In Re Atlantic Pipe Corp.

United States Court of Appeals
For the First Circuit

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, Saldaña-
Egozcue & Vallecillo, PSC were on 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 Antonetti Zequeira, with whom Luis A. Oliver-
Fraticelli 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.
 SELYA, Circuit Judge. This mandamus proceeding1 requires

us to resolve an issue of importance to judges and practitioners

alike: Does a district court possess the authority to compel an

unwilling party to participate in, and share the costs of, non-

binding mediation conducted by a private mediator? We hold that a

court may order mandatory mediation pursuant to an explicit

statutory provision or local rule. We further hold that where, as

here, no such authorizing medium exists, a court nonetheless may

order mandatory mediation through the use of its inherent powers as

long as the case is an appropriate one and the order contains

adequate safeguards. Because the mediation 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

maintain 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.

1
Although the 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
merely the obverse of the other — we follow past practice and make
no distinction between them. See, e.g., United States v. Horn, 29
F.3d 754, 769 n.18 (1st Cir. 1994).

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of Puerto Rico (Dick-PR), a subcontract for the operation and

maintenance of the Project to Thames Water International, Ltd.

(Thames Water), and a subcontract for the fabrication of pipe to

Atlantic Pipe Corp. (APC). After the Project had been built, a

segment of the pipeline burst. 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 insurers 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 over into

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 Court for the

District of Puerto Rico, seeking 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

moved to dismiss on grounds that, inter alia, (1) CPA had failed to

join an indispensable party whose presence would destroy diversity

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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,

Thames-Dick asked that the case be referred to mediation and

suggested Professor 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

pronounced mediation likely to conserve judicial resources;

directed all parties to undertake mediation in good faith; stayed

discovery pending completion of the mediation; and declared that

participation in the mediation would not prejudice the parties'

positions vis-à-vis the pending motion 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,

could not 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., and Thames Water) opposed the

petition. Two others (third-party defendants United States

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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 contemplated mediation

pending our review.

Prior to argument in this court, two notable developments

occurred. First, the district court considered 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 because APC will not suffer

irreparable harm in the absence of such relief. They rest this

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.3d 754, 769 (1st Cir. 1994). The problem, however, is that these

limitations typically apply only to supervisory mandamus. 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 systemically important issue as to which this

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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

effective 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

advisory mandamus is prudent under the circumstances.

Consequently, the existence vel non of irreparable harm is a non-

issue. We turn, then, to the merits.

III. THE MERITS

There are four potential sources of judicial authority

for ordering mandatory 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.

A district court's local rules may provide an appropriate

source 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

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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 from an impartial third party — the
judicial officer as mediator — a flexible non-
binding, 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 V also 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

envisioned by Rule V. It does so most noticeably because it

involves mediation before a private mediator, not a judicial

officer. Seizing upon this discrepancy, APC argues that the local

rules limit the district court in this respect, and that the court

exceeded its authority thereunder by issuing a non-conforming

mediation order (i.e., one that contemplates the intervention of a

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private mediator). The respondents counter by arguing that the

rule does not bind the district court because, notwithstanding the

unambiguous promise of the CJR 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

respondents' assurance that the relevant portion of the CJR Plan

has remained unimplemented, and we 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 Puerto Rico has no local rule in force that dictates the

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

2
This holding renders it unnecessary for us to discuss the
respondents' alternate contention that the CJR Plan is a dead
letter because the legislation that prompted 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.
Reform 887, 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.

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Dispute Resolution Act of 1998 (ADR Act), 28 U.S.C. §§ 651-658.

Congress passed the 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 appropriate ADR process. Id. § 651(a). Moreover, it

sanctions the participation of "professional neutrals from the

private sector" as mediators. 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 resolution in its district"). In the

absence of such local rules, the ADR Act itself does not authorize

any specific 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 respondents essay an end run around this lacuna:

they contend (borrowing a phrase from the court below) that the

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"spirit" of the ADR Act authorizes the mediation order because the

Act was intended to promote experimentation with ADR techniques.

We reject this attempt to press the ADR Act into service by

indirection.

