Can the Confidential Documents of a Non-Party be Subpoenaed?
If you have documents which require that you hold them in confidence, but receive a subpoena requiring the disclosure of those documents, can you withhold the documents? In this situation, non-parties served with a subpoena can file a timely objection and ask the court to quash or modify the subpoena to protect them from disclosing privileged or protected matter, trade secrets or confidential commercial information. See Fed.R.Civ.P. 45(3); see also United States v. Fed’n of Physicians & Dentists, Inc., 63 F. Supp. 2d 475, 479 (D. Del. 1999).
A confidentiality requirement alone is generally not sufficient to warrant a protective order. “[P]rivate confidentiality agreements do not preclude the production of documents for the purpose of discovery.” In re C.R. Bard, Inc. Pelvic Repair Systems Products Liability Litigation, 287 F.R.D 377, 384 (S.D. W.Va. 2012) (citing Zoom Imaging, L.P. v. St. Luke’s Hosp. and Health Network, 513 F.Supp.2d 411, 417 (E.D.Pa.2007); Niester v. Moore, No. 08–5160, 2009 WL 2179356, at *3 (E.D.Pa. July 22, 2009)). (more…)
Rule 45 Requires That a Party Imposing an Undue Financial Burden on a Third Party Must Reimburse its Costs
Rule 45 provides that “[a] party or attorney responsible for issuing and serving a subpoena must take reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena.” Fed. R. Civ. P. 45(d)(1). Discoverable information from a non-party is construed more narrowly, and is weighed against the potential prejudice to the non-party. See Laxalt v. McClatchy, 116 F.R.D. 455, 458 (D.Nev.1986) (“The standards for non-party discovery … require a stronger showing of relevance than for simple party discovery.”); Litton Indus., Inc. v. Chesapeake & Ohio Railway Co., 129 F.R.D. 528, 529-30 (E. D. Wis. 1990) (providing that “records of non-party shipbuilder concerning ship construction” were germane to establishing ship construction costs for damage purposes and would not prejudice the producing non-party; however, the other vast categories of documents sought regarding business operations were not discoverable from the non-party). The rules require that the courts be sensitive to the costs imposed on third parties, protecting them against significant cost. Watts v. S.E.C., 482 F.3d 501, 509, 375 U.S.App.D.C. 409, 417 (D.C. Cir. 2007). (more…)
Jay Young is a top mediator in Las Vegas, Nevada. ADR Certified since 1994. Additional 40 hour certification and graduate of Pepperdine Law’s Strauss Institute for Dispute Resolution’s “Advanced Mediation: Skills and Techniques” program. Jay is a Nevada Supreme Court Settlement Judge (mediator), a Judge Pro Tem, a Special Master, and a National Mediation Panelist for the American Arbitration Association and Advanced Resolution Management. Contact him at (855) 777-4476. Go here for Jay’s full bio.
What Is Mediation?
Simply put, mediation is a process where a person called a mediator helps people resolve a dispute in a non-confrontational setting. It is more akin to marriage counseling than litigation. The mediator will not be deciding any outcome but will try to get the parties to come to an agreement with which they can both live. According to the Nevada Rules Governing Alternative Dispute Resolution, Rule 1(B), the mediator:
acts to encourage and facilitate the resolution of a dispute between two or more parties. It is an informal and non-adversarial process with the objective of helping the disputing parties reach a mutually acceptable and voluntary agreement. In mediation, decision-making authority rests with the parties. The role of the mediator includes, but is not limited to, assisting the parties in identifying issues, fostering joint problem solving, and exploring settlement alternatives.
Since no two disputes are alike, no two solutions will be the same. The process of how mediation proceeds will therefore depend largely on the needs of those involved. I will attempt to illustrate some of the possible ways a mediation might proceed.
What is the Role of the Mediator?
As a mediator, I believe my first role is to understand the dispute between the parties. The parties to the suit have the most information about the issues that they currently face. To help them reach a resolution, I need to understand the genesis of the dispute through its current status. Therefore, before the parties and their counsel meet with me, I ask each of them to provide me with a “mediation brief,” which is essentially a summary of your dispute. Your brief should not be a trial advocacy brief or contain bundles of pleadings and deposition transcripts unless those are absolutely necessary to educate me. You should simply provide me general information regarding the types of claims filed, as well as the strengths and weaknesses of the evidence regarding those claims. Briefs should be civil and professional in tone, without personal attacks. The goal your brief should be to inform me, not to inflame your opponent.
