ADR Case Updates
Recent "Binding Mediation" Is An Oxymoron, 06/17/06
In case you have not seen them, attached are two recent California Court of Appeal decisions. The first is Lindsay v. Lewandowski, filed May 31, 2006 (2006 DJDAR 6709), a case that was settled at "binding mediation," where the parties agreed that any impasse in the negotiation at mediation would be resolved by the mediator, a retired judge. Impasse was reached and the mediator rendered a "binding mediation ruling" that was between the last demand and the last offer. The trial court then entered judgment under a CCP § 664.6 motion to enforce the stipulation for settlement over objection of one of the parties.
The Appellate court reversed the judgment. Because mediation is a voluntary process, giving the mediator the power to bind the parties converts the mediation to"low-quality arbitration," without the procedural and substantive safeguards that govern arbitration. "Binding mediation" is a deceptive, self-contradictory, and misleading term. However, the Court made it clear that the parties are not prohibited from agreeing that, if the mediation fails, they will proceed to arbitration. But if the same person is to serve as both mediator and arbitrator, great care must be taken to address what rules will apply during each phase of the dispute resolution process (e.g., mediation confidentiality rules, court-ordered mediation rules, arbitration rules, or some mix). Since that was not done here, the stipulation for settlement was unenforceable. "Binding Mediation" is an oxymoron.
The second case is Berglund v. Arthroscopic & Laser Surgery Center of San Diego, LP, filed May 22, 2006 (2006 DJDAR 6233), where the court compelled arbitration. The arbitrator ordered a nonparty to the arbitration to produce subpoenaed documents. That third-party sought a protective order from the Superior Court, which denied the motion on the grounds that it did not have jurisdiction, concluding only the arbitrator could grant relief. Reversing the trial court, the Appellate Court held that, although arbitrators have the authority to enforce discovery subpoenas against nonparties, the trial court continues to have "vestigial" jurisdiction to review the arbitrator's discovery orders. Therefore, the nonparty was entitled to seek judicial review of the arbitrator's order.
Both decisions underscore the judicial tendency to maintain oversight of alternative dispute resolution processes to insure that minimal due process requirements are met.
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