United States
Environmental Protection
Agency
of
Solid Waste and
Emergency Resconse
&EPA
DIRECTIVE NUMBER:
9834.12
TITLE: Final Guidance on Use of Alternatve Dispute
Resolution Techniques in Enforcement Actions
APPROVAL DATE: August 14, 1987
EFFECTIVE DATE: August 14, 1987
ORIGINATING OFFICE: OECM
H FINAL
D DRAFT
LEVEL OF DRAFT
r-X. Signed by Administrator
LJ A — Signed by AA or DAA
D 8 — Signed by Office Director
DC — Review & Comment
REFERENCE (other documents):
SWER OSWER OSWER
DIRECTJVE DIRECTIVE Dl
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United States
Environmental Protection
Agency
Office of
Solid Waste and
Emergency "esoonse
&EPA
DIRECTIVE DUMBER: 9834.12
TITLE: Final Guidance on Use of Alternatve Dispute
Resolution Techniques in Enforcement Actions
APPROVAL DATE: August 14, 1987
EFFECTIVE DATE: August 14, 1987
ORIGINATING OFFICE: OECM
H FINAL
D DRAFT
LEVEL OF DRAFT
.—.X Signed by Administrator
O A — Signed by AA or OAA
D 8 — Signed by Office Director
DC — Review & Comment
REFERENCE (other documents):
SWER OSWER OSWER
DIRECTIVE DIRECTIVE Dl
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united otates environmental Protection Agency
Washington. DC 20460
OSWER Directive Initiation Request
1. Directive Number
9834.12
2. Originator Information
Name of Contact Person
Rich Robinson
Mail Code
LE 130A
Office
OECM
'Teleoncne Coce
'• 382-2860
3. Title
Final Guidnace on Use of Alternative Dispute Resolution Techniques in
Enforcement Actions
4. Summary of Directive (include bnef statement of purpose)
As this guidance explains, ADR involves the use of third-party neutrals Jo aid in
the resolution of disputes through arbitration mediation, mini-trails and fact finding
ADR is being used increasingly to resolve Private commerical disputes.
5. Keywords
ADR
6arDoes This Directive Supersede Previous Directive(s)?
b. Does It Supplement Previous Directive(s)?
No
No
Yes What directive (number, title)
Yes What directive (number, title)
.DraftLevel x .Administrator
A - Signed by AA/DAA
B - Signed by Office Director
C - For Review & Comment
0 - In Development
8. Document to be distributed to States by Headquarters?
Yes
No
This Request Meets OSWER Directives System Format Standards.
9. Signature of Lead Office Directives Coordinator
Date
10. Name and/Title of Approving
Date
EPA Form 1315-17 (Rev. 5-87) Previous editions are obsolete.
(J
OSWER S OSWER OSWER O
VE DIRECTIVE DIRECTIVE DIRECTIVE
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9834.12
.<*•
«••*•-
AUG I 4 1937
~-S ••:'•' •• = "*•; =
MEMORANDUM "
SUBJECT: Final Guidance on Use of Alternative Dispute
Resolution Techniques in Enforcement Actions
TO: Assistant Administrators
Regional Administrators
I. . Purpose •.'...
Attached is the final guidance on the use of alternative
dispute resolution (ADR) techniques in enforcement actions. This
guidance has been reviewed by EPA Headquarters and Regional
offices, the Department of Justice, as well as by representatives
of the regulated community. We have also sought the advice of
leading ADR professionals, including many of the renowned partici-
pants at a recent Colloquium on ADR sponsored by the Administrative
Conference of the United States.
The reaction to the draft guidance has been overwhelmingly .
favorable and helpful. In response to comments, the guidance more •
clearly distinguishes the uses of binding and non-binding techniques,
emphasizes the need to protect the confidentiality of conversations
before a neutral, and includes model agreements and procedures for
the use of each ADR technique. . .
II. Use of ADR
As the guidance explains, ADR involves the use of third-party
neutrals to aid in the resolution of disputes through arbitration,
mediation, mini-trials and fact-finding. ADR ia being used increas-
ingly to resolve private commercial disputes. EPA is likewise
applying forms of ADR in various contexts: negotiated rulemaking,
RCRA citing, and Superfund remedial actions. ADR holds the promise
of lowering th« transaction costs to both the Agency and the
regulated community of resolving applicable enforcement disputes.
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9834.12
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I view ADR as a new, innovative and potentially more effective"
way to accomplish the results we have sought for years using ^sk '
conventional enforcement techniques. We retain our strict adher^^e
to the principle thaf the regulated community must comply with the
environmental laws. ' The following tasks will be undertaken to
enable the Agency to utilize ADR to more effectively and efficiently
foster compliance:
Training. Some within the Agency may fear that using Less
adversarial techniques to resolve enforcement actions implies that '
the agency will be seeking less rigorous settlements. This is not '•
the case. We must train our own people in what ADR is, what it is
not, and how it can help us meet our own compliance objectives. We.
plan to accomplish this by making presentations at national program;
and regional counsel meetings, and by consulting on particular cases.
Outreach. We must also make an affirmative effort to demon-
strate to the regulated community that EPA is receptive to sugges-
tions from them about using ADR in a given case. Nominating
a case for ADR need not be .viewed as a sign of weakness in either
party. After we have gained experience, we plan to conduct a
national conference to broaden willingness to apply ADR in the
enforcement context.
Pilot Cases. Ultimately/ the value of ADR must be proven by-
its successful application in a few pilot cases. ADR is being used
to resolve an important municipal water supply problem involving
the city of Sheridan, Wyoming. Two recent TSCA settlements also
utilized ADR to resolve disputes which may arise in conducting
environmental audits required under the consent agreements.
these, however, we need to explore the applicability of ADR to
additional cases.
III. Action and Follow-Up
I challenge each of you to help in our efforts to apply ADR
to the enforcement process. I ask the Assistant Administrators to
include criteria for using ADR in future program guidance, and to
include discussions of ADR at upcoming national meetings. I ask
the Regional Administrators to review the enforcement actions now
under development and those cases which have already been filed to
find cases which could be resolved by ADR. I expect each Region
to nominate at least one case for ADR this fiscal year. Cases
should be identified and nominated using the procedure set forth
in the guidance by September 4, 1987
Lee M. Thomas
Attachment
cc: Regional Enforcement Contacts
Regional Counsels
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9834.12
GUIDANCE ON THE USE OF ALTERNATIVE DISPUTE RESOLUTION
IN EPA ENFORCEMENT CASES
United State* Environaental Protection Agency
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9834.1 2
, wUiw_..s... w.i -i
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983412
GUIDANCE ON THE USE OK ALTERNATIVE DISPUTE RESOLUTION
IN EPA ENFORCEMENT CASES
I. INTRODUCTION
To effect compliance with the nation's environmental laws,.
the United States Environmental Protection Agency (EPA) has
developed and maintained a vigorous judicial and administrative
enforcement program. Cases instituted under the program must be
resolved, either through settlement or decision by the appro-
priate authority, as rapidly as possible in order to maintain
the integrity and credibility of the program, and to reduce the
backlog of cases.
Traditionally, the Agency's enforcement cases have been
settled through negotiations solely between representatives of
the Government and the alleged violator. With a 95 percent
success rate, this negotiation process has proved effective,
and will continue to be used in most of the Agency's cases.
Nevertheless, other means of reaching resolution, known col-
lectively as alternative dispute resolution (ADR), have evolved.
Long accepted and used in commercial, domestic, and labor disputes'/
AOR techniques, such as arbitration and mediation, are adaptable
to environmental enforcement disputes. These ADR procedures
hold the promise for resolution of some of EPA's enforcement
cases more efficiently than, but just as effectively as, those
used in traditional enforcement. Furthermore, ADR provisions
can also be incorporated into judicial consent decrees and consent
agreements ordered by administrative law judges to address
future disputes .
EPA does not mean to indicate that by endorsing the use of
ADR in its enforcement actions, it is backing away from a strong
enforcement position. On the contrary, the Agency views ADR as
merely another tool in its arsenal for achieving environmental
compliance. EPA intend* to use the ADR process, where appropriate,
to resolve enforcement actions with outcomes similar to those
the Agency reaches through litigation and negotiation. Since
ADR address** only the process (and not the substance) of case
resolution, its u*« will not necessarily lead to more lenient
results for violator*; rather, ADR should take EPA to its desired
ends by Bor« efficient means.
i* increasingly becoming accepted by many federal
agenci««> private citizens, and organizations as a method of
handling dispute*. Th« Administrative Conference of the United
States ha* repeatedly called for federal agencies' to make greater
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983412
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use of ADR techniques, and has sponsored numerous studies to
further their use by the federal government. The Attorney
General of the United States has stated that it is the policy
of the United States to use ADR in appropriate cases. By
memorandum, dated February 2, 1987, the Administrator of EPA
endorsed the concept in enforcement disputes, and urged senior
Agency officials to nominate appropriate cases.
This guidance seeks to:
(1) Establish Policy - establish that it is EPA policy
to utilize ADR in the resolution of appropriate civil
enforcement cases.
(2) Describe Methods - describe some of the applicable
types of ADR, and the characteristics of cases which
might call for the use of ADR;
(3) Formulate Case Selection Procedures - formulate
procedures for determining whether to use ADR in
particular cases/ and for selection and procurement
of a "third-party neutral" (i.e., mediators,
arbitrators, or others employed in the use of ADR);
(4) Establish Qualifications - establish qualifications
for third-party neutrals; and
(5) Formulate Case Management Procedures - formulate •
procedures for management of cases in which some
or all issues are submitted for ADR.
II. ALTERNATIVE DISPUTE RESOLUTION METHODS
ADR mechanisms which are potentially useful in environ-
mental enforcement cases will primarily be mediation and nonbind-
ing arbitration. Fact-finding and mini-trials may also be helpful
in a number of cases. A general description of these mechanisms
follows. (See also Section VIII, below, which describes in
greater detail how each of these techniques works.) Many other
forms of ADR exist, none of which are precluded by this guidance.
Regardless of th« technique employed, ADR can be used to resolve
any or all of th« issue* presented by a case.
A. Mediation1 is the facilitation of negotiations by a
person?not a party to the dispute (herein "third-party neutral")
who h*s* no power to decide the issues, but whose function is to
1 For further information on th« mediation role *of Clean Sites Inc.,
sea guidance from the Assistant Administrator, Office of Solid
Waste and Emergency Response and Assistant Administrator, Office
of Enforcement and Compliance Monitoring on the "Role of Clean
Sites Inc. at Superfund Sites," dated April 24, 1987.
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9834.12
assist the parties in reaching settlement. The mediator serves
to schedule and structure negotiations, acts as a catalyst between
the parties, focuses the discussions, facilitates exchange between
the parties, and serves as an assessor - but not a judge - of
the positions taken by the parties during the course of negotia-
tions. With the parties' consent, the mediator may take on
additional functions such as proposing solutions to the problem.
