I never heard of Zoom either and I'm pretty sure we're not alone. I think that was a time when that was a tool nobody ever knew about and frankly I think got really cranked up during the pandemic. Of course, prior to the pandemic, all settlement conferences were in person. There were some practical challenges to that and whether you had the right people in the room, if they had to come remotely, and I know that you and I have discussed that over the years about people or that the lawyer would call and say, I want them to participate by phone, and I was "absolutely not. I need everybody in my room, I need to look at them in the eye, in person is the only way we can do this. I can't require a plaintiff to show up and then have the defendant representative available by phone."
There was no options of video participation back then. So we went from the inability to do that in any form to Zoom. That's when we all learned about Zoom and other remote platforms and frankly, the use of that platform allowed us to keep the cases moving during the early days of the pandemic, particularly as the lawyers, as the pandemic went on and on as the lawyers realized that they were having trouble litigating their cases. Of course litigation of cases then went to Zoom and other platforms as well, remote depositions and the like, which was new to all the lawyers.
But there was a time when things just weren't moving and one thing we could offer the parties was the ability to have settlement conferences and I think it was very effective and there w[ere] a lot of mistakes made and I think there was that famous video of the guy who had appeared by Zoom in court and his kid had put a cat up on the screen and he kept saying to the judge, "I'm not a cat", I have to tell you that what did evolve were protocols because I think some of these people thought that they were in their living room so they could lay on their couch while they were conducting a settlement conference.
And so I started putting protocol rules in emails to the lawyers. This is as if you were in my chambers, as if you were in federal court. You have to be dressed properly, you have to be available. You still have lawyers who will be in their car on the way from one hearing to another. And our conferences, we advise the parties could last you all day and even longer. And so if they have a hearing at one o'clock, they shouldn't sign up for a settlement conference on that day if they have to take a break for that. It was a lifesaver to all of us during the early days of the pandemic. And so then the pandemic... Vaccines came out, the pandemic slowed down a little bit and yet we were still doing remote conferences because everybody got very used to them and there was some pushback by both parties and the lawyers, although not much. I would say on balance, most of the lawyers now and parties still want to do it by Zoom.
If you have a very complex case with multiple parties, which I've done by Zoom, they may ask to come in and do it in person and we've done that. So I would say as the last year or so we've transitioned probably to a return to more in person, but certainly still the minority of the cases and it's tremendously helpful to be able to schedule a conference. You can schedule them a lot more quickly if you're doing it by Zoom. There's no travel time. You can figure out dates when people, you might not be able to take three days, but you can take one day. So it's been really excellent in that regard. And while I am an absolute advocate of a look in a person in the eyes, Zoom has proven to be pretty effective in that regard. And I know from my standpoint, I feel like when I'm talking to somebody on Zoom, I'm actually talking to them.
I think we've had to set some ground rules to make sure that that was the case. It's still, I think largely by Zoom more in person and sometimes it's just a preference of a lawyer. So we've now included in our letters that I think most people may still default to Zoom and just say, "hey, let me know if you want it to be in person. We can do it in person." That's another potential dispute between the parties because one will say, "I want it to be in person" and the other one will say, "well, I don't because I have four corporate people who are located in Seattle who don't want to have to come here."
So that's a little tricky. I have not done a hybrid where you have some people present and some remotely. I think that's a very bad platform, although I think some of my colleagues have done that of necessity. I think the pandemic and Zoom and remote platforms has completely changed the manner in which we do our settlement conferences. And I think most of my colleagues would say that the settlement rate is at least as high as it was pre-pandemic if not higher for all the reasons I indicated. If people are in the right mindset and save themselves some time and money, then that might afford a better platform for a settlement.
Paul W. Grimm: I think often about this Beth, we were not trained mediators when we became magistrate judges. We had to learn how to fly that plane, build a plane while we were flying it, and we had a very good, very collegial and tight supportive group of magistrate judges and we would sit in with each other when we first started to get a sense of how it goes, but there's really an art to a settlement conference. You can study... And I remember at one of the judicial conferences going, they brought some law professor in that studied dispute resolution and she came up and she had all these, well, there's a so-and-so style, how all these boxes and lines connected. And after about an hour, I thought, this is the worst thing I've ever seen in my life because if I'm worried about whether I'm in this mode or that mode and which box I've got to fill, I'm not concentrating on what I want to focus on.
