# United Stat es Court of Appeals For the First C ircuit

No. 02-1339 IN RE ATLANTIC PIPE CORPORATION, Petitioner.

ON PETITION FOR A WRIT OF MANDAMUS TO THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO [Hon. Jaime Pieras, Jr., Senior U.S. District Judge ]

Before Boudin, Chief Judge , Selya, Circuit Judge , and Greenberg,* Senior Circuit Judge .

Fernando J. Fornaris , with whom Cancio, Nadal, Rivera, Diaz & Berríos was on brief, for petitioner. Jose L. Gonzalez-Castañer , with whom Gonzalez-Castañer, Morales & Guzman , Hector Saldaña Egozcue , and Saldaña, SaldañaEgozcue & Vallecillo, PSC wer e o n brief, for respondents United States Fidelity & Guaranty Co. and United States Surety and Indemnity Co. Carlos A. Rodríguez Vidal , with whom Jessica Hernández Sierra and Goldman, Antonetti & Cordova, P.S.C. were on brief, for respondent Thames Water International, Ltd. Salvador Anton ett i Zequeira , with whom Luis A. OliverFraticelli and Fiddler, Gonzalez & Rodriguez LLP were on brief, for respondents Thames-Dick Superaqueduct Partners and Dick Corp. Diane K. Kanca for respondent Zurich Ins. Co.

September 18, 2002

_____________ *Of the Third Circuit, sitting by designation.1 Altho ugh th e petition seeks the issuance of a writ of

mandamus, the relief sought is more in the nature of a writ of prohibition. Because the two writs have much in common — one is merelythe obverse of the other — we follow past practice and make no distinction between them. See , e.g. , UnitedStates v. Horn , 29 F.3d 754, 769 n.18 (1st Cir. 1994). -2- SELYA, CircuitJudge . This mandamus proceeding 1 requires

us to resolve an issue of importance to judges and practitioners alike: Does a district court possess the authority to com pel a n unwilling party to participate in, and share the costs of, nonbinding mediation conducted by a private mediator? We hold that a court may order mandatory mediation pursuant to an explicit statutoryprovision or local rule. We further hold that where, as here, no such authorizing medium exists, a cou rt nonetheless may order mandatory mediation through the use of its inherent powers as long as the case is an appropriate one and the o rder cont ains adequate safeguards. Because th e m ediation order here at issue lacks such safeguards (although it does not fall far short), we vacate it and remand the matter for further proceedings. I. BACKGROUND

In January 1996, Thames-Dick Superaqueduct Partners (Thames-Dick) entered into a master agreement with the Puerto Rico Aqueduct and Sewer Authority (PRASA) to construct, operate, and maint ai n the North Coast Superaqueduct Project (the Project). Thames-Dick granted subcontracts for various portions of the work, including a subcontract for construction management to Dick Corp.-3-

of Pu erto Rico (Dick-PR), a subcontract for the operation an d mainte nanc e of the Project to Thames Water International, Ltd. (Thames Water), and a subcontract for the fabrication of pipe to Atlantic Pipe Corp. (APC). Afte r the Proj ect had been built, a segment of the pipeline burs t. Thames-Dick incurred significant costs in repairing the damage. Not surprisingly, it sought to

recover those costs from other parties. In response, one of PRASA' s i nsurers filed a declaratory judgment action in a local court to determine whether Thames-Dick's claims were covered under its policy. The litigation ballooned, soon involving a number of parties and a myriad of issues above and beyond insurance coverage.

On April 25, 2001, the hostilities spilled ove r in to federal court. Two entities beneficially interested in the master agreement — CPA Group International and Chiang, Patel & Yerby, Inc. (collectively CPA) — sued Thames-Dick, Dick-PR, Thames Water, and various insurers in the United States District Cou rt for the District of Puerto Rico, seeki ng remuneration for consulting services rendered in connection with repairs to the Project. A googol of claims, counterclaims, cross-claims, and third-party complaints followed. Some of these were brought against APC (the petitioner here) . To complicate matters, one of the defendants movedto dismiss on grounds that, inter alia, (1) CPA had failed to join an indispensable party whose presence would destroy diversity-4-

jurisdiction, and (2) the existence of the parallel proceeding in the local court counseled in favor of abstention.