Although the ADR Act was designed to promote the use of

ADR techniques, Congress chose a very well-defined path: it

granted each judicial district, rather than each individual judge,

the authority to craft an appropriate ADR program. In other words,

Congress permitted experimentation, but only within the

disciplining format of district-wide 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 each district judge to

disregard a 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

such rules with the absence of power to employ an ADR procedure

(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

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adoption of a federal procedural rule does not implicitly abrogate

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 Civil Rules eliminated the district

court's inherent power to impose other sanctions); Link v. 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 analogous to Chambers and Link.

Even though Congress may cabin the district 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 policies

that undergird it that can be said to restrict the district courts'

authority to engage in the case-by-case deployment of ADR

procedures. Hence, we conclude that where, as here, there are no

implementing local rules, the ADR Act neither authorizes nor

prohibits the entry of a mandatory mediation order.

C. The Civil Rules.

The respondents next argue that the district court

possessed the authority to require mediation by virtue of the

Federal Rules of Civil Procedure. They concentrate their attention

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on Fed. R. Civ. P. 16, which states in pertinent part that "the

court may take appropriate action[] with 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 limitation on the district courts'

authority to order mediation thereunder,3 and we must adhere to

that circumscription. See Schlagenhauf v. Holder, 379 U.S. 104,

121 (1964) (explaining that the Civil Rules "should not be expanded

by disregarding plainly expressed limitations"). Because there is

no statute or local rule authorizing mandatory private mediation in

the District of Puerto Rico, see supra Parts III(A)-(B), Rule

16(c)(9) does not assist the respondents' cause.4

3
We think it is pertinent here to quote the advisory
committee's note:
The rule acknowledges the presence of statutes
and local rules or plans that may authorize
use of some [ADR] procedures 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 such
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 them
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).

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 D. Inherent Powers.

Even apart from 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)

(explaining that "the rules of civil procedure do not completely

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

attend pretrial 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. Coyante 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 of

inherent powers must comport with procedural fairness. Id. at 50.

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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 ADR procedures was a hot-button

issue for legal scholars. Compare, e.g., O'Hearne, supra at 320

(arguing that inherent power should not be used to compel

participation in pretrial settlement proceedings), with Lucille M.

Ponte, Putting 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 many federal district courts have forestalled further

debate by adopting local rules that authorize specific ADR

procedures and outlaw others, e.g., D.N.H. R. 53.1 (permitting

mandatory mediation); 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 not among them. Thus, we have no choice but to address the

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.5

5
A summary jury trial is an ADR technique in which the
opposing attorneys present their case, in abbreviated form, to a
mock jury, which proceeds to render a non-binding verdict. See In

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In the court's view, Fed. R. Civ. P. 16 occupied the field and

prevented a 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,

advisory committee's note (1993 Amendment) ("The [amended] rule

does not attempt to resolve questions as to the extent a court

would be 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

jury trials would undermine traditional discovery and privilege

rules by requiring certain disclosures prior to an actual trial.

838 F.2d at 888. We find this concern unwarranted. Because a

summary jury trial (like a non-binding mediation) does not require

any disclosures beyond what would be required in the ordinary

course of discovery, its principal disadvantage to the litigants is

that it may prevent them from 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. Carey-

Canada, Inc., 123 F.R.D. 603, 606 (D. Minn. 1988).

re NLO, Inc., 5 F.3d 154, 156 (6th Cir. 1993); see generally Thomas
D. Lambros, The Summary Jury Trial Report to the Judicial
Conference of the United States, 103 F.R.D. 461 (1984).

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 Relying on policy arguments, the Sixth Circuit also has

found that 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 worried that "too broad an

interpretation 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 articulated by these two respected courts

plainly apply to mandatory mediation orders. When mediation is

forced upon unwilling litigants, it stands to reason that the

likelihood of settlement is diminished. Requiring parties to

invest substantial amounts of time and money in mediation under

such circumstances may well be inefficient. Cf. Richard A. Posner,

The Summary Jury Trial 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 these

considerations establishes that mandatory mediation is always

inappropriate. There may well be specific cases in which such a

protocol is likely to conserve judicial resources without

significantly burdening the objectors' rights to a full, fair, and

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speedy trial. 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. After all, a party may resist mediation

simply out 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

Mandatory Mediation, 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 could well produce a

beneficial outcome, at reduced cost and greater speed, than would

a trial. While the possibility that parties will fail to reach

agreement remains ever present, the boon of settlement can be worth

the risk.

