In re Atlantic Pipe Corporation

Brief Fact Summary.

Plaintiff sought court-ordered mediation, and Defendant objected to the forced participation and costs of mediation.

Synopsis of Rule of Law.

Absent local rules, statutory authority, and federal rules, a district court may order mandatory, non-binding mediation through its own inherent power to serve the interests of justice, so long as procedural safeguards are present.

Facts.

Thames-Dick (Respondent) agreed to construct, operate, and maintain an aqueduct. After completion of the project, a segment of the pipeline burst and Respondent sought recovery from its subcontracts for the cost of repairs, including Atlantic Pipe Corporation (Petitioner). As more third-parties joined the claim, Respondent moved for the case to go to mediation. Petitioner objected to mediation on the grounds that the district court did not have the authority to force mediation.

Issue.

Does a district court have the power to order participation and shared costs of non-binding mediation?

Held.

Yes, the district court has the power to order participation and shared costs of non-binding mediation. However, the case is remanded to ensure the presence of procedural safeguards.

Discussion.

The Court found no local rules that dictated mediation orders and no guidance from the Alternative Dispute Resolution Act or Federal Rule of Civil Procedure 16 absent authorization from local rules. The Court found that the district court had the inherent power to mandate non-binding mediation in particularly complex cases, but reasonable time limits and fee constraints were necessary procedural safeguards for both parties.