ADR

Editor’s note: This article describes a hypothetical.

Bob knows mediation offers many benefits, even if the process does not always lead to a settlement of the dispute. To illustrate these benefits, Bob tells his Sandy Koufax story:

Sandy Koufax started every game with one goal — to throw a perfect game. If he walked a batter, he still had a goal — to throw a no-hitter. If he gave up a hit, his goal changed yet again — to pitch a shutout. And if he gave up one or more runs, his new goal was to win the game.

Mediation is like Koufax’s pitching strategy. (Editor’s note: This is Bob talking.) I approach mediation with laser-like focus just like Koufax approached each game he started. My goal: Achieve a settlement. If I can’t? I use the mediator to try to move the case to another alternative dispute resolution process — say, arbitration. Quick, inexpensive, final.

If I do not reach agreement to resolve the dispute through another ADR technique? No problem. The mediation at least allowed me to learn more about my adversary’s case. So I am in better shape to litigate the case.

Bob was not kidding when he said he stole signals from Koufax. Take a recent mediation in which Bob represented the plaintiff in a products liability case. Before the first mediation session, the parties gave mediation statements and supporting documents to the mediator. Each party highlighted portions of the documents the party believed were most important to the party’s position.

At the mediation session, the mediator knew more about the case than Bob. (That was the conclusion of everyone in the room other than Bob.) However, the mediation did not lead to a settlement. Nor, despite Bob’s Koufax-like efforts, did the parties agree to use some other ADR process to resolve the suit.

Although the mediation ended, there still was the game — or, rather, the litigation — to win, even if Bob did not throw a perfect game, a no-hitter or even a shutout during the mediation. He had learned an awful lot about the defendant’s case. And he was not going to let that go to waste. So Bob used all he learned in mediation when he communicated with his liability expert. He even provided his expert with the defendant’s mediation statements and accompanying highlighted documents.

Several weeks later, the liability expert handed Bob a report that ripped apart the defendant’s theory of liability. It did so by using the defendant’s own words; the expert report extensively cited portions of the defendant’s own mediation statement.

Bob could not wait for trial. He was happy the parties had not settled their dispute at the mediation or agreed to arbitrate. “Wait until the jury watches my expert hit the ball out of the park!” Bob was going to have a ball.

Bob’s home run dance lasted until the other side cried “foul” in its motion to strike Bob’s expert witness. Bob indignantly responded that the mediation attachments were not confidential and, therefore, were not out of bounds. “All were produced during discovery,” he responded. True, but Bob neglected to mention that he had given highlighted mediation documents to his expert — highlighting that revealed what the defendant concluded were the most significant documents for the mediator to review. Plus, Bob had given the defendant’s mediation statement to his expert.

The court rejected Bob’s “no harm, no foul” theory. In granting the motion to strike Bob’s expert, the judge relied less on a Koufax theory of mediation and more on a steroids theory of mediation. Excoriating Bob for unfairly boosting his case, the judge said Bob had made a mockery of the mediation process.

Where did Bob go into foul territory? In relying on the other side’s mediation materials? In giving those materials to his expert?

Experts rely all the time on facts that are not admissible. However, the other side is entitled to cross-examine an expert on the factual basis for his or her opinions and to challenge these factual bases.

In Bob’s case, however, the defendant was handcuffed. During cross-examination, the defendant could not use confidential mediation communications to confront Bob’s expert and to challenge the expert’s opinions; the defendant could not use the highlighted mediation attachments the defendant had submitted, in confidence, to the mediator.

The facts in Irwin Seating v. Int’l Business Machines, 2007 U.S. Dist. LEXIS 10472 (W.D. Mich. Feb. 14, 2007), are strikingly similar to Bob’s case. There, a federal judge affirmed a magistrate judge’s order granting a motion to strike expert reports that relied on mediation communications: “The Magistrate Judge’s decision to exclude the experts was reasonable and sound.”

Permitting experts to testify, after they had seen confidential mediation materials, would allow the party breaching mediation confidentiality rules to benefit from the breach. And the extreme sanction of striking the experts’ reports was necessary; as the magistrate judge concluded, “The court is aware this resolution may also have a salutary effect in preserving confidences of future mediation participants, and the candor necessary to successful facilitative mediations. A contrary result would certainly have a dramatically contrary impact.” (See Irwin Seating v. Int’l Business Machines, 2006 U.S. Dist. LEXIS 86988, *11 n.4 (W.D. Mich. Nov. 29, 2006).)

Consequently, the judge who granted the motion to strike the expert report in Bob’s case was not off base when she criticized Bob’s approach. If parties know mediation statements, documents and other materials are fair game for the experts, the parties will, understandably, be less open, less frank and less candid in their mediation communications. Just as the magistrate judge in the 2007 Irwin Seating said: “Parties must feel uninhibited in their communications” in order for mediation to be effective.

What should Bob have done? Bob could have given to his expert the documents that Bob’s adversary attached to the adversary’s mediation statement. Bob’s adversary had produced these documents in discovery and Bob’s expert had a right to look at them. However, Bob should not have disclosed the documents that contained his adversary’s highlighting. And Bob really went far afield when he gave his expert a copy of the defendant’s mediation statement.

Bob’s new game plan: no stealing signs, no spitters. He will not show confidential mediation materials to experts or witnesses. He will not tell experts or witnesses what took place in the mediation. “Everything that takes place in mediation — written or oral — is off limits to witnesses and experts. It all stays in the dugout.” •

Charles F. Forer is a member in the Philadelphia office of Eckert Seamans Cherin & Mellott, where he practices all types of alternative dispute resolution. He is a former co-chair of both the Philadelphia Bar Association’s alternative dispute resolution committee and the fee disputes committee. He is a frequent lecturer and writer on the use of ADR in a variety of settings. You can reach him at 215-851-8406 or cforer@eckertseamans.com.