While this motion was pending before the district court, Th ame s-Dick asked that the case be referred to mediation and suggestedProfessor Eric Green as a suitable mediator. The district court granted the motion over APC's objection and ordered non-binding mediation to proceed before Professor Green. The court pronouncedmediation likely to conserve judicial resources; directed all parties to undertake mediation in good faith; stayed discov ery pending completion of the mediation; and declared that participation in the mediation would not prejudice the parties' positions vis-à-vis the pending mot ion or the litigation as a whole. The court also stated that if mediation failed to produce a global settlement, the case would proceed to trial.

After moving unsuccessfully for reconsideration of the mediation order, APC sought relief by way of mandamus. Its petition alleged that the district court did not have the authority to require mediation (especially in light of unresolved questions

as to the court's subject-matter jurisdiction) and, in all events, couldnot force APC to pay a share of the expenses of the mediation. We invited the other parties and the district judge to respond. See Fed. R. App. P. 21(b)(4)-(5). Several entities (including Thames-Dick, Dick-P.R., a nd T hames Water) opposed the petitio n. Two others (third-party defendants United States-5-

Fidelity& Guaranty Company and United Surety and Indemnity Company) filed a brief in support of APC. We assigned the case to the oral argument calendar and stayed the co ntem plated mediation pending our review.

Prior to argument in this court, two notable developments occurred. First, the district court considere d and rejected the challenges to its exercise of jurisdiction. Second, APC rejected an offer by Thames-Dick to pay its share of the mediator's fees. II. JURISDICTION

In an effort to shut off further debate, the respondents asseverate that mandamus is improper becau se APC will not suffer irrep arable harm in the absence of such relief. They res t thi s asseveration on the notion that "[m]andamus is ordinarily appropriate [only] in those rare cases in which the issuance (or nonissuance) of an order presents a question anent the limits of judicial power, poses some special risk of irreparable harm to the appellant, and is palpably erroneous." United States v. Horn , 29 F.3d754, 769 (1st Cir. 1994). The problem, however, is that these limitations typically apply only to supervisorymandamus. Id. at 769 & n.19. In the tiny class of cases in which advisory mandamus is appropriate, irreparable harm need not be shown. Id. at 769-70.

We believe that this case is fit for advisory mandamus because the extent of a trial court's power to order mandatory mediation presents a systemicallyimportant issue as to which this-6-

court has not yet spoken. See In re Prov. Journal Co. , 293 F.3d 1, 9 (1st Cir . 2002) (discussing criteria for advisory mandamus). Moreover, that issue is capable of significant repetition prior to ef fectiv e review. See Jennifer O'Hearne, Comment, Compelled Participation in Innovative Pretrial Proceedings , 84 Nw. U. L. Rev. 290, 317 (1989) (noting that, as a practical matter, lawyers often

are unable to challenge pretrial innovations even when they may be invalid). That fact militates in favor of advisory mandamus. See Horn , 29 F.3d at 770. We conclude, therefore, that invoking advisorymandamus is prudent under the circumstances. Consequently, the existence vel non of irreparable harm is a nonissue. We turn, then, to the merits. III. THE MERITS

There are four potential s ourc es of judicial authority for ordering mand atory non-binding mediation of pending cases, namely, (a) the court's local rules, (b) an applicable statute, (c) the Federal Rules of Civil Procedure, and (d) the court's inherent powers. Because the district court did not identify the basis of its assumed authority, we consider each of these sources. A. The Local Rules . Adistrict court's local rules may provide an appropriate

so urce of authority for ordering parties to participate in mediation. See Rhea v. Massey-Ferguson, Inc. , 767 F.2d 266, 268-69 (6th Cir. 1985) (per curiam). In Puerto Rico, however, the local-7-

rules contain only a single reference to any form of alternative dispute resolution (ADR). That reference is embodied in the district court's Amended Civil Justice Expense and Delay Reduction Plan (CJR Plan). See D.P.R. R. app. III.

