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Prejean, Larry King and Hard Facts Making Bad Mediation Confidentiality Law

While reading this opinion (or simply this post) think about Carrie Prejean's accusation that Larry King's question to her -- "why did you settle" --was "completely inappropriate" because (presumably) her thought process was protected by mediation confidentiality. 

In yet another 2-1 opinion on mediation confidentiality -- Cassel v. Superior Court -- California's Second District Court of Appeal grapples with hard facts that made bad law. 

In conversations between litigation counsel and its client, Cassel, held on the days immediately preceding mediation as well as on the day of the mediation itself, Cassel allegedly told his attorney - Wasserman - that he would be willing to accept something north of $1.25 million to settle the case.   On the day of the mediation, Cassel signed a settlement agreement providing for payment of $1.25 million.  Cassel thereafter sued his attorney for legal malpractice, alleging that Wasserman "forced him to sign the settlement agreement for $1.25 million, rather than the higher amount he had told Wasserman . . . was acceptable." (if you're interested in the 411 on mediation advocacy malpractice, see my recent post Yet Another Path to Attorney Malpractice in Mediation Proceedings:  Coerce Your Own Client)

Before trial of the malpractice action, Wasserman filed a motion in limine asking the trial court to preclude the introduction into evidence of any testimony concerning Cassel's [otherwise attorney-client privileged] communications about the sum he was willing to accept in settlement.  The trial court granted the motion, holding that these communications - undeniably conducted in preparation for the mediation - were protected by mediation confidentiality under both the plain language of Evidence Code section 1119 and the Supreme Court decisions interpreting it.

The majority on the appellate panel disagreed for the following reasons:

  1.  Communications between a party to mediation and the attorney representing him in that mediation are not part of the mediation "process" if they are not communicated to either the mediator or the opposing party because California law defines mediation as a procedure in which "a neutral person . . . facilitate[s] communication between the disputants to assist them in reaching a mutually acceptable agreement.”
  2. "For mediation purposes, a client and his attorney operate as a single participant."
  3. Once the court collapses the attorney and client into a single "participant," there are no mediation communications among participants to protect, or, as the Court more formally stated:  they were not communications between 'disputants' and the 'mediator,' as required to come within the definition of a 'mediation' or 'mediation consultation' and, therefore, to qualify for protection under mediation confidentiality."
  4. "the fact that Cassel or his attorneys may have discussed a specific dollar amount for settlement" did not necessarily make it a communication that, in the Wimsatt Court's words "are materially related to, and foster, the mediation," because "some of the communications were more related to the civil litigation process as a whole rather than to the mediation."
  5. the most principled (but not necessarily correct) reason for the Court's holding: the attorney and its client were "not within the class of persons which mediation confidentiality was intended to protect from each other—the “disputants,” i.e., the litigants—in order to encourage candor in the mediation process." 
  6. finally, the Court's holding:

With start of trial within two weeks, the meetings and accompanying communications between Cassel and Wasserman . . . were for trial strategy preparation, not just for mediation . . .   The crux of the communications was that Cassel wanted his Wasserman Comden attorneys to honor his wishes, but they resisted to the extent, according to Cassel, that they breached their duties to him as his counsel. Neither Cassel nor Wasserman Comden assert that the communications contained information which the opposing party (or its representatives) or the mediator provided during mediation or otherwise contained any information of anything said or done or any admission by a party made in the course of the mediation. For the foregoing reasons, we conclude that the communications solely between Cassel as a client and his lawyer, Wasserman Comden, do not constitute oral and written communications made “for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation” protected by section 1119, subdivisions (a) and (b) or communications by “participants” protected by section 1119, subdivision (c).

Huh??????  Because separate caucus mediation communications between attorney and client about the sum the client is willing to settle the case for are not communicated to the mediator or the opposing party during the mediation (especially if the attorney fails to communicate the client's expressed wishes?) they cannot be considered "communications made 'for the purpose of . . . a mediation consultation"??

