[Federal Register Volume 61, Number 136 (Monday, July 15, 1996)]
[Notices]
[Pages 36895-36913]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 96-17744]


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DEPARTMENT OF JUSTICE

Office of the Senior Counsel for Alternative Dispute Resolution


Policy on the Use of Alternative Dispute Resolution, and Case 
Identification Criteria for Alternative Dispute Resolution

AGENCY: Office of the Senior Counsel for Alternative Dispute 
Resolution, Justice.

ACTION: Notice.

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SUMMARY: This notice publishes the Alternative Dispute Resolution 
Policy Statements prepared by each of the civil litigating components 
in the Department of Justice as well as their criteria for identifying 
cases as potentially suitable for dispute resolution. As indicated in 
the introduction by the Attorney General, these documents were prepared 
by teams of staff attorneys within each of the components. Each 
document reflects the nature of the practice of that component. These 
documents have been provided to all staff attorneys in the Department 
of Justice who handle civil litigation, in Washington and in United 
States Attorneys' Offices, and are being published in the Federal 
Register to make clear the Department's commitment to greater use of 
alternative dispute resolution. Nothing in these documents, however, 
creates any right or benefit by a party against the United States.

FOR FURTHER INFORMATION CONTACT:
Peter R. Steenland, Jr., Senior Counsel for Alternative Dispute 
Resolution, United States Department of Justice, Room 5708, Washington, 
DC 20530. (202) 616-9471.

    Dated: June 17, 1996.
Peter R. Steenland, Jr.,
Senior Counsel, Alternative Dispute Resolution.

ADR Federal Register Introduction

    On April 6, 1995, I issued an Order directing greater use of 
Alternative Dispute Resolution by the Department of Justice. In 
part, that Order required our civil litigating components to provide 
their attorneys with policy guidance on the use of Alternative 
Dispute Resolution techniques and directed them to develop case 
selection criteria for using ADR in appropriate cases. Our 
commitment to make greater use of ADR is long overdue. Clearly, our 
federal court system is in overload. Delays are all too common, 
depriving the public of swift, efficient, and just resolution of 
disputes. The Department of Justice is the biggest user of the 
federal courts and the nation's most prolific litigator. Therefore, 
it is incumbent upon those Department attorneys who handle civil 
litigation from Washington and throughout the country to consider 
alternatives to litigation.
    The Guidance documents for using Alternative Dispute Resolution 
were prepared by teams of attorneys in each of the components. Each 
policy statement and set of case selection criteria reflect the many 
varied types of litigation in which we represent the United States, 
federal agencies and federal officials. Each component head has 
approved the policy statement and case selection criteria, and has 
expressed a commitment to making greater use of Alternative Dispute 
Resolution. Working with our Senior Counsel

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for Alternative Dispute Resolution, I expect our attorneys to 
implement our commitment to use ADR in appropriate cases. It is also 
my expectation that their ability to use ADR will be given as much 
recognition within the Department and elsewhere as their present 
contributions as dedicated and resourceful litigators.
    If we are successful, the outcome will benefit litigants by 
producing better and quicker results, and will benefit the entire 
justice system by preserving the scarce resources of the courts for 
the disputes that only courts can decide. I urge everyone to work 
with us in this important civil justice reform effort.
    Today, I am making available all of the Department's ADR case 
selection criteria developed pursuant to the Order. These criteria 
relate to the government's voluntary participation in ADR. Nothing 
in these Guidance documents shall be construed to create any right 
or benefit, substantive or procedural, enforceable at law or in 
equity, by a party against the United States, its agencies, its 
officers or any other person. For further information contact: Peter 
R. Steenland, Jr., Senior Counsel for ADR, U.S. Department of 
Justice, Room 5708, Washington, DC 20530. Phone: (202) 616-9471.
Janet Reno,
Attorney General.

To: All Section and Field Office Chiefs, Antitrust Division.
From: Anne K. Bingaman, Assistant Attorney General, Antitrust Division.
Re: Use of Alternative Dispute Resolution Techniques.

    On April 6, 1995, the Attorney General issued the attached order 
directing Department-wide initiatives to promote greater use of 
Alternative Dispute Resolution (``ADR'') techniques in civil 
litigation. Under the AG Order, ADR techniques are defined to include 
arbitration, mediation, early neutral evaluation, neutral expert 
evaluation, mini-trials, and summary jury trials--essentially those 
techniques that employ the services of a third-party neutral to assist 
in the conciliatory resolution of a dispute. The ADR techniques 
addressed in the AG Order have the potential to eliminate unnecessary 
civil litigation, shorten the time that it takes to resolve civil 
disputes, and achieve better case resolutions with the expenditure of 
fewer resources.

General Policy

    Although the Antitrust Division has an excellent record of settling 
its civil cases through the use of unassisted negotiations, the 
application of ADR techniques in appropriate circumstances to the 
negotiation process has the potential to provide even better results. 
Just as it is important for our attorneys to develop good advocacy and 
litigation skills, and to be accomplished negotiators during settlement 
discussions, it is also important that they become knowledgeable 
concerning ADR techniques so that the Division can take advantage of 
the benefits that ADR provides.
    It is, therefore, the policy of the Antitrust Division to encourage 
the use of ADR techniques in those civil cases where time permits and 
there is a reasonable likelihood that ADR would shorten the time 
necessary to resolve a dispute or otherwise improve the outcome for the 
United States. Because of the time constraints imposed by the H-S-R Act 
and the exigencies of the merger review process in general, ADR 
techniques will likely be difficult to apply during the course of 
merger investigations. On the other hand, non-merger investigations 
often have more timing flexibility. In order better to assess the 
potential for ADR to shorten the resolution time for such 
investigations or otherwise to improve their outcome, I am directing 
the chiefs of sections and offices conducting civil, non-merger 
investigations to work closely with Becky Dick to identify cases where 
ADR can be tried at different stages of the investigative process 
(e.g., prior to the issuance of CIDs; during settlement negotiations) 
as test cases, to provide a basis for comparison and to help serve as a 
guide to future use of ADR by the Division.
    Please be assured that in implementing this ADR policy, the 
Antitrust Division will recognize the contributions made by staff 
attorneys who handle matters in ADR by providing the same opportunities 
for promotion, awards, and other professional recognition as those 
engaged in more traditional litigation. Often, ADR will accelerate 
settlements, avoid trials, and provide enhanced resolution of disputes 
that litigation cannot provide. Those who use ADR to these ends will be 
evaluated on their skills in these endeavors, and they will be 
recognized for the contributions they have made to the Department and 
the public.

Case Selection Criteria

    In order for this policy to work, it is necessary that our 
attorneys become knowledgeable about the types of ADR techniques that 
are available and sensitive to the possibilities that they offer for 
improving antitrust civil enforcement. To assist this effort, I am 
today issuing case selection criteria to aid in selecting the types of 
cases and the types of ADR techniques that are appropriate for 
resolving various issues and impasses that can arise during the course 
of civil investigations. For example, at the beginning of an 
investigation, prior to the issuance of a CID to the subject, it might 
be appropriate to engage in discussions with the subject about the 
nature of the Division's concerns, the type of information that we will 
be seeking, etc., in order to better formulate our CIDs, reduce 
compliance disputes, and speed the resolution of the investigation. A 
third-party neutral could be used to facilitate these discussions. This 
will not always be useful or lead to a better result, and there will be 
circumstances where various factors militate against employing ADR. But 
I believe that the best way initially to asses the value of ADR for the 
Division is actually to use it in some cases and evaluate the results.

Training Requirement

    Acknowledging that ADR is a new concept for many Department 
attorneys, the AG Order requires attorneys who have substantial civil 
litigation responsibilities to receive regular training in negotiation 
and ADR techniques. We will be working with the Department's Senior 
Counsel for ADR to identify the training needs for Antitrust Division 
attorneys in this area in light of the results of our experience in the 
use of ADR as it develops.
    In sum, ADR is another litigation tool that we have at our 
disposal. In appropriate circumstances it can help to enhance our 
investigation and negotiation efforts, conserve resources, and achieve 
better civil antitrust enforcement results.

Attachments

To: All Section and Field Office Chiefs, Antitrust Division.
From: Anne K. Bingaman, Assistant Attorney General, Antitrust Division.
Re: Case Selection Criteria for the Use of Alternative Dispute 
Resolution (``ADR'') in Antitrust Division Civil Litigation.

    The Administrative Dispute Resolution Act of 1990 (``ADR Act''), 
Pub. L. No. 101-552, 104 Stat. 2736-48, and Attorney General Order OBD 
1160.1, ``Promoting the Broader Appropriate Use of Alternative Dispute 
Resolution Techniques,'' (April 6, 1995) require careful consideration 
of the use of alternative means of dispute resolution by Antitrust 
Division personnel during the course of investigating, settling, and 
litigating civil disputes. ADR can be defined as any technique that 
results in the conciliatory resolution of a dispute, including 
facilitation, mediation, fact

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finding, minitrials, early neutral evaluation, and arbitration. While 
unassisted negotiation is a well understood dispute resolution 
technique that is frequently successfully employed within the Antitrust 
Division, other ADR techniques--techniques that require the use of a 
third-party neutral--have received much less attention. These 
``formal''ADR techniques are the focus of the AG Order and this policy 
memorandum, which is intended to provide guidance to Antitrust Division 
attorneys in identifying civil cases that are possible candidates to be 
resolved through the use of formal ADR techniques.
    As you are aware, federal courts are increasingly likely to require 
parties to disputes to consider the use of ADR in cases that do not 
settle rapidly following the filing of a complaint as part of a court-
annexed ADR program. However, the use of ADR may also be of real value 
prior to the filing of a complaint as an aid to the settlement 
negotiation process.\1\ ADR is not intended to replace traditional one-
on-one negotiations, but rather to provide attorneys with additional 
tools that may facilitate negotiation where traditional two-party 
negotiation has not produced an acceptable resolution. In appropriate 
circumstances, ADR techniques can be used in conjunction with 
unassisted negotiation to resolve particular issues if, in the 
estimation of the parties, such ADR techniques would likely result in a 
speedier resolution of the overall dispute, increase the likelihood 
that the dispute will be resolved short of litigation, or result in a 
better resolution of the dispute than would otherwise be obtained.
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    \1\ In light of the congressional directive contained in the 
Antitrust Procedures and Penalties Act of 1974 (``Tunney Act'') that 
consent judgments in civil antitrust cases entered into by the 
Antitrust Division be publicly aired and approved by a federal judge 
as being in the public interest, see 15 U.S.C. 16 (b)-(h), civil 
investigations that result in a determination by the Division that 
an antitrust violation has occurred should ordinarily not be 
resolved without the filing of a complaint. (Merger investigations 
where the proposed transaction has been abandoned and there is no 
reasonable likelihood of that transaction being renewed within the 
time period for which the existing H-S-R filing remains valid are an 
exception.) When the Division and opposing parties are able to agree 
on the appropriate resolution of a dispute prior to the institution 
of litigation, the disposition of that dispute through the filing of 
a complaint and simultaneous consent decree is consistent with the 
goals of the ADR Act, the AG Order, and the Tunney Act.
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Available ADR Techniques

    A variety of ADR techniques exist that make use of the presence of 
a third-party neutral to assist in the negotiation or litigation 
process. The following are the most common:
 Mediation
     Non-binding settlement process facilitated by a neutral 
who does not impose a resolution.
     Neutral has no authority to impose decision.
     Neutral meets with parties in joint session and in 
separate sessions to facilitate resolution that is acceptable to all 
parties.
     Can be used to narrow issues for trial.
 Early Neutral Evaluation (ENE)
     Gives non-binding prediction of outcome.
     Most useful in disputes involving specific legal issues.
     Most useful if neutral is a recognized expert in the 
particular subject area or area of law.
 Neutral Expert Factfinder
     Makes findings of fact on specific issues.
     Most useful in factual disputes.
     May be binding or non-binding depending upon agreement of 
the parties.
     Can be used to narrow factual issues for trial.
 Mini-trial
     Non-binding presentation of highlights of case by 
attorneys for each party to their decision makers in mock trial 
setting.
     May include some witnesses and testimony.
     Facilitated by a neutral who presides over presentation, 
engages parties in litigation risk analysis, and facilitates settlement 
discussions.
     After presentation of the case, neutral meets with parties 
to facilitate settlement.
     Allows decision makers to focus on and analyze their 
cases.
 Arbitration
     Can be binding or non-binding depending upon agreement and 
nature of the parties.
     Neutral or panel of neutrals who impose a decision or 
resolution.
     Is most adjudication-like of ADR processes.
     May be more costly than other forms of ADR if it involves 
discovery, witnesses, and the presentation of the case.
    It is important to appreciate the diversity and flexibility of 
available ADR techniques. Some ADR techniques, such as ENE or 
arbitration, involve the neutral in making evaluations of the 
respective parties claims or the strengths and weaknesses of their 
legal theories or evidence. Other techniques, such as mediation, use 
the neutral simply to facilitate the parties' negotiations without 
being in any way judgmental.
    Neutrals only perform those functions agreed upon by the parties, 
and only for so long as both parties believe that the presence of the 
neutral is of value. Neutrals can be brought in at the beginning of a 
negotiation to get the ball rolling smoothly or after a particular 
problem has arisen to help resolve that problem amicably, and they can 
be dismissed if they are not proving useful or after a predetermined 
period of time. Parties do not lose control by employing a third-party 
neutral; if anything they gain control, especially if the application 
of ADR techniques enable the parties to avoid the litigation process.

Factors To Consider in Selecting an Appropriate ADR Technique

    In those instances where a case is a good candidate for ADR, each 
of the available ADR techniques can be used effectively to break a 
litigation or negotiation deadlock, depending on the nature of the 
dispute that needs to be resolved. In reaching a decision concerning 
the selection of a particular ADR technique in any given case, there 
are a number of factors to consider.
     What is the nature of the problem that is preventing a 
consensual resolution of the dispute?
     Hostility/lack of communication between the parties.
     Technical or complex factual issues.
     Legal issues.
     Settlement issues.
     What would it take to break the negotiation stalemate?
     Intervention by a neutral party to diffuse hostility.
     Neutral evaluation of dispositive factual issues.
     Neutral evaluation of dispositive legal issues.
     Neutral evaluation of dispositive settlement issues.
     Presentation by each side of its case to party decision 
makers.
     What resource constraints do the parties face?
     Is there sufficient time available to employ a given ADR 
technique? Can the parties agree to an extension of time in order to 
attempt ADR?
     Do the parties have the financial resources to employ a 
given ADR technique?
     What practical constraints do the parties face?

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     Have either of the parties expressed a willingness or a 
hostility to engaging in ADR?
     Do either of the parties have any history of using ADR?
     Are the attorneys handling the investigation/litigation 
experienced with one or more ADR techniques?
    Of course, not every case or situation is appropriate for the use 
of ADR. There are a variety of factors that can be considered as either 
supporting the use of ADR or making the use of ADR less likely in a 
particular case.

