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In re Atlantic Pipe Corp.

    Brief Fact Summary.

    Atlantic Pipe Corporation objected to court-ordered mediation in a multiparty suit against Thames-Dick Superaqueduct Partners.

    Synopsis of Rule of Law.

    A court can subject a party to mandatory mediation without authority grounded in a statute. 

    Facts.

    After the completion of a large public works construction project, a portion of the pipeline burst, and the owner incurred significant expenses in the pipe’s restoration. Several parties, including the Puerto Rican Aqueduct and Sewer Authority (PRASA) sued the contractor, Thames-Dick Superaqueduct Partners (Thames) to recover the costs associated with the pipe burst. The district court appointed a mediator to resolve the several cross-claims and counterclaims. The Atlantic Pipe Corporation (Atlantic) objected on the grounds that the district court could not compel mandatory binding mediation.

    Issue.

    Whether a court can subject a party to mandatory mediation without authority grounded in a statute?

     

    Held.

    Yes. The district court was required to uphold procedural safeguards to make the parties to litigation share the costs the mediation. The order of the district court is reversed ad remanded. 

    Discussion.

    A court maintains authority to compel a non-consenting party to participate in mediation through the inherent powers of the court, local rules, the Federal Rules of Civil Procedure, and by statute. The court is also required to set time and cost restraints for the mediation as a procedural safeguard so that the mediation process does not overwhelm the litigation.


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