(g) Optional Waiver of Trial De Novo; Voluntary Arbitration.—At any time prior to the commencement of the hearing, the parties may by written stipulation approved by order of the assigned judge waive the right to a trial de novo following the award and proceed as in voluntary arbitration. In the event of such a stipulation, the provisions of state and federal law governing review of awards rendered in voluntary arbitration shall govern. (h) Authority of Arbitrators.-The arbitrators constituting the panel shall be authorized to make reasonable rules and issue orders necessary for the fair and efficient conduct of the hearing before them. Any two members of the panel shall constitute a quorum, but (unless the parties stipulate otherwise) the concurrence of a majority of the entire panel shall be required for any action or decision by the panel. (i) Ex Parte Communication.-There shall be no ex parte communication between an arbitrator and any counsel or party on any matter touching the action except for purposes of scheduling or continuing the hearing. 500-6. Award and judgment (a) Filing of Award.-The arbitrators shall file their award with the clerk's office promptly following the close of the hearing and in any event not more than ten days following the close of the hearing. The clerk shall serve copies on the parties. (b) Form of Award.-The award shall state clearly and concisely the name or names of the prevailing party or parties and the party or parties against which it is rendered, and the precise amount of money and other relief if any awarded. It shall be in writing and (unless the parties stipulate otherwise) be signed by at least two members of the panel. No member shall participate in the award without having attended the hearing. (c) Entry of Judgment on Award.-Promptly upon the filing of the award with the clerk, the clerk shall enter judgment thereon in accordance with Rule 58, Federal Rules of Civil Procedure. Unless either party files a demand for a trial de novo within thirty days of the entry of judgment, the judgment shall have the same force or effect as any judgment of the court in a civil action, except that no appeal shall lie from such a judgment (any notice of appeal shall be treated as a demand for a trial de novo). 500-7. Trial de novo (a) Time for Demand.-If either party files and serves a written demand for a trial de novo within thirty days of entry of judgment on the award, that judgment shall immediately be vacated by the clerk and the action shall proceed in the normal manner before the assigned judge. (b) Limitation on Evidence.-At a trial de novo, unless the parties have otherwise stipulated, no evidence of or concerning the arbitration may be received into evidence, except that statements made by a witness at the arbitration hearing may be used for impeachment only. (c) Costs. If the party who has requested the trial de novo fails to obtain judgment in an amount which, exclusive of interest and costs, is more favorable to that party, costs within the meaning of Rule 265-1 may be assessed against that party. RULE 505-VOLUNTARY ARBITRATION Notwithstanding the provisions of Rule 500, the parties to any action or proceeding may stipulate to its referral to arbitration upon such terms as they may agree to, subject to approval by order of the assigned judge. In the case of such referral, the provisions of state and federal law governing voluntary arbitration shall control. SOUTHERN DISTRICT OF NEW YORK: GUIDELINES FOR OPERATION OF THE 1. In a suitable case, a district judge participating in the program may assign a special master, who shall be known as the "volunteer special master". Such master shall serve voluntarily, without compensation, and be selected from a panel to be approved by the Chief Judge of the Second Circuit Court of Appeals (in consultation with the Chief Judge of the District and the participating judges) or,, if not on the panel, by agreement of the parties subject to the approval of the district judge in charge of the case. On such assignment, the parties shall have an unlimited number of challenges for cause and three peremptory challenges per side. Upon receipt of the order of assignment, the master shall forthwith set a time and place for the first meeting of the parties or their attorneys to be held within 20 days after the date of the order of assignment and shall notify the parties or their attorneys. It is the duty of the master to proceed with all reasonable diligence and in accordance with 28 U.S.C. §§ 144, 455 and 458, and with the applicable requirements of the Code of Judicial Conduct. 2. The volunteer special master shall analyze the pleadings and other pertinent papers; discuss at the initial conference the possibilities of mediation and settling the controversy; assist the parties in the preparation of a statement of issues; seek to clarify and narrow the issues involved; seek stipulations of fact; and endeavor to work out with the parties a plan of discovery. 3. The master shall issue a report to the judge on the matters agreed upon by the parties and the matters as to which no agreement could be reached. 4. On the consent of the parties, and the approval of the participating judge, the master may supervise discovery or arbitrate the controversy. NEW YORK COUNTY LAWYERS' ASSOCIATION, New York, N.Y., March 8, 1978. Senate Judiciary Subcommittee, Room 2228, Dirksen Office Building, Washington, D. C. GENTLEMEN: Please include the enclosed Report To Encourage Arbitration of Civil Cases in United States District Courts in the Record for hearing on S. 2253 on April 11, 1978. Thank you. Enclosure. RICHARD A. GIVENS, Chairman, Committee on Federal Legislation. REPORT NO. F-6 BY NEW YORK COUNTY LAWYERS' ASSOCIATION (Report on proposed legislation to encourage arbitration of civil cases in U.S. district courts) RECOMMENDATION: DISAPPROVAL H.R. 9778, 95th Cong., 1st Sess. (1977), was introduced by Representative Rodino on October 27, 1977, to enact a new Chapter 44 of Title 28 of the United States Code containing provisions for encouragement of arbitration of civil cases in the United States District Courts. The proposed legislation grows out of concern for overcrowded dockets in civil cases. The purpose of the bill, to encourage arbitration in appropriate cases, is praiseworthy, but the methods of doing