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A federal magistrate imposed attorneys’ fees and costs on plaintiff and her counsel for failing to provide a written demand and other information in the format required prior to a settlement conference with the magistrate. During a 3-1/2 hour settlement conference, plaintiff refused to budge from the $150,000 demand she had made months earlier. The magistrate refused to find that the negotiations were in bad faith, but did conclude that if defendant had known in advance that plaintiff’s position was firm, the voluntary settlement conference might have been cancelled. Relying on Rule 16(f)(1)(C) rather than three other bases, the magistrate awarded the attorneys’ fees and travel costs of defendant’s counsel, but not the lost time of the corporate representative, and then reduced that amount because defendant could have been proactive in contacting plaintiff to determine her position. The magistrate refused to include the $5,400 defendant spent preparing the sanctions motion, resulting in total sanctions of $3,300.
Snydman v. Amper, Politziner & Mattia, LLP, No. 10-1344 (U.S. E.D. Pa., July 15, 2011)
Continuing its strict interpretation of California’s broad mediation confidentiality statute, the California Supreme Court rejected the appellate court’s creation of a judicial exception, and prevented a party from using his private communications with his attorneys before and during a mediation in a later action for legal malpractice. The alleged malpractice involved claims that the party’s counsel had conflicts of interest and coerced him to settle for too little. Although private conversations during the mediation between the party and his attorneys did not involve the mediator or other party (or reveal anything said or done in mediation discussions with the mediator or other party), the Court relied on the plain language of the statue to conclude they were confidential nonetheless and that any exception must come from the legislature. The confidentiality statute only applies to civil actions, however, so would not protect an attorney from use of mediation-related oral communications in a criminal prosecution for fraud.
Cassel v. Superior Court, No. S178914 (Cal., January 13, 2011).
A federal appellate court has accepted an immediate appeal on a discovery ruling by the trial court that there is a “federal mediation privilege” under which documents from mediation proceedings are privileged, but documents from arbitration proceedings are discoverable.
Kimberly-Clark Worldwide, Inc. v. First Quality Baby Products, No. 957 (Fed. Cir., January 10, 2011)
The U.S. Court of Appeals for the Eleventh Circuit upheld an award of attorneys’ fees based in part on the fact that defendants did not offer to settle, despite plaintiff’s objection that such information should not have been disclosed from the mediation between the parties. However, the Circuit Court held that the applicable mediation confidentiality rules (M.D. Fla. L. R. 9.07(b)) only prevent statements made by a mediation participant from being used against the interest of that participant. In this case, the court did not rely on any statement of plaintiff during the mediation.
Angiolillo v. Collier County, No. 10-10895 (11th Cir., August 25, 2010)
The American Bar Association’s Standing Committee on Mediator Ethical Guidance issued an opinion on the level of care mediators must take when unrepresented parties request them to draft settlement agreements. While the specific context of the opinion is divorce mediation, much of the analysis would be similar in other contexts, since the Committee construed the general Model Standards of Conduct for Mediators rather than the Model Standards of Practice for Family and Divorce Mediation. Among other things, the opinion discusses the mediator acting as scrivener, moving beyond that role by suggesting provisions, providing legal information or offering actual legal advice.
A federal trial court in South Carolina sanctioned defendants for not having a corporate representative present at mediation, as required by local rule, and for having an insurance representative only participate by telephone without permission of the court. The court awarded full travel expenses, attorneys’ fees and mediation fees, as well as $2,000 of the $7,500 asserted as lost income by plaintiff for attending the unsuccessful mediation.
Barnthouse v. Wild Dunes Resort, LLC, No. 2:08-CV-2546 (D.S.C., August 5, 2010) (Subscription Required)
The U.S. Court of Appeals for the Ninth Circuit affirmed the Oregon district court’s grant of summary judgment to a lawyer against claims by his clients that he had committed malpractice by advising them against settling a case in mediation that they subsequently lost in court, because the evidence against the lawyer was inadmissible due to Oregon’s mediation confidentiality statute. The appellate court concluded that there is no confidentiality exception for clients to challenge their attorney, and without the confidential mediation communications there was no evidence of legal malpractice.
Fehr v. Kennedy, No. 09-35768 (9th Cir., July 16, 2010)
