[Code of Federal Regulations]
[Title 28, Volume 2]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 28CFR50.20]

[Page 71-73]
 
                    TITLE 28--JUDICIAL ADMINISTRATION
 
              CHAPTER I--DEPARTMENT OF JUSTICE (Continued)
 
PART 50--STATEMENTS OF POLICY--Table of Contents
 
Sec. 50.20  Participation by the United States in court-annexed arbitration.

    (a) Considerations affecting participation in arbitration. (1) The 
Department recognizes and supports the general goals of court-annexed 
arbitrations, which are to reduce the time and expenses required to 
dispose of civil litigation. Experimentations with such procedures in 
appropriate cases can offer both the courts and litigants an opportunity 
to determine the effectiveness of arbitration as an alternative to 
traditional civil litigation.
    (2) An arbitration system, however, is best suited for the 
resolution of relatively simple factual issues, not for trying cases 
that may involve complex issues of liability or other unsettled legal 
questions. To expand an arbitration system beyond the types of cases for 
which it is best suited and most competent would risk not only a 
decrease in the quality of justice available to the parties but 
unnecessarily higher costs as well.
    (3) In particular, litigation involving the United States raises 
special concerns with respect to court-annexed arbitration programs. A 
mandatory arbitration program potentially implicates the principles of 
separation of powers, sovereign immunity, and the Attorney General's 
control over the process of settling litigation.
    (b) General rule consenting to arbitration consistent with the 
department's regulations. (1) Subject to the considerations set forth in 
the following paragraphs and the restrictions set forth in paragraphs 
(c) and (d), in a case assigned to arbitration or mediation under a 
local district court rule, the Department of Justice agrees to 
participate in the arbitration process under the local rule. The 
attorney for the government responsible for the case should take any 
appropriate steps in conducting the case to protect the interests of the 
United States.
    (2) Based upon its experience under arbitration programs to date, 
and the

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purposes and limitations of court-annexed arbitration, the Department 
generally endorses inclusion in a district's court-annexed arbitration 
program of civil actions--
    (i) In which the United States or a Department, agency, or official 
of the United States is a party, and which seek only money damages in an 
amount not in excess of $100,000, exclusive of interest and costs; and
    (ii) Which are brought (A) under the Federal Tort Claims Act, 28 
U.S.C. 1346(b), 2671 et seq., or (B) under the Longshoreman's and Harbor 
Worker's Compensation Act, 33 U.S.C. 905, or (C) under the Miller Act, 
40 U.S.C. 270(b).
    (3) In any other case in which settlement authority has been 
delegated to the U.S. Attorney under the regulations of the Department 
and the directives of the applicable litigation division and none of the 
exceptions to such delegation apply, the U.S. Attorney for the district, 
if he concludes that a settlement of the case upon the terms of the 
arbitration award would be appropriate, may proceed to settle the case 
accordingly.
    (4) Cases other than those described in paragraph (2) that are not 
within the delegated settlement authority of the U.S. Attorney for the 
district ordinarily are not appropriate for an arbitration process 
because the Department generally will not be able to act favorably or 
negatively in a short period of time upon a settlement of the case in 
accordance with the arbitration award. Therefore, this will result in a 
demand for trial de novo in a substantial proportion of such cases to 
preserve the interests of the United States.
    (5) The Department recommends that any district court's arbitration 
rule include a provision exempting any case from arbitration, sua sponte 
or on motion of a party, in which the objectives of arbitration would 
not appear to be realized, because the case involves complex or novel 
legal issues, or because legal issues predominate over factual issues, 
or for other good cause.
    (c) Objection to the imposition of penalties or sanctions against 
the United States for demanding trial de novo. (1) Under the principle 
of sovereign immunity, the United States cannot be held liable for costs 
or sanctions in litigation in the absence of a statutory provision 
waiving its immunity. In view of the statutory limitations on the costs 
payable by the United States (28 U.S.C. 2412(a), 2412(b), and 1920), the 
Department does not consent to provisions in any district's arbitration 
program providing for the United States or the Department, agency, or 
official named as a party to the action to pay any sanction for 
demanding a trial de novo--either as a deposit in advance or as a 
penalty imposed after the fact--which is based on the arbitrators' fees, 
the opposing party's attorneys' fees, or any other costs not authorized 
by statute to be awarded against the United States. This objection 
applies whether the penalty or sanction is required to be paid to the 
opposing party, to the clerk of the court, or to the Treasury of the 
United States.
    (2) In any case involving the United States that is designated for 
arbitration under a program pursuant to which such a penalty or sanction 
might be imposed against the United States, its officers or agents, the 
attorney for the government is instructed to take appropriate steps, by 
motion, notice of objection, or otherwise, to apprise the court of the 
objection of the United States to the imposition of such a penalty or 
sanction.
    (3) Should such a penalty or sanction actually be required of or 
imposed on the United States, its officers or agents, the attorney for 
the government is instructed to:
    (i) Advise the appropriate Assistant Attorney General of this 
development promptly in writing;
    (ii) Seek appropriate relief from the district court; and
    (iii) If necessary, seek authority for filing an appeal or petition 
for mandamus.