Nevertheless, as in traditional negotiation, the parties retain
the power to resolve the issues through an informal, voluntary
process, in order to reach.a mutually acceptable agreement.
Having agreed to a mediated settlement/ parties can then make
the results binding.
B. Arbitration involves the use of a person —• not a party
to the dispute — to hear stipulated issues pursuant to procedures
specified by the parties. Depending upon the agreement of the
parties and any legal constraints against entering into binding
arbitration, the decision of the arbitrator may or may not be
binding. All or a 'portion of the issues -- whether factual,
legal or remedial — may be submitted to the arbitrator. Because
arbitration is less formal than a courtroom proceeding, parties
can agree to relax rules of evidence and utilize other time-saving
devices. For the present, EPA appears to be restricted by law
to use binding arbitration only for saall CERCLA cost recovery .'
cases. We are conducting further research regarding its use to
decide factual issues.
C. Fact-finding entails the investigation of specified
issues by a neutral with subject matter expertise, and selected
by the parties to the dispute. The process may be binding or
nonbinding, but if the parties agree, the material presented
by: the fact-finder may be admissible as an established fact in
a subsequent judicial or administrative hearing, or determinative
of the issues presented. As an essentially investigatory process,
fact-finding employs informal procedures. Because this ADR
mechanism seeks to narrow factual or technical issues in dispute,
fact-finding usually results in a report, testimony, or established
fact which may be admitted as evidence, or in a binding or advisory
opinion.
D. Mini-trial* perait the parties to present their case, or
an agreed upon portion of it, to principals who have authority
to settle the) dispute* (e.g., vice-president of a company and a
senior EPJt official) and, in some cases as agreed by the parties,
to a neutral third-party advisor. Limited discovery may precede
the case*presentation. The presentation itself may be summary
or an abbreviated hearing with testimony and cross-examination
as the partiee agree. Following the presentation, the principals
reinatitute negotiations, possibly with the aid of the neutral
as mediator. The principals are the decisionmakers while the
third-party neutral, who usually has specialized subject matter
expertise in trial procedures and evidence, acts as an advisor
on potential rulings on issues if the dispute were to proceed to
trial. This ADR mechanism is useful in narrowing factual issues
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•9834.12
or mixed questions of law and fact, and in giving the principals
a realistic view o"f the strengths and weaknesses of their cases.
III. CHARACTERISTICS OF ENFORCEMENT CASES SUITABLE FOR ADR
This section suggests characteristics of cases which may be
most suitable for use of ADR. These characteristics are neces-
sarily broad, as ADR may theoretically be used in any type of
dispute. Enforcement personnel can use these characteristics to
make a preliminary assessment of whether ADR should be considered
for use in a particular case, including a discrete portion or
issue in a case.
ADR procedures may be introduced into a case .at any point
in its development or while pending in court. However, it is
preferable that ADR be considered as early as possible in the
progress of the case to avoid the polarizing effect which frequently
results from long and intense negotiations or the filing of a
lawsuit. ADR should, therefore, be considered prior to referral
of a case to DOJ. Indeed, the threat of a referral may be used
as an incentive to convince the other parties to utilize an
appropriate ADR technique.
Notwithstanding the preference for consideration and use
of ADR at an early stage in the progress of a case, there are.
occasions when ADR should be considered after a case has been
referred and filed in court. This is particularly true when the
parties have reached an apparent impasse in negotiations, or the
court does not appear to be willing to expeditiously move the
case to conclusion through establishing discovery deadlines,
conducting motions hearings or scheduling trial dates. In such
cases, introduction of a mediator into the case, or submission
of some contested facts to an arbitrator may help to break the
impasse. Cases which have been filed and pending in court for a
number of years without significant movement toward resolution
should be scrutinized for prospective use of ADR.
In addition to those circumstances, the complexity of legal
and technical issues in environmental cases have resulted in a
recent trend of courts to appoint special masters with increasing
frequency. Those masters greatly increase the cost of the litigation
and, while they Bay speed the progress of the case, the parties
have little direct control over the selection or authority of
the masters. The government should give careful consideration
to anticipating a court's desire to refer complex issues to a
master^by proposing that the parties themselves select a mediator
to assist in negotiations or an arbitrator to determine some
factual issues.
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The following characteristics of cases which may be candidates
for use of some form of. AOR are not intended to be exhaustive.
Agency personnel must-rely upon their own judgment and experience
to evaluate their cases for potential applications of ADR. in all
instance*_where the other parties demonstrate their willingness to
use AOR, EPA should consider its use. Sample characteristics of
cases for ADR2:
A. Impasse or Potential for Impasse
When the resolution of a case is prevented through impasse,
EPA is prevented from carrying out its mission to protect and
enhance the environment, and is required to continue to commit
resources to the case which could otherwise be utilized to address
other problems. It is highly desirable to anticipate and avoid,
if possible, the occurrence of an impasse.
Impasse, or the possibility for impasse, is commonly created
by the following conditions, among others:
(1) Personality conflicts or poor communication among
negotiators;
(2) Multiple parties with conflicting interests;
(3) Difficult technical issues which may benefit from
independent analysis; .
(4) Apparent unwillingness of a court to rule on matters
which would advance the case toward resolution; or
(S) High visibility concerns making it.difficult for the
parties to settle such as cases involving particularly sensitive
environmental concerns such as national parks or wild and scenic
rivers, issues of national significance, or significant adverse
employment implication*.
In such cases, the) involvement of a neutral to structure,
stimulate and focus negotiations and, if necessary, to serve as an
intermediary between personally conflicting negotiators should be
considered as early a* possible.
B. Resource Considerations
All enforcement cases are important in that all have, or
shouldrhave), soee deterrent effect upon the violator and other
member« of -the regulated community who hear of the case. It is,
therefore, important that EPA's cases be supported with the
2 ADR is not considered appropriate in cases where the Agency is
contemplating criminal action.
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level of resources necessary to achieve the desired result.
Nevertheless, because _of the size of EPA's enforcement effort,
it is recognized that resource efficiencies must be achieved
whenever possible to enable EPA to address as many violations as
possible.-
There are many cases in which utilizing some form of ADR
would achieve resource efficiencies for EPA. Generally, those
cases contain the following characteristics:
(1) Those brought in a program area with which EPA has had
considerable experience, and in which the procedures, case law
and remedies are relatively well-settled and routine; or
(2) Those having a large number of parties dr issues where
AOR can be a valuable case management tool.
C. Remedies Affecting Parties not Subject to an Enforcement Action
Sometimes, the resolution of an underlying environmental "problem
would benefit from the involvement of persons, organization* or
entities not a party to an impending enforcement action. This is
becoming more common as EPA and the Congress place greater emphasis
on public participation in major decision* affecting remedies in
enforcement actions. Such cases might include thoie in which:
(1) A state or local governmental unit have expressed an
interest, but are not a party; ,
(2) A citizens group has expressed, or is likely to express
an interest; or
(3) The remedy is likely to affect not only the violator,
but the community in which the violator is located as well (e.g.,
those cases in which the contamination is wide-spread, leading
to a portion of the remedy being conducted off-site).
In such ca*es, EPA should consider the use of a neutral very
early in the enforcement process in order to establish communication
with thoae interested persons who are not parties to the action,
but who** understanding and acceptance of the remedy will be
important to an expeditious resolution of the case.
IV. PROCEDURES FOR APPROVAL OF CASES FOR ADR
Thi* section describe* procedure* for the nomination of
case* for ADR. These procedure* are designed to- eliminate confusion
regarding the selection of cases for ADR by: (1) integrating the
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9834.12
selection of cases for ADR into the existing enforcement case
selection process; and (2) creating decision points and contacts
in the regions, headquarters, and DOJ to determine whether to
use ADR in particular actions.
A. Decisionmakers
To facilitate decisions whether to use ADR in a particular
action, decision points in headquarters, the regions and DOJ
must be established. At headquarters, the decisionmaker will
be the appropriate Associate Enforcement Counsel (AEC) . The AEC
should consult on this decision with his/her corresponding head-
quarters compliance division director. At DOJ, the decisionmaker
will be the Chief, Environmental Enforcement Section. In the
regions, the decisionmakers will be the Regional Counsel in con-
sultation with the appropriate regional program division director.
If the two Regional authorities disagree on whether to use ADR
in a particular case, then the Regional Administrator (RA) or
the Deputy Regional Administrator (DRA), will decide the matter.
This decisionmaking process guarantees consultation with and
concurrence of all relevant interests.
B. Case Selection Procedures
Anyone in the regions, headquarters, or DOJ who is partici-
pating in the development or management of an enforcement action,
or any defendant or PRP not yet named .as a defendant, may suggest
.a case or. selected -issues in a case for ADR. 3 Any suggestion,
however, must be communicated to and discussed with the appropriate
regional office for its consent. The respective roles of the AECs
and DOJ are discussed below. After a decision by the Region or
litigation team to use ADR in a particular case, the nomination
should be forwarded to headquarters and, if it is a referred
case, to DOJ. The nominations must be in writing, and must
enumerate why the case is appropriate for ADR. (See Section III
of this document which describes the characteristics for selection
of cases for ADR.) Attachments A and B are sample case nomination
communications. Attachment A pertains to nonbinding ADR, and
Attachment B pertain* to binding ADR.
Upon a determination by the Government to use ADR, Government
enforcement personnel assigned to the case (case team) must
approach th« PRP(s) or other defendant (s) with the suggestion.
The ca««h tea* should indicate to the PRP(s) or defendant(s) the
factoesr1 which have led to the Agency's recommendation to use
Nomination papers should always be deemed attorney work produce
so that they are discovery free.
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ADR, and the potential benefits to all parties from its use.
The PRP(s) or other defendant(s) should understand, nevertheless!
that the Government is "prepared to proceed with vigorous litiga
in the case if the use of a third-party neutral fails to resolve
the matter. Further, for cases which are referrable, the defendar.t (s
should be-advised that EPA will not hesitate to refer the matter
to DOJ for prosecution.
1. Nonbinding ADR
For mediation, mini-trials, nonbinding arbitration, and
other ADR mechanisms involving use of a third-party neutral as a
nonbinding decisionmaker, regions should notify the appropriate
AEC and, if the case is referred, DOJ of: (1) its intent to use
ADR in a particular case, and (2) the opportunity to consult
with the Region on its decision. Such notification should be in
writing and by telephone call. The AEC will consult with the
appropriate headquarters program division director. The Region
may presume that the AEC and DOJ agree with the selection of the
case for ADR unless the AEC or DOJ object within fifteen (15)
calendar days of receipt of the nomination of the case. If
either the AEC or DOJ object, however, the Region should not
proceed to use ADR in the case until consensus is reached.
