California has long favored private negotiation and settlement of civil disputes. The state legislature has expressly stated that “[t]he peaceful resolution of disputes in a fair, timely, appropriate, and cost-effective manner is an essential function of the judicial branch of state government.” Cal. C. Civ. Proc. § 1775(a). To effectuate this policy, the state legislature has expressly validated mediation as a process that “provides parties with a simplified and economical procedure for obtaining prompt and equitable resolution of their disputes and a great opportunity to participate directly in resolving those disputes.” Cal. C. Civ. Proc. § 1775(c). Because mediation provides a simple, quick, and economical means of resolving disputes, and because it may also help reduce the court system’s backlog of cases, California has recognized that the public has an interest in protecting not only the mediation participants, but the mediation process itself. Rojas v. Superior Court, 33 Cal. 4th 407, 415 (2004).

The starting point for California’s mediation confidentiality scheme is Evidence Code Section 1115 which defines the processes that qualify for confidentiality protection. That protection extends to “mediations” and “mediation consultations.” A “mediation consultation” is defined a “a communication between a person and a mediator for the purpose of initiating, considering, or reconvening a mediation or retaining the mediator.” Cal. Evid. C. § 1115(c). A “mediation” is defined as a process in which “a neutral person or persons facilitate communication between the disputants to assist them in reaching a mutually acceptable agreement.” Cal. Evid. C. § 1115(a). The comments to Section 1115 make it clear that what qualifies as a mediation is to be determined by “the nature of a proceeding, not its label,” and that a proceeding might qualify as a mediation for purposes of the confidentiality protections “even though it is denominated differently.” The fact that a court may use the terms “mediation” and “settlement” interchangeably when referring to the process taking place or that a judicial officer might be assigned to preside over the talks will not transform the proceeding into a mandatory settlement conference without a clear record that such a conference was ordered. Doe I v. Superior Court, 132 Cal. App. 4th 1160, 1166-1167 (2005) (the “Archdiocese Case”) (“Except where the parties have expressly agreed otherwise, appellate courts should not seize on an occasional reference to ‘settlement’ as a means to frustrate the mediation confidentiality statutes.” This is an important distinction because Evidence Code Section 1117(b)(2) provides that the confidentiality protections afforded communications in mediation do not apply to communications had during a mandatory settlement conference convened pursuant to Rule 3.1380 of the California Rules of Court.

Under California law, confidentiality protection is provided in the form of an evidence exclusion provision. It does not provide for an evidentiary privilege. Evidence Code Section 1119 bars – as evidence in a court or other adjudicatory proceeding – disclosures of

  • (a) anything said or any admission made for the purpose of, in the course of, or pursuant to, a mediation or mediation consultation (Cal. Evid. C. § 1119(a));
  • (b) any writing prepared for the purpose of, in the course of, or pursuant to, a mediation or mediation consultation (Cal. Evid. C. § 1119(b)); and
  • (c) all “communications, negotiations, or settlement discussions” by and between participants in the course of a mediation or mediation consultation (Cal. Evid. C. § 1119(c)).

The California Supreme Court has confirmed on several occasions that the “any” and “all” provisions of Section 1119 are to be interpreted quite literally and made it clear that the scope of protection intended by the statute is unqualified, clear and absolute, and is not subject to judicially crafted exceptions or limitations. See, Foxgate Homeowners Ass’n v. Bramalea Calif., Inc., 26 Cal. 4th 1, 14 (2001); Rojas, supra, 33 Cal. 4th at 424; Fair v. Bakhtiari, 40 Cal. 4th 189, 197 (2006); Simmons v. Ghaderi, 44 Cal. 4th 570, 588 (2008); Cassel v. Superior Court, 51 Cal. 4th 113, 124 (2011). The facts of the cases in which the California Supreme Court has been called upon to rule about the scope of protection afforded by Section 1119 have been somewhat extreme and serve to illustrate the breadth of what will be held as confidential if the communications (and sometimes conduct) occurred during a mediation.

Absent an agreement to the contrary, a mediation does not end until and unless “[f]or 10 calendar days, there is no communication between the mediator and any parties to the mediation relating to the dispute.” Cal. Evid. Code § 1125(a)(5). Where the parties convene a mediation and commence settlement negotiations in that environment, their post-mediation negotiations will be protected for the ten-day period following the mediation. See, Rodriquez v. United Nat’l Ins. Co., No. BC43004, 2012 WL 541512 (2d Dist., Feb. 6, 2012) (when a mediation ends is defined by statute and does not occur when one party walks out of the mediation). Mediation confidentiality does not extend to the date, location and attendants at the mediation, nor does it cover correspondence exchanged two months after the mediation was concluded. Nazareth v. Malcolm & Cisneros, No. RG13674746, 2016 WL 4491452 (1st Dist., Aug. 26, 2016).

