Bankruptcy Mediation Rules are Lagging Behind All Other Federal Courts and Agencies (Part 3)

Lagging Behind

By: Donald L. Swanson

Bankruptcy courts have drawn the short mediation straw and are lagging behind:

–they don’t have a Federal rule of procedure for mediation.

Every other court in the bankruptcy-related court system has such a rule:

–The U.S. district courts have Fed.R.Civ.P. 16(c)(2) & 53 [as discussed in this article].

–The U.S. courts of appeals have Fed.R.App.P. 33 [as discussed in this article].

Appeals to BAP and District Court

Moreover, the U.S. district courts (in their bankruptcy-appeal capacity) and the bankruptcy appellate panels also have a Federal rule of procedure for mediation.  And this Federal rule is contained in the Federal Rules of Bankruptcy Procedure, no less!

Part VIII of the Federal Rules of Bankruptcy Procedure govern appeals from bankruptcy court rulings.  Fed.R.Bankr.P. 8027 contains this explicit provision for mediation of bankruptcy disputes on appeal:

“Rule 8027. Notice of a Mediation Procedure

If the district court or BAP has a mediation procedure applicable to bankruptcy appeals, the clerk must notify the parties promptly after docketing the appeal of:

(a) the requirements of the mediation procedure; and

(b) any effect the mediation procedure has on the time to file briefs.”

Here are some observations about this Fed.R.Bankr.P. 8027:

–This Rule 8027 is relatively new: adopted in 2014.

–Every U.S. district court must have a “mediation procedure,” because every district court  is subject to 28 U.S.C. § 651(b), which provides: “Each United States district court shall authorize, by local rule . . . , the use of alternative dispute resolution processes in all civil actions.”

–Each bankruptcy appellate panel has a “mediation procedure,” because it has either, (i) adopted a Local Rule 8027 on mediation, or (ii) adopted Fed.R.App.P. 33 and the circuit court’s local mediation rules by reference.

So . . . why are the bankruptcy courts left out and lagging behind?

And it’s even worse!

The bankruptcy courts are about the only dispute-resolving organ of the entire Federal government without a Federal mediation rule:

–The U.S. Tax Court has a Federal mediation rule [Rule 124(b), Tax Court Rules of Practice and Procedure].

–The U.S. Court of Claims has a Federal mediation rule [Appendix H, Rules of the United States Court of Federal Claims].

–The U.S. Court of International Trade has a Federal rule on mediation [Rule 16.1 USCIT Rules, Forms, Guidelines and Administrative Orders].

–And the entire Federal system is subject to a broad policy favoring mediation and other alternative dispute resolution processes.  Such policy is established by a variety of Federal mediation statutes and by an extensive range of rules and regulations throughout the entire Federal system.

Question and Answer

So . . . , again, why are the bankruptcy courts the only ones omitted from all of this focus on mediation?

Here’s the answer:  It’s an oversight.  The omission is wrong; and it needs to change.  A Federal bankruptcy rule on mediation needs to be adopted at once.


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