Factors Favoring ADR

The Parties

 Continuing Relationships
    The United States, aggrieved persons, or other litigants are likely 
to have continued contact with the defendants in implementation of the 
remedy or in other contexts.
 Barriers to Communication
    The United States or other litigants foresee impasses developing 
because of conflicts within interest groups, political visibility, or 
poor or non-existent communication among the participants (including 
attorneys) due to personality difficulties or past history.
 Absent Stakeholder(s)
    Participation of persons or groups who are not directly involved in 
the legal action may be beneficial or necessary to a optimal 
resolution.
 Divergence of Interests
    There are gains and losses to be apportioned constructively, and in 
which varying priorities among the parties will allow trading off of 
those gains and losses to permit all involved to benefit from the 
outcome.
 Numerous Parties
    The number of parties or interested persons or groups is so 
numerous that a structured/facilitated negotiation process would be 
helpful.

Nature of the Case

 Need for Problem Solving or Development of Creative 
Alternatives
    A thorough exchange of information and generation of alternatives 
and options will improve the outcome.
 Factural or Technical Complexity or Uncertainty
    The parties would benefit from reliance on the expertise of a 
third-party expert for technical assistance and/or fact-finding.
 Need for Facilitated Private Discussions
    The settlement desired may be improved by the neutral's ability to 
conduct frank, private discussions among the parties.
 Flexibility Desired in Shaping Relief
    The United States is seeking relief with detailed implementation 
and/or monitoring on multiple issues or subjects that may be difficult 
to obtain from the Court, or is amenable to resolution through 
cooperation between the parties.
 Ultimate Outcome Uncertain
    Litigants face uncertain outcome at the time of trial based on the 
law, the facts, or the decisionmaker. Also important is the likelihood 
of prevailing on appeal should the United States lose at trial.
 Hostile Decisionmaker
    Case will be tried in front of an unsympathetic judge, or jury 
venire is likely to be unsympathetic or even hostile.
 Conservation of Enforcement Resources
    Preparing the case for trial would require a burdensome commitment 
of significant resources without achieving a proportionate impact.
 Numberous Issues
    Discussion of multiple issues will be assisted by a structured/
facilitated negotiation process.
 Direct Settlement Negotiations Unsuccessful
    The United States has attempted traditional settlement negotiations 
without success or an impasse has been reached and the United States 
believes involvement of a third-party neutral will facilitate further 
progress and/or final resolution.

Representation

 Need to Speak Directly to Client
    The parties (or aggrieved persons) need to hear an evaluation of 
the case from someone other than their lawyers.
 Lawyers Are Willing To Consider ADR
    The lawyers involved are knowledgeable about ADR processes and 
intend to participate in the chosen ADR process in a good-faith attempt 
to resolve the dispute.

Timing

 Facts Are Sufficiently Developed
    The parties have sufficient information to permit them to make 
informed decisions concerning the ultimate disposition of the dispute.
 Parties Are Prepared to Discuss Settlement
    The parties are willing to resolve the case short of trial.

Factors Disfavoring ADR

 Public Sanction Necessary
    There is a need for public sanctioning of conduct.
 Imbalance of Power or Ability
    A party or parties are not able to negotiate effectively themselves 
or with assistance of counsel.
 Judicial Decision Required
    Development of the law is important or the imprimatur of a court 
decision is necessary to secure vindication of rights, enforcement, or 
compliance.
 Biased Selection Process of ADR Neutral
    Political sensitivity of case coupled with questionable neutral 
selection process would likely result in selection of ``neutral'' with 
ties to interests contrary to the United States.
 Successful Summary Judgment Certain
 Case Likely To Settle Through Unassisted Negotiation in Near 
Future * * *
    Using these selection criteria as a guide, it should be possible to 
identify Antitrust Division cases that would benefit from the 
application of ADR, and to identify the most appropriate ADR technique 
to assist the investigation/litigation process. Although many civil 
cases brought by the Antitrust Division will not be good candidates for 
ADR--for example, most merger investigations will face time constraints 
that make the use of ADR impossible, and many of our non-merger cases 
move swiftly and smoothly to resolution--there will be instances where 
one-on-one settlement negotiations may benefit from the presence of a 
neutral, either from the start or once they have reached an impasse, 
time is available, and a third-party neutral would advance the case 
more effectively than simply involving higher-level Division officials 
or permitting a cooling-off period. There may also be instances where 
involving a neutral expert could resolve a factual

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or legal dispute at the negotiation stage in a manner that would either 
speed the resolution of the case or result in a more favorable outcome 
for the United States than would unassisted negotiations or litigation. 
Such cases should be considered for the use of ADR.
    The issuance by the Antitrust Division of case selection criteria 
for the use of alternative dispute resolution relates solely to the 
government's voluntary participation in ADR. Nothing herein shall be 
construed to limit the government's duty to participate in ADR 
according to court order or applicable local rules, except that 
Antitrust Division attorneys shall resist participation in ADR, by 
appropriate motion, whenever said participation would violate the 
United States Constitution or other governing law.
    This memorandum shall not be construed as creating any right or 
benefit, substantive or procedural, enforceable at law or in equity, by 
a party against the United States, its agencies, its officers, or any 
other person. This memorandum shall not be construed to create any 
right to judicial review involving the compliance or noncompliance of 
any Antitrust Division attorney with its terms.

CIVIL DIVISION--STATEMENT ON ALTERNATIVE DISPUTE RESOLUTION

Introduction

    On April 6, 1995, the Attorney General issued an order promoting 
the broader use of alternative dispute resolution techniques for the 
Department of Justice's litigating divisions in appropriate matters. 
The order requires each litigating division handling civil matters to 
issue: a policy statement on ADR; case selection criteria identifying 
appropriate cases for ADR; criteria for the selection of ADR providers; 
training requirements in negotiation and ADR; a statement on internal 
procedures for authorization and funding of ADR; and finally a 
reporting system for statistics on each division's use of ADR.

I. POLICY

    The Civil Division is fully committed to encouraging consideration 
of alternative dispute resolution (``ADR'') in appropriate cases and 
implementing all aspects of the Attorney General's April 6th Order on 
ADR. ADR is any consensual dispute resolution process facilitated by 
third-party neutrals which can be utilized prior to or during 
litigation. ADR is not meant to replace traditional litigation or 
unassisted negotiation, but rather is meant to supplement them. In 
other words, ADR is another tool to resolve disputes and can provide 
unique advantages. ADR can be used when traditional negotiation is 
likely to be unsuccessful, has already been unsuccessful, or when it 
can expedite negotiations and/or allow them to proceed more 
efficiently. ADR can be used to resolve discrete parts of a particular 
case or, a series of cases; it can help narrow and/or eliminate issues; 
it can expedite critical discovery; and can help the parties gain a 
better understanding of the strengths and weaknesses of the case. ADR 
provides flexibility by allowing the parties to fashion their own 
resolutions to disputes--creative resolutions beyond what courts can 
offer.
    In a similar vein, ADR allows the parties to fashion their 
procedures for resolving disputes. There are as many ADR processes as 
the parties can create. The most widely used ADR techniques are 
mediation, early neutral case evaluation, arbitration, mini-trial and 
summary jury trial (see attached appendix for descriptions). 
Consideration of whether ADR can be beneficial to a particular matter 
should begin as soon as a Civil Division attorney is assigned to a 
case, should be ongoing, and should be revisited at the watershed 
points in the litigation. Different forms of ADR may be useful at 
particular points in the case.
    In analyzing a case for ADR and considering the particular 
component's case selection criteria, some general considerations should 
be kept in mind. the factors listed below for each Civil Division 
component will not all be relevant in any given case. Factors not 
listed may also be present that weigh in favor of or against the use of 
ADR. A threshold inquiry should be whether ADR will be beneficial to a 
case; that is, whether it will be more cost efficient, faster or will 
enhance the opportunities for a better result than would be the case 
with traditional litigation or unassisted negotiation. Even if the 
threshold inquiry is negative, consideration should still be given to 
whether ADR can be of benefit to a case even if it does not settle or 
entirely resolve the matter. For instance, if ADR can narrow the issues 
or expedite critical discovery, then ADR should be considered. In 
selecting a particular ADR process, each Civil Division component has 
listed a series of factors to evaluate for this selection, and there 
may be more than one ADR process appropriate for an individual case. 
Attorneys should also consider the different ADR processes that the 
relevant district or circuit court programs provide or require. Even 
where a particular district has an ADR program, Civil Division 
attorneys should employ the analysis in this statement.
    In determining whether a case can benefit from ADR, there are no 
hard and fast rules. It bears emphasizing that the use of ADR is not 
mandated, and the determination to use ADR and the selection of the 
particular ADR process should be done on a case-by-case basis. Because 
an understanding of the nature of the particular litigation is critical 
to an ADR assessment, and because the Civil Division handles such a 
wide variety of litigation, included below is a description of each 
Civil Division component's caseload.
    Finally, it is the policy of the Civil Division to recognize the 
work made by staff attorneys who handle matters in ADR by providing the 
same opportunities for promotion, awards and other professional 
recognition as those engaged in more traditional litigation. Often, ADR 
will accelerate settlements, avoid trials, and provide enhanced 
resolution of disputes that litigation cannot provide. Those who use 
ADR to these ends will be evaluated on their skills in these endeavors, 
and they will be recognized for the contributions they have made to the 
Department and the public.
    Commercial Litigation Branch: The Commercial Litigation Branch is 
the largest of the litigating components, accounting for 39% of the 
Division's caseload. Its cases consists of both affirmative and 
defensive work regarding financial disputes between the government and 
private parties. It has four principal litigating units:
    The Fraud unit files affirmative litigation, usually under the 
False claims Act. Last year it recovered over 1 billion dollars. Almost 
90% of its cases settle and approximately half of those are completed 
prior to filing a complaint. The nature of the cases indicates that 
they are good candidates for ADR mechanisms.
    The Court of Federal Claims unit defends suits brought by 
contractors, (usually as the result of an adverse decision by an agency 
contracting officer,) and defends appeals filed by government employees 
from decisions of the Merit Systems Protection Board. They settle 
approximately 30% of their cases and win the majority of the balance on 
motions. Both types of cases follow administrative reviews which have 
afforded the parties settlement opportunities. Although personnel cases 
can often benefit from third party neutral participation, these cases 
are small and are almost always disposed of in favor of the government 
on routine motions. In addition OPM, the client in most cases, would 
like to see their

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decisions, which have been the result of a rather lengthy 
administrative process, upheld. (Cases that have merit are usually 
disposed of in that administrative process.) Likewise, many contract 
cases are weeded out by dispositive motions on the basis of the Court's 
limited jurisdiction. However, the remaining complex contract actions 
can make use of not only mediation but informal fact finding and 
neutral evaluation procedures. The Court of Federal Claims has a 
standing order that provides for two modes of ADR. Other forms of 
consensual ADR are encouraged by the court.
    The Corporate/Financial Litigation unit litigates both affirmative 
and defensive cases, including complex contractual and financial 
matters, bankruptcies and large foreclosure proceedings. These cases 
can often benefit from ADR mechanisms.
    The Intellectual Property unit litigates matters involving patents 
and copyright issues. These are highly technical. They are often 
complex, especially regarding damage calculations.
    The Torts Branch: The Torts Branch is responsible for defending 
government agencies and employees in tort suits and administrative 
claims. It is subdivided into four litigating sections, General Torts, 
Constitutional and Specialized Torts, Environmental Torts and Aviation 
and Admiralty.
    The General Torts Staff's workload includes a broad array of 
traditional tort litigation (automobile cases, premise liability and 
medical malpractice). In addition, the FTCA Staff is responsible for 
conducting major litigation involving claims arising from financial 
institution failures and AIDS related tort suits. This Staff also 
handles highly visible suits that are likely to set significant 
precedents, involve large sums or are especially sensitive because of 
the factual context in which they arise.
    Constitutional and Specialized Torts (CST) is responsible for 
representing present and former high ranking officials and other 
employees who are personally sued for monetary damages as a result of 
actions taken in the course of their duties. CST handles cases filed 
under the National Vaccine Injury Compensation Program, which involve 
allegations of injuries and death which are claimed to have been caused 
by the administration of certain childhood vaccines. This section also 
reviews and adjudicates claims brought by individuals under the 
Radiation Exposure Compensation Program. These claims involve injuries 
which are alleged to have been caused by radiation exposure from 
atmospheric nuclear testing and from employment related to the mining 
of Uranium.
    The Environmental Torts Section defends the United States in 
environmental contamination suits alleging personal injury and property 
damage as a result of alleged exposure to chemicals, asbestos, 
radiation and other environmental toxins. Typical suits allege 
negligence on behalf of the United States and/or its contractors in 
operating installations and industrial facilities throughout the 
nation. The cases are complex and rely heavily on expert scientific and 
medical evidence to protect out interests.
    The Aviation and Admiralty section handles defensive and 
affirmative claims. Aviation litigation results from private, military 
and air carrier operations and accidents and from the Government's 
responsibility for air traffic control, airport and aircraft 
certification and weather information distribution. In Admiralty, on 
the defensive side, the cases involve collisions at sea, groundings, 
seaman's injury, search and rescue and other actions relating to the 
Government's regulation of the nation's waterways. On the affirmative 
side, the cases include mortgage foreclosure, oil pollution and damage 
to Government property. The admiralty section also handles cases filed 
in district courts involving maritime contracts, both defensive and 
affirmative.
    The Federal Programs Branch: The Federal Programs Branch of the 
Civil Division is a large law office with a diverse civil practice 
representing over 100 federal agencies. The Branch defends against 
major suits challenging the constitutionality of statues and the 
constitutionality and validity under the Administrative Procedure Act 
of government policies and programs; major Administration initiatives; 
and agency decisions, orders, and regulations. The Branch also handles 
significant government personnel litigation, including employment 
discrimination claims in federal district court and adverse action 
challenges before the Merit Systems Protection Board (when the 
Department of Justice is sued) and before federal district courts. 
Certain APA and personnel actions are amenable to ADR, especially those 
involving ongoing working relationships. The Branch also personally 
handles significant government information lawsuits, such as those 
brought under the Freedom of Information Act and the Privacy Act. About 
ten percent of the Branch's workload involves affirmative litigation to 
prevent interference with government operations and enforce various 
statutes and regulations such as banking laws, the National Highway 
Traffic Safety Act, and the Ethics in Government Act.
    Office of Consumer Litigation: The Office of Consumer Litigation 
(OCL) is responsible for enforcement of Federal consumer protection 
statutes, most of which provide for both civil and criminal remedies. 
OCL principally handles affirmative litigation. OCL receives most of 
its case referrals from the Food and Drug Administration, the Federal 
Trade Commission, the Consumer Product Safety Commission, and the 
National Highway Transportation Safety Administration. Approximately 
73% of OCL attorney hours are spent on FDA cases (the approximately 409 
pending FDA cases include both civil and criminal enforcement actions 
and defensive matters).\1\ The Office also handles approximately 25 
appellate cases per year.
---------------------------------------------------------------------------

