Huerta Mediation provides mediation and arbitration services for businesses, individuals, and the legal community. For the past twelve years, Huerta Mediation has been helping lawyers and their clients find reasonable, confidential, and expeditious resolution of their business, employment, real estate, intellectual property, securities, tort, personal injury, and insurance cases.  This is achieved in part by providing parties the opportunity to be heard and understood, and by helping parties identify and define their risks in litigation and develop creative, interest based resolutions.

MARCH 2011

CASES & RESOLUTIONS:

California Supreme Court Allows Use of Mediation Confidentiality as Shield to Avoid Legal Malpractice Claims

Continuing its strict interpretation of California’s broad mediation confidentiality statute, the California Supreme Court rejected the appellate court’s creation of a judicial exception, and prevented a party from using his private communications with his attorneys before and during a mediation in a later action for legal malpractice.  The alleged malpractice involved claims that the party’s counsel had conflicts of interest and coerced him to settle for too little.  Although private conversations during the mediation between the party and his attorneys did not involve the mediator or other party (or reveal anything said or done in mediation discussions with the mediator or other party), the Court relied on the plain language of the statue to conclude they were confidential nonetheless and that any exception must come from the legislature.  The confidentiality statute only applies to civil actions, however, so would not protect an attorney from use of mediation-related oral communications in a criminal prosecution for fraud. 
Cassel v. Superior Court, No. S178914 (Cal., January 13, 2011).
 

Court Refuses to Vacate Patent Invalidity Decision to Support Mediated Settlement After Balancing Factors

A settlement reached in the mediation program of the U.S. Court of Appeals for the Federal Circuit was contingent on being able to vacate the district court’s ruling that most of the claims in the patent at issue were invalid.  On remand, the district court balanced the importance of court-ordered mediation programs and encouraging mediated settlements against other factors, including the parties’ desire to conserve resources, the public interest in the orderly operation of the federal judicial system, and the potential to conserve judicial resources.  The court concluded that vacating its invalidity ruling was not in the public interest and ultimately would not save judicial resources because the outcome of other pending proceedings also turn on the validity of the patent.  
Ohio Willow Wood Co. v. Thermo-Ply, Inc., No. 9:07-CV-274 (E.D. Tex., February 3, 2011).
 

Use of Mediation PowerPoint to Prep Witnesses Opens It to Discovery

A federal district court ruled that materials used in mediation must be turned over to defendants because they were used in preparing plaintiffs for depositions in the case.  The court found that there was “testimonial” use of the 90-slide PowerPoint presentation in issue because it was used to refresh the memory of a witness, and that production to defendants was in the interest of justice because plaintiffs had failed to respond to numerous interrogatories and document requests on the specifics of their allegations.  The court also concluded that a claim of attorney work product would not prevent disclosure, in part because the materials had already been disclosed to defendants in the mediation.  The court stated that it need not consider the applicability of a mediation privilege, since a privilege would not prevent discovery in this situation. 
Greenwood Realty Inc. v. Action Realty Inc., No. 8:09-CV-02683 (D. S.C., February 15, 2011).
 

Expert Used in Mediation Properly Appointed as Trial Expert, But Must Generate New Report

A New Mexico appellate court concluded that a valuation expert hired by the parties in mediation may be appointed as an expert witness in the trial of the case, as long as her testimony omits anything covered by mediation confidentiality provisions.  While the valuation report that the expert generated for the mediation is confidential and not admissible at trial, the court or parties can have her prepare a new report from the same underlying data for use at trial.  The court applied New Mexico’s new Mediation Procedures Act, some provisions of which are based on the Uniform Mediation Act. 
Warner v. Calvert, No. 29,674 (N.M. App., February 9, 2011).
 

