Big Trouble with Porsche
A good friend of mine (let’s call him
Cazador[1]) wanted to buy a Porsche Cayenne because his wife’s Mini Cooper was not going to be helpful with the arrival of their first baby. After a good round of negotiations, he traded in the Mini and bought a V-8 Cayenne on credit.
A week later,
Cazador got a call from the dealership: the bank they chose did not accept his credit application, and had to be retried. He went to the agency and signed a new application.
Two days passed when they asked
Cazador to go back with them for a third credit application. He did it.
When
Cazador received a phone call again from them a week later, he refused to go and sign yet another credit application. But he did go to the dealership for a carwash. When they cleaned the Cayenne, they refused to give it back to him, arguing that something was wrong with the engine. Instead, they gave him a rental car.
Another two weeks passed. My friend
Cazador kept using the rental car they gave him at Porsche. Unable to reach an agreement, the salesperson from the dealership set an appointment with him. When he arrived, Porsche suggested him to buy a cheaper model: a V-6 instead of a V-8. He refused. Porsche told
Cazador that they were not giving him his SUV back.
My friend offered to return the Cayenne –well, to sign the papers, because physically they were in possession of the SUV-, and Porsche would have to give the Mini back. But this was not possible, because it had been sold already.
Cazador suggested them to sequester the Mini just as they had done with his Cayenne. Porsche obviously rejected the idea.
Porsche gave
Cazador an ultimatum: he could either (1) buy a V-6 Cayenne-$20,000 cheaper- or, (2) sign the papers to return the V-8 Cayenne, and get a check for $3,000 for his Mini.
At this point,
Cazador did not want to make any business with Porsche, so he rejected to get the V-6. He asked again to have his Mini back, since they were calling the deal quits. He could not reach any agreement, they refused to return him the Cayenne, asked for the rental car, and
Cazador had to take a taxi to go home.
The next day, my friend called a number he found in the purchase agreement. He is not sure where he called. All he knows is that it is an Austin telephone number –maybe the Texas Attorney General’s office?-, and there he explained his story.
Two hours later,
Cazador received an apologetic phone call from Porsche. They wanted to convince him to buy the V-6, but my friend refused once again. They asked him to go back to the dealership, and he did.
What happened there is hard to believe: he went there, resisted their tries to sell him a V-6, agreed on the fact that it was impossible to give him his Mini back, and Porsche consented to let
Cazador keep his V-8 for the price of the V-6 model. That was the limit of the credit the bank had authorized after his third credit application: $20,000 less than the V-8 price.
Because my friend was tired of Porsche behavior, he did not sign the new credit with the bank Porsche did business. He instead chose his own bank’s representative, and obtained a lower APR.
Porsche ended up being the loser of the problem: they had to give up a great amount of money and, lost more than one client, because
Cazador and his family are never going to do business with them.
As for
Cazador, he got a great deal: a 2005 V-8 Porsche Cayenne for the price of a V-6 SUV.
Footnote:
[1] Cazador is the Spanish word for hunter. My friend is indeed a hunter. He kills deer, elk, moose, black bear and Kodia bear. His skills as a hunter permitted him to survive the aggressive behavior from the employees of Porsche.
What Could King Solomon Do if He would Use Modern Mediation Solutions?
In the last journal entry we concluded that King Solomon’s approach to the dispute between the two women and the child they both claimed to be theirs
[1] was more consistent with those of the conventional dispute resolution methods. But how could Wise King Solomon solve the problem different, using an Alternative Dispute Resolution approach?
Some suggestions:
Ask both women to state their needs (present and future), not just the facts (past). In any dispute resolution, the focus should be on the needs of all the involved persons. To better serve them, empathetically listen. Even more, seek for the child welfare. Do not kill him.
Involve the parties in the creation of solutions to their dispute.
Help them develop a parenting plan. If unable to determine who the real mother is, include them both in the solution. Create a parenting plan, where they share the duties and joy of motherhood. They were
This exercise is applying modern time standards, probably an injustice to the greatness of King Solomon. But its only goal is to apply the goodness of ADR to well know stories for illustrative purposes.
Footnote:
[1] I Kings 3: 16-28.
Was King Solomon an Arbitrator or a Judge?