    \1\ All statistics are for fiscal year 1994.
---------------------------------------------------------------------------

    Referrals from the FDA involve the illegal production, 
distribution, and sale of misbranded and adulterated drugs, medical 
devices, and foods. In pursuing these affirmative enforcement actions, 
OCL seeks a variety of remedies under the Food Drug and Cosmetic Act 
(FDCA), including seizures, injunctions, and criminal prosecutions. 
While OCL does not seek monetary relief in FDA affirmative cases, ADR 
techniques may nonetheless prove effective in obtaining expeditious 
civil settlements. OCL also handles a number of cases defending FDA. 
The majority of FDA defensive cases are administrative and 
constitutional challenges to FDA statutes and regulations. These cases 
rarely settle as both parties need a judicial resolution.
    Referrals from the FTC typically involve allegations of FTC Rule 
violations (e.g. FTC's Franchise Rule, Used Car Rule, and Funeral Rule) 
or charges of false advertising. In pursuing these affirmative 
enforcement actions, OCL seeks a variety of remedies under the FTC Act, 
including civil penalties, consumer redress, and injunctions (which 
often require the defendants to modify and reform their consumer 
disclosure practices). Approximately 11% of OCL attorney hours are 
spent on FTC cases (the approximately 72 pending FTC cases include both 
FTC Rule and false advertising cases). Those cases are quite suitable 
for most ADR techniques.
    CPSC referrals constitute a small fraction of OCL's case load. 
Approximately 3% of OCL attorney hours are spent on CPSC cases (the 
approximately 11 pending CPSC cases

[[Page 36901]]

includes civil actions seeking civil penalties, consumer redress, and 
injunctions; OCL handles few CPSC criminal enforcement actions). NTSHA 
referrals involve criminal matters.
    The Office of Immigration Litigation: The Office of Immigration 
Litigation (OIL) is responsible for civil trial and appellate 
litigation concerning immigration and nationality matters, ranging from 
high seas interdiction and alien detention, deportation and exclusion, 
visa and naturalization suits, to document fraud and litigation arising 
under the employer sanction provisions that affect citizens as well as 
aliens. OIL has both affirmative and defensive litigation 
responsibilities, and represents the Immigration and Naturalization 
Service, Department of State, Executive Office of Immigration Review, 
and other agencies that regulate the movement of aliens across and 
within U.S. borders. A number of factors and statutory obligations make 
this type of litigation unique and generally unsuited to most ADR 
programs. OIL defends government policies relating to immigration that 
have broad implications for the nation. They also defend against 
challenges to the constitutionality of statutes, regulations, and 
government programs, as well as agency decisions and orders. ADR 
techniques may be appropriate in settling suits challenging certain 
operational decisions in the INS districts, where the agency may have 
some flexibility and the outcome may be guided by existing legal 
precedent, or in resolving attorney fee disputes. The majority of OIL's 
cases, however, are: (1) statutory, constitutional, and regulatory 
challenges to the enforcement of immigration laws and policy which 
rarely settle; and (2) petitions for review challenging orders of 
deportation and exclusion, which are preceded by lengthy administrative 
proceedings during which the record is established, and where there is 
little to no flexibility for either outcome or relief (especially as 
most meritorious cases and applications for relief are resolved prior 
to this stage by agency adjudication), and where any opportunity for an 
additional procedure is more likely to result in an unwarranted delay 
of deportation than to speed resolution of the case.
    The Appellate Staff: The Appellate Staff handles appeals in cases 
litigated by the individual Civil Division components, as well as by 
United States Attorneys' Offices. Most of the work emanates from the 
Torts, Federal Programs, and Commercial Litigation Branches, with a 
much smaller number of appeals from the Office of Consumer Litigation 
and the Office of Immigration Litigation. The Appellate Staff also 
handles petitions for direct review in the courts of appeals 
challenging agency actions. While most of the appeals involve defensive 
litigation (defending statutes, regulations, agency decisions, civil 
rights/personnel actions), some of the Office's appeals are based on 
affirmative litigation (e.g., FDA enforcement, enforcement of the 
federal trade laws, civil penalty actions). Many of the cases that are 
good candidates for ADR at the district court level are also good 
candidates for ADR in the Court of Appeals.

II. Case Selection Criteria

A. Criteria for the Commercial Litigation Branch

    In applying the below criteria, it is important to consider the 
development of the facts and whether any particular ADR mechanism is 
appropriate at the particular time to assist in a resolution of the 
case, or assist in the development of the facts toward a faster and 
more efficient resolution. Consideration should be given throughout the 
litigation to appropriate ADR assistance.
1. Factors Counseling in Favor of ADR
    (a) The Parties
    (1) There is a continuous relationship
    (2) There may be benefits to either client hearing directly from 
the opposing side
    (3) Either party would be influenced by opinion of neutral third 
party
    (4) The opposition does not have a realistic view of the case
    (5) The parties have indicated that they want to settle
    (6) Either party needs a swift resolution
    (b) Nature Of The Case
    (1) Complex Facts
    (2) Technical complexity
    (3) Hostile forum or decisionmaker
    (4) Flexibility in desired in relief
    (5) Trial preparation will be difficult, costly or lengthy
    (6) Need to avoid adverse precedent
2. Factors Counseling Against ADR
    (a) Need for precedent
    (b) Need for public determination or sanction
    (c) Case likely to settle soon without assistance
    (d) Case likely to be resolved efficiently by motion
    (e) Opposing counsel are not trustworthy

B. Criteria for ADR Use in Torts Branch

    In applying the below criteria, it is important to consider the 
development of the facts and whether any particular ADR mechanism is 
appropriate at the particular time to assist in a resolution of the 
case, or assist in the development of the facts toward a faster and 
more efficient resolution. Consideration should be given throughout the 
litigation to appropriate ADR assistance.
1. Factors Counseling for ADR
    (a) Seeking monetary relief is sole purpose of lawsuit
    (1) Any unfavorable precedent may be established
    (2) There are multiple defendants, with the United States having 
the greatest exposure
    (3) There are no dispositive legal precedents established or 
desired
    (4) Reasonable probability of unfavorable resolution of factual 
issues
    (5) Where at various stages of the litigation, an evaluation shows 
that the future costs of discovery and litigation would be greater than 
the amount of the settlement
    (6) In affirmative cases, there will be an unacceptable delay from 
the time suit is filed until payment
    (7) Multiple party litigation desiring intermediate mediation to 
reduce the number of parties and/or issues
    (8) In affirmative cases, the defendant is uninsured or under 
insured
    (b) Non-monetary relief sought
    (1) Injunctive relief is not necessary even though desired
    (2) A declaratory judgment is not necessary even though desired
2. Factors Counseling Against ADR
    (1) Need to obtain/maintain legal precedent
    (2) No liability on part of United States based on facts and/or 
well-established precedent
    (3) Case is anticipated to be one of many
    (4) Subject to a motion to dismiss in lieu of answer
    (5) Subject to a motion for summary judgment once facts are 
developed, where costs of proceeding are less than plaintiff would take 
in settlement
    (6) Individual is sued in his personal capacity as a Government 
employee
    (7) A case involving the seizure of property to pay a debt where 
the property is the only source of revenue
    (8) Injunctive relief sought where no compromise or relief 
available
    (9) Case is likely to settle soon without ADR

C. Criteria for the Office of Consumer Litigation

    In applying the below criteria, it is important to consider the 
development of the facts and whether any particular ADR mechanism is 
appropriate at the

[[Page 36902]]

particular time to assist in a resolution of the case, or assist in the 
development of the facts toward a faster and more efficient resolution. 
Consideration should be given throughout the litigation to appropriate 
ADR assistance.
1. FDA Referrals
    a. FDA Civil Affirmative Litigation. In civil affirmative actions 
under the Food Drug and Cosmetic Act (FDCA), the Government may pursue 
seizure remedies (e.g. in in rem actions against adulterated or 
misbranded food, drugs, or medical devices) and/or injunctive remedies 
(e.g. in actions against manufacturers or distributors of misbranded or 
adulterated food, drugs, or medical devices). Civil penalties and 
consumer redress are unavailable under the FDCA. While OCL does not 
seek monetary relief in FDA affirmative cases, ADR techniques may 
nonetheless prove effective in obtaining expeditious settlements.
    Because FDA seizure and injunction cases almost always involve 
serious public health concerns, the client agency may be more receptive 
to ADR techniques in which the Government takes an active role in 
fashioning the settlement and retains the ability to accept or reject a 
third party neutral's recommendations. Accordingly mediation (rather 
than arbitration) is likely to be the ADR technique of choice. In 
addition, the Government is likely to favor the utilization of third 
party neutrals (whether U.S. Magistrates, retired Federal Judges, or 
private mediators) who have an expertise in food and drug or public 
health law.
    Mediation may be particularly effective in the following 
situations:
    (1) Mediating claimants' manner of reconditioning or destruction of 
adulterated or misbranded products in seizure actions.
    (2) Mediating claimants' reimbursement of the Government's storage 
and destruction costs in seizure actions.
    (3) Mediating claimants' agreement to injunctive language in 
consent decrees in actions initially filed as civil seizures. In 
contested seizures, the Government may wish to expand its scope of 
relief upon discovery of new facts or upon expenditure of considerable 
resources. ADR is of particular use in these situations as the relief 
sought extends beyond that prayed for in the Complaint. ADR should also 
be considered in settling appeals of seizure actions (a settlement 
which includes an injunction may prove more effective than an appellate 
court's affirmance of a seizure that includes no prospective relief.)
    (4) Mediating terms of injunctions, including reconditioning plans, 
consumer notification obligations; and defendants; reimbursement of the 
costs of FDA inspections conducted to ensure compliance with consent 
decree terms.
    b. FDA Civil Defensive Litigation. Most of OCL's defensive 
litigation involves administrative and constitutional challenges to FDA 
statutes and regulations (e.g. Administrative Procedure Act challenges 
to the Nutrition Labeling and Education Act). Typically, both parties 
in these cases seek a judicial resolution of the dispute which will 
result in legal precedent. Nevertheless, ADR may be effective in 
certain cases in which the agency may wish to avoid publicity, a 
judicial decision is likely to be unfavorable, or the issue at stake 
(e.g. whether the FDA has engaged in unreasonable delay in evaluating 
an applicant's new drug application) is not of precedential importance 
to the Government.
    c. FDA Criminal Litigation. FDA criminal cases are inappropriate 
for ADR consideration because a final judicial decision (whether 
through a plea agreement or trial) is required.
2. FTC Referrals
    OCL's affirmative FTC Rule violation and false advertising actions 
include requests for monetary relief and are often most suitable for 
ADR techniques. Mediation or early neutral evaluation provided by U.S. 
Magistrates and/or Senior Judges is the ADR methodology currently 
preferred by the client agency for the following reasons: (1) The FTC 
recommends specific parameters to OCL regarding the acceptable range of 
monetary relief for which it will settle (settlement ranges are 
provided by the FTC's Bureau of Economics and are voted on by the FTC 
Commissioners). Any type of binding arbitration may therefore be 
inappropriate, as OCL must maintain an ability to reject a settlement 
proposal suggested by a third party neutral that is out of the range 
considered acceptable by the client agency. (2) Individual FTC Rule 
violation cases are often part of larger enforcement initiatives. OCL 
must therefore retain the ability to ensure that like cases are settled 
for like amounts. (3) The FTC's economic statistics used to guide the 
Government's settlement positions are confidential. The agency would be 
reluctant to release those statistics to third party neutrals who are 
not Judicial officers. However, other non-binding ADR techniques 
utilizing third party neutrals should be considered.
    Mediation may be particularly effective in the following 
situations:
    (1) Mediating the terms of a consent decree for FTC Rule violations 
including modification of the defendant's consumer disclosure 
practices.
    (2) Mediating the amount of civil penalties recovered.
    (3) Mediating the amount of consumer redress recovered and the 
method for dispersing such funds among injured consumers.
3. CPSC Referrals
    OCL's cases referred by the Consumer Product Safety Commission 
include civil actions seeking civil penalties, consumer redress, and 
injunctions. The criteria and concerns relating to civil CPSC matters 
mirror those relating to FTC civil enforcement actions discussed above. 
OCL also prosecutes a small number of criminal CPSC cases. These 
criminal matters are not amendable to ADR techniques as a judicial 
resolution is required.
4. NHTSA Referrals
    OCL referrals from National Highway Transportation and Safety 
Administration (and, to a lesser extent, State Highway Patrols and the 
FBI) relate primarily to criminal odometer tampering prosecutions. 
These criminal actions require judicial resolution and are not 
amendable to ADR techniques.

D. Criteria for the Office of Immigration Litigation

    In applying the below criteria, it is important to consider the 
development of the facts and whether any particular ADR mechanism is 
appropriate at the particular time to assist in a resolution of the 
case, or assist in the development of the facts toward a faster and 
more efficient resolution. Consideration should be given throughout the 
litigation to appropriate ADR assistance.
1. Factors Counseling for ADR
    a. Lawsuits challenging INS operations other than enforcement 
measures controlled by statute or regulation may be amendable to ADR at 
various stages. (The factors regarding other types of OIL litigation 
identified in section 2 below, should also be considered in deciding 
whether ADR is appropriate for these cases.) Mediation is most likely, 
although other ADR methods such as early neutral evaluation may be 
appropriate if they are likely to reduce the time and cost of 
litigation in a specific case.

[[Page 36903]]

    (1) Issue is localized or limited to a specific INS district or 
facility.
    (2) Agency (or district) has some flexibility in resolving matters.
    (3) Need exists to narrow issues, dispute is largely factual, or 
discovery needs to be tailored to material issues.
    (4) Hostile forum (where more control of case and a fairer or more 
effective and favorable outcome may be obtained through mediation).
    (5) Court appears to be unwilling to rule
    (6) Expectations of party/parties are unreasonable (parties or 
aggrieved persons may benefit from an evaluation of their case by 
someone other than their lawyers).
    (7) Statute or regulation has been rescinded.
    b. Attorney Fee Disputes.
    (1) Sole issue or remaining issue in the case
    (2) ADR will speed anticipated settlement and avoid needless 
increase in attorney fees.
2. Factors Counseling Against ADR
    a. Petitions for review of deportation orders in the courts of 
appeal and petitions for habeas corpus for judicial review of exclusion 
orders in the district court under 8 U.S.C. 1105a, or exercise of 
enforcement authority and discretion delegated to INS district 
directors or other officials:
    (1) Statute provides the ``exclusive'' procedures for judicial 
review.
    (2) Prescribed outcomes or statutory remedies are inflexible.

