ADR Act of 1998: Two Decades of Noncompliance, and an Artful Dodge in the Ninth Circuit

By:  Donald L. Swanson

The Alternative Dispute Resolution Act of 1998 (“ADR Act”) is celebrating its twenty-year anniversary this year.  It’s impact has been highly effective — but with some less-than-positive results.  This article is about the latter.

The ADR Act provides in 28 U.S.C.  § 652(d):

“Until such time as rules are adopted under chapter 131 of this title providing for the confidentiality of alternative dispute resolution processes . . . , each district court shall, by local rule . . . , provide for the confidentiality of [such] processes.”

A Two-Phase Process of Local and Federal Rules

This § 652(d) establishes a two-phase process for creating rules on confidentiality of mediation and other ADR processes:

Federal Rule:  One phase is the adoption of a federal rule on ADR confidentiality.  Such adoption is contemplated by these words: “Until such time as rules are adopted under chapter 131 of this title.”

[Editorial Note: The “under chapter 131 of this title” phrase is an explicit reference to, collectively, the Federal Rules of Civil Procedure, the Federal Rules of Evidence and the Federal Rules of Bankruptcy Procedure–see this link.]

Local Rules:  The second phase is a directive that each district court (including its bankruptcy court unit) “shall” create local rules on confidentiality for the interim period (i.e., until the Federal confidentiality rule is adopted).

Noncompliance and an Artful Dodge

Two Decades of Noncompliance

Although the ADR Act is two decades old this year, there remains one glaring failure to comply with the ADR Act:

–i.e., no Federal rule exists on ADR confidentiality.

One effect of such two-decades of noncompliance is an artful dodge in the Ninth Circuit.

An Artful Dodge in the Ninth Circuit

For more than a decade, the U.S. Ninth Circuit Court of Appeals has been doing an artful dodge of mediation confidentiality requirements under the ADR Act.  Under this dodge, mediation information is often admitted into evidence, despite local court rules to the contrary.

This dodge is significant because the Ninth Circuit covers a huge swath of western United States, including the states of Alaska, Arizona, California, Hawaii, Idaho, Montana, Oregon, Utah and Washington.

–The Artful Dodge: Summary and Details

Here’s a summary of how the Ninth Circuit’s artful dodge works:

(i) it doesn’t enforce local rules on mediation confidentiality;

(ii) it says a mediation privilege probably cannot arise from local court rules;

(iii) it refuses to decide whether a Federal mediation privilege exists at all or, if it does exist, what its terms might be; yet

(iv) it insists that the Federal mediation privilege controls and, therefore, refuses to allow state confidentiality laws to apply.

And here are the details.

(i)  The dodge starts with the unenforced proposition that a local rule on mediation confidentiality “can impose a duty of confidentiality” [Footnote 1].

The Ninth Circuit has yet to enforce any such local rule in the cases cited below.  In fact, the Ninth Circuit had an opportunity to do so in its Facebook case but, instead, reversed the District Court’s application of its own local confidentiality rule because “the parties used a private mediator rather than a court-appointed one” so that “the mediation was thus ‘not subject to the ADR Local Rules'” [Footnote 2].

(ii)  The dodge then suggests that a Federal mediation privilege probably cannot arise from a local confidentiality rule:

“privileges are created by federal common law”; so, “It’s doubtful that a district court can augment the list of privileges by local rule” [Footnote 3].

(iii)  Meanwhile, the dodge continues with the Ninth Circuit refusing to decide whether a Federal mediation privilege exists at all . . . or its scope:

Although “federal privilege law governs” admissibility of mediation information, the Ninth Circuit insists that it “need not determine” whether a mediation privilege “should be recognized under federal common law” or what “the scope of such a privilege” might be [Footnote 4].

(iv)  Finally, the dodge says that state confidentiality laws do not apply and that the Federal mediation privilege controls.

State laws on mediation confidentiality in California, for example, are strict and uncompromising.  So, the Ninth Circuit refuses to apply those laws.

–The Artful Dodge at Work

The Ninth Circuit seems fond of ignoring local confidentiality rules while insisting that federal, not state, privileges govern admissibility of mediation information.  And, it makes its evidence decisions, regarding mediation information, on grounds other than a local court rule or a mediation privilege.

Such decisions are often in favor of admitting mediation information into evidence.  For example:

–2007 Babasa case—it admitted mediation information based on a finding of privilege waiver [Footnote 5];

–2011 Facebook case—it excluded mediation information, but not on the basis of any court rule or privilege; instead, it based its evidence exclusion on the terms of a confidentiality agreement between the parties [Footnote 1];

–2014 Wilcox case—it admitted mediation information based on a finding of privilege waiver [Footnote 4];

–2016 Milhouse case—it admitted mediation information based on a finding of privilege waiver [Footnote 6]; and

–2016 TFT-LCD case—it reversed and remanded a District Court ruling that excluded mediation information under a State mediation privilege, ruling that “the federal law of privilege applies” [Footnote 7].  Yet, it still has not resolved whether a federal mediation privilege exists at all . . . or the scope of any such privilege.

–The Artful Dodge Effect

It appears that the Ninth Circuit:

–is bent on allowing the admission of mediation information into evidence in many circumstances; and

–is dodging mediation confidentiality requirements, to the contrary, whenever it can.

The Ninth Circuit’s continuing insistence on applying a Federal mediation privilege (which it has yet to recognize or define) appears to be an artful dodge to effectuate an inclination toward admitting mediation information into evidence.


Authorities responsible for creating and amending Federal rules of civil procedure, evidence and bankruptcy procedure have failed or refused, over the past two decades, to comply with the ADR Act’s presumption that a Federal rule will be created on mediation confidentiality.

The result of such a failure is the artful dodge by the Ninth Circuit noted above.

Footnote 1: The Facebook, Inc. v. Pacific Northwest Software, Inc., 640 F.3d 1034, 1040 (9th Cir.2011).

Footnote 2: Id., 640 F.3d at 1041.

Footnote 3: Id.

Footnote 4: Wilcox v. Arpaio, 753 F.3d 872, 876-77 (9th Cir. 2014); see also, Babasa v. Lenscrafters, Inc., 498 F.3d 972, fn. 1 (9th Cir. 2007).

Footnote 5: Babasa v. Lenscrafters, Inc., 498 F.3d 972 (9th Cir. 2007).

Footnote 6: Milhouse v. Travelers Commercial Insurance Co., Case No. 13-56959 & 13-5709 (9th Cir., Feb. 23, 2016, Unpublished).

Footnote 7: In re TFT-LCD (Flat Panel) Antitrust Litigation, 835 F.3d 1155 (9th Cir. 2016).

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