The U.S Government has today again raised the estimate of the amount of oil spilling into the Gulf of Mexico.  The estimated rate now stands at 60,000 barrels per day.  As of yet, there are no estimates of the cost of the flood of litigation to follow.

Perhaps in an effort to stave off some claims, BP has declared on its website that:

Appointing an Independent Mediator is a recognized practice to strengthen claims processes and resolve disputes. BP is working to appoint the best possible person to fill this important role.

In those cases in which a claimant and BP cannot agree on resolution of a claim, the claimant can seek review from the Independent Mediator.  The Independent Mediator then will make an advisory decision on the claim.

In his blog, The Frontal Cortex, Jonal Lehrer (author of How We Decide and Proust Was a Neuroscientist) describes the "ultimatum game," which is often used in teaching Negotiations to demonstrate how important a sense of "fairness" may be to reaching an agreement.  The game has two players.  The first player is given $10 and told that he or she must offer part of it to the second player.  The first player can offer any amount, if the second player accepts the offer, both players keep their share, but if the second player rejects the offer, then both players get nothing.  Almost invariably, if the first player offers much less than $5, the second player will reject the offer--even though rejecting the offer makes the second player worse off.  (A purely rational player would accept any offer above zero, because regardless of how much player one keeps, a non-zero propeal would be a gain).    This phenomenon has been shown in a variety of contexts.  For example, given a choice of a job that will pay $80,000 in a company in which everyone else makes $80,000 or less, and a job paying $90,000 in a company in which everyone else is paid $120,000 or more, most people would prefer the first job.

Lehrer describes additional research (using brain scanners) that shows concerns over fairness or equality may not be purely selfish--that people sometimes prefer someone else be given a gift to receiving a gift themself, if it will balance out a unfair starting point.

In a nutshell, when someone says "its the principle, not the money," they may actually mean it, and it would be a mistake for a mediator or negotiator to dismiss the such non-monetary motives.  In litigation, though, the issue is complicated by other psychological tendencies, such as the tendency to underestimate the time and cost of the lawsuit and overestimate the likelihood of success.  Further, even successful litigants often come away from a lawsuit feeling beaten down by the process and without the expected satisfaction derived from vindication.  Consequently, and perhaps counter-intuitively, negotiation or mediation of a settlement may require putting "fairness" aside, because the price of fairness is simply too high.  While I don't think a negotiator or mediator can, or should, discredit or diminish the importance of fairness to the parties, I do think he or she can make a significant contribution by helping them  more accurately assess both the cost of pursuing "fairness" and the potential for disappointment.

I always find astonishing our ability to see only what we want to see.  In a 1954 study by Albert Hastorf & Hadley Cantril, students from Princeton and Dartmouth were asked to review a film of a football game between the two schools and to count the number of penalties by each side. The Princeton students found that the Dartmouth team committed twice as many flagrant penalties and three times as many mild penalties as the Princeton team. On the other hand, the Dartmouth students found that the two teams committed an approximately equal number of penalties. The study concluded that it was as though the two sets of students "saw a different game."

Commentary on yesterday's healthcare summit follows this predictable, but still remarkable pattern.  Take a look at any blog discussion of the summit, and you will see commentary that appears to review entirely different events.  Online comments on the WSJ's unsurprisingly negative op-ed is one example.   The LA Times comments start from the opposite side I don't doubt the sincerity with which democrats and republicans view their side as the "winner."

Regardless of positions on healthcare refore, I have to admit that I find it hard to see how President Obama's performance and command of the event could be considered anything other than extraordinary; he would certainly make an exceptional mediator.   In the face of aggressive and emotional criticism, he responds calmly and (for the most part) in a manner that invites deescalation.  He acknowledges the validity of diverse perspectives and doesn't reject the view of opponents simply because of their source.   (e.g., He left John McCain speechless when he agreed that the healthcare reform should not include special deals for different states).  He also recognizes that sometimes there is simply too wide a gap between the parties.

The Pittsburgh Post Gazette Reports that  group of Braddock residents and activists from neighboring areas, and the group Save Our Community Hospitals, has filed a new action challenging the hospital system's tax-exempt status and demanding that it re-open the Braddock hospital it closed last month.  The action is notable in that it asks the Pennsylvania Supreme Court to  use its King's Bench power to take immediate jurisdiction over the case.  Braddock earlier rejected a proposal to demolish the building and create a mixed use facility with financial support from UPMC, as described in a PG Editorial. The case raises interesting and difficult policy issues that I hope to comment on after having a chance to review the 80 page complaint.

Contrary to all of the reporting on Mayor Ravenstahl's tuition-tax, it would not have been the first of its kind.  In fact, a nearly identical (but more inclusive) taxing strategy was enacted in Pittsburgh in 1968-9 but thrown out by the courts.

In December 1968, then Mayor Barr and the City Council of Pittsburgh actually enacted what amounted to a tuition tax to address what Mayor Barr called the the “greatest financial crisis” in Pittsburgh’s history by taxing the revenues receipts of local universities and hospitals (and other tax exempt institutions).  Although the tax on hospital stays, a  "sick tax," such as referenced in your November 9 article ("proposed but not enacted"), made bigger headlines, the 1968 "Institutions" tax was also imposed on tuition receipts of the then 8 local colleges and universities.   Notably, the city made the same arguments that were recently made by Mayor Ravenstahl--that the Local Tax Enabling Act authorized the "privilege" tax on tuition and hospital stays, because it did not expressly prohibit such taxes.  The Pennsylvania courts, however, squarely rejected this argument.  On December 11, 1969, a year after the tax was enacted in Pittsburgh,  Common Pleas  Judge Homer S. Brown declared the tax to be “invalid and unenforceable,” as a tax on charitable efforts, and that such taxes had been unconstitutional in Pennsylvania since  at least 1891.  Judge Brown’s ruling was later upheld by the Pennsylvania Supreme Court, which explained that “broad taxing statutes do not cover charities unless the Legislature specifically so states.” 

In short, notwithstanding the political theater, Mayor Ravenstahl's tuition tax was an empty threat.  Given that terms of the settlement have been kept confidential, I suspect that the threat was not especially effective but the local universities and Highmark ultimately played along to allow the Mayor to save face and put the matter to bed.

The New York Times reports that U.S. Government has settled a 13 year old case alleging mismanagement of revenue from indian trust funds.  A model of litigation efficiency, "[T]he case the lawsuit spanned three presidencies and engendered seven trials covering 192 trial days, generated 22 published judicial opinions, and went before a federal appeals court 10 times."  Here's the link.