PROCESSES TO BE AUTHORIZED IN 
              ALL DISTRICT COURTS.

    Section 651 of title 28, United States Code, is amended to read as 
follows:

``Sec. 651. Authorization of alternative dispute resolution

    ``(a) Definition.--For purposes of this chapter, an alternative 
dispute resolution process includes any process or procedure, other 
than an adjudication by a presiding judge, in which a neutral third 
party participates to assist in the resolution of issues in 
controversy, through processes such as early neutral evaluation, 
mediation, minitrial, and arbitration as provided in sections 654 
through 658.
    ``(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, in accordance with this 
chapter, except that the use of arbitration may be authorized only as 
provided in section 654. Each United States district court shall devise 
and implement its own alternative dispute resolution program, by local 
rule adopted under section 2071(a), to encourage and promote the use of 
alternative dispute resolution in its district.
    ``(c) Existing Alternative Dispute Resolution Programs.--In those 
courts where an alternative dispute resolution program is in place on 
the date of the enactment of the Alternative Dispute Resolution Act of 
1998, the court shall examine the effectiveness of that program and 
adopt such improvements to the program as are consistent with the 
provisions and purposes of this chapter.
    ``(d) Administration of Alternative Dispute Resolution Programs.--
Each United States district court shall designate an employee, or a 
judicial officer, who is knowledgeable in alternative dispute 
resolution practices and processes to implement, administer, oversee, 
and evaluate the court's alternative dispute resolution program. Such 
person may also be responsible for recruiting, screening, and training 
attorneys to serve as neutrals and arbitrators in the court's 
alternative dispute resolution program.
    ``(e) Title 9 Not Affected.--This chapter shall not affect title 9, 
United States Code.
    ``(f) Program Support.--The Federal Judicial Center and the 
Administrative Office of the United States Courts are authorized to 
assist the district courts in the establishment and improvement of 
alternative dispute resolution programs by identifying particular 
practices employed in successful programs and providing additional 
assistance as needed and appropriate.''.

SEC. 4. JURISDICTION.

    Section 652 of title 28, United States Code, is amended to read as 
follows:

``Sec. 652. Jurisdiction

    ``(a) Consideration of Alternative Dispute Resolution in 
Appropriate Cases.--Notwithstanding any provision of law to the 
contrary and except as provided in subsections (b) and (c), 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. 
Any district court that elects to require the use of alternative 
dispute resolution in certain cases may do so only with respect to 
mediation, early neutral evaluation, and, if the parties consent, 
arbitration.
    ``(b) Actions Exempted From Consideration of Alternative Dispute 
Resolution.--Each district court may exempt from the requirements of 
this section specific cases or categories of cases in which use of 
alternative dispute resolution would not be appropriate. In defining 
these exemptions, each district court shall consult with members of the 
bar, including the United States Attorney for that district.
    ``(c) Authority of the Attorney General.--Nothing in this section 
shall alter or conflict with the authority of the Attorney General to 
conduct litigation on behalf of the United States, with the authority 
of any Federal agency authorized to conduct litigation in the United 
States courts, or with any delegation of litigation authority by the 
Attorney General.
    ``(d) Confidentiality Provisions.--Until such time as rules are 
adopted under chapter 131 of this title providing for the 
confidentiality of alternative dispute resolution processes under this 
chapter, each district court shall, by local rule adopted under section 
2071(a), provide for the confidentiality of the alternative dispute 
resolution processes and to prohibit disclosure of confidential dispute 
resolution communications.''.

SEC. 5. MEDIATORS AND NEUTRAL EVALUATORS.

    Section 653 of title 28, United States Code, is amended to read as 
follows:

``Sec. 653. Neutrals

    ``(a) Panel of Neutrals.--Each district court that authorizes the 
use of alternative dispute resolution processes shall adopt appropriate 
processes for making neutrals available for use by the parties for each 
category of process offered. Each district court shall promulgate its 
own procedures and criteria for the selection of neutrals on its 
panels.
    ``(b) Qualifications and Training.--Each person serving as a 
neutral in an alternative dispute resolution process should be 
qualified and trained to serve as a neutral in the appropriate 
alternative dispute resolution process. For this purpose, the district 
court may use, among others, magistrate judges who have been trained to 
serve as neutrals in alternative dispute resolution processes, 
professional neutrals from the private sector, and persons who have 
been trained to serve as neutrals in alternative dispute resolution 
processes. Until such time as rules are adopted under chapter 131 of 
this title relating to the disqualification of neutrals, each district 
court shall issue rules under section 2071(a) relating to the 
disqualification of neutrals (including, where appropriate, 
disqualification under section 455 of this title, other applicable law, 
and professional responsibility standards).''.

SEC. 6. ACTIONS REFERRED TO ARBITRATION.

