Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca4-01-09543/USCOURTS-ca4-01-09543-0/pdf.json

Parties Involved:
Anonymous
Respondent

Document Text:

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

IN RE: ANONYMOUS, 

Respondents.

OFFICE OF THE CIRCUIT  No. 01-9543

MEDIATOR FOR THE UNITED STATES

COURT OF APPEALS FOR THE FOURTH

CIRCUIT,

Amicus Curiae. 

Before the Standing Panel on Attorney Discipline.

Argued: December 5, 2001

Decided: March 20, 2002

Before WILLIAMS, TRAXLER, and KING, Circuit Judges.

Decided by published per curiam opinion. 

OPINION

PER CURIAM: 

This attorney discipline action arises out of a dispute over litigation

expenses between an attorney (Local Counsel) and his client (Client),

which developed following a successful mediation (the mediation)

conducted by the Office of the Circuit Mediator for this Court (the

OCM).1 Local Counsel and Client agreed to resolve their "expense dis1Consistent with Rule 16(B) of the American Bar Association’s Model

Rules for Lawyer Disciplinary Enforcement and the confidentiality proUSCA4 Appeal: 01-9543 Doc: 1 Filed: 03/20/2002 Pg: 1 of 18
pute"2

 before an arbitral panel sponsored by the Virginia State Bar

(the VSB arbitration). In their submissions to the VSB arbitration,

Client, Local Counsel, and a third party3 (Current Counsel) (collectively, the participants), disclosed information about or relating to the

mediation and also sought responses to interrogatories from the Circuit Mediator. Upon being informed of these disclosures and the discovery effort, the Standing Panel on Attorney Discipline ordered each

participant to submit briefs and present argument regarding the propriety of their disclosures in light of the confidentiality provisions of

our Local Rule 33. Having considered the various submissions and

heard argument in this matter, we undertake to resolve the following

issues: (1) whether Client, Local Counsel, and/or Current Counsel

breached the confidentiality of the mediation required by Rule 33; (2)

whether sanctions are warranted for any breach; (3) whether and

under what standard the confidentiality of a mediation may be waived

for future disclosures; and (4) whether and under what standard the

mediator may divulge information relating to the mediation. Before

turning to these significant issues, we set forth in some detail the pertinent factual background and procedural history underlying this dispute. 

vision of Local Rule 33, the Standing Panel on Attorney Discipline

ordered, without objection prior to the commencement of oral argument,

that the proceedings in this matter would be confidential and that all confidential documents submitted in connection with this matter would be

sealed. To protect this confidentiality, we have omitted the names of the

parties and have omitted the identifying characteristics of the mediated

appeal. 

2We refer to the dispute as an "expense dispute" because no disagreement exists with respect to attorney’s fees; instead, the dispute relates

solely to Client’s responsibility to reimburse expenses and costs

advanced by Local Counsel during the federal trial that was the subject

of the mediation. 

3This third party attended the mediation conference as a "friend" of

Client, by consent of the parties and the mediator, and currently serves

as Client’s counsel in the expense dispute. He was not acting in a representative capacity during the mediation conference. 

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I.

On March 21, 1997, Client retained the services of an attorney to

initiate a Title VII claim for retaliatory firing. In the fee agreement

signed by Client, she agreed to pay attorney’s fees in the amount of

40% of the total recovery if the matter were resolved after trial and

33 1/3% if the matter settled. "In addition to" the attorney’s fees, Client agreed to pay all expenses of litigation, out-of-pocket expenses,

and court costs. 

In March 1998, the retained attorney hired Local Counsel to aid in

preparation of Client’s trial. The retained attorney advised Local

Counsel that she had obtained a signed fee agreement from Client, but

Client did not execute a separate fee agreement with Local Counsel.

Local Counsel thereafter advanced the majority of Client’s litigation

expenses and costs. On March 28, 2000, the Title VII case was tried

before a jury. After a three-day trial, the jury returned a substantial

verdict in favor of Client, which the district court reduced to comport

with Title VII’s statutory damages cap.4 Both Client and the defendant appealed to this Court. 

After filing their notices of appeal, a mediation conference was

conducted before the OCM in December 2000. In attendance at the

mediation conference were Client, Local Counsel, Current Counsel,

the defendant, the defendant’s two attorneys, and the Circuit Mediator. All those in attendance agreed to the confidentiality provision of

Rule 33. The mediation conference culminated in a settlement agreement, and this Court entered an order dismissing the appeals. 