Consent Judgment Following Mediated Settlement Cannot Be Appealed

A mediated settlement of an eminent domain action and an inverse condemnation action resulted in entry of a stipulated or consent judgment.  When the court later awarded funds to the city from a court-controlled deposit to cover costs of remediation, the other party sought to appeal the trial court’s orders.  A California appellate court concluded that the orders were not appealable because the matter ended with the consent judgment, which cannot be appealed unless specifically entered to facilitate an appeal. 
City of Gardena v. Rikuo Corp., No. B217302 (Cal. App. 2d Dist., February 7, 2011)
 

“Opt-out” Settlement Agreement Not Binding Where No Acceptance of Proposal Terms

The parties were not bound by a mediation agreement signed by their counsel, which provided a ten-day period for objections after which the agreement was to be binding, because the agreement also included a settlement “proposal” that was to be accepted or rejected within a specified period.  That proposal was not accepted, so under standard contract principles there was no meeting of the minds.  The failure of either party to opt out within the ten-day objection period did not result in an enforceable agreement, since there had never been acceptance of the settlement terms. 
Powerhouse Custom Homes, Inc. v. 84 Lumber Co., No. A10A2351 (Ga. App., January 24, 2011).
 

Cost Order Cannot Include Prevailing Party’s Half of Mediator’s Fees

A Colorado appellate court reversed the trial court’s cost order relating to mediation, holding that when parties agree to split the costs of mediation, the prevailing party’s half cannot subsequently be awarded as costs unless it reserved the right to seek later recovery.  
Valentine v. Mountain States Mutual Casualty Co., No. 09CA1767 (Colo. App., January 6, 2011)
 

Countrywide to Pay over $600 Million in Mediated Securities Fraud Class Action Settlement

One of the largest settlements of a securities fraud case in U.S. history was reach in mediation and approved by the federal court.  Under the class action settlement, Countrywide Financial Corp. will pay just over $600 million to New York pension funds for its involvement in sub-prime mortgage lending, to which its accounting firm will contribute $24 million.  However, 33 large institutional investors opted out of the settlement, which triggered the need for further mediation, using the same team of mediators, and resulted in a separate $22.5 million fund being set aside for those who opted out. 
TMCnet.com (February 28, 2011); Reuters (February 25, 2011)
 

Other Notable or High Profile Proceedings

• While analyzing a contract requiring a mini-trial as an alternative dispute resolution process, a federal court listed cases in which dismissal of an action due to failure to mediate was appropriate because a contract required mediation prior to litigation.  Union Electric Co. v. Energy Ins. Mutual Ltd., No. 4:10-CV-1153 (E.D. Mo., January 10, 2011)
• As widely reported, ongoing mediation is being conducted between owners of National Football League teams and the NFL Players Association to try to determine how to split over $9 billion in annual revenues from the most profitable professional sport in America.  The mediation is being conducted by the Federal Mediation and Conciliation Service and has involved numerous sessions which have extended past deadlines.  Failure to reach agreement may threaten the upcoming NFL season.  The Washington Post (March 9, 2011); NY Daily News.com (March 2, 2011); The Washington Post (March 1, 2011)
• Former New York Governor Mario Cuomo, said to be experienced as a mediator, was appointed by a federal judge to mediate a billion dollar lawsuit by Madoff trustee Irving Picard against the Mets ownership.  New York Times (February 18, 2011); Hedge Fund.net (February 17, 2011)
• Investors who lost money in Madoff’s ponzi scheme reached a $100 million settlement in mediation with funds affiliated with Tremont Group Holdings Inc., which invested with Madoff.  Reuters (February 25, 2011)
• James Roosevelt, Jr., grandson of Franklin Delano Roosevelt, has mediated disputes between well-known political figures, and may need his skills in the proposed merger of Harvard Pilgrim Health and Tufts Health Plan, where he is president and CEO.  Becker’s Hospital Review (January 28, 2011)
• U.S. Transportation Secretary Ray LaHood held a mediation session involving the expansion of O’Hare International Airport with Chicago Mayor Daley and the CEOs of United and American.  Chicago Tribune.com (February 10, 2011)
• Rapper 50 Cent states that mediation is scheduled to try to resolve his lawsuit against website WorldStarHipHop.com for using his image on the website.  Billboard.com (January 24, 2011)
• After failing to resolve sexual-abuse lawsuits in mediation, the Archdiocese of Milwaukee is filing for bankruptcy protection, becoming the eighth to do so since the clergy abuse scandal arose in 2002.  The Washington Post (January 4, 2011)
• A ten year old lawsuit by homeowners for faulty construction was finally resolved in the third attempt at mediation.  The homeowners were first awarded $800,000 in arbitration, which was appealed and resulted in a $58 million jury verdict.  The court had not finalized the judgment and sent the parties to mediation to try to avoid further appeals.  Star-Telegram (January 27, 2011)
• Court-ordered mediation has resulted in an agreement by AstraZeneca Plc to pay $150 million to settle 6,000 more lawsuits over its antipsychotic drug Seroquel.  Bloomberg BusinessWeek (February 17, 2011)

