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Wilcox v. Apraio – the 9th Circuit Sidesteps Mediation Confidentiality Questions

ADR Prof Blog by Andrea Schneider, Michael Moffitt, Sarah Cole,Art Hinshaw, Jill Gross and Cynthia Alkon.

On Monday, the 9th Circuit handed down its decision in the Wilcox v. Apraio case, a case arising out of the Maricopa County wars – former County Attorney and now gubernatorial candidate Andrew Thomas, with the help of Sheriff Joe Arpaio, indicted several sitting Superior Court judges and several members of the County’s Board of Supervisors, over funds slated for a new county courthouse . The political drama here has been titillating, to say the least, and resulted in Thomas’ disbarment (opinion here) for using the prosecutor’s office to punish his political enemies. For more detailed background about the ugly shenanigans, here are two stories from the ABA journal (here and here).

Wilcox, a member of the Board of Supervisors, along with virtually everyone who was indicted, sued the County under 42 USC §1983 and several other state claims (malicious prosecution, infliction of emotional distress, etc.). Recognizing the potential for conflict of interest charges in these cases, the Board of Supervisors adopted a resolution giving the County Manager the authority to “enter into binding arbitration/mediation agreements” and to “enter into contracts as needed” to settle the various lawsuits.

Like all of the other cases arising out of the courthouse wars, Wilcox’s claim against the County went to mediation. She alleged that during mediation she reached a settlement agreement with the County through the County Manager for $975,000 only to have the County renounce the agreement two weeks later. She moved to enforce the agreement in District Court, and after a hearing, the Court granted the motion after a hearing in which the county supervisor testified that he verbally authorized the mediator to make a settlement offer over email. The Court found that the emails between plaintiffs counsel and the mediator created the settlement agreement because the mediator had the authority to sign the deal for the County. Furthermore, the Court opined that the outcome would be the same applying either federal or Arizona mediation privilege law. On appeal, the County argued that the District Court’s decision should have been based on the Arizona mediation privilege statute, ARS §12-2238, and that the District Court misapplied the statute and relied on evidence that should have been privileged.

Although the briefing focused mostly on the Arizona mediation privilege, the Ninth Circuit focused on whether state or federal law governed the admissibility of the evidence supporting the District Court’s ruling. Noting that Fed. R. Evid. 501 states that “in a civil case, state law governs privilege regarding a claim or defense for which state law supplies the rule of decision,” the Court pointed out that state contract law governed the question of whether there was an enforceable settlement agreement.

However, the Court focused not on the single claim of enforcing the settlement agreement, but instead looked to the claims in Wilcox’s complaint, which contained both federal and state claims. Since the evidence before the District Court concerned the settlement of all of the federal and state claims and could not be parsed out among the various claims, the Ninth Circuit found that precedent required federal privilege law to govern the question. Interestingly it did not say what federal privilege, if any, applied (there was no local court rule for mediation confidentiality). It simply concluded that the County had waived any argument that the contested evidence should be privileged under federal law. Why? Because the County assumed Arizona privilege law applied and failed to argue that a federal common law mediation privilege might apply. See Folb v. Motion Picture Indust. Pension and Health Plans, 16 F.Supp.2d 1164 (C.D. Cal. 1998) (concluding that a federal mediation common law privilege exists). Thus, any argument that the disputed evidence should have been privileged under federal law was waived, and the Ninth Circuit affirmed the District Court’s decision to grant Wilcox’s motion to enforce the settlement agreement.

What bearing does this case have any bearing on the Arizona mediation privilege statute? The Ninth Circuit addressed the issue in a footnote, and I will answer that question in a follow-up post.

                        author

Art Hinshaw

Art Hinshaw’s research and teaching interests lie in the field of alternative dispute resolution (ADR), primarily mediation and negotiation. His research bridges ADR theory and practice, and his teaching responsibilities include the Lodestar Mediation Clinic and Negotiation among other ADR courses. Professor Hinshaw is active in the ADR community having… MORE >

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