§ 651. Authorization of alternative dispute resolution

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1988

   Judicial Improvements and Access to Justice Act

   Pub. L. 100–702 title IX § 901(a) · 102 Stat. 4642

   Enacted · 28 U.S.C. § 651

   Added Pub. L. 100–702, title IX, § 901(a), Nov. 19, 1988, 102 Stat. 4659

   Source evidence

   Code source credit
   Added Pub. L. 100–702, title IX, § 901(a), Nov. 19, 1988, 102 Stat. 4659

   Enacted provision · exact public law section
   (a) In General.— Title 28, United States Code, is amended by inserting after chapter 43 the following new chapter: “CHAPTER 44— ARBITRATION “Sec. “651. Authorization of arbitration. “652. Jurisdiction. “653. Powers of arbitrator; arbitration hearing. “654. Arbitration award and judgment. “655. Trial de novo. “656. Certification of arbitrators. “657. Compensation of arbitrators. “658. District courts that may authorize arbitration. “§ 651. Authorization of arbitration “(a) Authority of Certain District Courts.— Each United States district court described in section 658 may authorize by local rule the use of arbitration in any civil action, including an adversary proceeding in bankruptcy. A district court described in section 658(1) may refer any such action to arbitration as set forth in section 652(a). A district court described in section 658(2) may refer only such actions to arbitration as are set forth in section 652(a)(1)(A). “(b) Title 9 Not Affected.— This chapter shall not affect title 9. “§ 652. Jurisdiction “(a) Actions That May Be Referred to Arbitration.— (1) Notwithstanding any provision of law to the contrary and except as provided in subsections (b) and (c) of this section, and section 901(c) of the Judicial Improvements and Access to Justice Act, a district court that authorizes arbitration under section 651 may— “(A) allow the referral to arbitration of any civil action (including any adversary proceeding in bankruptcy) pending before it If the parties consent to arbitration, and “(B) require the referral to arbitration of any civil action pending before it if the relief sought consists only of money damages not in excess of $100,000 or such lesser amount as the district court may set, exclusive of interest and costs. “(2) For purposes of paragraph (1)(B), a district court may presume damages are not in excess of $100,000 unless counsel certifies that damages exceed such amount. “(b) Actions That May Not Be Referred Without Consent of Parties.— Referral to arbitration under subsection (a)(1)(B) may not be made— “(1) of an action based on an alleged violation of a right secured by the Constitution of the United States, or “(2) if jurisdiction is based in whole or in part on section 1343 of this title. “(c) Exceptions From Arbitration.— Each district court shall establish by local rule procedures for exempting, sua sponte or on motion of a party, any case from arbitration in which the objectives of arbitration would not be realized— “(1) because the case involves complex or novel legal issues, “(2) because legal issues predominate over factual issues, or “(3) for other good cause. “(d) Safeguards in Consent Cases.— In any civil action in which arbitration by consent is allowed under subsection (a)(1)(A), the district court shall by local rule establish procedures to ensure that— “(1) consent to arbitration is freely and knowingly obtained, and “(2) no party or attorney is prejudiced for refusing to participate in arbitration. “§ 653. Powers of arbitrator; arbitration hearing “(a) Powers.— An arbitrator to whom an action is referred under section 652 shall have, within the judicial district of the district court which referred the action to arbitration, the power— “(1) to conduct arbitration hearings, “(2) to administer oaths and affirmations, and “(3) to make awards. “(b) Time for Beginning Arbitration Hearing.— An arbitration hearing under this chapter shall begin within a time period specified by the district court, but in no event later than 180 days after the filing of an answer, except that the arbitration proceeding shall not, in the absence of the consent of the parties, commence until 30 days after the disposition by the district court of any motion to dismiss the complaint, motion for judgment on the pleadings, motion to join necessary parties, or motion for summary judgment, if the motion was filed during a time period specified by the district court. The 180-day and 30-day periods specified in the preceding sentence may be modified by the court for good cause shown. “(c) Subpoenas.— Rule 45 of the Federal Rules of Civil Procedure (relating to subpoenas) applies to subpoenas for the attendance of witnesses and the production of documentary evidence at an arbitration hearing under this chapter. “§ 654. Arbitration award and judgment “(a) Filing and Effect of Arbitration Award.— An arbitration award made by an arbitrator under this chapter, along with proof of service of such award on the other party by the prevailing party or by the plaintiff, shall, promptly after the arbitration hearing is concluded, be filed with the clerk of the district court that referred the case to arbitration. Such award shall be entered as the judgment of the court after the time has expired for requesting a trial de novo under section 655. The judgment so entered shall be subject to the same provisions of law and shall have the same force and effect as a judgment of the court in a civil action, except that the judgment shall not be subject to review in any other court by appeal or otherwise. “(b) Sealing of Arbitration Award.