NEWS & INITIATIVES: 

International Mediation Developm

• Greater use of mediation is urged to help offset budget cuts to legal aid in boroughs in London, England.  Hackney Citizen (February 18, 2011)
• Germany’s leading arbitration institution, the Deutsche Institution für Schiedsgerichtsbarkeit eV (DIS), has issued mediation and other alternative dispute resolution rules.  International Law Office (February 17, 2011)
• Italy’s lawyers’ union is calling for a week-long national strike to protest the March 21 implementation of the groundbreaking new mandatory mediation statute in Italy.  Karl Bayer.com (February 25, 2011)
• Russia’s new mediation law took effect on January 1 and regulates mediation procedures for business and commercial disputes, along with employment and family law matters.  Herbert Smith.com (January 31, 2011)
• The National Institute of Defense of Consumers in Angola mediated consumer complaints and obtained reimbursement of AKZ 3.9 million ($42,000) in 2010.  Angola Press (February 2, 2011)
• Qatar continues its push to become an international center for dispute resolution, holding a mediation training for local professionals.  The Peninsula (January 26, 2011)
• India’s Law and Justice Minister asserts that alternative dispute resolution will be the preferred way of settling disputes in the future and that India is working to become a preferred destination for ADR.  Press Information Bureau (January 9, 2011)
• A new mediation center opened at the Hazaribagh Civil Court in the state of Jharkhand, India.  OneIndia News (January 24, 2011)
• Four thousand lawyers wore black stripes in Surat, India to protest opening a mediation center to mediate cases under the Negotiable Instruments Act.  The Times of India (February 11, 2011)
• The Supreme Court of Nepal is expanding mediation with new centers in twenty-five remote district courts, making a total of 58 mediation centers.  Himalayan Times (December 28, 2010)
• The first Asia-Pacific Mediation Leadership Summit will be hosted in Bangkok, Thailand in July by the Asia-Pacific Mediation Forum.  APMF Website
• The Second Asian Mediation Association Conference is being hosted by the Malaysian Bar Council to encourage use of mediation.  Malaysian National News Agency (January 26, 2011)
• Mediation is growing in Hong Kong, with the Hong Kong International Arbitration Centre claiming a 90% mediation settlement rate at the end of 2010.  The Asset (January 28, 2011)
• The Lands Tribunal in Hong Kong issued a Direction to encourage parties in Land Compulsory Sale cases to use mediation.  7thSpace Interactive (February 11, 2011)
• The Intellectual Property Office of the Philippines is urging mediation of cases relating to copyright and other IP disputes, and devoted February to cases requiring mandatory mediation.  Business Insight Malaya (February 15, 2011)
   

States Continue Use of Mediation for Consumer Restitution

The Michigan attorney general is forming a multi-state task force of attorneys general to coordinate the mediation of consumer complaints against Allcare Dental and Dentures across the fifteen states in which the company operated before abruptly ceasing business.  The mediations will not only address financial issues, but protection of and access to patient dental records.  The Washington Post (January 7, 2011); Examiner.com (January 6, 2011) 
Mediation by the Missouri Department of Insurance resulted in recovery of $9.5 million for consumers who brought insurance complaints.  The largest number of complaints involved health insurance, followed by auto and homeowners.  The average consumer recovery in the mediations was $7,000.  Worker’s Compensation.com (January 27, 2011) 
The attorney general’s office in Massachusetts helped consumers recover over $4.7 million through mediation last year.  The attorney general received over 13,000 complaints in 2010 relating to consumer, health care and elderly issues.  The Elder and Health Care mediation program obtained nearly $700,000 for consumers in the state.  The Newburyport Current (February 14, 2011)
 

Mediation Encouraged for Medical Malpractice

NPR and a major health care provider each urge mediation as a beneficial alternative to malpractice litigation.  
National Public Radio (February 1, 2011); Kaiser Health News (February 1, 2011)
 

