Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-16418/USCOURTS-ca9-12-16418-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MARY ROSE WILCOX, wife; EARL

WILCOX, husband,

Plaintiffs-Appellees,

v.

JOSEPH M. ARPAIO; AVA ARPAIO;

ANDREW P. THOMAS; ANNE

THOMAS; LISA AUBUCHON; PETER R.

PESTALOZZI; DAVID HENDERSHOTT;

ANNA HENDERSHOTT,

Defendants,

and

MARICOPA COUNTY, a governmental

entity,

Defendant-Appellant.

No. 12-16418

DC No.

2:11 cv-0473

NVW

OPINION

Appeal from the United States District Court

for the District of Arizona

Neil V. Wake, District Judge, Presiding

Argued and Submitted

March 11, 2014—San Francisco, California

Filed June 2, 2014

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2 WILCOX V. ARPAIO

Before: Jerome Farris, Stephen Reinhardt,

and A. Wallace Tashima, Circuit Judges.

Opinion by Judge Tashima

SUMMARY*

Mediation

The panel affirmed a district court order granting

plaintiffs’ motion to enforce a settlement agreement reached

during mediation in an action brought under 42 U.S.C. § 1983

and state law against Maricopa County and certain present

and former County officials.

The panel held that federal privilege law governs the

admissibility of evidence of an alleged settlement reached

during the mediation of federal and state law claims. The

panel determined, however, that in this case the County

waived any available privilege and therefore that the district

court did not err in admitting and considering allegedly

privileged documents and testimony. The panel concluded

that the district court did not clearly err in finding that the

County authorized the County Manager to settle plaintiffs’

claims and therefore did not err in enforcing the settlement

agreement. 

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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WILCOX V. ARPAIO 3

COUNSEL

Jeffrey S. Leonard (argued), James W. Armstrong, and Helen

R. Holden, Sacks Tierney P.A., Scottsdale, Arizona, for

Defendant-Appellant.

Colin F. Campbell (argued) and Kathleen Brody O’Meara,

Osborn Maledon, P.A., Phoenix, Arizona, for PlaintiffsAppellees.

OPINION

TASHIMA, Circuit Judge:

We are asked to decide whether federal or state privilege

law governs the admissibility of evidence of an alleged

settlement reached during mediation of federal and state law

claims. We conclude that federal privilege law governs, but

that the County waived any available privilege; therefore, we

affirm the district court’s enforcement of the settlement

agreement reached in mediation.

I.

Plaintiffs Mary Rose Wilcox, a Maricopa County

Supervisor, and Earl Wilcox, her husband, filed suit against

Maricopa County (the “County”) and certain present and

former County officials. Plaintiffs alleged that these officials

wrongfully investigated, prosecuted, and harassed Plaintiffs

in retaliation for Plaintiffs’ opposition to the actions of the

County Sheriff, County Attorney, and their deputies. 

Plaintiffs pleaded federal claims under 42 U.S.C. § 1983 and

supplemental state law claims.

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4 WILCOX V. ARPAIO

Plaintiffs were not the only ones to file suit. Many other

claimants, including other County Supervisors, pursued

similar claims against the County. County advisors predicted

that a hundred or more people might pursue such claims,

potentially costing the County millions of dollars. County

advisors also warned that these claims might create conflicts

of interest for County Supervisors, who were both fiscal

stewards for the County and actual or potential claimants

against the County.

Concerned about the propriety, cost, and pace of

litigation, the County adopted a resolution directing County

Manager David Smith to establish an alternative dispute

resolution program to resolve these claims. The resolution

“directed and authorized [Smith] to take all actions necessary

to . . . adjudicate the claims included in the alternative dispute

resolution process,” including by “entering into binding

arbitration/mediation agreements with claimants” and

“entering into contracts as needed.” Smith, in turn, appointed

mediator Christopher Skelly, a retired judge, to help resolve

these claims. Through Judge Skelly, Smith settled multiple

claims.