— The district court shall provide by local rule that the contents of any arbitration award made under this chapter shall not be made known to any judge who might be assigned to the case— “(1) except as necessary for the court to determine whether to assess costs or attorney fees under section 655, “(2) until the district court has entered final judgment in the action or the action has been otherwise terminated, or “(3) except for purposes of preparing the report required by section 903(b) of the Judicial Improvements and Access to Justice Act. “(c) Taxation of Costs.— The district court may by rule allow for the inclusion of costs as provided in section 1920 of this title as a part of the arbitration award. “§ 655. Trial de novo “(a) Time for Demand.— Within 30 days after the filing of an arbitration award with a district court under section 654, any party may file a written demand for a trial de novo in the district court. “(b) Restoration to Court Docket.— Upon a demand for a trial de novo, the action shall be restored to the docket of the court and treated for all purposes as if it had not been referred to arbitration. In such a case, any right of trial by jury that a party otherwise would have had, as well as any place on the court calendar which is no later than that which a party otherwise would have had, are preserved. “(c) Limitation on Admission of Evidence.— The court shall not admit at the trial de novo any evidence that there has been an arbitration proceeding, the nature or amount of any award, or any other matter concerning the conduct of the arbitration proceeding, unless— “(1) the evidence would otherwise be admissible in the court under the Federal Rules of Evidence, or “(2) the parties have otherwise stipulated. “(d) Taxation of Arbitrator Fees as Cost.— (1) (A) A district court may provide by rule that, in any trial de novo under this section, arbitrator fees paid under section 657 may be taxed as costs against the party demanding the trial de novo. “(B) Such rule may provide that a party demanding a trial de novo under subsection (a), other than the United States or its agencies or officers, shall deposit a sum equal to such arbitrator fees as advanced payment of such costs, unless the party is permitted to proceed in forma pauperis. “(2) Arbitrator fees shall not be taxed as costs under paragraph (1)(A), and any sum deposited under paragraph (1)(B) shall be returned to the party demanding the trial de novo, if— “(A) the party demanding the trial de novo obtains a final judgment more favorable than the arbitration award, or “(B) the court determines that the demand for the trial de novo was made for good cause. “(3) Any arbitrator fees taxed as costs under paragraph (1)(A), and any sum deposited under paragraph (1)(B) that is not returned to the party demanding the trial de novo, shall be paid to the Treasury of the United States. “(4) Any rule under this subsection shall provide that no penalty for demanding a trial de novo, other than that provided in this subsection, shall be assessed by the court. “(e) Assessment of Costs and Attorney Fees.— In any trial de novo demanded under subsection (a) in which arbitration was done by consent of the parties, a district court may assess costs, as provided in section 1920 of this title, and reasonable attorney fees against the party demanding the trial de novo if— “(1) such party fails to obtain a judgment, exclusive of interest and costs, in the court which is substantially more favorable to such party than the arbitration award, and “(2) the court determines that the party’s conduct in seeking a trial de novo was in bad faith. “§ 656. Certification of arbitrators “(a) Standards for Certification.— Each district court listed in section 658 shall establish standards for the certification of arbitrators and shall certify arbitrators to perform services in accordance with such standards and this chapter. The standards shall include provisions requiring that any arbitrator— “(1) shall take the oath or affirmation described in section 453, and “(2) shall be subject to the disqualification rules of section 455. “(b) Treatment of Arbitrator as Independent Contractor and Special Government Employee.— An arbitrator is an independent contractor and is subject to the provisions of sections 201 through 211 of title 18 to the same extent as such provisions apply to a special Government employee of the executive branch. A person may not be barred from the practice of law because such person is an arbitrator. “§ 657. Compensation of arbitrators “(a) Compensation.— The district court may, subject to limits set by the Judicial Conference of the United States, establish and pay the amount of compensation, if any, that each arbitrator shall receive for services rendered in each case. “(b) Transportation Allowances.— Under regulations prescribed by the Director of the Administrative Office of the United States Courts, a district court may reimburse arbitrators for actual transportation expenses necessarily incurred in the performance of duties under this chapter. “§ 658. District courts that may authorize arbitration “The district courts for the following judicial districts may authorize the use of arbitration under this chapter: “(1) State listing. Northern District of California, Middle District of Florida, Western District of Michigan, Western District of Missouri, District of New Jersey, Eastern District of New York, Middle District of North Carolina, Western District of Oklahoma, Eastern District of Pennsylvania, and Western District of Texas. “(2) Ten additional judicial districts, which shall be approved by the Judicial Conference of the United States. The Judicial Conference shall give notice of the 10 districts approved under this paragraph to the Federal Judicial Center and to the public.”.