So sometimes the settlement judge will meet with both parties at the same time and have sort of an introduction. Sometimes the settlement judge allows the lawyers to give a brief statement, I didn't do that because I thought sometimes that got them in adversary mode rather than settlement mode. But sometimes that works. Sometimes the judge would want to meet immediately with one side or the other ex parte in sort of talk about something before they kicked it off. Talk about the art of the settlement conference and how the judge decides in any particular case, how you kick it off and how you start that back and forth process.
Hon. Beth P. Gesner: There is no science to this process. It's definitely an art. Each person, each mediator brings their own personality to the mix and frankly, as I've talked to my colleagues, you do whatever you need to do to get it done. Part of that I think is significantly building a rapport with the parties and with the lawyers. And for most of us, I think that starts before the conference. I must say that in the beginning I think I was probably more flexible. I'm probably more formulaic in my approach now, absent something unusual because I will, I would say in almost all cases, have a discussion with each lawyer ex parte before I get to the conference. That might occur when a case is first referred to me. Again, people familiar with the process may just call you out of the blue and say, "hey, can I talk to you about some of the dynamics here?"
Which is great or more likely than not, once I get the ex parte letters, which I ask for two weeks in advance, I'll call the lawyers separately and it may just be, I mean I may have an agenda, but I may just call and go, "hey, so you have a conference come up. Thanks for your letter. Just want to pick your brain on how you think we can get this done. Dynamics that you might tell me about." Because one thing lacking with Zoom is that you could always pull the lawyer at an in-person conferences you could always pull the lawyer to the side out of the room and talk to them privately and knock some sense into them or ask them a question you didn't want to ask in front of the clients. And that's a little bit trickier in the Zoom world.
So I think particularly post Zoom, I've done a lot more legwork in advance of the conference. Like you, I don't do opening statements. I think early on in my career I sat through opening statements by each of the two lawyers and my stomach was churning as I was sitting there and I wasn't even one of the parties. So I thought, okay, this can't provide a good platform because then when we split up, everybody was sort of trashing the other one about what was said during those opening statements. Again, I think the legwork done beforehand sort of tees all this up, but my approach generally is I get all the parties together, I tell them what the ground rules are, try to help, and particularly if it's a lay party who's never been involved in a process like this before, let them know how it all works, ensure them it's a confidential process.
The trial judge doesn't get any details with respect to the settlement discussions, nor will I share confidences that one side shares with me unless I ask if I can share them with the other side. And sometimes I do depending on what those circumstances are. And then I split up and I typically go into whatever room the ball is in the court of. So in advance I ask for a demand and offer. And so once I have those bookends, whoever's turn it is next, I typically go to them. Ideally it's the plaintiff in most cases, particularly where it's an individual plaintiff and a personal injury case or an employment discrimination case. I think part of it is the dynamics of that I think are important to the parties as well. But if the plaintiff makes a demand and the defendant gives an offer, then I can go ahead and start with the plaintiff.
Now there are some exceptions to the no opening rule. And again, I'll give you an example. I had a very interesting settlement a couple of years ago in a very complex environmental case. And the first time we met, each of the parties brought their representatives who were very well versed in the environmental issues and had their own opinions and everybody was arguing over what the right answer was, but it was a case where you're going to need experts. So we decided that day was not the day. And then the question was how do we tee this up for further discussions? Fast-forward, we did expedited discovery with respect to experts. They already each had their own experts. And then they hired an expert to be my consultant. And so we met several sessions in a courtroom where each of the experts presented their, we all in the same room, each of the experts presented their own opinions.
And then I sort of left the room and consulted with my own expert. So those were, in those instances, the lawyers gave opening statements. So you have to modify your approach for whether it's a simple two-party case or a more complex case, a business dispute. And so your approach differs significantly and you may have to make some game day decisions once you actually meet the parties and get the dynamics. Are the parties calling the shots or are the lawyers calling the shots or are the lawyers properly advising the client. So it really is, I think an art and as you said, I guess it's like they say about surgery, watch one, do one, teach one. That's sort of how we did with settlement conferences is that we learned on the job. Flexibility is the watchword, I think.
Paul W. Grimm: I do want to talk about something that was, I think to me one of the trickiest situations. You would sometimes get a situation where the lawyer would show up with the client and it didn't take very long to get a sense that there was, either there wasn't good communication between the lawyer and the client or that the lawyer was perhaps maybe because they were trying to put on a zealous advocate picture for the benefit of the client, was actually taking positions or urging positions that you thought were unlikely to be successful and really to the disadvantage of the client. And I think you pointed out, and it was the case when I was doing them, is you never wanted to sort of embarrass the lawyer in the face of the client, but sometimes the lawyer needed a rebooting of their approach and that was required. It's a delicate situation, but it comes up often enough that I'd love to hear your thoughts about sort of how you handle that.
