[Congressional Record Volume 144, Number 139 (Wednesday, October 7, 1998)]
[Senate]
[Pages S11808-S11810]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                ALTERNATE DISPUTE RESOLUTION ACT OF 1998

  Mr. McCAIN. Mr. President, I ask unanimous consent the Senate now 
proceed to the consideration of Calendar No. 514, H.R. 3528.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       A bill (H.R. 3528) to amend title 28 of the United States 
     Code, with respect to the use of alternative dispute 
     resolution processes in the United States district courts, 
     and for other purposes.

  The PRESIDING OFFICER. Is there objection to the immediate 
consideration of the bill?
  There being no objection, the Senate proceeded to consider the 
bill which had been reported from the Committee on the Judiciary, with 
amendments; as follows:

  (The parts of the bill intended to be stricken are shown in boldface 
brackets and the parts of the bill intended to be inserted are shown in 
italic.

                               H.R. 3528

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Alternative Dispute 
     Resolution Act of 1998''.

     SEC. 2. FINDINGS AND DECLARATION OF POLICY.

       Congress finds that--
       (1) alternative dispute resolution, when supported by the 
     bench and bar, and utilizing properly trained neutrals in a 
     program adequately administered by the court, has the 
     potential to provide a variety of benefits, including greater 
     satisfaction of the parties, innovative methods of resolving 
     disputes, and greater efficiency in achieving settlements;
       (2) certain forms of alternative dispute resolution, 
     including mediation, early neutral evaluation, minitrials, 
     and voluntary arbitration, may have potential to reduce the 
     large backlog of cases now pending in some federal courts 
     throughout the United States, thereby allowing the courts to 
     process their remaining cases more efficiently; and
       (3) the continued growth of Federal appellate court-annexed 
     mediation programs suggests that this form of alternative 
     dispute resolution can be equally effective in resolving 
     disputes in the federal trial courts; therefore, the district 
     courts should consider including mediation in their local 
     alternative dispute resolution programs.

     [SEC. 2.] 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:

     ``Sec. 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(b)] 
     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(b)] 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

[[Page S11809]]

     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.''.

     [SEC. 3.] SEC. 4. JURISDICTION.

       Section 652 of title 28, United States Code, is amended to 
     read as follows:

     ``Sec. 652. Jurisdiction

       ``(a) Consideration of Alternative Dispute Resolution in 
     Appropriate Cases.--Notwithstanding any provision of law to 
     the contrary and except as provided in subsections (b) and 
     (c), each district court shall, by local rule adopted under 
     section [2071(b)] 2071(a), require that litigants in all 
     civil cases consider the use of an alternative dispute 
     resolution process at an appropriate stage in the litigation. 
     Each district court shall provide litigants in all civil 
     cases with at least one alternative dispute resolution 
     process, including, but not limited to, mediation, early 
     neutral evaluation, minitrial, and arbitration as authorized 
     in sections 654 through 658. Any district court that elects 
     to require the use of alternative dispute resolution in 
     certain cases may do so only with respect to mediation, early 
     neutral evaluation, and, if the parties consent, arbitration.
       ``(b) Actions Exempted From Consideration of Alternative 
     Dispute Resolution.--Each district court may exempt from the 
     requirements of this section specific cases or categories of 
     cases in which use of alternative dispute resolution would 
     not be appropriate. In defining these exemptions, each 
     district court shall consult with members of the bar, 
     including the United States Attorney for that district.
       ``(c) Authority of the Attorney General.--Nothing in this 
     section shall alter or conflict with the authority of the 
     Attorney General to conduct litigation on behalf of the 
     United States, with the authority of any Federal agency 
     authorized to conduct litigation in the United States courts, 
     or with any delegation of litigation authority by the 
     Attorney General.
       ``(d) Confidentiality Provisions.--Until such time as rules 
     are adopted under chapter 131 of this title providing for the 
     confidentiality of alternative dispute resolution processes 
     under this chapter, each district court shall, by local rule 
     adopted under section 2071(b), provide for the 
     confidentiality of the alternative dispute resolution 
     processes and to prohibit disclosure of confidential dispute 
     resolution communications.''.

     [SEC. 4.] SEC. 5. MEDIATORS AND NEUTRAL EVALUATORS.

