The $7 Billion Call
When Wulff hung up he said to his wife, Krys: “That just sounded so cheesy. I can’t believe I said that.” Four years later, he chuckles at a line his Hollywood friends surely would edit out. “But it was true. That’s how I felt.”
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Wulff visited the World Trade Center site when he went to New York City to interview with Mukasey for the job he would later accept.
“It’s impossible to go to ground zero and not be a little overwhelmed by the breadth of the tragedy,” Wulff says. “The only way [the nation] was going to heal is if they rebuilt something, hopefully bigger and better than ever. And the only way it was going to get rebuilt is if somebody sorted out this incredible legal snarl. And that’s what I was being asked to do.”
The lawsuits, it seems, started before the dust from the fallen towers cleared. A few months before the attacks, the Port Authority of New York and New Jersey awarded ninety-nine-year leases to Silverstein Properties and Westfield Group. Silverstein would manage 12 million square feet of office space, while Westfield leased 427,000 square feet of retail space, considered Manhattan’s most successful mall. The equivalent of all leased floor space would house every UO building and athletic facility—twice.
Silverstein and Westfield had negotiated insurance coverage for the complex, but by September 11 they had yet to finalize policy language. After the attacks, the myriad layers of insurance companies and the lessees hired attorneys by the platoon. Those lawyers endlessly labored over legalese, debated definitions, and disputed dollars.
Before Wulff became involved, proceedings settled some matters, most notably setting the upper policy limit at $7 billion—at least four times the previous record for a single insurance claim. But the sides couldn’t agree whether the value of the obliterated buildings and lost income hit that mark. The rancor grew.
The insurance companies called for an appraisal, guided by a three-person panel, to put real-dollar values on the losses. They chose panelist Jonathon Held of New York, one of the nation’s foremost appraisers. Bill O’Connell of Texas, an accountant in charge of Deloitte’s Forensic and Dispute Services division, represented the lessees. Then the two sides had to agree on a neutral third member—an “umpire” in disputed appraisals—to lead the panel.
“A significant amount of research went into potential candidates,” Held says. “We’re talking heartbeat-away-from-the-Oval-Office-type guys.”
The first contact was by e-mail. “I actually thought it was spam,” Wulff says. “I couldn’t fathom why someone 3,000 miles away was interested in me.”
Mukasey ultimately selected him over a prominent New York attorney. “I think Mukasey knew that Wulff had the right stuff and that, being from across the country, he would be less influenced by what he would read in The New York Times,” Held says. “The stakes were as high as you could ever imagine, and the distrust was beyond imaginable.”
O’Connell agrees. “By the time that Randy got involved, these parties just hated each other. It was like the worst divorce proceeding. It was just a fiasco.”
Kareem of the crop
New Yorkers are famous for being blunt, which gives extra credence to Held’s praise of Wulff: “He’s so damned likeable. He’s not arrogant. He’s not egotistical. Very unlawyerlike, I might add. He’s a very simple guy—with a big brain.”
Jim Van Wyck ’70 arrived at the same conclusion four decades earlier, after he met Wulff during registration and they were accepted into the University of Oregon’s honors college and Theta Chi fraternity. “The first time we went one-on-one on the basketball court, I knew everything I needed to know about him,” says Van Wyck, who became a Hollywood producer or assistant director for such blockbusters as Maverick and this year’s The Incredible Hulk. “He’s just solid as a rock.”
Randall W. Wulff grew up in Stockton, California. He and Krys attended Lincoln High School, where he juggled basketball and baseball with debate and theater. He spent summers bending sheet metal and installing air conditioners in the broiling San Joaquin Valley with his father, a mechanical contractor. “It was useful for me because there’s really something to learning what you don’t want to do.”
He knew what he wanted to do when he got to the UO: play big-time college basketball. Unrecruited, he showed up with his high school press clippings and a chip on his shoulder. The five-foot-ten guard made the freshman team but was stuck deep on the bench. He remembers finally realizing he couldn’t compete with elite athletes the day UCLA’s freshman team arrived at McArthur Court with a phenom named Lew Alcindor, the future Kareem Abdul-Jabbar. Wulff was mesmerized—and deflated.