Hon. Beth P. Gesner: Yes, sometimes people can be unreasonable — shockingly. But as I said, if you can ferret that out before the conference and have conversations with the lawyers in advance, I've had some pretty candid bordering on aggressive conversations with lawyers in advance if they've sent me a letter that didn't recognize a significant issue. For example, in our jurisdiction, there's contributory negligence, which is a complete bar to recovery by a plaintiff. As you have, say that's a big issue in a case and the plaintiff's lawyer hasn't even identified that, well, I'm going to call him in advance and have a conversation with him, and I may say, "you're not going to do your client any service if you just overlook this significant issue.” Discussion on the front end I think is very important. And also important when you find yourself in a session when either the party or the lawyer is being unreasonable is to try to refocus it to the objective versus the subjective.
And I always say to people, I can't hope to understand how you feel about this and how strongly you feel about that, but unfortunately, that's not how the case is going to be decided. It's going to be decided by a judge on legal issues or a jury on the facts. And so I try to refocus on the objective. Who are your jurors going to be? What if we see another verdict [issued in a similar case]? And I will often in advance research, I think we started years ago, the giant trial binder where we have a summary of every jury trial in our district, I think I have them for the last 20 years, and go back and find examples of actual verdicts where there were similar issues to try to redirect them to again to the objective aspects of the case rather than the subjective aspects.
When you're in person again, so if I leave a room with you and your client and I'll say, "okay, lawyer, why don't you guys speak privately? Come get me in my office when you're ready for me." And then I'll tell my assistant, "when he comes looking for me, send him in my office", and then I'll have a conversation in my office, which I did quite frequently. With Zoom, I will tell the lawyers I'm going to call you before I come back into your room. And then when I call that lawyer, I'll make sure he is not on a speakerphone and he's by himself. And then I may have a candid conversation with him as well. But I am candid to a fault. I think I'm pretty aggressive in terms of trying to redirect people if I just think they're being unreasonable and not serving their client, a little bit harder when it's the client. I never would tell the client [they are unreasonable] I would again try to use the tools of just redirecting them to some of the more objective aspects of the case.
Paul W. Grimm: I think that what you pointed out is something which is so important is to try to, okay, let's take this away from the personal and let's just focus it from another matter because we're trying to get an idea. And one of the things that I would try to impress upon them is, look, there's always, no matter how thin the pancake, there's always two sides and the other side is going to have a different story. And if it goes to trial, you're going to have eight to 10 strangers deciding this. And I want to give you an actual example and I had one particular case that I remembered that I used as an example that had actually been tried twice. And so you got two completely different outcomes and you could have a comparison and I would recite the facts and I would say, "okay, so how much would you give and what would be your verdict?"
And I would see the client just struggling with that. And I would say, "well, imagine if there are eight people doing that and they're hearing contrary evidence." And so the decision is, is that if it's up to you and your lawyer to decide the case, then you'll get what you want, but it's not going to be that way. And you had to sort of step out of that. I do remember that one time I did something that I actually regretted but it was successful is the lawyer I thought was... We had a good offer on the table and the lawyer said, "no, we're going to take it to trial."
And I said, "okay", with the lawyer there, with the client, I said, "will you please tell your client the not to exceed number that you will not exceed, whatever your charges are between now and reaching a verdict. It will not exceed that number. So your client knows the cost of going forward to trial, will you give them that number and sign it right here now that you will not exceed that number." And when the lawyer hesitated and wouldn't do that, the client took the settlement offer. I only did that one time, but I thought it deserved it and it got the job done.
So we mentioned confidentiality and you've covered that very well. And that leads me to the next step in the process that I'd like to kind of discuss with you. I think the message that I learned as a magistrate judge and that you demonstrated here is that our magistrate judges were tenacious. They just would not let it go. And we tried to get it done in the settlement conference. If it didn't work, we would never say, that's it, I'm done.