    Section 654 of title 28, United States Code, is amended to read as 
follows:

``Sec. 654. Arbitration

    ``(a) Referral of Actions to Arbitration.--Notwithstanding any 
provision of law to the contrary and except as provided in subsections 
(a), (b), and (c) of section 652 and subsection (d) of this section, a 
district court may allow the referral to arbitration of any civil 
action (including any adversary proceeding in bankruptcy) pending 
before it when the parties consent, except that referral to arbitration 
may not be made where--
        ``(1) the action is based on an alleged violation of a right 
    secured by the Constitution of the United States;
        ``(2) jurisdiction is based in whole or in part on section 1343 
    of this title; or
        ``(3) the relief sought consists of money damages in an amount 
    greater than $150,000.
    ``(b) Safeguards in Consent Cases.--Until such time as rules are 
adopted under chapter 131 of this title relating to procedures 
described in this subsection, the district court shall, by local rule 
adopted under section 2071(a), establish procedures to ensure that any 
civil action in which arbitration by consent is allowed under 
subsection (a)--
        ``(1) consent to arbitration is freely and knowingly obtained; 
    and
        ``(2) no party or attorney is prejudiced for refusing to 
    participate in arbitration.
    ``(c) Presumptions.--For purposes of subsection (a)(3), a district 
court may presume damages are not in excess of $150,000 unless counsel 
certifies that damages exceed such amount.
    ``(d) Existing Programs.--Nothing in this chapter is deemed to 
affect any program in which arbitration is conducted pursuant to 
section title IX of the Judicial Improvements and Access to Justice Act 
(Public Law 100-702), as amended by section 1 of Public Law 105-53.''.

SEC. 7. ARBITRATORS.

    Section 655 of title 28, United States Code, is amended to read as 
follows:

``Sec. 655. Arbitrators

    ``(a) Powers of Arbitrators.--An arbitrator to whom an action is 
referred under section 654 shall have the power, within the judicial 
district of the district court which referred the action to 
arbitration--
        ``(1) to conduct arbitration hearings;
        ``(2) to administer oaths and affirmations; and
        ``(3) to make awards.
    ``(b) Standards for Certification.--Each district court that 
authorizes arbitration shall establish standards for the certification 
of arbitrators and shall certify arbitrators to perform services in 
accordance with such standards and this chapter. The standards shall 
include provisions requiring that any arbitrator--
        ``(1) shall take the oath or affirmation described in section 
    453; and
        ``(2) shall be subject to the disqualification rules under 
    section 455.
    ``(c) Immunity.--All individuals serving as arbitrators in an 
alternative dispute resolution program under this chapter are 
performing quasi-judicial functions and are entitled to the immunities 
and protections that the law accords to persons serving in such 
capacity.''.

SEC. 8. SUBPOENAS.

    Section 656 of title 28, United States Code, is amended to read as 
follows:

``Sec. 656. Subpoenas

    ``Rule 45 of the Federal Rules of Civil Procedure (relating to 
subpoenas) applies to subpoenas for the attendance of witnesses and the 
production of documentary evidence at an arbitration hearing under this 
chapter.''.

SEC. 9. ARBITRATION AWARD AND JUDGMENT.

    Section 657 of title 28, United States Code, is amended to read as 
follows:

``Sec. 657. Arbitration award and judgment

    ``(a) Filing and Effect of Arbitration Award.--An arbitration award 
made by an arbitrator under this chapter, along with proof of service 
of such award on the other party by the prevailing party or by the 
plaintiff, shall be filed promptly after the arbitration hearing is 
concluded with the clerk of the district court that referred the case 
to arbitration. Such award shall be entered as the judgment of the 
court after the time has expired for requesting a trial de novo. The 
judgment so entered shall be subject to the same provisions of law and 
shall have the same force and effect as a judgment of the court in a 
civil action, except that the judgment shall not be subject to review 
in any other court by appeal or otherwise.
    ``(b) Sealing of Arbitration Award.--The district court shall 
provide, by local rule adopted under section 2071(a), that the contents 
of any arbitration award made under this chapter shall not be made 
known to any judge who might be assigned to the case until the district 
court has entered final judgment in the action or the action has 
otherwise terminated.
    ``(c) Trial de Novo of Arbitration Awards.--
        ``(1) Time for filing demand.--Within 30 days after the filing 
    of an arbitration award with a district court under subsection (a), 
    any party may file a written demand for a trial de novo in the 
    district court.
        ``(2) Action restored to court docket.--Upon a demand for a 
    trial de novo, the action shall be restored to the docket of the 
    court and treated for all purposes as if it had not been referred 
    to arbitration.
        ``(3) Exclusion of evidence of arbitration.--The court shall 
    not admit at the trial de novo any evidence that there has been an 
    arbitration proceeding, the nature or amount of any award, or any 
    other matter concerning the conduct of the arbitration proceeding, 
    unless--
            ``(A) the evidence would otherwise be admissible in the 
        court under the Federal Rules of Evidence; or
            ``(B) the parties have otherwise stipulated.''.