“For the first time, it was so apparent to me that my mother fibbed when she told me I could accomplish anything if I tried hard enough,” he says.
Fortunately, Wulff had another career plan: the law. He concentrated on his studies, his fraternity, and student politics. Graduating during the Vietnam War with a low number in the draft lottery (which meant a high probability of being drafted), he enlisted in the National Guard. Active duty as a tank mechanic delayed law school a year but, like bending sheet metal for his father, strengthened his resolve. He chose Hastings College of the Law in San Francisco, where Krys was living. They married a year later, in 1972.
“In law school, grades have a far greater importance than they did in college,” Wulff says. His class started with 575 students, and he finished ranked first that spring. He repeated the feat his second year. The chief justice of the California Supreme Court offered an externship during his final year. “Whether I deserved it or not, I landed on the yellow brick road.”
“I’d like to think it was because of the notes I gave him,” jokes Steve English ’70, another close friend from Theta Chi and the honors college. Now among Portland’s best trial attorneys, English started a year earlier at Hastings, where “the competition is fierce.”
“We tracked him down like a dog,” says John Martel of Farella, Braun, and Martel in San Francisco, where Wulff got his first job out of law school. Martel, who cut his UO education short in the 1950s to serve in Korea, now is primarily a novelist and songwriter. “What was surprising to me is that [Wulff] was not only smart, but he was blessed with wit and personality. I was expecting some skinny guy with Coke-bottle glasses.”
Born to mediate
“Randy was heading in the direction of becoming a great trial lawyer. He had all the tools,” says Martel, whose protégé made partner in just six years. “But what he was really born to be was a mediator.”
Early on, trial law was exhilarating. Wulff would go full-force into preparing for a case, captivate a courtroom audience, and, if he played the game well, walk out victorious. When clients got his bill, they often lost that winning feeling. Worse than the shock of staggering legal costs, clients often felt powerless in solving their own problems. “It was very ego-gratifying, but increasingly it did not feel to me that I was helping people.”
In the mid-1980s, Wulff represented a group of Maui condominium owners in a dispute with developers. The twenty parties involved “couldn’t even agree when to break for lunch.” An opposing attorney suggested mediation. Wulff saw little to lose.
The mediator, Tony Piazza, settled the case quickly and made a lasting impression on Wulff. With encouragement from Piazza (“the Michael Jordan of this profession,” Wulff says), he took training and conducted occasional mediations. In 1994, after two decades as a trial attorney and frustrating back-to-back trial and mediation cases on the East Coast, Wulff returned home to become a full-time mediator, or “neutral.” In 2000, he co-founded Wulff Quinby Sochynsky Dispute Resolution in Oakland, close to his home in Piedmont.
“He’s conceptually brilliant. He grabs hold of things and internally collates, which is really a lot of what mediation’s about,” Martel says. “He knows how to diplomatically persuade others to his viewpoint. He’s firm, but his fist is always wrapped in velvet.”
English says his friend “became the go-to guy for extremely complicated, extremely contentious high-dollar cases that had to be solved short of trial.”
Some disputes will always land in court, with neither party willing to budge until a judge or jury rules. Mediators such as Wulff track court outcomes to add a dose of reality as they nudge clients toward early settlement. In California, most judges won’t schedule a trial unless mediation fails. That happens rarely with Wulff, whose settlement rates top 90 percent. In recent years, mediation has grown from cutting-edge to mainstream, with training programs such as the UO School of Law’s Appropriate Dispute Resolution Center helping meet the demand.
Wulff has mediated countless headline-worthy cases, including construction disputes involving Walt Disney Concert Hall and Staples Center in Los Angeles, Safeco Field in Seattle, and the Venetian in Las Vegas. When the federal government accused Microsoft of anticompetitive practices, class-action lawsuits arose in most states. Wulff wrapped up mediation of California’s case with attorneys at his house one Sunday. That settlement became a template for other states.
