D.N.J. L. Civ. R. 201.1

Table of Contents

REFERENCE SUBJECT HEADINGS

(a) Certification of Arbitrators

(b) Designation of Compliance Judge

(c) Compensation and Expenses of Arbitrators

(d) Civil Cases Eligible for Compulsory Arbitration

(e) Referral of Arbitration

(f) Arbitration Hearing

(g) Arbitration Award and Judgment

(h) Trial De Novo

(i) Guidelines for Arbitration

(a) Certification of Arbitrators

(1) The Chief Judge shall certify as many arbitrators as determined to be necessary under this

Rule.

Arbitrators shall be designated for terms of service up to three years, subject to extension at the discretion of the

Chief Judge, and all such terms shall be staggered to provide orderly rotation of a portion of the membership of

the panel of arbitrators.

(2) An individual may be designated to serve as an arbitrator if he or she: (a) has been for at

least five years a member of the bar of the highest court of a State or the District of Columbia, (b) is

admitted to practice before this Court, (c) is determined by the Chief Judge to be competent to perform

the duties of an arbitrator, and (d) has participated in a training program (or the equivalent thereof) to

the satisfaction of the Chief Judge.

(3) Each individual certified as an arbitrator shall take the oath or affirmation prescribed by

28 U.S.C. § 453 before serving as an arbitrator.

(4) A list of all persons certified as arbitrators shall be maintained in the office of the Clerk.

(5) Each arbitrator shall, for the purpose of performing his or her duties, be deemed a

quasijudicial officer of the Court.

(b) Designation of Compliance Judge

The Board of Judges shall designate a Judge to serve as the compliance judge for arbitration. This

compliance judge shall be responsible to the Board of Judges for administration of the arbitration program

established by this Rule and shall be responsible for monitoring the arbitration processes; provided, however

that the compliance judge shall not be responsible for individual case management.

(c) Compensation and Expenses of Arbitrators

An arbitrator shall be compensated $250 for service in each case assigned for arbitration. In the event

that the arbitration hearing is protracted, the Court will entertain a petition for additional compensation. The fees

shall be paid by or pursuant to an order of the Director of the Administrative Office of the United States Courts.

Arbitrators shall not be reimbursed for actual expenses incurred by them in the performance of their duties

under this Rule.

(d) Civil Cases Eligible for Compulsory Arbitration

(1) Compulsory Arbitration. Subject to the exceptions set forth in L.Civ.R. 201.1(d)(2), the

Clerk shall designate and process for compulsory arbitration any civil action pending before the Court

where the relief sought consists only of money damages not in excess of $150,000 exclusive of interest

and costs and any claim for punitive damages.

(2) Exclusion from Compulsory Arbitration. No civil action shall be designated or processed

for compulsory arbitration if the claim therein is

(A) based on an alleged violation of a right secured by the Constitution of the United States; or

(B) jurisdictionally based, in whole or in part, on (i) 28 U.S.C. § 1346(a)(1) (tax refund actions)

or (ii) 42 U.S.C. § 405(g) (Social Security actions).

Upon filing its initial pleading a party may request that an otherwise eligible case not be designated or

processed for compulsory arbitration if either circumstances encompassed within L.Civ.R. 201.1(e)(6) are

present or other specific policy concerns exist which make formal adjudication, rather than arbitration,

appropriate.

(3) Presumption of Damages. For the sole purpose of making the determination as to whether the

damages are in excess of $150,000 as provided in L.Civ.R. 201.1(d)(1), damages shall be presumed in all cases

to be $150,000 or less, exclusive of interest and costs and any claim for punitive damages, unless counsel of

record for the plaintiff at the time of filing the complaint or counsel of record for any other party at the time of

filing that party's first pleading, or any counsel within 30 days of the filing of a notice of removal, files with the

Court a document signed by said counsel which certifies that the damages recoverable exceed the sum of

$150,000 exclusive of interest and costs and any claim for punitive damages. The Court may disregard any

certification or other document complying with 28 U.S.C. § 1746 filed under this Rule and require arbitration if

satisfied that recoverable damages do not exceed $150,000. No provision of this Rule shall preclude an

arbitrator from entering an award exceeding $150,000 based upon the proofs presented at the arbitration

hearing; and an arbitrator's award may also include interest, costs, statutory attorney’s fees and punitive

damages, if appropriate.

