With the advent of the COVID-19 pandemic and lockdown orders, Zoom quickly became the platform du jour for mediations – allowing people to participate “live” from across state lines, borders, and continents. Against that backdrop, questions about which jurisdiction’s confidentiality laws would apply to any given mediation were called into question. The ultimate conclusion? In America, there is no absolute guarantee of confidentiality for mediation communications. Why not? Because there is no one national mediation confidentiality law in America.
Instead, federal rules of evidence, local rules of court, state statutes, and the Uniform Mediation Act (UMA) provide various protections for mediation confidentiality. Some states—like California—have strong mediation confidentiality statutes, while others not so strong. Accordingly, the confidentiality issue comes down to choice-of-law rules being applied by courts. What a court in one jurisdiction might protect as a confidential mediation communication, another may not.
Examples of this have been around for years, traditionally involving subpoenas and discovery requests for documents from a mediation held in a different action and possibly also in a different state, with the second court applying its own state’s law to determine the question of confidentiality of mediation communications in the prior matter. This is true even where there may have been a signed confidentiality agreement. [See, e.g., Larson v. Larson, 687 Fed. App’x 695 (10th Cir. 2017); People v. PwC, 150 A.D.3d 578 (N.Y. App. Div. 2017); and Hauzinger v. Hauzinger, 43 A.D.3d 1289 (N.Y. App. Div. 2007) aff’d, 10 N.Y.3d 923 (2008).]
Now, nearly two years into the great migration to online mediations, have there been any legal developments that might change that answer from the 2020 discussions? No. Are there any reported decisions on this issue involving online mediations? Also, no.
In what will be an interesting decision to watch for defense counsel and the insurance industry, the Florida Supreme Court has taken up the case of Mintz Truppman, P.A. v. Cozen O’Connor, PLC and Lexington Insurance Company (Fla. Apr. 26, 2021). There are a number of legal issues, but the core issue is whether the defense violated Florida’s Mediation Confidentiality and Privilege Act by attaching a pre-mediation settlement demand as an exhibit to its response to an attorney fee motion filed in the underlying federal court coverage case. That action was a first-party action against Lexington under a property insurance policy, the loss being water damage due to a broken pipe at the insured’s home. It was stipulated by the parties that the pre-mediation demand was a mediation communication as defined in the Act. The Florida Supreme Court case is in its final briefing stages and oral argument was requested.
In a New York breach-of-contract case, General Electric Co. v. APR Energy PLC, et. al., GE sought to compel the production of documents from a malpractice action APR had filed against Baker McKenzie in Florida and mediated in Illinois (a UMA state) with a signed confidentiality agreement and subject to statutory mediation privilege. APR objected, asserting the mediation privilege, attorney-client privilege, and attorney work-product protection. The court rejected the claim of mediation confidentiality, stating that “no mediation privilege exists under New York law, which governs this action and the instant privilege dispute.” It sustained objections based on the attorney-client privilege and work-product protection.
In Accent Delight v. Sotheby (S.D.N.Y., Dec. 8, 2020), the end result differed when Accent sought mediation documents from a prior action where Sotheby’s had been a party. That mediation had been held in New York, and the parties and mediator had signed an engagement letter providing that the mediation “was a settlement negotiation deemed private and confidential.” It was not a court-ordered mediation. In upholding mediation confidentiality for the documents sought, the court held that a three-part “heightened standard test” adopted by In re Teligent [640 F.3d 53 (2d Cir. 2911)]—a special need for the confidential material; resulting unfairness from a lack of discovery; and that the need for the evidence outweighs the interest in maintaining confidentiality—should apply to private mediations where there was an explicit promise of confidentiality, not just to court mediations.
In 2021, Georgia joined Hawaii, Idaho, South Dakota, Vermont, Utah, Ohio, Washington, New Jersey, Iowa, Illinois, Nebraska, and the District of Columbia in adopting the UMA, which provides a privilege for mediation communications intended to be confidential, subject to various exceptions.
Finally, if you want to know how to upset a federal judge, see John Doe MC-1 v. The University of Michigan, from the U.S. District Court for the Eastern District of Michigan. Judge Victoria A. Roberts issued a sternly worded Order on June 29, 2021, after the court “…learned of several articles which reference information from confidential sources” about ongoing settlement discussions. She reprimanded counsel, reminding that Local Rule 16 provides confidentiality for ADR proceedings and, in an eight-page order, detailed consequences for any future disclosure by counsel or parties of “…confidential information to anyone outside the mediation process.”
So where does that leave us in 2022? Simply stated, no one can promise that any mediation communication will be completely confidential. Although there do not yet appear to be any confidentiality decisions involving online mediations, they are as sure to come as the sun will set in the West.
Counsel should consider the wording of proposed confidentiality agreements and may need to draft an appropriate agreement. Counsel should also be mindful of, and strategic about, information shared at mediation. Mediators need to reconsider providing generic mediation agreements to counsel for a myriad of reasons. Claims professionals, general counsel, and parties need to be mindful about what is shared and said in mediations. Insurer counsel in first-party insurance disputes and counsel in commercial litigation would be well served to consider having the parties sign a confidentiality agreement about settlement discussions in general, akin to California’s “white waiver,” and to not merely rely on mediation confidentiality to protect the communications.
Again, there can be no guarantees that what is said and shared during a mediation will remain completely confidential under circumstances such as these examples, and participants in mediations should not be led to believe that there are.