A good brief will contain:
- A factual summary, including any factual disputes;
- A short statement outlining the type of work/business of every party, if relevant;
- A chronology of events, if relevant;
- A glossary of technical terms, if relevant;
- A list of the important parties and their relation to the dispute;
- An outline of the legal issues;
- A history of the settlement negotiations between the parties, if any (consider submitting this information in a separate confidential submission);
- A candid evaluation of the relative strengths and weaknesses of each party’s case;
- A procedural history of the litigation, and any upcoming deadlines, including a trial date;
- A fair settlement proposal to which you would be willing to agree (consider submitting this information in a separate confidential submission);
- Any non-monetary settlement terms you would like to explore (consider submitting this information in a separate confidential submission); and
- Any terms or conditions that the party or parties believe should be included in a settlement agreement.
Second, attorneys sometimes want all mediation briefs to be confidential. There are many times when parties could have saved hours of negotiations during the mediation session had counsel shared their briefs with each other. If the other side has an over-inflated view of their case, sharing that information early will assist in settling the matter and advance your cause.
While it is not recommended to disclose truly confidential information in your brief, sharing your brief is not an accommodation to other side. Retired judge and mediator Alexander H. Williams III is fond of pointing out that a shared brief is an enhancement of your presentation as well as your influence on the mediation. And even if the other side decides not to share its brief, and therefore chooses not to strengthen its presentation, that does not mean you should refuse to strengthen yours.
Third, I will not decide who wins your dispute. I do not “take sides”— I am not a judge, jury, or an advocate. My job is to help each side come to an agreement. You are the one who decides if you are willing to accept any offer made by the other party. I may provide the parties with some food for thought and even play devil’s advocate at times to challenge how each party sees both the dispute as well as the way forward. At times, I may act as an “agent of reality,” telling each party things that they don’t want to hear. I do so that the parties can see things that they may not have considered before, but you will be the one who makes the final decision whether you agree to a settlement. Most parties to mediation at one time or another express unrealistic goals or settlement offers. Rest assured that I will discuss “reality” with both side of the dispute.
Fourth, I will try to help the parties find common ground. As I do so, my goal is to guide the process in a fair fashion. Sometimes that means discussing money being paid from one side to another. Other times that will entail crafting a business relationship going forward that benefits both parties more than litigation does.
Finally, understand that I will often be asked to “carry water” for a party—that is, a party will ask that I deliver a message to the other party. These messages could be positive in nature—a willingness to express a sincere apology, or a more negative approach—if you don’t accept our offer, we intend to file a motion for fees, etc.
What is Your Role at Mediation?
In litigation, your attorney does most of the heavy lifting, and as a party, you are mostly watching the presentation. Much of that presentation, if not all, focuses on the past. In mediation, your attorney will still be an important advocate for your cause and will certainly be a very important adviser to you, but you play a more central role. I will sometimes speak with your attorney and I will sometimes speak directly to you in order to help find the best way forward. I will have learned about the past from your counsel’s brief and will look forward to understanding its impact on you when we meet. Please be engaged in the process and share with me your feelings both about what occurred as well as what you would like to see for the future. Even though I have been involved in thousands of disputes, I guarantee that I have never had one “just” like yours. Therefore, I need your help to understand your unique situation.
How Does Mediation Compare to Litigation?
Litigation is about proving your case and having a judge, or an arbitrator declare a winner; one party wins and another loses. In contrast, at mediation the law and your likelihood of success is a very important aspect of your case, but it is not the only factor. Mediation allows other factors to be considered and developed without being limited to just what the law might provide if everything at trial goes the way that you hope it will. Mediation is designed to try to find a resolution that is a win-win. Unless parties insist, I normally do not normally suggest that counsel give an opening statement at mediation. Doing so is, more often than not, counterproductive as they tend to devolve into a chest pounding session about who will win the litigation.