The Old Testament tells us about a dispute resolved by King Solomon
[1]. A sample of the Wisdom of Solomon, the case rest in the following facts: Two women living under the same roof gave birth to one child each within days of difference. One of the children died, and both women claimed to be the mother of the surviving child. Unable to solve their dispute by themselves, the women went (“spoke”) to the King. King Solomon asked for a sword and offered to cut the child in two, and give half to each claimant. The real mother of the living child opposed, and agreed to give the child to the other woman; this other woman rejected and asked for the partition. Wise King Solomon found for the first woman, disposing that the child was to be given to her, alive, as she was the mother. The population of the king’s territory held him as a wise man, and feared him.
The question I want to ask is: was the decision of King Solomon more like the ones that come from an arbitrator (Alternative Dispute Resolution) or more alike of those of a judge (Ordinary Dispute Resolution)?
The following table illustrates some characteristics of both conventional (CDR) and alternative (ADR) dispute resolution methods:
CDR
[2] 1 Focus> Past; what happened
2 Parties> Positions (facts)
3 Decision-maker’s goal> Allocate responsibilities
4 How the pie is divided> Win/lose, lose/lose
5Ways to solve title disputes> All/nothing for winner/loser; partition ordered if unable to establish title
ADR
[3]1 Focus> Future: what will happen
2 Parties> Needs
3 Decision-maker’s goal> Solve the root of the problem
4 How the pie is divided> Can be win/win
5Ways to solve title disputes> Tailored solutions are possible
Now analyzing King Solomon’s decision, the following elements can be established:
The decision focused in the past and not in the future. Actually, no future was possible under the arrangement of King Solomon.
The King looked at the parties’ positions and not at their needs. Each woman apparently wanted (needed) to keep the child to grow with them. The second woman’s cry ("He shall be neither mine nor yours; divide him!"
[4]) was made after King Solomon suggested the partition; her original intention was to keep the child alive with her. Had Solomon focused on the parties’ need, he should never suggest the killing of the child. And he obviously did not focus on the child’s needs.
Unable to solve the problem from its roots, King Solomon limited to apply justice, therefore creating iniquity.
The solution presented a lose/lose scheme. Both women would lose under his arrangement.
As if dividing common property, the King’s solution asked for the partition of the baby, frustrating the goals of dispute resolution. A creative parenting plan would be more effective, keeping the child alive and letting both women to share the joy of motherhood.
For all this reasons, King Solomon’s approach to resolve the dispute was more alike to those taken by judges in conventional dispute resolution procedures.
The fair ending of the story did not depend on his proposed solution, but in the desperate call of the real mother to keep the child alive.
Footnotes:
[1] I Kings 3: 16-28. The complete text is reproduced:
16Then two women who were harlots came to the king and stood before him.
17The one woman said, "Oh, my lord, this woman and I live in the same house; and I gave birth to a child while she was in the house.
18"It happened on the third day after I gave birth, that this woman also gave birth to a child, and we were together. There was no stranger with us in the house, only the two of us in the house.
19"This woman's son died in the night, because she lay on it.
20"So she arose in the middle of the night and took my son from beside me while your maidservant slept, and laid him in her bosom, and laid her dead son in my bosom.
21"When I rose in the morning to nurse my son, behold, he was dead; but when I looked at him carefully in the morning, behold, he was not my son, whom I had borne."
22Then the other woman said, "No! For the living one is my son, and the dead one is your son." But the first woman said, "No! For the dead one is your son, and the living one is my son." Thus they spoke before the king.
23Then the king said, "The one says, 'This is my son who is living, and your son is the dead one'; and the other says, 'No! For your son is the dead one, and my son is the living one.'"
24The king said, "Get me a sword." So they brought a sword before the king.
25The king said, "Divide the living child in two, and give half to the one and half to the other."
26Then the woman whose child was the living one spoke to the king, forshe was deeply stirred over her son and said, "Oh, my lord, give her the living child, and by no means kill him." But the other said, "He shall be neither mine nor yours; divide him!"
27Then the king said, "Give the first woman the living child, and by no means kill him. She is his mother."
28When all Israel heard of the judgment which the king had handed down, they feared the king, for they saw that the wisdom of God was in him to administer justice.
