Because of our state/federal political system, we have a so-called dual court system so many legal disputes can be fought out in either state or federal courts. If that were not complicated enough, we also have developed a third branch of the third branch, so to speak, private arbitration.
Alongside, on top of, underneath, or instead of our dual court system, private arbitration is a growing and controversial system. (By coincidence, I had the pleasure of interviewing Liz Kramer in the days before a serial New York Times article on arbitration.)
MN Litigator: I do not have arbitration experience, so what are your words of wisdom to the civil trial lawyer who finds him or herself in an arbitration for the first time?
Liz Kramer: The first is you have to know the rules. Every arbitration is governed by a set of rules, which are usually dictated by the parties’ agreement. If you’re representing a party in that arbitration, you absolutely have to know the rules. Court litigators should not assume that the rules of civil procedure will govern, because they generally don’t. Where I see people making mistakes is just assuming that things will be done as they do in court and then lawyers get caught unaware or under-prepared.
A fun example of that is I had a big arbitration hearing recently, and I was able to submit an affidavit from a key witness who the other side had assumed was unavailable because this witness couldn’t travel. But the other side didn’t realize that the rules allow parties to put in testimony by affidavit in arbitration. So I got this very compelling affidavit from this key witness and was able to put it into the record. The other side couldn’t cross examine him.
MN Litigator: Let’s take a step back. Tell readers about yourself.
Liz Kramer: I grew up in St. Paul. I went to public school at St. Paul Central and then was desperate to get out of town. Minnesota felt small and I was just ready for a change. So I only applied to places on the coasts. I ended up going to the highest ranked college where my family could get a tuition exchange discount (my step-mom worked at Hamline).
I went to Mount Holyoke College, a women’s college in Massachusetts. I loved it. I had a wonderful four years there and made great friends. Unfortunately, most of them still live on the East Coast.
I majored in politics and minored in economics.
MN Litigator: When did you graduate?
Liz Kramer: In ’96. I really wanted to go into politics, that’s what I had thought I wanted to do since I was about 15. I worked on the 1996 congressional campaign of Bill Luther. That was fun, but I had thought, naively, that working on the campaign meant that I would get to work in his office in D.C.. It was a re-election campaign, though, so he had a full staff. There was no employment offer waiting for me, but despite that I moved down to D.C. and kept knocking on doors trying to find something.
I ended up working at a brand new think-tank called Campaign for America’s Future. I was their first full-time employee. It was a great first job in D.C. I got to see how some of the interest groups work together. I learned a lot about social security policy. I also learned basic things like how to file, a few ideas for fixing a printer, how to hire and fire, and how to use Quickbooks.™ Those things I think are good life skills too.
But after three years with them, I felt like there was nowhere up to go in that organization and it wasn’t clear to me how I was going to parlay that experience into something different somewhere else.
I started looking at some kind of advanced degree, and I was getting a lot of advice that I should try law school. I didn’t want to be a lawyer. No one in my family was a lawyer and I had this concept that lawyers memorized statutes and regurgitated them to the judge.
ButI went ahead and took the LSAT and am fortunate to have done very well. So I started looking at law schools and ended up at Yale.
I spent three years at Yale, met my husband there, and realized that being a lawyer could be a wonderful career.
MN Litigator: Is your husband a lawyer too?
Liz Kramer: He is now a judge in Ramsey County. He’s from Texas, so we had a lot of conversation about where to end up. My summers were in New York City, and Austin, and South America, and here. We settled on the Twin Cities, for a variety of reasons. I was lucky enough to clerk for Justice Helen Meyer at the Minnesota Supreme Court for a year after graduation, and then started at Leonard Street. That’s my story.
MN Litigator:How long have you been at Stinson, Leonard, and Street now?
Liz Kramer:12 years.
MN Litigator: It might be a difficult question for you to answer, but I want to ask it anyhow: When Leonard, Street, and Deinard merged and became Stinson, Leonard, Street, did that change the culture?
Liz Kramer: In terms of what affects me day to day, not very much. I work with the same people, and I get work from the same people. We care about the same things. In that, which to me is the most relevant aspect, the culture has not changed. Obviously there are some things that are run differently and done differently when you’re managed from a different office. But in terms of fundamentally what our firm is about, and what kind of attorneys we are trying to attract, and what our values are, I don’t think there’s been a change.
MN Litigator: One of the things that I enjoy as a solo lawyer/ blogger, is that I have complete discretion about what I post and when I post it. I wondered about you since you are the author of Arbitration Nation but in the context of a large regional law firm. You’re the only author?
Liz Kramer: I’m the sole author.
MN Litigator: Do you have to run everything through firm committees to get approval?
Liz Kramer: No, it’s beautiful. They trust that I get my facts right and hopefully do the spell- check. Nobody reviews it before I publish.
MN Litigator:Have you ever ruffled any feathers with any posts on your blog?
