Incongruity = What’s With Bankruptcy Courts Ignoring Federal Mediation Law? (Part 1)

Incongruity = Fish on a Bicycle

By Donald L. Swanson

United States statutes require the adoption of local bankruptcy rules for mediation and other alternative dispute resolution tools.

Here’s how.


A.   The “Alternative Dispute Resolution Act of 1998” provides in part as follows (bold/italics added for emphasis):

28 U.S.C. Sec. 651: Authorization of alternative dispute resolution

(b) AUTHORITY- Each United States district court shall authorize, by local rule adopted under section 2071(a), the use of alternative dispute resolution processes in all civil actions, including adversary proceedings in bankruptcy . . .

28 U,S.C. Sec. 652: Jurisdiction.

(a) . . . each district court shall, by local rule adopted under section 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. . . .

B.   28 U.S.C. Sec. 151 is titled “Designation of bankruptcy courts” and provides in part:

“In each judicial district, the bankruptcy judges in regular active service shall constitute a unit of the district court to be known as the bankruptcy court for that district. Each bankruptcy judge, as a judicial officer of the district court, may exercise the authority conferred under this chapter with respect to any action, suit, or proceeding.”


The foregoing quotations are from exiting U.S. statutes. These words are law of the land. And they have been for many years.

These statutes are not merely a broad statement of policy to guide the conduct of the judicial branch of the United States Government. These statutes are laws to which judges must submit and with which judges must comply.


Read through the statutory language quoted above and focus on the words highlighted in bold/italics. Better yet, click on the statute links above and read the statutes in their entirety.


1. What’s with a U.S. Bankruptcy Judge saying he does not like mediation and won’t approve its use?  See, e.g., this article on In re Smith.

–In light of the foregoing statutes, isn’t such a position contrary to Federal law?

2. What’s with a U.S. Bankruptcy Court revoking its previously-existing mediation rules and then saying it has no authority to order mediation? See, e.g., this article on such actions by the Bankruptcy Court in Chicago.

–In light of the foregoing statutes, aren’t such actions contrary to Federal law?

3. What’s with multiple U.S. bankruptcy courts failing or refusing to adopted local mediation rules?

–In light of the foregoing statutes, isn’t such a failure or refusal contrary to Federal law?

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