Subsequent to the mediation conference but prior to the order of

dismissal, the expense dispute underlying the current proceeding

came to light. Client and Local Counsel agreed to resolve the expense

dispute using the VSB arbitration, and Client retained Current Counsel to represent her in the VSB arbitration. On March 1, 2001, acting

in his capacity as Client’s lawyer, Current Counsel submitted several

documents to the VSB arbitration on Client’s behalf, including a copy

of the settlement points of agreement from the mediation conference,

4Local Counsel had filed a petition for attorney’s fees and costs, which

the district court had not ruled on at the time of the appeal. 

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a copy of the typed settlement agreement, and a statement in which

Client described conversations that took place during and after the

mediation conference. Acting in his capacity as a witness at the mediation conference, Current Counsel submitted his own statement

detailing his recollection of certain discussions that took place during

and after the mediation conference. 

On March 21, 2001, Local Counsel requested the consent of defendant to the disclosure of statements made during the mediation conference. Defendant, through its counsel, granted consent to the

disclosure "solely for the purpose of the Bar mediation."5 On the same

day, Local Counsel telephoned the Circuit Mediator, informed her of

the dispute concerning the reimbursement of expenses and costs, and

requested her consent to the disclosure of statements made during the

mediation conference. The Circuit Mediator responded that she was

unable to give consent without instruction from this Court, and the

mediator requested Local Counsel to submit a written, specific

request detailing what he proposed to disclose. On March 22, 2001,

prior to gaining consent from this Court, and without presenting any

further request in support of such consent, Local Counsel submitted

several documents to the VSB arbitration, including a statement

wherein he described discussions that he had with Client at the mediation conference. 

On March 27, 2001, Local Counsel wrote the Circuit Mediator,

reiterating his request for her consent to disclose matters discussed

during the mediation conference and to disclose notes Local Counsel

prepared during the mediation conference. Local Counsel informed

the Circuit Mediator that Client and Current Counsel already had

breached the mediation’s confidentiality, and he asked her to respond

in writing to three informal interrogatories. With respect to the interrogatories, Local Counsel noted that he would supply the answers to

the VSB arbitration panel, and he would not require the Circuit Mediator to appear at the arbitration.6

5Defendant’s limited consent allowed Client and Local Counsel "to

discuss the terms and conditions of our settlement and to further discuss

the details of the settlement process." 

6The informal interrogatories posed to the Circuit Mediator by Local

Counsel on March 27, 2001, were the following: 

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The Circuit Mediator then advised this Court of Local Counsel’s

request for consent to disclosure and his submission of the interrogatories. In response, on October 12, 2001, we issued Standing Order

01-01, which provides in relevant part:

All statements, documents, and discussions in [mediation]

proceedings shall be kept confidential. The mediator, attorneys, and other participants in the mediation shall not disclose such statements, documents, or discussions without

prior approval of the Standing Panel on Attorney Discipline.

Any alleged violations of this rule shall be referred to the

Court’s Standing Panel on Attorney Discipline for a determination pursuant to Local Rule 46(g) of whether imposition of discipline is warranted. 

Pursuant to this Standing Order, Client, Local Counsel, and Current

Counsel were directed to appear before our Standing Panel on Attorney Discipline to address whether their submissions to the VSB arbitration breached the confidentiality provision of Rule 33. Having been

informed that the Standing Panel was addressing the propriety of the

participants’ submissions, the VSB arbitration stayed all proceedings

regarding the expense dispute until resolution of this matter. The

OCM was then requested to participate in this proceeding as amicus

curiae. Pending order of this Court, we directed the Circuit Mediator

not to divulge information or answer any inquiries relating to the

mediation. 

1. Did you hear [Local Counsel] discuss with [Client] that her

litigation expense obligation was to be taken out of [Client’s] portion of the recovery, at the mediation in this matter

held in Durham, North Carolina [i]n December[ ] 2000? 

2. Did you hear [Local Counsel] waive his or her firm’s entitlement to expense reimbursement or advise [Client] that the

case expenses would be taken out of [Local Counsel’s] contingent fee portion of the settlement? 