The district court adopted the CJR Plan on June 14, 1993, in response to the directive contained in the Civil Justice Reform Act of 1990 (CJRA), 28 U.S.C. §§ 471-482. Rule V of the CJR Plan states: Pursuant to 28 U.S.C. § 473(b)(4), this

Court shall adopt a method of Alternative Dispute Resolution ("ADR") through mediation by a judicial officer.

Such a program would allow litigants to obtain froman i mpartial third party — the judicial officer as mediator — a flexible nonbinding, dispute resolution process to facilitate negotiations among the parties to help them reach settlement. D.P.R. R. app. III (R. V.). In addition to specifying who may act

as a mediator, Rule Valso limns the proper procedure for mediation sessions and assures confidentiality. See id.

The respondents concede that the mediation order in this

case falls outside the boundaries of the mediation program envisionedby Rule V. It does so most noticeably because it involves mediation before a private mediator, not a j udic ial officer. Seizing upon this discrepancy, APC argues that the local rules limit the district court in this respect, and that the court exceededits authority thereunder by issuing a non-confo rm ing mediation order (i.e., one that contemplates the intervention of a2 This holding renders it unnecessary for us to discuss the

respondents' alternate contention that th e CJR Plan is a dead letter because the legislation th at pro mpted its enactment — the CJRA— expired in 1997. See , e.g. , Carl Tobias, Did the Civil Justice Reform Act of 1990 Actually Expire? , 31 U. Mich. J.L. Reform887, 892 (1998) (exploring the uncertainty regarding whether the CJRA expired and whether local plans adopted pursuant to it are still effective). By like token, this holding renders moot the respondents' claim that the district court could disregard Appendix III even if an ADR program were in force. See D.P.R. R. 105 ("When a judge of this court issues any order in a specific case which is not consistent with these rules, such order shall constitute a suspension of these rules for such case and only to the extent that it is inconsistent therewith."). Accordingly, we take no view of the meaning or validity of Local Rule 105. -8- private mediator). The respondents counter by arguing that the rule does not bind the district court because, notwithstanding the unambiguous promise of the C JR Plan (which declares that the district court "shall adopt a method of Alternative Dispute Resolution"), no such program has been adopted to date.

This is a powerful argument. APC does not contradict the resp ondent s' assurance that the relevant portion of the CJR Plan has remained unimplemented, andwe take judicial notice that there is no formal, ongoing ADR program in the Puerto Rico federal district court. Because that is so, we conclude that the District of Puer to Rico has no local rule in force that dictates t h e permissible characteristics of mediation orders. Consequently, APC's argument founders. 2 B. The ADR Act .

There is only one potential source of statutory authority for ordering mandatory non-binding mediation here: the Alternative-9-

Dispute Resolution Act of 1998 (ADR Act), 28 U.S.C. §§ 651-658. Congress pas sedthe ADR Act to promote the utilization of alternative dispute resolution methods in the federal courts and to set appropriate guidelines for their use. The Act lists mediation

as an approp riate AD R process. Id. § 651(a). Moreover, it sanctions the participation of "professional neutrals fr om th e private sector" as med iato rs. Id. § 653(b). Finally, the Act requires district courts to obtain litigants' consent only when they order arbitration, id. § 652(a), not when they order the use of other ADR mechanisms (such as non-binding mediation).

Despite the broad sweep of these provisions, the Act is quite clear that some form of the ADR procedures it endorses must be adopted in each judicial district by local rule. See id. § 651(b) (directing each district court to "devise and implement its own alternative dispute resolution program, by local rule adopted under [28 U.S.C.] section 2071(a), to encourage and promote the use of alternative dispute r eso lution in its district"). In the absence of such local rules, the ADRAct itself does not authorize anyspecific court to use a particular ADR mechanism. Because the District of Puerto Rico has not yet complied with the Act's mandate, the mediation order here at issue cannot be justified under the ADR Act.

The resp onde nts essay an end run around this lacuna: theycontend (borrowing a phrase from the court below) that the-10-

"spirit" of the ADR Act authorizes the mediation order because the Act was intended to pr omot e experimentation with ADR techniques. We rej ect this attempt to press the ADR Act into service b y indirection.