In litigation, one often listens to the other side, not for understanding and a search for common ground, but for the exposure of inconsistencies, weaknesses, and opportunities to score points. Because of this adversarial process, litigants almost always have an exaggerated view of the strength of their own case and the weakness of the other side, which means that you probably have an exaggerated view of your case, just as the other side does. Litigants tend to experience what psychologists call “confirmation bias” — the tendency to interpret new evidence and information as confirmation of one’s existing beliefs and theories. I therefore encourage you to be open to a conversation that requires parties to listen as well as to speak. Be honest about your “bad facts”. All cases have bad facts and neither yours nor your opponent’s case is an exception. Discuss your bad facts with your counsel before the mediation so that you will be prepared to understand how they motivate the other side and/or how they should influence you.
Lastly, in litigation, someone else determines your future. It might be a judge, a jury, or an arbitrator, but someone else will decide who is right and who is wrong. You will lose all control over the outcome. Conversely, by mediating your dispute, you can maintain control over the outcome.
The uncertainty of a litigated outcome alone justifies considering alternatives to a litigated result. Every experienced litigator can point to cases they won when they didn’t think they had a chance winning. They can also point to times when if there was any justice, they would have won, but lost. There simply is no way to accurately predict with certainty the outcome of a litigated case whether decided by a judge, a jury, or an arbitrator. A mediated result gives you certainty without the risk of litigation.
The Randall Kiser Study, released in the Journal of Empirical Legal Studies, found that parties who reject the last and best offer at mediation overwhelmingly regret the decision. The study surveyed thousands of cases in California and New York over a five-year period. It found that plaintiffs who rejected the last settlement offer and proceeded to trial do worse a whopping 61% of the time, while defendants did worse than their last offer 24% of the time. In only 15% of the cases did both sides obtain a better result at trial.
All is not good news for defendants, however. Although they seem to do better at predicting outcomes, the 24% of the time they are wrong ends up being much more costly to them. Defendants who fared worse at trial than the last demand, ended up with a verdict that was on average $1.1 Million more than the Plaintiff’s last demand. On the other hand, plaintiffs who fared worse than the last offer, received on average $43,000 less than the last offer given before trial. Some studies suggest that 95% or more of lawsuits settle rather than go to trial. Assuming that is true, your case seems destined to settle; therefore, why not resolve it now rather than later? Doing so will save time, aggravation, stress, and money. That said, mediation will not be an easy process. At times, you may feel uncomfortable, pressured, and perhaps even emotional. If the process were easy, the parties wouldn’t need a mediator’s assistance to settle the matter.
There may come a time during mediation when you may feel like giving up and you might feel like settlement is impossible. It is likely that in order to settle, both parties will be urged to step beyond the original “bottom line” limit they determined for themselves before the process started, in order to make a deal. Once the parties have come this close to a settlement, the last thing they should do is to give up. The easy answer will be to walk out the door in frustration. But remember what awaits you if you choose to leave: more attorney fees, stress, frustration, and an uncertain result through litigation. If you are inclined to say, “I offered my last dollar and they rejected it,” I would also urge you to avoid drawing a line in the sand. Instead, explore if there is something of non-monetary value that you can give or get that might make the deal more palatable. If not, I would recommend that instead of walking out the door, you tell the mediator that you are ready to quit and allow the mediator a chance to give you a reason to stay. If you give the process a chance, you may walk away with a settlement you can live with, rather than an uncertain future where the decision will be made by someone else.
Who May Attend The Mediation?
All parties directly involved in the dispute should attend the mediation. You and your attorney, as well as the other party and their counsel need to appear. Anyone who would be responsible to pay or to approve the amount paid or received should be in attendance or, at a minimum, be available by telephone. If an insurance company will be paying for any settlement, a representative of that insurance company who has full settlement authority should be there in person. If a company is a party to the litigation, an individual with final settlement authority should be present. My preference is that parties not participate via telephone, as it is easier to be dispassionate and disassociated with the process. Anecdotal evidence suggests that having a party appear by telephone increases the chances that the mediation fails to end in a settlement, so I prefer to have all decision makers present for my mediations.
Is Mediation Confidential?
Yes, mediation proceedings are confidential. There are several aspects of mediation confidentiality that are explained in greater detail below, which you should understand: 1) confidential submissions to the mediator; 2) confidentiality of the settlement itself; 3) admissibility of the negotiations should the matter not settle; and 4) the obligation of the mediator keep confidential, the information shared with him or her by a party.