3. Did you hear [Local Counsel] estimate [Client’s] litigation

and appellate expenses at or about $20,000 (or any other

number) at the mediation . . . in this matter held in Durham,

North Carolina [i]n December[ ] 2000? 

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II.

Having outlined the significant facts and procedural history, we

turn to the issue of whether Current Counsel, Local Counsel, and/or

Client breached Rule 33’s confidentiality provision, beginning with

an examination of the Rule at issue. Rule 33 currently provides in pertinent part as follows:

Information disclosed in the mediation process shall be kept

confidential and shall not be disclosed to the judges deciding the appeal or to any other person outside the mediation

program participants. Confidentiality is required of all participants in the mediation proceedings. All statements, documents, and discussions in such proceedings shall be kept

confidential. The mediator, attorneys, and other participants

in the mediation shall not disclose such statements, documents, or discussions without prior approval of the Standing

Panel on Attorney Discipline. 

4th Cir. R. 33.7 The participants do not deny that they each submitted

statements to the VSB arbitration revealing information disclosed during the mediation conference. Further, Current Counsel and Client

concede that they submitted the settlement agreement itself, as well

as notes regarding the settlement agreement, to the VSB arbitration.

Despite the apparent violations of the plain language of the Rule, the

participants maintain, for a variety of reasons, that their disclosures

did not violate the confidentiality required by Rule 33. 

7Rule 33 was amended on December 11, 2001, following notice and

public comment. The prior relevant text of Rule 33 provided: "Information disclosed in the mediation process shall be kept confidential and

shall not be disclosed by a circuit mediator, counsel, or parties to the

judges deciding the appeal or to any other person outside the mediation

program participants." Because the added language merely clarifies the

previous rule, we find it helpful in resolving the current action. To the

extent that the amendment eliminated ambiguity that existed at the time

of the participants’ disclosures, this ambiguity will be taken into account

when determining whether or to what extent sanctions are warranted. 

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A.

The participants first argue that their disclosures were not prohibited by Rule 33 because the disclosures did not involve matters central to the mediated dispute. The unambiguous text of Rule 33,

however, does not draw the suggested distinction; instead, it prohibits

the disclosure of "[a]ll statements, documents, and discussions." 4th

Cir. R. 33 (emphasis added).8 Moreover, because the confidentiality

provision as written provides clear guidance in the form of a bright

line rule, we decline to adopt an exception allowing for the disclosure

of matters collaterally related to the mediation. 

B.

The participants next argue that because their submissions were

made to a confidential forum,9 the submissions should not be construed as violating Rule 33. Again, the unambiguous text of Rule 33

does not provide an exception for disclosures made to a confidential

forum. Rather, it has at all relevant times restricted disclosures "to any

other person outside the mediation program participants." The participants concede, as they must, that the members of the VSB arbitration

are "person[s] outside the mediation program participants." Thus, the

submissions made to the VSB arbitration panel by the participants

breached the unambiguous text of Rule 33.10

8

Indeed, this language, added in the 2001 amendments to Rule 33,

merely clarified the prior Rule’s equally broad protection of "information

disclosed in the mediation process." 

9Virginia law provides for confidentiality of materials and communications divulged during a "dispute resolution program." Va. Code Ann.

§ 8.01-576.10 (Michie 2000). 

10We recognize circumstances where confidential material properly

may be divulged to someone other than one of the mediation participants

without obtaining prior consent of the Standing Panel. For instance, as

in cases involving the protection of attorney-client confidentiality, an

attorney is permitted to consult with other employees of her law firm and

with experts or professionals retained by the law firm to aid in the negotiation or structuring of the settlement, such as financial consultants,

without breaching confidentiality. If any person, however, employed

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C.

Current Counsel also asserts that, because he was not acting as

counsel during the mediation conference and because he was not a

party to the mediated dispute when he attended the mediation conference, his disclosures did not fall within the scope of Rule 33. At the

time of Current Counsel’s submissions, Rule 33 provided, "Information disclosed in the mediation process shall be kept confidential and

shall not be disclosed by a circuit mediator, counsel, or parties to the

judges deciding the appeal or to any other person outside the mediation program participants." Rule 33 (emphasis added). As is made

clear by our recent amendment to Rule 33, the term "parties," as used

in the earlier version of Rule 33, is not limited to the formal parties

of the mediated dispute, as Current Counsel asserts, but instead

applies to all participants in the mediation, including attendants at the

mediation conference.11 Moreover, it is significant to us that Current

Counsel is a lawyer, who was made aware of Rule 33’s confidentiality provision prior to his participation in the mediation conference,

and who explicitly agreed to abide thereby. Thus, we reject Current

Counsel’s contention that his disclosures did not fall within the scope

of Rule 33. 