Although the ADR Act was designed to promote the use of ADRtechni que s, Congress chose a very well-defined path: it grantedeach judicial district, rather than each individual judge, the authority to craft an appropriate ADRprogram. In other words, Congress permitted experimentation, but only within the disciplining format of district-wi de local rules adopted with notice and a full opportunity for public comment. See 28 U.S.C. § 2071(b). To say that the Act authorized ea ch distric t judge to disregarda district-wide ADR plan (or the absence of one) and fashion innovative procedures for use in specific cases is simply too much of a stretch.

We add, however, that although the respondents cannot use the ADR Act as a justification, neither can APC use it as a nullification. Noting that the Act requires the adoption of local rules establishing a formal ADR program, APC equates the absence of

su ch rules with the absence of power to employ an ADR procedur e (say, mediation) in a specific case. But that is wishful thinking: if one assumes that district judges possessed the power to require mediation prior to the passage of the ADR Act, there is nothing in the Act that strips them of that power. After all, even the-11-

adoption of a federal procedural rule does not implicitlyabrogate

a district court's inherent power to act merely because the rule touches upon the same subject matter. See Chambers v. Nasco, Inc. , 501 U.S. 32, 42-43 (1991) (rejecting the argument that the adoption of various provisions of the C ivil Rules eliminated the district court's inherent power to impose other sanctions); Linkv. Wabash R.R. , 370 U.S. 626, 630 (1963) (explaining that neither the permissive language of Fed. R. Civ. P. 41(b) nor the policy behind it justified a conclusion that it was meant to limit the district courts' inherent power to dismiss a case for want of prosecution).

The case before us is analog ous to Chambers and Link . Even though Congress may cabin the dis trict courts' inherent powers, its intention to do so must be clear and unmistakable. See Weinberger v. Romero-Barcelo , 456 U.S. 305, 313 (1982). Not so here: we know of nothing in either the ADR Act or the pol icies that undergirdit that can be said to restrict the district courts' authorityto engage in the case-by-case deployment of ADR procedures. Hence, we conclude that where, as here, there are no implementing local rules, the AD R Ac t neither authorizes nor prohibits the entry of a mandatory mediation order. C. The Civil Rules . The respondents next argue that the di strict court possessedthe authority to req uire mediation by virtue of the Federal Rules of Civil Procedure. They concentrate their attention3 We think it is pertinent here to quote the advisory

committee's note:

The rule acknowledges the presence of statutes a n dlocal rules or plans that may authorize use of some [ADR] proce dures even when not agreed to by the parties. The rule does not attempt to resolve questions as to the extent a court would be authorized to require suc h proceedings as an exercise of its inherent powers. Fed. R. Civ. P. 16, advisory committee's note (1993 Amendment) (citations omitted).

4 The cases that the respondents cite for the proposition that Rule 16 sanctions mandatory ADR procedures even in the absence of an enabling statute or local rule are inapposite. All of t hem predate the 1993 amendments, which added the pertinent language to Rule 16. See , e.g. , Fed. Reserve Bank v. Carey-Canada, Inc. , 123 F.R.D. 603, 606 (D. Minn. 1988); Arabian Am. Oil Co. v. Scarfone , 119 F.R.D. 448, 448-49 (M.D. Fla. 1988). -12- on Fed. R. Civ. P. 16, which states in pertinent part that "the court may take appropriate act ion[] wit h respect to . . . (9) settlement and the use of special procedures to assist in resolving the dispute when authorized by statute or local rule . . . ." Fed. R. Civ. P. 16(c)(9). But the words "when authorized by statute or local rule" are a frank limita tion o n the district courts' authorityto order mediation thereunder, 3 and we must adhere to that circumscription. See Schla genhauf v. Holder , 379 U.S. 104, 121 (1964) (explaining that the Civil Rules "should not be expanded bydisregarding plainlyexpressed limitations"). Because there is