This is perhaps the most convoluted reasoning of any appellate opinion in memory.  I'd prefer a decision that just came right out and said something along the lines of - sure the communication falls squarely within the language of the confidentiality statute, but we don't think it ought to apply where a client is suing his attorney for duress in the course of a mediation proceeding.  The Court is justifiably worried about saying that because the Supreme Court has repeatedly cautioned the lower courts not to make court-crafted exceptions to mediation confidentiality.  (See Simmons v. Ghaderi

Intellectual dishonesty never got any court anywhere near the goal of justice.  This might just have been the case that made the Supreme Court relent and say, "o.k., in this extremely narrow circumstance, we'll permit an exception to the statutory provision."  If the Supreme Court refused to budge, this case just might have persuaded the California legislature to make a few necessary exceptions to mediation confidentiality.  Now, unless the appellate court reconsiders and follows the wisdom of the dissenter, Californians won't be given the opportunity the common law creates to "course correct" the law-making process to meet the challenges of unintended legislative consequences.

As the dissent correctly observes:

In the end, the majority‚Äüs analysis of section 1119, subdivision (a), seems to be founded primarily on its concern that protecting private communications between a client and his or her lawyer under the rubric of mediation confidentiality may shield unscrupulous lawyers from well-founded malpractice actions without furthering the fundamental policies favoring mediation. That may well be true; but, respectfully, it is not our role to make that determination. Rather, it is for the Legislature to balance competing public policies and to create an exception to the statutory scheme governing mediation confidentiality where it finds it appropriate to do so.

For those more interested in Prejean than in mediation confidentiality, here's an analysis of the Prejean/King dust-up with the Prejean money quote:  "I don't see anywhere in the Bible where it says you shouldn't get breast implants."

And if you think mediation can't be as dramatic as courtroom "gotcha" moments, here's the proof that anything at all can and does happen in those "confidential" rooms:

It was reported by TMZ.com, who broke the story of the lawyers' gambit, that the lawsuit was settled within seconds of the sex tape being shown to Prejean. Just to make the episode even more embarrassing for the 22-year-old, her mother was also attending the meeting at which the tape was shown.

Description of the X-rated Perry Mason moment here.

Do remember that California law only precludes parties from:  (a) introducing confidential mediation communications into evidence; and, (b)  obtaining evidence of those communications in discovery.  Although sub-section (c) of section 1119 broadly provides that  mediation communications "shall remain confidential," no one to date has suggested that disclosure of those communications gives rise to a cause of action in favor of any party opposing their disclosure to the general public.   

After the jump, my colleague on the IP ADR Blog Mike Young of Alston Bird (Mike's Labor Law Blog here) gives the Cassel opinion a triple huh?????  Nice work, Mike!

by Michael D. Young

Here we go again.  A California appellate court has judicially created another exception to mediation confidentiality -- this one for alleged attorney malpractice occurring during the mediation but outside the presence of the mediator or opposing parties.

Essentially, the court (in a 2-1 vote) holds that a communication with one's attorneys only -- one that does not involve the mediator or the opposing party -- is not part of the mediation process, does not fall within the policy reasons supporting confidentiality, and hence are not protected by California's mediation confidentiality statutes.

For those who are interested, I go through the case  in a little more detail below.  However, at this point, I have  a question:  

Is there a public policy reason to protect communications  between an attorney and a client (and only between them) during the mediation  process?  In other words, do we need to protect those private  communications in order to reap the benefit of mediation?  Or are the  policies behind confidentiality amply supported if we only protect  communications with the mediator and opposing parties?  I had always  thought of confidentiality as being necessary to encourage frank and candid  discourse between the disputants.  Is it also necessary to encourage  frank and candid discourse between a client and his or her own  counsel?

SUMMARY OF OPINION

In this new case, Cassel v. Superior Court, the client alleged that his attorneys bullied and coerced him into signing a settlement agreement in mediation that was for less money than the client wanted.

He wanted to introduce evidence of things his attorneys said and did during the private time in the mediation when neither the mediator nor opposing party were present.

The debate was:  (a) were these communications simply privileged under the attorney-client privilege (and thus waived in a subsequent malpractice claim); or (b) were they also covered by the mediation confidentiality statute (not a privilege), and thus inadmissible even in a subsequent malpractice claim.

The trial court held the communications inadmissible under the mediation confidentiality statutes, and then stayed the proceedings to allow the parties to take a writ.

The appellate court looked at the policy behind confidentiality and decided it did not apply to communications between a party and his or her own counsel:  

Legislative intent and policy behind mediation  confidentiality are to facilitate communication by a party that  otherwise the party would not provide, given the potential for another party  to the mediation to use the information against the revealing party;  they are not to facilitate communication between a party and his own  attorney.