(e) Referral for Arbitration

(1) After an answer is filed in a case determined eligible for arbitration, the Clerk shall send

a notice to counsel setting forth the date and time for the arbitration hearing consistent with the

scheduling order entered in the case and L.Civ.R. 201.1(e)(3). The notice shall also advise counsel that

they may agree to an earlier date for the arbitration hearing provided the Clerk is notified within 30 days

of the date of the notice. In the event additional parties have been joined in the action, this notice shall

not be sent until an answer has been filed by all such parties who have been served with process and are

not in default.

(2) The arbitration hearing shall be held before a single arbitrator. The arbitrator shall be

chosen by the Clerk from among the lawyers who have been certified as arbitrators by the Chief Judge.

The arbitrator shall be scheduled to hear not more than three cases on a date or dates which shall be

scheduled several months in advance.

(3) The Judge to whom the case has been assigned shall, at least 30 days prior to the date

scheduled for the arbitration hearing, sign an order setting forth the date and time of the arbitration

hearing and the name of the arbitrator designated to hear the case. In the event that a party has filed a

motion to dismiss the complaint, for judgment on the pleadings, summary judgment or to join necessary

parties, or proceedings are initiated under L.Civ.R. 201.1(e)(6), the Judge shall not sign the order

required herein until the Court has ruled on the motion or order to show cause, but the filing of such a

motion on or after the date of said order shall not stay arbitration unless the Judge so orders.

(4) The Plaintiff shall within 14 days upon receipt of the order appointing the arbitrator send

to the arbitrator a copies of any complaint, amended complaint and answers to counterclaim; counsel for

each defendant shall, within 14 days upon receipt of this order, send to the arbitrator any answer,

amended answer, counterclaim, cross-claim and answer hereto, any third-party complaint. Upon receipt

of these materials, the arbitrator shall forthwith inform all parties, in writing, as to whether the arbitrator,

or any firm or member of any firm with which he or she is affiliated has (either as a party or attorney), at

any time within the past five years, been involved in litigation with or represented any party to the

arbitration, or any agency, division or employee of such a party.

(5) (A) Statutory Disqualification. Persons selected to be arbitrators shall be disqualified for

bias or prejudice as provided in 28 U.S.C. §1 44, and shall disqualify themselves in any action in which

they would be required under 28 U.S.C. § 455 to disqualify themselves if they were either a justice or

Judge.

(B) Impartiality. An arbitrator shall be impartial and advise all parties of any circumstances bearing on

possible bias, prejudice, or impartiality. Impartiality means freedom from favoritism or bias in

word, action, and appearance.

(C) Conflicts of Interest and Relationships; Required Disclosures; Prohibitions.

i. An arbitrator must disclose to the parties and to the compliance judge any current, past, or

possible future representation or consulting relationship with, or pecuniary interest in, any

party or attorney involved in the arbitration.

ii. An arbitrator must disclose to the parties any close personal relationship or other

circumstance which might reasonably raise a question as to the arbitrator’s impartiality.

iii. The burden of disclosure rests on the arbitrator. All such disclosures shall be made as soon

as practical after the arbitrator becomes aware of the interest or relationship. After

appropriate disclosure, the arbitrator may serve if all parties so desire. If the arbitrator

believes or perceives that there is a clear conflict of interest, the arbitrator shall withdraw

irrespective of the expressed desires of the parties.

iv. In no circumstance may an arbitrator represent any party in any matter during the arbitration.

v. An arbitrator shall not use the arbitration process to solicit, encourage, or otherwise incur

future professional services with any party.

(6) Either sua sponte, or upon a recommendation received from the arbitrator, or upon the application of

a party, the Judge to whom the case is assigned may exempt from arbitration any action that would otherwise be

arbitrable under this Rule if (a) it involves complex or novel legal issues, or (b) the legal issues predominate

over the factual issues, or (c) other good cause is shown. When initiating such a review either sua sponte or

upon recommendation of the arbitrator, the Judge may proceed pursuant to an order to show cause providing not

less than 14 days notice to all parties of the opportunity to be heard. Any application by a party to exempt an

action from arbitration shall be by formal motion pursuant to these Rules.

(f) Arbitration Hearing

(1) The arbitration hearing shall take place on the date and at the time set forth in the order of

the Court.

