Yesterday, the California Court of Appeal affirmed a judgment after a mediator awarded $5,000,000 to a plaintiff after both parties attempted to resolve the alleged defamation dispute in a mediation / baseball arbitration. Not familiar with this type of alternative dispute resolution? Let’s start off by discussing what mediation /baseball arbitration is and then we’ll discuss what went wrong for the defendant in Bowers v. Lucia Companies, Inc.
What is a Mediation – Baseball Arbitration?
This type of alternative dispute resolution shares aspects of mediation, arbitration, and our national pastime baseball. It is also unconventional for most types of litigation, including personal injury litigation. What happens is that the adverse parties will engage in typical full-day mediation. If at the end of that mediation, the parties have failed to reach an agreement, the mediator is empowered to set the amount of the judgment in favor of a party between two ranges of money set by the parties.
You may be thinking to yourself right now, what does this have to do with baseball? Well, this technique, without the mediation aspect, is used by Major League Baseball for player salary disputes. In the MLB, the player and club each submit a proposed salary figure to an arbitration panel that ultimately selects the more reasonable and fair proposal in light of the relevant market. By forcing the arbitrator to select either the plaintiffs demand or defendants offer, it often drives the parties offers together towards a reasonable amount as the more aggressive proposals are less likely to be chosen by the arbitrator.
How Did the Defendant Strike Out?
Now that we know what mediation/baseball arbitration is, let’s discuss what happened in Bowers v. Lucia Companies, Inc. Here, plaintiffs sued the defendant for defamation and other related business torts. The trial court subsequently determined that the plaintiffs were compelled to arbitrate their claims against the defendant. Eventually, the parties agreed to resolve the claims using mediation/baseball arbitration. After an unsuccessful mediation, the parties each submitted their “final offers” to the mediator who then was forced to pick either $100,000, which was defendant’s offer or $5,000,000, which was the plaintiff demand. The mediator ultimately selected the $ 5 million number, effectively striking out the defendant’s case. The defendant appealed the judgment as unenforceable, however the Court of Appeal found that there was substantial evidence to support the trial court’s determination.
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