Alternative Dispute Resolution Committee Meeting Minutes

2006 Winter Leadership Conference

The Alternative Dispute Resolution Committee and the Bankruptcy Litigation Committee held a joint educational session at the Winter Leadership Conference. The program was entitled “Litigation Tactics: Strategic Uses of ADR after the Code Amendments.” As the title of the program suggests, the panel focused on issues surrounding the strategic use of ADR following BAPCPA's enactment. Specifically, Dillon Jackson of Foster Pepper & Shefelman PLLC in Seattle, Washington addressed strategic points from the lawyer's perspective in mediations; Judge Barbara Houser, Chief Bankruptcy Judge, N.D. Tx., addressed using judges as mediators and the strategic implications of your choice of mediators in a case; Judge Redfield Baum, Chief Bankruptcy Judge, D. of Az., addressed why judges like the mediation process; and Judge Barry Russell, Chief Bankruptcy Judge, C.D. of Ca., addressed why judges may not like the mediation process. Tom Salerno of Squire, Sanders & Dempsey LLP in Phoenix, Arizona moderated the panel. The panel engaged in a lively discussion of these topics for 90 minutes, taking questions from the audience during the course of the presentation.

2006 Annual Spring Meeting

The Alternative Dispute Resolution and Commercial Fraud Task Force Committees held a joint panel presentation at ABI’s 2006 Annual Spring Meeting in Washington, D.C. entitled “Impact of Commercial Bankruptcy Fraud on the ADR Process: How to Avoid The Perfect Bankruptcy Fraud!"

The panel included: Irving E. Walker of Saul Ewing LLP in Baltimore, Kristin Mihelic of Spector Gadon & Rosen PC in Philadelphia and Patricia Brown Fugee of Roetzel & Andress in Toledo, Ohio.

Chief Judge Barbara J. Houser of the U.S. Bankruptcy Court for the Northern District of Texas and co-chair of the ADR Committee, and Jack Seward of Jack Seward Associates LLC in New York, co-chair of the Commercial Fraud Task Force Committee, made a short introduction regarding the mission statement of their respective committees and welcoming active participation by those in attendance at this years ASM.

The presentation covered the following topics:

• Bankruptcy court jurisdiction over alleged fraud perpetrated on another court
• Electronically-stored information under the new proposed FRCP
• Uncovering fraud by debtors and insiders in the digital age

The committees thank the panelists for making this informative information available along with acknowledging the efforts of Kathleen P. Makowski of Saul Ewing LLP for assistance in preparing the material regarding the recent decision by the district court in Tennessee, which addressed the "fraud on the court" issue.

Comments received from those attending, included “this was the best information at the ASM” - Judge (Ret.) Roger M. Whelan.

2004 Winter Leadership Conference

The committee teamed up with Mass Torts to present a panel discussion covering two areas where ADR techniques are being explored and utilized to resolve highly contentious issues that are recurring regularly in mass tort cases: (1) the resolution of disputes between mass tort debtors, putative mass tort creditors and insurance carriers as to the availability and timing of insurance assets in mass tort cases, and (2) the use of ADR techniques to resolve putative mass tort claims during the pendency of mass tort bankruptcies and as part of the post confirmation claims allowance and distribution process.

2003 Winter Leadership Conference

The subject matter for the meeting was "Why is ADR used less frequently in bankrutcy cases than in other areas of commercial law?" To answer this question, committee chairs Lester Levy and Barbara Houser, together with committee member Jack Fishman, presented a survey of ADR programs in selected bankruptcy courts around the country, including Delaware, New York, Chicago, Texas, San Francisco and Los Angeles. The presenters reported on statistical information maintained by the courts, including numbers of cases referred into the ADR program, the ADR processes used, success rates and comments from the clients, lawyers and judges involved.

The committee also discussed two substantial projects: (1) the completion of an ADR Manual to be published by ABI, and (2) the development of content for the ADR section of the ABI web site, including useful information for bankruptcy practitioners. Plans were made to move forward with both projects.

2001 Annual Spring Meeting

At the ADR Subcommittee's meeting, Co-chair Jack Esher (Boston/Cambridge) reported on current ADR developments in the bankruptcy courts. There are a total number of about thirty bankruptcy courts with mediation programs, rules or general orders around the country, with Delaware being among the most recent. Federal District Court programs are similarly developing under the Federal ADR Act of 1998 (28 USC §651 et. seq.). The Northern District of Indiana is also in the process of promulgating a mediation rule. This District based their Rule largely on the ADR Subcommittee's Model Local Rule, as has the Southern District of Indiana.