We would come back and try again. We would let them take some more discovery and then come back. We would never quit. And sometimes it was even during trial or post-trial that it happened. So there's a time in a settlement conference where you can start to see where you might be able to “go”, the parties are exhausted, they can't get there and you don't want to give up yet you know that something has stalled, what are the strategies, what are the ways in which you can try to decide how to breathe new momentum into the process or decide we got to stop and pick it up later? What kind of techniques can you use in that situation?
Hon. Beth P. Gesner: Yes, again, flexibility is the watchword there. You have to do what you need to get the parties back to the table. If it's apparent that either, that everybody's fried for the day or more importantly that something else needs to be done, if you're going back and forth on a dispute, on well, he said, she said, then maybe you need to do a little bit of discovery. So I start talking about, okay, if today's not the day, what do we need to do to put this in the posture to come back to this room not to litigate the case? And what do we need to do and how do we do that in the least costly and most effective manner? So for example, if you need to depose two witnesses, who are the critical witnesses in the case, let's talk about doing that. Let's talk about scheduling it.
How long will it take you and then get you back and I will pick another date for them to come back and sort of hold their feet to the fire in terms of getting the discovery done. I also, with the trial judge, with the parties, tell them that I will talk to the trial judge and take care of any scheduling modifications, which most trial judges are happy to know that we're keeping track of it and we're only extending things or modifying it for the cause of trying to settle the case. It's trying to stage the discussions, if you will. And sometimes you might say, you know what? You really don't need to do anything else. But if they feel like they do, then you sort of got to roll with that. But the minimum necessary, and as I said earlier, you're trying to avoid them filing any significant substantive motions because then that sort of defeats one of the purposes of settlement is having the trial judge have to resolve that motion.
So I've also had situations where everybody thought they were going to win dispositive motions and rather than file them, they each filed five-page letters with me detailing what their arguments were on the motions. They shared them with each other. And then we came back and we had a discussion about the motions. And what I did in the meantime was pull opinions particularly from the trial judge at issue. I always say, I'm not the judge deciding this. Here's what I've seen. Here's what I've had in my cases. Here are my thoughts. And then you can have ex parte discussions with them on the flaws and potential flaws. So expediting the process in the most cost-effective way I think is important to continuing that dialogue. But you might, it's great if you have one settlement, but in a complex case, particularly if it's early on in the life of the case, you're going to need more than one session and you want to figure out how to most efficiently do that.
Paul W. Grimm: Every time I think back on that process, I realize the justification that our court had in allowing the magistrate judges the time to be able to devote to these things in the way that was the most effective way to do that. And what I think the audience doesn't necessarily have a feel for is that the reputation of the magistrate judges in the District of Maryland was so good on settlement that it sort of preceded the individual judge. And the parties came in with the expectation that they were going to get it done and that once they had sort of psychologically conceded that we're going to get it done, there was some transition in their mind about how they would approach it. And they were really looking to the judge for guidance and the flexibility, the commitment, the tenacity is what makes that program such a successful program.
So I want to talk about something a little bit different. We've moved through, the hard work has paid off, you got a deal and everyone's tired, it's five o'clock and everyone's given until it hurts and everyone wants to go home and you got a deal. And I learned having been burned once by not doing this, that you can't leave till you got something that memorializes what that is. So that if someone goes back, they go back and they talk to someone else or a family member and they say, what you settled for this, that buyer's remorse does not torpedo the settlement.
And, of course, you'd prefer not to be called as a witness in a motion to enforce a settlement conference. So what do you do at that when everyone's exhausted, you've got it done, they want to go home, but you want to make sure that it's clear what the terms were. Some of these settlements produced 25, 30 page settlement agreements, but the key terms I felt had to be memorialized. How do you approach that to make sure that what they agreed to sticks and they don't come back later and say, "well, I didn't agree to that."
Hon. Beth P. Gesner: Well, among the many things you taught me, Paul, were to make sure you do that because if you don't, then somebody's going to change their mind. They're going to go home and their aunt or uncle or cousin's going to tell them they should have gotten a million dollars and then they'll want to back down off of what they got. So it is critical, I think, to document the material terms. When we did all conferences in person, I would literally go and hand write it, the material terms. I would come back into the room with those terms, with all the parties present and go over them and say, "Here's what I understand that be the material terms." I would have them sign it — the parties and the lawyers — each sign the material terms and make copies for everybody and send them on their way.
