1. Agenda for 12th Class Admin Name plates Handouts Slides Polinsky
Appeals
German procedure
Introduction to Settlement & ADR

2. Assignment for Next Class
Settlement and ADR
Yeazell pp , ,
You do not need to read these materials carefully
Handout (Polinsky)
If you are not quantitatively inclined, you will need to read this carefully. Polinsky is extremely clear, but it will take time.
Blackboard Questions on Settlement
Questions on last page of Polinsky handout, except Qs 1, 3 & 5 (which are the Blackboard questions)
WG1. Q2
WG2. Q4
WG3. Q6
WG4. Q7
WG5. Q8
WG6. Q9
WG7. Q10
Double points if turned in by Sunday noon

3. Appeal: Who Side who lost below
Can only appeal to change judgment, i.e. relief or lack thereof
More or less damages, Different injunction
Cannot appeal just to change reasoning
Often both sides can appeal --- Cross appeals
If won, can defend judgment on appeal with reasons rejected by trial court
Need not cross appeal
“Right for any reason” doctrine
Judge denies 12(b)(6) motion based on invalid legal theory, but grants defendant’s SJ based on uncontradicted evidence. Plaintiff appeals. Defendant can argue that appellate court should affirm based invalid legal theory argument in 12(b)(6) motion.
Plaintiff sues on contract and tort theory. Both give same damages. Court grants SJ to defendant on tort theory, but gives judgment to plaintiff on contract theory. Defendant appeals. Plaintiff can argue that appellate court should affirm based on tort theory on appeal.
If in doubt, cross appeal.

4. Appeal: Finality Can only appeal final judgment
Rule is about when, not what
But when judgment is final, can appeal all issues resolved in case
Examples of final judgments
Grant of 12(b)(6), grant of SJ, grant of JMOL, judgment in accordance with verdict
Assuming these are complete rather than partial
Examples of non-final judgments
Denial of 12(b)(6), denial of sanctions, discovery rulings, denial of SJ, grant of new trial, denial of JMOL
Partial Summary Judgment, 12b6 on some but not all claims
Sanctions are NOT final judgments
Rule 11 sanctions, discovery sanctions
Must wait until end of case
Interlocutory appeals allowed if both District Court and Appellate Court agree. 28 USC 1292(b)
Some other exceptions

5. Appeal: Waiver & Harmless Error
Can only raise issue on appeal if raised issue properly in trial court
Cannot challenge legal theory, if did not challenge in answer or 12(b)(6) motion
Cannot challenge sufficiency of evidence, if did not make JMOL motion
Cannot challenge particular evidence if did not object at trial (or before)
Harmless Error
Court of appeals only overturns judgment if error is not harmless
Court has to decide whether outcome at trial is likely to have been different if error was not made
Did error make real difference at trial?
These 2 rules are very important
Litigators need to consider when litigating and considering appeal
Clerks to appellate court judges will use all the time

6. Appeal: Standards of Review I
De novo (non deferential)
Court of appeals examines issue afresh and reverses if it disagrees with the trial court, even if it thinks that issue was close call and trial court decision had strong arguments to support it
For legal issues
12(b)(6), SJ, JMOL
Purely legal issues in discovery
Deferential standards
Court of appeals only reverses if it thinks that the trial court made a serious error
Clearly erroneous standard
For trial court determinations of fact
Bench trial
Purely factual aspects of discovery

7. Appeal: Standards of Review II
Deferential standards (continued)
Abuse of discretion standard
For trial court discretionary decisions
Whether to sanction, if sanction not mandatory
Amount/kind of sanctions
Some evidentiary issues
New trial

8. Appeal Questions I
Go back through all the cases read so far in Civil Procedure
If the case was decided by an appellate court, what standard of review did the court use and why? If the case is not explicit about the standard of review, what standard should the court have used?
If the case was decided by a trial court, what standard of review should an appellate court use if the issue(s) resolved in the case were appealed? Note that if more than one issue is appealed, the appellate court may apply different standards of review to each issue.
Briefly summarize Anderson and Harnden
How could you argue that the district court judge’s error in Harnden was not harmless? In doing so, consider why it is important that an expert report be submitted in the form of an “affidavit or sworn statement.” 8 8

