From the Disputing Blog of Karl Bayer, Victoria VanBuren, and Holly Hayes.
The Texas ADR Act, provides for very broad confidentiality in mediation procedures. Section 154.073 states in relevant portion that:
(a) Except as provided by Subsections (c), (d), (e), and (f), a communication relating to the subject matter of any civil or criminal dispute made by a participant in an alternative dispute resolution procedure, whether before or after the institution of formal judicial proceedings, is confidential, is not subject to disclosure, and may not be used as evidence against the participant in any judicial or administrative proceeding.
(b) Any record made at an alternative dispute resolution procedure is confidential, and the participants or the third party facilitating the procedure may not be required to testify in any proceedings relating to or arising out of the matter in dispute or be subject to process requiring disclosure of confidential information or data relating to or arising out of the matter in dispute.
(c) An oral communication or written material used in or made a part of an alternative dispute resolution procedure is admissible or discoverable if it is admissible or discoverable independent of the procedure.
(d) A final written agreement to which a governmental body, as defined by Section 552.003, Government Code, is a signatory that is reached as a result of a dispute resolution procedure conducted under this chapter is subject to or excepted from required disclosure in accordance with Chapter 552, Government Code.
(e) If this section conflicts with other legal requirements for disclosure of communications, records, or materials, the issue of confidentiality may be presented to the court having jurisdiction of the proceedings to determine, in camera, whether the facts, circumstances, and context of the communications or materials sought to be disclosed warrant a protective order of the court or whether the communications or materials are subject to disclosure.
Thus, the ADR Act provides for a great deal of confidentiality except for a few excepted occasions. The broad scope is further reinforced in another provision of the Act, wherein it is declared, “Unless expressly authorized by the disclosing party, the impartial third party may not disclose to either party information given in confidence by the other and shall at all times maintain confidentiality with respect to communications relating to the subject matter of the dispute,” and, “Unless the parties agree otherwise, all matters, including the conduct and demeanor of the parties and their counsel during the settlement process, are confidential and may never be disclosed to anyone, including the appointing court.”
Given the broad nature of these provisions, a problem that arises is a lack of uniformity or certainty in their interpretation. Although the Texas confidentiality rules are not perfect, Texas has for years taken a stance against adopting the Uniform Mediation Act (UMA), which has been adopted or at least introduced or addressed in nearly half of the United States. The UMA takes quite the opposite approach in terms of confidentiality; while the Texas ADR Act begins with a presumption of confidentiality until a valid exception is raised, the UMA Section 8 says, “Unless subject to the [insert statutory references to open meetings act and open records act], mediation communications are confidential to the extent agreed by the parties or provided by other law or rule of this State.”
Of course, either act has its positive notes and drawbacks. One of the main purposes for confidentiality of mediation proceedings is that those participating in the mediation trust both the mediator and in the process itself, thereby promoting efficacy. With a more limited stance on confidentiality, the UMA may cause many to harbor more doubt in relation to mediation, thereby acting as a detriment to the underlying cause. On the other hand, the framers of the UMA have recognized the value uniformity across states could have on mediation in America, which would ease doubts in mediation from a different, horizontal choice-of-law type of angle. The problem is that the numerous exceptions and seemingly complex structure of the UMA do not make it attractive in comparison to the Texas ADR Act.
Even the most recent Texas cases have shown at least a consistency within the state of Texas in following the general outline of the ADR Act provisions. In 2010, an order compelling discovery and attorney testimony were said to have violated the confidentiality requirements of the act. See In re Empire Pipeline Corp., 323 S.W.3d 308, 315 (Tex. App. — Dallas 2010, no pet.). Following a settlement agreement reached in mediation between H. Glenn Gunter and the Empire Pipeline Corporation over which there were attempts to rescind or invoke from the respective parties, Harris, attorney for Empire Pipeline, was informed that he would be required to produce various discovery documents. The court determined, “[A]ll such discovery is barred by sections 154.073(a) and 154.073(b) of the civil practice and remedies code…[and] the trial court abused its discretion by ordering the testimony and production of documents at issue.” At the very least, then, recent jurisprudence reveals courts in an uncontroversial manner adhering to the Texas ADR Act.