       Section 653 of title 28, United States Code, is amended to 
     read as follows:

     ``Sec. 653. Neutrals

       ``(a) Panel of Neutrals.--Each district court that 
     authorizes the use of alternative dispute resolution 
     processes shall adopt appropriate processes for making 
     neutrals available for use by the parties for each category 
     of process offered. Each district court shall promulgate its 
     own procedures and criteria for the selection of neutrals on 
     its panels.
       ``(b) Qualifications and Training.--Each person serving as 
     a neutral in an alternative dispute resolution process should 
     be qualified and trained to serve as a neutral in the 
     appropriate alternative dispute resolution process. For this 
     purpose, the district court may use, among others, magistrate 
     judges who have been trained to serve as neutrals in 
     alternative dispute resolution processes, professional 
     neutrals from the private sector, and persons who have been 
     trained to serve as neutrals in alternative dispute 
     resolution processes. Until such time as rules are adopted 
     under chapter 131 of this title relating to the 
     disqualification of neutrals, each district court shall issue 
     rules under section [2071(b)] 2071(a) relating to the 
     disqualification of neutrals (including, where appropriate, 
     disqualification under section 455 of this title, other 
     applicable law, and professional responsibility 
     standards).''.

     SEC. 5. ACTIONS REFERRED TO ARBITRATION.

       Section 654 of title 28, United States Code, is amended to 
     read as follows:

     ``Sec. 654. Arbitration

       ``(a) Referral of Actions to Arbitration.--Notwithstanding 
     any provision of law to the contrary and except as provided 
     in [subsections (b) and (c)] subsections (a), (b), and (c) of 
     section 652 and subsection (d) of this section, a district 
     court may allow the referral to arbitration of any civil 
     action (including any adversary proceeding in bankruptcy) 
     pending before it when the parties consent, except that 
     referral to arbitration may not be made where--
       ``(1) the action is based on an alleged violation of a 
     right secured by the Constitution of the United States;
       ``(2) jurisdiction is based in whole or in part on section 
     1343 of this title; or
       ``(3) the relief sought consists of money damages in an 
     amount greater than $150,000.
       ``(b) Safeguards in Consent Cases.--Until such time as 
     rules are adopted under chapter 131 of this title relating to 
     procedures described in this subsection, the district court 
     shall, by local rule adopted under section [2071(b)] 2071(a), 
     establish procedures to ensure that any civil action in which 
     arbitration by consent is allowed under subsection (a)--
       ``(1) consent to arbitration is freely and knowingly 
     obtained; and
       ``(2) no party or attorney is prejudiced for refusing to 
     participate in arbitration.
       ``(c) Presumptions.--For purposes of subsection (a)(3), a 
     district court may presume damages are not in excess of 
     $150,000 unless counsel certifies that damages exceed such 
     amount.
       ``(d) Existing Programs.--Nothing in this [section] chapter 
     is deemed to affect any action in which arbitration is 
     conducted pursuant to section 906 of the Judicial 
     Improvements and Access to Justice Act (Public Law 100-102), 
     as in effect prior to the date of its repeal.''.

     [SEC. 6.] SEC. 7. ARBITRATORS.

       Section 655 of title 28, United States Code, is amended to 
     read as follows:

     ``Sec. 655. Arbitrators

       ``(a) Powers of Arbitrators.--An arbitrator to whom an 
     action is referred under section 654 shall have the power, 
     within the judicial district of the district court which 
     referred the action to arbitration--
       ``(1) to conduct arbitration hearings;
       ``(2) to administer oaths and affirmations; and
       ``(3) to make awards.
       ``(b) Standards for Certification.--Each district court 
     that authorizes arbitration 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 under 
     section 455.
       ``(c) Immunity.--All individuals serving as arbitrators in 
     an alternative dispute resolution program under this chapter 
     are performing quasi-judicial functions and are entitled to 
     the immunities and protections that the law accords to 
     persons serving in such capacity.''.

     [SEC. 7.] SEC. 8. SUBPOENAS.

       Section 656 of title 28, United States Code, is amended to 
     read as follows:

     ``Sec. 656. 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.''.

