* * * Judges Inside the System Speak Out * * *
- J.A.I.L. News Journal
Los Angeles, California October 27, 2006Judges Inside the System Speak OutWEST - Los Angeles TimesOctober 22, 2006Is Justice Served? (p.20)By Eric Berkowitzhttp://www.latimes.com/features/printedition/magazine/la-tm-arbitrate43oct22,1,6981618.story?coll=la-headlines-magazine(Excerpts)Hundreds of judges have deserted the bench to enrich themselves in a system of private arbitration. The arena is largely unregulated and tilted, many say, in favor of big business and against the little guy.After nine years of hearing family law cases in her Santa Monica courtroom, Jill Robbins was tired--tired of schlepping files home every night.... ...a number of retired judges were telling Robbins about the piles of money she could make by hiring herself out to wealthy couples looking to resolve their divorces quietly. "They said, 'Oh my God, there's so much business out here; if you're thinking about it, this is the time,' " she recalls.Not only did Robbins think about it, at least two attorneys remember her talking about it--openly from the bench. They said that, shortly before giving up her commissioner's robe in 1995, Robbins announced during a hearing that she had turned in her resignation and would be starting in private practice in about two months. .... Robbins is now one of the city's top private family law judges, commanding $600 an hour. ... People were calling to hire her, she acknowledges, even before she left government service. It's no mystery why. The pay-for-justice phenomenon extends nationwide, generating hundreds of millions of dollars in business a year. (Nobody has an exact figure.) ...... Robbins is one of hundreds of judges who have abandoned the bench to enrich themselves by working in the private sector. Among them are four former California Supreme Court justices. ... Stephen Reinhardt, who sits on the federal appellate court in Los Angeles, once compared such marketing to "the rivalry between Alka-Seltzer and Pepto-Bismol."The effect of all this is threefold. First, it has meant that a large number of cases are being decided out of public view, leaving no record or legal precedent for others to follow. Second, it has left the courts--with its overload of cases and myriad other challenges--without some of its most experienced jurists. Meanwhile, many of the best have walled themselves off behind what is, in effect, a gated community..... Says California Supreme Court Chief Justice Ronald George: It's a "two-track system of justice--one for people who can decide which trial service they want and which judge they will pick" while "others stand at the end of the line." "We're doing the luxury spa," adds former judge and arbitrator Richard Hodge, "rather than the public swimming pool."...A 2004 study by Stanford law professor Deborah Hensler and Rand Corp. researcher Linda Demaine found that more than 55% of consumer contracts have such clauses, leaving the public at the mercy of private judges who can rule with almost no accountability. And take a guess: When private judges are deciding between a big company and you, which way do you think they tend to lean?Until his retirement in 2004, Michael Shapiro was one of the city's leading franchising attorneys. I practiced law with him for six years in the 1990s. Long afterwards, he worked at a large firm representing a franchise chain in an arbitration against individual franchisees. "You are not going to lose," Shapiro says one of his partners assured him. The firm sent the arbitrator so much business, the partner explained, "he has never decided against us." Sure enough, Shapiro said "on a very close case he came down in our favor.".... "Private judging is an oxymoron because those judges are businessmen. They are in this for the money," says J. Anthony Kline, a state appellate justice in San Francisco. ... "I had an insurance company that very noticeably did not hire me further after I ruled against them in arbitration," Hodge says. "You would have to be unconscious not to be aware that if you rule a certain way, you can compromise your future business.".... But it wasn't until the 1970s that private judging began to take hold more generally, thanks to a prominent Los Angeles attorney named Hillel Chodos. ... Soon, word got out. "This is exactly what created the industry," Chodos says. "I feel like I created a Frankenstein." A monster it has indeed become. As the courts got even more crowded .... Services such as JAMS [Judicial Arbitration & Mediation Services] popped up to meet it..... ...In a crucial 1992 decision, Moncharsh vs. Heily & Blase [3 Cal.4th 1], the state Supreme Court held than an arbitrator's award can stand even if it is legally wrong [violates the law] and causes "substantial injustice." The result is that California now has a second legal system in which arbitrators "can rule on the basis of the tea leaves," Hodge says. "...there is no appeal if I make a stupid or diabolical mistake, or one that is made in bad faith. The parties are on their own."Four years after the Supreme Court handed down its ruling in Moncharsh, the opinion's author, former state Chief Justice Malcolm Lucas, went to work for JAMS. He charges $6,500 a day, according to a company fee schedule datedJanuary 2006. Former Justice Edward A. Panelli, who also signed the decision, is now at JAMS too. His rate: $7,500 a day.$1,000,000 - The estimated annual income of a top-tier retired judge acting as a private arbitrator.
Many in the ADR industry [Alternative Dispute Resolution] are reluctant to talk about the ins and outs of what they do. Not Lucie Barron. Perhaps that's because the Australian-born owner of Los Angeles-based ADR Services isn't an attorney. A voluble single mother of seven, Barron isn't one to wrap herself in a lot of high-minded talk about justice. "The whole business of resolving disputes is market-driven," she says. And when marketing judicial talent, it pays to have judges on your roster with name recognition. "We fight like crazy over the highly regarded judges. If people tell you we don't, it's not true."Barron's company represents about 85 retired judges. In 12 years, she has built her firm into an ADR "supermarket." Some of her private judges make $1 million a year, after Barron takes a 25% to 28% cut. ... [$312,000 times 85 judges = $26,520,000 per year]Barron meets the judges--sometimes in their courtrooms--to make her pitch. She also teaches them how to improve their prospects when they go private, advising them to collect lawyers' business cards for mailing lists, cultivate a reputation for settling cases and raise their public profile. ...As I dug deeper and deeper into the world of private judging, I came across no shortage of horror stories from people who found themselves, often unwittingly, caught up in arbitration. ....
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