2. Binding ADR
For binding arbitration and fact-finding, and -other ADR
mechanisms involving the use of third-party neutrals as binding
decisionmakers, the appropriate AEC must concur in the nomination
of the case by the Region. In addition, DOJ must also concur in
the use of binding ADR in referred cases. Finally, in non-CERCLA
cases which may involve compromise of claims in excess of $20,000
or where the neutral's decision will be embodied in a court order,
DOJ must also concur. Without the concurrence of headquarters
and DOJ under these circumstances, the Region may not proceed
with ADR. OECM and DOJ should attempt to concur in the nomina-
tion within fifteen (15) days of receipt of the nomination.
Under the Superfund Amendments and Reauthorization Act (SARA),
Pub. L. No. 99-499. J122(h) (2) (1986), EPA may. enter into binding
arbitration for cost recovery claims under Section 107 of CERCLA,
provided the claims are not in excess of $500,000, exclusive of
interest. Until regulations are promulgated under this section,
EPA is precluded from entering into binding arbitration in cost
recovery actions. Accordingly, Attachment C is not yet appropriate
for us*- in cases brought under this section. It is, however, avail-
able lor? use in nonbinding arbitration.
-i • -
V. SELECTION OF A THIRD-PARTY NEUTRAL
A. Procedures for Selection
Both the Government and all defendants must agree on the need
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for a neutral in order -to proceed with ADR. in some situations
(e.g., in a Superfund case), however, the parties may proceed with
ADR with consensus of "only some of the parties depending on the
issue and .the parties. Once agreed, the method for selecting
the neutral and the actual selection in both Superfund and other
cases will be determined by all parties involved with the excep-
tion of cases governed by §107 of CERCLA. To help narrow the
search for a third-party neutral, it is useful, although not
required, for the parties to agree preliminarily on one or more
ADR mechanisms. OCCM is available to help at this point in the
process, including the procurement of in-house or outside persons
to aid the parties in selecting an appropriate ADR mechanism.
In Section VIII below, we have indicated some of the situations
where each ADR mechanism may be most appropriate* . Of course, the
parties are free to employ whichever technique the'y deem appropriate
for the case. Because the ADR mechanisms are flexible, they are
adaptable to meet the needs and desires of the parties.
The parties can select a third-party neutral in many ways.
Each party may offer names of proposed neutrals until all parties
agree on one person or organization. Alternatively, each party
may propose a list of candidates, and allow the other parties to
strike unacceptable names from the list until agreement is
reached. For additional methods, see Attachments C, D, and E.
Regardless of how the parties decide to proceed, the Government
may obtain names of qualified neutrals from the Chief, Legal
Enforcement Policy Branch (LEPB) (FTS 475-8777, LE-130A, E-Mail
box EPA 2261), by written or telephone request. With the help
of the Administrative .Conference of the U.S. and the Federal
Mediation and Conciliation Service, OECM is working to establish
a national list of candidates from which the case team may select
neutrals. In selecting neutrals, however, the case team is not
limited to such a .list.
It is important to apply the qualifications enumerated below
in section V.B. in evaluating the appropriateness of a proposed
third-party neutral for each case. Only the case team can decide
whether a particular neutral is acceptable in its case. The
qualifications described below provide guidance in this area.
At any point in the process of selecting an ADR mechanism or
third-party neutral, the case team may consult with the Chief,
LEPB, for guidance.
B. Qualifications for Third-Party Neutrals
The following qualifications are to be applied in the
selection of all third-party neutrals who may be'considered for
service in ADR procedures to which EPA is a party. While a
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third-party neutral should meet as many of the qualifications as
possible, it may be difficult to identify candidates who possess
all the qualifications for selection of a third-party neutral.
Failure to meet one or more of these qualifications should not
necessarily preclude 'a neutral who all the parties agree would
be satisfactory to serve in a particular case. The qualifications
are, therefore, intended only as guidance rather than as.pre-
requisites to the use of ADR. Further, one should apply a greater
degree of flexibility regarding the qualifications of neutrals
involved in nonbinding activities such as mediation, and a stricter
adherence to the qualifications for neutrals making binding
decisions such as arbitrators.
1. Qualifications for Individuals
a. Demonstrated Experience. The candidate should
have experience as a third-party neutral in arbitration, mediation
or other relevant forms of ADR. However, other actual and active
participation in negotiations, judicial or administrative hearings
or other forms of dispute resolution, service as an administrative
law judge, judicial officer or judge, or formal training as a
neutral may be considered. The candidate should have experience
in negotiating, resolving or otherwise managing cases of similar
complexity to the dispute in question, e.g., cases involving
multiple issues, multiple parties, and mixed technical and legal
issues where applicable.
b. Independence. The candidate must disclose any
interest or relationship which may give rise to bias or the
appearance of bias toward or against any party. These interests
or relationships include:
(a) past, present or prospective positions with or financial
interests in any of the parties;
(b) any existing or past financial, business, professional,
family or social relationships with any of the parties
to the dispute or their attorneys;
(c) previous or current involvement in the specific dispute;
(d) paet or prospective employment, including employment as
a neutral in previous disputes, by any of the parties;
(e) pact or present receipt of a significant portion of the
........ neutral's general operating funds or grants from one or
_?' more of the parties to the dispute.
The existence of such an interest or relationship does not
necessarily preclude the candidate from serving as a neutral,
particularly if the candidate has demonstrated sufficient
independence by reputation and performance. The neutrals with
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the most experience are most likely to have past or current
relationships with some parties to the dispute, including the
Government. Nevertheless/ the candidate must disclose all
interests, and the. parties should then determine whether the
interests create actual or apparent bias.
c. Subject Matter Expertise. The candidate should
have sufficient general knowledge of the subject matter of the
dispute to understand and follow the issues, assist the parties
in recognizing and establishing priorities and the order of
consideration of those issues, ensure that all possible avenues
and alternatives to settlement are explored, and otherwise serve
in the most effective manner as a third-party neutral. Depending
on the case, it may also be helpful if the candidate has specific
expertise in the issues under consideration.
d. Single Role. The candidate should not be serving
in any other capacity in the enforcement process for that particular
case that would create actual or apparent bias-. The case team
should consider any prior involvement in the dispute which may
prevent the candidate from" acting with objectivity. For example,
involvement in developing a settlement proposal, particularly
when the proposal is developed on behalf of certain parties, may
preclude the prospective neutral from being objective during
binding arbitration or other ADR activities between EPA and the . '
parties concerning that particular proposal.
Of course, rejection of a candidate for a particular ADR
activity, such as arbitration, .does not necessarily preclude
any role for the candidate in that case. The candidate may
continue to serve in other capacities by, for example, relaying
information among parties and presenting offers on behalf of
particular parties.
2. Qualifications for Corporations and Other Organiza-
tions.4 Corporations or other entities or organizations which
propose to act as third-party neutrals, through their officers,
employees or other agents, in disputes involving EPA, must:
(a) like unaffiliated individuals, make the disclosures
listed above; and
(b) submit to tha parties a list of all parsons who, on
behalf of tha corporation, entity or organization, will
or may ba significantly involved in the ADR procedure.
Thesa raprasantativas should also make tha disclosures
' :•'• listed above.
4 For furthar guidance regarding Clean Sitas Inc., sea guidance
from the Assistant Administrator, Offica of Solid Waste and
Emergency Response and Assistant Administrator, Office of
Enforcement and Compliance Monitoring on tha "Role of Clean Sites
Inc. at Superfund Sites," dated April 24, 1987.
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In selecting a third-party neutral to resolve or aid in the
resolution of a dispute to which EPA is a party, Agency personnel
should remain at all times aware that the Agency must not only
uphold its obligation to protect public health, welfare and the
environment, but also develop and maintain public confidence
that the Agency is performing its mission. Care should be taken
in the application of these qualifications to avoid the selection
of third-party neutrals whose involvement in the resolution of
the case might undermine the integrity of that resolution and
the enforcement efforts of the Agency.
VII. OTHER ISSUES;
A. Memorialization of Agreements
Just as it would in cases where AOR has not been used, the
case team should memorialize agreements reached through ADR in
orders and settlement documents and obtain 00J and headquarters
approval (as appropriate) of the terms of any agreement reached
through ADR.
8. Fees For Third-Party Neutrals
The Government's share of ADR costs will be paid by Head-
quarters. Contact LEPB to initiate payment mechanisms. Because
such mechanisms require lead time, contact with LEPB should be
made as early as possible after approval of a case for ADR,
It is EPA policy that PRPs and defendants bear a share of
these costs equal to EPA except in unusual circumstances. This
policy ensures that these parties "buy in" to the process. It
is important that the exact financial terms with these parties
be settled and set forth in writing before the initiation of AOR
in the case.
C. Confidentiality
Unless otherwise discoverable, records and communications
arising from ADR shall be confidential and cannot be used in
litigation or disclosed to the opposing party without permission.
This policy does not include issues where the Agency is required
to oak* decisions on the basis of an administrative record such
as the* select ion of a remedy in CERCLA cases. Public policy
interest* in fostering settlement compel the confidentiality of
ADR negotiations and documents. These interests are reflected
in a nuaber of measures which seek to guarantee confidentiality
and are recognized by a growing body of legal authority.
Most indicative of the support for non-litigious settlement
of disputes is Rule 408 of the Federal Rules of Evidence which
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9834.12
renders offers of compromise or settlement or statements made
during discussions inadmissable in subsequent litigation between
the parties to prove liability. Noting the underlying policy
behind the rule, court's have construed the rule to preclude
admission-of evidence regarding the defendant's settlement of
similar cases. 5
Exemption protection under the Freedom of Information Act
(FOIA), 15 U.S.C. §552, could also accommodate the interest in
confidentiality. While same courts have failed to recognize the
"settlement negotiations privilege,"6 other courts have recognized
the privilege. '
In addition to these legal authorities and policy arguments,
confidentiality can be ensured by professional ethical codes.
Recognizing that promoting candor on the parties \..part and
impartiality on the neutral's part is critical to the success: of
ADR, confidentiality provisions are incorporated, into codes of
conduct as well as written ADR agreements (See Attachment, D).
The attachment provides liquidated damages where a neutral reveals
confidential information except under court order.
Furthermore, confidentiality can be effected by court order,
if ADR is court supervised. Finally, as many state* have don*
See Scaraauzzo v. Glenmore Distilleries Co., 501 F.Supp. 727
CN.D. 111. 1980), and to bar discovery, see Branch v. Phillips
Petroleun Co., 638 F.2d 873 (5th Cir. 198TJ". Courts have
also construed labor laws to favor mediation or arbitration
and have therefore prevented third-party neutrals from being
compelled to testify. See, e.g., N.L.R.B. v. Joseph Macaluso,
Inc., 618 F.2d 51 (9th CT?. 1980) (upholding N.L.R.8. 's
revocation of subpoena issued to mediator to avoid breach of
impartiality).