no statute or local rule authorizing mandatory private mediation in the District of Puerto Rico, see su pra Pa rts III(A)-(B), Rule 16(c)(9) does not assist the respondents' cause. 4-13- D. Inherent Powers . Even apa rt fro m positive law, district courts have substantial inherent power to manage and control their calendars. See Link , 370 U.S. at 630-31; see generally Brockton Sav. Bank v. Peat, Marwick, Mitchell & Co. , 771 F.2d 5, 11 (1st Cir. 1985) (ex plaining that "the rules of civil procedure do not comple tel y describe and limit the power of district courts"). This inherent power takes many forms. See Fed. R. Civ. P. 83(b) (providing that judges may regulate practice in any manner consistent with federal law and applicable rules). By way of illustration, a district court may use its inherent power to compel represented clients to attendpretrial settlement conferences, even though such a practice is not specifically authorized in the Civil Rules. See Heileman Brewing Co. v. Joseph Oat Corp. , 871 F.2d 648, 650 (7th Cir. 1989) (en banc). Of course, a district court's inherent powers are not infinite. There are at least four limiting principles. First, inherent powers must be used in a way reasonably suited to the enhancement of the court's processes, including the orderly and expeditious disposition of pending cases. Coyan te v. P.R. Ports Auth. , 105 F.3d 17, 23 (1st Cir. 1997). Second, inherent powers cannot be exercised in a manner that contradicts an applicable statute or rule. Chambers , 501 U.S. at 47. Third , the use o f inherent powers must comport with procedural fairness. Id. at 50.5 A summ ary jury trial is an ADR technique in which the

o pposing attorneys present their case, in abbreviated form , to a mock jury, which proceeds to render a non-binding verdict. See In -14- And, finally, inherent powers "must be exercised with restraint and discretion." Id. at 44.

At one time, the inherent power of judges to compel unwilling parties to participate in ADRprocedures was a hot-button issue for legal scholars. Compare , e.g. , O'Hearne, supra at 320 (arguing that in herent power should not be used to compel participation in pretrial settlement proceedings), with Lucille M. Ponte, Pu tting Mandatory Summary Jury Trial Back on the Docket: Recommendations on the Exercise of Judicial Authority , 63 Fordham L. Rev. 1069, 1094 (1995) (urging the opposite conclusion). Although m any f ederal district courts have forestalled further debate by adopting local rules that au thor ize specific ADR proc edur es and outlaw others, e.g. , D.N.H. R. 53.1 (permitting mandatorymediation); D. Me. R . 83 .11 (permitting only voluntary mediation); D. Mass. R. 16.4 (permitting mandatory summary jury trials but only voluntary mediation), the District of Puerto Rico is n ot among them. Thus, we have no choice but to add ress th e question head-on.

We begin our inquiry by examining the case law. In Strandell v. Jackson County , 838 F.2d 884 (7th Cir. 1987), the Seventh Circuit held that a district court does not possess inherent power to compel participation in a summary jury trial. 5re NLO, Inc. , 5 F.3d 154, 156 (6th Cir. 1993); see generallyThomas

D. Lambros, The Summary Jury Trial Report to the Judi cia l Conference of the United States , 103 F.R.D. 461 (1984). -15- In the court's view, Fed. R. Civ. P. 16 occupied the field and preventeda district court from forcing "an unwilling litigant [to] be sidetracked from the normal course of litigation." Id. at 887. But the group that spearheaded the subsequent revision of Rule 16 explicitly rejected that interpretation. See Fed. R. Civ. P. 16, advisorycommittee' s note (1993 Amendment) ("The [amended] rule does not attempt to re solv e questions as to the extent a court wouldbe authorized to require [ADR] proceedings as an exercise of its inherent powers."). Thus, we do not find Strandell persuasive on this point.

The Strandell court also expressed concern that summary jurytrials would undermine traditional dis c overy and privilege rules byrequi ring certain disclosures prior to an actual trial. 838 F.2d at 888. We find this concern unwarranted. Because a summaryjurytrial (like a non-binding mediation) does not require anydisclosures beyond what would be requir ed in the ordinary

course of discovery, its principal disadvantage to the litigants is that it may prevent themfrom saving surprises for the time of trial. Since trial by ambush is no longer in vogue, that interest does not deserve protection. See Fed. Reserve Bank v. CareyCanada, Inc. , 123 F.R.D. 603, 606 (D. Minn. 1988).-16- Relying on policy arguments, the Sixth Circuit also has foundthat district courts do not possess inherent power to compel participation in summary jury trials. See In re NLO, Inc. , 5 F.3d 154, 157-58 (6th Cir. 1993). The court thought the value of a summary jury trial questionable when parties do not engage in the process voluntarily, and it worr ied that "too broad an inte rpre tation of the federal courts' inherent power to regulate their procedure . . . encourages judicial high-handedness . . . ." Id. at 158 (citation and internal quotation marks omitted).

