In a recent unpublished decision, Smith v. ABN AMRO Mortgage Group, Inc., the Sixth Circuit delved into the propriety of a district judge serving as a mediator in a case pending before him.  The plaintiffs in the case agreed to a settlement, which the district court orally memorialized on the record after a day-long mediation session.  They subsequently disputed that a settlement had been reached and claimed undue pressure by the district court in reaching the settlement.  The Sixth Circuit squarely rejected all of plaintiffs’ arguments, finding that the district judge had fairly summarized all key terms of the settlement on the record in the presence of the plaintiffs.  The Court also searched the record in vain for any evidence of undue pressure by the district court and rejected similar arguments of bias raised by the plaintiffs.

Although the case is not remarkable insofar as the evidence before the Circuit demonstrated that an agreement had been reached by the parties, it does provide a note of caution about the memorialization of settlement agreements, particularly when reached by judges as mediators.  This case demonstrates a number of best practices, such as getting the court to orally describe the material terms on the record, which should hopefully minimize disputes going forward.  This is more problematic in a mediation context without a trial judge, because of certain states’ (such as Ohio’s) mediation privilege that might bar introduction of such evidence.  The case also illustrates the difficulty of making an argument of undue pressure from a district judge in the course of mediation, because of the absence of any record evidence of that point.  A party that feels so pressured should obviously resist any sort of settlement, or if they agree to a settlement, at least put something on the record.  In other words: preserve, preserve, preserve!