See, a.g., Center for Auto Safety v. Department of Justice, 576
see, e.g., Center for Auto Sate
F. Supp~T73 9, 749 (D.D.C. 1983).
See Bottaro v. Hattpn Associates, 96 P.R.D. 158-60 (E.D.N.Y 1982)
(noting "strong public policy of favoring settleaents" and public
interact in "insulating the bargaining table froa unnecessary
intrusions"). In interpreting Exemption 5 of the FOIA, the Supreme
Court- asserted that the "contention that £a requester could] obtain
through' the FOIA material that is normally privileged would create
an anomaly in that the FOIA could be used to supplement civil
discovery. ...We do not think that Congress could have intended
that the weighty policies underlying discovery privileges could
be so easily circumvented." United States v. Weber Aircraft,
104 S.Ct. 1488, 1494 (1984).
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statutorily, EPA is considering the promulgation of regulations
which further ensure the confidentiality of ADR proceedings.
D. Relationship"of ADR to Timely and Appropriate and
Significant Noncompliance Requirements
The decision to use ADR would have no particular impact under
the "timely and appropriate" (T&A) criteria in a case where there
is already an administrative order or a civil referral since the
"timely and appropriate" criteria would have been met by the
initiation of the formal enforcement action. In the case of a
civil referral, the 60-day period by which DOJ is to review and
file an action may be extended if ADR is used during this time.
The decision to use ADR to resolve a violation prior to the
initiation of a formal enforcement action, however, would be
affected by applicable "timely and appropriate" criteria (e.g.,
if the violation fell under a program's Significant Nbncompliance
(SNC) definition, the specific timeframes in which compliance
must be achieved or a formal enforcement action taken would
apply). The use of ADR would not exempt applicable "T&A"
requirements and the ADR process would normally have to proceed
to resolve the case or "escalate" the enforcement response.
However, since, "T&A" is not an immutable deadline, that ADR
is being used for a particular violation would be of central
significance to any program management review of that case (e.g.,
the Deputy Administrator's discussion of "timely and appropriate"
enforcement during a regional review would identify the cases in
which ADR is being used.) -
VIII. PROCEDURES FOR MANAGEMENT OF ADR CASES
This section elaborates on the various ADR techniques: How
they work, some problems that may be encountered in their use,
and their relationship to negotiation and litigation. For each
ADR technique, we have provided, as an attachment to this guidance,
an example of procedures reflecting its use. These attachments
are for illustrative purposes only, and do not represent required
procedures. The specific provisions of the attachments should
be adapted to the circumstances of the case or eliminated if not
applicable.
A. Arbitration
1. Scope) and Nature
As stated in Section II, above, arbitration involves the
selection by the parties of a neutral decisionaaker to hear
selected issues and render an opinion. Depending on the parties
agreement, the arbitrator's decision may or may not be binding.
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For the present, EPA appears to be restricted by law to use
binding arbitration only for small CERCLA cost recovery cases.
We are conducting further research regarding its use to decide
factual issues. Included as Attachment C are draft generic
arbitration procedures for formal arbitration. To conduct less
formal proceedings, the parties may modify the procedures.
2. Use
Arbitration is most appropriate in resolving routine cases
that do not merit the resources required to generate and process
a civil judicial referral. It may aid in resolving technical
disputes that are usually submitted to the courts or administrative
law judges (ALJs), which disputes require subject-matter expertise
which federal district court judges and ALJs may,lack.8
8. Mediation
1. . Scope and Nature
Mediation, an informal process, is entered into voluntarily
by the parties to a dispute and in no way binds then beyond their
own agreement. More than the other ADR processes, nediation is
best viewed as an extension of the direct negotiation process
begun by the parties. As in direct negotiation, the parties
continue to control the substance of discussions and any agree-
ment reached. In mediation, however, the mediator directs and
structures the course of discussions.
The mediation-format varies.with the individual style of the
mediator and the heeds of the parties. Initially, the mediator is
likely to call a joint meeting with the parties to work out ground
rules such as how and when meetings will be scheduled. Included
as Attachment 0 are generic mediation protocols for use and
adaptation in all EPA mediations. Most of the iteas covered in
the attachment would be useful as ground rules for most EPA
enforcement negotiations. Ordinarily, mediators will hold a
series of meetings with the parties in joint session, as well as
with each party. In joint meetings, the aediator facilitates
discussion. In separate caucuses, the mediator may ask questions
or pose hypothetical terms to a party in order to clarify its
position and identify possible areas for exchange and agreement
with the opposing party. Some mediators will be more aggressive
than others in this role; they may even suggest possible settlement
alternatives) to resolve deadlocks between the parties. In general,
howeve*> the nediator serves as a facilitator of discussions and
abstain* from taking positions on substantive points.
8 Arbitration is specifically authorized under Section 107 of CERCLA
for cost recovery claims not in excess of 5500,000, exclusive of
interest•
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There are no external time limits on mediation other than
those imposed by the parties or by external pressures from the
courts, the community or public interest groups. In all cases,
the Government should insist on a time limit for the mediation
to ensure that the defendants do not use mediation as a stalling
device. The Government should also insist on establishing points
in the process to evaluate progress of the mediation. As the
parties approach settlement terms through mediation, final authority
for decisionmaJcing remains the same as during direct negotiations,
i.e., requirements for approval or concurrence from senior managers .
are applicable.
2. Use of Mediation •
Mediation is appropriate for disputes in which the parties
have reached or anticipate a negotiation impasse based on, among
other things, personality conflicts, poor communication, multiple
parties, or inflexible negotiating postures. Additionally,
mediation is useful in those cases where all necessary parties are
not before the court (e.g., a state which can help with the funding
for a municipality's violation). Mediation is the most flexible
AOR mechanism, and should be the most widely used in Agency disputes
3. Withdrawal from Mediation
As a voluntary and unstructured process, mediation proceeds
entirely at the will of the parties and, therefore, may be conclude
by the parties prior to .settlement. A determination to withdraw
from mediation should be considered only when compelling factors
militate against proceeding. If the mediation has extended
beyond a reasonable time period (or the period agreed upon by
the parties) without significant progress toward agreement, it
may be best to withdraw and proceed with direct negotiations or
litigation. Withdrawing from mediation might also be considered
in the unlikely event that prospects for settlement appear more
remote than at the outset of the mediation. Finally, inappropriate
conduct by the mediator would warrant concluding the mediation
effort or changing mediators.
4. Halation to Litigation
In th« ordinary case, prio'r to referral or the filing of an
administrative) complaint, the time limit* for mediation could be
the saaer a* those) for negotiation. In contrast to normal
negotiations, however, the parties may agree that during the
time- period specified for mediation, litigation activities
such as serving interrogatories, taking depositions, or filing
motions may be suspended. In filed civil judicial cases, where
the court imposes deadlines, it will be necessary to apprise the
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court of the parties' activities and to build ADR into the court's
timetable. For agreements relating ADR activities to ongoing
litigation, see paragraph 17 of Attachment E.
C. Mini-Trial
1. Scope and Nature :! '
Like other ADR techniques, the mini-trial is also voluntary
and nonbinding on the parties. In the mini-trial, Authority for
resolution of one or more issues rests with senior managers who,
.representing each party in the dispute, act as decisiohmakers.
In some cases a neutral referee is appointed to supervise the
proceedings and assist the decisionraakers in resolving an issue
by providing the parties with a more realistic view of their
case. In addition, the neutral's presence can enhance public
acceptability of a resolution by effectively balancing the
interests of the Government and the defendant.
The scope and format of the mini-trial are determined solely
by the parties to the dispute and are outlined in an initiating
agreement. Because the agreement will govern the proceedings,
the parties should carefully consider and define issues in advance1
of the mini-trial. Points that could be covered include the.
option of and role for a neutral, issues to be considered, and
procedural matters such as order and schedule of proceedings and
time limits. Attachment E'is a sample mini-trial agreement.
The mini-trial proceeds before a panel of decisionmakers
representing the parties and, in some cases, a neutral referee.
Preferably, the decisionmakers will not have participated directly
in the case prior to the mini-trial. The defendant's represen-
tative should be a principal or executive of the entity with
decisionmaking authority. CPA's representative should be a
senior Agency official comparable in authority to the defendant's
representative. In some cases, each side may want to use a
panel consisting of several decisionmakers as its representatives.
The neutral referea is selected by both parties and should have
expertise in the issues under consideration. .
At the «ini-trial, counsel for each side presents his or her
strongest and nost persuasive case to the decisionmakers in an
informal, trial-like proceeding. In light of this structure,
stricfc rules] of evidence do not apply, and the format for the
presentation is unrestricted. Each decisiorunaker is then afforded
the unique- opportunity to proceed, as agreed, with open and
direct questioning of the other side. This information exchange
allow* the decisionaakers to adjust their perspectives and posi-
tions in light of a preview of the case. Following this phase
of the mini-trial, the decisionmakers meet, with or without
counsel or the neutral referee, to reso|ve the, issus(s) or case
presented, through negotiation.
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2. Role of the Neutral
The neutral referee may serve in more than one capacity
in this process, and should be selected with a clearly defined
concept o{ his or her role. The most common role is to act as
an advisor to the decisionmakers during the information exchange.
The neutral may offer opinions on points made or on adjudication
of the case in litigation, and offer ass'-Ifs-tance to the decision-
makers in seeing the relative merits pf their positions. The
neutral's second role can-be to mediate the .negotiation between
the decisionmakers should they reach an impasse or seek assistance
in forming an agreement. Unless otherwise agreed by the parties,
no evidence used in the mini-trial is admissible in litigation.
3. Use . . . .
As with mediation, prior to referral or the filing of an
administrative complaint, the time limits for a mini-trial would
be the same as those for negotiation. The parties usually agree,
however, that during the time period specified for a mini-trial,
litigation activities such as serving interrogatories, talcing
depositions, or filing motions may be suspended except as otherwise
agreed. In general, mini-trials are appropriate in cases involving
only a small number of parties, and are most useful in four kinds
of disputes:
1. Where the parties have reached or anticipate reaching
a negotiation impasse due to one party's overestimation, in the
view of the other party, of the strength of its position;
2. Where significant policy issues exist which would
benefit from a face-to-face presentation to decisionmakers (without
use of a neutral);
3. Where the issues are technical, and the decisionmakers
and neutral referee have subject-matter expertise; or
4. Where the imprimatur of a neutral's expertise would
aid in the resolution of the case.
