District of New Jersey


IN BRIEF

Process summary

Arbitration. New Jersey is one of the ten districts authorized by 28 U.S.C. §§ 651-658 to provide mandatory, nonbinding court-annexed arbitration in cases involving monetary claims only of $100,000 or less. Under General Rule 49, eligible cases are automatically referred to arbitration. See below.

Mediation. Under its CJRA plan, effective December 31, 1991, and General Rule 49, the District of New Jersey has established a mandatory mediation program targeted at complex civil cases. See below.

Other ADR. Consensual use of arbitration, mediation, minitrial, summary jury trial, and summary bench trial are also authorized by General Rules 47 and 49. Between January and September 1994, several cases were referred to mediation and arbitration at the request of the parties.

Judicial settlement conferences. Mandatory settlement conferences with judges are an established settlement method of the court.

Of note

Obligations of counsel. Attorneys are required to discuss ADR options with their clients and each other, address the case's ADR suitability in their case management statement, and be prepared to discuss ADR's use in the case with the assigned judge.

Information from court. The court has prepared two publications-Guidelines for Arbitration and Guidelines for Mediation-to explain the court's programs to counsel and clients. The judges also frequently participate in bench-bar programs to discuss the court's ADR programs.

Evaluation. The district's arbitration program has been studied by the Federal Judicial Center. See Barbara Meierhoefer, Court-Annexed Arbitration in Ten District Courts (Federal Judicial Center 1990). The court's Lawyers Advisory Committee also conducted a survey of arbitrators in 1993; the results are available from the court. The court has not conducted any formal evaluation of its mediation program, but it routinely sends questionnaires to attorneys and parties who participate in the process.

For more information

Ronald J. Hedges, U.S. Magistrate Judge, 201-645-2247 or 3827


IN DEPTH

Arbitration in New Jersey

Overview

Description and authorization. New Jersey is one of ten districts authorized by 28 U.S.C. §§ 651-658 to provide mandatory, nonbinding court-annexed arbitration in cases involving money damages only of $100,000 or less. Parties may also elect to use arbitration by consent. Cases are automatically referred to arbitration at the time the complaint is filed, and the arbitration hearing is held after discovery is completed. A single arbitrator presides and is compensated by the court at court-set fees. The program, which is governed by the district's General Rule 47, was implemented in March 1985 and is described for litigants and counsel in the court's pamphlet, Guidelines for Arbitration.

Number of cases. Between January and September 1994, approximately 1,235 cases were referred to arbitration.

Case selection

Eligibility of cases. Eligible cases are those involving money damages only of $100,000 or less, exclusive of interest, costs, and claims for punitive damages. Parties may also consent to arbitration in any civil action regardless of the amount in controversy. Excluded from arbitration are constitutional claims, tax refund actions, and Social Security actions.

Referral method. All eligible cases are automatically referred to mandatory arbitration when complaints are filed. Parties are notified of the referral by written notice from the clerk's office, and the arbitration referral is discussed at the initial case management conference. Parties in cases not eligible for automatic referral may elect to use arbitration by consent.

Opt-out or removal. A party may request, at filing or subsequently by motion, that an otherwise eligible case be excluded from arbitration. The assigned district or magistrate judge may also exempt a case from arbitration sua sponte or on the recommendation of the arbitrator if the matter involves complex or novel legal issues, if legal issues predominate over factual issues, or for other good cause.

Scheduling

Referral. Eligible cases are automatically referred to mandatory arbitration at the time the complaint is filed.

Discovery and motions. Discovery is permitted for the period specified in the scheduling order entered by the assigned district or magistrate judge in every case. If timely filed dispositive motions are pending at the time of the arbitration hearing, a party or parties may request that the arbitration hearing be postponed until the motion is decided.

Written submissions. Before the arbitration hearing, the clerk sends the arbitrator all the pleadings, and each counsel provides the arbitrator and adverse counsel with copies of all exhibits.

Arbitration hearing. Arbitration hearings are held at the courthouse, and logistical arrangements are made by court staff. Hearings are conducted after discovery and dispositive motion practice is completed.

Length of hearing. Hearings generally last about three hours.

Program features

Party roles and sanctions. In addition to counsel, all parties, corporate representatives, and any other necessary claims professionals with full settlement authority are required to attend the hearing. Local rules authorize sanctions for noncompliance with arbitration procedures, but noncompliance is exceedingly rare.

Filing of award. A written award is filed by the arbitrator within thirty days of the hearing. The award is not docketed or entered as a judgment until the time period for demanding a trial de novo has expired.

De novo request. A party requesting a trial de novo must do so within thirty days of the filing of the arbitration award. When requesting a trial de novo, the moving party must deposit $150 with the clerk. The sum is returned if the party obtains a final judgment more favorable than the arbitration award or if the court determines, pursuant to a timely motion, that the demand for trial de novo was made for good cause.

Confidentiality. Neither the clerk nor any party or attorney may disclose the contents of the arbitration award to any judge to whom the action is or may be assigned. Contact between the arbitrator and the assigned judge is not permitted, except in instances of noncompliance with arbitration procedures.

Neutrals

Qualifications and training. To serve as an arbitrator, attorneys must have practiced law at least five years, be admitted to the bar in the district, be recommended by the court's committee on arbitration, and be determined by the chief judge to be competent to perform the duties of an arbitrator. In practice, the panel of approximately 150 certified arbitrators has an average of fifteen to twenty years of federal litigation experience. No training is required to serve on the court's panel of arbitrators.

Selection for case. The court assigns one attorney, selected randomly from the court's roster, to serve as arbitrator.

