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Standards for Disqualification of Opposing Counsel Who Served as Mediator in Earlier Dispute between Parties

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From Hossaini v. Vaelizadeh, 2011 U.S. Dist. LEXIS 86436 (D. Neb. Aug. 4, 2011):

Relatively few courts have considered the disqualification of an attorney who has previously served as a mediator for a dispute between the parties. The most thorough discussion comes in the case of Poly Software International, Inc. v. Datamost Corporation, 880 F.Supp. 1487, 1494 (D. Utah 1995) and proposes a slightly more restrictive standard than the one identified under the Nebraska ethical rules. In addressing whether an attorney should be dismissed because he previously served as a mediator for the parties the court set forth the following rule:

Where a mediator has received confidential information in the course of mediation, that mediator should not thereafter represent anyone in connection with the same or a substantially factually related matter unless all parties to the mediation proceeding consent after disclosure.

Poly Software, 880 F.Supp. at 1494. The court went on to explain the reasoning for its rule preventing representation not only in identical matter that was mediated, but in "substantially related" matters as well:

This rule also takes into account some important policy considerations. If parties to mediation know that their mediator could someday be an attorney on the opposing side in a substantially related matter, they will be discouraged from freely disclosing their position in the mediation, which may severely diminish the opportunity for settlement. If, on the other hand, the disqualification net is thrown too wide, attorneys will be discouraged from becoming mediators. The "substantially factually related" standard best balances those two interests. It encourages parties to freely disclose their positions during mediation by assuring them that the specific information disclosed will not be used against them at a later time. It also limits disqualification to subsequent situations where there is a substantial factual nexus with the previously mediated dispute.

***In this case, disqualification of Galter is not justified under the ethical guidelines set forth in Nebraska or under the lower "substantially related" standard established in Poly Software. The provisions of the Nebraska professional code and statutes governing family law mediators are not applicable because Galter is not attempting to represent Mahnaz in the same "matter" he mediated between Mahnaz and Vaelizadeh. The mediated matter was a custody dispute, apparently involving only the disagreement in how often and under what conditions Vaelizadeh would be able to visit his minor child. The current case is, at its core, a suit for monetary damages due to the action of the parties and the exchange of promises and gifts during the relationship between Mahnaz and Vaelizadeh. Although the Nebraska ethics rules would prevent Galter from representing either party in the litigated custody action, the rules do not appear to prevent Galter from representing Mahnaz in a separate matter.

Even if the court applies the "substantially related" test, as Vaelizadeh seems to advocate, Galter's disqualification is still not required. Although Vaelizadeh argues he conveyed confidential information to Galter, he does not assert in what way the confidential information could be used to Vaelizadeh's disadvantage in the current case. Indeed, a careful comparison of the facts and legal theories between the two cases indicate they have little in common except for the fact Mahnaz and Vaelizadeh are involved in both. The case in which Galter served as a mediator was a custody dispute which apparently involved only discussions regarding the terms and conditions of Vaelizadeh's visitation rights. The current case involves disputes over property rights and various acts of each party during their courtship. There is no mention in any of the pleadings regarding the custody or visitation of their minor child. Nor does Vaelizadeh present any evidence that any information gleaned by Galter in the custody dispute will be relevant to this case. His bald assertions that Galter will "use every possible unconstitutional lynchpin to punish the child, punish the father for the breakup of a marriage engagement . . ., inflame the judge or jury against the father of the child, including the most vicious and inappropriate forms of service of process" are unsupported by any actual evidence. In short, Vaelizadeh has not met his burden of proving Galter should be disqualified in this case.

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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