Authority for Mediation Mandates

A seat of authority: Grosvenor Square, London, UK

By: Donald L. Swanson

“Where does a bankruptcy judge get authority to order parties into mediation?”

—Question at a discussion of bankruptcy mediation.

This question comes from a skeptic. And it has little to do with the topic under discussion.  So, the others in the discussion hem and haw.  One finally says, “Section 105.”

The questioner then gives a snort: something like a “harrumph” or “pshaw” or similar show of derision.

Here are Some Answers

So . . . I’ve been thinking about the authority question. And here are some answers.

1. A Practical Answer. The best response I’ve ever heard to the authority question is from a sitting Bankruptcy Judge who often serves as a mediator and is a proponent of mediation. His response to the authority question is a practical one. It’s this:

–Many judges “strongly encourage” parties to mediate, rather than actually ordering them to do so.

And, he observes, he’s never seen anyone refuse to comply with such an encouragement. This observation proves, once again, that people skills trump authority every day of the week.

2. Case Load and Docket Control. Every Judge has inherent authority to manage and control his/her case load and docket. For example, a judge has inherent authority to set deadlines, to require a joint pretrial statement, to require status reports, to require pretrial or settlement conferences, etc. This inherent authority also authorizes a judge to mandate mediation as a tool for managing the court’s case load and controlling the docket.

3. Fed.R.Civ.P. 16. Rule 16 is incorporated into adversary proceedings by Fed.R.Bkry.P. 7016. Here is the operative language in Rule 16(c)(2)(I):

“At any pretrial conference, the court may consider and take appropriate action on . . . settling the case and using special procedures to assist in resolving the dispute when authorized by statute or local rule.”

This rule is available as authority for mediation mandates, and the vast majority of all bankruptcy courts have a local mediation rule of some type.

4. Alternative Dispute Resolution Act of 1998.  28 U.S.C. Sec. 651(b) says:

“Each United States district court shall authorize by local rule . . . the use of alternative dispute resolution processes in all civil actions, including adversary proceedings in bankruptcy”; and

28 U.S.C. Sec. 652(a) says:

“each district court shall . . . require that litigants in all civil cases consider the use of an alternative dispute resolution process at an appropriate stage in the litigation.”

Furthermore, 28 U.S.C. Sec. 652(a) says (italics and bold face added for emphasis):

“Any district court that elects to require the use of alternative dispute resolution in certain cases may do so only with respect to mediation, . . . “

Such statutory language supports mediation mandate authority, since a bankruptcy court is a “unit” of its district court under 28 U.S.C. § 151.

5. 11 U.S.C. Sec. 105. This section provides:

“The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title.”

Despite the scoffing in the mediation discussion noted above, § 105 does in fact provide additional authority for a judge to mandate mediation.

A Resistance to Progress

The skeptic’s question on authority for mandating mediation seems, these days, a bit tone deaf.

After all, mediations are frequently mandated in many courts, both state and federal, by local court rule or statute and by court order in individual cases. And the authority to do so is never seriously challenged.

To challenge mandating authority, now, is a bit late.  It’s like asking on what authority courts require electronic filings: that horse is already out of the barn; the question is a day late and a dollar short; [insert additional and similar cliches here].

Additionally, the question reveals a progress-resistant attitude.  It’s like an older person missing out on family communications by refusing to use email.

A Federal Rule is Needed

Nonetheless, the authority question and scoffing at the legitimate response noted above point out the need for a Federal Rule of Bankruptcy Procedure that explicitly authorizes bankruptcy courts to utilize and mandate mediation.  The authority question needs to be resolved once-and-for-all.  It needs to be eliminated.

**  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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