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News from the Federal Circuit: No Breach of ADR Confidentiality Claim

News from the Federal Circuit: On January 14, 2015, a panel of the U.S. Court of Appeals for the Federal Circuit issued its decision in Higbie v. U.S., __F.3d__, No. 2014-5042.  The panel, 2-1, rejected Higbie's claim that violations of the mediation confidentiality agreement from a federal-sector EEO complaint mediation should give rise to breach-of-contract remedies under the Tucker Act.

As previously analyzed in this blog, recent Federal Circuit caselaw has greatly expanded the ability of parties to enforce settlement agreements for federal-sector personnel settlement agreements in Tucker Act breach-of-contract claims before the Court of Federal Claims.  Higbie sought to extend this line of cases from settlement agreement to the routine confidentiality agreements which parties often sign before mediations and settlement conferences.  Mr. Higbie had an EEO complaint pending against the State Department, which went to mediation during the formal complaint stage.  The parties failed to settle at mediation.  Later, during the investigation, managers who had attended the mediation discussed the events of the mediation itself in their investigative affidavits.  After further proceedings, Mr. Higbie brought suit under the Tucker Act, seeking money damages for the managers' breach of the mediation confidentiality agreement.  The Court of Federal Claims dismissed the claim for lack of jurisdiction, and Mr. Higbie then appealed to the Federal Circuit.

The majority of the Federal Circuit upheld the dismissal of Mr. Higbie's Tucker Act claim.  One requirement for a breach of contract claim to proceed under the Tucker Act is that the contract contemplates money damages for breach.  The majority held that the mediation confidentiality agreement in Mr. Higbie's case did not, finding that the remedy for breach under the agreement was exclusion of any offending statements from the record.  The majority distinguished Mr. Higbie's case from Cunningham, noting that the mediation confidentiality agreement here was routine boilerplate applied uniformly in mediations, and was not a custom-negotiated agreement imposing specific duties for the government with regards to Mr. Higbie.

Writing in dissent, Judge Taranto objected to carving out mediation confidentiality agreements from Tucker Act jurisdiction.  Judge Taranto noted that this holding stands contrary to the line of precedent presuming money damages as a remedy for breach of contract, and fails to deal with the inadequacy of the exclusionary remedy in this breach of confidentiality context.  Judge Taranto also faulted the majority for not explaining its decision to differ from other courts' decisions allowing money damages specifically for breaches of mediation confidentiality agreements.  

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