so under this legislation would appear to present extremely serious problems. For this reason, we are constrained to recommend disapproval of the bill in its present form. The bill establishes rather minimal qualifications for arbitrators. No detailed qualifications are set forth in the statute, other than that the arbitrators must be lawyers who have been members of the Bar for five years and be determined to be competent. Arbitrators are to be certified by the Chief Judge of each United States District Court, which by local rule establishes a program under the Act. This would undoubtedly be a minor source of judicial patronage. However, the patronage, and more importantly, the recruitment of good arbitrators, is severely inhibited by the minimal fee payable, limited to a maximum of $50 per case regardless of its complexity (proposed section 643 (a)). More serious, proposed section 644 (a) (2) (B) contemplates reference of substantial numbers of civil suits based on negotiable instruments, contracts, personal injury or property damage involving claims under $50,000 to arbitration without the consent of the parties. This contravenes the concept of arbitration, which ordinarily involves voluntary submission, with rare exceptions where "compulsory" arbitration is specifically authorized, such as in certain emergency labor disputes. See 77 Stat. 132 (1963), upheld in Brotherhood of Locomotive Firemen v. Chicago, B. & Q. R.R., 225 F. Supp. 11 (D.D.C.), aff'd., 331 F. 2d 1020 (D.C. Cir.) cert. denied, 377 U. S. 918 (1964), discussed in S. Rep. No. 459, 88th Cong., 1st Sess. (1963); Marshall, "New Perspectives on National Emergency Disputes," CCH Labor L. J., August 1967, p. 451. Under proposed section 645, actions subject to arbitration, with certain exceptions, are to be referred automatically by the Clerk unless certain steps are taken, such as the initiation of discovery, a motion for summary judgment, or the like, within specified times. This would penalize parties not wishing arbitration where there were reasonable grounds for delaying taking the specified actions. In addition, the initiation of discovery and like procedures, whether needed or not, would be encouraged where the party does not wish arbitration. Under section 648, either party has the right to demand a trial de novo. This largely defeats the advantage of expedition sought to be attained by arbitration. Monetary penalties are provided against a party who demands a trial de novo, but fails to obtain a better result than at the arbitration. This procedure, however, is more adverse to parties less able to withstand the imposition of such penalties, and as such is not equitable. Section 5 of the bill provides that the procedures involved "shall be implemented on a test basis pursuant to this section for three years in no fewer than five nor more than eight representative districts to be designated by the Chief Justice of the United States, after consultation with the Attorney General." This is inconsistent with the provision in section 641 of the proposed Chapter 44 that "[a] United States district court may authorize by local rule the use of arbitration in accordance with the provisions of this chapter." If the procedure is to be triggered by local rule adopted by the Judges of a particular Court, this could well occur in a different number of districts than those specified in section 5 of the bill. On the other hand, the bill is not clear as to what would happen if the Chief Justice designates a District, but the Judges of the District fail to adopt a local rule pursuant to Section 641. The bill thus fails to take full account of the independence of the Judges of individual United States District Courts in establishing local rules, and therefore creates overlapping, inconsistent sources of authority for implementation of the statute. This Committee recommends that if such legislation is to be adopted, all arbitration authorized be voluntary, and that trials de novo not be authorized. Moreover, any test authorized should be controlled by one authority, be it rulemaking by District Courts, or designation by the Chief Justice; unless the local rulemaking is expressly triggered by the designation. For these reasons, the bill in its present form is disapproved, This report is issued by the Committee pursuant to the By-laws of the Association which permit such dissemination. It has not been submitted to the Board of Directors for approval and therefore does not necessarily represent the views of the Board. PUBLIC CITIZEN LITIGATION GROUP Hon. DENNIS DECONCINI, DEAR SENATOR DECONCINI: We wish to call your attention to a dangerous end-run around the power of Congress to regulate the jurisdiction of the federal courts over constitutional controversies, in which the Department of Justice and the United States District Court for the District of Connecticut are now engaged. S. 2253, currently pending before the Subcommittee on Improvements in Judicial Machinery, would authorize the adoption of local court rules compelling the submission of certain commercial and personal injury damage claims to arbitration before the parties may bring their complaints to the attention of a federal judge. Without waiting for Congress' determination of the wisdom of that requirement, the Department of Justice has induced three districts of the United States District Court to adopt "experimental" rules that would compel such arbitration. The rule adopted by the District of Connecticut' would include not only ordinary statutory and diversity personal injury and commercial litigation, but also damage actions for "police misconduct." It is very dangerous to begin the process of subjecting constitutional claims to compulsory arbitration. Where the constitutional rights of Americans are at stake, it is important to provide tenured judges to adjudicate disputes and stand as a bulwark for the people against the power of state and federal governments. These matters are simply too important to be left to volunteers or to part-time adjudicators who have not been nominated by the President and confirmed by the Senate. 