     [SEC. 8.] SEC. 9. ARBITRATION AWARD AND JUDGMENT.

       Section 657 of title 28, United States Code, is amended to 
     read as follows:

     ``Sec. 657. 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 be filed 
     promptly after the arbitration hearing is concluded 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. 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 adopted under section [2071(b)] 
     2071(a), 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 until the district court has 
     entered final judgment in the action or the action has 
     otherwise terminated.
       ``(c) Trial de Novo of Arbitration Awards.--
       ``(1) Time for filing demand.--Within 30 days after the 
     filing of an arbitration award with a district court under 
     subsection (a), any party may file a written demand for a 
     trial de novo in the district court.
       ``(2) Action restored 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.
       ``(3) Exclusion of evidence of arbitration.--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--
       ``(A) the evidence would otherwise be admissible in the 
     court under the Federal Rules of Evidence; or
       ``(B) the parties have otherwise stipulated.''.

     [SEC. 9.] SEC. 10. COMPENSATION OF ARBITRATORS AND NEUTRALS.

       Section 658 of title 28, United States Code, is amended to 
     read as follows:

     ``Sec. 658. Compensation of arbitrators and neutrals

       ``(a) Compensation.--The district court shall, subject to 
     regulations approved by the Judicial Conference of the United 
     States, establish the amount of compensation, if any, that 
     each arbitrator or neutral shall receive

[[Page S11810]]

     for services rendered in each case under this chapter.
       ``(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.''.

     [SEC. 10.] SEC. 11. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated for each fiscal 
     year such sums as may be necessary to carry out chapter 44 of 
     title 28, United States Code, as amended by this Act.

     [SEC. 11.] SEC. 12. CONFORMING AMENDMENTS.

       (a) Limitation on Money Damages.--Section 901 of the 
     Judicial Improvements and Access to Justice Act (28 U.S.C. 
     652 note), is amended by striking subsection (c).
       (b) Other Conforming Amendments.--(1) The chapter heading 
     for chapter 44 of title 28, United States Code, is amended to 
     read as follows:

            ``CHAPTER 44--ALTERNATIVE DISPUTE RESOLUTION''.

       (2) The table of contents for chapter 44 of title 28, 
     United States Code, is amended to read as follows:

``Sec.
``651.  Authorization of alternative dispute resolution.
``652.  Jurisdiction.
``653.  Neutrals.
``654.  Arbitration.
``655.  Arbitrators.
``656.  Subpoenas.
``657.  Arbitration award and judgment.
``658.  Compensation of arbitrators and neutrals.''.

       (3) The item relating to chapter 44 in the table of 
     chapters for Part III of title 28, United States Code, is 
     amended to read as follows:

``44. Alternative Dispute Resolution.............................651''.


                           Amendment No. 3784

    (Purpose: To make technical modifications regarding the use of 
  alternative dispute resolution processes in United States district 
                    courts, and for other purposes)

  Mr. McCAIN. Mr. President, Senators Grassley and Durbin have an 
amendment at the desk. I ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Arizona [Mr. McCain], for Mr. Grassley, 
     for himself, and Mr. Durbin, proposes an amendment numbered 
     3784.

  The amendment follows:
       Page 6, line 17, strike ``2071(b)'' and substitute 
     ``2071(a)''.
       Page 8, line 1, strike ``SEC. 5'' and substitute ``SEC. 
     6''.
       Page 9, line 12, strike ``action'' and substitute 
     ``program''.
       Page 9, line 13, strike ``section 906'' and substitute 
     ``Title IX''.
       Page 9, lines 14 and 15, strike ``100-102'' and substitute 
     ``100-702''.
       Page 9, line 15, strike ``as in effect prior to the date of 
     its repeal'' and substitute ``as amended by Section 1 of 
     Public Law 105-53''.
       Page 13, line 10, after ``arbitrators'' insert ``and other 
     neutrals''.

  Mr. McCAIN. I ask unanimous consent the amendment be agreed to, the 
committee amendments be agreed to, the bill be considered read a third 
time and passed, the motion to reconsider be laid upon the table, and 
any statements appear in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 3784) was agreed to.
  The committee amendments were agreed to.
  The bill (H.R. 3528) was considered read the third time and passed.

                          ____________________