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Legal Mediation News – September 2014

This is another in a series of updating articles on Legal Mediation News by News Editor, Keith Seat. See our related Newsletter Service for your clients and referral sources.

Discovery for Mediation in California Doesn’t Make Data Confidential
Applying California law, a federal court concluded that data provided in discovery prior to mediation was not confidential mediation material that was shielded from other use in the litigation.  The court based its conclusion on the facts that the raw data existed prior to the mediation, the discovery requests were made before mediation discussions began, the data was not marked “for mediation purposes only,” and reports from the data were developed by the receiving party, not the party who produced the data.  Using the data in mediation did not transform it into data protected by the mediation privilege.
Gonzales v. T-Mobile, USA, Inc., No. 13cv1029-BEN (U.S.D.C. S.D. Cal., August 14, 2014)

Initiating Litigation Isn’t Refusing Mediation If Other Party Hasn’t Sought It
A mediation provision in a real estate contract required a party who refused to mediate and then lost in litigation to pay the other party’s attorneys’ fees.  A federal appellate court, however, concluded that there must be a request for mediation before there could be a refusal; simply filing the litigation was not sufficient to prove a refusal to mediate.  Thus, since the defendant who prevailed in the litigation had not sought to mediate, the plaintiff had not refused and was not responsible for paying defendant’s attorneys’ fees. 
Thompson v. Cloud, Nos. 13-1120, 13-1121 (U.S.C.A. 1st Cir., August 20, 2014)

Court Refuses to Compel Mediation When Party Seeks Determination on Merits
A motion to compel mediation by plaintiffs in a class action case was denied by a federal court due to defendants’ assertion that they would not settle because they desired a dispositive ruling from the court.  The court noted that requiring mediation in this circumstance would increase attorneys’ fees pointlessly, but that the court would again determine whether mediation might be useful to the parties later in the case.
Darrington v. Assessment Recovery of Washington, LLC, No. C13-0286-JCC (U.S.D.C. W.D. Wash., August 5, 2014) 

Oral Agreement Reached in Mediation Is Enforceable in Pennsylvania
When the parties failed to agree on the terms of a written settlement agreement following mediation, a federal court applying Pennsylvania law enforced an oral agreement reached in mediation, without any discussion of mediation confidentiality.
Bayer v. CitiMortgage, Inc., No. 3:11-CV-02105 (U.S.D.C. M.D. Pa., August 22, 2014).

Sanctions Upheld for Failure to Mediate in Good Faith
A federal appellate court upheld sanctions against a party for bad faith and lack of preparation during a court-ordered mediation, based on a report from the mediator that the party arrived late to mediation, was unprepared, lacked full settlement authority, and generally did not act in a matter conducive to mediation.  In addition, that party filed a lawsuit before the mediation process was formally concluded. 
Spradlin v. Richard, Nos. 13-5629, 13-5630, 13-5728 (U.S.C.A. 6th Cir., July 15, 2014)

Sufficient Screen Found Between Mediator and Advocates Who Joined Firm, Despite Informality
When, some months after an unsuccessful mediation, defense counsel joined the law firm at which the mediator practiced, plaintiff sought to have defense counsel disqualified.  But a Minnesota appeals court concluded that despite a lack of formal screening procedures between the mediator and defense counsel, sufficient separation existed where no confidential information had been disclosed to the mediator in the mediation, he never shares any confidential information from mediation sessions with anyone in the firm, and he always keeps his mediation files securely stored outside the law firm.
Bradley v. Kelley, No. A13-0063 (C.A. Minn., July 21, 2014)

DirecTV Seeks Mediation Over Arbitration
DirecTV has taken a firm position that it is not interested in arbitration of a carriage dispute that continues to prevent 70% of the Los Angeles market from viewing Dodgers games, but will consider mediation involving all pay-TV operators in the market and a compromise by the Dodgers ownership.  Separately, eight U.S. Representatives sent a letter asking the Federal Communications Commission to mediate the ongoing dispute involving Time Warner Cable, which owns distribution rights to the Dodgers’ television network, SportsNet LA.  FierceCable (August 6, 2014); Los Angeles Daily News (July 27, 2014)

Detroit Bankruptcy Mediation Moves to Final Stage
Just a week before the bankruptcy judge begins a confirmation hearing to determine whether to approve Detroit’s sweeping restructuring plan, the city and its major hold-out creditors have been ordered into mediation.  The session will include bond insurers that guaranteed payment on $1.4 billion of certificates of participation on which the city is offering only pennies on the dollar.  One of the bond insurers, Syncora, accused the bankruptcy mediators of bias and “naked favoritism” in a court filing, assertions the bankruptcy judge rejected as “scandalous and defamatory,” ordering Syncora attorneys to show cause why they should not be sanctioned.
Detroit Free Press (August 12, 2014); Reuters (August 26, 2014); Detroit Free Press (August 29, 2014)

