[ADR] Western District of Michigan

Western District of Michigan

IN BRIEF

Process summary

ADR generally. Local Rule 41, adopted in 1983, states that "[t]he judges of this District favor initiation of alternative formulas for resolving disputes, saving costs and time, and permitting the parties to utilize creativity in fashioning non-coercive settlements." The rule also established a Committee on Procedures and Standards in Alternative Methods of Dispute Resolution, made up of attorneys, with the chief judge or a designee serving ex officio. As one of the demonstration districts designated by the CJRA to experiment with differentiated case management, the court's ADR programs are part of a comprehensive case management system.

Case valuation (Michigan Mediation). Since 1983, Local Rule 42 has authorized an ADR process that resembles an arbitration hearing and provides a valuation of the case. See below.

Arbitration. The Western District of Michigan is one of ten courts authorized by 28 U.S.C. งง 651-681 to mandatorily refer certain classes of cases to nonbinding court-annexed arbitration. See below.

Voluntary facilitative mediation. The Western District of Michigan has adopted a facilitative mediation program, effective January 1, 1996. See below.

Judicial settlement conferences. Since 1983, pursuant to Local Rule 45, the court may hold a settlement conference in any civil case. Settlement options are discussed at the initial case management conference and, where the judge believes a judicial settlement conference would be helpful, a referral is entered onto the scheduling order. The district judge may conduct the conference or, as is the usual practice, may refer the case to a magistrate judge. The judges vary in the submissions they require before the conference, but customarily they order plaintiffs and defendants to be present. Between January and September 1994, 147 cases were referred to judicial settlement conferences.

Summary jury and bench trials, mini-hearings, and early neutral evaluation. Local Rule 44, adopted in 1983, authorizes use of summary jury trials, mini-hearings, and early neutral evaluation. Cases may be referred to these procedures, as well as to summary bench trials, by stipulation of the parties with approval of the court, on motion by a party with notice to opposing parties, or on the court's own motion. The judges and parties fashion these procedures in the way they believe is appropriate for the case. Each of these procedures is used in only a small number of cases each year. From January through September 1994, no cases were referred to summary jury or bench trials or to a mini-hearing. Thirteen cases were referred to early neutral evaluation.

Appointment of special master. The court's CJRA plan and Fed. R. Civ. P. 53 authorize the use of a single neutral who meets with the parties to facilitate settlement. Complex civil cases requiring specialized knowledge-for example, environmental or patent cases-are the types of cases generally referred.

Of note

Obligations of counsel. Attorneys must be prepared to discuss ADR options with the judge and must discuss in the case management statement whether ADR is suitable for the case.

Information from court. The court's brochure, Your Day in Court: The Federal Court Experience, includes a brief description of the ADR procedures used by the court.

Evaluation. The court's mandatory arbitration program was included in the Federal Judicial Center's evaluation of the ten mandatory arbitration programs, Barbara Meierhoefer, Court-Annexed Arbitration in Ten District Courts (Federal Judicial Center 1990). The court's current programs are included in the Center's ongoing study of the five CJRA demonstration districts, which will be reported to Congress by the Judicial Conference in 1996.

For more information

Richard A. Enslen, Chief U.S. District Judge, Chair, Judges' ADR Committee, 616-343-7542; Hugh W. Brenneman, Jr., U.S. Magistrate Judge, Court ADR Coordinator, 616-456-2568

IN DEPTH

Case Valuation (Michigan Mediation) in Michigan Western

Overview

Description and authorization. In 1983, the Western District of Michigan, through Local Rule 42, established a procedure that is similar to arbitration but is referred to by the court as mediation. To distinguish the procedure from true mediation, it is often referred to as Michigan Mediation or case valuation. The program, which was first established twenty years ago in the state courts and then adopted by the federal district courts in Michigan, is currently the most popular form of ADR in the Western District of Michigan. In cases referred to the program, counsel present their case to a panel of three neutrals (called mediators), who render an evaluation based on counsels' arguments and evidence. All civil cases are eligible and may be referred by stipulation of the parties with court approval, by motion of one party with notice to the other, and by the court's own motion. Referral is mandatory in cases whose sole basis of jurisdiction is diversity and for which the rule of decision is supplied by Michigan tort or medical malpractice law. Each party pays a fee of $150 to the mediators.