The concerns articul atedby these two respected courts plainlyapply to m and atory mediation orders. When mediation is forcedupon unwilling litigants, it stand s to reason that the likelihoodof settlement is diminished. Requiring parties to invest substantial amounts of tim e and money in mediation under such circumstances may well be inefficient. Cf. Richard A. Posner, The Summary Jury Tri al and Other Methods of Alternative Dispute Resolution: Some Cautionary Observations , 53 U. Chi. L. Rev. 366, 369-72 (1986) (offering a model to evaluate ADR techniques in terms of their capacity to encourage settlements).

The fact remains, however, that none of t hese considerations establishes that mandatory mediation is always inappropriate. The re may well be specific cases in which such a pro toco l is likely to conserve judicial resources without significantlyburdening the objectors' rights to a full, fair, and-17-

speedytrial. Much depends on the idiosyncracies of the particular case and the details of the mediation order.

In some cases, a court may be warranted in believing that compulsory mediation could yield significant benefits even if one

or more parties object. Afte r all, a party may resist mediation simplyout of unfamiliarity with the process or out of fear that a willingness to submit would be perceived as a lack of confidence in her legal position. See Campbell C. Hutchinson, The Case for MandatoryMediation , 42 Loy. L. Rev. 85, 89-90 (1996). In such an instance, the party's initial reservations are likely to evaporate

as the mediation progresses, and negotiations couldwell produce a beneficial outcome, at reduced cost and greater speed, than would

a tri al. While the possibility that parties will fail to reach agreement remains ever present, the boon of settlement can be worth the risk. This is particular ly tr ue in complex cases involving multiple claims and parties. The fair and expeditious resolution of such cases often is helped along by creative solutions — solutions that simply are not available in the binary framework of traditional adversarial litigation. Mediation with the assistance of a skilled facilitator gives parties an opportunity to explore a much wider range of options, including those that go beyond conventional zero-sum resolutions. Mindf ul of these potential advantages, we hold that it is within a district court's inherent-18-

power to order non-c ons ensual mediation in those cases in which that step seems reasonably likely to serve the interests of justice. Cf . Reillyv. United States , 863 F .2d 1 49, 156-57 (1st Cir. 1988) (finding that distric t c ourts have inherent power to appoint technical advisors in especially complex cases). E. The Mediation Order . Our determination that the district courts have inherent power to refer cases to non-binding mediation is made with a

reco gnition that any such order must be crafted in a manner th a t preserves procedural fai rness and shields objecting parties from undue burdens. We thus turn to the specifics of the mediation order entered in this case. As with any exercise of a district court's inherent powers, we review the entry of that order for abuse of discretion. See Chambers , 501 U.S. at 50; Re illy , 863 F.2d at 156.

As an initial matter, we agree with the lower court that the complexity of th is cas e militates in favor of ordering mediation. At last count, the suit involves twelve parties,

asser ting a welter of claims, counterclaims, cross-claims, and third-party claims predicated on a wide variety of theories. The pendencyof nearly parallel litigation in the Puerto Rican courts, which features a slightly different cast of characters and claims that are related to but not completely congruent with those assertedhere, f urth er complicates the matter. Untangling the6 Although we take no view of this aspect of APC's argument, we

note that when a jurisdictional question involves disputed facts, the district court sometimes "may defer resolution of the jurisdictional issue until the time of trial." Valentin v. Hosp. Bella Vista , 254 F.3d 358, 363 n.3 (1st Cir. 2001). How this -19- intric ate web of relationships among the parties, along with the difficult and fact-intensive arguments made by each, will be timeconsuming and will impose significant costs on the parties and the court. Against this backdrop, mediation holds out the dual prospect of adv antaging the litigants and conserving scarce judicial resources.