Oregon’s Medical Malpractice Mediation Program Takes Effect with Less Confidentiality than Intended
Oregon’s Early Discussion and Resolution program for mediating medical malpractice claims prior to litigation took effect on July 1, although providers remain concerned about how confidential the program will be.  The state has not been successful in persuading the federal government to keep mediated settlements from being included in the National Practitioner Data Bank.  While consumer advocacy groups were concerned that not reporting settlements would hurt public safety by helping bad doctors cover up their mistakes, proponents were seeking greater candor from medical practitioners and believed that medical care would be enhanced by requiring malpractice claims to be confidentially shared with the Oregon Patient Safety Commission, which would look for patterns of errors and help improve health care. 
The Oregonian (July 1, 2014)

Wisconsin’s Medical Mediation Panels Declining
Medical Mediation Panels were established in Wisconsin in 1986 as an arm of the state supreme court to offer the possibility of early resolution prior to medical malpractice litigation, but in recent years have resulted in few mediations and almost no resolutions.  The panels are comprised of a lawyer, a doctor and a lay person, but the process is voluntary and parties are effectively opting out.  While more than 400 claims were filed in the first full year of operation in 1987, by last year that number was down to 161.  Worse, the proportion of cases going to a panel in 2003 was just over half, and last year was down to less than a quarter.  Further, in the last two years panels have resolved only two cases.  Journal Sentinel (August 9, 2014)

Massachusetts Mediation Program for Tax Disputes Off to Good Start
The Massachusetts Department of Revenue is pleased with its new Early Mediation Program (EMP), as eight of the first eleven tax disputes have resulted in settlements.  The Department’s goal is to have one-third of all eligible disputes mediated.  The required minimum amount in dispute is $250,000, down from $1 million, and parties have four months within which to complete mediation or return to the formal appeals process.
The National Law Review (August 4, 2014)

Detailed Report on Mediation in Maryland
An overview of all 70+ court-affiliated mediation programs throughout the state of Maryland has been published in a nearly 300-page report, Alternative Dispute Resolution Landscape: An Overview of all ADR in the Maryland Court System.  The report is part of groundbreaking research on the effectiveness of ADR in the state, and finds that all of Maryland’s 23 counties have some court-connected ADR programs, but that some programs are much more widespread than others.  Research is ongoing and several additional reports in the project are scheduled in the next two years.
University of Maryland Francis King Carey School of Law (August 2014); Report

Global Mediation Centers Target Cross-Border Disputes
Increasing efforts are under way to establish global mediation centers to attract cross-border disputes, such as the center recently established in Ireland.  The quality of mediation laws and regulations in the country in which the center is located also impacts its attractiveness for cross-border disputes.  A forthcoming book, The Variegated Landscape of Mediation:  A Comparative Study of Mediation Regulation and Practices in Europe and the World, reviews mediation processes and regulations in 60 jurisdictions.
JAMS International (June 18, 2014)

Updated Model Mediation Documents Available
The Centre for Effective Dispute Resolution (CEDR) has updated its model mediation documents and rules to reflect changes in the use of mediation.  Updates include a tighter timeline for appointment of mediators and for the mediation to occur and more robust confidentiality language.  The international contract clause is now available in ten languages, with the addition of Portuguese, Japanese, Arabic and Russian.  Going forward, CEDR plans to update the documents yearly. 
Business Credit Management (July 1, 2014); CEDR Model Documents

Mediation Helps Businesses Live with Aloha
A Honolulu attorney-mediator and the Better Business Bureau have created the Hawaii Mediation Pledge to encourage mediation prior to litigation, based on the Hawaiian core values of living with Aloha and nurturing trust in relationships.  Since its launch last year, 125 businesses have signed the pledge; proponents seek 100,000 signatures by the end of next year.
HawaiiBusiness (August 2014); Hawaii Mediation Pledge

Celebrities in Mediation

  • A dispute between SBS radio executive Jesus Salas and Latin pop singer Katherine Alexander is being mediated to try to resolve sexual assault and unfair record contract claims.  BillboardBiz (July 22, 2014)
  • Balenciaga’s lawsuit for €7 million against its former creative director, Nicolas Ghesquiere, shifted to mediation at the suggestion of the tribunal on the day the court was to render its decision.  Vogue News (August 27, 2014)
  • U.S. Representative Mark Sanford and his ex-wife have been ordered into mediation to address a dispute over trust funds for their two youngest sons.  ABC News (July 14, 2014)

Keith Seat

Keith L. Seat is a full-time mediator and arbitrator who can effectively assist parties in resolving a wide range of telecommunications, antitrust and other commercial disputes. With over twenty years of legal experience as a mediator, arbitrator, litigator, advocate before executive branch agencies, and key staffer in the legislative and… MORE >

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