Now this is interesting. A plaintiff sues a product distributor in California claiming product-related injuries. She learns of a different plaintiff with a similar claim in New Jersey against the same distributor. She subpoenas the distributorâs New Jersey mediation statement and, guess whatâthey produced it. Yes, really.
So what happened? The distributor sought to claw-back the mediation statement claiming the mediation privilege protected it. And the court agreed, essentially blocking any waiver argument and chastising the plaintiff for even trying! Lakes v. Bath & Body Works LLC, 2018 WL 2318106 (E.D. Cal. May 22, 2018). You may read it here.
Yes, Really
Crystal Lakes sued Bath & Body Works alleging that she suffered burns when one of BBWâs candles âflaredâ and âexploded.â   Lakes learned of similar flaring litigation in New Jersey, and subpoenaed the âlitigation recordsâ from the NJ plaintiffâs counsel and BBWâs NJ counsel. Both lawyers produced BBWâs âbrief submitted in the mediation or settlement proceedings.â
BBW then filed a motion to claw-back its mediation statement from Lakesâ clutched hands, and Lakes countered with a motion to compel. BBW argued that the mediation privilege required the statementâs return, but Lakes countered that BBW waived the privilege by producing it or, alternatively, that the court should impose a crimeâfraud exception to the privilege.
Conflict of Laws
The involvement of NJ (the statementâs location) and California (the forum state) warranted a choice-of-law analysis. The case was in federal court under diversity jurisdiction, so the court correctly applied state privilege law.  But which state?
The court reviewed Californiaâs mediation privilege and NJâs mediation privilege and, finding âno meaningful, substantive conflict,â applied the forum lawâhere, California.
Waiver?
Californiaâs mediation-privilege statute, Cal. Evid. 1119, protects a mediation statement from discovery unless the mediation participants âexpressly agree in writing, or orally ⌠to its disclosure.â Cal. Evid. 1122. Interestingly, NJâs mediation-privilege statute also contains an âexpress waiverâ exception, but no writing requirement.  See NJ Rev. Stat. § 2A:23C-5.
Claw-Back
The court found that BBW did not waive the mediation privilege even though both the plaintiffâs counsel and BBWâs counsel produced the mediation statement to Lakes. The court reasoned that neither NJ party waived the privilege and, even if the lawyers could waive it, neither lawyer did so âexpressly.â
Lakesâ crimeâfraud-exception argument likewise failed because Californiaâs mediation-privilege statute contains no such exception. After that ruling, the court said, in short, â[n]o further analysis need be made.â
Chastisement
But there was further analysis, or perhaps foreshadowing. The court noted that Lakes âis fortunateâ that she did not reference the NJ mediation statement at trial because California law allows sanctions for such conduct. See Cal. Evid. 1128. And, in a thinly veiled threat, â[w]hether this trial sanction is one applicable in federal court is an issue plaintiff would probably like to avoid.â Ouch.