An interesting side development concerning the mediation confidentiality protections available under California law concerns parties’ efforts to avoid the consequences of a settlement by settling with their adversary and then suing their attorney for “settlement malpractice.” In our inaugural Recent Developments program in 2013, we looked at Filbin v. Fitzgerald, 211 Cal. App. 4th 154 (2012) as an example of this developing trend of settle with your attorney and then sue your attorney for “negligent” or “inadequate” settlement. Following a bench trial, the trial court in this case entered judgment in plaintiffs’ favor on the malpractice claim. The First District Court of Appeal reversed, explaining that in a “settle and sue” malpractice action, the plaintiff must prove that but for the malpractice she would certainly have received more money. Simply showing that the attorney erred is not enough. The Court noted that the requirement that a malpractice plaintiff prove damages to a “legal certainty” is difficult to meet in “settle and sue” cases because claims of inadequate settlement are often inherently speculative since settlement involves a wide spectrum of considerations and broad discretion. Importantly, however, the Court did not flatly prohibit liability against former counsel for less favorable settlement, and simply concluded that based upon the facts before it, plaintiffs had failed to prove causation or damages as a matter of law.

It is even more difficult for parties to prove settlement malpractice when the settlement is the product of mediation, because there are the additional hurdles of (1) mediation confidentiality protection under Evidence Code section 1119 making inadmissible as evidence any communications, negotiations or discussions had during a mediation, and (2) that fact that there presently is no exception to the broad scope of confidentiality protection provided by Section 1119 for claims of fraud or professional malpractice during a mediation. Cassel v Superior Court, 51 Cal. 4th 113 (2011) is the landmark decision from the California Supreme Court and kicked off this issue in 2011, but we have looked at similar cases of alleged mediation or settlement malpractice each year since the ADR updates program was first presented in 2013. See, e.g., Filbin v. Fitzgerald, 211 Cal. App. 4th 154 (2012); Roldan v. Callahan & Blaine, 219 Cal. App. 4th 87 (2013); Moua v. Pittullo Howington Barker Abernathy LLP, 228 Cal. App. 4th 107 (2014); Syers Properties III, Inc. v. Rankin, No. RG10518323, 2014 WL 1761923 (1st Dist., May 5, 2014); Amis v. Greenberg Taurig LLP, 235 Cal. App. 4th 331 (2015).

Another interesting side development concerning mediation confidentiality protection under California law is that demonstrated in the unreported Fourth District decision in Chodosh v. Trotter, No. 30-2017-722371, 2017 WL 4020446 (4th Dist., Sep. 13, 2017), discussed in Section (c), below, where disgruntled plaintiffs who did not settle at mediation later sued the mediator and provider for alleged misconduct during the course of the mediation which they believe compromised their due process rights to an impartial judge when they returned to court for trial setting. The bottom line: I anticipate there will be more “process litigation” directed at mediation and its participants as mediation becomes further incorporated / annexed to the civil litigation process, and that resulting case law will continue to influence

  • (a) how the various participants (including mediators) view their roles,
  • (b) how the process is administered,
  • (c) what parties and counsel expect from the mediation process, and
  • (d) what constitute “best practices” by mediators and attorneys.

In Chodosh v. Trotter, No. 30-2017-722371, 2017 WL 4020447 (4th Dist., Sep. 13, 2017), the court held that alleged statements made by the mediator for the ostensible purpose of coercing a settlement were inadmissible to support opposition to anti-SLAPP motion brought by the mediator and provider when sued by a mediation participant for alleged misconduct.

Plaintiffs were residents in a mobilehome park who got into a dispute with the mobilehome park’s association over a special assessment. The judge to whom the matter was assigned – Judge Nancy Stock – encouraged the parties to try to settle the dispute with the help of a mediator at JAMS – Justice Trotter. In late 2013, the parties attended two separate mediation sessions with Justice Trotter – the first in October and the second in November – but the matter did not resolve. According to plaintiffs, when the parties’ reached impasse at the second mediation in November, Justice Trotter allegedly told the plaintiffs that the association’s settlement offer “was a gift and that he would personally tell ‘Judge Nancy’ that Plaintiffs refused to settle … and were the reason why settlement was not reached.”