[2] Conventional Dispute Resolution mechanisms
[3] Alternative Dispute Resolution mechanisms
[4] I Kings 3: 26
The Mexican Ombudsman and the Human Rights National Commission
In the 1990’s, the Federal Legislative branch of México created an independent agency to safeguard the human rights of all Mexicans from governmental abuse. The head of this agency, the Human Rights National Commission, is Ombudsman José Luis Soberanes Fernández, PhD.
Each State in México has its own State Human Right Commission, with its State Ombudsman.
As Ombudsman, Dr. Soberanes receives complaints of human rights violations allegedly committed by members of the executive branch and orders investigations to determine if indeed human rights were violated.
If the Ombudsman finds that the human rights of a complaining party had been violated, sends a non-binding recommendation to the immediate superior of the accused government employee to sanction them, and if applicable, to cease the abuse.
Another important function of the Ombudsman is the promotion of the respect for the human rights in México. People are now aware of their rights, and this is a novelty. Twenty years ago, most of the population did not see themselves as recipients of the rights contained in the Mexican Constitution. The government was feared. But the Human Rights National Commission and different changes in the laws have helped to close the gap between what the law says and what happened in reality.
The Ombudsman’s decisions are non-binding, merely recommendations, but their power is moral: it points out those public employees that are violating human rights; sends reports to the mass media containing the names of the public entities that decide to ignore his recommendations; gives press conferences to inform to the public about their principal cases.
The Ombudsman is not feared by public employees, but can become a nuisance for middle and upper level directors of agencies and public entities.
In the case of México, we needed a figure like the Ombudsman. The Human Rights National Commission has helped to advance a culture of respect for Human Rights. Government employees and general population had been educated through out the last three decades thanks in part to the work of the Ombudsman.
Getting Coca Cola on Their Knees
In a truly David v. Goliath case, a convenience store owner in México refused to let Coca Cola tell her how to run her business, contacted the Federal Economic Competition Commission –CFCE, by its acronym in Spanish-, the Mexican Anti-Monopoly agency.
According to CNN.com,
[1] Raquel Chávez’s inconformity arose when a distributor from Coca Cola threatened to stop selling her Coca Cola products because of her decision to sell a rival soft drink from Perú, Big Cola. Apparently, Coca Cola employees also offered her money to stop selling Big Cola.
Ms. Chávez went to the CFCE to submit a complaint for what is considered a monopolist practice under Mexican legislation, and that started an investigation that ended up with a fine of $68 million dollars.
The decision has been appealed, and a ruling can be expected next year.
Ms. Chávez is owner of an abarrotes, a mini-convenience store not bigger than a typical small classroom of a law school. According to her words, she did not want to be told what to do in her store.
Her case prompted a broader investigation and the CFCE found a pattern of similar behavior from Coca Cola with small businesses, and decided to impose the biggest anti-monopoly fines ever in CFCE history.
Apparently Ms. Chávez attempted to solve the matter with the distributor, but she failed. How could Coca Cola avoid all this trouble? Even assuming that Coke gets a reversal in appeal, or at least a reduction in the amount of the fine, it will cost it millions in attorney’s fees, public relations strategies, etc.
In the other hand, this result is good news, because Coca Cola was indeed incurring in monopolist practices under Mexican law, deliberately trying to push out of business to its Peruvian competitor.
But in any case a micro-entrepreneur challenged one of the world’s biggest emporia, jumping to fame and becoming a local hero.
Footnotes:
[1] Mexico Shop Owner Beats Coca Cola, Nov. 15, 2005, available at
http://edition.cnn.com/2005/BUSINESS/11/15/mexico.coke.ap/; for a picture of Ms. Chávez, see
http://news.bbc.co.uk/hi/spanish/business/newsid_4445000/4445826.stm.
Avoiding Probate the Colombian Way
This story was told me by a middle-age Colombian couple, and although it was presented as true story, it has some fantasy elements that can easily put it in the urban legend category. Except that it contains rural elements.
The place: rural Colombia. A local farmer, businessman and politician had a good life, alternating terms as city mayor with his wife. Let’s call him Bolión Simívar
[1] This went on and on over the years. They were a well-respected, wealthy family. They had two children. Up to this point, this will be an ordinary story of success in rural Latin America: the strong man of town, married to the strong women of town. By the time Mr. Simívar got old, he accumulated a fair fortune, product of his lifetime work.
