Opinion
No. CS-01-0127-EFS.
June 15, 2004
On May 27, 2004, the Court conducted a motion hearing in the above-captioned matter. J. David Blair-Loy appeared on behalf of Rhubarb Sky LLC ("Rhubarb Sky"), Laurel Siddoway appeared for the City of Spokane (the "City"), Ladd Leavens appeared for Citizens Realty Company, Lincoln Investment Company of Spokane, River Park Square, LLC, and RPS II, LLC (taken together, the "RPS Defendants"), and William Cronin appeared on behalf of Preston Gates Ellis ("Preston Gates"). The parties were represented at the hearing as reflected in the Court's minutes, (Ct. Rec. 1886). At the hearing, the Court considered the City's Motion for Order Clarifying Confidentiality of Settlement Communications, (Ct. Rec. 1836), and Rhubarb Sky's Motion to Intervene on Issue of Scope of Court's Mediation Confidentiality Order, (Ct. Rec. 1848). Both motions were appropriately accompanied by memoranda. After reviewing the file and hearing the arguments of counsel, the Court orally granted Rhubarb Sky's Motion to Intervene, (Ct. Rec. 1848), and sketched the limits of confidentiality as used in its Local Rules and in various orders entered in this case by Judge Suko. This Order memorializes and supplements the oral rulings of the Court.
I. ISSUES
In its motion, the City asks the Court to clarify Judge Suko's confidentiality order. The City was prompted to file the motion to ensure the actions it took with respect to a public record request were in compliance with Washington's Public Disclosure Act, R.C.W. § 42.17.250 et seq.
The City's motion seeks clarification on the following issues:
(1) Whether the Court's referral order in conjunction with Local Rule 16.2(c)(4), or Judge Suko's later Confidentiality Order and/or settlement conference orders protect the confidentiality of all settlement communications among counsel and party representatives participating in the mediation process, whether or not occurring during, or with a view to, a particular settlement conference, and
(2) Whether the Court's referral order in conjunction with Local Rule 16.2(c)(4), or Judge Suko's later Confidentiality Order and/or settlement conference orders protect the confidentiality of all settlement communications among party representatives, even representatives who are not direct participants in the mediation process.
In response, Rhubarb Sky identifies several categories of documents that it believes are not within the boundaries of the orders entered as part of the federal court mediation process in this case, (hereafter, "Confidentiality Orders"). In the weeks before the settlement agreement with the Plaintiffs was formalized, the City communicated with Bond counsel, the Financial Advisor, the Underwriter, and other non-legal consultants. Rhubarb Sky wants the "2004 bond documents" that the City refuses to produce. In addition, it requests, and the City declines to release, communications from the RPS Defendants to recently-elected City council member, Joe Shogan. Rhubarb Sky argues that because Mr. Shogan was not a member of the City's mediation team and was not a direct participant in the litigation, these communications do not fall within the Confidentiality Orders. Finally, Rhubarb Sky requests and the City declines to release a "one-page" record of a telephone message dated February 19, 2004, from Internal Revenue Service agent Derek Knight to City Chief Financial Officer Gavin Cooley on the grounds that it reflects mediation information. In summary there are three groups of documents at issue: (1) 2004 bond documents, (2) Shogan communications, and (3) IRS telephone message.
II. HISTORY
On June 19, 2002, the Court referred this case to mediation pursuant to Local Rule 16.2(c)(4) which provides, in pertinent part:
Proceedings Confidential. All proceedings of the mediation conference, including any statement made by a party, attorney, or other participant, shall, in all respects, be confidential and may be privileged and not reported, recorded, placed in evidence, made known to the trial court or jury, or construed for any purpose as an admission against interest.
During the course of mediation, Judge Suko issued a number of orders. In his October 4, 2002, Order, Judge Suko expanded the materials to be treated as confidential to include: all memos, documents, reports, compilations, statements of position and related materials, whether in written, printed, electronic or other format, prepared, generated or received for purposes of mediation shall be and remain confidential and not be disclosed, reproduced or otherwise summarized to non-parties to this litigation.