At the December 2013 trial setting conference, plaintiffs asked for a phased trial starting with a bench trial on legal issues, and the association asked for an unphased jury trial. Judge Stock agreed with the association and set the matter for an unphased jury trial. Judge Stock retired in January 2014 and soon thereafter joined JAMS. Plaintiffs then moved to disqualify Judge Stock retroactively and to void her order for the unphased jury trial alleging that Judge Stock had directed the parties to mediate with Justice Trotter while she was in discussions with JAMS about joining JAMS after her retirement and that neither disclosed this alleged conflict. Plaintiffs also alleged that Judge Stock’s trial setting motion had been influenced by Justice Trotter carrying through on his threat to contact Judge Stock and tell her that plaintiffs (basically) did not participate in good faith in the mediation effort and turned down a reasonable (gift) offer. Plaintiffs’ motion was denied and plaintiffs’ petition for writ of mandate was denied.

Plaintiffs then filed a lawsuit against Justice Trotter and JAMS for breach of contract, fraudulent concealment, negligence, intentional and negligent infliction of emotional distress, intentional and negligent misrepresentation and unfair business practices. These claims were based on Justice Trotter’s alleged threat during the November 2013 mediation the purported failure on the part of Justice Trotter and JAMS to disclose that Judge Stock was joining JAMS or in discussions to join JAMS after her impending retirement. In response to the lawsuit, JAMS and Justice Trotter filed a special motion to strike the complaint under the anti-SLAPP statute (CCP § 425.16) and argued that their alleged acts were protected litigation-related conduct and that plaintiffs could not establish a likelihood of prevailing due to mediation confidentiality, quasi-judicial immunity and the litigation privilege under Civil Code § 47. Plaintiffs opposed the motion and, in support of their opposition, offered declarations in which they repeated Justice Trotter’s alleged statements (threats) at the mediation session. Defendants objected to the declarations being considered as falling within the scope of Evidence Code § 1119.

The trial court granted defendants’ anti-SLAPP motion, finding that the gravamen of plaintiffs’ claims arise out of statements made in connection with an issue under consideration by a judicial body and in a mediation. In so ruling, the trial court held that plaintiffs did not meet their burden to present admissible evidence demonstrating a possibility of prevailing on their claims. First, the court found that the statements attributed to Justice Trotter were inadmissible “because they are protected by the mediation privilege” set forth in the Evidence Code. The court noted that the Evidence Code “sets forth an extensive statutory scheme protecting the confidentiality of mediation proceedings, with narrowly delineated exceptions” and prohibits participants and mediators alike from revealing mediation communications. The trial court further buttressed its ruling with findings that defendants were protected by quasi-judicial immunity and that the communications at issue were entitled to absolute protection under the litigation privilege.

On appeal to the Fourth District, the trial court’s granting of defendants’ anti-SLAPP motion was affirmed. The appellate court found that the trial court did not err in ruling that the alleged statements made by Justice Trotter were inadmissible under Evidence Code § 1119 and, as such, plaintiffs had no admissible evidence to establish a probability of prevailing at trial. In so ruling, the appellate court rejected plaintiffs’ argument that mediation confidentiality should not apply because to do so would sanction conduct by which defendants “denied [them] due process by threatening to unlawfully taint their constitutional right to an impartial judge.”

“The issue is not whether defendants impeded plaintiffs’ due process rights, but whether mediation confidentiality would do so. And even if their ability to pursue claims were limited by mediation confidentiality, Cassel confirms this scenario does not, without more, establish a due process violation…. ‘Implicit in our decisions in Foxgate, Rojas, Fair, and Simmons is the premise that the mere loss of evidence pertinent to the prosecution of a lawsuit for civil damages does not implicate such a fundamental interest.’”

*7, citing Cassel, supra, 51 Cal. 4th at 135.

The appellate court also found unpersuasive plaintiffs’ claim that use of the mediation statutes to protect mediator misconduct is an absurd result contrary to legislative intent.

“The intent of the Evidence Code mediation provision is to encourage mediation. [Citations omitted.] This requires confidentiality, which means participants generally must forego claims arising from mediation conduct….

*8, citing Cassel, supra, 51 Cal. 4th at 133.

Finally, the appellate court declined plaintiffs’ invitation to craft a judicial exception to Evidence Code § 1119, and noted that the issue of whether California law should provide rules to govern private mediator conduct was a matter for the Legislature.

Comment: An interesting thing about this decision is the introduction of the litigation privilege as an additional ground for immunizing from later litigation attack those who participate in the mediation of a litigated dispute. The significance of the litigation privilege is that it provides a complete defense / bar to litigation based upon a long-established and accepted common law doctrine dating back to jolly old England, whereas Evidence Code § 1119 simply provides a basis to present a defense on the merits because the only evidence the other side has is inadmissible as a matter of California law. As discussed below, federal law does not view mediation confidentiality the same way as California, so the common law doctrine of litigation privilege may actually provide greater protection for what is said and done in a mediation of a litigated dispute.