Number of cases. Between January and September 1994, 127 cases were referred to case valuation.

Case selection

Eligibility of cases. Any civil action or part thereof is eligible for referral to case valuation. Referral is mandatory in (1) all actions alleging medical malpractice under the Michigan Medical Malpractice Mediation Act (Michigan Comp. Laws งง 600.4901-4923) and (2) all cases based on Michigan tort law under the Michigan Tort Mediation Act (Michigan Comp. Laws งง 600.4951-4969). The following matters are generally not referred to the program: prisoner civil rights actions brought pursuant to 42 U.S.C. ง 1983; petitions for writs of habeas corpus; ง 2255 cases; bankruptcy appeals; and Social Security and student loan cases.

Referral method. A case may be selected for referral by stipulation of the parties with approval of the court, on motion of a party with notice to the opposing party, or on the court's own motion without notice to any party. The court's ADR options are discussed at the initial Rule 16 conference, and a referral to the case valuation process is entered into the case management order if it is deemed appropriate. At the same time, an order is entered setting out (1) the deadline for notifying the court's ADR clerk of the selection of the neutrals, (2) the date, time, and place of the hearing, and (3) the deadline by which the session must be held.

Opt-out or removal. Parties' objections to referral must be made within ten days of the date of the court's order. A copy of the motion for reconsideration must be served on opposing counsel and the court. The ADR process is stayed pending decision on the motion unless otherwise ordered by the court.

Scheduling

Referral. The referral most frequently occurs at the initial scheduling conference, in cases mandatorily referred under Michigan law as well as in cases selected by other procedures.

Discovery and motions. Selection of a case for the ADR process has no effect on the normal progress of the case toward trial.

Written submissions. At least ten business days before the session, parties must provide to each neutral and opposing counsel all documents on questions of liability and damages, including all medical reports, bills, records, photographs, and any other documents supporting the party's claim, including a summary or brief of factual and legal positions. A fee of $60 is assessed ($20 for each neutral) if a party fails to submit documents by the time designated.

Valuation hearing. The time frame for completion of the ADR process is established in the case management and referral orders and is monitored by the ADR clerk. The ADR clerk sets the date, time, and place for the hearing if the parties fail to make their own arrangements. At least thirty days before the hearing date, the ADR clerk sends notice of the hearing to all counsel and the mediators, indicating deadlines for submission of fees and proof of service of the written submissions, as well as the date, time, and place of the hearing.

Length of hearing. Presentations to the panel are limited to thirty minutes per side unless there are multiple parties or unusual circumstances. Generally only one session is held.

Program features

Party roles and sanctions. Pursuant to Local Rule 42, parties are required to attend the hearing unless excused by the panel chair. When scars, disfigurement, or other unusual conditions exist, they may be demonstrated to the panel in person; however, no testimony may be taken from any party. In practice, the parties are almost always excused from appearing at the hearing.

Filing of award. Within ten days of the hearing, the panel must notify each counsel in writing of its valuation of the case, including all fees, costs, and interest. The award may be rendered by any two of the three mediators. Within twenty-eight days of the date of the valuation, each party must submit to the ADR clerk a written acceptance or rejection of the valuation. If all parties accept the valuation, the award is entered on the docket unsealed, and the plaintiff's counsel is directed to prepare for submission to the court a judgment consistent with the valuation and approved by opposing counsel. If any party rejects the valuation, the docket notes that the outcome is sealed.