On May 23, 2003, Judge Suko issued an Order that made clear the confidentiality requirements outlined above were ongoing: "Counsel for the parties and their clients are herewith required to keep confidential the substance of ongoing negotiations which occur in this proceeding prior to arrival at a tentative settlement." In his August 22, 2003, Order, Judge Suko denied the City's motion seeking relief from the confidentiality order, holding that confidentiality is a critical part of any successful mediation process, but cautioned that "[t]hrowing a veil of secrecy over the entire controversy, including matters of public record, . . . was not what the confidentiality orders were intended to do."
In March 2004, the City received the records request from Rhubarb Sky that it believes would violate the Confidentiality Orders. This hearing followed.
III. DISCUSSION
It is undisputed that the Court has the authority to determine the scope of its Confidentiality Orders and it is for the state courts to enforce Washington's Public Disclosure Act.
In defining the breadth of the phrase, "for the purposes of mediation," this Court must be careful not to throw, "a veil of secrecy over the entire controversy, including matters of public record," as Judge Suko aptly put it. To begin, anything prepared by a party or counsel or experts retained by a party for a mediation session and anything occurring during a mediation session are undisputedly, "for the purposes of mediation" and therefore, within the breadth of the Confidentiality Orders. Further, the term embraces settlement discussions between or among attendees following a mediation session that are an extension of matters prepared for and discussed at that mediation session. However, not every document produced or contacts made by a party following a mediation session, regardless of how long thereafter, are "for the purposes of mediation." This is particularly true when one of the parties is a public entity subject to state public disclosure laws as is the City.
Of the three groups of documents at issue, the Court unhesitatingly rules that communications between the City and other government agencies are not within the term "for the purposes of mediation" as used in the Confidentiality Orders. In particular, the February 19, 2004, telephone message from the Internal Revenue Service to the City does not fall within that phrase. As to the communications between Ms. Cowles and Mr. Shogan before he was sworn in, they are not "for the purposes of mediation" as used in the Confidentiality Orders. Councilman Shogan was not a member of the City Council nor a member of the mediation team when those communications occurred. However, communications between them after he took office do fall within both the letter and spirit of the phrase and, therefore, are subject to the Confidentiality Order. It is immaterial that the Councilman was not a member of the City's mediation team; as a member of the City Council, he was an integral part of settlement efforts. His views on settlement were undoubtedly important to the other members of the City Council and to the team.
Third, the communications between the City and its various expert advisors on the subject of issuing general obligations bonds to replace the revenue bonds were not "for the purposes of mediation." These laudable efforts to construct a creative, if partial, resolution to the litigation can not be defined as "for the purposes of mediation" without erecting a barrier of secrecy to all efforts following an unsuccessful mediation. To rule otherwise would permit parties to engage in a mediation session and thereafter pursue different strategies for an extended period as confidential without reconvening any other mediation session. That is not "for the purposes of mediation." The Court does caution that no negative inference regarding any party or counsel in this case should be drawn from the expression of this concern.
The Court, as requested by the City, has clarified what is embraced by the phrase "for the purposes of mediation" as used in the federal Confidential Orders, recognizing that it is for the Washington state courts to apply Washington's Public Disclosure Act to such material that is not covered by the federal Confidentiality Orders in such state court cases as may follow. Accordingly,
In response to Preston Gates' submission in which counsel describes a series of phone calls and e-mails exchanged between counsel and Judge Suko, the Court concludes clearly such correspondence, as described, would be covered by the Confidentiality Orders. However, the Court specifically observes that merely labeling materials with captions such as "CONFIDENTIAL FOR SETTLEMENT MEDIATION PURPOSES ONLY" is an insufficient means to shield documents otherwise subject to disclosure.
IT IS HEREBY ORDERED:
1. The City of Spokane's Motion for Order Clarifying Confidentiality of Settlement Communications, (Ct. Rec. 1836), is GRANTED IN PART AND DENIED IN PART.
2. Rhubarb Sky LLC's Motion to Intervene on Issue of Scope of Court's Mediation Confidentiality Order, (Ct. Rec. 1848), is GRANTED IN PART AND DENIED IN PART.
3. Specifically, the following materials are NOT within the scope of the Confidentiality Orders: (1) the 2004 bond documents, (2) IRS telephone message, and (3) Shogan communications (prior to taking office only). It is for the Washington state courts to apply Washington's Public Disclosure Act to such material that is not covered by the federal Confidentiality Orders. IT IS SO ORDERED. The District Court Executive is directed to enter this Order and to furnish copies to counsel.