SEC. 10. COMPENSATION OF ARBITRATORS AND NEUTRALS.

    Section 658 of title 28, United States Code, is amended to read as 
follows:

``Sec. 658. Compensation of arbitrators and neutrals

    ``(a) Compensation.--The district court shall, subject to 
regulations approved by the Judicial Conference of the United States, 
establish the amount of compensation, if any, that each arbitrator or 
neutral shall receive for services rendered in each case under this 
chapter.
    ``(b) Transportation Allowances.--Under regulations prescribed by 
the Director of the Administrative Office of the United States Courts, 
a district court may reimburse arbitrators and other neutrals for 
actual transportation expenses necessarily incurred in the performance 
of duties under this chapter.''.

SEC. 11. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated for each fiscal year such 
sums as may be necessary to carry out chapter 44 of title 28, United 
States Code, as amended by this Act.

SEC. 12. CONFORMING AMENDMENTS.

    (a) Limitation on Money Damages.--Section 901 of the Judicial 
Improvements and Access to Justice Act (28 U.S.C. 652 note), is amended 
by striking subsection (c).
    (b) Other Conforming Amendments.--(1) The chapter heading for 
chapter 44 of title 28, United States Code, is amended to read as 
follows:

            ``CHAPTER 44--ALTERNATIVE DISPUTE RESOLUTION''.

    (2) The table of contents for chapter 44 of title 28, United States 
Code, is amended to read as follows:
``Sec.
``651.  Authorization of alternative dispute resolution.
``652.  Jurisdiction.
``653.  Neutrals.
``654.  Arbitration.
``655.  Arbitrators.
``656.  Subpoenas.
``657.  Arbitration award and judgment.
``658.  Compensation of arbitrators and neutrals.''.
    (3) The item relating to chapter 44 in the table of chapters for 
Part III of title 28, United States Code, is amended to read as 
follows:

``44. Alternative Dispute Resolution..............................651''.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.
Alternative Dispute Resolution Act of 1998 - Replaces Federal judicial code arbitration provisions with alternative dispute resolution (ADR) provisions. 
Directs each U.S. district court to: (1) authorize the use of ADR processes in all civil actions; (2) devise and implement its own ADR program to encourage and promote the use of ADR in its district; (3) examine the effectiveness of existing ADR programs and adopt appropriate improvements; and (4) retain or designate an employee or judicial officer who is knowledgeable in ADR practices and processes to implement, administer, oversee, and evaluate the court's ADR program. 
Authorizes the Federal Judicial Center and the Administrative Office of the United States Courts to assist the district courts in the establishment and improvement of ADR programs. 
(Sec. 4) Directs each district court to:  (1) require that litigants in all civil cases consider the use of an ADR process at an appropriate stage in the litigation; and (2) provide litigants in all civil cases with at least one ADR process.  Allows any district court that elects to require the use of ADR in certain cases to do so only with respect to mediation, early neutral evaluation, and, if the parties consent, arbitration. Authorizes each court to exempt from requirements of this section cases in which arbitration would not be appropriate.  Requires each court to provide for the confidentiality of ADR processes and to prohibit disclosure of confidential dispute resolution communications. 
(Sec. 5) Requires each district court that authorizes the use of ADR processes to adopt appropriate processes for making neutrals available for use by the parties for each category of process offered.  Sets forth provisions regarding neutral selection, qualifications, and training. 
(Sec. 6) Authorizes a district court to allow the referral to arbitration of any civil action pending before it, when the parties consent, except where:  (1) the action is based on an alleged violation of a right secured by the Constitution; (2) jurisdiction is based on Federal civil rights and elective franchise provisions; or (3) the relief sought consists of money damages exceeding $150,000. Directs the district court to establish interim procedures to ensure that consent to arbitration is freely and knowingly obtained and that no party or attorney is prejudiced for refusing to participate in arbitration. 
(Sec. 7) Empowers ADR arbitrators to:  (1) conduct arbitration hearings; (2) administer oaths and affirmations; and (3) make awards. Requires district courts to establish standards for arbitrator certification.   Entitles arbitrators in an ADR program to the immunities and protections that the law accords to persons serving in a quasi-judicial capacity. 
(Sec. 8) Makes Federal Rule of Civil Procedure 45 (relating to subpoenas) applicable to subpoenas for the attendance of witnesses and the production of documentary evidence at an arbitration hearing. 
(Sec. 9) Sets forth provisions regarding:  (1) filing procedures and the effect of an arbitration award and judgment; (2) the sealing of such award until the court enters its final judgment or the action has otherwise terminated; and (3) filing deadlines, restoration to the court docket, and the exclusion of evidence of arbitration with respect to a trial de novo of arbitration awards. 
(Sec. 10) Directs the district court to establish the amount of compensation that each neutral shall receive for services rendered. 
(Sec. 11) Authorizes appropriations.
Alternative Dispute Resolution Act of 1998