Conflict Resolution

Exception Found for Mediation Confidentiality

It is hard (we hope) to find exceptions to the general rule that statements made in mediation are inadmissible.  However, Judge J. William Ditter of the U.S. District Court for the Eastern District of Pennsylvania has held that some party statements can be admissible — such as statements to the effect of “I intend to abuse this mediation as a way to drive up your litigation costs.”

In Bethlehem Area School District v. Zhou (E.D. Pa. July 23, 2010), plaintiff school district sought to recover its attorney fees under the fee-shifting provisions of the Individuals with Disabilities Education Act (IDEA) and a corresponding state law.  The district alleged that Diana Zhou, a parent of two children in the school district, had repeatedly initiated administrative proceedings against the district for improper purposes and in bad faith. 

Ms. Zhou’s kids were eligible for special education services under the IDEA, which allows parents to settle disputes with the school district through a number of procedural avenues including filing complaints, requesting due process hearings, and requesting mediation sessions.

 During the period 2001 to 2008, Ms. Zhou requested 10 due process hearings for one of her sons and, during 2008-09 alone, four hearings for her other son. Twice, new hearings were requested while prior hearings were already convened but not yet concluded.  She refused to participate in one of the hearings and failed to prevail in any of them.

A native speaker of Mandarin Chinese, Ms. Zhou at first communicated in English and participated in all hearings.  However, beginning in June 2007, she began requesting translator services and, in 2008, requested that all documents related to a hearing be translated into Mandarin Chinese.

She demanded three mediation sessions in 2008-09 and walked out of one session.  At another mediation session, she “advised the mediator that it was her intention to drive up costs for the district so it would agree to pay for [her sons] to go to private school.”   

In this action, the district sought recovery of its legal fees on the ground that Ms. Zhou had brought her complaints to harass and to increase costs of litigation, and that her conduct was arbitrary, vexatious, and in bad faith.  Among the allegations in the complaint was Ms. Zhou’s statement at the mediation that she was participating in order to drive up the district’s costs. 

Ms. Zhou moved to strike that portion of the complaint on grounds set forth in the IDEA, 20 U.S.C. §1415(e)(2)(G).  That section provides that “discussions that occur during the mediation process shall be confidential and may not be used in evidence in any subsequent due process hearing or civil proceeding.” 

The court noted the protections afforded by that provision, but also noted that the complaint did not allege that the statement was made in the course of a mediation — at least not one that was contemplated in the statute.  To the contrary, held the court, “the defendant’s statements do not evidence an intent to mediate or resolve the dispute” but rather an intent to force the plaintiff district to incur further legal costs.  Ms. Zhou cannot, on the one hand, abuse the mediation process and, on the other hand, seek its evidentiary protections.  The motion to strike the allegation made during “mediation” was therefore denied.

In support of this finding, the court cites Trammel v. U.S., 445 U.S. 40, 49-50 (1980), holding that testimonial exclusionary and privilege rules must be strictly construed, and should be observed “only to the very limited extent that … excluding relevant evidence has a public good transcending the normally predominant principle of utilizing all rational means for ascertaining truth.”

Good outcome.  But is anyone eager to litigate the question whether this statement or that statement, made in the course of mediation, should be excluded because doing so “has a public good”?

  1. I have to disagree that this is a good outcome. It seems there was enough evidence of this party’s intent to force the school district to run up costs, without having to rely on a statement she made during the course of the mediation. And once you let a statement like that in, even in a case where it seems that the party’s conduct was abusive, you open the door to all kinds of statements. If I catch someone in a mediation chuckling to themselves that it is costing the other side a lot in attorneys’ fees to spend time at the mediation, and maybe that will give them some leverage in the negotiations, are all the participants in that mediation, including the mediator, now subject to being called as witnesses in some future court case? I would not be happy about being called in that situation.

    I have written in favor of some exceptions to confidentiality in an ancillary proceeding. For example, if a party wants to sue his own attorney for malpractice, there are some good arguments for denying the attorney the shield of confidentiality.

    But I tend to think that confidentiality should be absolute as between the opposing parties in the mediation. I tell people at the beginning of a mediation that nothing they say in the course of these proceedings can ever be quoted back to them in any subsequent proceeding if the case does not settle. I would hate to have to start making exceptions to that rule.

  2. I will agree with Joe. Building trust and encouraging candor is essential to mediators in order to reveal underlying party interests and motivations which are often the barriers to resolution, and conversely, the understanding of same which become our tools to overcome those barriers. If the attorneys start coaching their clients to become tighter lipped for fear of their words later being used against them, the process of mediation will suffer.

  3. To be the devil’s advocate — could the court have legitimately reasoned that she was not there in good faith and therefore there were no legitimate settlement negotiations, and her statements did not warrant protection? It seems like a stretch to me and I would not want to be called to testify.

    However, if one were to look at 4th Amendment precedent for guidance, Justice Black reasoned that quashing illegally seized evidence would act as a deterrent to illegal seizures. Could making an exception for bad faith abuse of the system comments later used in litigation prevent the abuse of the system? I’m doubtful as I don’t think motions to quash actually prevent illegal searches.

    My colleagues and I (both as mediators and as litigators) have seen the mediation process abused. It is unfortunate, but a natural reaction for those hell bent on manipulating the system to their advantage.

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