sible for the breach. See, e.g., Model Rules of Prof’l Conduct R. 1.6(a)

& cmt. 8 (1998) (noting that a lawyer may reveal confidential information "for disclosures that are impliedly authorized in order to carry out

the representation"); Model Rules of Prof’l Conduct R. 5.1 & 5.3

(describing lawyers’ responsibility to ensure that employees’ conduct

conforms with relevant rules of professional conduct). Additionally, as

we hold in Section IV.A.1. infra, under some circumstances, it may be

appropriate for the Standing Panel to grant consent for disclosures

regarding a compensation dispute. Cf. Model Rules of Prof’l Conduct R.

1.6(b)(2) & cmt. 18 (providing an exception to confidentiality where an

attorney discloses client information for the purpose of resolving a compensation dispute). 

11For instance, we understand that, in some circumstances, the Circuit

Mediator sometimes allows the parties to the mediated dispute to bring

family members to the mediation conference, but the family members are

advised of Rule 33 and agree to abide by its confidentiality provision. 

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D.

The participants also argue that due process requires us to conclude

that their submissions did not violate Rule 33, in that a contrary conclusion would deny Client and Local Counsel the right to resolve their

expense dispute. We disagree. Rule 33, in both its current and previous form, does not deprive participants of a forum for resolution of

disputes; rather; it limits the availability and use of information

gleaned during the mediation in subsequent proceedings. Smith v.

Cromer, 159 F.3d 875, 882 (4th Cir. 1998) ("It is clear that there are

limits upon the due process which is accorded a defendant in presenting his defense, and, further, that the right to compulsory process is

not absolute."). Courts routinely have recognized the substantial interest of preserving confidentiality in mediation proceedings as justifying restrictions on the use of information obtained during the

mediation. Calka v. Kucker Kraus & Bruh, 167 F.3d 144, 146 (2d Cir.

1999) (holding that Second Circuit’s rule protecting the confidentiality of matters disclosed during mediation barred use of statements

regarding the mediation in a subsequent state court proceeding); cf.

Cromer, 159 F.3d at 882-83 (noting that the due process rights of the

party seeking disclosure of confidential information must be weighed

against the asserted interest in confidentiality and holding that the

defendant’s constitutional rights did not overcome the Justice Department’s claim of privilege in maintaining the secrecy of its confidential

informant files). Further, Rule 33 does not and has never precluded

requests for consent to disclosures, as is evidenced by Local Counsel’s attempt to gain the Circuit Mediator’s consent to his disclosures

and our prompt adoption of Standing Order 01-01 subsequent to this

attempt, as well as our decision, in Section IV.A. infra, to grant

waiver of confidentiality where manifest injustice would result.

Accordingly, we reject the participants’ claim that due process renders the confidentiality provision of Rule 33 unenforceable. 

E.

Finally, in addition to their disclosures about conversations that

took place at the mediation conference, Client and Current Counsel

disclosed conversations relating to the mediated dispute that took

place as the participants were leaving the mediation conference. Client and Current Counsel claim that these disclosures did not violate

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Rule 33 because they involved conversations that occurred after the

mediation had concluded. Although Rule 33 does not specifically

define the duration of "mediation" for purposes of maintaining confidentiality, it is plain that the "mediation" is not limited to the mediation conference, but continues until the mediated dispute has been

either dismissed or is otherwise removed from the OCM. This conception of the duration of mediation is a practical necessity of the process itself, in that the mediated dispute is rarely conclusively resolved

during the mediation conference. Instead, the parties to the dispute

often resume mediation, or refine aspects of the settlement agreement,

subsequent to the mediation conference, and many times do so outside the presence of the mediator. These conversations and the information disclosed therein are entitled to the same degree of

confidentiality as disclosures made during the mediation conference.

Accordingly, until a mediated dispute is dismissed or is otherwise

removed from the OCM, all "statements, documents, and discussions"

relating to the mediation remain within the bailiwick of the OCM and,

therefore, remain confidential. 