Plaintiffs assert that their claims were among those that

were settled. They alleged that the County agreed to a

$975,000 settlement, and filed a motion to enforce the alleged

settlement. In support of their motion to enforce, Plaintiffs

submitted an e-mail from Judge Skelly to Plaintiffs’ counsel,

dated April 9, 2012, stating that Skelly wrote to confirm a

settlement in the amount of $975,000. Plaintiffs also

submitted e-mails from Judge Skelly to counsel for two other

claimants, also dated April 9, 2012. These e-mails were

identical to Skelly’s e-mail to Plaintiffs’ counsel in every

material respect (except for the identity of counsel and

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WILCOX V. ARPAIO 5

claimants, and the respective settlement amounts), except

one: The e-mail to Plaintiffs’ counsel included the sentence

“This settlement is subject to any further approvals deemed

necessary by the parties.” Judge Skelly’s e-mails to the other

claimants did not include this sentence. Plaintiffs also

submitted e-mails from Plaintiffs’ counsel and from counsel

for the other claimants, accepting the terms of settlement.

The district court set an evidentiary hearing on Plaintiffs’

motion to enforce, and ordered the County to produce Smith

and Judge Skelly for the hearing. Judge Skelly, however, did

not appear and only Smith appeared as a witness. At the

hearing, Smith testified that the two other April 9 e-mails sent

by Skelly to claimants’ counsel resulted in settlements paid

to those claimants in accordance with the e-mails, in the

amounts of $500,000 each. He further testified that he

believed that he had authority to settle Plaintiffs’ claims; that

he had authorized Judge Skelly to communicate the County’s

$975,000 settlement offer to Plaintiffs’ counsel; that he was

aware that Judge Skelly in fact communicated the offer; that

he understood the “further approvals” sentence in Skelly’s email to Plaintiffs’ counsel to refer only to possible

compliance with Ariz. Rev. Stat. § 11-626;1and that he

believed that a binding settlement was entered into, subject

only to the “further approvals” sentence. Plaintiffs’ counsel

testified that he, too, believed that the “further approvals”

sentence referred only to compliance with § 11-626. The

County then explicitly took the position “for the record, on

1 Ariz. Rev. Stat. § 11-626 states: “A claim against the county presented

by a member of the board of supervisors shall be verified as other claims,

and shall bear the written approval of at least one member of the board

other than the claimant, and of the county treasurer.”

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6 WILCOX V. ARPAIO

behalf of Maricopa County . . . that [§ 11-626] does not

apply.”

At the close of the hearing, the district court found Smith

had the authority to settle Plaintiffs’ claims without further

action: it discredited the two affidavits to the contrary

submitted by the County and, instead, found Smith’s

testimony “credible in every respect.” The district court also

found that the “further approvals” sentence referred only to

compliance with § 11-626, but that no further approvals were

necessary, because of the County’s concession that § 11-626

did not apply. It therefore granted Plaintiffs’ motion to

enforce the settlement agreement. See Donahoe v. Arpaio,

872 F. Supp. 2d 900 (D. Ariz. 2012).

The County now appeals. It contends that Smith’s

testimony and the April 9 e-mails were privileged under

Arizona’s mediation privilege, and thus inadmissible in the

district court. The County further contends that, even if this

evidence was admissible, the district court abused its

discretion in enforcing the settlement agreement.

II.

The district court had subject matter jurisdiction under 28

U.S.C. §§ 1331, 1367(a). We have appellate jurisdiction

under 28 U.S.C. § 1291.

III.

“We review de novo the ruling of a district court on the

scope of a privilege.” United States v. Chase, 340 F.3d 978,

981 (9th Cir. 2003) (en banc). “We also review de novo the

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WILCOX V. ARPAIO 7

question of when state law applies to proceedings in federal

court.” Zamani v. Carnes, 491 F.3d 990, 994 (9th Cir. 2007).