De novo request. If a party rejects the valuation award, it must do so in writing within twenty-eight days of the mailing of the award. If the award is unanimous and the defendant accepts it but the plaintiff rejects it, the plaintiff must, to avoid payment of actual costs to the defendant, obtain a trial verdict that is more than 10% greater than the valuation. If the award is unanimous and the plaintiff accepts it but the defendant rejects it, the defendant must, to avoid payment of actual costs to the plaintiff, obtain a trial verdict that is more than 10% less than the valuation. If the panel decision is not unanimous and both parties reject the valuation and the trial verdict is not more than 10% above or below the valuation, the defendant must pay actual costs if the trial verdict is more than 10% above the valuation, and the plaintiff must pay actual costs if the trial verdict is more than 10% below the valuation. A party against whom actual costs are awardable under Local Rule 42 forfeits the right to tax costs otherwise collectable by that party. (See Local Rule 42 for discussion of Sixth Circuit and other laws regarding taxing of costs and fees as sanctions in this procedure.)

Confidentiality. Statements by counsel and the brief or summary of factual and legal positions prepared by the parties are not admissible in any court or evidentiary proceeding. If the valuation of the panel is rejected, the ADR clerk places all documents in a sealed envelope before forwarding them to the clerk of court for filing. Neither the parties nor their lawyers may reveal the award to the judge in a nonjury case.

Neutrals

Qualifications and training. An individual must be certified by the chief judge for inclusion on the court's roster. To be certified, an individual (1) must have been a member of the state bar for at least five years, (2) must be admitted to practice in the court, and (3) must be determined by the judges to be qualified to perform the duties of an ADR neutral.

Selection for case. The hearing is conducted by three lawyers. A list of neutrals (called mediators by the court) is maintained in the clerk's office. When a case is referred to case valuation, counsel for the plaintiff(s) and defendant(s) each select one neutral from the list. The third neutral is chosen by agreement of counsel. If they cannot agree, the other two neutrals select the third. If the neutrals decline to select the third, or if any party fails to choose an ADR neutral, the ADR clerk makes the selection and provides written notice to the parties. Notwithstanding these provisions, the judge assigned the case may select the third neutral, who may be someone not on the court's list and may be a magistrate judge of the district.

Disqualification. No person may serve as a neutral in an action in which any of the circumstances specified in 28 U.S.C. ง 455 exist or may in good faith be believed to exist.

Immunity. The court is unaware of any claims against a neutral in this district. Notwithstanding, the court would rely on present case law, such as Wagshal v. Foster, 28 F.3d 1249 (D.C. Cir. 1994) (court-appointed mediator or neutral case evaluator has absolute quasi-judicial immunity when performing official duties).

Fees. The parties pay the neutrals' fees, which are $50 per neutral per party, payable within ten days of the mailing of the notice of the hearing. An additional fee of $20 per neutral is assessed against a party who fails to pay the fee within the time designated. If notice of settlement is given to the ADR clerk at least ten days before the hearing date, the fees are returned to the parties.

Program administration

This ADR process is administered by the clerk's office. Problems that may arise are initially handled by the ADR deputy clerk, with assistance provided as needed by the court's ADR coordinator.

Arbitration in Michigan Western

Overview

Description and authorization. The arbitration program in the Western District of Michigan, which was implemented in 1985, is one of ten mandatory arbitration programs authorized under 28 U.S.C. งง 651-658. Arbitration was at one time used extensively, but after the court implemented its CJRA plan on September 1, 1992, the number of cases referred to the arbitration program fell dramatically because the time needed to arbitrate a case does not fit well into the timeline of most of the differentiated case management tracks now in use by the court. Consequently, arbitration is now a voluntary procedure and is one among several ADR options offered by the court. Local Rule 43 describes the court's arbitration procedures. Eligible cases include most civil cases, except certain case types specified by the rule. Referrals are made at the initial scheduling conference. The procedure involves a formal hearing before a single arbitrator at which testimony is taken and arguments presented. The court pays the arbitrator's fee.

Number of cases. Between January and September 1994, nine cases were referred to arbitration.