--Grounds for exclusion and deportation are determined by statute
--Requirements for relief are determined by statute

    (3) There has been prior extensive administrative process

--Review is limited to the administrative record, and facts of these 
cases are rarely in dispute by the time case reaches federal court
--Actual challenge is to the agency's evaluation of facts, exercise of 
discretion, or other elements entitled to deference by the courts

    (4) Additional procedure would most benefit the alien who seeks to 
delay his inevitable departure or to stall for the time he lacks to 
minimally qualify for relief such as suspension of deportation and 
212(c) waivers.
    (5) Actual error can be corrected by motion to remand to BIA or 
reconsideration by agency.
    b. Litigation challenging implementation of the immigration laws, 
including new legislative initiatives, Executive orders, government 
policy, amended regulations, and enforcement actions under existing 
authority, statutes and regulations:
    (1) Judicial resolution or precedent is needed.

--case involves significant legal, policy, or constitutional issues 
where there is little or no likelihood of flexibility in the 
government's position
--case involves issue of first impression and is important to 
development of a particular area of law
--favorable facts make the case a good vehicle to establish legal 
ruling in development of law
--judicial resolution is unavoidable because statutory or regulatory 
program is at stake

    (2) Injunctive relief is sought and delay would cause prejudice.
    (3) Agency is exercising its judicially recognized exclusive 
authority over issues of immigration and needs to respond to changed 
circumstances.
    (4) Executive Branch must be able to fully preserve its ability to 
respond to events that may implicate relations with other nations.
    (5) Law enforcement function cannot be compromised.

--goal of opponent's suit is to undermine or minimize adverse 
consequences prescribed by Congress
--challenge is to principles so fundamental that productive negotiation 
is unrealistic
--nongovernmental party has an incentive to stall

    (6) Issue needs uniform treatment.

--issue has nationwide impact
--similar suits pending or anticipated
--aliens' advocates are bringing similar actions in different courts in 
search of a sympathetic forum
--no legitimate reason to settle with one party or plaintiff group
--need to maintain established policies or consistent results between 
individual cases
--need to discourage similar suits
    (7) Law is settled.

--no compromise or relief is available
--strong likelihood of success on the legal issues
--case is likely to be disposed of by summary judgment or other 
dispositive motion
--case is frivolous, dispute is different from actual grievance (i.e., 
due process claim when alien is ineligible for relief), or only 
discernible purpose is delay

    (8) Case is likely to settle or settle faster through unassisted 
negotiation without ADR
    (9) Parties are not willing to negotiate or prepared to settle case
    (10) Government official, officer or other individual is sued in 
his personal capacity
    (11) Parties are not represented by counsel
    (12) Opponent is untrustworthy, his credibility is a disputed 
issue, or United States has reason to believe that he is engaging in 
fraudulent or criminal behavior

E. Criteria for the Federal Programs Branch

    Among the Branch cases which appear most amenable to ADR are 
personnel actions, particularly those involving factual disputes and 
parties which have an ongoing work relationship. Less amenable as a 
group are the constitutional and major APA challenges, since the cases 
the Branch chooses to personally handle involve the most visible 
government policies and programs which impact not just the parties 
directly involved in the lawsuits but often have broad implications for 
the whole of society. These are often the cases whose policy 
determinations are considered the most important by the defendant 
agencies and for which flexibility in terms of settlement options is 
quite limited. Consideration of ADR may be appropriate, however, for 
routine APA challenges where there is more flexibility in the agency, 
substantial legal precedent already exists, and the use of a third-
party neutral may be beneficial to expedite the settlement process.
    In applying the below criteria, it is important to consider the 
development of the facts and whether any particular ADR mechanism is 
appropriate at the particular time to assist in a resolution of the 
case, or assist in the development of the facts toward a faster and 
more efficient resolution. Consideration should be given throughout the 
litigation to appropriate ADR assistance.
1. Factors Counseling for ADR
    (a) Continuing relationships between plaintiffs and agency.
    (b) Case involves largely a factual dispute.
    (c) Relief sought is money damages.
    (d) Agency is essentially a stakeholder, with plaintiffs or co-
defendants trying to impose on agency diametrically opposed relief or 
requirements (this element may appear in some APA and other policy type 
cases); similarly, where there are many parties to the lawsuit with 
divergent interests which hamper standard negotiation efforts.
    (e) Plaintiffs and agency are interested in seeking resolution but 
personality conflicts or poor communication

[[Page 36904]]

between opposing counsel adversely affects settlement negotiations.
    (f) There are underlying issues which are not formally part of the 
complaint and which cannot be resolved by the relief legally available, 
but which are the catalyst for the lawsuit.
    (g) Apparent unwillingness of court to rule on matters which would 
advance the case toward resolution.
    (h) Where you expect to settle eventually, most likely on the 
``courthouse steps.''
    (i) Where plaintiffs' demands, or the agency's view of the case, 
are unrealistic, and a realistic appraisal of the situation by a 
neutral third party may help unlodge the recalcitrant party.
    (j) Where there is a need to avoid adverse precedent but 
traditional settlement negotiations have reached an impasse.
2. Factors Counseling Against ADR
    (a) Case involves significant legal, policy, or constitutional 
issues where there is little or no likelihood of flexibility in the 
government's position.
    (b) Where judicial resolution is necessary for precedential value.
    (c) The case can likely be efficiently disposed of by summary 
judgment or other dispositive motion.
    (d) The case is likely to settle in near future without need for 
neutral assistance.

F. Criteria for the Appellate Staff

    The criteria listed below are suggested as a starting point for 
analyzing whether a case on appeal could benefit from ADR. While each 
attorney should also examine the criteria of the trial component from 
which the appeal arose, other criteria come into play or take on a 
different degree of importance at the appellate level. For instance, 
the role of precedent at the court of appeals level is much greater. 
Attorneys should consider what if any ADR efforts were attempted 
earlier in the case, and whether and how the case has changed from its 
posture at the trial level, both factually and legally. The ADR 
techniques that are likely to be used by the Appellate Staff are 
mediation and case evaluation, because at the appellate level the 
issues are largely legal ones that would not benefit from the more 
fact-intensive techniques such as mini-trials.
1. Factors Counseling for ADR
    (a) Predominantly factual case where government faces clearly 
erroneous standard.
    (b) Monetary cases without significant precedential concerns.
    (c) Risk of adverse precedent or publicity. E.g., case is poor 
vehicle to establish favorable legal precedent, circuit has poor track 
record on type of issue, risk of circuit split and Solicitor General 
unlikely to authorize certiorari, loss on the issue may create poor 
precedent for other government agencies.
    (d) Need for swift resolution. E.g., agency has programmatic needs 
that cannot await the usual length of the appellate process, the appeal 
is only one part of multi-issue litigation with the potential for 
future remands and appeals.
    (e) Continuing relationships. E.g., ongoing federal/state 
relationship, ongoing relationship between agency and regulated entity, 
continued contact in implementation of remedy or class action.
    (f) Numerous parties and issues.
    (g) Need to avoid increased attorneys fees or post-judgment 
interest that unsuccessful appeal will incur.
    (h) Need for problem solving or development of creative 
alternatives or flexibility in shaping relief e.g., suit is only one 
facet of a deeper dispute involving other issues court may not be able 
to address.
    (i) Other parties are willing to consider ADR.
    (j) Certain statutory, regulatory, or constitutional cases e.g., no 
continuing importance because statutes or regulations have been 
amended, constitutional challenge such as due process actually masks 
some underlying issue capable of resolution such as plaintiff's desire 
for expungement of record or consideration for job opening.
    (k) Case is one which should have been settled in district court 
but was not.
2. Factors Counseling Against ADR
    (a) Need for judicial precedent. E.g., need to establish legal 
ruling in development of a particular area of law and favorable facts 
make case a good vehicle, judicial resolution unavoidable because 
nothing short of validity of statutory/regulatory program is at stake.
    (b) Need for uniform treatment. E.g., many similar suits pending 
and no legitimate reason to settle with only one party.
    (c) Need to discourage similar suits.
    (d) Need for continuous monitoring of compliance by court or public 
judicial decision in certain enforcement cases.
    (e) Likelihood of success is great and relief sought is 
significant.

III. Which ADR Techniques Are Appropriate for a Case

A. Mediation

    1  There is a continuing relationship among the parties.
    2  The disputed facts are not technical, requiring subject-matter 
expertise.
    3  There are multiple defendants, with the United States having the 
greatest exposure.
    4  Risk of unfavorable precedent.
    5  In affirmative cases, there will be an unacceptable delay from 
the time suit is filed until payment.
    6  Either side can benefit from hearing directly from the client.
    7  Opposition needs a realistic view of the case.
    8  Flexibility in desired relief.

B. Early Neutral Case Evaluator/Expert

    1  Know at the outset that case can be settled.
    2  The parties disagree on the amount of damages.
    3  Factual issues requiring expert testimony may be dispositive of 
liability or damage issues and use of an expert neutral is cost 
effective.
    4  A resolution of the factual issue will assist in settlement.
    5  Opposition needs a realistic view of the case.

C. Arbitration

    1  The parties disagree on the amount of damages.
    2  It is a District where the arbitrators are well-respected.
    3  There are no complex factual issues involving several areas of 
expertise and the parties disagree on the facts.

D. Mini Trials

    1  In affirmative cases, there will be an unacceptable delay from 
the time suit is filed until payment.
    2  There are simple factual issues which do not necessarily require 
expert testimony, but would take an excessive amount of time to present 
in a traditional forum.
    3  There are complex factual issues which are generally explained 
with expert testimony.
    4  The attorneys can equably summarize the facts to the fact-
finder, without the necessity of lengthy cross-examination.

IV. Criteria for the Selection of ADR Providers

    In selecting an ADR provider for a case, Civil Division attorneys 
should consider the non-exclusive factors set out below. When assessing 
these factors, attorneys may also consider whether an ADR provider 
meets the requirements of the relevant state or federal court rules for 
neutrals. Attorneys may wish to interview the prospective neutral and 
obtain their resumes in ADR experience

[[Page 36905]]

where appropriate. Attorneys may also wish to consult other attorneys 
who have used the prospective neutral in other cases. In finding 
prospective ADR providers, attorneys may consult the Senior Counsel for 
Dispute Resolution, other attorneys in their office, division, or in 
the Department for such providers.
    1. Neutrality, and Related Ethics Standards--Is the ADR provider 
unbiased, acting in good faith, diligent, and not seeking to advance 
his or her own interest at the expense of the parties? Will the ADR 
provider deal fairly with the parties, be reasonably available to the 
parties, show no personal interest in the content of the settlement? 
Does the neutral know counsel, and if so, what is the nature and 
context of that knowledge? Is the neutral subject to disqualification 
on grounds analogous to those found within 28 U.S.C. 455. Check Society 
of Professional for Dispute Resolution's Ethical Standards.
    2. Training--What kind and extent of training for the particular 
ADR process has the neutral received? Has the neutral been trained by a 
well-recognized program?
    3. Experience--
    (a) ADR Experience: number of cases in which the neutral has 
employed the particular dispute resolution process or related 
processes, dollar amount in controversy, diversity of processes, 
complexity of the issues, years of experience in a particular 
process(es), breadth of experience in types of disputes, experience in 
multi-party and/or multi-issue disputes, affiliation with court-annexed 
programs.
    (b) Litigation Experience: Is the neutral an attorney? Type of 
legal practice, years of experience, complexity of cases and issues, 
experience in government litigation.
    4. Subject-Matter Expertise In The Type of Dispute and/or Issues--
Factors Favoring Subject-Matter Expertise:
    (a) Highly technical areas of law are central for understanding the 
dispute and/or issues and the fashioning of the options for resolution 
of the dispute (e.g. patent, subspecialities of science or medicine).
    (b) Issue is one of damages--when offers are far apart, expertise 
in typical damage awards and in standard components of damage 
calculation may bring parties; offers closer (e.g. certain attorney 
fees, personal injury disputes).
    (c) When the parties and attorneys are hesitant to use ADR for a 
particular case, and expertise will build credibility for them.
    (d) There is an impasse over discrete factual and/or legal issues.
    (e) Expertise is central to a particular Kind of ADR process--e.g. 
case evaluation on factual issues, mini-trial, arbitration.

V. Training

    Each Civil Division attorney will be trained in a basic, but 
comprehensive, 6-hour ADR course. The course will be skills-based and 
interactive. Classes should be comprised of 30-35 attorneys from a 
variety of Civil Division components. The small class size will permit 
an interactive focus and discussion format, while the class composition 
will facilitate a cross-pollination of experiences and ideas among the 
components. As many of the instructors as possible will be Civil 
Division litigators with substantial ADR experience. The agenda for the 
basic ADR training course is envisioned as follows:
    A. ADR TECHNIQUES, CASE SELECTION CRITERIA, SELECTION OF PARTICULAR 
ADR PROCESS (lecture/discussion 1\1/2\ hours).
    B. CONCRETE EXAMPLES BY GOVERNMENT LITIGATORS OF ADR AND HOW IT 
WORKS (lecture/discussion 30 minutes).
    C. NEGOTIATION SKILLS (lecture 1 hour).
    D. INTERNAL PROCEDURES, AUTHORIZATION & FUNDING OF NEUTRALS, 
SELECTION OF NEUTRALS (lecture 30 minutes). This section will include 
guidance on how to find an appropriate neutral and how to assess 
whether the prospective neutral will be a good fit for the case.
    E. ATTORNEY PREPARATION FOR ADR (lecture 30 minutes)--includes 
discussion of case and client agency preparation for ADR, and pre-
settlement & settlement authorization.
    F. ADR ROLE-PLAYS (2 to 2\1/2\ hours)--class may be divided into 
smaller groups. Each member of the small groups will have the 
opportunity to participate in the role-play. Instructors and 
participants will have the opportunity to critique and give feedback 
both during and after the role-plays. The fact patterns for the role-
plays will be chosen to reflect the Civil Division's diverse litigation 
responsibilities, for example, torts, contract, EEO, and an APA 
challenge. Every effort will be made to match the participant with a 
role-play relevant to their litigation caseload.
    At the conclusion of the course, participants will be asked to 
complete and evaluation form. On the basis of those evaluations, 
comments from the instructors and our actual experiences with ADR, the 
Civil Division will continue to modify and refine the basic course. All 
new Civil Division attorneys will also be required to take the course. 
Once experience with the basic ADR training occurs, the Civil Division 
will be able to develop supplemental ADR training as needed. This 
training will be coordinated with the Office of the Senior Counsel for 
ADR.