Disqualification. After receiving notice of appointment, the arbitrator is required under General Rule 47 to inform all parties in writing whether the arbitrator, or any firm or member of any firm with which he or she is affiliated, has (either as a party or attorney) at any time within the past five years been involved in litigation with or represented any party to the arbitration, or any agency, division, or employee of such a party.

Arbitrators are disqualified for bias or prejudice as provided in 28 U.S.C. § 144 and must disqualify themselves in any action in which they would be required under 28 U.S.C § 455 to disqualify themselves if they were a justice, judge, or magistrate judge.

Immunity. Immunity is not addressed in the court rules.

Fees. The court sets and pays the arbitrator's fee, which is currently $250 per case. If parties use arbitration by consent, they must pay the arbitrator's fee.

Program administration

The arbitration program is administered by the clerk's office. Problems arising in specific cases are handled by the assigned district or magistrate judge.

Mediation in New Jersey

Overview

Description and authorization. The District of New Jersey established a mandatory mediation program for complex cases under the district's CJRA plan, effective December 31, 1991. The plan authorizes the assigned judge to refer civil cases to mediation at any time during the litigation. Judges may refer cases sua sponte or with party consent. There is no limit on the number of cases judges may refer with party consent, but they are permitted to refer only two complex cases to the program at any one time sua sponte. Attorney-mediators, trained and selected by the court, serve without compensation for the first six hours of service. Thereafter, the parties share the mediator's court-set fee of $150 an hour.

The mediation program is governed by General Rule 49 and is described for litigants and counsel in the court's pamphlet, Guidelines for Mediation. Mediation began as an experimental program in the spring of 1992, but it became a permanent court-wide program in November 1993.

Number of cases. Between January and September 1994, seventeen cases were referred to mediation.

Case selection

Eligibility of cases. The mandatory mediation program was established for complex cases, designated as Track II cases by the court, such as complex patent and environmental cases. All civil case types, however, are eligible for referral to mediation. No civil case types are excluded by rule from participation.

Referral method. The assigned judge may refer any case to mediation on his or her own initiative. Only two complex cases may be referred to mediation by a judge without party consent at any time. There are no per-judge limits on referrals made with party consent. When a case is referred to mediation, an order of referral is entered.

Opt-out or removal. Court rules do not provide a mechanism for removing a case from referral to mediation.

Scheduling

Referral. A case may be referred to mediation at any time in the litigation.

Written submissions. Parties submit a position paper of ten pages or less to the mediator. Other essential papers may be appended, but pleadings are not submitted unless requested by the mediator.

Mediation session. Logistical arrangements for the mediation session are made jointly by the mediator and the parties. The mediation session can be held at any convenient location. The mediation process must generally be concluded within sixty days of the referral date.

Number and length of sessions. The number and length of mediation sessions vary depending on the case.

Program features

Discovery and motions. When a case is referred to mediation, all proceedings, including pretrial motions and pursuit of discovery, are stayed for a sixty-day period. To extend the stay, the parties and the mediator must apply jointly. The district's Guidelines for Mediation states that the purpose of the stay is to give parties a reasonable period of time to reach settlement. If it appears unlikely that settlement will be reached before the stay expires, the mediator may ask that the case be restored to the active calendar.

Party roles and sanctions. The mediator may order the parties to attend the mediation session. The court's plan does not specify whether or what type of sanctions might be imposed for failure to comply with the attendance and other requirements.

Outcome. Nothing is filed with the court at the conclusion of the mediation process.

Confidentiality. All information presented to the mediator is, if a party requests, held confidential and may not be disclosed by anyone, including the mediator, without consent except as necessary to advise the court of an apparent failure to participate. The mediator may not be subpoenaed by any party. Statements made and documents prepared for mediation may not be disclosed in any subsequent proceeding or construed as admissions. No communication between the neutral and the assigned judge is permitted.

Neutrals

Qualifications and training. To qualify as a mediator, a lawyer must be a member of the New Jersey state bar for at least five years, be admitted to practice in the district, be deemed competent to serve as a mediator by the chief judge, and have satisfactorily completed the training program offered by the court. The court's mediation training consists of two days (sixteen hours) of lectures, simulations, and role play exercises.

Selection for case. In a mandatory referral to mediation, the compliance judge selects the mediator from the court's roster. In appropriate cases, two co-mediators may be appointed. When parties consent to mediation, they may select a neutral from the court's roster or from any other source.

Disqualification. General Rule 49B addresses mediator conflicts of interest and provides:

1. A mediator must disclose to the parties and to the compliance judge any current, past, or future representation or consulting relationship with or pecuniary interest in any party or attorney involved in the mediation.

2. A mediator must disclose to the parties any close personal relationship or other circumstance that might reasonably raise a question as to the mediator's impartiality.

3. The burden of disclosure rests on the mediator. All such disclosures must be made as soon as practical after the mediator becomes aware of the interest or the relationship. After appropriate disclosure, the mediator may serve if all parties so desire. If the mediator believes or perceives that there is a clear conflict of interest, the mediator must withdraw irrespective of the expressed desires of the parties.

4. In no circumstance may a mediator represent any party in any matter during the mediation.

5. A mediator may not use the mediation process to solicit, encourage, or otherwise incur future professional services with any party.

Immunity. The question of mediator immunity is not directly addressed by the mediation procedures, but General Rule 49A.3 provides that "[e]ach mediator shall, for the purpose of performing his or her duties, be deemed a quasi-judge of the Court."

Fees. Mediators serve without compensation for the first six hours of service; thereafter parties equally share the mediator's court-set fee of $150 an hour. The mediator has the discretion to extend the mediation beyond the initial six hours.

Program administration

The mediation program is administered by the compliance judge designated by the court.


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