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CA Confidential: How The Latest Challenges to California’s Evidence Code Undermine Mediation

Just Court ADR, November 3rd, 2015

In the world of ADR news, California’s mediation confidentiality provisions are achieving “Kardashian”-like levels of fame at the moment, with a comparable amount of dramatic fireworks to boot. Since 1993, California has included in its Evidence Code provisions which guarantee mediation confidentiality and greatly limit the discovery and admission of evidence procured from mediations. However, between an initiative to rewrite the California Evidence Code and a recent decision in Delaware’s influential Court of Chancery, these protections face a challenge, one that threatens to jeopardize the reliability of mediation as a viable dispute resolution process in the Golden State.

As RSI covered in the October 2015 issue of its monthly newsletter Court ADR Connection (click the link and head to the bottom right corner to become a subscriber if you’re not one already), the California Law Revision Commission (“CLRC”) has been attempting to revise the California Evidence Code (“Code”) to make writings and admissions made in mediation sessions discoverable in cases involving attorney malpractice and other types of misconduct.  This effort has been met with significant resistance from the ADR community, whose concerns about the threat the proposed revision poses to the mediation pillar of confidentiality are well documented in this October 2 CLRC memo. While there appears to be a dialogue working toward a middle ground, ADR advocates continue to push back zealously against the CLRC’s proposal to carve out broad exceptions to confidentiality; once the CLRC makes its final proposal, it will very likely be adopted by the state legislature.

Now, as reported in The National Law Review, California’s evidentiary privileges face a new challenge as the Delaware Court of Chancery recently declined to apply the statute in a case before the court. In OptimisCORP v. Waite, 2015 Del. Ch. LEXIS 222 (Del. Ch. Aug. 26, 2015), Vice Chancellor Donald F. Parsons, Jr., writing for a unanimous court held that the “Code by its terms, applies only to the courts and judicial proceedings of California.” However, the relevant provision cited by the court reads:

Except as otherwise provided by statute, this code applies in every action before the Supreme Court or a court of appeal or superior court, including proceedings in such actions conducted by a referee, court commissioner, or similar officer, but does not apply in grand jury proceedings. (Cal. Evid. Code §300.)


Photo courtesy Zscout370 [Public domain], via Wikimedia Commons

Nothing in this provision suggests exclusivity: while the California courts named are bound by the Code, it does not say that its jurisdiction is limited to these courts. Moreover, in 2013, the Delaware Supreme Court reversed a Chancery Court decision that failed to accord full faith and credit to a California judgment. The Chancery Court arguably made a similar error in Waite by not applying the Code. While in the present case the subject of confidentiality was made moot by the parties having waived the privilege, the court’s rationale could make for troublesome precedent in future actions before one of America’s preeminent forums for corporate disputes.

California is part of a minority of states in which mediation confidentiality is codified by statute rather than court rule. One of the perceived advantages of such a scheme, at least in theory, is that mediations conducted in California should therefore remain confidential when litigation arises in any court following California law, as the Delaware Chancery Court should have in Waite. The parties and their counsel most likely considered these protections when deciding to mediate their dispute, which we now know involved sordid claims of sexual harassment and corporate conspiracy. Many others have availed themselves of mediation in California under the belief it was a confidential way to resolve their disputes. Under this decision, we now have uncertainty whether a mediation conducted in California will remain confidential if litigation arises outside of California.

Confidentiality is a pillar of mediation for a reason: without it, the whole method can crumble. Parties need to be free to explore the issues and pursue their interests, and not worry that what they will say or do during the process exposes them to liability down the road. When legislative bodies attempt to tweak these rules, or courts determine justice is not served by enforcing them, their actions, well-intentioned though they may be, can end up undermining the entire mediation process.

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One Response to “CA Confidential: How The Latest Challenges to California’s Evidence Code Undermine Mediation”

  1. Jim Alfini says:

    Hi Eric,
    Thanks for this excellent post on recent challenges to mediation confidentiality in California, particularly your discussion of the Delaware case. I am writing to add a few thoughts. Many ADR advocates, including me and others within the state of California, are pleased with the steps taken thus far by the California Law Revision Commission. The reason is that over the past decade the Supreme Court of California has applied the California law reflexively, rejecting needed exceptions to the statute. Most recently they rejected an exception for attorney malpractice in the Cassell case. The Uniform Mediation Act, as well as other state acts, has such an exception and we believe that California would be well advised to consider one.

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