The court quoted language from other cases describing the purpose of confidentiality to encourage frank discussions with "the mediator" and "the opposing party.The court acknowledged the Wimsatt case (familiar to our California brethren) which upheld confidentiality in the face of malpractice claims.

That court reluctantly stated:

[t]he stringent result we reach here means that  when clients ... participate in mediation they are, in effect, relinquishing  all claims for new and independent torts arising from mediation, including  legal malpractice causes of action against their own counsel.

The Cassel court sidestepped this by saying the quoted language was not the Wimsatt court's holding and thus was not binding authority.  Instead, the Cassel court determined that the attorney/client communication, despite being held during a mediation process and addressing issues such as whether the client should settle and for how much, was not "linked" to the mediation:  "there is no readily identifiable link to the mediation in the communications."  ["Huh?" says Mike.]

As another example of why the communications were "tenuous," and were "more related to the civil litigation process as a whole rather than to the mediation:" 

For example, according to the record, Cassel[] expressed in his  deposition that, during the course of Wasserman Comden's conference with  their client that occurred after the mediation process had begun, he was  evaluating the value of the case as he always does when it appears that the case will go to trial.

[Can I say HUH? a third time?  Of course one values a case when it appears it will go to trial.  One values a case before it is filed and at every stage thereafter.  One also values a case in mediation; and indeed, one uses the mediation process to refine and test that valuation.  According to this court, simply because the communication was of a type that occurs as part of the trial process, it is not sufficiently "linked" to the mediation to enjoy confidentiality protection.]

After all this wind-up, the court finally got to what I think is the main point:

That  is, as we previously concluded, they were not  communications between “disputants” and the “mediator,” as required to come within the  definition of a “mediation” or “mediation  consultation” and, therefore, to qualify for  protection under mediation  confidentiality.

In other words, if the communication does not involve the mediator or the opposing party, it is not part of the mediation process, and hence is not covered by the mediation confidentiality statutes.  The attorneys were not part of the class of persons who confidentiality was designed to protect.

 One thought that comes from this -- the discussion between counsel and client during the mediation process regarding the wisdom of settlement will inevitably include an analysis of information and communications from the mediator and opposing party.  If these private attorney/client communications are admissible, won't that necessarily result in the disclosure of the mediator's and opposition's thoughts and actions?  Would this exception swallow the rule?  The Court anticipated this argument, and sidestepped it, with the following:

Neither Cassel nor Wasserman Comden assert that  the communications contained information which the opposing party (or its  representatives) or the mediator provided during mediation or otherwise  contained any information of anything said or done or any admission by a  party made in the course of  the mediation.

The dissent noted that the confidentiality statute covers all communications in mediation, and that the court should not judicially create new exceptions.  That's the legislature's job

Comments (9)

Read through and enter the discussion by using the form at the end
Deborah Rothman - November 13, 2009 2:37 PM

The Cassel decision is painful to read. It should have been a couple of paragraphs, and come out the other way.

Vickie Pynchon - November 13, 2009 3:40 PM

Thanks for dropping by Deborah! And you KNOW how much I like it when you AGREE with me! (Deborah Rothman, ladies and gentlemen, is one of the best arbitrators and mediators in Los Angeles with fifteen years of experience and one of the best analytical minds in the business. http://deborahrothman.com

Timothy R. Hughes - November 13, 2009 3:58 PM

On the substance ... it seems like a client suing over what he was willing to settle for waives any inherent confidentiality regarding what he said he was willing to take to his lawyer. I do not know why they dance around the topic - the same theory applies to waiver of attorney client privilege under similar circumstances.

The better part of the post: thanks for the great links for an entertaining Friday afternoon!

Vickie Pynchon - November 13, 2009 4:07 PM

Thanks for dropping by to comment Tim. The reason the court is dancing around the waiver issue is because the California Supreme Court has held that you can neither waive nor be estopped from asserting mediation confidentiality under a strict interpretation of the confidentiality statute. That's a problem to many practitioners here and one the legislature needs to consider since the Supremes keep lateraling the problem to the law makers.

Marty Gofberg - November 16, 2009 1:02 PM

Let me add a 4th HUH? In order to have a settlement at a mediation all the parties must sign off on it, short of Cassel proving that Wasserman held a gun to his head to sign the MOU at the conclusion of the mediation, I don't see duress; also it was my understanding (however naive) that ALL communications in the mediation process are confidential, otherwise why would parties avail themselves of the process?

