Gimme Back My (Privileged) Mediation Statement! Reply

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 distributor’s New Jersey mediation statement and, guess what—they 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 BBW’s candles “flared” and “exploded.”   Lakes learned of similar flaring litigation in New Jersey, and subpoenaed the “litigation records” from the NJ plaintiff’s counsel and BBW’s NJ counsel.  Both lawyers produced BBW’s “brief submitted in the mediation or settlement proceedings.”

BBW then filed a motion to claw-back its mediation statement from Lakes’ clutched hands, and Lakes countered with a motion to compel.  BBW argued that the mediation privilege required the statement’s return, but Lakes countered that BBW waived the privilege by producing it or, alternatively, that the court should impose a crime–fraud exception to the privilege. More…

Important Choice-of-Privilege-Law Issue Unfolding in the Ninth Circuit 1

Resist the urge to stop reading when you see the phrase “choice of laws.”  There is an important choice-of-privilege-law issue brewing in the 9th Circuit that could have significant privilege repercussions in federal-court cases containing federal- and state-law claims.

Still reading?  Let’s discuss the situation in In re: TFT-LCD (Flat Panel) Antitrust Litig. (Sony Electronics, Inc. v. HannStar Display Corp.), No. 14–15916 (CTA9).

Background

Sony Electronics, Inc. possessed antitrust and related claims against HannStar Display Corporation (and others) arising from HannStar’s alleged conspiracy to fix prices and limit the output of LCD panels.  Sony and HannStar participated in a pre-suit mediation where it appeared, through confirming emails, that both parties agreed to a mediator’s proposal of $4.1M. More…

Settlement Agreement Not Privileged, Court Rules

The USDC for the Eastern District of Tennessee recently ruled that the Sixth Circuit’s settlement privilege does not prevent a non-settling defendant from obtaining the settlement agreement settlementbetween a plaintiff and a settling defendant.  Kelley v. Apria Healthcare, Inc., 2016 WL 737919 (E.D. Tenn. Feb. 23, 2016).  You may access the decision here.

Sixth Circuit’s Settlement Privilege

In Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 976 (CTA6 2003), the Sixth Circuit adopted a federal common-law “settlement privilege” that prevents compelled disclosure of settlement communications and negotiations.  Critics of Goodyear correctly point out that the court was exercising diversity jurisdiction and should have applied state law—not federal law—in determining whether a settlement privilege exists under common law.

Courts outside the Sixth Circuit reject Goodyear’s analysis, but the decision remains good law.  For an explanation of Goodyear and practice tips for outside and in-house counsel, see my post Important Lessons about the Settlement Privilege.

Background

In Kelley, the plaintiff sued multiple defendants following a fire that erupted in a traveling camper and killed the camper’s occupant.  All defendants except Apria Healthcare settled, and Apria filed a motion to compel the settlement agreements.

The plaintiff and the settling defendants opposed the motion on grounds of relevancy, but also that the Sixth Circuit’s settlement privilege protected the settlement agreements from compelled disclosure.

Ruling

Noting that “a number of district courts have recognized that settlement agreements are not privileged,” the Kelley court ruled that, “[a]lthough the Sixth Circuit recognizes that the settlement privilege protects settlement negotiations from discovery, ‘this privilege does not extend to the terms of the final agreement.’” (emphasis added).

What about Confidentiality Provisions?

The plaintiff and settling defendants argued for non-disclosure because the settlement agreements contained confidentiality provisions, but the court ruled that was of no consequence, stating that the no-privilege rule “is true even where the agreement is designated as ‘confidential.’”

Protective Order

The plaintiff and settling defendants received a consolation prize as the court ruled that it would approve entry of a protective order limiting use and disclosure of the settlement agreement.  So, while the settlement privilege does not protect settlement agreements from discovery, counsel likely can limit disclosure through a court-approved protective order.