In an effort to parry this thrust, APC raises a series of objections. Its threshold claim is that the district court erred in ordering mediation before resolving a pending motion to dismiss for lack of subject-matter jurisdiction (or, alte rnatively, to abstain). See , e.g. , BouchardTransp. Co. v. Fla. Dep't of Envtl. Prot. , 91 F.3d 1445, 1448-49 (11th Cir. 1996) (vacating a mediation order and directing the lower court first to consider the objecting party's assertion of Eleventh Amendment immunity).

Given what has transpired, this argument is fruitless. While this proce eding was pending, the district court denied the motion in question and confirmed the existence of its subjectmatter jurisdiction. See CPA Group Int'l, Inc. v. Am. Int'l Ins. Co. , No. 01-1483, slip op. at 16-25 (D.P.R. May 23, 2002). Thus, even if it were error to enter the mediation order before passing upon the motion to dismiss, 6 the error was harmless: it would beproposition affects a trial court's ability to issue interim orders

designedto move litigation forward while it ponders a challenge to its jurisdiction is a matter that we leave for another day. -20- an empty exercise to vacate the mediation order on this ground when the lower court has already rejected the challenges to its exercise of jurisdiction. See , e.g. , Gibbs v. Buck , 307 U.S. 66, 78 (1939); Aoude v. Mobil Oil Corp. , 862 F.2d 890, 895 (1st Cir. 1988).

Next, APC posits that the appointmen t of a private mediator proposed by one of the parties is per se i mproper (and, thus, invalidates the order). We do not agree. The district court has inherent power to "appoint persons unconnected with the court to aid judges in the performance of specific judicial duties." Ex parte Peterson , 253 U.S. 300, 312 (1920). In the context of nonbinding mediation, the mediator does not decide the merits of the

case and has no authority to coerce settleme nt. Thus, in the absence of a contrary statute or rule, it is perfectly acceptable for the district court to appoint a qualified and neutral private partyas a mediator. The mere fact that the mediator was proposed byone of the parties is insufficient to establish bias in favor of that party. Cf. TechSearch, L.L.C. v. Intel Corp. , 286 F.3d 1360, 1379 n.3 (Fed. Cir. 2002) (noting that technical advisors typically wouldbe selected from a list of candidates submitted by the parties). We hasten to add that the litigants are free to challenge the qualifications or neutrality of any suggested mediator (whether7 We say "not ideal" because, in an ideal worl d, it w ould be

pref era ble for the district court, before naming a mediator, to solicit the names of potential nominees from all parties and to provide an opportunity for the parties to comment upon each others' proposed nominees. -21- or not nominated by a party to the case). APC, for example, had a full opportunity to present its views about the suggested mediator both in i ts opposition to the motion for mediation and in its motion for reconsideration of the mediation order. Despite these opportunities, APC offered no convincing reason to spark a belief that Professor Green, a nationally recognized med iat or with si gn ificant experience in sprawling cases, is an unacceptable choice. When a court enters a mediation order, it necessarily makes an independent determination that the mediator it appoints is both qualified and neutral. Because the court made that implicit determination here in a manner that was procedurally fair (if not ideal), we find no abuse of discretion in its selection of Professor Green. 7

APC also grouses that it should not be forced to share the costs of an unwanted mediation. We have held, h oweve r, that courts have the power under Fed. R. Civ. P. 26(f) to issue pretrial cost-sharing orders in complex litigation. See In re San Juan Dupont Plaza Hotel Fire Litig. , 994 F.2d956, 965 (1st Cir. 1993). Given the difficulties facing trial courts in cases involving multiple parties and multiple claims, we are hesitant to limit that power to the tradi tional discovery context. See id. This is8 We do not assign significant weight to Thames-Dick's belated

offer to pay APC's share of the mediator's fee. There are other expenses involved, and there is too much of a risk th at "free rider" status will itself breed problems. -22- especiallytrue in complicated cases, where the potential value of mediation lies not only in promoting settlement but also in clarifying the issues remaining for trial.