And in Zoom days, I now do it by email. So I will actually do it in initially in ex parte form. So, when we've settled a case, I'll type up the terms. I will send it by email to the parties, asking them to reply to all, discuss it with their client in their respective rooms and reply to all that they accept those terms. And once everybody replies to all, then I'll bring everybody back into the same Zoom room or remote platform room and go over the terms in person with them and importantly, make sure that everybody realizes they have a binding agreement, that they can't leave and change their mind that they have a binding agreement. Now, as you said, many settlement conferences, particularly in complex cases, have many, many terms. There's a lot of boilerplate that most of the lawyers are familiar with. Occasionally you have lawyer who's not familiar with a particular odd term that is a standard term for a corporation in their settlement agreements.
Sometimes disputes will arise. And so after I do that process and before I send people on their way is say, "How long do you need to finalize your formal agreement?" Figure out what to let the court know in terms of the case. Are the parties going to file a dismissal order? Can the court issue one of our local Rule 1[11] orders, which gives the parties 30 days to wrap it all up? So I keep on it until they get across the finish line and you have the signed agreement, if money is to be paid or terms, which sometimes can be long-term terms, if there's sort of an injunctive nature. So I will let them know that if any disputes arises, they're finalizing their formal agreement that they should contact me. They shouldn't file anything, like file a motion to enforce, they should call me first.
So that, and I have had this on occasion where I then had to mediate issues on what the agreement was. And knock on wood, most of those have worked out. I had one odd one that was actually my case. And I should add, we magistrate judges actually do these conferences also for fellow magistrate judges in their consent cases. And so I had a case — it was my case and the parties settled and they sent the check from the insurance company and actually it was stolen and was a subject of fraud. And the whole question is, who bears the loss on that? So that's a motion that probably needs to be litigated because of the legal issues and nobody's willing to just split it. But it's important that you get the parties to a final resolution and make sure that everybody understands what those material terms are. Hiccups arise. But I think documenting those terms has really been critical to preventing tons of litigation.
Paul W. Grimm: I think that's absolutely critical. I will say this, is that when I did start memorialize it, there were two occasions when I actually, there was a motion to compel enforcement of a settlement conference and it went to a hearing and I was subpoenaed and called to testify. And the fact that I had that, I was able to walk through it and of course it was affirmed by the district judge, I want to have two questions as we come to the end of our time, and I think our audience might not be aware of this. As a person who's taught a lot, you can teach hundreds of students over dozens of years, and one time you'll get a letter from a student that will say, your class really changed how I thought about the law or did something. You only need one of those to keep you motivated to doing it.
During the course of my 16 years, there were some letters that I treasured that I received back from, usually from an individual, not necessarily from a company where the fact that that case had been so occupied, their mind and their life was upside down and it was resolved and it allowed them to move forward where you would get a letter, a handwritten letter in the mail, sometimes the card that thanked you for it. And I didn't have a whole bunch of them, but when they came, they made my day. And it allowed me to realize how important that vision of Judge Motz was that we could provide a service that had that impact. Because when a case is tried, they go home. We don't see what happens after that. But when you get that feedback afterwards, it would just blow me away. I'm sure you had experiences like that because you were one of the best that ever took that on in our court. Did you ever have that experience and did it sort of reinvigorate your belief in the system that we had?
Hon. Beth P. Gesner: Yes, I always say that in our jobs we don't get a whole lot of positive feedback. The nature of the job isn't such that you get reviews or feedback, but when you do get to settling a case that is compelling, particularly where there's emotional issues involved. One of the most compelling cases I ever had was where family had lost a daughter due to alleged negligence. It was so fulfilling. Again, you might get cards or I had a sketch of me drawn by a minor plaintiff that was sent to me. And those are so incredibly meaningful because one thing this platform provides is while you may not be going to trial, it gives people their “day in court”.
And I think that was part of Judge Motz's thinking when he put this robust program into place. And so while you may not be sitting through a six day or six week trial, you're in the courthouse, at least pre-pandemic. And even now, I mean they know they're talking to a judge and they feel like they’re getting judicial attention, if you will. And I think that's meaningful to people. I've had people hug me after conferences, in very emotional situations and it's hard to keep it together in those circumstances. Yes, that's the reward is when you feel like you've helped people to a resolution that is far better than the cost and uncertainty of going forward with litigation.