This is particularly true 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. Mindful of these potential

advantages, we hold that it is within a district court's inherent

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power to order non-consensual mediation in those cases in which

that step seems reasonably likely to serve the interests of

justice. Cf. Reilly v. United States, 863 F.2d 149, 156-57 (1st

Cir. 1988) (finding that district courts 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

recognition that any such order must be crafted in a manner that

preserves procedural fairness 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; Reilly, 863

F.2d at 156.

As an initial matter, we agree with the lower court that

the complexity of this case militates in favor of ordering

mediation. At last count, the suit involves twelve parties,

asserting a welter of claims, counterclaims, cross-claims, and

third-party claims predicated on a wide variety of theories. The

pendency of 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

asserted here, further complicates the matter. Untangling the

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intricate web of relationships among the parties, along with the

difficult and fact-intensive arguments made by each, will be time-

consuming and will impose significant costs on the parties and the

court. Against this backdrop, mediation holds out the dual

prospect of advantaging 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, alternatively, to

abstain). See, e.g., Bouchard Transp. 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 proceeding was pending, the district court denied the

motion in question and confirmed the existence of its subject-

matter 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 be

6
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

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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 appointment of a private

mediator proposed by one of the parties is per se improper (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 non-

binding mediation, the mediator does not decide the merits of the

case and has no authority to coerce settlement. 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

party as a mediator. The mere fact that the mediator was proposed

by one 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

would be 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 (whether

proposition affects a trial court's ability to issue interim orders
designed to move litigation forward while it ponders a challenge to
its jurisdiction is a matter that we leave for another day.

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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 its 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 mediator with

significant 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, however, 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.2d 956, 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 traditional discovery context. See id. This is

7
We say "not ideal" because, in an ideal world, it would be
preferable 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.

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especially true 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, without default cost-

sharing 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 appropriate cases

would be rendered nugatory absent the corollary power to order the

sharing of reasonable mediation costs. To avoid this pitfall, we

hold that the district court, in an appropriate case, is empowered

to order the sharing of reasonable costs and expenses associated

with mandatory non-binding mediation.

The remainder of APC's arguments are not so easily

dispatched. Even when generically appropriate, a mediation order

must contain procedural and substantive safeguards to ensure

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

8
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 that "free
rider" status will itself breed problems.

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 We need not wax longiloquent. As entered, the order

simply requires 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 pending 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

can easily return to the court at any time. While this might be

enough of a safeguard in many instances, the instant litigation is

sufficiently complicated and the mediation efforts are likely to be

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sufficiently expensive that, here, reasonable time limits and fee

constraints, set in advance, are appropriate.9

A court intent on ordering non-consensual mediation

should take other precautions as well. For example, the court

should make it clear (as did the able district court in this case)

that participation in mediation will not be taken as a waiver of

any litigation position. The important point is that the

protections we have mentioned are not intended 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

issued under 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 the district 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

9
We do not mean that a mediation order in such a case must be
etched in stone. The mediator and the parties remain free, for
good cause shown, to ask the district court to extend or modify the
original order.

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ordering mandatory mediation 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

holding is in tension with the opinions of the Sixth and Seventh

Circuits in NLO and Strandell, respectively, but we believe it is

justified by the 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

need of the district court as an institution to adopt an ADR

program and memorialize it in its local rules. In the ADR Act,

Congress directed that "[e]ach United States district court shall

authorize, by local rule under 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 statute was

enacted four years ago. This omission having been noted, we are

confident that the district court will move expediently to bring

the District of Puerto Rico into compliance.

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

we vacate the district court's mediation order and remand for

further proceedings consistent with this opinion. The district

court is free to order mediation if it continues to believe that

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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.

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