VI. Procedures for Authorization and Funding of Neutrals

    These procedures supplement the instructions issued by the Office 
of Senior Counsel for Alternative Dispute Resolution (SCADR) in the 
Associate Attorney General's Office. Civil Division attorneys shall 
request authorization and funding for neutrals in accordance with these 
procedures. Prior to using these procedures you should make 
arrangements with the opposing party and third party neutral and 
execute a proposed ADR agreement (available from your ADR 
representative).
    The revised Form OBD-47, Request for Authorization, and Agreement 
for Fees and Expenses for Witnesses and Alternative Dispute Resolution 
Neutrals will be used. This document will serve as the formal contract 
with the third party neutral.
    STEP 1--It is impractical to obtain full and open competition for 
ADR in most cases. However, before the OBD-47 is completed, the case 
attorney must negotiate the best neutral rate possible.
    STEP 2--Once the OBD-47 has been completed and approved by the 
branch director, forward the OBD-47, the ADR agreement, and any 
additional supporting documentation to Raziya Clouser of the Contracts 
and Procurement Branch (Room 7110, Todd Building) for processing. 
Contracts and Procurement Branch will obtain a commitment of funds from 
SCADR for each request; a neutral should not begin work in advance of a 
fully approved request.
    STEP 3--After the Contracts and Procurement Branch has returned the 
approved agreement, the case attorney should sign it, obtain the 
neutral's signature, and return a copy of the fully executed agreement 
back to the Branch. It is not necessary for the case attorney to 
forward a copy of the signed agreement to the SCADR; the Contract and 
Procurement Branch will perform this task.
    STEP 4--The neutral should forward all invoices to the case 
attorney for review and certification. Because of Prompt Payment Act 
requirements, it is critical that invoices are date stamped when they 
are received by the attorney. It is also vital that the case attorney 
review the invoice and (1) reject it, if it is defective, or (2) 
certify it for payment,

[[Page 36906]]

if it is proper, within seven days of the invoice's receipt (refer to 
the Civil Division directive on expert witnesses, CIV 2110A, Sec. d. 
Payment of the Expert Witness for more detailed invoice rejection and 
certification instructions).
    STEP 5--Once a neutral's invoice has been certified for payment, it 
should be forwarded along with a copy of the signed OBD-47 to Frank 
Free of the Office of Planning, Budget, and Evaluation (Room 7032, Todd 
Building) for payment.
    Questions regarding the procurement of third party neutrals should 
be directed to Ms. Clouser at 606-0786. Questions regarding payment 
should be directed to Mr. Free at 307-0842.

VII. Coordination, Reporting, and Evaluation

    The Civil Division ADR committee shall coordinate ADR activities on 
behalf of the Division. The committee consists of Stephen Altman 
(Chair), Deborah Kant (Vice Chair), Susan Cavanagh, Mary Doyle, Vince 
Faggioli, Debra Kossow, Cindy Lebow, Emily Radford, Deborah Smolover, 
and Sandy Schraibman and Kim Humphries.
    A system of reporting on cases in ADR shall be established. A 
reporting form of one page shall be filled out when an ADR process is 
considered or used, and the data shall be included in the computerized 
data bank maintained by the Civil Division's Management Programs 
component.
    In addition, a system of evaluation will be instituted that allows 
for civil division attorneys using ADR providers to give immediate 
feedback to a centralized data base. Attorneys using ADR providers' 
services will be asked to rate the provider on the general standards 
set out above in the selection of neutrals section. These evaluation 
forms should then be made available to any potential future users of an 
ADR provider's services. When any providers consistently receive poor 
evaluations, this information will be included in the data bank and 
made available to civil division attorneys.

VIII. Miscellaneous

    The Civil Division's Statement On ADR relates to the government's 
voluntary participation in ADR. Nothing herein shall be construed to 
limit the government's duty to participate in ADR pursuant to court or 
applicable local rules, except that Civil Division attorneys shall 
resist participation in ADR, by appropriate motion, whenever said 
participation would violate the United States Constitution or other 
governing law.
    This Statement shall not be construed as creating any right or 
benefit, substantive or procedural, enforceable at law or in equity, by 
a party against the United States, its agencies, its officers, or any 
other person. This Statement shall not be construed to create any right 
to judicial review involving the compliance or noncompliance of a Civil 
Division attorney with its terms.

Appendix

    ``Alternative Dispute Resolution'' (``ADR'') means any 
procedure, involving a ``neutral,'' that is used in lieu of trial to 
resolve one or more issues in controversy, and includes but is not 
limited to the following ``ADR techniques'';
    1. Mediation means a flexible, nonbinding process in which a 
neutral third party, the mediator, facilitates negotiations among 
the parties to help them reach a settlement. In doing so, the 
mediator may expand traditional settlement discussion and broaden 
resolution options, often by going beyond the legal issues in 
controversy or incorporating nonparties in discussions. 
Theoretically, the mediator does not provide an opinion as to how 
the case should be resolved, but merely helps the parties settle the 
case among themselves.
    2. Early neutral case evaluation, unlike mediation, on liability 
and/or damages. The evaluator usually has subject-matter expertise. 
The opinion is non-binding and generally occurs early in the 
lawsuit. The parties may have the option of asking the evaluator to 
continue to mediate the dispute.
    3. Neutral expert evaluation is similar to early neutral case 
evaluation; however, the evaluation does not necessarily occur early 
in the litigation. The expert is chose based on the expertise needed 
to resolve some factual dispute in the case. The export provides a 
non-binding opinion.
    4. Arbitration usually consists of a panel of one or more 
arbitrators who listen to the parties present their respective views 
of the case in an expedited, adversarial hearing format. The 
formality varies and may involve presentation of documents and 
witnesses or simply a summary by counsel. A decision is rendered 
that addresses liability and damages, if necessary. As of this time, 
it is non-binding on the United States and either party may request 
a trial de novo.
    5. Minitrial means a flexible, nonbinding hearing, generally 
reserved for complex cases, in which counsel for each party 
informally presents a shortened form of its case to settlement-
authorized representatives of the parties in the presence of a 
presiding judge, magistrate judge, or other neutral, at the 
conclusion of which the representatives meet, with or without the 
judge or neutral, to negotiate a settlement, failing which the case 
proceeds to trial.
    6. Summary bench trial means, in any case not triable by a jury, 
a pretrial procedure intended to facilitate settlement consisting of 
a summarized presentation of a case to a Judicial Officer whose 
decision and subsequent factual and legal analysis serves as an aid 
to settlement negotiations.
    7. Summary jury trial means a flexible nonbinding procedure, 
usually reserved for trial-ready cases in which protracted jury 
trials are anticipated, and involving a short hearing in which 
evidence is presented by counsel in summary form, following which a 
jury returns an advisory verdict that forms the basis for settlement 
negotiations.

Civil Rights Division, Alternative Dispute Resolution, Case Screening 
Factors

    Alternative Dispute Resolution (``ADR''), as used here, is any 
dispute resolution process facilitated by a third-party neutral. The 
Civil Rights Division resolves consensually many of its civil cases 
through traditional two-party negotiation and will continue to do 
so. ADR is not meant to replace traditional negotiation, but rather 
to provide attorneys with additional tools that may facilitate 
communication and resolution of matters where party-to-party 
negotiations have been or are likely to be unsuccessful.
    In evaluating whether an ADR process may be useful, there are no 
hard and fast rules. Attorneys should consider whether ADR might be 
helpful in a particular case at the beginning of the litigation and 
revisit the question throughout the progress of the case taking into 
account the ADR processes that may be available through or imposed 
by the court in a particular district or circuit as well as the 
private ADR providers available in the relevant market. The 
following is a brief description of the major ADR processes.
    1. Mediation. An impartial third party facilitates confidential 
discussions or negotiations among the parties to help them reach 
settlement. Mediation is a creative, flexible process that may 
broaden resolution options, often by going beyond the legal issues 
in controversy.
    2. Neutral Evaluation. Neutral evaluation is a confidential 
conference where the parties and their counsel present the factual 
and legal bases of their case and receive a non-binding assessment 
by an experienced neutral with subject-matter expertise and/or with 
significant trial experience in the jurisdiction. This assessment 
can form the basis for settlement discussions facilitated by the 
evaluator if the parties so choose.
    3. Joint Fact-Finding. This term encompasses various processes 
in which facts relevant to a controversy are examined and determined 
by a neutral third party. Typically, the parties appoint a neutral 
expert to resolve complex factual, technical, scientific, or legal 
questions and agree in advance whether the findings will be treated 
as advisory or binding.
    4. Mini-Trial/Summary Jury Trial. An informal hearing-like 
presentation by the parties of their best case in shortened form to 
settlement-authorized representatives. Following the hearing, the 
parties and representatives meet, with or without a neutral advisor, 
to negotiate a settlement. If a jury is used, the jury's non-binding 
verdict is used as a basis for subsequent settlement negotiations.
    5. Arbitration. One or more arbitrators issue a judgment on the 
merits (binding or non-binding) after an expedited adversarial 
hearing.
    The following is a non-exclusive list of factors to assist 
attorneys in determining whether to use ADR in a particular case. 
Not

[[Page 36907]]

all factors listed will be relevant to a given case, and factors not 
listed below may weigh in favor of or against use of ADR in a 
particular instance.

Factors Favoring Use of ADR

The Parties

     Continuing Relationships. The United States, aggrieved 
persons, or other litigants are likely to have continued contact 
with the defendants in implementation of remedy or in other 
contexts.
     Barriers to Communication. The United States or other 
litigants foresee impasses developing because of conflicts within 
interest groups, political visibility, or poor or non-existent 
communication among the participants (including attorneys) due to 
personality difficulties or past history.
     Absent Stakeholder(s). Participation of persons or 
groups who are not directly involved in the legal action may be 
beneficial or necessary to optimal resolution.
     Divergence of Interests. There are gains and losses to 
be apportioned constructively, and in which varying priorities among 
the parties will allow trading off of those gains and losses to 
permit all involved to benefit from the outcome.
     Numerous Parties. The number of parties or interested 
persons or groups is so numerous that a structured/facilitated 
negotiation process would be helpful.
     Litigation Against Other Government Agencies. 
Involvement of a third-party neutral may assist in sorting through 
and/or evaluating ``public interest'' claims of various governmental 
components (among federal agencies or between federal and state or 
local entities), provided non-Departmental litigants are acting in 
good faith.

Nature of the Case

     Need for Problem Solving or Development of Creative 
Alternatives. A thorough exchange of information and generation of 
alternatives and options will improve the outcome.
     Factual or Technical Complexity or Uncertainty. The 
parties would benefit from reliance on the expertise of a third-
party expert for technical assistance and/or fact-finding.
     Need for Facilitated Private Discussions. The 
settlement desired may be improved by the neutral's ability to 
conduct frank, private discussions among the parties.
     Flexibility Desired in Shaping Relief. The United 
States is seeking relief with detailed implementation and/or 
monitoring on multiple issues or subjects that may be difficult to 
obtain from the Court, or is amenable to resolution through 
cooperation between the parties.
     Ultimate Outcome Uncertain. Litigants face uncertain 
outcome at the time of trial based on the law, the facts, or the 
decisionmaker. Also important is the likelihood of prevailing on 
appeal should the United States lose at trial.
     Hostile Decisionmaker. Case will be tried in front of 
an unsympathetic Judge, or jury venue is likely to be unsympathetic 
or even hostile.
     Conservation of Enforcement Resources. Preparing the 
case for trial would require a burdensome commitment of significant 
resources without achieving a proportionate impact.
     Numerous Issues. Discussion of multiple issues will be 
assisted by a structured/facilitated negotiation process.
     Direct Settlement Negotiations Unsuccessful. The United 
States has attempted traditional settlement negotiations without 
success or an impasse has been reached and the United States 
believes involvement of a third-party neutral will facilitate 
further progress and/or final resolution.

Representation

     Need To Speak Directly to Client. The parties (or 
aggrieved persons) need to hear an evaluation of the case from 
someone other than their lawyers.

(For example, a case that appears to be headed for trial merely 
because a defendant does not understand the applicable law.)
     Lawyers Are Willing To Consider ADR. The lawyers 
involved are knowledgeable about ADR processes and intend to 
participate in the chosen ADR process in a good-faith attempt to 
resolve the dispute.

Timing

     Facts Are Sufficiently Developed. The parties have 
sufficient information to permit them to make informed decisions 
concerning the ultimate disposition of the dispute.
     Parties Are Prepared To Discuss Settlement. The parties 
are willing to resolve the case short of trial.

Factors Disfavoring Use of ADR

     Public Sanction Necessary. There is a need for public 
sanctioning of conduct.
     Imbalance of Power or Ability. A party or parties are 
not able to negotiate effectively themselves or with assistance of 
counsel.
     Judicial Decision Required. Development of the law is 
important or the imprimatur of a court decision is necessary to 
secure vindication of rights, enforcement, or compliance.
     Biased Selection Process for ADR Neutral. Political 
sensitivity of case coupled with questionable neutral selection 
process would likely result in selection of ``neutral'' with ties to 
local political powers or parochial interests contrary to the United 
States. (This situation may be dealt with by insisting that the 
United States have power to overturn final selection of neutral.)
     Successful Summary Judgment Certain To Resolve Case 
Conclusively.
     Case Very Likely To Settle Through Unassisted 
Negotiation in Near Future.

Civil Rights Division, Alternative Dispute Resolution, Case Screening 
Factors

    Alternative Dispute Resolution (``ADR''), as used here, is any 
dispute resolution process facilitated by a third-party neutral. The 
Civil Rights Division resolves consensually many of its civil cases 
through traditional two-party negotiation and will continue to do 
so. ADR is not meant to replace traditional negotiation, but rather 
to provide attorneys with additional tools that may facilitate 
communication and resolution of matters where party-to-party 
negotiations have been or are likely to be unsuccessful.
    In evaluating whether an ADR process may be useful, there are no 
hard and fast rules. Attorneys should consider whether ADR might be 
helpful in a particular case at the beginning of the litigation and 
revisit the question throughout the progress of the case taking into 
account the ADR processes that may be available through or imposed 
by the court in a particular district or circuit as well as the 
private ADR providers available in the relevant market. The 
following is a brief description of the major ADR processes.
    1. Mediation. An impartial third party facilitates confidential 
discussions or negotiations among the parties to help them reach 
settlement. Mediation is a creative, flexible process that may 
broaden resolution options, often by going beyond the legal issues 
in controversy.
    2. Neutral Evaluation. Neutral evaluation is a confidential 
conference where the parties and their counsel present the factual 
and legal bases of their case and receive a non-binding assessment 
by an experienced neutral with subject-matter expertise and/or with 
significant trial experience in the jurisdiction. This assessment 
can form the basis for settlement discussions facilitated by the 
evaluator if the parties so choose.
    3. Joint Fact-Finding. This term encompasses various processes 
in which facts relevant to a controversy are examined and determined 
by a neutral third party. Typically, the parties appoint a neutral 
expert to resolve complex factual, technical, scientific, or legal 
questions and agree in advance whether the findings will be treated 
as advisory or binding.
    4. Mini-Trial/Summary Jury Trial. An informal hearing-like 
presentation by the parties of their best case in shortened form to 
settlement-authorized representatives. Following the hearing, the 
parties and representatives meet, with or without a neutral advisor, 
to negotiate a settlement. If a jury is used, the jury's non-binding 
verdict is used a basis for subsequent settlement negotiations.
    5. Arbitration. One or more arbitrators issue a judgment on the 
merits (binding or non-binding) after an expedited adversarial 
hearing.
    The following is a non-exclusive list of factors to assist 
attorneys in determining whether to use ADR in a particular case. 
Not all factors listed will be relevant to a given case, and factors 
not listed below may weigh in favor of or against use of ADR in a 
particular instance.