Case selection

Eligibility of cases. Almost all civil cases are eligible for participation in arbitration. The following matters may not be referred: cases seeking money damages greater than $100,000, exclusive of punitive damages, interest, costs, and attorneys' fees (except by stipulation of the parties that the award may exceed $100,000); Social Security cases; pro se civil rights cases; any case based on an alleged violation of a right secured by the U.S. Constitution; or any case for which jurisdiction is based in whole or in part on 28 U.S.C. ง 1343.

Referral method. Under the original mandatory program, eligible case types were automatically referred to arbitration by the clerk within sixty days of the last responsive pleading. Under the new voluntary program, the court's ADR options are discussed at the initial Rule 16 conference, and, if appropriate, a referral to arbitration is included in the case management order and a separate order is issued referring the case to the arbitration track. Thirty days after entry of the orders, the ADR clerk sends a notice of referral to all counsel.

Opt-out or removal. Once referred to arbitration, a party may seek to remove a case from the arbitration track by motion at any time during the arbitration process.

Scheduling

Referral. Referrals are made at the initial scheduling conference.

Discovery and motions. Discovery is limited to 120 days from the filing of the last responsive pleading. The time taken to dispose of certain motions (to dismiss, for judgment on the pleadings, to join parties, and for summary judgment) is not charged against the 120 days allowed for discovery.

Written submissions. At least ten business days before the hearing, a summary of factual and legal positions, together with copies of all documents on questions of liability and damages, must be submitted to the arbitrator and opposing counsel. Documents must include all medical records, bills, photographs, and any other document supporting the party's claim. Failure to provide documents within the time designated results in an assessment of $60, payable to the arbitrator or to the court.

Arbitration hearing. The arbitration hearing must take place within 180 days of filing of the last responsive pleading, unless the arbitration period has been stayed by the filing of motions. Hearings may be held at any location within the district designated by the arbitrator, including any courtroom or other room in the federal, state, or county courthouses. The court's ADR clerk arranges the date, time, and location of the hearing and sends notices of the hearing after the arbitrator has been selected and before the end of discovery.

Length of hearing. Each party is given two and a half hours to present its case.

Program features

Party roles and sanctions. Each individual party must attend the hearing in person. Each party that is a corporation, governmental body, or other entity must be represented by an officer or person with complete settlement authority. The court's rules do not specify whether or what type of sanctions might be imposed for failure to comply with the attendance and other requirements.

Filing of award. The arbitrator should announce the award to the parties at the close of the hearing, but in any event must file an award with the ADR clerk within ten days after the hearing. The clerk serves copies on the parties. If a demand for trial de novo is not made within thirty days of the filing of the award, the award becomes the judgment in the case. The award is sealed unless it becomes the judgment.

De novo request. Within thirty days of filing the arbitration award, any party may demand a trial de novo. The requesting party must post a bond equal to the amount the court paid the arbitrator. Once the matter is resolved, if the party requesting trial de novo has failed to better its position by 10% or more, the bond is forfeited to the court, unless the court finds the party had just cause to request the trial de novo. In cases where the parties have consented to the arbitration process, the court may also assess against the requesting party the opposing party's costs under 28 U.S.C. ง 1920 and reasonable attorney's fees if (1) the requesting party fails to obtain judgment, exclusive of interest and costs, that is substantially more favorable than the arbitration award and (2) the court determines that the party's request for trial de novo was made in bad faith.

Confidentiality. There may be no ex parte communication between the arbitrator or any counsel or parties except to schedule or continue a hearing. The contents of the award must not be made known to the judge assigned to the case except as allowed by 28 U.S.C. ง 654(b). No evidence of or concerning the arbitration hearing may be admitted at the trial de novo except by stipulation or as provided by 28 U.S.C. ง 655(c).