Paul W. Grimm: To highlight the point that you made, I thought many times that in our court with civil cases, there were usually motions for summary judgment at the end. We had a local rule that said that there would not be a hearing, it could be decided on the filings unless the parties asked for a hearing and the court felt it was necessary. More often than not, there wasn't a hearing. And I always thought to myself that there were these situations where a lawyer would get the ruling and call the client up and say, "well, we lost our case. The case is over, we can appeal." And that client never set foot in a courtroom, they never saw a judge, they never talked to a judge. It was all done on the motions and everything. And the sense of what a court was and the vital role that courts play was completely something that they didn't experience [but ] in the settlement conferences they did.
They were face-to-face with the judicial officer. And because our court was wise enough to give the magistrate judges their own dockets to try cases, they could rely on their own experience as a trial judge as well. That notion that they had their day in court, they faced, talked to a judge who listened to them with respect and dignity and helped them work through it, was one of the most important things that our court did. So let's finish up with this. Give us some examples of things you saw lawyers do in the process of a settlement conference that you thought were effective and good, and then maybe some things that [were] not so much.
Hon. Beth P. Gesner: So you talk about what you learn in law school and the students who you teach. I think that the fundamental quality that's critical, not just in settlement conferences but in practice is common sense. And in fact, I must've drilled that into my law clerks so much that one of my last law clerks gave me a stamp to stamp on papers that said, "Motion denied for lack of common sense."
I think those who bring that common sense are going to be the best. [The problems] come if you're unprepared, impractical, or unrealistic. Conversely, the best ones are those who are prepared, practical and realistic. I think you need to know your case, you need to prepare your clients, and you need to weigh all the factors and look for a resolution that reflects all those factors and not sell your client short. What's a bad example? An example, and this sadly has happened more than once, where I have someone who perhaps doesn't practice in federal court, is more of a state practitioner, and [may be an the expert] there. I never practiced much in state court, so I can't comment on it. But different dynamics, different jury pool, and the like. So you'll go through this lengthy discussion, I will with the client, painstakingly help them understand where they are in the case now, how the case is going to proceed.
If it's a case that's going to trial, you'll talk about the jury composition. I'll talk specifically what counties the juries come from. I'll pull verdicts in other cases and show them [even if] you win, our juries are conservative. And I think it's important for plaintiffs to understand that conservative [outcome] in most cases. I will get through with this whole big lecture and then the lawyer will talk about, make it about themselves. And I've had lawyers then say like, "Well, yeah, okay,” but the last verdict I had was a million dollars in XYZ county or this. And you want to say, "Okay, were you listening to me?" And at least be a little diplomatic about it. So, I think making the case about you is one of the worst things that I've seen lawyers do and become defensive. I try to be fair to both sides when I'm talking to them and try to make them feel like they're getting a fair shake and understand what they know or don't know.
The good ones are the ones who come in and are candid, not at the risk of selling their client short, but candid, and push back when necessary and equip you with the proper information to discuss with the other side. So a funny example of that, which links into the confidentiality. It was a personal injury case [and] the ex parte letters from each side. The plaintiff's ex parte letter was pretty bare-bones. The defendant's ex parte letter disclosed to me that the plaintiff had been a plaintiff in eight other cases, personal injury cases, each of which were with different lawyers, not the plaintiff's lawyer in the case that I had.
Paul W. Grimm: Oh boy.
Hon. Beth P. Gesner: So I'm like, okay, this plaintiff's lawyer can't walk in like that. So the defense lawyer, as an example, the defense lawyer had really done his job. He had done all this research he had found no discovery had been done, and he had found all these other cases. And so I called the defense lawyer and I said, "You got to let me tell the plaintiff's lawyer about all these cases. You can't just walk him into this." And I wouldn't have disclosed it without getting his permission. And so, he did after some discussion, agree that let me tell the plaintiff's lawyer.
And I called the plaintiff's lawyer, and the plaintiff's lawyer was very appreciative that I had shared that information with him. He said he would get back to me and shortly after they got back to me and told me the case had been resolved and they didn't need to have a settlement conference. So, I mean, kind of a funny example, but an example where the defense lawyer had done his job and the plaintiff's lawyer when equipped with that information, got something for his client, but probably more than he would've gotten had he proceeded with the litigation. So, I think again, that the common sense overlays it all, and don't make it about yourself. Make it about your client, and make sure that you prepare them and that you're realistic about what your case is and what a reasonable settlement might be.
Paul W. Grimm: This was a delight. I could spend more hours talking to you. And the chat that we had today reminded me of how lucky I was to have worked with you for the years that I did and your dedication. And I think the district is very lucky that you continue to be available on a recall basis to help with this because you're so good at it. So thanks very much.