Mediation is the most commonly utilized, and a highly effective, method of alternative dispute resolution (“ADR”).
“Case evaluation” is another ADR process. We don’t hear about it as much—but it is also effective.
The State of Michigan has formalized a “case evaluation” process in its state courts. What follows is an example of how that process works.
The opinion is Alemarah v. General Motors, LLC, Case No. 20-1346 in the U.S. Sixth Circuit Court of Appeals (issued 11/18/2020), arising from a ruling in the U.S. District Court for the Eastern District of Michigan (Case No. 19-cv-10556, Doc. 42 issued 03/06/2020).
Here’s what happened.
Plaintiff files two nearly-identical lawsuits for employment discrimination: (i) one in a Michigan state court (under Michigan state laws), and (ii) one in a Michigan federal court (under federal laws).
While both lawsuits are pending, the parties engage in a “case evaluation” process, under Michigan’s law, in the state court proceeding.
That process results in, (i) a $400,000 case evaluation in favor of plaintiff, (ii) an acceptance of that evaluation by both plaintiff and defendant, (iii) a payment by defendant to plaintiff of the $400,000 amount, and (iv) a dismissal of the state court lawsuit with prejudice.
Then, defendant moves for a summary judgment in the federal court lawsuit, seeking dismissal with prejudice, based on the resolution of the state court lawsuit. Plaintiff opposes the motion, apparently wanting to recover more money in the federal lawsuit. Ultimately, defendant succeeds on its motion and obtains a dismissal with prejudice of the federal case as well — but it is required to vigorously present and defend its position.
Michigan’s Case Evaluation Rules Under State Law
Michigan state laws include “Michigan Court Rules,” Chapter 2 of which relates to “Civil Procedure.” Within the Civil Procedure rules are ADR provisions, such as Case Evaluation (Rule 2.403) and Mediation (Rule 2.411).
What follows is an abbreviated version of Michigan’s Rule 2.403 on Case Evaluation.
(A) Scope and Applicability of Rule.
- A court may submit to case evaluation any civil action in which the relief sought is primarily money damages or division of property.
- Case evaluation of tort cases filed in circuit court is mandatory . . .
(B) Selection of Cases.
- The judge . . . may select it for case evaluation . . . after the filing of the answer, (a) on . . . stipulation by the parties, (b) on . . . motion by a party, or (c) on the judge’s own initiative. . . .
(C) Objections to Case Evaluation.
- . . . a party must file a written motion to remove from case evaluation . . . [which] must be heard before the case is submitted to case evaluation.
(D) Case Evaluation Panel.
- Case evaluation panels shall be composed of 3 persons . . .
- A case evaluator may not be called as a witness at trial.
. . .
- Each party must send a check for $75 . . . However, if a judge is a member of the panel, the fee is $50.
- Only a single fee is required of each party, even where there are counterclaims, cross-claims, or third-party claims. . . .
(I) Submission of Summary and Supporting Documents.
- . . . at least 14 days before the hearing, each party shall (a) serve a copy of the case evaluation summary and supporting documents . . . , and (b) file a proof of service . . .
- The case evaluation summary shall . . . [set] forth that party’s factual and legal position on issues presented by the action. . . .
(J) Conduct of Hearing.
- A party has the right, but is not required, to attend a case evaluation hearing . . . no testimony will be taken or permitted of any party.
- The rules of evidence do not apply . . . Factual information having a bearing on damages or liability must be supported by documentary evidence, if possible.
- Oral presentation shall be limited to 15 minutes per side . . . Information on settlement negotiations not protected under MCR 2.412 and applicable insurance policy limits shall be disclosed at the request of the case evaluation panel. . . .
- Within 14 days after the hearing, the panel will make an evaluation and submit the evaluation to the ADR clerk. . . . If an award is not unanimous, the evaluation must so indicate. . . .
- In a tort case . . . , if the panel unanimously finds that a party’s action or defense as to any other party is frivolous, the panel shall so indicate on the evaluation. . . .
(L) Acceptance or Rejection of Evaluation.
- Each party shall file a written acceptance or rejection of the panel’s evaluation with the ADR clerk within 28 days after service of the panel’s evaluation. . . . The failure to file a written acceptance or rejection within 28 days constitutes rejection. . . .
(M) Effect of Acceptance of Evaluation.
- If all the parties accept the panel’s evaluation, judgment will be entered in accordance with the evaluation, unless the amount of the award is paid within 28 days after notification of the acceptances, in which case the court shall dismiss the action with prejudice. . . .
- If only a part of an action has been submitted to case evaluation . . . and all of the parties accept the panel’s evaluation, the court shall enter an order disposing of only those claims. . . .
(N) Proceedings After Rejection.
- If all or part of the evaluation of the case evaluation panel is rejected, the action proceeds to trial in the normal fashion. . . .
(O) Rejecting Party’s Liability for Costs.
- If a party has rejected an evaluation and the action proceeds to verdict, that party must pay the opposing party’s actual costs unless the verdict is more favorable to the rejecting party than the case evaluation.
- However, if the opposing party has also rejected the evaluation, a party is entitled to costs only if the verdict is more favorable to that party than the case evaluation. . . . actual costs are (a) those costs taxable in any civil action, and (b) a reasonable attorney fee based on a reasonable hourly or daily rate . . .
- Costs shall not be awarded if the case evaluation award was not unanimous. . . .
Case Evaluation rules, under Michigan law, appear to provide an effective process for resolving disputes.
Details of the Alemarah v. General Motors case reveal that some adjustment to Michigan’s Case Evaluation rules may be needed, when nearly-identical lawsuits are pending in state and federal courts. But the effectiveness of those rules appears to be strong, nonetheless.
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