Mediation could be the answer

In a surprise ruling Monday, a federal judge in Philadelphia ordered attorneys for more than 4,200 former NFL players suing the league over concussion injuries and league attorneys to participate in mediation to determine whether settlement is possible. The ruling by U.S. District Court Judge Anita B. Brody raises questions about the players' claims, the league's response to their claims and the future of the litigation:

Q: The judge was scheduled to make a major ruling July 22 -- whether the retirees had a right to sue the league in court or whether, as the NFL insists, the player claims should be dealt with under the collective bargaining agreement and therefore should be resolved in arbitration. What prompted her to order the players and the team owners into a mediation process?

A: Brody said in her order Monday that she had conducted an "informal exploratory telephone conference" with the lead attorneys for both sides. Either she said something that prompted the lawyers to suggest mediation or the lawyers said something that prompted the judge to suggest mediation.

In such calls, which are more common than many people realize, Brody might have tipped the lawyers on her upcoming ruling. She might have indicated she would deny the league's demand to send the claims to arbitration under the labor agreement. Or she might have told attorneys for the players just the opposite, an equally major setback. To avoid further damage, the losing side might have suggested mediation. It is also possible that the attorneys for one side, or even both sides, signaled to the judge that they thought settlement efforts would be productive. But it is more likely the judge's signal on her ruling prompted the attorneys to suggest mediation.

Q: Is a settlement possible? Can a mediator find a way to resolve a dispute involving thousands of players and possibly billions of dollars?

A: It is possible. The mediator, Layn Phillips, is skilled and experienced. He has succeeded in settling other highly complex cases and served as a federal judge in Oklahoma for four years before moving to Newport Beach, Calif., to establish a mediation practice. The lawyers participating in the concussion litigation suggested Phillips, showing respect for his abilities.

Both sides have reasons to try to settle. The players are older and face uncertain futures that might include depression and dementia. They are aware of the damage concussions can cause, and they are aware of the suicides of former players Junior Seau and Dave Duerson, among others. If the players succeed in their quest for jury trials instead of arbitration, Brody would preside over a lengthy discovery process and could then return their cases to the cities where they were originally filed for trial, a process that would consume years. A settlement now would avoid years of litigation anxiety and provide the players with a level of financial certainty as they face what might be difficult futures.

The owners face the prospects of continuing accusations of abusing players by concealing the dangers of concussions, significant legal fees and enormous awards of money damages in jury trials. Even with the NFL's highly skilled public relations staff, the concussion crisis has been a nightmare. A settlement would end the crisis and allow the league to return to some version of normalcy before the violence of the game becomes an even more difficult problem.

Q: Why would the league even consider paying the players in settlements at this early stage in the litigation process?

A: It's simple: The league is not likely to prevail in its attempt to move the players' claims to arbitration. The legal precedents on the issue favor the players. If the league fails to move the cases to arbitration, it faces an expensive and possibly embarrassing discovery process.

The roster of attorneys representing the players is full of figurative first-round draft picks. It is a highly skilled team, and it is motivated by the prospect of enormous fees at the end of the process. Led by these lawyers, the discovery process will amount to nothing less than a strip search of NFL records, a process that could easily produce powerful evidence that the owners concealed the dangers of head injuries from the players.

The attorneys for the NFL, another team of all-stars, recognize what the discovery process could deliver and might be interested in finding a way to avoid the discovery and settle with the players. Although it is difficult to imagine team owners voluntarily paying settlements to players, the exposure from these cases is so massive that the owners must consider settlement. Tobacco companies and asbestos manufacturers faced similar mass tort litigation and found a way to settle.

Q: If there is a settlement, will the owners be able to use insurance funds to pay the players?

A: Yes. But it's incredibly complicated. The players' claims involve decades of games and injuries. The league purchased numerous policies of liability insurance during the years the players claim they were victims of concealment. The league and its insurance carriers are already involved in at least four lawsuits in which the insurers claim they are not responsible for payments to the players.

These cases are complicated, but the league and the insurance companies know they must find a way to resolve the issues quickly and assemble a fund that will be used to pay the players' claims. It is more a problem of mathematics than an issue of principle. The league and the carriers must find a formula that will determine what percentage each carrier must pay in any settlement. It is the kind of thing insurance companies and their attorneys do each day.

Once each side has measured its leverage in the insurance policies, the league and the carriers will find the formula that will work. In addition to insurance payments, the owners face the prospect of contributing their own funds to any settlement.

Q: If there is a settlement, how much will each player receive?

A: Any settlement will be based on a formula for determining the value of each player's claim. Both sides must agree on the terms of the formula.

The factors to be considered will include the nature and extent of the player's current problems, his history of injury in the NFL, his history of any injury in college and high school, and the estimated cost of any future medical care. Each player and his lawyer must agree to the formula, a process that will be difficult but not impossible. The settlement could include a provision for a player to opt out of the settlement and pursue his claim, but the league would resist any such provision.

The process would be a massive version of the process used when baseball players made their claims for damages resulting from MLB's collusion conspiracy years ago, a process that worked reasonably well after the players won a series of arbitrations.

Q: Is there any chance this mediation could lead to a settlement?

A: Yes. Despite the complex insurance coverage and the difficulty of evaluating each player's claim, it is possible that mediator Phillips could effect a settlement. Brody, who has been on the federal bench since 1992, said or heard something in the telephone conference Monday that resulted in this mediation. With even minimal willingness from the players and the owners, the mediation process could produce a historic settlement. It will not be easy. If Phillips succeeds in producing a settlement, he will be the featured speaker at lawyers conferences and seminars for the next 10 years.