Local Rule Local Civil Rule 83.7: Court-Annexed Arbitration (Eastern District Only) [formerly Local Civil Rule 83.10]

Local Civil Rule 83.7. Court-Annexed Arbitration (Eastern District Only) [formerly Local Civil Rule 83.10]

(a) Certification of Arbitrators

(1) The chief judge or a judge or judges authorized by the chief judge to act (hereafter referred to as the certifying judge) may certify as many arbitrators as may be determined to be necessary under this rule.

(2) An individual may be certified to serve as an arbitrator if he or she:

(A) has been for at least five years a member of the bar of the highest court of a state or the District of Columbia,

(B) is admitted to practice before this court, and

(C) is determined by the certifying judge to be competent to perform the duties of an arbitrator.

(3) Each individual certified as an arbitrator must take the oath or affirmation required by Title 28, U.S.C. § 453 before serving as an arbitrator.

(4) A list of all persons certified as arbitrators must be maintained in the office of the clerk.

(b) Compensation and Expenses of Arbitrators. An arbitrator will be compensated $250.00 for services in each case. If an arbitration hearing is protracted, the certifying judge may entertain a petition for additional compensation. If a party requests a panel of three arbitrators, as described below, then each arbitrator will be compensated $100.00 for service. The fees must be paid in accordance with the order of the court subject to the limits set by the Judicial Conference of the United States.

(c) Immunity of Arbitrators. Arbitrators will be immune from liability or suit with respect to their conduct as arbitrators to the maximum extent permitted by applicable law.

(d) Civil Cases Eligible for Compulsory Arbitration

(1) The clerk of court must, for all cases filed after January 1, 1986, designate and process for compulsory arbitration all civil cases (excluding social security cases, tax matters, prisoners' civil rights cases and any action based on an alleged violation of a right secured by the Constitution of the United States or if jurisdiction is based in whole or in part on Title 28, U.S.C. § 1343) wherein only money damages only are being sought in an amount not in excess of $150,000.00 exclusive of interest and costs.

(2) The parties may by written stipulation agree that the clerk of court will designate and process for court-annexed arbitration any civil case that is not subject to compulsory arbitration hereunder.

(3) Only for purposes of this rule, in all civil cases damages must be presumed to be not in excess of $150,000.00 exclusive of interest and costs, unless:

(A) Counsel for plaintiff, at the time of filing the complaint, or in the event of the removal of a case from state court or transfer of a case from another district to this court, within 30 days of the docketing of the case in this district, files a certification with the court that the damages sought exceed $150,000.00, exclusive of interest and costs; or

(B) Counsel for a defendant, at the time of filing a counterclaim or cross-claim files a certification with the court that the damages sought by the counter-claim or cross-claim exceed $150,000.00 exclusive of interest and costs.

(e) Referral to Arbitration

(1) After an answer is filed in a case determined eligible for arbitration, the arbitration clerk must send a notice to counsel setting forth the date and time for the arbitration hearing. The date of the arbitration hearing set forth in the notice must be approximately four months but in no event later than 120 days from the date the answer was filed, but the arbitration proceeding must 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 120-day and 30-day periods specified in the preceding sentence may be modified by the court for good cause shown. The notice must also advise counsel that they may agree to an earlier date for the arbitration hearing if the arbitration clerk is notified with 30 days of the date of the notice. The notice must also advise counsel that they have 90 days to complete discovery unless the judge to whom the case has been assigned orders a shorter or longer period for discovery. The district judge may refer the case to a magistrate judge for purposes of discovery. In the event a third party has been brought into the action, this notice must not be sent until an answer has been filed by the third party.

(2) The court will, sua sponte, or on motion of a party, exempt any case from arbitration in which the objectives of arbitration would not be realized

(A) because the case involves complex or novel issues,

(B) because legal issues predominate over factual issues, or

(C) for other good cause.

Application by a party for an exemption from compulsory arbitration must be made by written letter to the court not exceeding three pages in length, outlining the basis for the request and attaching relevant materials, which must be submitted no later than 21 days after receipt of the notice to counsel setting forth the date and time for the arbitration hearing. Within four days of receiving the letter, any opposing affected party may submit a responsive letter not exceeding three pages attaching relevant materials.

(3) Cases not originally designated as eligible for compulsory arbitration, but that in the discretion of the assigned judge, are later found to qualify, may be referred to arbitration. A district judge or a magistrate judge, in cases that exceed the arbitration ceiling of $150,000.00 exclusive of interest and costs, in their discretion, may suggest that the parties should consider arbitration. If the parties are agreeable, an appropriate consent form signed by all parties or their representatives may be entered and filed in the case before scheduling an arbitration hearing.

(4) The arbitration must be held before one arbitrator unless a panel of three arbitrators is requested by a party, in which case one of whom must be designated as chairperson of the panel. If the amount of controversy, exclusive of interest and costs, is $5,000.00 or less, the arbitration must be held before a single arbitrator. The arbitration panel must be chosen at random by the clerk of the court from the lawyers who have been duly certified as arbitrators. The arbitration panel must be scheduled to hear not more than three cases.