D. Fact-finding
1. Scope and Nature
Binding or nonbinding fact-finding may be adopted voluntarily
by parties to a dispute, or imposed by a court. It is most
appropriate for issues involving technical or factual disputes.
The primary purpose of this process is to reduce or eliminate
conflict over facts at issue in a case. The fac.t-finder's role
is to act as an independent investigator, within the scope of the
authority delegated by the parties. The findings may be used in
reaching settlement, as "facts" by a judge or ALJ in litigation,
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or as binding determinations. Like other ADR processes involving
a neutral, a resolution based on a fact-finder's report will have
greater credibility with the public.
The neutral's role in fact-finding is clearly defined by an
initial agreement of the parties on the issue(s) to be referred
to the fact-finder and the use to be made of the findings or
recommendations, e.g., whether they will be binding or advisory.
Once this agreement is framed, the role of the parties in the
process is limited and the fact-finder proceeds independently.
The fact-finder may hold joint or separate meetings or both with
the parties in which the parties offer documents, statements, or
testimony in support of their positions. The fact-finder is also
free to pursue other sources of information relevant to the
issue(s). The initial agreement Of the parties should include a
deadline for receipt of the fact-finder's report. Attachment F
is a sample fact-finding agreement.
The fact-finder issues a formal report of findings, and
recommendations, if appropriate, to the parties, ALJ or the
court. If the report is advisory, the findings and recommenda-
tions are used to influence the parties' positions and give
impetus to further settlement negotiations. If the report is
binding, the parties adopt the findings and recommendations a»
provisions of the settlement agreement. In case of litigation,
the findings will be adopted by the judge or ALJ as" "facts" in
the case.
2. Relation to Litigation
Decisions regarding pursuit of litigation when fact-finding
is instituted are contingent upon the circumstances of the case
and the issues to be referred to the fact-finder. If fact-find-
ing is undertaken in connection with an ongoing settlement
negotiation, in most cases it is recommended that the parties
suspend negotiations on the issues requiring fact-finding until
the fact-finder's report is received. If fact-finding is part
of the litigation process, a decision must be made whether to
proceed with litigation of the rest of the case or to suspend
litigation while awaiting the fact-finder's report.
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Q O 7 ft 1 O
ATTACHMENT A ^ '
MEMORANDUM
SUBJECT: Nomination of U.S. v. XYZ Co. for Non-binding
Alternative for Dispute Resolution
FROM: Deputy Regional Administrator
TO: Associate Enforcement Counsel
for Hazardous Waste Enforcement
Chief, Environmental Enforcement Section
Department of Justice
This memorandum is to nominate U.S. v. XYZ Co. for alterna-
tive dispute resolution (ADR). The case is a CERCLA enforcement
action involving multiple PRPs as well as a number of complex
technical and legal issues. The RI/FS and the record of decision-
have both been completed. We anticipate that the PRPs are inte-
rested in settling this matter and, we believe, a trained mediator
will greatly aid negotiations. The members of the litigation
team concur in this judgment.
We understand that if you object within 15 days of the receipt
of this letter, we will not proceed with ADR in this case without
your approval. We do believe, however, that ADR is appropriate
in this action. We look forward to working with your offices in
this matter.
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9834.12
ATTACHMENT 8
MEMORANDUM
SUBJECT: Jfomination "of United States v. ABC Co. for Binding
Alternative Dispute Resolution
FROM: Deputy Regional Administrator
TO: Associate Enforcement Counsel for Water Enforcement
Chief, Environmental Enforcement Section
Department of Justice
This memorandum requests concurrence in the use of a binding
fact-finding procedure in United States v. ABC Co-... The case
'involves the following facts:
ABC Co. owns and operates a specialty chemical production
and formulation facility. Wastewater streams come from a variety
of production areas which change with product demand. Because
of these diverse processes, the company's permit to discharge
wastewater must be based on the best professional judgment of
the permit writer as to the level of pollution control achievable.
The company was issued an NPDES permit in 1986. The permit
authorizes four (4) outfalls and contains limits for both conven-
tional and toxic organic pollutants. The effluent limitations of
the permit incorporate the Best Available Technology requirements
of the Clean Water Act (CWA).
EPA filed a civil lawsuit against the company for violating
effluent limits of the 1986 permit. As part of the settlement of
the action, the company was required to submit a compliance plan
which would provide for modification of its existing equipment,
including institution of efficient operation and maintenance
procedures to obtain compliance with the new permit. The settle-
ment agreement provides for Agency concurrence in the company's
compliance plan.
The company submitted a compliance plan, designed by in-house
engineers, which proposed to slightly upgrade their existing
activated sludge treatment system. The company has claimed that
this upgraded system provide* for treatment adequate to meet the
permit'liait*. EPA has refused to concur in the plan because EPA
expert«nb«lieve that additional treatment modifications to enhance
pollutant removals are required to meet permit limits on a con-
tinuous basis. This enhancement, EPA believes, is possible with
moderate additional capital expenditures.
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of experts in
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ATTACHMENT C 983412
ARBITRATION PROCEDURES*
SUBPART A - GENERAL
1. Purpose
This document establishes and governs procedures for the
arbitration of EPA disputes arising under [insert, applicable
statutory citations].
2. Scope and Applicability
The procedures enunciated in this document may be used to
arbitrate claims or disputes of the EPA regarding [insert
applicable statutory citations and limitations on scope, if
any.]
SUBPART B - JURISDICTION OP ARBITRATOR, REFERRAL OF CLAIMS,
AND ARBITRATOR SELECTION . - .
1. J-urisdiction of Arbitrator
(a) In accordance with the procedures set forth in this'
document, the Arbitrator is authorized to arbitrate
[insert applicable categories of claims or dispute*.]
(b) The Arbitrator is authorized to resolve,disputes
and award claims within the scope of the issues .
presented in the joint request for arbitration.
2. Referral of Disputes
(a) EPA [insert reference to mechanism by which EPA has
entered into dispute, e.g., after EPA has issued
demand letters or an administrative order], and one
or more parties to the case may submit a joint request
for arbitration of [EPA's claim, or one or more issues
in dispute among the parties] [a group
authorized to arbitrate such matters, e.g., the National
Arbitration Association (NAA)] if [restate any general
limitations on scope]. The joint request shall include:
A statement of the matter in dispute; a statement of
the issue* to be submitted for resolution; a statement
that the signatories consent to arbitration of the
.:• dispute in accordance with the procedures established
.i:.li':: by thi» document; and the appropriate filing fee.
Within thirty days after submission of the joint request
for arbitration, each signatory to the joint request shall
individually submit to the National Arbitration Association
Regulations applicable to section 112 of SARA are currently
being prepared.
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two copies of a written statement which shall include:
(1) An assertion of the parties' positions in the
matter in dispute;
(2) The amount of money in dispute, if appropriate;
(3) The remedy sought;
(4) Any documentation which the party deems necessary
to support its position;
C(5) A statement of the legal standard applicable to
the claim and any other applicable principles of
law relating to the claim;]
(6) The identity of any known parties who are not
signatories to the joint request for arbitration;
and
(7) A recommendation for the locale for the arbitral
hearing.
A copy of the statement shall be sent to all parties.
3. Selection of Arbitrator
(a) The NAA.has established and maintains a National Panel of
Environmental Arbitrators.
(b) After the filing of the joint request for arbitration, the
NAA shall submit simultaneously to all parties to the
dispute an identical list of ten [five] names of persons
chosen from the National Panel of Environmental Arbitrators.
Each party to the dispute shall have seven days from the
date of receipt to strike any names objected to, number
the remaining names to indicate order of preference, and
return the list to the NAA. If a party does not return
the list within the time specified, all persons named
shall be deemed acceptable. From among the persons
who have been approved on all lists, and if possible, in
accordance with the designated order of mutual preference,
the HAA shall invite an Arbitrator to serve. If the
parties) fail to agree upon any of the persons named, or
if acceptable Arbitrators are unable to serve, or if for
any other reason the appointment cannot be made from the
submitted lists, the NAA shall make the appointment from
aaong other members of the Panel without the submission
of any additional lists. Once the NAA ma)$e» the appointment
it shall immediately notify the parties of the identity
of the Arbitrator and the date of the appointment.
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(c) The dispute shall be heard and determined by one
Arbitrator, unless the NAA decides that three Arbitrators
should be approved based on the complexity of the issues
or'the number of parties.
(d) The NAA shall notify the parties of the appointment of the
Arbitrator and send a copy of these rules to each party.
A signed acceptance of the case by the Arbitrator shall
be filed with the NAA prior to the opening of the hearing.
After the Arbitrator is appointed, all communications
from the parties shall be directed to the Arbitrator.
(e) If any Arbitrator should resign, die, withdraw, or be
disqualified, unable or refuse to perform -the duties of the
office, the NAA may declare the office vacant. Vacancies
shall be filled in accordance with the applicable provisions
of this Section, and unless the parties agree otherwise,
the matter shall be reheard.
4. Disclosure
(a) A person appointed as an Arbitrator under the above section.
shall, within five days of receipt of his or her notice of/
appointment disclose to the NAA any circumstances likely
to affect impartiality, including [those factors listed in
section V.B. of the accompanying guidance] .
(b) Upon receipt of such information from, an appointed .
Arbitrator or other source, the NAA shall on the same day
communicate such iaformation to the parties and, if it
deems it appropriate, to the Arbitrator and others.
(c) The parties may request within seven days of receipt of
such information from the NAA that an Arbitrator be
disqualified.
(d) The NAA shall make a determination on any request for
disqualification of an Arbitrator within seven days after
the NAA receives any such request. This determination
shall be within the sole discretion of the NAA, and its
decision shall be final.
5. Intervention and Withdrawal
(a): Subject to the approval of the parties and the Arbitrator,
any person [insert applicable limitations, if any, e.g.
any person with a substantial interest in.the subject of
the referred dispute] may move to intervene in the arbitral
proceeding. Intervening parties shall be bound by rules
that the Arbitrator may establish.
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(b) Any party may for good cause shown move to withdraw from
the arbitral proceeding. The Arbitrator may approve such
withdrawal, with or without prejudice to the moving party,
and nay assess administrative fees or expenses against
th« withdrawing party as the Arbitrator deems appropriate.
SUBPART C - HEARINGS BEFORE THE ARBITRATOR
1. Filing of Pleadings
(a) Any party may file an answering statement with the NAA no
later than seven days from the date of receipt of an
opposing party's written statement. A copy of any
answering statement shall be served upon all parties.
(b) Any party may file an amended written statement with
the NAA prior to the appointment of the Arbitrator. A
copy of the amended written statement shall be served
' '; . upon all parties. After the Arbitrator is appointed,
however, no amended written statement may be submitted
except with the Arbitrator's concent.
