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January 13, 2011 | Law Alert

Cassel v. Superior Court (Wasserman, Comden, Casselman & Pearson, L.L.P.) (2010) 51 Cal.4th 113

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The California Supreme Court holds that mediation confidentiality encompasses private discussions between attorney and client.

Michael Cassel retained Wasserman, Comden, Casselman & Pearson, L.L.P. (WCCP) to represent him in a trademark infringement dispute over a clothing label. Cassel sued WCCP claiming that his attorneys insisted he remain at a mediation, and pressured him to accept an insufficient settlement offer.  WCCP successfully moved in limine under the mediation confidentiality statutes (E.C. §§ 1115 et. seq.) to exclude all evidence of communications between Cassel and WCCP that were related to the mediation, including matters discussed at the pre-mediation meetings and while the mediation was under way.

The Court of Appeal granted mandamus relief reasoning that the mediation confidentially provisions did not extend to communications between a mediation participant and his or her own attorneys outside the presence of other participants in the mediation.

The California Supreme Court reversed.  It noted that the statutory purpose of mediation confidentiality is to encourage its use by promoting a candid and informal exchange.  This is achieved only if the participants know that mediation related communications will not be used to their detriment in later court proceedings and other adjudicatory processes.

The Legislature intended the unambiguous provisions of the mediation confidentiality statutes to be applied broadly.  Exceptions are limited to narrowly proscribed statutory exemptions, express waiver, or where due process is implicated.

In prior cases the Supreme Court has held that mediation confidentiality is absolute.  The Legislature has determined that the benefit of securing the candor necessary for a successful mediation trumps all other considerations.  For example, a mediator may not submit a report to the court of communications or conduct the mediator believes violates a court order or exhibits bad faith.  Mediation confidentiality protects all writings prepared in connection with mediation without exception for good cause.  Only written settlement agreements containing particular statutory language are exempt.

The plain language of § 1119(a) is that anything said or admission made “for the purpose of, in the course of, or pursuant to a mediation … is not admissible or subject to discovery….” This includes communications outside of the mediation itself and those between attorney and client.

This conclusion is reinforced by § 1122 (a)(2) which sets forth the circumstances under which fewer than all of the participants in a mediation may stipulate to the disclosure of otherwise confidential mediation-related communications. Disclosure is allowed by a participant for whom a communication or document was prepared only if it does not reveal anything said or done in the course of the mediation. The court concluded these must include communications that are made or prepared outside mediation and between a mediation disputant and his or her attorney.

The Court rejected the conclusion of the Court of Appeal that a party to mediation, and the party’s attorney, are a single mediation “participant” whose internal communications are not within the mediation confidentiality statutes.  There is no persuasive basis to equate mediation “parties” or “disputants” with mediation “participants,” and thus to restrict confidentiality to potentially damaging mediation-related exchanges between disputing parties.  Sections 1119, (a) and (b) are not limited to “participants.”  In addition, “disputants” are not the only participants the mediation and the statutory scheme makes clear that the term includes more than just the parties or disputants.  For example, the comments to § 1122, regarding waiver of mediation confidentiality, refers to agreement by the mediator and other nonparties attending the mediation.

The Court also rejected the Court of Appeal’s conclusion that the mediation confidentiality statutes could not trump Evidence Code § 958, which eliminates the confidentiality protections otherwise afforded by the attorney-client privilege in suits between clients and their own lawyers. The mediation confidentiality statutes include no exception for legal malpractice actions by mediation disputants against their own counsel.

In addition, the statutory schemes serve separate and unrelated purposes.  The attorney client privilege allows the client to consult frankly with counsel.  The exception acknowledges that in litigation between lawyer and client the client should not be able to use the privilege to bar otherwise relevant and admissible evidence which supports the lawyer’s claim, or undermines the client’s.

The mediation confidentiality statutes do not create a “privilege” in favor of any particular person. They encourage the resolution of disputes by means short of litigation and govern only the narrow category of mediation-related communications.  This assures participants that that their interests will not be damaged by attempting this alternative means of resolution, and by encouraging candid disclosures and assessments.  The Court would not craft an exception to accommodate a competing policy concern, protection of a client’s right to sue his or her attorney.

Although application of mediation confidentiality to legal malpractice actions results in loss of evidence, this does not implicate due process concerns so fundamental that they might warrant an exception on constitutional grounds.  Legal malpractice actions involve money damages, not constitutionally protected rights.

The Court found several reasonable bases for the Legislature to include private attorney client discussions in the mediation confidentiality scheme.  It might have been concerned that a legal malpractice exception would endanger the confidentiality of the mediation proceedings themselves.  Including attorney-client conversations allows frank discussions about the strengths and weaknesses of the case, the progress of negotiations, and the terms of a fair settlement. Arguably it is not fair to allow a client to support a malpractice claim with excerpts from private discussions with counsel concerning the mediation, while barring the attorneys from placing such discussions in context by citing communications within the mediation proceedings themselves.

Finally, the Court would not create an exception due to difficulties of determining whether a discussion between attorney and client related to mediation.  An exception would ignore the plain language of the statute, and in the case being decided there was no dispute about the relationship of the communications to the mediation.

A concurring opinion questioned whether the Legislature had made the correct policy choice by including discussions between attorney and client in the mediation confidentiality scheme.

Comment: In remains to be seen whether the Legislature will act on the suggestion made in several opinions to revisit the wisdom of encompassing private attorney-client communications within mediation confidentiality.  For now there exists a bright line rule that such communications are not admissible in a dispute between attorney and client.

Practice Area: Lawyers & Judges Defense Group
Attorney: Jennifer A. Becker

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