With respect to the Larry King interview, he clearly did not ask for the specifics of the mediation communications but rather as to why she decided to mediate the matter, I don't think the woman has an active or functioning brain cell to have been able to answer the question...she belongs on Fox news for the imbalanced...

Diane Levin - November 16, 2009 1:46 PM

Vickie, thanks for such a riveting discussion of mediation confidentiality as you deconstruct this California case. Fascinating stuff!

What particularly struck my ear was the court's view that "For mediation purposes, a client and his attorney operate as a single participant." How curious.

Anyone who has ever observed the terrible struggles that can ensue between a client and his or her lawyer knows that practically speaking this is not the case. This is the mediation-within-the-mediation, often more demanding of the talents and patience of the mediator than the cross-the-table negotiations.

It calls to mind the archaic legal doctrine of coverture, that women gave up their legal identities upon marriage and that husband and wife constituted a single legal entity.

Such a problematic opinion for many reasons - Vickie, I thank you for deconstructing it so ably for your readers.

Steve Goldberg - November 17, 2009 2:58 PM

I must confess that I am Victoria's husband before I go any farther. And I, as a civil litigator who also volunteers as a federal court mediator,.

I don't see what all this dust-up is over this decision. It makes perfectly good sense to me. I am curious whether only mediators care about this or if others do as well.

Here is my take: I doubt that any client in the world would think that they were giving up their right to sue their attorney for malpractice for what he or she did during the mediation (however hard such a claim for damages may be to prove). Do you think that any attorney so advises their client of that fact? I doubt it.

Yet that is what the Wimsatt court had held, making up that fluff out of whole cloth. And the California Supreme Court had earlier held that no one could waive or be estopped from the iron-clad rigors of mediation confidentiality - in another context.

The mediation confidentialy statute was designed to keep evidence out of the hands of the parties to the mediation and here the case was apparently settled and completed (to the apparent chagrin of the unhappy client suing his former lawyer). If that is so, what is there left to protect? Why would any court stretch to find a reason to preclude the client from suing his lawyer? Is there some public policy that would justify precluding a client from suing his lawyer (if there really is a basis for the suit) just because the settlement discussions that led to the supposedly coerced now-completed settlement occured during a mediation rather than just in discussions between the parties? I don't see any reason for it.

On another note, I don't recall the Supreme Court case that said no waiver or estoppel can be allowed for the mediation confidentiality rules. I assume that was not in any context close to this situation and guess without pulling up that case that it dealt with enforcement of settlements. Didn't the supreme court just make up that rule as well by articulating a rule that no waiver or estoppel can exist with respect to these statutes notwithstanding that waiver and estoppel exists with respect to many other statutory rights one has?

While intellectual purity is always better than the converse, I think the discussion should be framed as whether or not any societal harm emanates from this supposed breach in the confidentiality of mediations IN THIS CONTEXT. I don't see any, if if much of the back and forth of participant offers or mediator comments might come into evidence. I doubt that the legislators were seeking to protect mediators or a process that was completed to the later chagrin of one of the parties and don't see any reason why the court should reach out to try to protect alleged lawyer malpractice in this context. I can envision a different result if the client were trying to unravel or escape from an enforceable executory settlement agreement in which, the adversary party would be harmed if the mediation play came in to evidence.

See, husbands and wives can have differing views on even matters of the law.......

Joe Markowitz - November 18, 2009 10:02 PM

I agree that this decision is a bit hard to justify in light of the literal language of the statute, which seems to have a pretty broad definition of mediation confidentiality. And maybe if it's too broad, the legislature should fix it. But I also have to agree with Steve above. If an attorney committed malpractice by giving improper advice in the context of settlement negotiations, and that might be a pretty big if in this case and in a lot of other cases, it seems a bit unfair that the attorney should be able to shield their malpractice by claiming that the advice that constituted malpractice was protected by mediation confidentiality. My post on this case is here:
http://www.mediate-la.com/2009/11/carrie-prejean-sex-tape.html

Jeff Bean - November 21, 2009 6:57 PM

Oh, what a tangled web we weave. So glad that here in Washington we've got the Uniform Mediation Act, which provides an exception to the privilege for mediation communications that are offered to prove malpractice.

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