The short of the matter is that, witho ut default costsharing rules, the use of valuable ADR techniques (like mediation) becomes hostage to the parties' ability to agree on the concomitant financial arrangements. This means that the district court's inherent power to order private mediation in appro pria te cases wouldbe rendered nugatory absent the corollary power to order the sharing of reasonable mediation costs. To avoid this pitfall, we holdthat the district court, in an appropriate case, is empowered to order the sharing of reasonable costs and expen ses as sociated with mandatory non-binding mediation.

The remainde r of APC's arguments are not so easily dispatched. Even when generically appropriate, a mediation order must contain procedural and substantive safeguards to en sure fairness to all parties involved. The mediation order in this case does not quite meet that test. In particular, the order does not set limits on the duration of the mediation or the expense associated therewith. 8-23- We need not wax longiloquent. As entered, the order simplyrequires the parties to mediate; it does not set forth either a timetable for the mediation or a cap on the fees that the mediator may charge. The figures that have been bandied about in the briefs — $900 per hour or $9,000 per mediation day — are quite large and should not be left to the mediator's whim . Relatedly, because the mediator is to be paid an hourly rate, the court should have set an outside limit on the number of hours to be devoted to mediation. Equally as important, it is trite but often true that justice delayed is justice denied. An unsuccessful mediation will postpone the ultimate resolution of the case — indeed, the district court has stayed all discovery pen din g the completion of the mediation — and, thus, prolong the litigation. For these reasons, the district court should have set a definite time frame for the mediation. The respondents suggest that the district court did not need to articulate any limitations in its mediation order because the mediation process will remain under the district court ' s ultimate supervision; the court retains the ability to curtail any excessive expenditures of time or money; and a dissatisfied party

c an easily return to the court at any time. While this might b e enough of a safeguard in many instances, the instant litigation is sufficientlycomplicated and the mediation efforts are likely to be9 We do not mean that a mediation order in such a case must be

etchedin stone. The mediator and the parties r emain free , for goodcause shown, to ask the district court to extend or modify the original order. -24- sufficiently expensive that, here, reasonable time limits and fee constraints, set in advance, are appropriate. 9

Acourt intent on ordering non-consensual mediation shouldtake other precautions as well. For example, the court shouldmake it clear (as did the able district court in this case) that participation in mediation will not be ta ken a s a waiver of

an ylitigation position. The important point is that th e protections we have mentioned are not i ntended to comprise an exhaustive list, but, rather, to illustrate that when a district court orders a party to participate in mediation, it should take

care to assuage legitimate concerns about the possible negative consequences of such an order.

To recapitulate, we rule that a mandatory mediation order issuedunder the district court's inherent power is valid in an appropriate case. We also rule that this is an appropriate case. We hold, however, that t he dis trict court's failure to set reasonable limits on the duration of the mediation and on the mediator's fees dooms the decree. IV. CONCLUSION

We admire the district court's pragmatic and innovative approach to this massive litigation. Our core holding — that-25-

ordering mandatory m edi ation is a proper exercise of a district court's inherent power, subject, however, to a variety of terms and conditions — validates that approach. We are mindful that this ho lding is in tension with the opinions of the Sixth and Seventh Circuits in NLO and Strandell , respectively, but we believe it is justified by t he important goal of promoting flexibility and creative problem-solving in the handling of complex litigation.

That said, the need of the district judge in this case to construct his own mediation regime ad hoc underscores the greater needof the district court as an institution to adopt an ADR programand memorialize it in its local rules. In the ADR Act, Congress directed that "[e]ach United States district court shall authorize, by local rule u nder section 2071(a), the use of alternative dispute resolution processes in all civil actions . .

. ." 28 U.S.C. § 651( b). While Congress did not set a firm deadline for compliance with this directive, the s tatu te was enactedfour years ago. This om issio n having been noted, we are confident that the district court will move expedientl y to b ring the District of Puerto Rico into compliance.

We need go no further. For the reasons set forth above,

we vacate the d istrict court's mediation order and remand for further proceedings consistent with this opinion. The district court is free to order mediation if it co ntinues to believe that-26-

such a course is advisable or, in the alternative, to proceed with discovery and trial.

Vacated and remanded . Costs shall be taxed in favor of the petitioner .