April 10, 2018

Whether local or global, settling tough disputes require ownership and respect among parties

Participants engaged in mediation, whether in an international stage such as the Arab-Israeli conflict or more locally through U.S. bankruptcy courtrooms, must take ownership and develop trust with each other to have any chance of success.

That was a message delivered on the opening day of the four-day 2018 Spring Conference of the ABA Section of Dispute Resolution, which closed in Washington, D.C. on April 7.

New York Times columnist Thomas Friedman addresses the Spring Conference of the ABA Section of Dispute Resolution

In two different sessions, Thomas Friedman, foreign affairs columnist for The New York Times, and lawyers involved in leading the city of Detroit through its bankruptcy proceedings, struck a common theme in their presentations: People having the most at stake in any negotiation must enter deliberations with good listening skills and respect for the other parties.

“Mediation in situations like this can be quite controversial,” observed David Heiman, a Jones Day attorney who served as lead counsel for Detroit, recalling the 2013 municipal bankruptcy proceeding. He added that the various stakeholders must be listened to.

Friedman suggested the same approach in Israeli-Palestinian negotiations. It doesn’t matter if presidential aide Jared Kushner of another American is in charge, it will take the “will” of parties in the Middle East “and not U.S. leadership” to resolve these decades-old differences.

The conference, titled “Dispute Resolution in Complex Times,” addressed the current changing environment for alternative dispute resolution, as well as offering programs in six additional areas: arbitration; mediation, negotiation; advocacy; communication, psychology and neuroscience; and ethics. The Detroit panel was one of several case studies on the success of mediation in resolving local disputes.

Heiman joined then emergency manager Kevyn Orr and retired federal judges Steven Rhodes, who presided over the case, and Gerald Rosen, who engineered the mediation that led to what is called the “Grand Bargain,” to provide a post-mortem in the program, “The Detroit Bankruptcy: The Power of Mediation.”

Their success is widely touted nationally. As Rosen, a federal district court judge at the time who accepted the offer to mediate, observed, “The short, long story of this was … the city peaked in 2009 at a rate of unemployment of 17.9 percent. The city (unemployment) is better off now than the national average.”

Rhodes, a retired federal bankruptcy judge, said he realized early on that “mediation was going to be an important component of the solution of Detroit’s problems.” He said he “toed the line between (mediation) being compulsory or it being voluntary,” and tried to ensure that the various stakeholders in the city – primarily pensioners, teachers and city workers — had an opportunity to speak in regular court sessions and be listened to.

“The thoughts they brought to me were highly impactful,” he said. “I knew (mediation) was the key to the resolution. … Not just the case but the city’s future.”

The city emerged from bankruptcy — the largest municipal case in U.S. history — in December 2014, or 17 months after filing Chapter 9. The “Grand Bargain” conceived and pushed by Rosen prohibited the sale of artwork from the city-owned Detroit Institute of Arts (DIA) to pay off the city’s massive debt and pension obligations. Under its terms, $816 million was donated by multiple foundations, DIA and the State of Michigan to offset pension and other cuts, which were accepted by city retirees.

At the opening plenary session, Friedman deliver the Frank Sander Lecture, named for a Harvard law professor and pioneer in the field of alternative dispute resolution who died earlier this year. A three-time Pulitzer Prize winner, Friedman also received the D’Alemberte-Raven Award, the section’s highest honor, for his writings on foreign affairs and globalization that, in his words, “translates from English to English” so readers can better understand world events.

In his remarks, Friedman emphasized the importance of the art of listening and showing respect for the other party, although the context was more from an international perch where the parties have a long history of antagonism.

Friedman also discussed many of the ideas and concepts in his 2016 book “Thank You for Being Late: An Optimist's Guide to Thriving in the Age of Accelerations,” including sharing his thinking that in today’s environment those who show “resilience” and “propulsion” will ultimately be the winners in economic and other sectors.