Once again, the Ninth Circuit Court of Appeals has addressed the issue of the federal common law mediation confidentiality privilege without addressing it. It avoids the issue by saying that while the federal common law mediation confidentiality privilege applies, the defendant waived it and so it is not necessary to address this issue substantively.

In Wilcox et al v. Arpaio et al., the Ninth Circuit Court of Appeals (Case No. 12-16418, issued on June 2, 2014) affirmed a district court order enforcing a settlement agreement reached during mediation.  (Wilcox12-16418.pdf )

Plaintiff Mary Wilcox, a Maricopa County Supervisor, along with her husband Earl Wilcox, sued the County and certain of its officials for violation of their civil rights under 42 U.S.C. å¤1983, and supplemental state law claims, alleging that the defendant officials “…wrongfully investigated, prosecuted, and harassed Plaintiffs in retaliation for Plaintiffs’ opposition to the actions of the County Sheriff, County Attorney, and their deputies.” (Id. at 3.)

Plaintiffs were one of many who sued. Consequently, the County set up an alternative dispute resolution process, appointing the County Manager to take all actions necessary to adjudicate the claims. To this end, the County Manager appointed a mediator who settled multiple claims. (Id. at 4.)

In certain e-mails confirming the settlements, the mediator added a provision that “The settlement is subject to any further approvals deemed necessary by the parties.” (Id. at 5). This provision was included to comply with a particular Arizona statute.

Plaintiffs settled with the defendants for $975,000. The mediator sent a confirming e mail but did not include the above provision. The Plaintiffs filed a motion to enforce the settlement. The Federal district court held an evidentiary hearing, ordering both the County Manager and mediator to appear. While the County Manger appeared, the mediator did not. The County Manager testified that even though he did not add the provision in question, he believed he had the authority to settle, and did not need the further approval of any one member of the Board of Supervisors as required by the referenced Arizona statute. The County agreed with the mediator’s position, taking the position that the provision was not applicable.

Based on this testimony, the district court found that the County Manager had the authority to settle and ordered enforcement of the settlement.

The County appealed contending that the testimony of the County Manger and the e mails confirming the settlements were privileged under Arizona’s mediation privilege and thus not admissible at the hearing to enforce the settlement.

Both parties agreed that Arizona state law regarding contracts governed whether an enforceable agreement was reached. (Id. at 7.) But, the County argued that state privilege law regarding mediation confidentiality applied here, while plaintiffs contended that federal privilege law governed since the claims were under both federal and state law.

The appellate court, noting that “…

[u]under Federal Rule of Evidence 501, federal common law generally governs claims of privilege”, further pointed out that this is a civil action; thus, “…state law governs privilege regarding a claim or defense for which state law supplies the rule of decision. ‘(Fed. R. Evid. 501 (emphasis added))'”. (Id. at 8.) But, the court then added, “[w]here, as here, the same evidence relates to both federal and state law claims, ‘we are not bound by Arizona law’ on privilege (citation omitted.).Rather, federal privilege law governs…. (Citations omitted.)” (Id. at 8- 9.) In short, the federal common law relating to mediation confidentiality governs.

But, in the very next sentence, the appellate court side steps having to delve into the issue, by concluding that the appellant/defendant County waived “… any argument that the contested evidence should be privileged under federal law…” (Id.) because both in the district court and in its opening brief on appeal, the County argued that Arizona state law on mediation privilege applied, thereby waiving any application of the federal mediation privilege. The court concluded, it “…need not determine whether a mediation privilege should be recognized under federal common law and, if so, the scope of such privilege. (Citation omitted.)” (Id. at 10.)

So… once again, the federal common law on mediation privilege remains vague and unexplained. Will this nebulous concept ever be explained by its creators?

… Just something to think about.


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