Factors Favoring Use of ADR

The Parties

     Continuing Relationships. The United States, aggrieved 
persons, or other litigants are likely to have continued contact 
with the defendants in implementation of remedy or in other 
contexts.
     Barriers to Communication. The United States or other 
litigants foresee impasses developing because of conflicts within 
interest groups, political visibility, or poor or non-existent 
communication among the participants (including attorneys) due to 
personality difficulties or past history.
     Absent Stakeholder(s). Participation of persons or 
groups who are not directly

[[Page 36908]]

involved in the legal action may be beneficial or necessary to a 
optimal resolution.
     Divergence of Interests. There are gains and losses to 
be apportioned constructively, and in which varying priorities among 
the parties will allow trading off of those gains and losses to 
permit all involved to benefit from the outcome.
      Numerous Parties. The number of parties of interested 
persons or groups is so numerous that a structured/facilitated 
negotiation process would be helpful.
     Litigation Against Other Government Agencies. 
Involvement of third-party neutral may assist in sorting through 
and/or evaluating ``public interest'' claims of various governmental 
components (among federal agencies or between federal and state or 
local entities), provided non-Departmental litigants are acting in 
good faith.

Nature of the Case

     Need for Problem Solving or Development of Creative 
Alternatives. A thorough exchange of information and generation of 
alternatives and options will improve the outcome.
     Factual or Technical Complexity or Uncertainty. The 
parties would benefit from reliance on the expertise of a third-
party expert for technical assistance and/or fact-finding.
     Need for Facilitated Private Discussions. The 
settlement desired may be improved by the neutral's ability to 
conduct frank, private discussions among the parties.
     Flexibility Desired in Shaping Relief. The United 
States is seeking relief with detailed implementation and/or 
monitoring on multiple issues or subjects that may be difficult to 
obtain from the Court, or is amenable to resolution through 
cooperation between the parties.
     Ultimate Outcome Uncertain. Litigants face uncertain 
outcome at the time of trial based on the law, the facts, or the 
decisionmaker. Also important is the likelihood of prevailing on 
appeal should the United States lose at trial.
     Hostile Decisionmaker. Case will be tried in front of 
an unsympathetic Judge, or jury venire is likely to be unsympathetic 
or even hostile.
     Conservation of Enforcement Resources. Preparing the 
case for trial would require a burdensome commitment of significant 
resources without achieving a proportionate impact.
     Numerous Issues. Discussion of multiple issues will be 
assisted by a structured/facilitated negotiation process.
     Direct Settlement Negotiations Unsuccessful. The United 
States has attempted traditional settlement negotiations without 
success or an impasse has been reached and the United States 
believes involvement of a third-party neutral will facilitate 
further progress and/or final resolution.

Representation

     Need To Speak Directly to Client. The parties (or 
aggrieved persons) need to hear an evaluation of the case from 
someone other than their lawyers.

(For example, a case that appears to be headed for trial merely 
because a defendant does not understand the applicable law.)

     Lawyers Are Willing To Consider ADR. The lawyers 
involved are knowledgeable about ADR processes and intend to 
participate in the chosen ADR process in a good-faith attempt to 
resolve the dispute.

Timing

     Facts Are Sufficiently Developed. The parties have 
sufficient information to permit them to make informed decisions 
concerning the ultimate disposition of the dispute.
     Parties Are Prepared To Discuss Settlement. The parties 
are willing to resolve the case short of trial.

Factors Disfavoring Use of ADR

     Public Sanction Necessary. There is a need for public 
sanctioning of conduct.
     Imbalance of Power or Ability. A party or parties are 
not able to negotiate effectively themselves or with assistance of 
counsel.
     Judicial Decision Required. Development of the law is 
important or the imprimatur of a court decision is necessary to 
secure vindication of rights, enforcement, or compliance.
     Biased Selection Process for ADR Neutral. Political 
sensitivity of case coupled with questionable neutral selection 
process would likely result in selection of ``neutral'' with ties to 
local political powers or parochial interests contrary to the United 
States. (This situation may be dealt with by insisting that the 
United States have power to overturn final selection of neutral.)
     Successful Summary Judgment Certain To Resolve Case 
Conclusively.
     Case Very Likely To Settle Through Unassisted 
Negotiation in Near Future.

September 11, 1995.

ADR Criteria--Environment and Natural Resources Division

    The Environment and Natural Resources Division (``ENRD'') 
proposes the following ADR criteria for use by its attorneys.
    ENRD has made substantial progress in developing an ADR docket. 
Approximately 18 months ago, we began to require each section 
regularly to review its docket for potential ADR cases and to make 
reports to the Assistant Attorney General. In this time, the 
sections have identified approximately 200 cases as candidates for 
resolution through ADR; of those matters, approximately 150 cases 
are now in an ADR process or have been resolved through ADR or 
otherwise.
    We have several ideas for building on these initial successes. 
Principally, we seek to encourage the use of ADR in new types of 
cases and to increase the number of attorneys who are actively 
involved in ADR and who have ADR expertise. For our purposes, the 
ADR criteria should be inclusive, rather than exclusive, and should 
encourage attorneys to be creative in the use of ADR. The criteria 
are not intended to be utilized as a ``checklist'' of factors that 
must be present for an ADR process; rather, they are offered as some 
reasons among many others to use ADR. Further Division experience 
with ADR processes will likely allow refinement of these criteria.
    We therefore propose that ENRD attorneys should use a single 
criterion and several factors in evaluating the use of ADR:
    ADR Criterion: ENRD attorneys should consider and use ADR 
techniques in their cases whenever ADR may be an effective way to 
reach a consensual result that is beneficial to the United States.
    ADR Factors: In its use of ADR thus far, ENRD has found that ADR 
can be helpful in achieving a beneficial settlement in various 
situations, some of which are identified below. ENRD attorneys 
should look to these factors as some reasons why ADR might be useful 
in their cases. Even cases that do not exhibit these factors are 
often appropriate for ADR.
    One of the advantages of ADR is that it gives the parties to a 
dispute the flexibility to fashion their own procedures for 
resolving the dispute. There are almost as many kinds of ADR as 
there are parties and disputes. Thus, in evaluating whether ADR 
processes may be useful, there are no hard and fast rules. Attorneys 
should begin considering whether ADR might be helpful in a 
particular case at the beginning of the litigation and should 
continue to revisit the question throughout the progress of the 
case. Such analysis must take account of the ADR processes that may 
be available through or imposed by the court in a particular 
district court or circuit. Attorneys should keep in mind that many 
different kinds of ADR are available both through the courts and 
independent of the courts.
    As ENRD gains more experience with ADR. we intend to amend and 
add to these factors:

--Ability of neutral to conduct frank, private discussions may 
improve the outcome.
--Range of issues are broad enough, or can be creatively made broad 
enough, to allow tradeoffs and creative generation of options 
presented, especially when some options cannot be ordered by a 
court. For example, in a NEPA dispute, underlying resource 
management decisions are likely the crux of concern, but cannot be 
reached by a court. Addressing concerns with respect to the 
underlying dispute can resolve the issue at hand, and may forestall 
future litigation. Money disputes can often be more complex than 
they first appear.
--A neutral may be helpful in facilitating negotiations by breaking 
through impasses that develop because of :
--Conflicts within interest groups;
--Technical complexity or uncertainty;
--Political visibility;
--Poor communication among the participants due to personalities or 
past history.

    For example, a neutral can defuse tension with a citizens' group 
angry about a particular agency project by presenting negotiating 
proposals from all sides in an even-handed manner. If appropriate, a 
neutral or other joint expert might offer technical expertise on a 
given issue.

--Thorough exchange of information will improve the outcome. For 
example, a neutral can help to ensure that all issues are addressed, 
and that the heat of negotiating has not caused the parties to 
overlook an item that may be crucial to settlement implementation.

[[Page 36909]]

--Participation of parties not directly involved in a legal action 
is necessary or beneficial to the settlement. For example, numerous 
citizens' groups may be interested in a particular agency project; 
addressing the concerns only of the group that sued may be short-
sighted, and invite future litigation from others.
--Number of parties and issues numerous, such that a facilitated, 
structured settlement process would be helpful, and no party is 
willing or able to take on his role. For example, CERCLA allocation 
disputes often involve multiple parties and issues, and a neutral 
who provides a structure for allocation can assist the parties in 
reaching a global settlement.
* * * * *
    This document relates to the United States' voluntary 
participation in ADR. Nothing here shall be construed to limit the 
United States' duty to participate in ADR pursuant to court order or 
applicable local rules, except that Division attorneys shall resist 
participation in ADR, by appropriate motion, whenever such 
participation would violate the United States Constitution or other 
governing law.
    This document shall not be construed to create any right or 
benefit, substantive or procedural, enforceable at law or in equity, 
by a party against the United States, its agencies, its officers, or 
any other person. This document shall not be construed to create any 
right to judicial review involving the compliance or noncompliance 
of a Division attorney with its terms.

Executive Office for United States Attorneys' Policy Statement and 
Practice and Procedure Guide on the Use of Alternative Dispute 
Resolution

    This Policy Statement and Practice and Procedure Guide 
(``Guide'') is distributed to all United States Attorneys (USAs) 
nationwide pursuant to paragraph 7 of Department of Justice Order 
OBD 1160.1, dated April 6, 1995, and entitled, ``Promoting the 
Broader Appropriate Use of Alternative Dispute Resolution 
Techniques.'' This Guide should be distributed immediately to all 
Assistant United States Attorneys (AUSAs) and Special Assistant 
United States Attorneys (SAUSAs) handling civil litigation in state 
or federal courts.

I. Introduction

    The purpose of this Policy Statement and Practice and Procedure 
Guide is to encourage the use of Alternative Dispute Resolution 
(ADR) and to foster and develop alternatives to the traditional 
adversarial techniques used to resolve civil legal disputes 
involving the United States. Pursuant to the Department of Justice 
Order OBD 1160.1, the civil litigating components of the Department 
of Justice (DOJ) are expected to use ADR techniques in appropriate 
civil cases in an effort to resolve or avoid litigation. The USAs 
have the opportunity to take the lead in formulating and 
implementing ADR methods in order to promote less time consuming, 
more effective resolution of civil litigation.
    The April 6, 1995 Order, requires each component of the 
Department of Justice, including the Executive Office for United 
States Attorneys (EOUSA) to:
    (1) issue a policy statement concerning and promoting the use of 
ADR and to cooperate with court-annexed or court-sponsored ADR 
programs;
    (2) create a set of criteria to be used in identifying specific 
cases appropriate for resolution through settlement negotiations or 
formal ADR techniques, identifying the most suitable methods of ADR 
for specific case categories and developing a criteria for selection 
of independent neutrals;
    (3) implement a component-wide comprehensive basic training 
program in negotiation and ADR that shall be mandatory for all 
attorneys handling civil matters with periodic supplemental 
training;
    (4) issue a complete explanation of the internal procedures 
attorneys should follow in obtaining authorization and funding for 
the use of formal ADR techniques;
    (5) designate person(s) within the component who shall have 
primary responsibility for coordinating the component's ADR efforts 
so that a network of individuals with ADR expertise is established, 
and
    (6) collect and maintain statistics regarding component use of 
ADR and report these statistics annually to the Associate Attorney 
General.
    All attorneys within the litigating components of the DOJ, 
including AUSAs, who handle civil litigation, are urged to consider 
the appropriate use of ADR in each matter handled. Alternative 
Dispute Resolution should be used in conjunction and association 
with traditional settlement processes found within the litigation 
process.
    Civil AUSAs will be responsible for reviewing their respective 
cases and matters to determine whether ADR is appropriate and what 
ADR process is most suitable for each case or matter in accordance 
with each district's approval procedures. Assistant United States 
Attorneys with primary case responsibility, with approval and 
oversight of the district's ADR Officer, will be responsible for 
analyzing the matter or case in light of the following guidelines.
    It is important to the concept of Access to Justice that the 
courts provide for swift resolution of conflict for civil litigants. 
As the courts continue to be saturated with criminal matters and 
significant civil litigation, appropriate ADR will serve to reserve 
judicial time and court expense to the truly intractable issue.

II. General Civil Litigation Policy Statement

    A. Settlement Objectives. The goal of USAs as participants in 
ADR and during other settlement discussions shall be as follows: In 
consultation with the client, to weigh the magnitude and likelihood 
of all costs, risks, and benefits associated with nonsettlement 
versus participation in ADR and to consider the best interests of 
the client and the government, and--through voluntary settlement 
and/or ADR, if possible and cost-efficient--to achieve the most 
favorable result reasonably obtainable under the circumstances on 
behalf of the client, consistent with applicable law and the highest 
standards of fairness, justice and equity.
    B. Although the interest of the government in participating in 
ADR is compelling, this Guide is intended neither to compel ADR nor 
any ADR technique in any particular case or category of cases, nor 
is it to compel pretrail settlement. Nothing in this Guide shall be 
construed to obligate the United States to offer funds to settle any 
case, to accept a particular settlement or resolution of a dispute, 
to alter its standards for accepting settlements, or to alter any 
existing delegation of settlement or litigating authority.
    C. This Guide relates to the government's voluntary 
participation in ADR. Nothing herein shall be construed to limit the 
government's duty to participate in ADR pursuant to court order or 
applicable local rules, except that USAs shall resist participation 
in ADR, by appropriate motion, whenever said participation would 
violate the United States Constitution or other governing law.
    D. The USAs are encouraged to recognize contributions made by 
AUSAs who handle matters in ADR by providing the same opportunities 
for promotion, awards and other professional recognition as those 
engaged in more traditional litigation.
    E. This Guide shall not be construed as creating any right or 
benefit, substantive or procedural, enforceable at law or in equity, 
by a party against the United States, its agencies, its officers, or 
any other person. This Guide shall not be construed to create any 
right to judicial review involving the compliance or noncompliance 
of the USAs with its terms.

III. Purposes

    The purposes of this Guide include the following:
    A. To designate various categories of cases as generally 
``appropriate for ADR'' according to cause of action and nature of 
disputed issues.
    B. To designate various other categories of cases as generally 
``inappropriate for ADR.''
    C. With respect to those categories of cases designated as 
``appropriate for ADR,'' to suggest preferred ADR techniques, 
without limiting the discretion of the USA to employ other ADR 
techniques.
    D. To identify, by way of example but not limitation, various 
circumstances under which the USA might wish to participate in ADR, 
notwithstanding that the particular case may fall outside a category 
designated as ``appropriate for ADR'' or may be designated as 
generally ``inappropriate for ADR.''
    E. Generally to promote the broader appropriate use of ADR 
techniques by United States Attorneys through enhanced awareness, 
training, and recordkeeping, among other things.