Neutrals

Qualifications and training. An individual must be certified by the chief judge for inclusion on the court's roster of arbitrators. To be certified, an individual must have been a member of the state bar for at least five years, must be admitted to practice in this court, and must be determined by the judges to be qualified to perform the duties of an arbitrator. The arbitrators were trained when the program was implemented in 1986.

Selection for case. When a case is referred to arbitration and before the arbitration discovery period is over, the ADR clerk gives each party a list of arbitrators whose names have been drawn at random from the court's roster of arbitrators. The list includes one more name than there are parties to the case. Each party must strike one name. Barring any conflict of interest, the remaining name is appointed the arbitrator.

Disqualification. No person may serve as an arbitrator in an action in which any of the circumstances specified in 28 U.S.C. ง 455 exist or may in good faith be believed to exist.

Immunity. The court is unaware of any claims against a neutral in the district. Notwithstanding, the court would rely on existing case law, such as Wagshal v. Foster, 28 F.3d 1249 (D.C. Cir. 1994) (court-appointed mediator or neutral case evaluator has absolute quasi-judicial immunity when performing official duties).

Fees. The court pays the arbitrator a fee of $250, plus expenses and mileage, per case.

Program administration

The arbitration program is administered by the clerk's office. Problems that may arise in cases are initially handled by the ADR deputy clerk, with assistance provided as needed by the court's ADR coordinator.

Voluntary Facilitative Mediation in Michigan Western

Overview

Description and authorization. The Western District of Michigan adopted a facilitative mediation program on July 7, 1995. The program, effective January 1, 1996, is a flexible, nonbinding dispute resolution process in which an impartial third party facilitates negotiations among the parties to help them reach settlement. The mediator, who may meet jointly or separately with the parties, serves as a facilitator only and does not decide issues or make findings of fact. Most civil cases are eligible for facilitative mediation, but referral is made only with consent of all parties, who equally share the mediator's normal hourly fee. The court's program has not yet been incorporated into local rules but is described in a handout, Voluntary Facilitative Mediation Program Description. This program is distinguished from the court's hybrid process known as Michigan Mediation, which is an evaluative form of ADR.

Number of cases. Information is not yet available.

Case Selection

Eligibility of cases. All civil cases are eligible for voluntary facilitative mediation except prisoner civil rights complaints, habeas corpus, Social Security cases, and ง 2255 motions.

Referral method. In preparation for the initial Rule 16 scheduling conference, parties are encouraged to discuss the use of alternative dispute resolution and to indicate their preference in the joint status report. If the district or magistrate judge is satisfied that the selection of facilitative mediation is purely voluntary and has the full approval of all parties, the judge incorporates their selection into the case management order. After the parties have selected a mediator, the judge issues an order of referral.

Opt-out or removal. Opt-out and removal procedures are not necessary, as referral is made only with the consent of all parties.

Scheduling

Referral. Referral is made at the time of the initial Rule 16 scheduling conference.

Written submissions. Not less than seven calendar days before the initial mediation session, each party must provide the mediator with a concise memorandum of no more than ten double-spaced pages, setting forth the party's position on the issues to be resolved in mediation, including damages and liability. The mediator may distribute the party's memorandum to other parties.

Mediation session. Within fourteen days of issuance of the referral order, the mediator consults with the parties, sets a time and place for the mediation session, and sends a notice of hearing to all parties and the ADR clerk. Sessions may be conducted at the courthouse, mediator's office, or any other location agreed to by the parties. The mediator determines the length and timing of the sessions and the order in which issues are presented The initial mediation session is held within sixty days of the referral order, but the mediation process may continue as long as the parties consider it useful.

Number and length of sessions. The mediation process may involve one or several sessions, depending on the needs of the case.

Program features

Discovery and motions. Any case referred to mediation continues to be subject to management by the assigned judge. Unless otherwise ordered, parties are not precluded from filing pretrial motions or pursuing discovery.

Mediation assessment. The court assesses parties a fee of $50 per referral, of which $25 is paid by the plaintiff(s) and $25 by the defendant(s). The fees are deposited into the Voluntary Facilitative Mediation Training Fund. In the instance of a pro bono mediation, the assessment is waived.

