BEHIND CLOSED DOORS:
The Supreme Court Protects Mediation Confidentiality in Foxgate.
Kevin Thomas McIvers, Esq.
in edited form in the Los Angeles Daily Journal - July 2001.)
veil of mediation confidentiality which is mandated by statute be subject to a
judicially created exception when bad faith tactics are allegedly employed in
mediation? Does a trial judge have the inherent power to determine when
mediation confidentiality applies and when it does not? On July 9, 2001, the
California Supreme Court issued an opinion which answered these important
questions, preserving the confidentiality of the mediation process. Foxgate
Homeowners Association, Inc., v. Bramalea California, Inc. (July 9, 2001)
Facts of Foxgate:
arose from a court-ordered construction defect mediation, in which the judge
appointed the same person to serve as mediator and special master (discovery
referee). A case management order (CMO) permitted the neutral to report to the
court as a special master, but confirmed the confidentiality protections of
the California Mediation Act (Evidence Code §1115 - 1128) for the mediation.
The CMO also empowered the neutral to schedule mediation sessions, including
expert meetings. When the neutral perceived that defense counsel was
subverting the mediation process by not producing experts when directed to do
so and by other conduct, he wrote a report to the trial judge which was highly
critical of defense counsel, and which contained references to mediation
communications and conduct. That report, and a motion for sanctions by
plaintiff's counsel which also disclosed confidential mediation communication,
were considered by the judge in ordering sanctions against the defense of over
actions of the trial judge were troubling for several reasons. Confidentiality
is the cornerstone of mediation. It allows for candor and creativity, which
maximizes the potential for settlement. Without a firm assurance of
confidentiality, the process is undermined. This principle is recognized in
the statute. Evidence Code §1121 prohibits a mediator from reporting
to the court about mediation, or the court from considering such a report. Evidence
Code §1119 precludes disclosure of any mediation communication. Evidence
Code § 703.5 declares that a mediator is incompetent to testify about a
mediation. The CMO in Foxgate confirmed that the Evidence Code confidentiality
protections would apply. The facts of Foxgate did not fit within any
previously recognized exception to mediation confidentiality. See, Olam v.
Congress Mortgage Company (October 1999) 68 F. Supp. 2d 1110 (mediator
compelled to testify regarding consent to a mediated settlement agreement);
and, Rinaker v. Superior Court (1998) 62 Cal. App. 4th 155 (right to
confront and cross-examine witnesses in juvenile hearing takes precedence over
of Appeal acknowledged all of these points, but fashioned a new exception to
statutory mediation confidentiality, which we will call "The Sanctions
Exception". It reasoned that the legislature could not have intended that
confidentiality shield parties from the consequences of violating a court
order, and ruled that the judge was correct to consider those portions of the
mediator's report which constituted a "purely neutral account" of
mediation conduct and communication, and references in the plaintiff's motion
to mediation communication. To rule otherwise, the Court reasoned, would
frustrate the legislative purpose and lead to an absurd result.
of Appeal opened a pandora's box. The problem was this: To consider the merits
of such a motion, a judge must breach confidentiality and hear about what
occurred behind the closed doors of a mediation. To file or oppose such a
motion, counsel must breach confidentiality. Even if the motion is denied, the
damage is done. Confidentiality is reduced to a hollow ideal. Counsel would
have to approach every mediation with the knowledge that the judge might hear
about what was said or done. This Sanctions Exception would have had a very
chilling impact on mediation in California.
The Supreme Court Analysis:
California Supreme Court in Foxgate took a surprisingly strong stand on
behalf of mediation confidentiality. In a 6-0 decision, it concluded that
there were "no exceptions" to the confidentiality of mediation
communications under Evidence Code §1119, or to the statutory limits
on reporting by a mediator under Evidence Code § 1121. The
Court rejected the argument that judicial construction of the statute was
needed to avoid frustrating the legislative intent, or to avoid an absurd
result. The clear language of the statute precludes mediator reporting, and
requires strict confidentiality for all mediation communication.
principle concern of the Court of Appeal, that litigants might be able to
ignore court orders and subvert the mediation process, was deftly handled by
the Supreme Court. An important distinction was made between disclosing
mediation "conduct" and "mediation communication." The
court noted that the statute does not preclude a party from reporting
to the trial court about conduct at a mediation (the mediator may not
do so). Footnote 14 specifically states that the mediation statute is not
violated by counsel's declaration revealing that opposing experts were not
produced, as required by court order. In fact, the opinion concludes with an
invitation to the trial court in Foxgate to consider plaintiff's
evidence of conduct (not communication), if the sanctions motion is pursued.
"conduct" distinction should effectively address the most common
complaint about mediation: that the opposition has not brought the real
decision-maker to the table. Many local rules require that decision-makers be
personally present for mediation. Counsel who appear without the plaintiff, or
a real defense decision-maker, will risk sanctions based on a report of this
"conduct" to the court.
the "no exception" language of the opinion, the Supreme Court
distinguished the rulings in Olam and Rinacker, supra, and
allowed their exceptions to stand. In Olam, the parties partially or
completely waived confidentiality to allow inquiry into a
party's voluntary consent in signing a settlement agreement. In Rinaker,
the constitutional due process right to cross-examine witnesses at a juvenile
hearing was deemed more worthy of protection than the policy favoring
confidentiality in mediation. In each case, the trial court conducted an in
camera review of the evidence, and then engaged in a weighing of the
competing arguments and policies.
The Lessons of Foxgate:
California courts will give much greater weight to arguments in favor of
mediation confidentiality, and will resist the temptation to fashion new
judicial exceptions. However, under Olam and Rinaker, trial
courts may still engage in a balancing analysis that could overcome mediation
practical issues should counsel be aware of after Foxgate?
conduct may be reported by counsel, but communication
may not. Make sure your opponent agrees in advance to the absence of
clients or insurance representatives. Confirm in writing.
not bring a sanction motion without strong conduct evidence,
which requires no communication evidence to understand the context.
Case Management Orders carefully. Old form CMOs
may contain language which waives confidentiality protections.
Never hire the same neutral
to be Special Master and Mediator. The role of mediator is inconsistent
with a decision-making role.
remember that the Mediation Act does not preclude disclosure of mediation
communication in a subsequent criminal proceeding. If a criminal investigation
is underway, you may be wise to limit client communication in any related
McIvers is a full-time mediator since 1996, serving California and the Western
United States. He is a Fellow and
Vice President of the International
Academy of Mediators, and a Diplomate of the Academy
of Distinguished Neutrals.