C(c) Any party may file an answering statement to the amended
written statement with the NAA no later than seven day*
from the date of receipt of an opposing party's amended
written statement. A copy of any answering statement
shall be served upon all parties.J
2. Pre-hearing Conference
At the request of one or more of the parties or at the
discretion of the Arbitrator, a pra-hearing conference with the
Arbitrator and the parties and their counsel will be scheduled in
appropriate cases to arrange for an exchange of information,
including witness statements, documents, and the stipulation
of uncontested facts to expedite the arbitration proceedings.
The Arbitrator may encourage further settlement discussions
during the pre-hearing conference to expedite the arbitration
proceedings. Any pre-hearing conference must be held within
sixty days of the appointment of the Arbitrator.
3. Arbitral Hearing
(a) Th«r Arbitrator shall select the locale for the arbitral
/ hearing, giving due consideration to any recommendations
'; by the parties.
(b) Th« Arbitrator shall fix the time and place for the
hearing.
(c) The hearing shall commence within thirty days of the
pre-hearing conference, if such conference is held, or
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within sixty [thirty] days of the appointment of the
Arbitrator,, if.no pre-hearing conference is held. The
Arbitrator shall notify each party by mail of the
hearing at least thirty days in advance, unless the parties
by mutual agreement waive such notice or modify the terms
thereof.
(d) Any party may be represented by counsel. A party who
intends to be represented shall notify the other parties
and the Arbitrator of the name and address of counsel at
least three days prior to the date set for the hearing at
which counsel is to appear. When an arbitration is
initiated by counsel, or where an attorney replies for
the other parties, such notice is deemed to have been
given.
(e) The Arbitrator shall make the necessary arrangements for
.making a record of the arbitral hearing.
(f) The Arbitrator shall make the necessary arrangements for
the services of an interpreter upon the request of one or
more of the parties, and the requesting parties shall
assume the cost of such service.
(g) The Arbitrator may halt the proceedings upon' the request of
any party or upon the Arbitrator's own initiative.
(h) The Arbitrator shall administer oaths to all witnesses
before they testify at the arbitral hearing.
(i) (1) A hearing shall be opened by the recording of the
place, time, and date of the hearing, the presence
of the Arbitrator and parties, and counsel, if any,
and by the receipt by the Arbitrator of the written
statements, amended written statements, if any, and
answering statements, if any. The Arbitrator may, at
the beginning of the hearing, ask for oral statements
clarifying the issues involved.
(2) The) EPA shall then present its case, information and
witnesses, if any, who shall answer questions posed
by both parties. The Arbitrator has discretion to
vary this procedure but shall afford full and equal
opportunity to all parties for the presentation
.of any material or relevant information.
(3) Exhibits, when offered by any party, may be received
by the Arbitrator. The names and addresses of all
witnesses, and exhibits in ths order received, shall
be part of the record.
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9834.12
-6-
( j) The arbitration -may proceed in the absence of any party
which, after notification, fails to be present or fails
to obtain a' stay of proceedings. If a party, after
notification, fails to be present, fails to obtain a
stay, or fails to present information, the party will be
in default and will have waived the right to be present
at the arbitration. A decision shall not be made solely
on the default of a party. The Arbitrator shall require
the parties who are present to submit such information as
the Arbitrator may require for the making of a decision.
(k) Information and Evidence
(1) The parties may offer information as t.hey desire,
subject to reasonable limitations as the Arbitrator deems
appropriate, and shall produce additional information as
the Arbitrator may deem necessary to an understanding and
determination of the dispute. The Arbitrator shall be
the judge of the relevancy and materiality of the information
offered, and conformity to legal rule* of evidence shall
not be necessary.
(2) All information shall be introduced in the presence
of the Arbitrator and all parties, except where any of
the parties has waived the right to be present pursuant
to paragraph (j) of this section. All information
pertinent 'to the issues presented to the Arbitrator for
decision, whether in oral or written fora, shall be made
a part of the record.
(I) The Arbitrator may receive and consider the evidence
of witnesses by affidavit, interrogatory or deposition,
but shall give the information only such weight as the
Arbitrator deems appropriate after consideration of any
objections made to its admission.
(m) After the presentation of all information, the Arbitrator
shall specifically inquire of all parties whether they
have any further information to offer or witnesses to be
heard. Upon receiving negative replies, the Arbitrator
shall declare the hearing closed and minutes thereof
shall b« recorded.
parties may provide, by written agreement, for the
sv waiver of the oral hearing.
"«K"-.. -
(o) Ail documents not submitted to the Arbitrator at the
hearing, but arranged for at the hearing pr by subsequent
agreement of the parties, shall be filed with the Arbitrator
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• 9834.12
-7-
All parties shall be given an opportunity to examine
documents.
4. Arbitral Decision
(a) The Arbitrator shall render a decision within thirty [five]
days after the hearing is declared closed except if:
(1) All parties agree in writing to an extension; or
(2) The Arbitrator determines that an extension of the
time limit is necessary.
(b) The decision of the Arbitrator shall be signed and in
writing. It shall contain a brief statement of the basis
and rationale for the Arbitrator's determination. At the
close of the hearing, the Arbitrator may issue an oral
opinion which shall be incorporated into a subsequent written
opinion.
(c) The Arbitrator may grant any remedy or relief within the
scope of the issue* presented in the joint request for
arbitration.
(d) The Arbitrator shall assess arbitration fees* and expenses
in favor of any party, and, in the event any administra-
tive fees or expenses are due the NAA, -in favor of the
(e) If the dispute has been heard by three Arbitrators, all
decisions and awards must be made by at least a majority,:
unless the parties agree in writing otherwise.
(f) If the parties settle their dispute during the course of
the arbitration, the Arbitrator, upon the parties' request,
may set forth the terms of the agreed settlement.
(g) The Arbitrator shall mail to or serve the decision on
the parties.
(h) The) Arbitrator shall, upon written request of any party,
furnish certified facsimiles of any papers in the Arbitrator's
possession that may be required in judicial proceedings
relating to the arbitration.
SUBPART D - APPEALS, FEES AND OTHER PROVISIONS
1. Appeals Procedures
(a) Any party may appeal the award or decision within thirty
days of notification of the decision. Any such appeal
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9834.12
-8-
shall be made to the [insert "Federal district court for
the district in which the arbitral hearing took place" or
"Chief Judicial Officer, U.S. Environmental Protection
Agency"].
(b) The award or decision of the Arbitrator shall be binding
and conclusive, and shall not be overturned unless achieved *
through fraud, misrepresentation, abuse of discretion,
other misconduct by any of the parties, or mutual mistake
of fact. [Insert "No court shall" or "The Chief Judicial
Officer shall not"] have jurisdiction to review the award
or decision unless there is a verified complaint with
supporting affidavits attesting to specific instances
of such fraud, misrepresentation, abuse of discretion,
other misconduct, or mutual mistake of fact.
(c) Judgment upon the arbitration award may b*..entered in
any Federal district court having jurisdiction. The award
may be enforced in any Federal district court having
jurisdiction. . • .
(d) Except as provided in paragraph (c), no award or decision
shall be admissible as evidence of any issue of fact or
law in any proceeding brought under any other provision
of [insert applicable statutory acronyms] or any other-
provision of law, nor shall any prearbitral settlement be
admissible as evidence in any such proceeding. Arbitration
decisions shall have no precedential value for future
arbitration, administratiave or judicial proceedings.
2. Administrative Fees, Expenses, and Arbitrator's Fee
(a) the NAA shall prescribe an Administrative Fee Schedule
and a Refund Schedule. The schedules in effectJat the
time of filing or the time of refund shall be applicable.
The filing fee shall be advanced by the parties to the
NAA as part of the joint request for arbitration, subject
to apportionment of the total administrative fees by the
Arbitrator in the award. If a matter is withdrawn or
settled, a refund shall be made in accordance with the
Refund Schedule.
(b) Expenses of witnesses shall be borne by the party presenting
such witnesses. The expense of the stenographic record
and all transcripts thereof shall be prorated equally
among all parties ordering copies, unless otherwise
agreed by the parties, or unless the Arbitrator.assesses
'-- such expenses or any part thereof against any specified
party in the award.
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9834.12
-9-
(c) The per diem fee for the Arbitrator shall be agreed upon
by the parties and the NAA prior to the commencement of
any activities .by the Arbitrator. Arrangements for
compensation of the Arbitrator shall be made by the NAA.
(d) The NAA may require an advance deposit from the parties
to defray the Arbitrator's Fee and the Administrative
Fee, 'nut shall render an accounting to the parties and
return any balance of such deposit in accordance with
the Arbitrator's award.
3. Miscellaneous Provisions
(a) Any party who proceeds with the arbitration after know-
ledge that any provision or requirement of this Part
has not been complied with, and who fails to object
either orally or in writing, shall be deemed to
have waived the right to object. An objection, whether
oral or written, must be made at the earliest possible
opportunity.
(b) Before the selection of the Arbitrator, all oral or
written communication* from the parties for the Arbitra-
tor's consideration shall be directed to the NAA for
eventual transmittal to the Arbitrator.
(c) Neither a party nor any other interested person shall
engage in ex parte communication with the Arbitrator.
t
(d) All papers connected with the arbitration shall be served
on an opposing party either by personal service or United
States mail, First Class, addressed to the party's attorney,
or if the party is not represented by an attorney or the
attorney cannot be located, to the last known address of
the party.
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9634J2
ATTACHMENT D
. MEDIATION PROTOCOLS
I. PARTICIPANTS
A. Interests Represented. Any interest that would be
substantially affected by EPA's action in
[specify case] may be represented. Parties may
group together into caucuses to represent allied
interests.
B. Additional Parties. After negotiations have begun, addi-
tional parties may join the negotiations only with the
concurrence of all parties already represented.
C. Representatives. A representative of' each party or
alternate must attend each full negotiating session.
The designated representative aay be accompanied by such
other individuals as the representative believes is~-
aporopriate to represent his/her interest, but only the
designated representative will have the privilege of
sitting at the negotiating table and of speaking
during the negotiations, except that any repre-
sentative may call upon a technical or legal adviser
to elaborate on a relevant point.
II. DECISIONMAKING . :
A. Agendas. Meeting agendas will be developed by consensus.
Agendas will be provided before every negotiating
session.
B. Caucus. A caucus can be declared by any participant at
any time. The participant calling the caucus will inform
the others of the expected length of the caucus.
III. SAFEGUARDS FOR THE PARTIES
A. Good Faith. All participants oust act in good faith in
ail aspects of these negotiations. Specific offers,
position** or statements made during the negotiations
sj*y not b« used by other parties for any other purpose
vY" or as a basis for pending or future litigation. Personal
.':"• attacks and prejudiced statements are unacceptable.
B. Right to Withdraw. Parties may withdraw from the
negotiations at any time without prejudice. Withdrawing
parties remain bound by protocol provisions on public
comment and confidentiality.