Liz Kramer: I have been threatened with copyright suits a few times. Because in the beginning, I was using images off Google and I didn’t think anyone would care.
There have been a couple of times that institutional clients of ours had arbitration issues, and I just declined to post about those. It wasn’t that I ruffled feathers, but I anticipatorily did not comment.
MN Litigator: You self-censored.
Liz Kramer: Yes.
MN Litigator:And when you say your institutional clients had arbitration issues, you mean you declined to comment on those particular clients’ issues or there are particular arbitration issues that you don’t touch?
Liz Kramer:The former. One of our clients was in the news on an arbitration issue. And I was called to comment and I just didn’t.
MN Litigator: How many arbitrations have you done?
Liz Kramer: You mean arbitrations that went all the way to hearings? [Editor’s note: “arbitration hearings,” being the equivalent to trials in this context.]
MN Litigator: Yes.
Liz Kramer: I’ve had five full arbitration hearings. And I haven’t counted the number of arbitrations in which I represented parties that resolved before the hearing.
MN Litigator: What percentage of your practice is arbitration?
Liz Kramer: There are two different aspects of my arbitration practice. I represent clients in arbitration, and I represent clients in court where I’m fighting about arbitrability or vacatur. It varies each year, but if we put those things together, I would say somewhere between 25%-50% of my practice is made up of one of those two types of cases.
MN Litigator: Do you have any arbitration horror stories?
Liz Kramer: Often times when people say arbitration horror stories, what they mean is that the arbitrator was terrible or something like that. I’ve had other parties that I thought really took advantage of the lack of formality in arbitration. For example, in one of my first arbitrations, the other side didn’t produce any documents until the morning of the hearing. I had brought it up and the arbitrators had said the other side needed to, but there was no clear mechanism for enforcing that ruling. It wasn’t a huge dispute and I think in the end the arbitrators thought, “We’ll see what happens at the hearing…”
MN Litigator: How did it go?
Liz Kramer: I won everything and I got the other side to pay my client’s attorney’s fees.
MN Litigator: It must have been a pretty upsetting thing to be confronted with all of these documents on the day of the arbitration hearing.
Liz Kramer: It definitely leads to some anxiety as you’re preparing, when you have no idea what they’re going to come with. Part of what’s fun about being a litigator is having to think on your feet, though.
MN Litigator: Going back to your earlier comments about the trial lawyers inexperienced about arbitration rules and paying the price, what other deviations between civil procedure, and I’ll just say generically arbitration rules, come to mind that civil litigators might overlook? If you can think of any…
Liz Kramer: One is there’s just more room. Sometimes I describe arbitration as the Wild West and you just have to be ready to be that cowgirl. In our courts, we’re very constrained. You can only make motions that are authorized by the rules. You can only take discovery that is authorized by the rules. In arbitration, A) there are very few rules and B) the whole point is for the parties to come up with a type of resolution procedure that best fits their case. You really can think much more broadly and creatively and say, “I think we should have no discovery at all and have a hearing in three months.” Or, “I think this might be one where we should present evidence in phases.” It’s not a deviation exactly, it’s more of a mindset of allowing yourself to think outside of the court box and be creative in terms of serving your client.
MN Litigator: Are there certain instances where you recommend clients include arbitration clause and others where you suggest they not?
Liz Kramer: Not surprisingly, I have a blog post about that issue. My general thought is sometimes people choose arbitration for the wrong reasons. They think it will be quicker or cheaper, and it’s not necessarily those things. Especially in big complex commercial disputes,
However, arbitration makes a lot of sense if the parties need for a specialized decision maker. In construction disputes, for example, , sometimes it really comes down to “did the engineer design this building right?”. And a jury of lay people have a hard time figuring that out. Whereas if you have a panel of three arbitrators, one, an engineer, one, an architect, and one who is an experienced construction lawyer, they are more likely to get to the right answer. The need for a professional decision maker is one of the valid rationale for choosing arbitration.
Second, another rationale for choosing arbitration is confidentiality. I remember reading that Jennifer Lopez had an arbitration clause in her pre-nup, which helps her avoid having all the celebrity press see the details of any dissolution proceeding. I think that’s a decent reason to opt for arbitration.
Another rationale that comes to mind is in the consumer context, you can waive class actions in arbitration and that can be a compelling reason. Putting aside whether we like that on that policy grounds, it is a legitimate business reason to choose arbitration.
And if you’re dealing in an international context, it’s easier to collect on an arbitration judgment than a court judgment in another country because there are better treaties around arbitration.
MN Litigator: There are different arbitration organizations, one is called the AAA [the American Arbitration Association] for example. I don’t know these different organizations. I don’t know how many of them there are, and I don’t know if they have reputations. Who are the big players in the arbitration biz and how do you feel about them? Compare and contrast them if you can.
