Local Confidentiality Rules DO Create a Mediation Privilege: ADR Act of 1998

By: Donald L. Swanson

“It’s doubtful that a district court can augment the list of privileges by local rule” because “privileges are created by federal common law.”

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

The Facebook case deals with evidence on “what was said and not said” during mediation. In Facebook, the Ninth Circuit excludes such evidence because of a Confidentiality Agreement between the parties—NOT because of the District Court’s local confidentiality rules.

The Ninth Circuit is Wrong—Because of a Federal Statute

The Ninth Circuit’s suggestion that a local confidentiality rule cannot “augment the list of privileges” is wrong in mediation confidentiality contexts.

Here’s why: because a Federal statute provide otherwise.

–The ADR Act of 1998

Twenty years ago, U.S. Congress enacted its Alternative Dispute Resolution Act of 1998 (the “ADR Act”).

Among the requirements of the ADR Act is 28 U.S.C. § 652(d), which says:

(d) CONFIDENTIALITY PROVISIONS.—Until such time as rules are adopted under chapter 131 of this title providing for the confidentiality of alternative dispute resolution processes under this chapter, each district court shall, by local rule adopted under section 2071(a), provide for the confidentiality of the alternative dispute resolution processes and to prohibit disclosure of confidential dispute resolution communications.

[Note: Chapter 131 of Title 28 , cited in this § 652(d), deals with “Rule-making power” over Federal rules of civil procedure, evidence and bankruptcy.]

This § 652(d) has two parts:

1. It starts with an expectation that Federal rules on ADR confidentiality will be adopted in the near future — that was twenty years ago; and

2. It ends with a directive that local court rules “shall” be adopted to provide ADR confidentiality in the interim: i.e., “until such time as” Federal confidentiality rules are adopted.

–Plain Meaning

This § 652(d) supersedes any common law considerations the Ninth Circuit might identify.

And the plain meaning of § 652(d) on this point is clear and unambiguous. It means this:

–Until Federal confidentiality rules on ADR are adopted, local court rules on ADR confidentiality are to have the same force and effect as a Federal rule.

Ninth Circuit Has its Own Local Rule on Mediation Confidentiality

The Ninth Circuit Court of Appeals has its own mediation program and its own local rule on mediation confidentiality: Local Rule 33-1.  Such local rule opens with this statement:

“the Court establishes the following rules to achieve strict confidentiality of the mediation process.”

And the Ninth Circuit’s website includes this statement:

“The court has enacted strict confidentiality rules and practices; all who participate in one of the court’s mediations may be assured that what goes on in mediation stays in mediation.”

–Any Hypocrisy?

So, here’s the deal:

(i) the Ninth Circuit does not think local district court rules on mediation confidentiality rise to the level of an evidence privilege, but

(ii) its own local rule declares “strict confidentiality” for its own mediation program, so that participants will “be assured” of stays-in-Vegas confidentiality.

Is there any hypocrisy here?

–A Hypothetical

Let’s say, hypothetically, that parties to a Ninth Circuit mediation do not settle:

Then, the Ninth Circuit reverses and remands;

Back in district court, one party offers information from their Ninth Circuit mediation into evidence — and, let’s say, the district court allows it in;

Then, the case goes back to the Ninth Circuit on a second appeal; and

The Ninth Circuit is asked to decide whether its mediation confidentiality rule should be enforced.

Here’s guessing the Ninth Circuit’s attitude, in this hypothetical, toward enforcing its own confidentiality rule will be exactly what its local rule and website suggest: intense and unwavering.

–Such a guess would be consistent with reactions of their brethren and sistren in other U.S. circuit courts of appeals, who tend to be persnickety and inflexible in enforcing their own mediation confidentiality rules (see, e.g., In re Anonymous).

Conclusion

The Alternative Dispute Resolution Act of 1998 gives full-privilege force to local court rules on mediation confidentiality — until a Federal rule on mediation confidentiality is adopted.  This reality needs to be recognized, adopted and followed.

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