## Facts

- A Title VII retaliation plaintiff retained counsel under a contingency agreement requiring the client to reimburse litigation expenses in addition to any fee.
- Trial assistance was provided by local counsel, who advanced most litigation expenses.
- After a verdict and appeals, the Fourth Circuit referred the case to court-annexed mediation conducted by the Office of the Circuit Mediator; participants agreed to be bound by Fourth Circuit Local Rule 33 confidentiality.
- The mediation resulted in a settlement.
- A post-settlement dispute arose between the client and local counsel regarding reimbursement of litigation expenses.
- The expense dispute was submitted to Virginia State Bar arbitration.
- In the arbitration, the client, local counsel, and later the client’s current counsel disclosed information about or relating to the Fourth Circuit mediation and attempted to obtain mediator responses to interrogatories.
- The Fourth Circuit Standing Panel on Attorney Discipline stayed the arbitration and initiated disciplinary proceedings to determine whether Local Rule 33 was violated, whether sanctions were warranted, and what standards govern waiver and mediator disclosure.

## Issues

1. Whether the client, local counsel, and current counsel violated Fourth Circuit Local Rule 33 by disclosing mediation-related information in state bar arbitration and by seeking mediator testimony or interrogatory responses.
2. Whether disciplinary sanctions should be imposed for any breach of Local Rule 33 confidentiality.
3. What standard governs court-approved waiver of Local Rule 33 mediation confidentiality for use in later proceedings.
4. Whether, and under what standard, a circuit mediator may be compelled or permitted to disclose mediation information.

## Decision

- The panel held that the client, local counsel, and current counsel violated Local Rule 33 by disclosing mediation information to nonparticipants and by attempting to secure mediator discovery without prior court consent.
- The panel declined to impose disciplinary sanctions, citing the novelty of the confidentiality and waiver questions and the nonpublic context of the disclosures.
- The panel adopted a stringent waiver standard: mediation disclosures are generally barred unless the requesting party shows that non-disclosure would cause “manifest injustice.”
- The panel conditionally permitted limited, narrowly tailored disclosures by the client and local counsel in the expense arbitration to the extent necessary to avoid manifest injustice and subject to court-controlled restrictions.
- The panel denied permission for current counsel to disclose mediation information while continuing to represent the client in the arbitration, conditioning any such disclosure on withdrawal as counsel.
- The panel prohibited the circuit mediator from disclosing any mediation information, including by testimony or written discovery responses.

## Legal Principles

- Court-annexed mediation confidentiality rules may extend broadly to all statements, documents, and discussions occurring in the course of mediation and may not be bypassed by disclosure in another confidential forum.
- Disclosure of mediation communications to nonparticipants violates Local Rule 33 absent prior approval from the court’s designated authority.
- Waiver of mediation confidentiality requires a demanding showing that non-disclosure would result in “manifest injustice,” reflecting a balance between the integrity of the mediation program and competing evidentiary interests.
- Any permitted disclosure should be strictly limited to what is necessary to prevent manifest injustice and may be conditioned on safeguards imposed by the court.
- Mediators are generally shielded from compelled disclosure of mediation communications to preserve neutrality and avoid chilling candid participation.

## Conclusion

The Fourth Circuit disciplined the conduct at issue by clarifying that Local Rule 33 prohibits unauthorized disclosure of mediation communications in collateral proceedings, allowing waiver only on a “manifest injustice” showing with narrow, court-controlled limits, and barring mediator testimony or discovery entirely.


In re Anonymous, 283 F.3d 627 (4th Cir. 2002)