IIA
105TH CONGRESS
2D SESSION
H. R. 3528
IN THE SENATE OF THE UNITED STATES
APRIL 22, 1998
Received; read twice and referred to the Committee on the Judiciary
AN ACT
To amend title 28, United States Code, with respect to
the use of alternative dispute resolution processes in
United States district courts, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
HR 3528 RFS
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Alternative Dispute
Resolution Act of 1998’’.
SEC. 2. ALTERNATIVE DISPUTE RESOLUTION PROCESSES
TO 
BE 
AUTHORIZED 
IN 
ALL 
DISTRICT
COURTS.
Section 651 of title 28, United States Code, is
amended to read as follows:
‘‘§ 651. Authorization of alternative dispute resolu-
tion
‘‘(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 proc-
esses such as early neutral evaluation, mediation, mini-
trial, 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(b), the use of alternative dispute resolution proc-
esses 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 de-
vise and implement its own alternative dispute resolution
HR 3528 RFS
program, by local rule adopted under section 2071(b), to
encourage and promote the use of alternative dispute reso-
lution 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 enact-
ment 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 con-
sistent 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 pro-
gram. 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 Cen-
ter and the Administrative Office of the United States
Courts are authorized to assist the district courts in the
HR 3528 RFS
establishment and improvement of alternative dispute res-
olution programs by identifying particular practices em-
ployed in successful programs and providing additional as-
sistance as needed and appropriate.’’.
SEC. 3. JURISDICTION.
Section 652 of title 28, United States Code, is
amended to read as follows:
‘‘§ 652. Jurisdiction
‘‘(a) CONSIDERATION
OF ALTERNATIVE DISPUTE
RESOLUTION IN APPROPRIATE CASES.—Notwithstanding
any provision of law to the contrary and except as pro-
vided in subsections (b) and (c), each district court shall,
by local rule adopted under section 2071(b), 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 cer-
tain 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
HR 3528 RFS
SEC. 5. ACTIONS REFERRED TO ARBITRATION.
Section 654 of title 28, United States Code, is
amended to read as follows:
‘‘§ 654. Arbitration
‘‘(a) REFERRAL OF ACTIONS TO ARBITRATION.—
Notwithstanding any provision of law to the contrary and
except as provided in subsections (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 (includ-
ing any adversary proceeding in bankruptcy) pending be-
fore it, 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 dam-
ages 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 dis-
trict court shall, by local rule adopted under section
2071(b), establish procedures to ensure that any civil ac-
tion in which arbitration by consent is allowed under sub-
section (a)—
HR 3528 RFS
‘‘(1) consent to arbitration is freely and know-
ingly obtained; and
‘‘(2) no party or attorney is prejudiced for re-
fusing 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 section
is deemed to affect any action in which arbitration is con-
ducted pursuant to section 906 of the Judicial Improve-
ments and Access to Justice Act (Public Law 100–102),
as in effect prior to the date of its repeal.’’.
SEC. 6. ARBITRATORS.
Section 655 of title 28, United States Code, is
amended to read as follows:
‘‘§ 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.
HR 3528 RFS
‘‘(b) STANDARDS FOR CERTIFICATION.—Each dis-
trict court that authorizes arbitration shall establish
standards for the certification of arbitrators and shall cer-
tify arbitrators to perform services in accordance with
such standards and this chapter. The standards shall in-
clude provisions requiring that any arbitrator—
‘‘(1) shall take the oath or affirmation de-
scribed in section 453; and
‘‘(2) shall be subject to the disqualification
rules under section 455.
‘‘(c) IMMUNITY.—All individuals serving as arbitra-
tors 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. 7. SUBPOENAS.
Section 656 of title 28, United States Code, is
amended to read as follows:
‘‘§ 656. Subpoenas
‘‘Rule 45 of the Federal Rules of Civil Procedure (re-
lating to subpoenas) applies to subpoenas for the attend-
ance of witnesses and the production of documentary evi-
dence at an arbitration hearing under this chapter.’’.
HR 3528 RFS
SEC. 8. ARBITRATION AWARD AND JUDGMENT.
Section 657 of title 28, United States Code, is
amended to read as follows:
‘‘§ 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 other-
wise.
‘‘(b) SEALING OF ARBITRATION AWARD.—The dis-
trict court shall provide, by local rule adopted under sec-
tion 2071(b), 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 ac-
tion has otherwise terminated.
‘‘(c) TRIAL DE NOVO OF ARBITRATION AWARDS.—
HR 3528 RFS
‘‘(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 dis-
trict 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 ar-
bitration.
‘‘(3) EXCLUSION
OF
EVIDENCE
OF
ARBITRA-
TION.—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 arbi-
tration proceeding, unless—
‘‘(A) the evidence would otherwise be ad-
missible in the court under the Federal Rules of
Evidence; or
‘‘(B) the parties have otherwise stipu-
lated.’’.
SEC. 9. COMPENSATION OF ARBITRATORS AND NEUTRALS.
Section 658 of title 28, United States Code, is
amended to read as follows:
HR 3528 RFS
‘‘§ 658. Compensation of arbitrators and neutrals
‘‘(a) COMPENSATION.—The district court shall, sub-
ject 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 regu-
lations prescribed by the Director of the Administrative
Office of the United States Courts, a district court may
reimburse arbitrators for actual transportation expenses
necessarily incurred in the performance of duties under
this chapter.’’.
SEC. 10. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated for each fis-
cal year such sums as may be necessary to carry out chap-
ter 44 of title 28, United States Code, as amended by this
Act.
SEC. 11. 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:
HR 3528 RFS
‘‘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’’.
Passed the House of Representatives April 21, 1998.
Attest:
ROBIN H. CARLE,
Clerk.