## Facts

- Scott Folb served as Administrative Director of the Motion Picture Industry Pension & Health Plans (the Plans) and alleged he reported suspected ERISA violations and conflicts of interest involving plan directors and vendor relationships.
- A Plans employee, Vivian Vasquez, accused Folb of sexual harassment; the Plans retained outside counsel to investigate.
- Vasquez pursued claims against the Plans and participated in private mediation and follow-on settlement negotiations, which ultimately resolved her dispute.
- The Plans later terminated Folb, who sued alleging retaliation and that the harassment allegations were used as a pretext for discharge.
- In discovery, Folb subpoenaed mediation-related communications and documents from (1) Deborah Saxe, an attorney involved in investigating Vasquez’s allegations, and (2) Vasquez’s counsel, Hadsell & Stormer.
- Folb argued the materials could show the Plans took inconsistent positions about whether harassment occurred (litigation against Folb versus settlement posture with Vasquez).
- A magistrate judge denied Folb’s motion to compel; Folb objected under Federal Rule of Civil Procedure 72(a).

## Issues

1. Whether federal common law recognizes a privilege barring discovery of communications and materials created in connection with private mediation and related settlement negotiations in a federal-question case.
2. Whether the requested mediation materials were independently protected under the attorney work-product doctrine, including opinion work product.
3. Whether a claimed need to show inconsistent positions for impeachment purposes justifies compelling production notwithstanding privilege or work-product protection.
4. Whether the magistrate judge’s denial of the motion to compel was clearly erroneous or contrary to law under Rule 72(a).

## Decision

- The district court overruled Folb’s objections and affirmed the magistrate judge’s denial of the motion to compel.
- The court recognized a federal mediation/settlement privilege under Federal Rule of Evidence 501 protecting communications made in connection with or during mediation and materials prepared for mediation.
- The court held the subpoenaed mediation briefs, counsel communications, and settlement-related documents fell within the privilege and were not discoverable.
- The court further held much of the requested material constituted attorney work product, including opinion work product receiving near-absolute protection absent extraordinary circumstances.
- The court found Folb’s asserted impeachment rationale (possible inconsistent positions) insufficient to overcome either the mediation privilege or opinion work-product protection.

## Legal Principles

- In federal-question cases, privilege questions are governed by federal common law under Federal Rule of Evidence 501.
- Federal common law may protect mediation-related communications and materials from discovery through a mediation/settlement privilege when confidentiality is necessary to effective dispute resolution.
- Federal Rule of Evidence 408 limits admissibility of settlement discussions but does not itself create a discovery privilege; a separate privilege may be recognized under Rule 501.
- The mediation privilege extends to communications between parties or counsel made in connection with or during mediation and to materials prepared for mediation and related settlement efforts.
- Attorney work product protects materials prepared in anticipation of litigation; opinion work product reflecting mental impressions and legal strategies is rarely discoverable.
- A party’s desire to obtain mediation communications for impeachment or to probe alleged inconsistency between settlement and litigation positions is generally insufficient to defeat mediation privilege or opinion work-product protection.
- Review of a magistrate judge’s non-dispositive discovery order under Rule 72(a) is deferential; reversal requires a showing that the order was clearly erroneous or contrary to law.

## Conclusion

The court upheld denial of discovery of mediation and settlement communications sought from attorneys involved in a related dispute, holding that federal common law recognizes a mediation/settlement privilege and that the materials were also protected as work product; an asserted need for impeachment based on allegedly inconsistent positions did not justify compelled disclosure under the deferential Rule 72(a) standard.


Folb v. Motion Picture Indus. Pension & Health Plans, 16 F. Supp. 2d 1164 (C.D. Cal. 1998)