Although the limited text concerning exceptions to the broad rule of confidentiality within the ADA Act, courts have made the right moves in interpreting the possibly enigmatic provisions. Perhaps it makes the most logical sense to consider the portions of §154.073 in order. In subsection (a), “communication relating to the subject matter of” mediation is protected as confidential. (emphasis added) So the question arising from the language is whether unrelated communication during mediation is also confidential and how this would gel with subsection (b)’s assurance of a confidential record at mediation.
Taking these two provisions together, a Texas court has found no confidentiality when the material sought did not relate to the substantive issues of the mediation. See In re Daley, 29 S.W.3d 915, 918 (Tex. App. — Beaumont 2000, no pet.). In a case stemming from an automobile accident, the court required an employee of an insurance company holding the policy of one of the accident’s victims to attend mediation.The lower court ordered that the deposition of this employee should be limited to “the sole issue of whether Paul Daley left the mediation session in this case prior to its conclusion, and whether he did so with or without the mediator’s permission.” Daley argued that he was protected under the confidentiality guaranteed in the Texas ADR Act, but the court ruled, “Here, the matter in contention concerns only the procedural issue of attendance, not the subject matter of the dispute being mediated. Therefore, we hold the trial court’s order is not in violation of the Alternate Dispute Resolution statute.”
Courts have also done some work in clarifying the language of Section 154.073(c). In a dispute concerning a family business, defendants argued that, because the plaintiff brought suit concerning an agreement forged through mediation, the mediator should have to testify pursuant to that provision of the Texas ADR Act. See Smith v. Smith, 154 F.R.D. 661, 669 (N.D. Tex. 1994). The court succinctly dismissed the defendant’s argument by explaining, “§ 154.073(c) provides that oral communications and written materials that are otherwise admissible or discoverable are not made inadmissible or non-discoverable solely because they have been uttered or disseminated in an alternative dispute resolution proceeding. To interpret § 154.073(c) as do defendants would unjustifiably create an exception to the confidentiality proviso of § 154.073(b) that is not expressly set out in the ADR Act and that should not be impliedly recognized in the face of the Act’s pellucid confidentiality requirements.”
Also excepted from confidentiality under subsection (c) is an example of videotaping for the purposes of mediation. See In re Learjet Inc., 59 S.W.3d 842, 845 (Tex. App. – Texarkana 2001, no pet.). Where Learjet was sued by Raytheon in a breach of contract claim, Learjet videotaped the statements of several of its employees to be played during mediation, but the mediation failed. Raytheon requested that the tapes be played during trial, but Learjet insisted that the tapes were not discoverable under confidentiality and were subject to the attorney-client privilege. Combining the language of § 154.073(c) allowing for a confidentiality exception in this instance as well as its finding that the attorney-client privilege was not applicable, the court concluded that “the videotapes constitute discoverable material, that the mediation activities did not provide a blanket protection for all such material, and that this particular material is not protected by that privilege.”
Perhaps the most cited case in the mediation confidentiality jurisprudence of Texas resulted from, in part, an interpretation of subsection (e). See Avary v. Bank of Am., N.A., 72 S.W.3d 779, 786 (Tex. App. — Dallas 2002, pet. denied). Avary involved a wrongful death action and court-ordered mediation subsequent. The court, being careful to note that the circumstances of the case were very limited, concluded, “[W]here a claim is based upon a new and independent tort committed in the course of the mediation proceedings, and that tort encompasses a duty to disclose, section 154.073 does not bar discovery of the claim where the trial judge finds in light of the “facts, circumstances, and context,” disclosure is warranted.” Because there was a new tort being forged here concerning a fiduciary relationship that required disclosure, there was a collision between the disclosure requirement and the ADR Act so that subsection (e) came into play.
Thus, the cases do show courts adhering to the intention of the Texas ADR Act in that there is a general presumption of confidentiality of communication from mediation and only a few exceptions exist for this confidentiality, though they will be respected in the rare circumstances in which they arise. Although the choice would remain to switch to the UMA in the interest of state-to-state uniformity in mediation confidentiality, the cases show that Texas does have a workable system that promotes confidentiality and trust in the mediation process from lawyers and non-lawyer participants alike.
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