Update on Home Foreclosure Mediation

• A hearing by the U.S. Senate Judiciary Committee emphasized the foreclosure mediation programs of the Bankruptcy Courts in New York and Rhode Island, which began in 2009.  However, a loan servicer has challenged the authority of the Rhode Island Bankruptcy Court’s mediation program.  Senator Sheldon Whitehouse (D-RI), who chaired the hearing, has introduced S.222, the Limiting Investor and Homeowner Loss in Foreclosure Act to clarify the authority of Bankruptcy Courts to run loss mitigation programs and to expand them nationwide.  The State Column (February 3, 2011); Market Watch (February 1, 2011); The Providence Journal (January 29, 2011); Loan Rate Update (January 31, 2011); S.222
• Legislation requiring mediation with homeowners prior to repossession has made progress in Washington state, with extensive negotiations on language resulting in support from both bankers and anti-poverty advocates.  The News Tribune (February 18, 2011)
• Legislation requiring mandatory mediation of home foreclosures is being contemplated in Hawaii.  The Hawaii House of Representatives passed and sent to the Senate a measure that would provide a five-month moratorium on non-judicial home foreclosures, which would give homeowners time to mediate or otherwise negotiate with lenders.  KITV.com (February 3, 2011); Forbes.com (February 11, 2011)
• The proposal of the mayor of Boston, Massachusetts to require face-to-face mediation prior to mortgage foreclosures in the city has passed the City Council; it needs permission from the state before going into effect.  The Boston Globe (January 6, 2011)
• Florida’s court-mandated foreclosure mediation program is not achieving the results expected, as only 5.7% of cases referred to mediation statewide have resulted in agreements, with some counties showing settlement rates as low as 1%.  Some Florida counties are working to remedy a glitch in the program that gives bank attorneys better access to financial records than defense lawyers.  TBO.com (January 28, 2011); St. Petersburg Times (January 28, 2011)
• Pre-foreclosure cases are being added to mediation programs in six of Florida’s twenty court circuits.  The change results in beginning the mediation process at an earlier point, when the mortgage may be delinquent as little as 65 days, without waiting for the foreclosure process to begin, when the situation is much more serious.  This can result in more successful mediations and may be a “game changer.”  Fannie Mae and Freddie Mac are considering whether to force loan servicers in South Florida to participate.  Miami Herald.com (January 8, 2011); PR Newswire (January 7, 2011); Sun Sentinel.com (January 10, 2011); The Ledger.com (January 12, 2011)
• After its first year, Nevada’s Foreclosure Mediation Program has kept nearly half its participants in their homes, and only 13% of 6,000 mediations resulted in foreclosure.  The Nevada Supreme Court has updated the rules for its Foreclosure Mediation Program, with the changes taking effect on March 1.  Las Vegas Sun (February 17, 2011); E-wisdom.com (January 22, 2011); ABC News (January 12, 2011)
• The mortgage foreclosure mediation program in Maryland requires homeowners to opt in, so has resulted in only 317 completed mediations since it began, despite 33,000 active foreclosures.  About one-third of the mediations resulted in agreements, with loan modifications and other resolutions.  Baltimore Business Journal (January 18, 2011); Center for American Progress (January 19, 2011)
• With only a tiny number of homeowners benefiting from New Jersey’s Residential Mortgage Foreclosure Mediation Program, a court-ordered change gives homeowners 30 days to enter the program rather than just 15. Delaware State Courts (February 1, 2011); Cape Gazette.com (February 13, 2011) (Registration Required)
• A Wisconsin mandatory mediation program for home foreclosures has been working well after beginning last year in Walworth County.  Rock and Milwaukee Counties also have mediation programs.  Gazette Xtra.com (January 16, 2011)

JANUARY 2010

CASES & RESOLUTIONS:

California Court Shields Mediation from Scrutiny with Absolute Quasi-Judicial Immunity

