When a suit raises both state and federal law claims, the Federal Rules of Evidence and federal common law govern questions of evidentiary privilege, not state law. This is true even if the federal law claims are later dismissed before entry of judgment. Federal common law of privilege does not prevent admission of communications with a mediator indicating a party’s acceptance of a settlement. Here, those communications showed both parties accepted the mediator’s settlement proposal. The district court erred in refusing to admit that evidence and thus denying plaintiff’s summary judgment motion to enforce the settlement agreement.
Ninth Circuit Court of Appeals (Graber, J.; Lynn, sitting by designation, dissenting); September 1, 2016; 2016 WL 4547357