There followed a report on the ongoing projects of the committee, as follows:

  1. ADR Web Site development on abiworld.org: Former Judge and new Dewey Ballantine partner (LA) Lisa Hill Fenning spoke about this effort, which will soon be visible on the abiworld web site. The site will have forms and examples of ADR processes used in specific cases, as well as various articles and other resource materials concerning using ADR in bankruptcy cases. The site will also contain links to Local Bankruptcy Court Rules on ADR across the country, as well as links to related organizations. ABI is presently in discussion with the Federal Judicial Center for collaboration on the task of compiling needed materials.
  2. Proposed Federal Rule of Bankruptcy Procedure: Certain recurring issues in bankruptcy ADR would be clarified and achieve consistency in result under a uniform national rule, primarily dealing with mediator/neutral retention in cases. The committee will be working on a proposal for such a rule. However, the committee is of the view that local courts should continue to be in charge of the design and implementation of ADR rules. This is consistent with the approach of the 1998 Federal ADR Act.
  3. Revision of Mediation Manual and Model Local Rule: With the work on the web site, these prior projects of the committee will be updated as well.
  4. ABI Mediator Panel: The committee is continuing to discuss the formation of a panel of ADR providers/practitioners. This project is spearheaded by co-chair Judge Erwin Katz (Chicago) and attorney Colin Wied (San Diego).
  5. Joint Project with Former Bankruptcy Judge's Association: The Committee is planning a joint presentation with the FBJA to be conducted at the 2001 NCBJ in Orlando. Rather than repeating prior programs merely introducing ADR concepts, this program will offer substantive practice pointers and guidance to attorneys and judges who are using or planning to use ADR in specific cases.

The meeting concluded with a discussion of court-approved ADR Claims Facilities, used in cases to resolve claims in an efficient, orderly and cost-reducing manner. While of particular help in cases involving mass tort claims, even small and medium cases where reduction of administrative expense is equally if not more crucial to a successful reorganization, can and have benefitted greatly through use of these procedures. The ADR Web Site will initially focus on this area and disseminate needed information.

2000 Winter Leadership Conference

At the ADR Subcommittee's meeting, Co-Chair Jack Esher reported on current ADR developments in the bankruptcy courts. There are a total number of about 30 bankruptcy courts with mediation programs, rules or general orders around the country, with Delaware being among the most recent. Federal District Court programs are similarly developing under the Federal ADR Act of 1998 (28 USC Sec. 651 et. seq.).

Former Judge Lisa Hill Fenning spoke about her vision for the continued development of ADR in the bankruptcy courts. Her inspiring talk gave rise to several important new directions for work by the Committee, including:

ABI Web Site development on ADR
Proposed Federal Rule of Bankruptcy Procedure
Revision of Mediation Manual and Model Local Rule

These projects are now being planned and implemented. Additionally, based on a letter received by the Subcommittee from Attorney Colin Wied of San Diego, an additional project of creating a national panel of Chapter 11 plan mediators is being planned. Attorney Wied and the recently appointed Co-Chair of this Subcommittee, Judge Erwin Katz of Chicago, will spearhead this effort.

2000 Annual Spring Meeting

At the ADR Subcommittee's meeting, Chair Jack Esher reported on current ADR developments in the bankruptcy courts. During the last year, new mediation programs were implemented or being worked on in the Northern and Southern Districts of Indiana, bringing the total number of mediation programs to about thirty around the country. Existing programs are maturing§for example, the Central District of California has reported handling over a thousand cases, with an excellent success ratio. Federal district court programs are similarly developing, particularly with the strong push from Congress under the Federal ADR Act of 1998 (28 USC §651 et. seq.).

There followed a discussion concerning mediator immunity. This question arose recently in the Northern District of Indiana as they worked on a local rule for a mediation program. They received an opinion from the Administrative Office of the U.S. Courts that quasi-judicial immunity extends to mediators in a court ADR program. This is based on common law and has been recognized in several cases, such as Wagshal v. Foster, 28 F.3d 1249 (D.C. Cir. 1994), cert. denied, 514 U.S. 1004 (1995).

The subcommittee then turned its attention to current projects. These include a revision of the Mediation Manual published by the Subcommittee in 1996, and the creation of a client-oriented handout explaining the uses, benefits and risks or disadvantages of ADR. Members were urged to provide comments, revisions and any other assistance to the chair at jack@rileyesher.com. The subcommittee plans a follow-up meeting at the 2000 Winter Leadership Conference on these projects.

1999 Annual Spring Meeting

The Alternative Dispute Resolution (ADR) Subcommittee, chaired by Jack Esher, reviewed recent developments in ADR. John Carr presented the new Local Rule of the Southern District of Indiana for using mediation in bankruptcy cases. The rule closely tracked the suggested ABI Model Local Rule developed by the subcommittee over the last two years in conjunction with the Mediation Manual. It is the first jurisdiction to have adopted the ABI model, to the best of our knowledge! New rules and/or programs continue to be developed around the country as ADR grows and more cases are benefitted by it.

The subcommittee discussed the Alternative Dispute Resolution Act of 1998 (Public Law 105-315, 11 U.S.C. 651 et seq.). The act is addressed to the district courts and mandates that all courts, by local rule, authorize the use of ADR in all civil actions, "including adversary proceedings in bankruptcy." At this time, the Administrative Office of the U.S. Courts' (AOUSC) interpretation of this phrase is that it refers to the adversary proceedings to which the reference has been withdrawn to the district court. As a result, it does not appear that bankruptcy courts that do not have local rules authorizing ADR will be compelled to adopt one.

The subcommittee also discussed the impact of proposed legislation (H.R. 833) and resolved to consider a role that ADR could play in assisting the courts and parties, particularly in light of Judge Newsome's comments at the conference opening reception concerning the multiple points of litigation to be anticipated.