Liz Kramer: I would say there’s three big players. There’s the AAA, which is really by far and away the biggest player. Then there’s an organization called JAMS [, Judicial Arbitration and Mediation Services]. Then, maybe third, an organization called CPR [the International Institute for Conflict Prevention & Resolution]. Especially when we’re talking about commercial disputes, those are the big three.
Although, as I’ve gotten more involved in arbitration, I have found there are other organizations that have a local presence. There’s one in Missouri that people in Missouri like. And there are some religious ones. There are some that are specific to healthcare There’s a lot out there. I should say I’m a little bit biased because I’m on the AAA’s “large case committee,” but most people in this area use the AAA to administer arbitration. The AAA has more people on their panel, it has developed good sets of rules that are specific to different industries, and it is just written into contracts more often.
MN Litigator: What are the things you like the most about the practice of law?
Liz Kramer: I like variety. Thinking about all the different kinds of issues is really fun. I like strategizing. I like all the think-on-your-feet stuff: Taking depositions, oral arguments, hearings. I like dealing with clients too. Meeting people, hearing their stories, finding out what makes them tick and what they care about in the case. I still like writing. A lot of people don’t like research and writing, but I still like it.
MN Litigator:What are your least favorite parts of your professional life?
Liz Kramer: Anytime that I have to deal with firm politics or have sharp elbows with my own colleagues. That’s not fun. But it’s true in any large organizations. It’s not specific to law firms, it’s kind of a function of being in a larger organization. Nobody likes that. I’m fine having sharp elbows with adversaries but it’s not that fun if it ever happens internally.
MN Litigator: What do you when you’re not practicing law?
Liz Kramer: I have two children, seven and nine, so lately I’ve been going to a lot of soccer games.. I like playing games – I am part of a group of women lawyers that has been playing poker together for ten years I read a lot.
MN Litigator: What books are you recommending these days?
Liz Kramer: One of the best ones I’ve read recently was “All the Light We Cannot See” by Anthony Doerr. A really beautifully written book. I like Jhumpa Lahiri, I read a book of hers recently too.
MN Litigator:If you could change an aspect of the practice of law, in your practice, is there something you would change? Whether procedural rules or anything?
Liz Kramer: I would like to restructure how we’re all paid. The billable hour is tough on attorneys and tough on clients and sometimes creates bad incentives. I certainly don’t have an answer to those things, but it would be great if we could figure them all out.
MN Litigator: If you could send out a message to the Minnesota bar, if you could say anything to Minnesota trial lawyers, what would you say?
Liz Kramer: Please stop arguing under the Minnesota Arbitration Act. It doesn’t apply to your case; it never applies to your case.
MN Litigator: Is the Minnesota Arbitration Act preempted?
Liz Kramer: Anytime a transaction involves interstate commerce, it’s the Federal Arbitration Act that governs. The case law that developed under the federal act, often varies significantly from the case law that’s developed under the Minnesota act. I think most practitioners assume that because their cases are in state court, so they should look to the state act. Often, both sides do it, and the courts are never advised that it should think about the federal act. But then you have all of this case law that develops that is crap.
MN Litigator: There is literally no case, in your mind, where the Minnesota Arbitration Act could apply?
Liz Kramer: No, I wouldn’t go that far. Only if your arbitration agreement specifically says this arbitration agreement shall be governed and construed by the Minnesota Revised Uniform Arbitration Act as opposed to the Federal Arbitration Act. It has to be clear and unambiguous that you want the state act to apply instead of the federal. I suppose it is also possible that if I had a contract with my babysitter that someone would find that doesn’t affect interstate commerce. But really, it has to be that local and not involve any materials from other states.[Previous Minnesota Litigator Profiles: Bob Lear, Residential Real Estate Appraiser/Expert Witness, Tim Nolan, Lawyer/poet, Laurie Vasicheck, 25 year veteran of the Minneapolis office of the EEOC, Jake Holdreith, an IP litigator for “drug dealers” (better known as pharmaceutical companies), Pam VanderWiel, lawyer for Minnesota municipalities, Bill Dossett, Executive Director of Minnesota’s Nice Ride bike-sharing program, Christina Snow, lender/servicer real estate and foreclosure lawyer, Clayton Halunen, plaintiffs’ employment lawyer, consumer rights lawyer, Stephen L. Smith, straddling a civil and a criminal litigation practice, Kevin Dunlevy, Minnesota real property authority, Vildan Teske, consumer rights class action litigation and service members class actions, Jim Behrenbrinker, civil rights/excessive force cases, Eric Cooperstein, “ethics maven“, Mike Flom, Gray Plant’s General Counsel, Phil Gainsley, veteran solo civil litigator, John Halpern, collections, Elliot Olsen, foodborne illness litigation, Dave Potter, railroad industry litigator, Katherine Mackinnon, ERISA plaintiff’s lawyer, Kristine Boylan, international IP/Complex Litigation lawyer.]