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Mediation Confidentiality is Alive and Well in the Tenth Circuit

by Phyllis Pollack
May 2012

PGP Mediation Blog by Phyllis G. Pollack

Phyllis  Pollack

Readers of not only my blog but those of other California neutrals are no doubt familiar with all of the hullaballoo raised over AB 2025- the California Legislature’s attempt to exclude actions for legal malpractice and disciplinary actions from the cloak of mediation confidentiality. At present, that assembly bill has been amended to simply refer the whole issue to the California Legislative Review Commission. It will be quite a while before we hear from the Commission.

But, it seems that mediation confidentiality is alive and well and doing just fine in the federal courts, especially in the Tenth Circuit which encompasses Oklahoma, Kansas, New Mexico, Colorado, Wyoming, Utah plus portions of Yellowstone National Park extending into Montana and Idaho. There, a plaintiff e-mailed extensively about what had happened at mediation, and as a result, got his case dismissed.

In J. Michael Hand v Walnut Valley Sailing Club, Case No. 11-3228 (Tenth Circuit, April 4, 2012), Plaintiff Michael Hand wrote a letter to the Governor of Kansas complaining that a storage shed he owned at the defendant sailing club did not comply with the American With Disabilities Act. In response, Plaintiff found his membership revoked. So, he filed a federal lawsuit. During the course of the lawsuit, the trial court ordered the parties to mediation, in compliance with the Alternative Dispute Resolution Act of 1998 (28 U.S.C. §652(d)). Unfortunately, the mediation was not successful; it did not result in a settlement.

Plaintiff, though, rather than keeping what happened at mediation to himself, “…sent an e-mail to at least forty-four club members (and others) disparaging the club’s positions and relating all the details of the mediation, including what the mediator said and the amount of the club’s settlement offer. This despite “…a written district court rule expressly require[ing] anyone involved in court-ordered mediation to keep all such information confidential.” (Id.)

When the club found out, it moved to sanction Plaintiff urging dismissal of the lawsuit as the appropriate remedy. In his response to the sanctions motion, Plaintiff did not dispute his breach, but simply urged that the sanction sought was too onerous. He made no mention of being ignorant of this rule of confidentiality. The trial court agreed with Defendant and dismissed the lawsuit with prejudice (meaning Plaintiff could never refile it!).

Plaintiff appealed. The Tenth Circuit, issuing its opinion without oral argument, affirmed, finding that the district court did not abuse its discretion:

In explaining the scope of the sanction it ordered, the district court emphasized that Mr. Hand’s disclosures reached club members who might testify about the “crucial issue in the case” — why the club expelled him. Aplt. App. at 99. The club was, the court found, prejudiced by its inability to respond to Mr. Hand’s disclosures because it was bound by the confidentiality requirement that Mr. Hand “fully disregarded.” Id. And by implying that the club had acted unreasonably during the mediation, Mr. Hand’s disclosures fostered animosity and prejudiced any future efforts to resolve the case. Given all this, the district court held that no sanction short of dismissal “would adequately admonish [Mr. Hand] for his complete disregard for and willful violation of the confidentiality rule, deter similar conduct by others in the future, restore respect for [the] Court’s authority, repair the damage caused by [Mr. Hand] to the integrity of the Court’s ADR program, and minimize prejudice to the [club].” Aplt. App. at 105.

…Our review confirms that the district court did not abuse its discretion. Mr. Hand committed a serious violation of the confidentiality rule. He didn’t just share a few tidbits about the mediation with a friend; he revealed extensive and prejudicial details about the mediation to over forty people, many likely witnesses in the case. And he did so not accidentally but intentionally. In his deposition, Mr. Hand explained that he “absolutely” disclosed mediation information because he believed club members “had a right to know.” Aplt. App. at 103.

On appeal, Plaintiff raised for the first time, his contention that he was unaware of his confidentiality obligations; he claimed he did not know the rule about mediation confidentiality. The court, noting that typically, the confidentiality of mediation is stressed not only by the courts but by the mediator as well, rejected the contention on a more basic ground; the issue was not raised in the sanctions motion before the trial court, and so could not be considered for the first time on appeal.

Accordingly, the appellate court affirmed the judgment of dismissal with prejudice. Plaintiff’s case was over.

In light of all the ruckus over mediation confidentiality, I find this decision comforting and re-assuring… much like, “Yes, Virginia, there is a Santa Claus” (http://www.newseum.org/yesvirginia/.)

I hope you do, as well.

….Just something to think about.

Biography


Phyllis Pollack with PGP Mediation uses a facilitative, interest-based approach. Her preferred mediation style is facilitative in the belief that the best and most durable resolutions are those achieved by the parties themselves. The parties generally know the business issues and priorities, personalities and obstacles to a successful resolution as well as their own needs better than any mediator or arbitrator. She does not impose her views or make decisions for the parties. Rather, Phyllis assists the parties in creating options that meet the needs and desires of both sides.  When appropriate, visual aids are used in preparing discussions and illustrating possible solutions. On the other hand, she is not averse to being proactive and offering a generous dose of reality, particularly when the process may have stalled due to unrealistic expectations of attorney or client, a failure to focus on needs rather than demands, or when one or more parties need to be reminded of the potential consequences of their failure to reach an agreement.



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