Thus, despite their various protestations to the contrary, we conclude that Client, Local Counsel, and Current Counsel each breached

Rule 33’s confidentiality provision by disclosing information

obtained during the mediation to persons other than the mediation

program participants. 

III.

We next turn to the question of whether the violations of Rule 33

committed by Client, Legal Counsel, and Current Counsel warrant the

imposition of sanctions by the Standing Panel. In assessing the sanctions issue, we review the totality of the circumstances, and determine, first, whether sanctions are warranted, and if warranted, the

severity of any such sanctions. In so doing, we analyze and weigh the

following and other relevant factors: (1) whether the mediator

explained the extent of the confidentiality rules, and the clarity of

such explanation; (2) whether the parties executed a confidentiality

agreement; (3) the extent of willfulness or bad faith involved in the

breach of confidentiality Rule; (4) the severity or adverse impact of

the disclosure on the parties or the case; and (5) the severity or

adverse impact of the disclosure on the mediation program. See gen10 IN RE: ANONYMOUS

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erally Robert J. Niemic et al., Guide to Judicial Management of Cases

in ADR 104 (Federal Judicial Center 2001) (discussing various considerations regarding the propriety of sanctions). 

Applying these factors, we note that the participants agree that the

mediator clearly explained the confidentiality provision prior to commencement of the mediation conference and that they each agreed to

abide by it. Although no one executed a confidentiality agreement at

that time, the settlement agreement, which Client and Local Counsel

both signed, contained a confidentiality provision that provides for

confidentiality as to all of the "terms of the agreement." On the other

hand, at the time of these disclosures, we had not previously interpreted the scope of Rule 33, and Current Counsel, as a participant but

not a formal party to the mediated dispute, had some basis, however

modest, for asserting that his disclosures did not fall within the literal

scope of the former Rule’s prohibition. Additionally, Local Counsel

had some basis to believe that his disclosures did not breach confidentiality, in that the Model Rules of Professional Conduct provide an

exception to confidentiality for disclosures of confidential client

information where the disclosures are for the purpose of establishing

an attorney’s entitlement to compensation. Model Rules of Prof’l

Conduct R. 1.6(b)(2) & cmt. 18; Restatement (Third) of Law Governing Lawyers § 65 (1998). 

Weighing these factors and considering the participants’ statements

and submissions before the Standing Panel, we are convinced that

none of the participants intended to violate Rule 33, and we are

unable to conclude that the disclosures were made in bad faith or with

malice. Moreover, the disclosures have not had an adverse impact on

the mediated dispute, and because the disclosures were made to a

non-public, confidential forum, any adverse impact on the mediation

program has been slight. Accordingly, considering the totality of the

circumstances, we conclude that the violations of Rule 33 are not sufficient to warrant sanctions in this case. 

IV.

The participants next contend that, pursuant to Rule 33’s provision

allowing participants to seek the Standing Panel’s approval for future

disclosures of confidential information, we should grant a limited

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waiver of confidentiality to permit the VSB arbitration to consider

their previously-submitted disclosures in resolving the expense dispute.12 Local Counsel also argues that we should grant consent for the

Circuit Mediator to submit written answers to the informal interrogatories posed in his letter dated March 27, 2001. We address each argument in turn, setting forth the standard by which we will determine

whether waiver is appropriate in each context. 

A.

To determine when the Standing Panel should grant a waiver of

confidentiality to the participants, it is necessary to examine the relevant interests protected by non-disclosure. The assurance of confidentiality is essential to the integrity and success of the Court’s mediation

program, in that confidentiality encourages candor between the parties and on the part of the mediator, and confidentiality serves to protect the mediation program from being used as a discovery tool for

creative attorneys. In re Lake Utopia Paper Ltd., 608 F.2d 928, 930

(2d Cir. 1979) ("It is essential to the proper functioning of the Civil

Appeals Management Plan that all matters discussed at these conferences remain confidential."); Alan Kirtley, The Mediation Privilege’s

Transition from Theory to Implementation: Designing a Mediation

Privilege Standard to Protect Mediation Participants, the Process

and the Public Interest, 1995 J. Disp. Resol. 1, 9-10 ("Without adequate legal protection, a party’s candor in mediation might well be

‘rewarded’ by a discovery request or the revelation of mediation

information at trial."). As the Second Circuit properly has observed:

If participants cannot rely on the confidential treatment of

everything that transpires during [mediation] sessions then

counsel of necessity will feel constrained to conduct themselves in a cautious, tight-lipped, non-committal manner

12Standing Order 01-01 and Rule 33 each provide that "prior" to the

disclosure of information related to the mediation, the participant must

seek approval from the Standing Panel. Here, although the participants

did not seek and obtain such approval prior to their disclosures, we consider their request for waiver of confidentiality because the avenue for

obtaining waiver provided in Rule 33 and Standing Order 01-01 was

implemented subsequent to the participants’ disclosures. 