Party roles and sanctions. Parties or individuals with settlement authority are required to attend the mediation session. The court's program description does not address the question of sanctions for noncompliance with this or other mediation requirements.

Outcome. If settlement is reached the mediator helps the parties draft a settlement agreement, as well as a stipulation and proposed order to dismiss, which is filed with the court. If settlement is not reached, the parties have seven calendar days to inform the mediator whether they want to continue with the mediation process. Within ten calendar days of completing mediation, the mediator must file a brief report with the ADR clerk and send copies to all the parties. The report indicates who participated in the mediation session and whether settlement was reached.

Confidentiality. Information disclosed during any mediation session may not be disclosed to any other party without consent of the party disclosing the information. All mediation proceedings are considered to be compromise negotiations within the meaning of Fed. R. Evid. 408.

Neutrals

Qualifications and training. To be considered for certification for the court's roster, an attorney must have a minimum of five years of practice, be an active member of the court's bar, have general peer recognition for his or her expertise, demonstrate an interest in the program, and display attributes that make it likely he or she will be successful, such as (1) the ability to listen actively; (2) the ability to analyze problems, identify and separate the issues involved, and frame these issues for resolution or decision making; (3) the ability to use clear, neutral language; (4) sensitivity to strongly felt values of the disputants; (5) ability to deal with complex factual materials; (6) an overt commitment to honesty, dignified behavior, respect for the parties, and an ability to create and maintain control of a diverse group of disputants; (7) the ability to identify and to separate the neutral's personal values from issues under consideration; and (8) the ability to understand power imbalances. A committee of attorneys has been appointed by the court to help select and certify mediators.

The court sponsors periodic training sessions for new mediators and refresher training for currently certified mediators. Certified mediators must complete at least sixteen hours of training either sponsored or approved by the court and serve as a co-mediator in at least one case. The court may also ask mediators to attend periodic refresher seminars sponsored by the court.

Each mediator is assessed an initial fee of $100 for certification and thereafter an annual fee of $25 for recertification. The funds are held by the court in a separate account for training mediators, court personnel, and judicial staff and for education of the public and bar.

Selection for case. Within ten calendar days of issuance of the case management order, the parties must jointly choose one mediator from the list of court-certified mediators. The list discloses each mediator's hourly fee. When the parties agree on a mediator, the plaintiff is responsible for notifying the ADR clerk of the selection. If the parties cannot agree, they must notify the ADR clerk, who then makes the selection. The ADR clerk notifies the mediator and requests a check for potential conflicts of interest. If the mediator notifies the ADR clerk of a conflict, the clerk either selects an alternate mediator or asks the parties to make a new selection. Once a mediator has been selected, the ADR clerk notifies the judge assigned to the case, who issues an order of referral for facilitative mediation. A mediator may decline to serve after completing five or more mediations in a given calendar year. The court expects a mediator to serve in a pro bono capacity once each calendar year, but any further requests for pro bono appointment may be declined.

Disqualification. No person may serve as a mediator in any action in which any of the circumstances specified in 28 U.S.C. ง 455 exist or in good faith are believed to exist.

Immunity. The court considers certified mediators to be officers of the court and therefore entitled to quasi-judicial immunity.

Fees. Mediators are paid their normal hourly rate, divided equally by the parties, and are responsible for billing the parties directly. In the event of noncompliance, the mediator may petition the district or magistrate judge for an order directing payment of his or her fees.

Program administration

The mediation program is administered by the clerk's office. Any problems that arise in the course of a mediation session are brought initially to the ADR clerk. The ADR clerk also collects data about the efficacy of the program and reports to the court on a regular basis.

Excerpted from ADR and Settlement in the Federal District Courts: A Sourcebook for Judges & Lawyers, 1996, a publication of the Federal Judicial Center and CPR Institute for Dispute Resolution