The Solicitor General, the Assistant Attorneys General, and the U.S. 
Attorneys are instructed to take all appropriate steps to resist the 
imposition of such penalties or sanctions against the United States.
    (d) Additional restrictions. (1) The Assistant Attorneys General, 
the U.S. Attorneys, and their delegates, have no authority to settle or 
compromise the interests of the United States in a case

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pursuant to an arbitration process in any respect that is inconsistent 
with the limitations upon the delegation of settlement authority under 
the Department's regulations and the directives of the litigation 
divisions. See 28 CFR part 0, subpart Y and appendix to subpart Y. The 
attorney for the government shall demand trial de novo in any case in 
which:
    (i) Settlement of the case on the basis of the amount awarded would 
not be in the best interests of the United States;
    (ii) Approval of a proposed settlement under the Department's 
regulations in accordance with the arbitration award cannot be obtained 
within the period allowed by the local rule for rejection of the award; 
or
    (iii) The client agency opposes settlement of the case upon the 
terms of the settlement award, unless the appropriate official of the 
Department approves a settlement of the case in accordance with the 
delegation of settlement authority under the Department's regulations.
    (2) Cases sounding in tort and arising under the Constitution of the 
United States or under a common law theory filed against an employee of 
the United States in his personal capacity for actions within the scope 
of his employment which are alleged to have caused injury or loss of 
property or personal injury or death are not appropriate for 
arbitration.
    (3) Cases for injunctive or declaratory relief are not appropriate 
for arbitration.
    (4) The Department reserves the right to seek any appropriate relief 
to which its client is entitled, including injunctive relief or a ruling 
on motions for judgment on the pleadings, for summary judgment, or for 
qualified immunity, or on issues of discovery, before proceeding with 
the arbitration process.
    (5) In view of the provisions of the Federal Rules of Evidence with 
respect to settlement negotiations, the Department objects to the 
introduction of the arbitration process or the arbitration award in 
evidence in any proceeding in which the award has been rejected and the 
case is tried de novo.
    (6) The Department's consent for participation in an arbitration 
program is not a waiver of sovereign immunity or other defenses of the 
United States except as expressly stated; nor is it intended to affect 
jursidictional limitations (e.g., the Tucker Act).
    (e) Notification of new or revised arbitration rules. The U.S. 
Attorney in a district which is considering the adoption of or has 
adopted a program of court-annexed arbitration including cases involving 
the United States shall:
    (1) Advise the district court of the provisions of this section and 
the limitations on the delegation of settlement authority to the United 
States Attorney pursuant to the Department's regulations and the 
directives of the litigation divisions; and
    (2) Forward to the Executive Office for United States Attorneys a 
notice that such a program is under consideration or has been adopted, 
or is being revised, together with a copy of the rules or proposed 
rules, if available, and a recommendation as to whether United States 
participation in the program as proposed, adopted, or revised, would be 
advisable, in whole or in part.

[Order No. 1109-85, 50 FR 40524, Oct. 4, 1985]