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more suitable to poker players in a high-stakes game than to

adversaries attempting to arrive at a just resolution of a civil

dispute. This atmosphere if allowed to exist would surely

destroy the effectiveness of a program which has led to settlements and withdrawals of some appeals and to the simplification of issues in other appeals . . . . 

In re Lake Utopia, 608 F.2d at 930. In a program like ours, where participation is mandatory and the mediation is directed and sanctioned

by the Court, "the argument for protecting confidential communications may be even stronger because participants are often assured that

all discussions and documents related to the proceeding will be protected from forced disclosure." Folb v. Motion Picture Indus. Pension

& Health Plans, 16 F. Supp. 2d 1164, 1176 n.9 (C.D. Cal. 1998),

aff’d 216 F.3d 1082 (9th Cir. 2000). 

On the other hand, we must recognize that under certain circumstances, non-disclosure may result in an untenable "loss of information to the public and the justice system." Sarah R. Cole et al.,

Mediation: Law, Policy & Practice § 9:2 (2d ed. 2001). Thus, in

determining whether waiver is appropriate, we must balance the public interest in protecting the confidentiality of the settlement process

and countervailing interests, such as the right to every person’s evidence. In re: Grand Jury Subpoena, 148 F.3d 487, 492-93 (5th Cir.

1998); see also Wilson v. Attaway, 757 F.2d 1227, 1245 (11th Cir.

1985) (holding that the district court did not abuse its discretion by

weighing confidentiality in mediation proceedings against public’s

interest in insuring that "justice [is] done"). 

We believe that the balance between these interests is best resolved

by disallowing disclosure unless the party seeking such disclosure can

demonstrate that "manifest injustice" will result from non-disclosure.

Cf. Administrative Dispute Resolution Act of 1996, 5 U.S.C.A.

§ 574(a)(4)(A) (1998) (providing that disclosures of dispute resolution communications are prohibited unless, inter alia, a court determines that disclosure is necessary to prevent "manifest injustice").

Application of the manifest injustice standard requires the party seeking disclosure to demonstrate that the harm caused by non-disclosure

will be manifestly greater than the harm caused by disclosure. 

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In evaluating the harm resulting from non-disclosure, we observe

that in most instances, an expense dispute between lawyer and client

should easily be resolved without reference to settlement negotiations,

primarily because the client is obligated to reimburse advanced litigation expenses as a matter of the state’s ethics rules, independent of

mediation proceedings. See, e.g., Va. R. Prof’l Conduct R. 1.8(e)(1)

("[A] lawyer may advance court costs and expenses of litigation, provided the client remains ultimately liable for such costs and

expenses."). On the other hand, where an attorney seeks to establish

his entitlement to reimbursement of expenses, the attorney typically

is permitted to disclose confidential client information.13 Model Rules

of Prof’l Conduct 1.6(b)(2) & cmt. 18; Restatement (Third) Law Governing Lawyers § 65.

1.

With these general principles in mind, we turn to our application

of the manifest injustice standard to Local Counsel’s and Client’s submissions. Local Counsel and Client agree that disclosure of information related to the mediation proceedings is critical to resolution of

their expense dispute. As Local Counsel and Client note, the expense

dispute arose during the mediation conference, and resolution of the

dispute requires disclosures relating to the context of the dispute’s

origination. Additionally, portions of information disclosed during the

mediation may shed light on their understanding of the expense obligation at that time. Specifically, Client contends that the disbursement

of the settlement proceeds between herself and Local Counsel, which

13As noted earlier, the Model Rules of Professional Conduct provide

that an attorney may disclose confidential client information in a compensation dispute without breaching confidentiality. Model Rules of

Prof’l Conduct R. 1.6(b)(2) & cmt. 18 (1998). Although we recognize

the benefits of such an exception, we conclude that prior to making any

disclosure relevant to a compensation dispute, the attorney must request

and secure the consent of the Standing Panel, in that the mediation program has interests beyond those of the lawyer and client. Cf. Henry D.