2. 1998

   Alternative Dispute Resolution Act of 1998

   Pub. L. 105–315 § 3 · 112 Stat. 2993

   1. Amended · 28 U.S.C. § 651

      Pub. L. 105–315 amended section generally

   2. Substituted · 28 U.S.C. § 651

      Pub. L. 105–315 substituting provisions relating to authorization of alternative dispute resolution for provisions relating to authorization of arbitration

   Source evidence

   Code amendment note
   Pub. L. 105–315 amended section generally, substituting provisions relating to authorization of alternative dispute resolution for provisions relating to authorization of arbitration.

   Enacted provision · exact public law section
   SEC. 3. ALTERNATIVE DISPUTE RESOLUTION PROCESSES TO BE AUTHORIZED IN ALL DISTRICT COURTS. Section 651 of title 28, United States Code, is amended to read as follows: “§ 651. Authorization of alternative dispute resolution “(a) Definition.— For purposes of this chapter, an alternative dispute resolution process includes any process or procedure, other than an adjudication by a presiding judge, in which a neutral third party participates to assist in the resolution of issues in controversy, through processes such as early neutral evaluation, mediation, minitrial, and arbitration as provided in sections 654 through 658. “(b) Authority.— Each United States district court shall authorize, by local rule adopted under section 2071(a), the use of alternative dispute resolution processes in all civil actions, including adversary proceedings in bankruptcy, in accordance with this chapter, except that the use of arbitration may be authorized only as provided in section 654. Each United States district court shall devise and implement its own alternative dispute resolution program, by local rule adopted under section 2071(a), to encourage and promote the use of alternative dispute resolution in its district. “(c) Existing Alternative Dispute Resolution Programs.— In those courts where an alternative dispute resolution program is in place on the date of the enactment of the Alternative Dispute Resolution Act of 1998, the court shall examine the effectiveness of that program and adopt such improvements to the program as are consistent with the provisions and purposes of this chapter. “(d) Administration of Alternative Dispute Resolution Programs.— Each United States district court shall designate an employee, or a judicial officer, who is knowledgeable in alternative dispute resolution practices and processes to implement, administer, oversee, and evaluate the court’s alternative dispute resolution program. Such person may also be responsible for recruiting, screening, and training attorneys to serve as neutrals and arbitrators in the court’s alternative dispute resolution program. “(e) Title 9 Not Affected.— This chapter shall not affect title 9, United States Code. “(f) Program Support.— The Federal Judicial Center and the Administrative Office of the United States Courts are authorized to assist the district courts in the establishment and improvement of alternative dispute resolution programs by identifying particular practices employed in successful programs and providing additional assistance as needed and appropriate.”.

3 of 3 references resolved to an enrolled provision