IV. Definitions

    The following definitions shall apply throughout this Guide \1\
---------------------------------------------------------------------------

    \1\ Most of the definitions set forth herein have been 
excerpted, with minor adaptions, from National ADR Institute for 
Federal Judges, Judge's Deskbook on Court ADR (Harvard Law School, 
November 12-13, 1993).
---------------------------------------------------------------------------

    A. ``Alternative Dispute Resolution'' (``ADR'') means any 
procedure, involving a ``neutral,'' that is used in lieu of trail to

[[Page 36910]]

resolve one or more issues in controversy, and includes, but is not 
limited to the following ``ADR techniques'':
    1. ``Arbitration'' means a flexible adjudicatory dispute 
resolution process in which one or more arbitrators issue a 
nonbinding judgment on the merits after an expedited, adversarial 
hearing. The nonbinding decision of the arbitrator(s) addresses only 
the disputed legal issues and applies legal standards. Either party 
may reject the nonbinding ruling and request a trial de novo.
    2. ``Early neutral evaluation'' means bringing all parties and 
their counsel together early in the pretrial phase of litigation to 
present summaries of their cases and receive a nonbinding assessment 
by an experienced, neutral evaluator with subject-matter expertise, 
usually an attorney, who may also provide case planning guidance 
and, if requested by the parties, settlement assistance.
    3. A ``judicial settlement conference'' means a settlement 
conference before a judge or magistrate judge, who, upon hearing 
summaries of each party's case and applicable law, may articulate 
opinions about the merits of the case or otherwise facilitate the 
trading of settlement offers by mediatory or other techniques aimed 
at improving communication among the parties and eliminating 
barriers to settlement. Because the judicial settlement conference 
constitutes a more traditional litigation mechanism, judicial 
settlement conferences will not be reported as an ADR mechanism for 
statistical purposes.
    4. ``Mediation'' means a flexible, nonbinding process in which a 
neutral third party, the mediator, facilitates negotiations among 
the parties to help them reach a settlement. In doing so, the 
mediator may expand traditional settlement discussion and broaden 
resolution options, often by going beyond the legal issues in 
controversy or incorporating nonparties in discussions.
    5. ``Minitrial'' means a flexible, nonbinding hearing, generally 
reserved for complex cases, in which counsel for each party 
informally presents a shortened form of its case to settlement-
authorized representatives of the parties in the presence of a 
presiding judge, magistrate judge, or other neutral, at the 
conclusion of which the representatives meet, with or without the 
judge or neutral, to negotiate a settlement. If settlement is not 
reached, the case then proceeds to trial.
    6. ``Neutral expert evaluation'' means bringing all parties and 
their counsel together to present summaries of their cases to an 
experienced, neutral expert for the purpose of receiving a 
nonbinding assessment or otherwise resolving a ``swearing contest'' 
among competing experts.
    7. ``Summary bench trial'' means, in any case not triable by a 
jury, a pretrial procedure intended to facilitate settlement 
consisting of a summarized presentation of a case to a judicial 
officer whose decision and subsequent factual and legal analysis 
serves as an aid to settlement negotiations.
    8. ``Summary jury trial'' means a flexible nonbinding procedure, 
usually reserved for trial-ready cases in which protracted jury 
trials are anticipated, and involves a short hearing in which 
evidence is presented by counsel in summary form to a jury. 
Following the evidentiary presentation, the jury returns an advisory 
verdict that forms the basis for settlement negotiations.
    B. ``Client'' means the particular client represented by the USA 
in the case at issue and, depending on the circumstances, may 
include the United States of America or one or more of its agencies, 
officers or employees, or other individuals or entities for whom 
representation has been authorized.
    C. ``Government'' means the United States of America and its 
agencies and officers.
    D. ``Nonbinding'' means that the parties are not bound by any 
resolution unless they agree in advance to be bound. All of the ADR 
techniques described in this Guide produce nonbinding outcomes. (In 
contrast, the terms ``mandatory'' and ``voluntary'' describe how 
cases enter ADR. ``Mandatory'' means that the referral to ADR is 
court-ordered; ``voluntary'' means that the referral to ADR is by 
consent of the parties.)
    E. ``United States Attorney'' includes any duly authorized 
designate of the USA.

V. General Case Analysis Criteria

    In order to operate successfully, the chosen ADR technique must 
be specifically tailored to the particular dispute. Alternative 
Dispute Resolution is often appropriate in cases where litigation 
will produce an unsatisfactory result regardless of outcome or where 
litigation is too slow or cumbersome. Alternative Dispute Resolution 
also permits the parties to exercise more direct control over the 
dispute resolution remedy. ADR techniques have proven successful in 
many categories of cases where the cases are routine (not precedent 
setting), such as routine auto torts, slip and fall, and employment 
rights cases, or where confidential communication with a neutral 
third party will help to clarify issues. Alternative Dispute 
Resolution techniques also allow the parties to craft 
individualized, nontraditional remedies. The following are some 
general suggestions to consider when determining whether to 
undertake ADR in a give case.
    Use of ADR should be seriously considered in matters involving 
contract performance or interpretation disputes, permit or licensing 
disputes, discrimination cases or any case in which the parties will 
have a continuing relationship regardless of outcome. ADR is also 
appropriate in many tort cases.
    The use of an ADR technique should be considered, but is often 
inappropriate, in cases involving the need to set precedent or to 
clarify constitutional issues. In addition, ADR is rarely 
appropriate in cases where there are prescribed outcomes or 
statutory remedies are inflexible. For example, in Social Security 
cases, the agency has no real discretion to depart from the 
statutory mandates of the Social Security Act. Finally, in those 
cases in which it is clear that the parties are not ready to 
negotiate or are opposed to the use of any ADR process, ADR is 
inappropriate.
    Alternative Dispute Resolution is not meant to replace 
traditional negotiation in every case. Rather, it may serve to 
provide attorneys with additional tools to facilitate negotiation 
where traditional two-party negotiation has not produced an 
acceptable resolution or where the presence of a neutral may cause 
negotiations to proceed more efficiently.
    The following, by way of example but not limitation, are factors 
to consider when determining whether to use ADR and when determining 
which ADR technique will be most suitable in a given case:
    A. General Considerations. The following is a list of factors to 
consider and analyze when determining whether and when to use ADR in 
a given matter. These factors are neutral in the sense that whether 
they militate in favor of or against the use of ADR depends entirely 
upon the specific facts and circumstances of the case at issue.
    1. The parties' purpose in filing the lawsuit demonstrates an 
agenda separate from the specific issues in the case.
    2. Case procedural history, i.e., what administrative 
proceedings have preceded filing in court.
    3. Assessment of likely outcome including likelihood of appeal.
    4. Where is the case in the discovery process? Has all of the 
information necessary to settle the case been discovered?
    5. Where is the United States in terms of procuring settlement 
authority? Is more information necessary before authority can be 
obtained?
    6. Who is in charge of the litigation, parties or counsel?
    7. Are factual disputes significant?
    8. Are legal disputes significant?
    9. Are parties individuals, corporations or other governmental 
entities, and how does that affect their ability to participate in 
ADR process?
    10. Witness credibility and its impact on the litigation.
    11. Are there individuals or entities with interests in the 
outcome who are not parties to the case?
    12. There has been prior extensive administrative process.
    13. Position on the court docket.
    14. Expenses of litigation versus expenses of ADR.
    B. Factors That Generally Favor ADR. 1. If suit is one facet of 
a deeper dispute necessitating remedies unavailable to the court, 
for example, where the remedy available through the litigation may 
be different from the true agenda of the opposing party, ADR may be 
helpful to resolve the larger, underlying dispute by permitting the 
parties to fashion remedies not available to the court.
    2. The relationship between the parties will continue beyond the 
resolution of the litigation. For example, in employment dispute 
cases where the plaintiff will continue to be employed by the 
agency, ADR may help to resolve the issues while minimizing damage 
to an employment relationship that will continue beyond the 
litigation.
    3. There will be detrimental impact on parties, witnesses, and 
evidence because of crowded court dockets and projected trial dates.
    4. Any of the parties has limited resources.
    5. The relative resources of the parties are unequal.

[[Page 36911]]

    6. Relative positions of multiple parties (while the entire case 
may not be resolved, with multiple parties, disputes may be narrowed 
for trial).
    7. There is a need for confidentiality.
    8. There is a large administrative record in cases involving APA 
review.
    9. The client or other participants in the litigation may 
benefit from the input of an impartial third party.
    C. Factors That Generally Disfavor ADR. 1. There is a need for 
precedential decision.
    2. There is a need for resolution of public policy issues or 
constitutional issues.
    3. There is a parallel criminal investigation or proceeding 
involving the parties or circumstances of the case.
    4. There is a strong likelihood of swift resolution on 
jurisdictional or other legal issues.
    5. The United States has reason to believe that the opponent is 
engaging in fraudulent or criminal behavior. For example, in an auto 
tort case there is reason to believe that the accident has been 
staged.
    6. It is believed that settling the case would encourage future 
meritless litigation.

VI. Designation of Cases

    A. The ADR techniques which may be appropriate for a case depend 
upon many specific factors peculiar to that case. The following 
categories of cases are generally ``appropriate for ADR.''
    The ADR techniques to consider within the context of the given 
case include, but are not limited to, arbitration, early neutral 
evaluation, judicial settlement conference, mediation, mini-trial, 
neutral expert evaluation, summary bench trial, and summary jury 
trial.
    1. Drivers, Motor Vehicle Accidents (TODR), Property Damage 
(TOPD), Personal Injury (TOPI), Medical Malpractice (TOMM) and 
Wrongful Death (TOWD).
    2. Employment Discrimination (ED) and Civil Rights Fair Housing 
(CRTH), Veteran's Reemployment Rights Act (LBVR).
    3. Employment Rights of Government Employees (ER), Back Pay 
(ERBP), Adverse Action (ERAA) and Grievance (ERGR).
    4. Land/Real Property Condemnation (LDCN) (only where United 
States is plaintiff).
    5. Commercial Litigation Adversarial Proceeding (COAD), other 
claims related to federal assistance programs (COOC) and Recovery of 
overpayments made by the government (CORO).
    6. Recovery of Health Education Assistance Loans (COHE), 
Recovery of National Health Services Corps Scholarships (COHS) and 
Civil Penalty (CV).
    7. Fraud (FR), Anti-Kickback (FRAK), Government Commercial 
Programs (FRCM), False Claims (FRFC), Health Care Fraud (FRHC), 
Education (FRED), Environmental (FREV), Medicaid/Medicare (FRME), 
Medicare Only (FRMO) and Qui Tam suits (FRQT). In Qui Tam suits, 
there must be careful analysis of the relator's position on ADR.
    B. The following categories of cases are generally 
``inappropriate for ADR'':
    1. Notwithstanding that a particular category may be enumerated 
in Part VI-A above, any case in which there is a dispositive motion 
by the United States Attorney, to which opposition would be 
frivolous or insubstantial in the considered opinion of the USA.
    2. Government agents sued in their individual capacity, e.g., 
Bivens (TOBI) and other non-government individuals (e.g., witnesses 
and jurors) sued in their individual capacities (TOOI). (In Bivens 
cases, careful consideration should be given to the fact that the 
individual defendant is the client rather than the government.)
    3. Any case in which the adverse party appears pro se.
    4. Preliminary injunctions/TRO's (IJ) (where United States or 
its agency is a defendant).
    5. Foreclosure/Liens (COMC).
    6. Constitutionality of Statute (CN).
    7. Social Security cases (SS) and all related causes of action 
as presently structured.
    8. Any case in which the United States Attorney has determined 
that a precedent setting decision is required on a significant issue 
in the case.
    9. Freedom of Information Act (FO).
    10. Privacy Act (PV).
    11. Immigration (IM).
    12. Prisoner Cases (PC), Post Conviction Sec. 2255 (PCST), 
Habeas Proceedings (PCHC).
    13. Asset Forfeiture (COFF).
    C. With the client's consent and input, the United States 
Attorney should consider voluntary participation in ADR in cases 
specifically designated as generally ``inappropriate for ADR,'' 
including those designated in Part VI-B above, under the following 
circumstances:
    1. The United States Attorney believes that the enhanced 
communication available through ADR will increase the likelihood of 
settlement or the scope of settlement options under construction.
    2. The United States Attorney foresees a substantial probability 
that, even in the absence of complete settlement, ADR will result 
either in a stipulation narrowing the scope of disputed issues or a 
more focused, mutual effort of the parties to tailor further 
discovery to material issues that are genuinely disputed.
    D. This Guide reflects recommendations formulated within the 
context of practice in United States Attorneys' Offices and may vary 
from guidance provided by other DOJ litigating components because of 
different underlying policy considerations.

VII. Specific Guidance for Cases Designated As Generally ``Appropriate 
for ADR''

    With respect to those categories of cases designated as 
``appropriate for ADR'' in Part VI-A above and not otherwise 
excluded by Part VI-B, it is recommended that USAs pursue the 
following course:
    A. With the client's consent and input, engage in genuine 
settlement discussions with opposing counsel at an early practicable 
opportunity and at reasonable times thereafter for the purpose of 
settling the case even without the necessity of ADR, if possible and 
appropriate under the circumstances.
    B. Notify the court in writing, either in such case management 
reports or pretrial statements as may be filed under Fed. R. Civ. P. 
16 or under applicable local rules or otherwise, of:
    1. The client's willingness, if any, to participate in ADR;
    2. The client's preferred ADR technique, and
    3. The preferred timing of ADR under the circumstances of the 
case (e.g., before, during or after discovery, before or after 
ruling on dispositive motion(s)).
    C. Participate in ADR if ordered by the court or, with the 
client's consent, voluntarily, with such notice to the court of the 
employment of ADR as the circumstances may suggest.

VIII. Specific Guidance for Cases Designated As Generally 
``Inappropriate for ADR''

    With respect to those categories of cases designated as 
``inappropriate for ADR'' in Part VI-B above, it is recommended that 
USA's:
    A. With the client's consent and input, engage in genuine 
settlement discussions with opposing counsel at an early practicable 
opportunity and at reasonable times thereafter for the purpose of 
settling the case, if possible and appropriate under the 
circumstances;
    B. Participate in ADR if ordered by the court;
    C. Participate in ADR voluntarily with the consent of the client 
at the discretion of the USA, if circumstances, including but not 
limited to those set forth at Part VI-C above, suggest that ADR may 
enhance the opportunity for a cost-efficient resolution of the case.