(5) The judge to whom the case has been assigned must, 30 days before the date scheduled for the arbitration hearing, sign an order setting forth the date and time of the arbitration hearing and the names of the arbitrators designated to hear the case. If a party has filed a motion for judgment on the pleadings, summary judgment, or similar relief, the judge must not sign the order before ruling on the motion, but the filing of that motion on or after the date of the order must not stay the arbitration unless the judge so orders.

(6) Upon entry of the order designating the arbitrators, the arbitration clerk will send to each arbitrator a copy of all pleadings, including the order designating the arbitrators, and the guidelines for arbitrators.

(7) Persons selected to be arbitrators will be disqualified for bias or prejudice as provided in Title 28, U.S.C. § 144, and must disqualify themselves in any action that they would be required under title 28 U.S.C. § 455, to disqualify themselves if they were a justice, district judge, or magistrate judge.

(f) Arbitration Hearing

(1) The arbitration hearing must take place in the United States Courthouse in a courtroom assigned by the arbitration clerk on the date and at the time set forth in the order of the court. The arbitrators are authorized to change the date and time of the hearing if the hearing is commenced within 30 days of the hearing date set forth in the order of the court. Any continuance beyond this 30-day period must be approved by the judge to whom the case has been assigned. The arbitration clerk must be notified immediately of any continuance.

(2) Counsel for the parties must report settlement of the case to the arbitration clerk and all members of the arbitration panel assigned to the case.

(3) The arbitration hearing may proceed in the absence of any party who, after notice, fails to be present. In the event, however, that a party fails to participate in the arbitration process in a meaningful manner, the court may impose appropriate sanctions, including, but not limited to, the striking of any demand for a trial de novo filed by that party.

(4) Fed. R. Civ. P. 45 applies to subpoenas for attendance of witnesses and the production of documentary evidence at an arbitration hearing under this rule. Testimony at an arbitration hearing must be under oath or affirmation.

(5) The Federal Rules of Evidence must be used as guides to the admissibility of evidence. Copies or photographs of all exhibits, except those intended solely for impeachment, must be marked for identification and delivered to adverse parties at least 14 days before the hearing. The arbitrators must receive exhibits in evidence without formal proof unless counsel has been notified at least seven days before the hearing that the adverse party intends to raise an issue concerning the authenticity of the exhibit. The arbitrators may refuse to receive in evidence any exhibit, a copy or photograph of which has not been delivered to the adverse party as provided herein.

(6) A party may have a recording and transcript made of the arbitration hearing, but that party must make all necessary arrangements and bear all expenses thereof.

(g) Arbitration Award and Judgment

(1) The arbitration award must be filed with the court promptly after the hearing is concluded and must be entered as the judgment of the court after the 30-day period for requesting a trial de novo under section (h) has expired, unless a party has demanded a trial de novo. The judgment so entered will be subject to the same provisions of law and will have the same force and effect as a judgment of the court in a civil action, except that it will not be appealable. In a case involving multiple claims and parties, any segregable part of an arbitration award for which an aggrieved party has not timely demanded a trial de novo shall become part of the final judgment with the same force and effect as a judgment of the court in a civil action, except that it will not be appealable.

(2) The contents of any arbitration award must not be made known to any judge who might be assigned the case,

(A) unless necessary for the court to determine whether to assess costs or attorney's fees,

(B) until the district court has entered final judgment in the action, or the action has been otherwise terminated, or

(C) except for purposes of preparing the report required by section 903(b) of the Judicial Improvement and Access to Justice Act.

(3) Costs may be taxed as part of any arbitration award in accordance with 28 U.S.C. § 1920.

(h) Trial De Novo

(1) Within 30 days after the arbitration award is entered on the docket, any party may demand in writing a trial de novo in the district court. That demand must be filed with the arbitration clerk and served by the moving party on all counsel of record or other parties. Withdrawal of a demand for a trial de novo will not reinstate the arbitrators' award and the case will proceed as if it had not been arbitrated.

(2) Upon demand for a trial de novo and the payment to the clerk required by paragraph (4) of this section, the action must be placed on the calendar of the court and treated for all purposes as if it had not been referred to arbitration, and any right of trial by jury that a party would otherwise have will be preserved inviolate.

(3) At the trial de novo, the court must not admit evidence that there had been an arbitration proceeding, the nature or amount of the award, or any other matter concerning the conduct of the arbitration proceeding.

(4) Upon making a demand for trial de novo the moving party must, unless permitted to proceed in forma pauperis, deposit with the clerk of the court an amount equal to the arbitration fees of the arbitrators as provided in section (b). The sum so deposited must be returned to the party demanding a trial de novo if that party obtains a final judgment, exclusive of interest and costs, that is more favorable than the arbitration award. If the party demanding a trial de novo does not obtain a more favorable result after trial or if the court determines that the party's conduct in seeking a trial de novo was in bad faith, the sum so deposited must be paid by the clerk to the Treasury of the United States.

For relevant historical context for this local rule, consult the Appendix of Committee Notes.