2 The apparent justification for inclusion of damage claims under § 1983 for police brutality is that the law in that area is settled and that only simple factual controversies remain to be resolved. Accordingly, says the Department of Justice, trained attorneys amply fill the role of fact-finders; access to a judge, at least at this preliminary stage, is unnecessary. Certainly the law is clear that police officers enjoy a qualified immunity which confers upon them a good faith defense to § 1983 actions for damages. Yet the good faith element is, in part, a factual surrogate for the policy issue whether the substantive law has become sufficiently clear to warrant the imposition of liability. In addition, the substantive rules of the officers' liability are certainly not settled. For example, there remains substantial dispute about when deadly force is permissible, and the Supreme Court has yet to speak on the issue. Also, issues of police misconduct often involve questions about the content of the constitutional rights with which the police are said to have interfered. Furthermore, the implicit assumption that questions of law may easily be segregated from questions of fact is simply incorrect. Whenever a general legal standard must be applied to specific cases (negligence is the classic example), there is a movement of cases from factual to legal determinations. After a series of cases in which disputes involving similar facts have been resolved in a certain way, it becomes a matter of law that such cases should be so resolved. It would thus be a grave error to remove judges from the determination of the legal consequences of the circumstances of each case, because it is those very determinations that establish, over time, the legal consequences of abstract patterns of fact. Arbitrators should not be permitted to usurp such a role in the formulation of the law, and particularly the constitutional law, because the judicial temperament plays a crucial role in that process. Moreover, by cutting off judges from the variety of factual situations in which police brutality is at issue, and by helping judges avoid immersion in repeated patterns of fact, application of a compulsory arbitration rule in this area would hamper the development of the law. 1 A copy is attached. By its terms, the Connecticut rule is much broader. "Police misconduct" could apply not only to excessive use of force, but also to unlawful searches, improper identification procedures, and even improper curtailment of leafletting. The adoption of the rule was apparently stimulated by police brutality cases, but it will be impossible to be certain whether the rule is similarly confined until the local judges have applied it. The fact that the arbitrators' decision will not be final protects neither the interest of the individual complainants nor the social interest in the development of the law protecting citizens from police misconduct. The rule imposes a major obstacle to litigants that they must overcome before they may present their controversy to a federal judge. Furthermore, the imposition of sanctions for failure to accept the determination of the arbitrator, for which the bill provides at § 649, provides an additional and substantial disincentive to insistence by victims of police misconduct upon a federal judicial determination of their grievances. The imposition of the Connecticut arbitration requirement by Local Rule is particularly distressing. The district courts are empowered to fill the interstices of the Federal Rules of Civil Procedure pursuant to Rule 83. But this rule is not similar to regulations of admission to and discipline of the Bar, procedures for notice of other parties or of the United States or provisions for security for costs, which are typical of the rules that Rule 83 was intended to authorize. Compulsory arbitration is at least a basic procedural change, if not a regulation of the substantive rights of the parties. Even a rule-making by the Supreme Court might well be beyond the power that Congress has conferred by 28 U.S.C. § 2072. Congressional legislation is thus the preferable route, if the journey is to be undertaken at all. The Department of Justice's covert extension of its arbitration experiment beyond simple commercial and personal injury litigation to these constitutional cases also arouses concern that this step foreshadows further inroads on the access of Americans to the federal courts for protection of their constitutional rights. It is certainly no secret that certain Justice Department officials are uncomfortable with the existence of § 1983 and would, if unchecked, severely curtail its efficacy. If, in a year or two, the Department concludes that this arbitration "experiment" in police brutality cases was a "success", it may seek to extend the program to prison conditions cases or other categories of constitutional cases in which the plaintiffs are insufficiently popular to withstand the political onslaught of defendants who wish to shield themselves from liability. And if the precedent of legislating by Local Rule is permitted to stand, the Department will not even be required to secure Congressional approval. Now that there is at last widespread recognition that the Supreme Court has unduly restricted citizens' access to the courts for adjudication of their grievances against government, it is disheartening that the Justice Department is advocating and implementing further barriers to access. And in any event, should these barriers be deemed desirable in constitutional cases, the determination whether or not to raise them should be made by Congress, not by district courts acting by Local Rule. The Department of Justice should be required to justify both the use of compulsory arbitration in constitutional and civil rights cases, and the authority of the courts to impose any arbitration requirement by Local Rule. We hope that, during the consideration of S. 2253, the Subcommittee will discourage both abuses. Sincerely yours, PAUL ALAN LEVY, For the Public Citizen Litigation Group. CONGRESS OF THE UNITED STATES, Hon. DENNIS DE CONCINI, The concept embodied in this legislation has my complete support and endorsement. This measure, the diversity of jurisdiction reform as well as the It is interesting to note that so far no rigorous hypotheses have been formulated against which the success or failure of the "experiment" is to be tested. Accordingly, when the time comes to evaluate the "experiment" the Department will no doubt develop its objectives in order to fit the data. |