As I indicated above, counsel may submit truly confidential matters to me without sharing it with the other side. I will absolutely hold those in confidence unless you later authorize me to share that information with someone. The settlement reached at a mediation is not necessarily confidential unless the parties make confidentiality a term of the agreement. The parties will have to determine whether they should allow one or both parties to be able to speak openly about the fact that the case settled, or about the amount of the settlement.
Things that happen and information exchanged at mediation cannot be used against a party to that litigation or in other court proceedings so long as the information is not discoverable by other means. This point is so important that it is written into the law. First, an offer to compromise one’s position by way of negotiation “is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible.” Nevada Revised Statutes 48.105. Federal Rule of Evidence, Rule 408 provides the same protection for matters in Federal Court. Second, a mediator in Nevada cannot be forced by any court to disclose any matter discussed during mediation proceedings. Nevada Revised Statutes 48.109(3). Finally, in order to encourage parties to be open, honest, and to achieve a mediated resolution, our legislature has declared that “no admission, representation or statement made during the [mediation] session, not otherwise discoverable or obtainable, is admissible as evidence or subject to discovery.” Nevada Revised Statute 48.109(2).
Mediators may not share confidential information you provide to him or her to your opponent. Some mediators will tell you they hold everything you tell them in confidence and only divulge what you specifically tell them is not confidential. Other mediators (me included) feel that sharing of information is so essential to the process that nothing is treated as confidential unless they are specifically instructed that the matter is confidential. I will assume you want me to be able to share information if and when I feel it may assist with settlement unless you tell me it is confidential. There is no right or wrong approach, but you should make sure you understand your mediator’s philosophy before you share sensitive information. Finally, communications between you and your counsel are attorney-client privileged communications protected by law.
What Will Happen At The Mediation?
First, I prefer to have a pre-mediation discussion by telephone with counsel a few days before we meet. I find that these conversations give me a flavor for the dispute that I cannot always get from the written briefs and help me to jumpstart the actual mediation by getting to know the attorneys and their issues better. Attorneys often choose to use this phone call as an opportunity to deliver an ”opening statement,” laying out their client’s case in a safe environment where they are not likely to enflame emotions as sometimes happens when opening statements are given with litigants present. I appreciated the candid exchange, as well as the advocacy in an environment that is not likely to set negotiations back because someone is offended.
Second, I like to start the day with a short joint session. In the joint session, all participants will be introduced and will sign a confidentiality agreement before proceeding. Next, I will take a moment to introduce myself and my background as a professional neutral, and outline the process of holding separate sessions. I will ask for a commitment to the process of the mediation. You should be prepared to commit to making a good faith effort to settle your differences at mediation.
What Is A Separate Session?
A separate session is sometimes referred to as a caucus or a private session. It is simply a private meeting between a mediator and one party (with that party’s counsel). I place the parties in separate rooms, and far enough apart that they won’t run into each other easily and uncomfortably in the hall and will not be able to hear one another’s separate session. I then meet separately with each party. These sessions can be as short as a few minutes and as long as necessary to make progress.
The time spent in separate sessions will certainly not be equal between the parties, but you should not read any significance into that fact. Understand that each person processes information, offers, and emotions differently, so a mediator may have to spend more time with one party than another. It does not mean that I am in the other room “drinking the kool-aid” being served by the other side. Rather, think of it as me taking the amount of time I believe is necessary to move that party closer to a resolution. During a separate session, a mediator may simply gather information before even asking either party to make any offer. Thereafter, a mediator may engage in shuttle diplomacy, moving from one room to another, delivering information, exploring options, and making offers and counteroffers.
Can You Speak With Your Attorney Privately Any Time You Want?
Yes! All you have to do, whether in a joint session or separate session, is tell me and I will make arrangements for privacy so that you can speak freely with your counsel.
How Long Will the Mediation Last?
No two mediations are alike, but you should be prepared for a long, sometimes tedious, tiresome, trying, and emotional process. The more complex the problem, the more likely that the mediation will take some time to come to a conclusion. I have spent as little as an hour and as long as 40 hours (over multiple days of course) mediating a single matter. Most business mediations take at least a half a day, but complex matters can go a full day or longer. Bring any item with you that you need to be comfortable. Some people bring a good book or a hobby to work on during down time when the mediator is in a separate session with the other party.
What Helps To Get The Case Settled?