A California appellate court concluded that a mediator was shielded by absolute quasi-judicial immunity regardless of whether he was mediating or arbitrating in Phillips v. JAMS (Cal. App. 2d Dist.).  The mediator had agreed in a previous mediation settlement to make a binding decision for the parties if future disputes arose.  The mediator tried to mediate a subsequent dispute, in the midst of which he felt he was being abused by aggressive counsel and announced he could no longer be impartial and was not going to make a binding decision, even if the parties could not reach a mediated resolution.  Litigation followed, but the appellate court affirmed summary judgment dismissing claims against the mediator and his sponsoring organization, concluding that litigation is not allowable against those providing dispute resolution services which are connected to the judicial process.  The court held that “[a]ll functions integral to the dispute resolution process are shielded by absolute immunity.”
Phillips v. JAMS (Cal. App. 2d Dist. January 28, 2010)

New York Court Sanctions Party for Rigidity in Mediation

A bankruptcy court in New York imposed penalties for mediating in bad faith on a party the court found to be rigid and obstructionist during court-ordered mediation.  The court recognized that of course parties cannot be forced to settle and may take a “no pay” position.  But mere attendance without active participation is not sufficient for good faith.  Sending representatives who would not consider the risks involved and who could only repeat a mantra that they would pay nothing renders mediation futile and forms the basis for penalties for obstruction of the mediation.  Party representatives must have full authority to settle; having to telephone for additional authority is not sufficient.  The offending party did ultimately make a settlement offer, but only after the threat of sanctions, and the offer was considered to be insincere by the mediator and other party.  Under the mediation rules of the court, mediators are required to report incidents of bad faith mediation, and are permitted to provide information under the court’s confidentiality provisions. 
In re A. T. Reynolds & Sons, Inc., No. 08-37739 (U.S. Bankr. S.D.N.Y. February 5, 2010)

Federal Judge Orders Early Mediation in Airliner Crash

The federal judge managing the roughly three dozen lawsuits filed after the February 2009 crash of Continental Connection Flight 3407 has ordered mediation to begin by mid-June and assigned the cases to four local mediators.  Both sides say they welcome mediation but wonder whether it is being ordered too soon, as depositions are not expected to begin until summer.  Plaintiffs’ lawyers strongly assert that this is a punitive damages case, which impacts resolution.  However, the lead plaintiffs’ attorney notes that he tried the last major aviation liability case, which was the 1992 trial of the Lockerbie crash, and that every case since then has settled.
Buffalo News.com (January 7, 2010)

Mediation Agreement Aims to Calm Racial Tensions in City

Two years after a gunman killed the mayor, other city officials and police officers during a council meeting in suburban St. Louis, the U.S. Justice Department mediated an agreement that is intended to improve relations between the black and white communities and begin to heal racial divisions.  The agreement, which contains tangible programs and steps by the city, is seen as hopeful progress by many, while others are concerned by the city’s failure to fully admit that a racial problem exists.  A follow up meeting has been scheduled to try to further reduce tensions.
STL Today.com (January 22, 2010); Fox 2 Now.com (February 9, 2010)