“We review a district court’s decision regarding the

enforceability of a settlement agreement for an abuse of

discretion.” Maynard v. City of San Jose, 37 F.3d 1396, 1401

(9th Cir. 1994). We will reverse only if the district court

based its decision “‘on an error of law or clearly erroneous

findings of fact.’” Id. (quoting United States v. Oregon,

913 F.2d 576, 580 (9th Cir. 1990)). Under Arizona law, a

district court’s interpretation of an ambiguous agreement is a

finding of fact, see Leo Eisenberg & Co. v. Payson, 785 P.2d

49, 51–52 (Ariz. 1989), as is its determination that a disputed

agency relationship exists, see Salvation Army v. Bryson,

273 P.3d 656, 663 (Ariz. Ct. App. 2012). We review such

findings of fact for clear error. See Smith v. Salish Kootenai

Coll., 434 F.3d 1127, 1130 (9th Cir. 2006) (en banc).

IV.

The parties rightly agree that state contract law governs

whether they reached an enforceable agreement settling the

federal and state law claims alleged in Plaintiffs’ complaint. 

See Botefur v. City of Eagle Point, Or., 7 F.3d 152, 156 (9th

Cir. 1993) (recognizing that “a settlement agreement is

governed by principles of state contract law . . . even where

a federal cause of action is ‘settled’”). They dispute,

however, whether state or federal privilege law governs the

admissibility of evidence in support of that determination. 

The County contends that state privilege law governs because

state contract law determines whether the parties reached an

enforceable settlement agreement. Plaintiffs contend that

federal privilege law governs because any settlement

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8 WILCOX V. ARPAIO

agreement concerns both Plaintiffs’ federal and state law

claims.

Under Federal Rule of Evidence 501, federal common

law generally governs claims of privilege. “But in a civil

case, state law governs privilege regarding a claim or defense

for which state law supplies the rule of decision.” Fed. R.

Evid. 501 (emphasis added). Here, as noted, Plaintiffs allege

both federal and state law claims in their complaint. The

contested evidence (Smith’s testimony and the April 9 emails) concerns all of these claims for relief – federal and

state law claims alike. Where, as here, the same evidence

relates to both federal and state law claims, “we are not bound

by Arizona law” on privilege.2 Agster v. Maricopa Cnty., 422

2 Even if Arizona privilege law applied to the evidence at issue here –

which it does not – we agree with the district court’s conclusion (although

on a different basis) that the contested evidence would still be admissible. 

See Donahoe, 872 F. Supp. 2d at 909–11 (analyzing issue under state

law).

Arizona’s mediation privilege statute, Ariz. Rev. Stat. § 12-2238,

protects “[c]ommunications made . . . during a mediation.” The statute

specifically provides, however, that the privilege does not apply to “the

terms of an agreement that is evidenced by a record that is signed by the

parties.” Ariz. Rev. Stat. § 12-2238(D).

The statute’s exception fits this case exactly. Here, Judge Skelly emailed Plaintiffs’ counsel on behalf ofthe County, as authorized by Smith,

offering to settle, and Plaintiffs’ counsel e-mailed back accepting the offer. 

These e-mails constituted facial evidence of “an agreement that is

evidenced by a record that is signed by the parties.” Id. Upon receipt of

this evidence, the district court had an obligation to consider all relevant

evidence to determine whether the parties reached an agreementwithin the

meaning of § 12-2238(D). See Taylor v. State Farm Mut. Auto. Ins. Co.,

854 P.2d 1134, 1139–41 (Ariz. 1993); Firchau v. Barringer Crater Co.,

344 P.2d 486, 490 (Ariz. 1959) (determining “whether there had been a

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WILCOX V. ARPAIO 9

F.3d 836, 839 (9th Cir. 2005). Rather, federal privilege law

governs.3Id.; Religious Tech. Ctr. v. Wollersheim, 971 F.2d

364, 367 n.10 (9th Cir. 1992) (per curiam); see Facebook,

Inc. v. Pac. Nw. Software, Inc., 640 F.3d 1034, 1041, 1038

(9th Cir. 2011) (applying state contract law to determine

whether in mediation the parties reached an enforceable

settlement of plaintiffs’ federal and state law claims, but

applying federal privilege law to determine what evidence

from mediation was admissible in support of that

determination).