But Mr. Simívar had a secret passion. To be more precise, he had lots of secret passions: he was well known to have a weakness for women, but what set him apart from the rest was that he let that passion flow to the limits, or to be more precise, he let it flow to the limits too often and with too many women.
[2]When wealthy Mr. Simívar died in intestacy, the older of the two sons he had with his wife –let’s call him Big Brother- expected the worst. He started to receive threats by the phone from alleged sons of the deceased, claiming their part form the estate. Decided to protect his patrimony and the future of his mother and brother, he decided to place and advertisement in the local newspaper.
Here is where the story deviates from credible course to enter into the shaken waters of the improbable. The act supposedly read:
To those who consider themselves offspring from the late Mr. Bolión Simívar, they are advised to be present with evidence to identify themselves as his children, at Mr. Simívar’s principal residence, the next Saturday at 12:00. Lunch will be provided.
As a result, more than twenty men and women ranging from ages 19 to 40 showed up to the house of the deceased, somehow accredited themselves as descendants of Mr. Simívar, and Big Brother welcomed them. He gave them a speech highlighting their common ancestor recently died, explained them the disadvantages of fighting over the estate, made an inventory of the estate of inheritance,
[3] came up to an amount of money, and divided it between twenty two. He extended checks from his personal account with the correspondent amount, made his coheirs sign a transmission of inheritance rights and a no-lawsuit agreement. At the end, they ended up as a happy family.
If this ending to the story was true, most likely Mr. Bolión Simívar rested in peace. The mechanism used by Big Brother conveniently avoided a never ending conflict that would very likely consume a large part of the estate, and except by the fact that he defrauded his coheirs by hiding properties and money, he was very ingenious and practical in his approach.
Footnotes:
[1] This is an arbitrary combination of the syllables of the name of Simón Bolivar, the Great Liberator of America -the Continent, of course (practically everywhere outside the United States of America, people consider and study America as a sole continent). For a note on his biography, see generally History of Simon Bolivar, http://www.bolivarmo.com/history.htm. He helped six Latin American countries to achieve their independence –Bolivia, Panama, Colombia, Ecuador, Peru, and Venezuela-. He is referred to as the “George Washington of South America;” I can bet two-to-one that he received the name from an U.S. Citizen, because it would not mean a compliment in some of the Latin American countries he helped to liberate, especially Venezuela in these days.
[2] The Colombian couple who told me this story claim to be related to Mr. Simívar. They said that when he was asked about his demeanor, he always said that organization and time management were the keys to success.
[3] It would not be a genuine Latino story should Big Brother not keep something extra for himself. The inventory he presented had been filtered to hide the most valuable properties, calf and money, supposedly to assure that their mother would not suffer poverty during her last years. The same could be alleged for the more than a dozen mothers to Mr. Simívar’s children, but I guess being the wife should carry some advantages.
Arbitration as a Dispute Resolution Method for the NFL: The Terrell Owens Case
National Football League team Philadelphia Eagles suspended receiver Terrell Owens because of what was perceived as negative behavior. The straw that broke the camel’s back occurred in November 3, when he accused his team of showing “a lack of class” for not celebrating Owens’ 100th touchdown.
The Eagles suspended Terrell Owens for four games, and announced that were going to deactivate him for the rest of the year.
The National Football League Players Association filed a grievance against the Eagles. The means to solve disputes between the league and players is arbitration, and the designed sole arbitrator was Richard Bloch.
[1]Bloch played for the Dartmouth hockey team in 1962 and a graduated at Michigan Law. He is –and has been for the last thirty years- an arbitrator and a magician by hobby.
[2] Legend says that his business card reads “Richard Bloch - Whatever I Damn Well Want to Do.”
[3]In his arbitral award, Arbitrator Bloch ruled that “no violation of the labor agreement inherent in the club's decision to pay Mr. Owens, but not to permit him to play or practice due to the nature of his conduct and its destructive and continuing threat to the team,”
[4] ant therefore upheld the suspension imposed on the player by the Philadelphia Eagles.
The answer from the syndicate of players is apparently going to be the deactivation of Mr. Bloch as an arbitrator.
[5]Mr. Bloch was indeed a qualified arbitrator, and probably one of the most suitable to deal with sports arbitration, both because of his legal profile and because he himself was a professional sport player.
And for Terrell Owens, it is clear that discipline and respect for the team matter more than individual ability. After all, football is the team game by definition.
