Embracing the legal arguments of an Orrick team, the 9th US. Circuit Court of Appeals today enforced a settlement agreement between Orrick client Sony Electronics Inc. and HannStar Display Corp. based on both parties’ acceptance of an e-mailed mediator’s proposal.
Sony had threatened to sue HannStar, a Taiwanese manufacturer of LCD panels, under U.S. and California antitrust laws for its involvement in an LCD price-fixing conspiracy. Before Sony filed its complaint, the two companies conducted a mediation and eventually both parties accepted a mediator’s proposed settlement sent via email, but HannStar later refused to pay the settlement.
Led by Orrick partners Stephen Bomse and David Goldstein, Sony sued HannStar, asserting both antitrust claims and a breach of contract claim to enforce the settlement. HannStar claimed the emails were not admissible under California’s mediation confidentiality statute. Sony maintained that federal mediation law, rather than state mediation law, applied because the parties settled both federal and state claims.
The 9th Circuit agreed, overturning the district court’s decision. Writing for the court, 9th Circuit Judge Susan Graber concluded the emails constituting the settlement agreement were admissible under federal mediation law. “At the time of mediation, both parties would have expected to litigate both federal and state law issues…Because, here, at the time the parties engaged in mediation, their negotiation concerned (and the mediated settlement settled) both federal and state law claims, the federal law of privilege applies.”
In addition to Steve and David, the Orrick team included associate Shannon Leong.