ALTERNATIVE DISPUTE RESOLUTION
It is the intent of the Court to facilitate the use of alternative dispute resolution (“ADR”)
in all matters, including specifically contested matters and adversary proceedings, to the
extent practicable, helpful and appropriate.
(a) ADR REPORT
Upon order of the Court entered in any contested matter or adversary proceeding, the
Debtor and/or Trustee, and all parties (as well as all parties-in-interest affected thereby,
including official Committees(s)) shall submit a report addressing the status of settlement
negotiations, disclosing the identity of the person responsible for settlement negotiations
for each party, and truthfully, candidly and realistically evaluating whether alternative
dispute resolution is appropriate in the contested matter or adversary proceeding.
Counsel shall certify in the report that their clients have been informed of the ADR
procedures available in this district. In the event the parties conclude that ADR is
appropriate and agree upon a method of ADR and a neutral, they should identify both the
method of ADR and the neutral they have selected, the method by which the neutral was
selected, and how the neutral will be compensated. If the parties agree upon an ADR
method and neutral, the Court will defer to the parties' agreement, unless the Court finds
that another ADR method or neutral is better suited to the contested matter, adversary
proceeding or the parties.
(b) REFERRAL TO ADR
The Court on its own motion or upon the motion of any party or party-in-interest may
order the participation in a non-binding alternative dispute resolution proceeding,
including non-binding arbitration, early neutral evaluation, mediation, or mini-trial in
accordance with Local Rule 1001(i). The order may further direct the parties to bear all
expenses relating to alternative dispute resolution proceedings in such proportions as the
Court finds appropriate, and may direct that portions thereof be allowed as an
administrative expense entitled to priority in the case, but in no event should
apportioning of costs constitute a penalty for failing to arrive at a settlement. The
alternative dispute resolution proceeding shall begin at a date and time selected by the
parties, subject to the schedule of the neutral or neutrals, but in no event later than fortyfive
(45) days after the entry of the order compelling participation in the proceeding.
(c) ATTENDANCE
Party representatives with authority to negotiate a settlement and all other persons
necessary to negotiate a settlement must attend and participate in good faith in the
alternative dispute proceeding, subject to the Court’s power to assess appropriate
sanctions.
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(d) SELECTION OF NEUTRAL
Upon entry of an order compelling participation in alternative dispute resolution, or upon
agreement of the parties where they have not selected a neutral or neutrals from the
roster, the Clerk shall forthwith furnish to each party a list of neutrals. If the compelled
procedure is non-binding arbitration or moderated settlement conference, the list shall
include five neutrals whose names have been selected from the roster of arbitrators
maintained in the District Clerk's Office. If the compelled procedure is other than nonbinding
arbitration or moderated settlement conference the list shall include three
neutrals selected from general neutral roster. The parties shall then confer with each side
entitled to strike one name from the three neutral list (two names from the five neutrals
list). The person remaining shall be designated the neutral. The parties may by
agreement reject the list furnished by the Clerk and instead unanimously select a neutral
or neutrals from either roster. Failure of counsel to timely notify the Clerk of their strikes
or selection shall result in the selection of the neutral or neutrals by the Clerk. The Clerk
shall promptly notify the neutral or neutrals selected. If any person selected is unable or
unwilling to serve the Clerk shall submit an additional list of names to the parties until a
neutral or complete panel of neutrals is selected. When a neutral or full panel of neutrals
have been selected and have agreed to serve, the Clerk shall promptly notify the neutral
or neutrals and the parties of the selection. No person shall serve as a neutral if any of
the circumstances specified in 28 U.S.C. § 455 of the Judicial Code of Conduct exist, or
if the neutral believes in good faith that such circumstances exist. Any person whose
name appears on the roster maintained in the Clerk's Office may ask at any time to have
his or her name removed, or, if selected to serve in any case, decline to serve but remain
on the roster.
Upon its own motion or upon motion and showing of good cause by any party, the Court
may order appointment of a neutral or neutrals from outside the roster of qualified
neutrals maintained by the Clerk's Office.
(e) CONFIDENTIALITY
Except as otherwise provided herein, a communication relating to the subject matter of
any case under Title 11, contested matter or adversary proceeding made by a participant
in an alternative dispute resolution procedure, whether before or after the institution of
formal judicial proceedings, is confidential, is not subject to disclosure, and may not be
used as evidence against the participant in any judicial or administrative proceeding.
(1) Any record made at an alternative dispute resolution procedure is confidential,
and the participants or the third party neutral(s) facilitating the procedure may not
testify, or be required to testify, in any proceedings relating to or arising out of the
matter in dispute or be subject to process requiring the disclosure of confidential
information or data relating to or arising out of the matter in dispute.
(2) An oral communication or written material used in or made a part of an
alternative dispute resolution procedure is only admissible or discoverable if it is
admissible or discoverable independent of the procedure.
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(3) If this section conflicts with other legal requirements for disclosure of
communications or materials, the issue of confidentiality may be presented to any
Court having jurisdiction of the proceedings to determine, in camera, whether the
facts, circumstances, and context of the communications or materials sought to be
disclosed warrant a protective order of the Court or whether the communications
or materials are subject to disclosure.
(f) SUMMARY TRIAL OR JURY TRIAL
In cases where other alternative dispute resolution procedures have proved unsuccessful
and a complex and lengthy trial is anticipated, the Court may conduct a summary trial or
jury trial, provided that the Court finds that a summary trial or jury trial may produce
settlement of all or a significant part of the issues and thereby effect a saving in time,
effort and expense for all concerned. The Court should develop procedures, which may
include referral to one or more neutrals on the roster of arbitrators (for report and
recommendation), for such summary trial or jury trial with the advice of counsel.
(g) REPORT
At the conclusion of each ADR proceeding, the neutral or panel of neutrals shall submit
to the Court a notice of outcome, including the style and number of the case, the date(s)
of the ADR proceeding, the names of the participants and only whether the case has
settled or not.
(h) SANCTIONS
All sanctions available under Federal Rule of Civil Procedure 16(f), Federal Rule of
Bankruptcy Procedure 7016 and/or any Local Rule or previous Order of the Court shall
apply to any violation of this rule.
(i) COURT AUTHORIZATION NOT REQUIRED
Nothing in this rule should be interpreted as limiting parties’ ability to agree to a form of
alternative dispute resolution or the selection of a neutral without a court order, through
mutual consent. In fact, consent is preferred.