Levine, Self-Interest or Self-Defense: Lawyer Disregard of the AttorneyClient Privilege for Profit and Protection, 5 Hofstra L. Rev. 783, 825-26

(1977) (urging that judicial approval be required before a fee-collection

disclosure is made). 

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is set forth in the settlement agreement, is evidence that her obligation

to reimburse legal expenses was incorporated into Local Counsel’s

share of the settlement proceeds. In response, Local Counsel argues

that conversations that took place during the mediation conference are

evidence that Client understood that the settlement agreement did not

affect Client’s obligation to reimburse the litigation expenses in any

manner, and he contends that his notes regarding the settlement conference corroborate his assertion that these conversations took place.

Insofar as the mediation conference was the genesis of the expense

dispute and information divulged during the conference is critical to

resolution of the expense dispute, the harm resulting from non disclosure might, in the context of the expense dispute, be substantial. 

Further, any harm resulting from disclosure would be slight, in that

the contemplated disclosures will be made to a non-public, confidential forum, and all of the attendants of the mediation, excluding the

Circuit Mediator, have consented to a limited waiver of confidentiality for disclosures relating to the expense dispute.14 Cf. 5 U.S.C.A.

§ 574(a)(1) (allowing for disclosure of confidential settlement information where all parties consent to disclosure). Additionally, it is significant that little mention needs to be made regarding the mediation

of the substantive merits of the appeal. In light of these considerations, we conclude that Local Counsel and Client have demonstrated

that non-disclosure of limited and relevant information related to the

mediation would cause manifestly greater harm than the disclosure of

such information. Accordingly, we grant conditional consent for

Local Counsel and Client to disclose the following limited material:

(1) conversations that took place during the mediation regarding the

expense dispute and their notes, or portions thereof, regarding the settlement negotiations corroborating these conversations; and (2) the

settlement agreement and notes regarding the settlement agreement,

but only to the extent that these materials explain or relate to the disbursement of the settlement funds. Our consent is conditioned upon

Local Counsel and Client securing from the VSB arbitral panel its

14The attendants’ consent, excluding the mediator, is limited to disclosures made to the VSB program. The ultimate decision to grant or deny

consent on behalf of the mediator to the other attendants’ disclosures is

vested in the Standing Panel, although the Standing Panel will normally

seek input from the mediator prior to granting or denying consent. 

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written agreement to abide by Rule 33’s confidentiality provision. We

caution Local Counsel and Client to adhere strictly to the parameters

of this limited waiver, and we direct that all previous submissions outside the confines of this waiver be withdrawn from the VSB arbitration. 

2.

With respect to Current Counsel’s disclosures, our analysis is

impacted by different considerations. In Current Counsel’s submitted

statement to the VSB arbitral panel, he has detailed his recollection

of conversations that he overheard during and after the mediation conference regarding the expense dispute. This submission allows Current Counsel impermissibly to act as both an advocate and as a

witness on behalf of Client in the expense dispute, which is forbidden

by the Rules of Professional Conduct of both Virginia and Florida.15

Va. R. Prof’l Conduct R. 3.7(a); Fla. R. Prof’l Conduct R. 4-3.7(a).

Regardless of the extent to which Current Counsel’s statement may

be necessary or helpful in resolving the expense dispute, we decline

to grant consent for him to violate his ethical obligation to refrain

from acting as both an advocate and a material witness on behalf of

Client. If, however, Current Counsel withdraws as Client’s attorney

in the expense dispute, we grant consent for Current Counsel’s disclosures, subject to the same conditions and limitations that we have set

forth with respect to Local Counsel and Client. Assuming that Current

Counsel does not withdraw as Client’s advocate, we direct Current

Counsel to retract all documents previously submitted to the VSB

arbitration in his capacity as a witness of the mediation. 

B.