Other Notable Cases and Proceedings

• Court-ordered mediation between the telephone company FairPoint Communications and the Maine Public Utilities Commission was delayed by the inability of the Maine PUC staffer to bind the agency despite the court’s requirement that representatives must have complete authority.  The agency is seeking to modify the court order to permit a public hearing before any tentative settlement is voted on by the PUC commissioners.  WSJ.com (January 22, 2010)
• Although Ohio’s federal court-conducted mediation program is voluntary, the court requires each participating party to have a representative attend in person who has authority to agree to the last offer or demand made.  Jack v. Allied Systems, Case No. 3:05-cv-125 (U.S. S.D. Ohio January 7, 2010)
• A federal magistrate imposed $6,000 in costs and expenses on companies which failed to send representatives with adequate settlement authority to mediation in a dispute over 55 trees that a pipeline company cut down to keep roots from impacting the underground pipe.  The companies have backed out of mediation and intend to litigate the $300,000 claims against them by the city and local school district.  PDDnet.com (January 12, 2010); Helenair.com (January 13, 2010)
• Even though counsel moved to withdraw prior to mediation, counsel was jointly liable with the client who failed to appear at mediation for the time of both the mediator and opposing counsel.  George W. Park Seed Co. v. DHL Express, Civil Action No. 8:08-1993-WMC (U.S. D.S.C. January 5, 2010)
• Mediation was improperly ordered by court where the statutory requirement mandates a hearing within a short time period on the merits of a personal protection order.  Moreover, court-imposed mediation may not be appropriate when domestic violence or stalking is alleged.  Baker v Holloway, No. 08-007173-PH (Mich. App. January 26, 2010)
• Appeal dismissed due to parties’ failure to engage in appellate mediation.  Alba v. Passage Realty, Inc., No. 14-09-00304-CV (Tex. App. January 7, 2010)
• Mediator sued party for cancellation fee for not proceeding with mediation, but appellate court affirmed summary judgment dismissing case because party had not agreed to cancellation term which was unilaterally sent out by mediator after parties agreed to mediate.  Levin Law Group v. Sigmon, No. 14-08-01165-CV (Tx. App. January 21, 2010)
• Mediation settlements are especially unsuited for rescission based on unilateral mistake.  Rachid v. Perez, No. 08-1210 (Fla. App. January 20, 2010)
• After 17 years of litigation, six months of mediation resulted in a tentative agreement by the state of Utah to pay $33 million to a class of 8,000 Navajos for mismanagement of an oil royalty trust fund created in 1933.  Deseret News.com (January 6, 2010)
• Failure to specify the width of road paving in mediation settlement leads to breakdown and litigation over “normal city standards.”  James v. City of Russellville, No. 2080881 (Ala. App. January 8, 2010)
• New York town objects to mediators selected to resolve environmental claims against General Motors bankruptcy estate due to their lack of subject matter expertise in light of the complexities of environmental science.  WSJ.com (February 8, 2010)
• Los Angeles City councilwoman planned to mediate dispute between the Port of Los Angeles and company seeking to open $50 million shipyard, but recused herself after revelations of campaign contributions from company.  Daily Breeze.com (February 10, 2010)
• Four years after talks to settle lawsuit for $2 million broke down, Tuomey Healthcare System and the federal government have agreed to mediate.  Tuomey alone has spent over $4 million on legal fees in the case.  The Item.com (January 6, 2010)
  
   

NEWS & INITIATIVES: 

Payment of Settlement Funds to Charities Gaining in Both Popularity and Scrutiny

Settlements in class action lawsuits are requiring payments to charities at triple the rate in the past, according to a recent study, which is raising concerns when the charities are unrelated to the litigation or have some connection to the defendants or the judge approving the settlement.  Judicial review is pending of a proposed $9.5 million settlement by Facebook of litigation over sharing personal information.  Objections have been raised in the Facebook hearing to the entire settlement amount funding a foundation to promote privacy rights apart from the 30% going to plaintiffs’ counsel.  In part, concerns are related to Facebook having a role in creating the foundation’s bylaws and input on a board member.  However, the trend of settlements going to charity may continue as legislation was introduced in Ohio earlier this year encouraging judges to use these types of arrangements.
WSJ.com (March 2, 2010)

Federal Office Mediates Disputes Between FOIA Requesters and Federal Agencies

Freedom of Information Act disputes are now being mediated by the Office of Government Information Services (OGIS), which was created within the National Archives and Records Administration and officially began work in September 2009.  In its first months, OGIS has begun work on about 40 disputes.  OGIS, which will have a staff of six, is working with a contractor to add online dispute resolution and is seeking to provide more transparency into matters it is mediating.  In addition to directly resolving disputes, OGIS is tasked with providing suggestions for FOIA improvements.  OGIS also plans to provide mediation training to FOIA officers in federal agencies to reduce the number of disputes that arise from the roughly 600,000 FOIA requests made each year.
Federal Computer Week (January 14, 2010); OGIS Website

Concerns Raised over Determining “Bad Faith” in Texas Balance Billing Mediations 

Mediators are concerned over provisions in new Texas legislation which would require them to report parties who act in “bad faith” in mediations involving balance billing.  The new legislation allows insured patients to mediate whenever they would have to pay over $1,000 for services of out-of-network doctors received at in-network hospitals.  In an effort to compel serious mediation efforts, the law includes a requirement for reporting bad faith conduct, without providing standards.  The Texas Department of Insurance is drafting rules to implement the statute, which is to take effect in September 2010.  Mediators hope to get the bad faith reporting requirement adjusted in the regulations in order to maintain neutrality.
Dallas Morning News (January 26, 2010)

