On Bankruptcy and Mediation
By Donald L. Swanson “In sum, the walls of the mediation room are remarkably transparent." -- James Coben & Peter Thompson The State of California is studying mediation confidentiality in the context of legal malpractice disputes. Suprise # 1 A surprise of the study is from a 2006 law review article by Coben and Thompson... Continue Reading →
By Donald L. Swanson California has been studying this question: should a malpractice exception be added to California's mediation confidentiality laws? If, for example, a mediating party sues his/her/its attorney for malpractice committed during a mediation session, should statements made during the mediation session be admissible evidence in the malpractice lawsuit? Or should such statements... Continue Reading →
By: Donald L. Swanson Can mediation confidentiality be waived? The answer is, “Yes.” --That’s according to the U.S. Ninth Circuit Court of Appeals, from an unpublished “Memorandum” decision in Milhouse v. Travelers Commercial Insurance Co., Case No. 13-56959, 13-57029 (9th Cir., Feb. 23, 2016). Facts The Milhouse residence, located in California, had been destroyed in... Continue Reading →
By: Donald L. Swanson "The court declines to adopt a new mediation privilege under the facts of this case." --Judge Cynthia A. Norton, U.S. Bankruptcy Judge -- December 19, 2016 The case is In re Lake Lotawana Community Improvement District, a Chapter 9 municipale bankruptcy in the Western District of Missouri (Case No. 16-42357). The issue... Continue Reading →
By: Donald L. Swanson “Confidentiality is an important feature” of mediation, because it "promotes the free flow of information that may result in the settlement of a dispute." “We vigorously enforce the confidentiality provisions” of our own mediation system “because we believe that confidentiality is essential" to its “vitality and effectiveness.” U.S. Second Circuit Court... Continue Reading →
By: Donald L. Swanson I've been asked many times for the number of bankruptcy court districts who, (i) HAVE adopted local rules on mediation, and (ii) HAVE-NOT adopted such rules. --The have-not courts, it seems, are hanging on to the past -- for reasons that are unknown . . . and not readily apparent. Initial... Continue Reading →
By: Donald L. Swanson Mediation needs to be included — explicitly and by name — in the Federal Rules of Bankruptcy Procedure. Mediation Authorization and Confidentiality The new mediation provision must cover two specific subject areas: (i) mediation authorization, and (ii) mediation confidentiality. Authorization. If a city is a Chapter 9 debtor in a jurisdiction... Continue Reading →
By: Donald L. Swanson (d) Confidentiality Provisions.— Until such time as rules are adopted under [28 U.S.C. §§ 2071 et seq.] providing for the confidentiality of alternative dispute resolution processes . . . , each district court shall, by local rule adopted under section 2071(a), provide for the confidentiality of . . . dispute resolution... Continue Reading →
By: Donald L. Swanson It's a beautiful scene: Federal courts applying and enforcing their local rules on mediation confidentiality. --Nearly all U.S. District Courts and U.S. Circuit Courts of Appeals, and many Bankruptcy Courts, have such local rules. But then the Ninth Circuit Court of Appeals comes along with a bombshell. It suggests that local... Continue Reading →
By: Donald L. Swanson Chapter 11 Debtor successfully mediates confirmation disputes with a half-dozen creditors. Now, a hold-out creditor moves for discovery of the mediation communications in an effort to torpedo plan confirmation. The mediating parties come to realize that their Bankruptcy Court has no local rule requiring mediation confidentiality. And, of course, there is... Continue Reading →
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