IX. Training Program

    A. Current Training: The Office of Legal Education (OLE), EOUSA, 
has played a leading role in ADR and negotiations training. An ADR 
Seminar, where ADR is the exclusive subject, is offered twice a year 
by the Legal Education Institute (LEI) (whose primary target is 
agency counsel) and twice a year in the Attorney General's Advocacy 
Institute (AGAI) (whose primary target is AUSAs and Department of 
Justice Trial Attorneys). In addition, ADR is taught as part of 
several LEI and AGAI courses including: the Negotiations Skills 
Course, offered three times a year; the Federal Administrative 
Process Course, offered two to three times a year; the Civil Chiefs 
Seminar, offered for Supervisory Assistant U.S. Attorneys each year; 
the Affirmative Civil Enforcement Course, offered twice each year; 
the Advanced Civil Trial Course, offered at least once each year; 
and the Civil Practice Seminar, offered three times a year.
    The Office of Legal Education also has an extensive video and 
audiotape lending library which includes several selections on ADR 
issues. The Office of Legal Education continually updates this 
library and makes it available to all USAOs offices and DOJ 
litigating divisions.
    B. Future Training: The Office of Legal Education will develop 
future training within existing budgetary constraints in 
consultation with the USAOs, the AGAC Working Group on ADR and the 
Senior Counsel for ADR.

[[Page 36912]]

X. Internal Procedures for Authorization and Funding

    A. ADR Officer: The USA shall designate one AUSA as the ADR 
Officer who shall oversee, implement and monitor the ADR activity 
within the district's civil litigation. It is suggested that the 
Civil Chief of the district be designated the ADR Officer.
    The ADR Officer will be responsible for coordinating ADR 
activity within the district. Specific responsibilities of ADR 
Officers include:
    1. Ensuring that each AUSA with civil litigation responsibility 
receives comprehensive basic training in negotiation and ADR with 
periodic supplemental training.
    2. Coordinating the district's collection and reporting of 
statistics consistent with the provisions of section XIII of this 
Guide.
    B. ADR Reporting Responsibilities: Each district will be 
responsible for making an annual report to EOUSA showing the 
frequency and type of ADR techniques utilized within the year and 
whether ADR was instrumental in resolving the litigation prior to 
trial.
    C. Withdrawal From ADR Activity: The United States retains the 
right to object and withdraw from any ADR activity where the USA or 
his designate has made a determination that the selected neutral 
should be disqualified under conditions analogous to those found 
within 28 U.S.C. Sec. 455. It is recommended that the USA or his 
designate should promptly communicate this objection and withdrawal 
to the Clerk of Court and should strive to identify an alternative 
neutral acceptable to the court and all parties prior to objection 
and withdrawal.

XI. Selection Criteria for Appointment of Neutrals

    A. Selection Criteria for Neutrals: Factors to be considered 
when selecting a neutral include, but are not limited to:
    1. Whether the neutral is an attorney;
    2. What other training or expertise the neutral possesses;
    3. Experience in the technical area of the dispute;
    4. Experience in ADR processes;
    5. Experience in government litigation;
    6. Experience in multiparty litigation;
    7. Whether the neutral knows counsel and the nature and context 
of that knowledge; and,
    8. Cost associated with hiring neutral.
    B. Selection and Certification: Any person qualified as a 
neutral by a federal judicial officer or pursuant to the rules 
promulgated by the highest court of a state, its legislative bodies 
or other government sanctioned ADR unit and who is not disqualified 
or disqualifiable under conditions analogous to those found within 
28 U.S.C. Sec. 455 may act as a neutral in a case or matter 
involving the United States.

XII. Payment of Fees and Expenses Associated With ADR

    A. Neutrals: Neutrals shall be paid for through the neutrals 
fund established through JMD and in the manner prescribed by EOUSA.
    B. Expert witnesses: Shall be paid in the same manner as expert 
witnesses in any civil litigation within the USAO.
    C. Fact witnesses: Shall be paid in the same manner as fact 
witnesses in any civil litigation in the USAO.
    Other fees and expenses: Fees and expenses associated with ADR 
proceedings, other than fees for neutrals, shall be paid from the 
litigation expense budget of the USAO.

XIII. Designation of ADR Coordinators

    The following are designated as ADR coordinators for the USAOs 
and EOUSA:

1. William D. Wilmoth, United States Attorney for the Northern 
District of West Virginia, 304-234-0100
2. Jeanette Plante, Special Assistant United States Attorney, 
Executive Office for U.S. Attorneys, 202-616-6444

XIV. Statistics

    The Executive Office will collect statistics on the use of ADR 
in the Districts. The statistical collection plan will be developed 
in consultation with the USAOs and the Senior Counsel for ADR and 
will be as minimally burdensome as possible.

XV. Miscellaneous

    USAO Employees Serving As Neutrals: USAO employees, with the 
written approval of the United States Attorney, may render services 
as a ``neutral'' on a case by case basis when it has been determined 
that the United States has no known or future interest in the 
litigation and the USAO employee ``neutral'' is not disqualified 
under conditions analogous to those found within 28 U.S.C. Sec. 455. 
The USAO employees who render services as a ``neutral'' may not 
receive reimbursement for said services, except for travel and per 
diem.

Tax Division--Policy for Tax Litigation

Introduction

    On April 6, 1996, the Attorney General signed an order promoting 
broader use of Alternative Dispute Resolution as a toll for 
resolving disputes between the government and its citizens in as 
prompt, efficient, and inexpensive a manner as possible. Alternative 
Dispute Resolution (``ADR'') is any non-binding dispute resolution 
process facilitated by a third-party neutral. ADR methods include, 
but are not limited to, arbitration, mediation, early neutral 
evaluation, neutral expert evaluation, mini-trials, and summary jury 
trials. ADR may be conducted pursuant to the agreement of the 
litigants, or it may be court-mandated.

Policy

    the Tax Division always has had, and continues to have, a policy 
of settling cases, where appropriate, as early in the litigation as 
reasonably possible. I believe that the use of ADR will further this 
Division policy. Therefore, Tax Division attorneys are expected to 
use ADR in appropriate cases and to cooperate with and support 
court-annexed or court-sponsored ADR programs.
    Tax Division lawyers should consider the use of ADR in all civil 
cases within the Division in a manner consistent with our 
enforcement objectives and the need for consistent treatment of 
similarly situated taxpayers. In cases where the attorney assigned 
to the case, in consultation with his or her reviewer, believes that 
ADR may be appropriate, he or she should consider using an 
independent third-party neutral through a court-sponsored program, 
from another government agency, or from outside of the government. 
Where court-sponsored and/or court-annexed ADR programs are 
available, Division attorneys are expected to utilize and 
participate fully in such programs in all appropriate cases.
    The Tax Division has a strong record of resolving disputes 
through settlements achieved through traditional negotiation between 
counsel. I expect that all attorneys in the Division will continue 
to use their negotiation skills to settle cases where settlement is 
appropriate. ADR is not a substitute for traditional negotiation, 
but rather provides attorneys with additional tools to facilitate 
settlement of cases on an appropriate basis at the earliest state at 
which such a settlement reasonably can be reached. Knowing how and 
when to settle a case is as important as knowing how to try a case. 
ADR processes can be important tools in the prompt and fair 
resolution of tax disputes and the skilled use of negotiation and 
ADR processes is part of the responsibility of every attorney in the 
Division. To facilitate the greater use of ADR, as well as to 
improve attorneys' negotiating skills in general, all Division 
attorneys will be required to participate in comprehensive and 
continuing training in both negotiation and ADR.
    It is the policy of the Tax Division, in making promotions and 
giving awards and other professional recognition, to recognize the 
outstanding contributions of trial attorneys in skillfully 
negotiating settlements as well as in trying cases. Thus, skillful 
use of ADR will likewise be considered in evaluating attorneys and 
recognizing their contributions to the Division.
    Attached is a set of case selection criteria to be used by the 
Civil Trial Sections, Court of Federal Claims Section, Appellate 
Section, and Office of Review in evaluating whether and when ADR is 
appropriate in a particular case.

Tax Division--Alternative Dispute Resolution

Case Selection Criteria

    Alternate Dispute Resolution (``ADR''), as used here, is any 
non-binding dispute resolution process facilitated by a third-party 
neutral, whether or not appointed by a court. The Tax Division 
presently resolves a large number of its cases through settlements 
negotiated through traditional two-party negotiation and believes 
that it will continue to do so. ADR is not meant to replace 
traditional negotiation, but rather to provide attorneys with 
additional tools that may facilitate negotiation of settlement where 
traditional two-party negotiation has not produced an acceptable 
resolution or where the presence of a third party may cause 
negotiations to proceed more quickly or efficiently.
    One of the advantages of ADR is that it gives the parties to a 
dispute the flexibility

[[Page 36913]]

to fashion their own procedures for resolving the dispute. There are 
almost as many kinds of ADR as there are parties and disputes. Thus, 
in evaluating whether ADR processes may be useful, there are no hard 
and fast rules. Attorneys should begin considering whether ADR might 
be helpful in a particular case at the beginning of the litigation 
and should continue to revisit the question throughout the progress 
of the case. Such analysis must take account of the ADR processes 
that may be available through or imposed by the court in a 
particular district or circuit.\1\ Attorneys also should keep in 
mind that many different kinds of ADR are available both through the 
courts and independent of the courts. Some forms of ADR may be more 
useful than others at particular points in the litigation. For 
example, early neutral evaluation, a process whereby a third-party 
neutral evaluates each side's case and helps the parties agree on 
the most efficient method of exchanging factual material, is most 
appropriate at the beginning of litigation and can be a useful tool 
in quickly obtaining a better understanding of the strengths and 
weaknesses of your case. By contrast, mediation, a process where a 
third party facilitates negotiation between the parties, may be most 
useful after the case has been more fully developed.
---------------------------------------------------------------------------

    \1\ The taxpayer should be required to provide a waiver of 26 
U.S.C. 6103 as a condition of the government's agreement to 
participate in ADR other than ADR imposed by the Court. In the 
absence of such a waiver, the government might not be able to make a 
full factual disclosure to the third-party neutral which would 
substantially undermine the utility of the ADR process.
---------------------------------------------------------------------------

    This statement on ADR relates to the government's voluntary 
participation in ADR. Nothing herein shall be construed to limit the 
government's duty to participate in ADR pursuant to court order or 
applicable local rules, except that Tax Division attorneys shall 
resist participation in ADR, by appropriate motion, whenever said 
participation would violate the U.S. Constitution or other governing 
law or would not be in the best interest of the United States.
    This statement shall not be construed as creating any right or 
benefit, substantive or procedural, enforceable at law or in equity, 
by a party against the United States, its agencies, its officers, or 
any other person. This statement shall not be construed to create 
any right to judicial review involving the compliance or 
noncompliance of Tax Division attorneys with its terms.
    The following is a list of factors to assist attorneys in the 
Tax Division in determining whether to use ADR in a particular 
case.2 Not all listed factors will have relevance in any given 
case and factors not listed below may also be present that weigh in 
favor of or against the use of an ADR process.
---------------------------------------------------------------------------

    \2\ Many of these factors are equally applicable in determining 
whether a case should be settled using traditional, unassisted 
negotiations.
---------------------------------------------------------------------------

Factors Favoring ADR

    1. The case involves largely factual issues and the legal 
principles are well established (e.g., valuation cases, 
substantiation cases, trust fund recovery cases).
    2. The case is legally and/or factually complex.
    3. The case involves multiple independent factual issues (e.g., 
bankruptcy cases).
    4. The case is one where there is a particular need for a prompt 
resolution of the dispute (e.g., summons, estate tax and bankruptcy 
cases).
    5. The case is one where a consensual resolution may lead to 
greater future compliance (e.g., employee-independent contractor 
cases).
    6. A settlement in the case would be based solely on 
collectibility.
    7. The other party has a particular need to keep information 
confidential (e.g., financial information or trade secrets).
    8. There are problems perceived either with respect to the 
decisionmaker or the forum, for example:
    a. The judge is particularly slow in resolving cases;
    b. The docket is backlogged with criminal and/or civil cases;
    c. There is the potential for jury nullification.
    9. The case is one where the Government will be required to 
litigate in a forum other than a federal court.
    10. The case is one where the nature or status of a party to the 
dispute might, in itself, influence the outcome of the litigation 
(e.g., sympathetic plaintiff).
    11. The case is one where there are substantial litigating 
hazards for both parties.
    12. The case is one where trial preparation will be difficult, 
costly and/or lengthy and the expected out-of-pocket and lost 
opportunity costs outweigh any benefit the government can 
realistically expect to obtain through litigation.
    13. The case is one where it is desirable to avoid adverse 
precedent.
    14. The case is one where either the party or the attorney may 
have an unrealistic view of the merits of the case or an 
unreasonable desire to litigate, with insufficient regard for what 
may be in the client's best interest.
    15. The case is one where the other party has expressed an 
interest in using ADR.
    16. The case is one where the working relationship between the 
parties or their counsel suggests that the intervention of a neutral 
third party would be beneficial.
    17. The case is one where traditional negotiations will be 
difficult and protracted.
    18. The case is one where the progress of settlement discussions 
may be improved by a third-party neutral's ability to conduct frank, 
private discussions with each of the parties.

Factors Disfavoring ADR

    1. Taxpayer's case clearly has no merit (e.g., certain Bivens 
cases or protestor suits).
    2. The case is one that should be resolved on motion, such as a 
motion to dismiss or for summary judgment.
    3. The case presents an issue where legal precedent is needed, 
for example:
    a. Issue involved is of national or industry-wide significance;
    b. Issue is presented in a substantial number of cases;
    c. Issue is a continuing one with same taxpayer.
    4. The importance of the issue involved in the case makes 
continued litigation necessary despite some adverse precedent.
    5. The information presently available about the case is 
insufficient to evaluate meaningfully the issues involved or 
settlement potential.
    6. The case involves significant enforcement issues, for 
example:
    a. Case involves protestors;
    b. Case is high profile and will involve publicity which could 
encourage taxpayer compliance;
    c. Case involves a uniform settlement position (e.g., shelter 
cases).
    7. The case involves a constitutional challenge.
    8. The case is one where government concession is under 
consideration.
    9. The case is one which is very likely to settle through 
traditional negotiations within a reasonable time after the facts 
have been ascertained, without a third-party neutral.
    10. The case is one where Court imposed scheduling makes use of 
ADR impractical (e.g., ``rocket-dockets'').
    11. The case is one where the other party has already engaged in 
ADR at the agency level.\3\
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    \3\ For purposes of this factor, normal agency administrative 
procedures, such as appellate conferences or administrative claims 
review, are not considered to be ADR procedures.
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    12. The case involves 26 U.S.C. Section 6103 information or 
privileges which would prevent open discussions with a third-party 
neutral (e.g., case involving request for third-party tax return 
information).

[FR Doc. 96-17744 Filed 7-12-96; 8:45 am]
BILLING CODE 4410-01-M