Mediation Available for Online Gaming Disputes

An inspection and certification agency for online gaming operators, eCOGRA, certifies that online casinos are safe and fair sites, in part by mediating disputes and ensuring that players’ issues are adequately addressed by the online casinos.   The agency received over 800 mediation requests in 2009, and reported that valid mediation requests were up 14% over 2008.
Casino Advisor (January 15, 2010)

Hong Kong’s Practice Directive on Mediation Takes Effect

Hong Kong’s Practice Directive 31 (PD31) on mediation went into effect on January 1, as scheduled in the Civil Justice Reform adopted in early 2009.  PD31 requires counsel to explain mediation to parties and file with the court in each litigation a statement that the party is willing to mediate or why it is not.  Further, PD31 sets up a process by which either party can propose mediation and receive a response from the other party within fourteen days.  If mediation is unreasonably refused, the court potentially can impose litigation costs on the unreasonable party.
Clifford Chance (January 7, 2010)

Other International Mediation Developments

• Association of Arrears Mediators founded in the U.K. by five leading mortgage and loan arrears mediation companies.  My Introducer.com (January 21, 2010)
• Armenia’s Financial System Mediator reports success in its first year of mediating between financial organizations and customers.  Armenia Now (January 25, 2010)
• South Africa’s Commission for Conciliation Mediation and Arbitration (CCMA) caseload is increasing steadily to over 140,000 cases in fiscal year 2008-09.  Busrep.co.za (February 8, 2010)
• India’s Bangalore Mediation Centre has a settlement rate in excess of 60% and plans to expand its mediation model of using experienced lawyers rather than judges as mediators.  Express Buzz.com (January 25, 2010); Hindu (January 28, 2010) (Subscription Required)
• China has resolved hundreds of cross-Straits lawsuits involving Taiwan businesses and residents since opening the first court for such cases in March 2009, with 80% of cases settled through mediation.  CRI English.com (February 13, 2010)
• Significant movement toward mediation in New Zealand seen in both civil and criminal justice systems, such as dispute resolution provisions in the Financial Service Providers Act which take effect later this year.  Scoop (January 14, 2010)
• World Bank’s IFC helps establish mediation in the Solomon Islands through workshop for court and consulting with other groups.  Finchannel.com (January 23, 2010)

Update on Home Foreclosure Mediation

• Members of Congress from Ohio, California and Florida in February introduced the Foreclosure Mandatory Mediation Act, H.R. 4635, as companion legislation to S. 2912.  The federal legislation would require mandatory mediation by lenders of loans with federal guarantees or federal insurance.  The required one-time mediation would involve both the mortgagor and a housing counseling agency and would be paid for by the lender.  Federal Information & News Dispatch (March 3, 2010) (Subscription Required)
• While the Florida Supreme Court ordered each of the 20 circuit courts in the state to establish its own foreclosure mediation process, only three circuits have complied with the order to date.  Florida was hit with an additional 296,000 foreclosure filings in the last quarter of 2009, pushing the number of pending foreclosures to 456,000.  Jacksonville.com (February 13, 2010)
• Nevada judges have stated publicly that they will not impose loan modifications even if lenders do not negotiate in good faith in mediations.  RGJ.com (January 24, 2010)
• New Hampshire has begun a Foreclosure Mediation Program which is voluntary for homeowners and free to both borrowers and lenders.  The program is being funded by grants from several sources.  Nashua Telegraph (January 18, 2010); Foreclosure Mediation Program
• Lenders attempting to foreclose on primary residences on the Big Island of Hawaii must now notify borrowers of their right to mediation by serving a mediation notice along with other documents.  Star Bulletin (January 21, 2010); Judiciary Press Release (January 20, 2010)
• Providence, Rhode Island has mandated a foreclosure mediation process, and the City Council is seeking to add a $2,000 fine for banks or lenders who fail to attempt to renegotiate mortgages with homeowners before filing a deed of foreclosure.  Projo.com (January 25, 2010)
• Maryland’s governor is pushing for the emergency legislation he introduced to institute a mandatory foreclosure mediation program in the state, and would like lenders to support the plan.  Lenders remain concerned about anything that would slow down the foreclosure process.  Maryland looked to South Carolina’s foreclosure prevention efforts, which require a showing that borrowers are not eligible for modification under the federal Home Affordable Modification Program prior to foreclosure.  Governor O’Malley Press Release (February 16, 2010); Daily Record (January 18, 2010)