We further conclude that the County waived any

argument that the contested evidence should be privileged

under federal law. See Babasa v. LensCrafters, Inc., 498 F.3d

972, 975 n.1 (9th Cir. 2007). Before the district court, the

County specifically distinguished its position from cases in

which a party urged the court to recognize a federal mediation

privilege, and disavowed any intent to urge the same. In its

opening brief on appeal, the County again assumed that

Arizona privilege law governed, and failed to argue that the

evidence admitted should be privileged under federal law. 

meeting of the minds” based “on all of the evidence submitted”); see also

Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987) (“Where material facts

concerning the existence or terms of an agreement to settle are in dispute,

. . . the district court abuse[s] its discretion by not conducting an

evidentiary hearing.”).

Thus, both the e-mails themselves (as facial evidence of an agreement

under § 12-2238(D)) and Smith’s testimony (as evidence of whether a

§ 12-2238(D) agreement was in fact reached) fall clearly within the

exception from the mediation privilege under § 12-2238(D).

3 We do not decide whether, in federal question cases, state or federal

privilege lawgoverns the admissibility of evidence that relates exclusively

to state law claims.

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10 WILCOX V. ARPAIO

We thus need not determine whether a mediation privilege

should be recognized under federal common law and, if so,

the scope of such a privilege. See id. (finding no need to

“consider whether a federal mediation privilege exists”).

The district court did not err in admitting and considering

the allegedly privileged documents and testimony.

V.

A district court “may enforce only complete settlement

agreements.” Callie, 829 F.2d at 890. The County argues

that even when Smith’s testimony and the April 9 e-mails are

considered, the district court abused its discretion in

enforcing an incomplete settlement agreement, and clearly

erred in finding that the parties had a meeting of the minds

and that Smith had the authority to settle Plaintiffs’ claims

through Judge Skelly. We disagree.

The district court did not clearly err in finding that the

County authorized Smith to settle Plaintiffs’ claims. The

district court’s finding was based on the text and purposes of

the resolution, Smith’s testimony, and the County’s reliance

on Smith to settle other claimants’ claims with essentially

identical e-mails. Likewise, the district court’s finding that

Smith authorized Judge Skelly to convey the County’s

settlement offer to Plaintiffs’ counsel was based on Smith’s

testimony, Judge Skelly’s actions, and the County’s course of

performance. The district court’s finding was far from

clearly erroneous.

Nor did the district court clearly err in finding that the

parties intended the “further approvals” sentence to refer only

to compliance with Ariz. Rev. Stat. § 11-626. Smith testified

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WILCOX V. ARPAIO 11

that he understood the “further approvals” sentence to refer

only to possible compliance with § 11-626, and the district

court found Smith’s testimony “credible in every respect.” 

Plaintiffs’ counsel testified that he, too, understood the

“further approvals” sentence to refer only to § 11-626. There

was thus ample support for the district court’s finding that the

parties understood the “further approvals” sentence (the only

sentence that differentiated Skelly’s e-mail to Plaintiffs’

counsel from his e-mails to other claimants’ counsel) to refer

only to § 11-626.

Having made these findings of fact, which are amply

supported by the record, the district court did not err in

concluding that compliance with § 11-626 was unnecessary

because the County conceded that § 11-626 did not apply. 

The district court did not abuse its discretion in enforcing the

settlement agreement.

• • ! • •

For the reasons set forth above, the judgment of the

district court is

AFFIRMED.

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