ADR Case Updates
Evidence Used In Mediation Does Not Necessarily Render It Immune From Production, 12/03/08
In Kullar v. Foot Locker Retail, Inc., 168 Cal. App. 4th 116 (Nov. 7, 2008), a wage and hour class action case, the California Court of Appeal, First District, Div. Three, held that the trial court must determine the fairness to all class members of a settlement agreement reached in mediation based on non-privileged information exchanged during the mediation. The fact that communications occurred in mediation, and that writings were prepared for and used therein, which are inadmissible and not subject to compulsory production, does not render the underlying data, not otherwise privileged, immune from production.
Plaintiff filed a class action against Defendant claiming that he and other employees were required to purchase certain types of shoes as part of mandatory work uniforms without reimbursement in violation of the California Labor Code. The class representative Plaintiff and Defendant settled the case in mediation.
Three members of the represented class objected to the settlement, claiming the court erred in finding it fair, reasonable, and adequate without any basis to evaluate its reasonableness. The objectors also sought discovery of various information regarding the settlement. The trial court approved the settlement without reviewing the information evaluating the fairness of its terms, finding the supporting data was exchanged during mediation and therefore �privileged,� and denied objector�s request for discovery.
Reversed and remanded. The trial court must determine the adequacy of a class action settlement by independently satisfying itself that the terms are reasonable in light of the strengths and weaknesses of the claims and defenses and risks inherent in trial.
Evidence Code § 1120 provides, in pertinent part, that �evidence otherwise admissible or subject to discovery outside of a mediation � shall not be or become inadmissible or protected from disclosure solely by reason of its introduction or use in mediation � .� Thus, the trial court must assess whether the settlement terms were adequate based upon the non-privileged supporting information exchanged during mediation, such as Foot Locker�s payroll records.
Accordingly, the trial court�s approval of the settlement was vacated. On remand, it must reconsider whether the settlement was fair and reasonable based on additional information the parties present following very limited discovery.
This case may be viewed at: http://www.courts.ca.gov/opinions.htm.
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