 
Lawrence Huerta

HUERTA MEDIATION
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Mediation Quote:

"[In mediation,] what lawyers think is strategic information often turns out to be information that, if they did convey it to the other team, would help settle the case….  The private session might be the vehicle they need to assess the risks of exchanging information…and decide to divulge it to the other side."
J. Anderson Little, Making Money Talk: How to Mediate Insured Claims and Other Monetary Disputes (American Bar Association 2007) at 21

Check These Out:

One to Watch on “Federal Mediation Privilege”
A federal appellate court has accepted an immediate appeal on a discovery ruling by the trial court that there is a “federal mediation privilege” under which documents from mediation proceedings are privileged, but documents from arbitration proceedings are discoverable. 
Kimberly-Clark Worldwide, Inc. v. First Quality Baby Products, No. 957 (Fed. Cir., January 10, 2011)
WIPO Dispute Resolution Survey Under Way
The World Intellectual Property Organization’s (WIPO) Arbitration and Mediation Center is conducting a detailed international survey on dispute resolution clauses in technology agreements and use of alternative dispute resolution in technology disputes.  The results will be made available in a report that is intended to provide support in negotiating contract provisions and finding good solutions for future disputes.
 WIPO.int (February 17, 2011); Survey
“Annapolis Idol” Raises Funds for Mediation
The non-profit Anne Arundel Conflict Resolution Center raises funds by sponsoring an Annapolis Idol event to choose a winner from among finalists who audition to show they have a winning personality and singing ability.  This is the fourth year for the Center’s fund-raiser and finalists are expected to sing before a live audience of about 300 guests and a panel of judges. 
Anne Arundel Conflict Resolution Center (January 7, 2011)
 

Other Cases & Resolutions:

• Atlanta and the terminated design team for a new international airport terminal have mediated a resolution to the firing and resulting $60 million in claims against the city.  Atlanta Business Chronicle (February 28, 2011)
   
• Forsyth County Commission reached an agreement with a landfill operator in which the county will be paid $2.9 million in back fees.  Waste Management World (January 2, 2011)
   
• A $1.9 million mediated settlement has resolved claims by Wichita Public Schools against four businesses for shoddy construction.  Wichita Business Journal (March 1, 2011)
   
• Bitter litigation by wine growers against pesticide drift resolved in mediation during appeal of mistrial decision.  The Register-Guard (January 2, 2011)
   
• After dismissing antitrust claims, judge orders mediation by defendant University of Minnesota and 24 orchards and apple growers over remaining procedural due process claim.  Star Tribune.com (February 4, 2011)
   
• A councilor has proposed a “public mediation board” of local officials and politicians to try to mediate a private contract dispute between Exeter Hospital and Anthem Blue Cross and Blue Shield.  Sea Coast Online.com (February 5, 2011)
   
• Deloitte & Touche involved in mediation over its audits of Washington Mutual that allegedly hid mortgage lending problems.  Insurance Journal (January 24, 2011)
   
• Attorney asserts reputed mob boss’s $250,000 workers’ compensation settlement is reasonable because it occurred in mediation.  Chicago Sun-Times (January 25, 2011)
   
• Mediation ordered in dispute over management of $5.6 million trust.  KIVITV.com (January 7, 2011)
   
• Apotheke partner and its celebrity mixologist ordered to mediate falling out.  NY Times.com (January 7, 2011)
   
• Lawsuit by former CEO of Red Hat and family against investment management firm for loss of $60 million sent to mediation.  News Observer.com (January 4, 2011)
   
• City paying for mediation between two sky-diving companies to ensure safety at municipal airport.  The Daytona Beach News-Journal (January 5, 2011)
   
• Cities of Texarkana, Arkansas and Texarkana, Texas continue to mediate dispute over shared water utility.  Chron.com (January 4, 2011)
   
• Papau New Guinea’s chief judge has ordered mediation between Exxon Mobil, landowners and the government over a multi-billion dollar LNG project.  Radio New Zealand International (January 24, 2011)