ADR Act of 1998: Progress in Bankruptcy Courts

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Making progress — but with a ways to go yet

By:  Donald L. Swanson

2018 is the twenty-year anniversary of the Alternative Dispute Resolution Act of 1998 (codified at 28 U.S.C. § 651 et seq., the “ADR Act”).

Bankruptcy Courts – Lagging Adopters but Making Progress

Bankruptcy courts, generally, have been lagging adopters of mediation. And a few bankruptcy districts remain stubbornly opposed to complying with local-rule requirements of the ADR Act.

Nevertheless, the effect of the ADR Act upon bankruptcy courts has been significant and substantial. For example:

–Of the 94 bankruptcy districts throughout the U.S. and its territories, 75 districts (that’s 79.79%) have a local mediation rule of some sort. Many of these 75 districts utilize mediation extensively—and some bankruptcy courts even mandate mediation in various circumstances by local rule.

Bankruptcy Courts — Some Delinquecies

Only 19 of the 94 bankruptcy districts have NO local mediation rule whatsoever, and 11 of these 19 come from only 5 states. Here is a list of the 19 bankruptcy districts that have no local mediation rule whatsoever (listed alphabetically by state):

1. Alabama — Middle District
2. Alabama – Northern District
3. Alabama – Southern District
4. Arkansas – Eastern District
5. Arkansas – Western District
6. Illinois – Southern District
7. Kentucky – Eastern District
8. Kentucky – Western District
9. Louisiana – Eastern District
10. Louisiana – Middle District
11. Missouri – Western District
12. New York – Western District
13. North Dakota
14. Northern Mariana Islands
15. South Dakota
16. Virginia – Western District
17. West Virginia – Northern District
18. Wisconsin – Eastern District
19. Wisconsin – Western District

A Complete Listing

Here is an article that lists all 94 bankruptcy districts and identifies the local mediation rules for each (or lack thereof), as of the end of 2017:

A List of Bankruptcy Districts that HAVE and HAVE-NOT Adopted Local Mediation Rules.”

Some Oddities

There are some oddities among the 75 districts that have a local mediation rule of some sort. For example:

–Each of the following six districts has only a one-or-two sentence local rule, which authorizes mediation without any further details (listed alphabetically by state):

1. Illinois – Northern District
2. Maine
3. Minnesota
4. New Hampshire
5. Texas – Northern District
6. West Virginia – Southern District

Obviously, it would be helpful for each of these six districts to flesh-out their local rules with confidentiality provisions (which are required by § 652(d) of the ADR Act) and other details.

–These five districts have no local mediation rules of their own but are explicitly covered by mediation rules adopted by their respective district courts (listed alphabetically by state/territory):

1. District of Columbia (District Court’s LCvR 84.4(e) says, “Mediation is also available to litigants in bankruptcy proceedings”)
2. Guam (District Court’s CVLR 16-2 mediation rule applies in “proceedings in bankruptcy”)
3. Iowa – Northern District (District Court’s LR 72B mediation rule applies in “adversary proceedings in bankruptcy”)
4. Iowa – Southern District (District Court’s LR 72B mediation rule applies in “adversary proceedings in bankruptcy”)
5. Puerto Rico (District Court’s Rule 83.1 mediation rule applies to, “All civil cases arising under the jurisdiction of this Court”; and Bankruptcy Court’s Rule 1001(b) incorporates District Court rules when “a procedural matter is not covered”)

Conclusion

All of the foregoing represents a major improvement from only a decade ago, when the number of bankruptcy districts with local mediation rules of any kind hovered around 50%.

While some bankruptcy districts still have a ways to go, as noted above, the entire bankruptcy system has made major strides on mediation under the Alternative Dispute Resolution Act of 1998.

** If you find this article of value, please feel free to share. If you’d like to discuss, let me know.

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