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9834.12
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C. Minutes • Ses'sions shall not be recorded verbatim.
Formal minutes of the proceedings shall not be kept.
D. Confidentiality and the Use of Information
(1) CAll parties agree not to withhold relevant informatior
If a party believes it cannot or should not release '.
such information/ it will provide the substance of
the information in some form (such as by aggregating
data, by deleting non-relevant confidential informa-
tion, by providing summaries, or by furnishing it -
to a neutral consultant to use or abstract) or a
general description of it and the reason for not
providing it directly.]
(2) [Parties will provide information called for by this
paragraph as much in advance of the meetings as
possible.J
(3) The entire process is confidential. The parties and
the mediator will not disclose information regarding
the process/ including settlement terms, to third
parties/ unless the participants otherwise agree. The
process shall be treated as compromise negotiation
for purposes of the Federal Rules of Evidence and
state rules of evidence. The mediator will be
. disqualified as a witness/ consultant or expert in
any pending or future action relating to the subject
matter of the mediation, including those between
persons not parties to the mediation. Failure to
meet the confidentiality or press requirements of
these protocols is a basis for exclusion from the
negotiations.
(4) The mediator agrees that if he/she discloses informa-
tion regarding the process, including settlement terms,
to third parties without the participants' agreement,
except as ordered by a court with appropriate juris-
diction, he/she agrees to the following as liquidated
damages to the parties:
(a) Removal from the case;
(b) Removal from any EPA list of approved neutrals;
and
(c) Payment of an amount equal to Cat a
minimum, the amount of the mediator's reej.
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9834.12
-3-
IV. SCHEDULE
A. Time and location. Negotiating sessions will initially
be held ^ [insert how often]. The first
negotiating session is scheduled for .
Unless otherwise agreed upon, a deadline of
months for the negotiations will be established.
The location of the meetings will be decided by the
participants.
B. Discontinue if unproductive. The participants may dis-
continue negotiations at any time if they do not appear
productive.
V. Press
A. [Joint Statements. A joint press statement shall be
agreed to by the participants at th« conclusion
of each session. A joint concluding statement shall.
be agreed to by the participants and issued by the
mediator at the conclusion of the process. Participants
and the mediator shall respond to press inquires within
the spirit of the press statement agreed to at the
conclusion of each session.]
B. [Meetings with the Press. Participants and—the
mediator will strictly observe the protocols regarding
confidentiality in all contacts with the press and
in other public forums. The mediator shall be
available to discuss with the press any questions on
the process and progress of the negotiations. No
party will hold discussions with the press concerning
specific offers, positions, or statements made during
the negotiations by any other party.]
VI. MEDIATOR
A neutral mediator will work with all the parties to
ensure that the process runs smoothly.
VII. APPROVAL OF PROPOSALS
A* Partial Approval. It is recognized that unqualified
'-:*-.." acceptance of individual provisions is not possible
out of context of a full and final agreement. However,
tentative agreement of individual provisions or portions
thereof will be signed by initialing of the agreed
upon items by the representatives of all interests
represented. This shall not preclude the parties from
considering or revising the agreed upon items by mutual
consent.
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B.
9834.12
-4-
Final Approva.1. Upon final agreement, all representatives
shall sign and date the appropriate document. It is
explicitly recognized that the representatives of the
U.S. EPA do not have the final authority to agree to any
terms in this case. Final approval must be obtained
from [insert names of proper officials].
VIII. EFFECTIVE DATE
These protocols shall be effective upon the signature of the
representatives.
For the U.S. Environmental Protection Agency
Signature Date
For [Name of violator]
Signature Date
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98341?
Attachment E >u-»-M _
AGREEMENT TO INSTITUTE MINI-TRIAL PROCEEDINGS
The United States Environmental Protection Agency (EPA)
and XYZ Corporation, complainant and respondent, respectively,
in the matter of XYZ Corp., Docket No. , agree to
the alternative dispute resolution procedure set forth in
this document for the purpose of fostering the potential
settlement of this case. This agreement, and all of the
actions that are taken pursuant to this agreement, are
confidential. They are considered to be part of the settlement
process and subject to the same privileges that apply to
settlement negotiations.
1. The parties agree to hold a mini-trial to inform
their management representatives of the theories, strengths,
and weaknesses of the parties' respective positions: At the
mini-trial,: each side will have the opportunity and responsibility
to present its ."best case" on all of the issues involved in
this proceeding.
2. Management Representatives of both parties, including -
an EPA official and an XYZ official at the Division Vice
President level or higher, will attend the mini-trial. The
representatives have authority to settle the dispute.
3. A mutually selected "Neutral Advisor" will attend the
mini-trial. The Neutral Advisor will be chosen in the
following manner. By • , [insert date] the parties
shall exchange a list of five potential Neutral Advisors
selected from the list of candidates offered by _^__^______
[insert neutral organization]. The potential candidates
shall be numbered in order of preference. The candidate who
appears on both lists and who has the lowest total score
shall be selected as the Neutral Advisor. If no candidate
appears on both lists, the parties shall negotiate and shall
select and agree upon a Neutral Advisor by
[insert date].
4. The fees and expenses of the Neutral Advisor will be
borne equally by both parties. [However, if the Neutral
Advisor provide* an opinion as to how the case should be
resolved* and * party does not follow the recommended
dispo«itioir of the Neutral Advisor, that party shall bear the
Advisor.'* entire fees and expenses.]
• ''~~
5;r neither party, nor anyone on behalf of either party,
shall unilaterally approach, contact or communicate with the
Advisor. The parties and their attorney* represent and
warrant that they will make a diligent effort to'ascertain
all prior contact between themselves and the Neutral Advisor,
and that all such contacts will be disclosed to counsel for
the opposing party.
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9834,12
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6. Within 10 days' after the appointment of the Neutral
Advisor, mutually agreed upon basic source material will be
jointly sent to the Neutral Advisor to assist him or her in
familiarizing himself or herself with the basic issues of the
case. This material will consist of neutral matter including
this agreement, the complaint and answer, the statute, any
relevant Agency guidance, a statement of interpretation and
enforcement policy, the applicable civil penalty policy, and
any correspondence between the parties prior to the filing
of the complaint.
7. All discovery will be completed in the
Cinsert number] working days following the execution of this
agreement. Neither party shall propound more than"25 inter-
rogatories or requests for admissions, including subparts;
nor shall either party take more than five depositions *nd '
no deposition shall last more than three hours. Discovery
taken during the period prior to the mini-trial shall be
admissible for all purposes in this litigation, including
any subsequent hearing before [a federal judge or administrative
law judge] in the event this mini-trial does not result in a
resolution of this dispute. It is agreed that the pursuit
of discovery during the period prior to the mini-trial shall
not restrict either party's ability to take additional discovery
at a later date. In particular, it is understood and agreed
that partial depositions may be necessary to prepare, for the
mini-trial. If this matter is not resolved informally as a
result of this procedure, more complete depositions of the
same individuals may be necessary. In that event, the partial
depositions taken during this interim period shall in no way
foreclose additional depositions of the same individual regarding
the same or additional subject matter for a later hearing.
8. By ____^ » [insert date] the parties shall
exchange all exhibits they plan to use at the mini-trial,
and send copies at the same time to the Neutral Advisor. On
the same date the parties also shall exchange and submit to
the Neutral Advisor and to the designated trial attorney for
the opposing sidet (a) introductory statements no longer than
25 double-spaced pages (not including exhibits), (b) the
names of witnesses planned for the mini-trial, and (c) all
documentary evidence proposed for utilization at the mini-tial.
" !£ - "
f. Two weeks before the mini-trial, if he or she so
desire* and if the parties agree, the Neutral Advisor may
confer jointly with counsel for both parties to resolve any
outstanding procedural questions.
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9834,12
-3-
10. The mini-trial proceeding shall be held on ,
and shall take day(s). The morning proceedings shall begin
at a.m. and shall "continue until • a.m. The afternoon's
proceedings shall begin at p.m. and continue until p.m.
A sample two day schedule follows:
Day 1
S:30 a.m. -
12:00 Noon -
1:00 p.m. -
2:30 p.m. -
4:00 p.m. -
12:00 Noon
1:00 p.m.
2:30 p.m.
4:00 p.m.
5:00 p.m.
Day 2
8:30 a.m - 12:00 Noon
12:00 Noon - 1:00 p.m.
1:00 p.m. - 2:30 p.m.
2:30 p.m. - 3:00 p.m.
3:00 p.m. - 4:30 p.m.
4:30 p.m. - 4:45 p.m.
4:45 p.m. - 5:00 p.m.
EPA's position and case presentation
Lunch*
XYZ's cross-examination
EPA's re-examination
Open question and answer period
XYZ's position and case presentation
Lunch*
EPA's cross-examination
XYZ's re-examination
Open question and answer period
EPA's closing argument
XYZ's closing argument
•Flexible time period for lunch of a stated duration.
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9834,12
-4-
11. The presentations at the mini-trial will be informal.
Formal rules of evidence will not apply, and witnesses may
provide testimony in the narrative. The management repre-
sentatives may question a witness at the conclusion of the
witness' testimony for a period not exceeding ten minutes,
per witness. In addition, at the conclusion of each day's
presentation, the management repesentatives may ask any
further questions that they deem appropriate, subject to the
time limitations specified in paragraph 10. Cross-examination
will occur at the conclusion of each party's direct case
presentation.
12. At the mini-trial proceeding, the trial attorneys
will have complete discretion to structure their presentations
as desired. Forms of presentation include, but are not
limited to, expert witnesses, lay witnesses, audio .visual
'aids, demonstrative evidence, and oral argument. The parties
agree that there will be no objection by either party to
the form or content of the other party's presentation.
13. In addition to asking clarifying questions, the Neutral
Advisor may act as a moderator. However* the Neutral Advisor
will not preside like a judge or arbitrator, nor have the
power to limit, modify or enlarge the scope or substance of
the parties' presentations. The presentations will not be
recorded, but either party may take notes of the proceedings.
14. In addition to counsel, each management representative
may have advisors in attendance at the mini-trial, provided
that all parties and the Neutral Advisor shall have been
notified of the identity of such advisors at least ten days
before commencement of the mini-trial.
15. At the conclusion of the mini-trial, the management
representatives shall meet, by themselves, and shall attempt
to agree on a resolution of the dispute. By agreement, other
members of their teams may be invited to participate in the
meetings.
16. At the request of any management representative,
the Neutral Advisor will render an oral opinion as to the
likely outcome at trial of each issue raised during the mini-
trial.x- Following that opinion, the management representatives
will again attempt to resolve the dispute. If all management
representative* agree to request a written opinion on such
matters, the Neutral Advisor shall render a written opinion
within 14 days. Following issuance of any such written
opinion, the management representatives will again attempt
to resolve the dispute.
