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Exception Found For Mediation Confidentiality

by F. Peter Phillips
November 2010

From the Business Conflict Blog of Peter Phillips.

F. Peter  Phillips

It is hard (we hope) to find exceptions to the general rule that statements made in mediation are inadmissible. However, Judge J. William Ditter of the U.S. District Court for the Eastern District of Pennsylvania has held that some party statements can be admissible — such as statements to the effect of “I intend to abuse this mediation as a way to drive up your litigation costs.”

In Bethlehem Area School District v. Zhou (E.D. Pa. July 23, 2010), plaintiff school district sought to recover its attorney fees under the fee-shifting provisions of the Individuals with Disabilities Education Act (IDEA) and a corresponding state law. The district alleged that Diana Zhou, a parent of two children in the school district, had repeatedly initiated administrative proceedings against the district for improper purposes and in bad faith.

Ms. Zhou’s kids were eligible for special education services under the IDEA, which allows parents to settle disputes with the school district through a number of procedural avenues including filing complaints, requesting due process hearings, and requesting mediation sessions.

During the period 2001 to 2008, Ms. Zhou requested 10 due process hearings for one of her sons and, during 2008-09 alone, four hearings for her other son. Twice, new hearings were requested while prior hearings were already convened but not yet concluded. She refused to participate in one of the hearings and failed to prevail in any of them.

A native speaker of Mandarin Chinese, Ms. Zhou at first communicated in English and participated in all hearings. However, beginning in June 2007, she began requesting translator services and, in 2008, requested that all documents related to a hearing be translated into Mandarin Chinese.

She demanded three mediation sessions in 2008-09 and walked out of one session. At another mediation session, she ”advised the mediator that it was her intention to drive up costs for the district so it would agree to pay for [her sons] to go to private school.”

In this action, the district sought recovery of its legal fees on the ground that Ms. Zhou had brought her complaints to harass and to increase costs of litigation, and that her conduct was arbitrary, vexatious, and in bad faith. Among the allegations in the complaint was Ms. Zhou’s statement at the mediation that she was participating in order to drive up the district’s costs.

Ms. Zhou moved to strike that portion of the complaint on grounds set forth in the IDEA, 20 U.S.C. §1415(e)(2)(G). That section provides that “discussions that occur during the mediation process shall be confidential and may not be used in evidence in any subsequent due process hearing or civil proceeding.”

The court noted the protections afforded by that provision, but also noted that the complaint did not allege that the statement was made in the course of a mediation — at least not one that was contemplated in the statute. To the contrary, held the court, “the defendant’s statements do not evidence an intent to mediate or resolve the dispute” but rather an intent to force the plaintiff district to incur further legal costs. Ms. Zhou cannot, on the one hand, abuse the mediation process and, on the other hand, seek its evidentiary protections. The motion to strike the allegation made during “mediation” was therefore denied.

In support of this finding, the court cites Trammel v. U.S., 445 U.S. 40, 49-50 (1980), holding that testimonial exclusionary and privilege rules must be strictly construed, and should be observed “only to the very limited extent that … excluding relevant evidence has a public good transcending the normally predominant principle of utilizing all rational means for ascertaining truth.”

Good outcome. But is anyone eager to litigate the question whether this statement or that statement, made in the course of mediation, should be excluded because doing so “has a public good”?

Biography


F. Peter Phillips is a commercial arbitrator and mediator with substantial experience providing consultation on the management of business disputes to companies around the globe.

A cum laude graduate of Dartmouth College and a magna cum laude graduate of New York Law School, Mr. Phillips served for nearly ten years as Senior Vice President of the International Institute for Conflict Prevention and Resolution (CPR Institute). During that time, he earned a reputation as an author, teacher, industry liaison, and systems designer for the avoidance, management and resolution of complex and sophisticated business conflicts.

In 2008, Mr. Phillips formed Business Conflict Management LLC (BCM) in order to offer his direct services as a neutral and a consultant. Through BCM, Mr. Phillips also continues his career as a highly sought-after public speaker, facilitator and instructor.



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Website: www.BusinessConflictManagement.com

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