Turning to the question of whether to consent for the Circuit Mediator to divulge information related to the mediation, we observe that

allowing disclosures by the mediator in subsequent proceedings

implicates concerns well beyond those implicated by disclosures of

15Current Counsel is licensed to practice law in Florida and has not

been admitted to practice law in Virginia. We trust that, before proceeding further as Client’s advocate, Current Counsel will gain appropriate

pro hac vice admission to represent Client in the VSB arbitration. 

16 IN RE: ANONYMOUS

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other participants to a mediation.16 For example, our granting of consent for the mediator to participate in any manner in a subsequent proceeding would encourage perceptions of bias in future mediation

sessions involving comparable parties and issues, and it might encourage creative attorneys to attempt to use our court officers and mediation program as a discovery tool. As noted in NLRB v. Macaluso, Inc.,

618 F.2d 51 (9th Cir. 1980),

If [mediators] were permitted or required to testify about

their activities, or if the production of notes or reports of

their activities could be required, not even the strictest

adherence to purely factual matters would prevent the evidence from favoring or seeming to favor one side or the

other. The inevitable result would be that the usefulness of

the [mediation program] in the settlement of future disputes

would be seriously impaired, if not destroyed. 

Id. at 54 (internal quotation marks omitted); Olam v. Cong. Mortgage

Co., 68 F. Supp. 2d 1110, 1134 (N.D. Cal. 1999) ("Good mediators

are deeply committed to being and remaining neutral and nonjudgmental, and to building and preserving relationships with parties.

To force them to give evidence that hurts someone from whom they

actively solicited trust . . . rips the fabric of their work and can

threaten their sense of the center of their professional integrity."). In

light of these heightened concerns unique to disclosures by the Circuit

Mediator, the threshold for granting of consent to disclosures by the

mediator is substantially higher than that for disclosures by other participants. Thus, we will consent for the Circuit Mediator to disclose

confidential information only where such disclosure is mandated by

manifest injustice, is indispensable to resolution of an important subsequent dispute, and is not going to damage our mediation program.17

16The OCM has requested that we utilize the resolution of this case to

adopt a federal mediation privilege. In essence, a federal mediation privilege would be a rule of evidence to preclude the disclosure of any document, discussion, or statement made during mediation. Because we are

able to interpret and apply Rule 33 without the adoption and application

of a federal mediation privilege, we will reserve this issue for another

day. 

17Of course, we do not address the rare case in which the mediator violates some independent law in the course of conducting the mediation,

IN RE: ANONYMOUS 17

USCA4 Appeal: 01-9543 Doc: 1 Filed: 03/20/2002 Pg: 17 of 18
In this situation, Local Counsel has failed to establish that the

expense dispute is incapable of resolution absent the Circuit Mediator’s involvement. Further, Client objects to the Circuit Mediator’s

involvement, contending that she will be biased in her responses to

Local Counsel’s inquiries. And the mediation program may be damaged when a party who has been assured of confidentiality subsequently faces a disclosure of confidential material by a mediator who

is perceived, rightly or wrongly, as biased. This perception of bias is

the type of damage against which our confidentiality rule, as applied

to the Circuit Mediator, is attempting to protect. Accordingly, we

decline to consent for the Circuit Mediator to respond to the informal

interrogatories posed by Local Counsel or to otherwise disclose confidential information in the expense dispute.18

V.

Based upon the foregoing, we conclude that Client, Local Counsel,

and Current Counsel each breached Rule 33, but we decline to impose

sanctions upon them in the circumstances of this case. We conditionally consent to disclosures by Local Counsel and Client, limited to the

expense dispute as set forth above. We deny consent, however, for

Current Counsel to make any disclosures related to the mediation, and

we order Current Counsel to withdraw all materials submitted to the

VSB arbitration in his capacity as a witness, unless Current Counsel

withdraws from his representation of Client. We also decline to consent for the Circuit Mediator to disclose any information or answer

any questions related to the mediation. 

SO ORDERED

wherein the mediator certainly could be required to testify at a subsequent proceeding. Cf. Virmani v. Novant Health Inc., 259 F.3d 284, 287-

93 (4th Cir. 2001) (holding that hospital’s peer review records were not

privileged from discovery where physician claimed that hospital’s peer

review process was conducted in a discriminatory manner). 

18As with our consideration of whether to grant consent to other attendants’ disclosures, before the Standing Panel would grant consent for the

mediator to disclose information related to the mediation, the Standing

Panel should seek the input of the mediator. 

18 IN RE: ANONYMOUS

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