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Dispute Resolution

Confidentiality in ADR Federal Courts

U.S. courts will likely give mediation confidentiality some protection, but the question is open

By Charles W. Ehrhardt

Federal courts do not currently recognize a general privilege that can be asserted to prohibit the introduction of evidence concerning mediation proceedings, even when a state statutory mediation privilege protects the communication. Therefore, whether a mediation privilege would be recognized in the federal courts would be governed by Federal Rule of Evidence 501, the sole rule on evidentiary privileges. Federal Rule of Evidence 408, which covers settlement negotiations, may also provide some protections, along with common law principles.

Evidence Rule 501. Rule 501 provides that the privileges applied in federal criminal prosecutions and in federal civil cases that are not based on diversity jurisdiction shall "be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience." In a federal criminal action, an Internal Revenue Service investigation or an action alleging a violation of Title VII of the Civil Rights Act, a state mediation statute will not be recognized even as to mediations that are ordered by a court of that state. In these cases, the question is whether the U.S. Supreme Court will recognize a "common law" mediation privilege under Rule 501.

In recent years, the Supreme Court has faced a number of cases involving new or novel claims of privilege. Rule 501 has been interpreted to provide the federal courts with flexibility to develop the rules of privilege on a case-by-case basis. However, the Court has not been inclined "to exercise this authority expansively." Although Rule 501 uses the phrase "principles of the common law," the rule does not freeze the law of privilege to that which existed at some prior time in legal history. Rather, it directs the courts to "continue the evolutionary development of testimonial privileges." Nevertheless, privileges are not recognized under Rule 501 unless the recognition promotes sufficiently important interests that outweigh the need for probative evidence.

Independent Counsel Cases. In a series of cases arising out of the investigation of President Clinton, the federal courts have indicated a narrowing interpretation of existing privileges and a hesitation to recognize new privileges under the principles of the common law. When a federal grand jury subpoenaed documents created during meetings between Hillary Clinton and an attorney for the Office of the Counsel to the President regarding the aftermath of Vincent Foster’s death, the 8th U.S. Circuit Court of Appeals ruled that the documents were not protected by the attorney-client privilege, even though the client had a reasonable belief that the conversations were privileged. Similarly, the U.S. Court of Appeals for the District of Columbia rejected the argument that a new "protective function" privilege was present under Rule 501 with respect to information obtained by Secret Service personnel while performing their protective function in close proximity to the president. In In re Sealed Case, the court reasoned that the Supreme Court has demanded that the proponent of a new privilege must "come forward with a compelling empirical case for the necessity of the privilege."

On the other hand, in Jaffee v. Redmond, the court recognized a new psychotherapist-patient privilege under Rule 501 because the proposed privilege serves important private interests as well as the necessary public ends. Since all states have enacted a statutory psychotherapist-patient privilege, their consensus in recognizing the privilege indicates "reason and experience" support the privilege.

Evidence Rule 408. Regardless of whether a common law mediation privilege is recognized, Federal Rule of Evidence 408 protects confidentiality by prohibiting the admission of statements made by the parties during settlement negotiations when offered to show liability or the lack of liability for the underlying claim. Rule 408 includes within its protection statements made during voluntary and court-ordered mediations. However, the rule does not require the exclusion of evidence when offered for another purpose, such as proving the bias or prejudice of a witness or negativing an allegation of undue delay.

"Common Law" Privilege. The most persuasive argument to recognize a mediation privilege under Rule 501 would be based on empirical data that demonstrates substantially more cases are resolved prior to trial in states that have a mediation privilege than in states that do not, and protect confidentiality with only Rule 408. If the mediation process cannot be shown to be enhanced by the presence of the privilege, recent federal cases indicate that it is unlikely the privilege will be recognized under Rule 501. The federal courts would then defer to Congress.

If a common law mediation privilege is recognized under Rule 501, the federal courts will not immediately delineate the parameters of the privilege, but rather, as in Jaffee and Upjohn Co. v. United States, leave the development of the privilege to occur on a case-by-case basis. Therefore, it is unlikely that the federal courts will soon supply answers to serious questions, including whether a privilege extends to statements during premediation consultation, to statements during the caucus and/or the joint session and to demeanor or conduct.

A "common law" mediation privilege under Rule 501 should be absolute, rather than qualified. It should not depend on the court’s balancing the interests to determine whether the privilege can be asserted–and indeed, the court previously has rejected arguments that the attorney-client and psychotherapist-patient privilege should be qualified rather than absolute. Rather, to serve the purposes of these privileges, the court has reasoned that the participants in the conversations must be able to predict with some certainty whether discussions will be protected.

Almost certainly, if the privilege were recognized, the federal courts would also recognize that there are situations in which it should not be applied. Again, these exceptions should not be spelled out, but should be developed when appropriate cases arise. The Jaffee court observed that "there are situations in which the [psychotherapist-patient] privilege must give way, for example, if a serious threat of harm to the patient or to others can be averted only by means of a disclosure by the therapist."

So, too, if a mediation privilege is recognized under Rule 501, it is probable that the federal courts would also recognize exceptions when the interests of justice so require.

Diversity Cases. It is clear that a state mediation privilege would be recognized in federal courts when that state’s substantive law supplies the rule of decision. Rule 501 specifically provides that in cases where the substantive law of a state supplies the rule of decision, the state’s law of privilege applies in federal court. If the state has an applicable mediation privilege it also would be applied in the federal litigation.

Looking Ahead. The confidentiality of mediation will likely be protected in federal court, at least to some degree. Rule 408 generally excludes evidence relating to mediation proceedings. However, in the absence of legislative action by Congress, whether an evidentiary privilege applies to mediation proceedings, as well as the parameters of any privilege, is uncertain.

Charles W. Ehrhardt is a professor of law specializing in evidence at Florida State University College of Law.

- This article is an abridged and edited version of one that originally appeared on page 17 in Dispute Resolution Magazine, Winter 1998 (5:2).

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