9. Appeal Questions II
It is relatively easy for a district court’s decision to grant JMOL to be overturned on appeal (because the standard of review is de novo) but relatively hard for a district court’s decision to grant new trial to be overturned on appeal (because that decision is reviewed under the more deferential “abuse of discretion” standard” and may not be reviewable at all until after the second (or third or fourth) trial). Does this make sense? Why or why not?
Assuming that the jury returned a verdict for the plaintiff and that the defendant moved for JMOL and new trial, who can appeal in each of the following 4 situations and when.
Judge grants JMOL and conditional new trial
Judge grants JMOL and denies conditional new trial
Judge denies JMOL but grants new trial
Judge denies JMOL, denies new trial, and enters judgment for the plaintiff 9 9

10. Langbein, “German Advantage…”
1) Are you convinced that German civil procedure is better than American civil procedure? Why or why not?
2) What aspects, if any, of German civil procedure do you think are superior to American civil procedure? Could we adopt them without changing other aspects of our procedure?
3) What aspects of American procedure do you think are superior to German civil procedure? Could they adopt them without changing other aspects of their procedure?
4) Do you think that US courts would need a larger or smaller number of judges if we were to adopt German civil procedure ?
5) Do you think a bad judge has a bigger negative effect in Germany or the U.S.?
6) Europeans are generally willing to pay higher taxes to fund higher quality public services. Can that help explain why Germany and the U.S. have different systems of civil procedure?

11. Langbein, “German Advantage…”
Control of sequence
Discovery
Witnesses
Experts
Appellate review
Judicial career

12. Intro to Settlement I Most cases settle
Roughly 2/3rds of filed cases settle
Some cases settle even before complaint filed
Roughly 5% go to trial
Roughly 20% dismissed (Rule 12) or terminated by summary judgment
Roughly 10% other – default judgment, plaintiff failed to prosecute, referred to arbitration, etc.
Settlement is contract by which plaintiff dismisses case in return for something valuable from the defendant
Usually money
Can be almost anything – job, house, letter of recommendation, apology
Often non-monetary terms -- Confidentiality/secrecy, return of discovery documents, payment of costs
Economic analysis of settlement
Settlement is attractive to parties because it enables them to save on the cost of litigation
Settlements is sometimes not possible, because parties are sometimes too optimistic about trial outcomes
Settlement is sometimes not reached, if the parties are too stubborn (strategic) in their negotiations

13. Intro to Settlement II Economic analysis of settlement
Settlement attractive to parties because saves on litigation costs
Total litigation costs often equal net amount plaintiff recovers
Suppose plaintiff wins $90,000
Usually pays one third to lawyer.
So plaintiff’s lawyer gets $30,000
So plaintiff nets $60,0000 = $90,000 - $30,000
Defendant usually pays lawyers roughly same amount: $30,000
So lawyers get $60,000 ($30,000 + $30,000) and plaintiff gets $60,0000
Defendant pays $120,000 = $90,000 + $30,000
If settle early, parties can both be better off
E.g. Defendant settles with plaintiff for $80,000
Of course, depends in part on how much parties have already invested in litigation

14. Intro to Settlement III
Economic analysis of settlement (cont.)
Settlement possible if it makes both sides better off than trial
Need to calculate outcome if case did not settle
Easy if trial outcome known with certainty
Plaintiff. Judgment minus lawyers fees. 90K -30K=60K
Defendant. Judgment plus lawyer’s fees. 90K+30K=120K
So any settlement amount between 60K and 120K would make both parties better off
Of course, may fail to settle because of hard bargaining
If trial outcome uncertain, need to calculate expected value
Expected value = probability that plaintiff will prevail x judgment amount if plaintiff prevails
Suppose 50% probability that plaintiff will get 100K
Plaintiff better off with settlement greater than:
(50% x 100K) – 30K = 50K – 30K = 20K
Defendant better off with settlement less than:
(50% x 100K) + 30K = 50K + 30K = 80K
So any settlement between 20K and 80K would make both parties better off
Of course, lots of simplifying assumptions….

15. Intro ADR ADR = Alternative Disputes Resolution
Mediation. Settlement negotiations with assistance from neutral person
Mediator does not have power to imposed settlement
Used with increasing frequency
Arbitration. Adjudication by private judge
Settlement is sometimes classified as ADR