The arbitrator is authorized to change the date and time of the hearing, provided the hearing is commenced

within 30 days of the hearing date set forth in the Court's order. Any continuance beyond this 30-day period

must be approved by the Judge to whom the action is assigned. The Clerk must be notified immediately of any

continuance.

(2) Counsel for the parties shall report settlement of the action to the Clerk and to the

arbitrator assigned to that action.

(3) The arbitration hearing may proceed in the absence of any party who, after notice, fails to

be present. In the event that a party fails to participate in the arbitration process in a meaningful manner,

the arbitrator shall make that determination and shall support it with specific written findings filed with

the Clerk. Thereupon, the Judge to whom the action is assigned shall conduct a hearing upon notice to

all counsel and personal notice to any party adversely affected by the arbitrator's determination and may

thereupon impose any appropriate sanctions, including, but not limited to, the striking of any demand for

a trial de novo filed by that party.

(4) Fed. R. Civ. P. 45 shall apply to subpoenas for attendance of witnesses and the production

of documentary evidence at an arbitration hearing under this Rule. Testimony at an arbitration hearing

shall be under oath or affirmation.

(5) The Federal Rules of Evidence shall be used as guides to the admissibility of evidence.

Copies or photographs of all exhibits, except exhibits intended solely for impeachment, must be marked

for identification and delivered to adverse parties at least 14 days prior to the hearing and the arbitrator

shall receive exhibits into evidence without formal proof unless counsel has been notified at least seven

days prior to the hearing that the adverse party intends to raise an issue concerning the authenticity of

the exhibit. The arbitrator may refuse to receive into evidence any exhibit a copy or photograph of which

has not been delivered to the adverse party, as provided herein.

(6) A party desiring to have a recording and/or transcript made of the arbitration hearing

shall make all necessary arrangements for same and shall bear all expenses so incurred.

(g) Arbitration Award and Judgment

Within 30 days after the hearing is concluded, the arbitrator shall file under seal with the Clerk a written

award, accompanied by a written statement or summary setting forth the basis for the award which shall also be

filed under seal by the Clerk. Neither the Clerk nor any party or attorney shall disclose to any Judge to whom

the action is or may be assigned the contents of the arbitration award except as permitted by 28 U.S.C. §657(b).

The arbitration award shall be unsealed and entered as the judgment of the Court after the time period for

demanding a trial de novo, pursuant to L.Civ.R. 201.1(h), has expired, unless a party demands a trial de novo

before the Court. The judgment so entered shall be subject to the same provisions of law, and shall have the

same force and effect as a judgment of the Court in a civil action, except that it shall not be the subject of

appeal. In a case involving multiple claims and parties, any separable part of an arbitration award may be the

subject of a trial de novo if the aggrieved party makes a demand for same pursuant to L.Civ.R. 201.1(h) before

the expiration of the applicable time period. If the aggrieved party fails to make a timely demand pursuant to

L.Civ.R. 201.1(h), that part of the arbitration award shall become part of the final judgment with the same force

and effect as a judgment of the Court in a civil action, except that it shall not be the subject of appeal.

(h) Trial De Novo

(1) Any party may demand a trial de novo in the District Court by filing with the Clerk a

written demand, containing a short and plain statement of each ground in support thereof, and serving a

copy upon all counsel of record or other parties. Such a demand must be filed and served within 30 days

after the arbitration award is filed and service is accomplished by a party pursuant to 28 U.S.C. § 657(a),

or by the Clerk (whichever occurs first), except that in any action in which the United States or any

employee or agency thereof is a party the time period within which any party therein may file and serve

such a demand shall be 60 days.

(2) Upon the filing of a demand for a trial de novo, the action shall be placed on the calendar

of the Court and treated for all purposes as if it had not been referred to arbitration, except that no

additional pretrial discovery shall be permitted without leave of Court, for good cause shown. Any right

of trial by jury that a party would otherwise have shall be preserved inviolate.

(3) The Magistrate Judge shall conduct a pretrial conference within 60 days of filing of a

demand for a trial de novo.

(i) Guidelines for Arbitration

The Court, the Clerk, the parties, attorneys and arbitrators are hereby referred to the Guidelines for

Arbitration (Appendix M to these Rules) for their information and guidance in civil actions arbitrated pursuant

to this Rule.