Being one of the nation’s top neutrals—the Mediation Society named him “Mediator of the Year” in 2004—has its payoffs. Wulff’s basic daily rate is $11,500, which increases for larger numbers of parties or travel. Most sessions last a day or two. “You get a chance to do the right thing and prosper at the same time. Honestly, there aren’t many jobs where you can say that,” says Wulff, who charged less for the World Trade Center work.
Although disputing parties often believe they are too far apart for mediation to succeed, that gulf usually isn’t so vast. Bridging that gap is Wulff’s particular talent. “If people could negotiate face-to-face effectively, I’d be out of work,” Wulff says. “I don’t try to persuade people they’re wrong. I try to persuade people they’re not quite as right as they think they are.”
Billions upon billions
By the time Wulff arrived in New York for the first hearings in September 2004, it seemed that everyone thought they were more right than everyone else. Some fifty to sixty high-powered attorneys crammed into hearings. Wulff, forever diplomatic, likens them to legal “dream teams.” Others are less charitable.
“Some of those guys,” O’Connell says, “they had to come through the door sideways, their heads were so big.”
If the egos were large, the stakes were gigantic. The panel divided damages into more than twenty categories. They first tackled the more than 200,000 tons of structural steel—enough to build at least twenty-five Eiffel Towers—used to construct the original World Trade Center. Not only did the three panelists have to determine the market price of so much metal but also the cost of fabricating, shipping, and erecting it.
Construction costs rise with taller buildings, in part because workers lose productivity when they have to climb 110 stories to work. Sorting it all out required exhaustive expert testimony and scores of exhibits entered into evidence over several weeks of hearings and eleven days of deliberations stretched across several months. Panelists wrapped up this first category with a price tag around $1 billion and a daunting realization that they already were straining their schedule.
The parties adopted a new strategy. Wulff led informal mediation, followed by formal hearings if necessary and ending with the panel’s binding decision. That process was sleeker but forced Wulff into an uncomfortable role as potential tiebreaker between Held and O’Connell’s opposing interests, “but it was apparent it was the best mechanism to try to finish this in my lifetime, so I agreed,” Wulff says.
Held still marvels at Wulff’s “ability even in the most stressful situations to never, ever give a hint of losing control. I can’t imagine that the guy’s blood pressure ever changed, even in the most stressful times.”
“If you’ve known Randy as long as I have, you would know when he’s angry,” English says. “It’s an almost imperceptible glint in his eyes and a slight flushing in his face. Otherwise, you wouldn’t know. And now I’ve given away his secret.”
The panel settled another eight or nine issues, each time with Wulff convincing fellow panelists to sign off on the agreements—even though both felt some of those deals tilted too much in favor of the other—because Wulff demanded unanimous approval.
“If I’m in his chair,” O’Connell says, “I want to make this thing absolutely bulletproof, so some poor sap doesn’t have to go through this again.”
From the time Wulff arrived, the appraisal process ground on for more than two years in periodic sessions but was really bogging down in early 2007. “Mediation’s a little like penicillin,” Wulff explains. “It is a wonder drug, but you can become immune.”
That’s when then–New York governor Eliot Spitzer swooped in. Using the agreements Wulff’s panel had reached as a starting point, he pushed the sides to settle. “God bless him for that,” Wulff says.
The final settlement amount is a matter of debate, obscured by confidentiality agreements and convoluted by the many layers of insurance companies that underwrote the policies. O’Connell’s sources tell him the total payments were within about 2 percent of the $7 billion cap, but others believe that estimate is high.
Spitzer held a press conference to trumpet the settlement. The three panelists shunned the limelight and convened at the Peninsula Hotel, where Held says Wulff bought “an ungodly expensive bottle of champagne” to toast the end of their service.
“For somebody in my line of work, this was the Super Bowl,” Wulff says. And the healing is in progress at ground zero. “The Freedom Tower is coming out of the ground.”
Eric Apalategui ’89 is a freelance writer who lives in Beaverton.