17. If the parties agree, the [adminstrative law judge or
federal district court judge] may be informed in a confidential
communication that an alternative dispute resolution procedure
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-5-
loyed, but neither party shall inform the
.ive law judge or federal district court judge]
as to any aspect of the mini-trial or of the
urthermore, the parties may file a joint motion to
jceedings in the [appropriate court] in
The motion shall advise the court that the suspension
purpose of conducting a mini-trial. The court will
1 as to the time schedule established for completing
trial proceedings. Written and oral statements
me party in the course of the mini-trial proceedings
e utilized by the other party and shall be inadmissible
..earing of this matter before the [administrative law
; federal district court judge] for any purpose,
ng impeachment. However, documentary evidence that
irwise admissible shall not be rendered inadmissible
esult of its use at the mini-trial.
18. Any violation of these rules by either party will
usly prejudice the opposing party and be prima facie
ids for a motion for a new hearing; and to the extent
the violation results in the communication of information
.he [administrative law judge or federal district court judge]
crary to the terms of this agreement, it shall be prima
ie grounds for recusal of the [administrative law judge or
ieral district court judge]. Moreover, notwithstanding the
ovisions of Paragraph 4 above, any violation of these rules
' either party will entitle the opposing party to full
ompensation for its share of the Neutral Advisor's fees and
xpenses, irrespective of the outcome of any administrative
jr court proceeding.
19. The Neutral Advisor will be disqualified as a hearing
witness, consultant, or expert for either party, and his or her
advisory response will be inadmissible for all purposes in
this or any other dispute involving the parties. The Neutral
Advisor will treat the subject matter of the presentations
as confidential and will refrain from disclosing any trade
secret information disclosed by the parties. After the
Advisor render* hi» or her opinion to the parties, he or she
shall return, all materials provided by the parties (including
any copies) t«nd, destroy all notes concerning this matter.
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9834.12
Datedt
Dated:
By:
Attorney for United States
Environmental Protection
Agency
By:
Attorney for XYZ
Corporation
Affirmation of Neutral Advisor:
I agree to the foregoing provisions of this Alternative
Dispute Resolution Agreement.
Dated:
Signed:
Neutral Advisor
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9834.12
ATTACHMENT F
UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
In the Matter of )
XYZ Corporation, ) Docket No.
Respondent )
AGREEMENT TO INSTITUTE FACT-FINDING PROCEDURES
A. General Provisions
1. Purpose
2. Definitions
B. Guidelines for Conduct of Neutral Fact-finding
1. Scope and Applicability '
2. Jurisdiction of Neutral Fact-finder '
3. Selection of Neutral Fact-finder
4. Information Regarding Dispute
5. Determination of Neutral Fact-finder
6. Confidentiality
7. Appeals Procedures
8. Administrative Fees, Expenses, and Neutral Fact-finder's Fee
9. Miscellaneous Provisions
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9834.12
A. GENERAL PROVISIONS
1. Purpose
This agreement contains the procedures to be followed
for disputes which arise over [state issue(s)].
2. Definitions
Terms not defined in this section have the meaning given by
[state applicable statute(s) and section(s)].
All time deadlines in these alternative dispute resolution (ADR)
procedures are specified in calendar days. Except when
otherwise specified:
(a) "Act" means [state applicable statute(s) and citation in
U.S. Code].
(b) "NAO" means any neutral administrative organization
selected by the parties to administer the requirements of
the ADR procedures.
(c) "Neutral Fact-finder" means any person selected in accordance
with and governed by the provisions of these ADR procedures.
(d) "Party" means EPA and the XYZ Corporation.
B. GUIDELINES FOR CONDUCT OF NEUTRAL FACT-FINDING
1. Scope and Applicability
The ADR procedures established by this document are
for disputes arising over [state issue(s)].
2. Jurisdiction of Neutral Fact-finder
In accordance with the ADR procedures set forth in this
document, the Neutral Fact-finder is authorized to issue
determination* of fact regarding disputes over [state
__^__^_^^_—^-__ issue(s)], and any other issues
authorized by the parties.
3. Selection of Neutral Fact-finder
The Neutral Pact-finder will be chosen by the parties in
the? following manner.
(a) The parties shall agree upon a neutral adminis-
trative organization (NAO) to provide services to the
parties as specified in these ADR procedures.
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9834,12
-3-
The parties shall jointly request the NAO to provide
thea with a list of three to five (3-5) potential Neutral
Fact-finders. .Either party may make recommendations
to the NAO of qualified individuals, within ten (10)
days after the receipt of the list of potential Neutral
Fact-finders, the parties shall numerically rank the
listed individuals in order of preference and simultane-
ously exchange such rankings. The individuals with
the three (3) lowest combined total scores shall be
selected as finalists. Within ten (10) days after such
selection, the parties shall arrange to meet with and
interview the finalists. Within ten (10) days after
such meetings, the parties shall rank the finalists in
order of preference and exchange rankings. . The individual
with the lowest combined total score shall 6« selected
as the Neutral Fact-finder.
• (b) The NAO shall give notice of the appointment of the
Neutral Fact-finder to each of the parties. A signed
acceptance by the Neutral Fact-finder shall be filed
with the NAO prior to the initiation of fact-finding
proceedings.
(c) If the Neutral Fact-finder should resign, die, withdraw,
or be disqualified, unable, or refuse to perform the
duties of the office, the NAO may, on proof satisfactory
to it, declare the office vacant. Vacancies shall be
filled in accordance with the applicable provisions
of this section, and the dispute shall be reinitiated,
unless the parties agree otherwise.
4. Information Regarding Dispute
(a) Within ten (10) days after the selection of the Neutral
Fact-finder, basic source material shall be jointly
submitted to the Neutral Fact-finder by the parties.
Such basic source material shall consist of:
1) an agreed upon statement of the precise nature of
the dispute,
2) th«j position of each party and the rationale for it,
3) all information and documents which support each
•'•;•• party's position, and
4) [describe additional material].
(b) Thereafter, for a period of days, the Neutral
Fact-finder shall conduct an investigation of the issues
in dispute. As part of such investigation, ths Neutral
Fact-finder may interview witnesses, request additional
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documents, request additional information by written
questions, and-generally use all means at his or her
disposal to gather the facts relevant to the disputes as
he or she determines. The Neutral Fact-finder shall be
the sole determiner of the relevancy of information.
Conformity to formal rules of evidence shall not be
necessary.
5. Determination of Neutral Factfinder
(a) The Neutral Fact-finder shall render a determination
within _ days of the time limitation specified
in Section B. 4(b) above, unless:
(1) Both parties agree in writing to an extension;
Cor
(2) The Neutral Fact-finder determines that an
extension of the time limit is necessary.]
(b) The determination of the Neutral Fact-finder shall be
signed and in writing. It shall contain a full statement
of the basis and rationale for the Neutral Fact-finder's
determination.
(c) If the parties settle their dispute prior to the deter-
mination of the Neutral Fact-finder, the Neutral Fact-finder
shall cease all further activities in regard to the
dispute upon receipt of joint notice of such settlement
from the parties.
(d) The parties shall accept as legal delivery of the deter-
mination the placing of a true copy of the decision in
the mail by the Neutral Fact-finder, addressed to the
parties' last known addresses or their attorneys, or by
personal service.
(e) After the Neutral Fact-finder forwards his or her deter-
mination to the parties, he or she shall return all
dispute-specific information provided by the parties
(including any copies) and destroy notes concerning
this matter.
•-• fc'-
6. Confidentiality
(a) The determination of the Neutral Fact-finder, and all
of the actions taken pursuant to these AOR procedures,
shall be confidential and shall be entitled to the
same privileges that apply generally to settlement
negotiations.
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(b) The Neutral Fact-finder shall treat the subject matter
of all submitted information as confidential, and
shall refrain from disclosing any trade secret or
confidential bus'iness information disclosed as such
by the parties. [If XYZ has previously formally claimed
information as confidential business information (CBI),
XYZ shall specifically exclude the information from '
such CBI classification for the limited purpose of
review by the Neutral Fact-finder.]
(c) No determination of the Neutral Fact-finder shall be
admissible as evidence of any issue of fact or law in any
proceeding brought under any provision of [state statute!
or any other provision of law.
7. Appeals Procedures
(a) Any party may appeal the determination of the Neutral
Fact-finder within thirty days of notification of
such determination. Any such appeal shall be made to
the [Chief Judicial Officer, U.S. Environmental Protec-
tion Agency, or district court judge].
(b) The determination of the Neutral Fact-finder shall be
binding and conclusive, and shall not be overturned
unless achieved through fraud, misrepresentation,
other misconduct by the Neutral Fact-finder or by any
of the parties, or mutual mistake of fact. The [admin-
istrative law judge or federal district court judge] -
shall not have jurisdiction to review the determination
unless there is a verified complaint with supporting
affidavits filed by one of the parties attesting to
specific instances of such fraud, misrepresentation,
other misconduct, or mutual mistake of fact.
8. Adainiatrative Fees, Expenses, and Neutral Fact-finder's Fee
(a) The fee* and expenses of the Neutral Fact-finder, and
of the NAO, shall be borne equally by the parties.
The partie* «ay employ additional neutral organizations
to administer these ADR procedures as mutually deemed
necessary, with the fees and expenses of such organizations
born* equally by the parties.
(b) The MAO shall prescribe an Administrative Fee Schedule
and a Refund Schedule. The schedules in effect at the time
of the joint request for fact-finding shall be applicable.
The filing fee, if required, shall be advanced by the
parties to the NAO as part of the joint request for
fact-finding. If a matter is settled, a refund shall
be made in accordance with the Refund Schedule.
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9-8 3 4.1 2
(c) Expenses of providing information to the Neutral Fact-finder
shall be borne by the party producing such information.
(d) The per diem fee for the Neutral Fact-finder shall be
agreed upon by the parties and the NAO prior to the
commencement of any activities by the Neutral Fact-finder.
Arrangements for compensation of the Neutral Fact-finder
shall be made by the NAO.
9. Miscellaneous Provisions
(a) Before the selection of the Neutral Fact-finder, all oral
or written communications from the parties for the Neutral
Fact-finder's consideration shall be directed to the NAO
for eventual transmittal to the Neutral Fact-finder.
(b) All papers connected with the fact-finding shall be served
on the opposing party either by personal service or United
States mail, First Class.
(c) The Neutral Fact-finder shall be disqualified from acting
on behalf of either party, and his or her determination
pursuant to these ADR procedures shall be inadmissible
for all purposes, in any other dispute involving the
parties.
(d) Any notification or communication between the parties,
or with and by the Neutral Fact-finder shall be confidential
and entitled to the same privileges that apply generally
. to settlement negotiations.
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