505 F.Supp.3d 281
S.D.N.Y.2020Background
- Plaintiffs Accent Delight and Xitrans allege Yves Bouvier secretly marked up purchases (including da Vinci’s Christ as Salvator Mundi), and that Sotheby’s assisted or facilitated the fraud.
- Sotheby’s separately sued the da Vinci Sellers and, before filing, the parties engaged in a private mediation with former Judge Barbara Jones under a written engagement letter stating the mediation was “private and confidential.”
- That mediation resulted in a confidential settlement; Plaintiffs later subpoenaed the settlement agreement and other mediation-related materials from the da Vinci Sellers and Sotheby’s.
- The court reviewed the settlement agreement in camera and quashed the subpoena for the agreement but allowed other requests to proceed subject to objections; the da Vinci Sellers produced some materials while withholding about 250 documents claimed to be mediation-related.
- Plaintiffs moved to compel production of the withheld mediation materials (communications among Sotheby’s counsel, the da Vinci Sellers’ counsel, and the mediator); Sotheby’s argued a heightened disclosure standard applies and alternatively asserted work-product protection for a subset.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Second Circuit’s heightened Teligent standard governs confidential private mediations | Teligent should not apply to purely private mediations; Rule 26(c) good-cause standard suffices | Teligent applies to any confidential mediation communications, including private mediations | Teligent’s heightened three-factor test applies to private mediations with an explicit confidentiality promise |
| Whether Plaintiffs demonstrated the Teligent factors (special need, resulting unfairness, need outweighs confidentiality) | Materials relate to a core transaction (Salvator Mundi) and are necessary to prove claims | Plaintiffs have not shown special need or unfairness and can obtain the information from other sources | Plaintiffs failed to meet Teligent’s requirements; compelled production denied |
| Whether alternative sources exist so discovery is not necessary | Mediation materials are uniquely probative and unavailable elsewhere | Plaintiffs already have access to underlying transaction witnesses and Sotheby’s public complaint outlining its theory | Court found Plaintiffs could obtain the substance elsewhere; lack of uniqueness undermined special-need showing |
| Whether certain documents shown only to the mediator are protected by work product | Plaintiffs argued they need those materials | Sotheby’s contended those 16 mediator-only documents are work product | Court did not reach the issue but noted they likely are protected and declined to order production under Teligent |
Key Cases Cited
- In re Teligent, Inc., 640 F.3d 53 (2d Cir. 2011) (adopted a three-part heightened test for disclosure of confidential mediation materials)
- In re Tremont Sec. Law, State Law & Ins. Litig., [citation="699 F. App'x 8"] (2d Cir. 2017) (applied Teligent standard to private confidential mediation)
- Rocky Aspen Mgmt. 204 LLC v. Hanford Holdings LLC, 394 F. Supp. 3d 461 (S.D.N.Y. 2019) (held Teligent inapplicable to private mediations without court-ordered confidentiality)
- Gambale v. Deutsche Bank AG, 377 F.3d 133 (2d Cir. 2004) (encourages settlement and recognizes policy favoring confidentiality to facilitate resolution)
- Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 976 (6th Cir. 2003) (recognized protection for statements made in furtherance of settlement)