Footnotes:
[1] David Aldridge,
Bloch an Arbitrator by Trade, Magician by Hobby, Centre Daily Times (State College, PA), Nov. 17, 2005, available at
http://www.centredaily.com/mld/centredaily/sports/13196086.htm.
[2] Id.
[3] Id.
[4] Arbitrator Rules Against T.O., Upholds Suspension, Associated Press, Nov. 24, 2005, available at http://sports.espn.go.com/nfl/news/story?id=2234459
[5] Id.
Mission [Im]possible: Forming a Coalition Government in Germany
Looking at the legislative impasse my Country experienced during the last five years, with the first president from an opposition party –ending 70 years of hegemony of the PRI-, but with a Congress dominated by the old party, it is hard to imagine the negotiations needed in Germany to agree in a government for the country during the last elections held in September of this year.
His opponent, Conservative leader Angela Merkel, led her party to a narrow victory but fell short of winning the necessary majority in the German parliament to be inaugurated as Chancellor. Then all parties had to come up with a broad coalition to govern the Country.
Of course the parties were compelled to negotiate; otherwise they would not have a head of government. But despite the fact that it may be seen as the natural thing to do, having Germany a parliamentary system where the executive branch of government depends on the support of the parliament, the previous grand coalition happened forty years ago.
Merkel is going to be Germany’s first chancellor. But the making of the agreement to form the coalition lasted five weeks, so her designation will come with big concessions for all members of the coalition.
In theory, legislators from a parliamentary system should be better negotiators than their counterparts in a presidential system. But this is probably an overstatement, because they all carry their work according to the characteristics of each legal system.
And Mexican legislators have no excuse to simply block the proposals from the executive, when legislators in Germany were able to agree to designate a new chancellor.
How Can Having a Partisan Arbitrator Be Common Practice in the United States?
When Professor Sheppard[1] gave us a lecture about the great advance in arbitration ethics experimented in 2004, I was confused. The big change in ethics came through the 2004 Revision to the AAA/ABA Code of Ethics for Arbitrators in Commercial Disputes, specifically in the presumption of neutrality to all arbitrators, including party-appointed.[2] Before this revision, the Code of Ethics established a presumption of non-neutrality for party appointed arbitrators.
My confusion came because I assumed that arbitrators were supposed to be always neutral; but as Professor Sheppard explained, it was customary practice in domestic arbitrations for parties to appoint their arbitrators as partials advocates of their cases. This has never been the practice in international arbitration, nor in the jurisdiction where I previously practiced law.
Why would the Americans want to have non-neutral arbitrators in the first place? I understand a party’s desire for an advocate for their cause sitting in the arbitral tribunal, but if their counterparty had the same power and desire, this power is annulled. The work that a partial arbitrator for Party A does as a member of the arbitral tribunal, ends been nullified by the actions of Party B’s appointed arbitrator.
Arbitrators are similar to judges in that they settle disputes through binding decisions. But we could hardly imagine a three-judge panel where two of them were partial towards each party. That would be a mimic of justice, not justice. In my opinion as an outsider, I see the same situation applicable to arbitrators.
But the important point is that the Revision of the Code of Ethics gives the first step towards homogenization with international and foreign arbitration, establishing a presumption of neutrality for all arbitrators, including party-appointed.
The desirable next step will be a new revision –probably in the next decade- to mandate neutral arbitrators in all situations. But for now, the step taken is important enough to be proud of the development in domestic arbitration.
As Professor Sheppard said in his article, foreign colleagues would have to choose another topic to recriminate to their American counterparts.[3]
Footnotes:
[1] Ben H. Sheppard, Jr. is a Law Professor at the University of Houston Law Center and Partner at Vinson & Elkins LLP.
[2] Ben Sheppard, A New Era of Arbitrator Ethics for the United States: The 2004 Revision to the AAA/ABA Code of Ethics for Arbitrators in Commercial Disputes, 21 Arb. Int’l 91 (2005).
[3] Id. at 97.
A good friend of mine (let’s call him Cazador[1]) wanted to buy a Porsche Cayenne because his wife’s Mini Cooper was not going to be helpful with the arrival of their first baby. After a good round of negotiations, he traded in the Mini and bought a V-8 Cayenne on credit.