Everything I have covered in this article is designed to assist you in trying to resolve your dispute. The more you prepare, the more likely you are to reach a settlement. Perhaps the most important factor in you being able to settle your case is having a realistic expectation regarding the value of your case and what is means to really compromise. If you think you could get $1,000,000 from a jury on your very best day, do not expect the other side to be willing to pay you that $1,000,000, as they will be looking at how little they could pay you if the jury believes them more than it believes you. If you are an injured party, you may likely feel that no amount of money can really make the past go away. Likewise, if you are defending that case, do not expect to walk away paying the amount you think you would at trial if you did everything right and the jury agreed with all of your analysis and presentation. The sweet spot for settlement is somewhere between those two extremes.
Ultimately, if your case is not settled at mediation, a judge or jury will decide the case value. Jurors are strangers to your case and may have differing beliefs and attitudes toward you. Jurors are often suspicious of people who bring lawsuits and of their attorneys. They also tend to wonder why they shouldn’t get the $1,000,000 that you are seeking and sometimes resent the person asking for money. This is especially true where there are minimal property damages and soft tissue injuries that cannot be verified objectively or where damages in a business matter are caused to a new business and are hard to quantify. On the other hand, juries tend to be unforgiving if they feel a plaintiff has been treated unfairly or if they feel the acts of the defendant are particularly harmful that they need to be punished. Further, some jurors have religious or moral objections to filing a lawsuit and therefore hold some bias. Some jurors, for reasons they may not even understand, will simply like one party more than the other party. You should come prepared to discuss a realist case value in light of all of these risks.
Abuse of Process Claim Requires an Allegation of Abusive Acts After the Filing of a Claim
An abuse of process claim in Nevada has two fundamental elements: (1) an ulterior purpose, and (2) a willful act in the use of the process not proper in the regular conduct of a proceeding. Executive Mgmt. Ltd. v. Ticor Title Ins. Co., 114 Nev. 823, 843, 963 P.2d 465, 478 (1998). The action for abuse of process hinges on the misuse of regularly-issued process. Nevada Credit Rating Bureau, Inc. v. Williams, 88 Nev. 601, 606, 503 P.2d 9 (1972).
The mere filing of a complaint itself is insufficient to establish the tort of abuse of process. Hampton v. Nustar Managment Financial Group, Dist. Court, (D. Nev. 2007); Laxalt v. McClatchy, 622 F. Supp. 737, 752 (D. Nev. 1985). Instead, the complaining party must include some allegation of abusive measures taken after the filing of the complaint in order to state a claim. Id. Merely alleging that an opposing party has a malicious motive in commencing a lawsuit does not give rise to a cause of action for abuse of process. Id.; Curiano v. Suozzi, 469 N.E.2d 1324, 1326 (N.Y. 1984). (more…)
A Subpoena Seeking Documents from a Third Party That Could be Obtained from a Party is Unduly Burdensome
The discovery standards and case law applied when seeking documents or information from non-parties differ from those of a party to the litigation. The limits on discovery should be more narrowly construed when non-parties are the target of discovery. Dart Indus. Co., Inc. v. Westwood Chemical Co., 649 F.2d 46, 649 (9th Cir. 1980) (recognizing that although there is a strong policy in favor of liberal discovery, there is potential for abuse in applying that policy to nonparties); In re Subpoena to Apple, Inc., No. 5:14-cv-80139-LHK-PSG, 2014 WL 2798863, *2 (N.D. Cal., June 19, 2014) (“Discovery may be limited to ‘protect third parties from harassment, inconvenience, or disclosure of confidential documents.'” quoting Dart, supra); Edwards v. California Dairies, Inc., 2014 WL 2465934 at *2 (“While discovery should not be unnecessarily restricted, discovery is more limited to protect third parties from harassment, inconvenience, or disclosure of confidential documents.” citing Dart, supra). Pursuant to Rule 45(c)(2)(B), which allows the answering party to timely object to the Subpoena, once a party raises a timely objection to a Subpoena, it is not required to produce documents, or even search for them, until the subpoenaing party obtains an order compelling the same. Id. (citing Pennwalt Corp. v. Durand-Wayland, Inc., 708 F.2d 492, at 494 & n. 5 (9th Cir. 1983)); see also Forsythe v. Brown, 281 F.R.D. 577, 587 (D.Nev.2012) report and recommendation adopted, 3:10–CV–00716–RCJ, 2012 WL 1833393 (D. Nev. May 18, 2012). (more…)