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Citing the voluntary nature of mediation, the California Court of Appeals held that under the rules of court, California trial courts do not have authority to order mediation over a party's objection where the amount in controversy exceeds $50,000.
In Jeld-Wen, Inc. v. Superior Court, No. D048782, 2007 WL 16068 (Cal. Ct. App. Jan. 4, 2007), the court ordered mandatory mediation in a multi-party construction defect case involving damages in excess of $500,000. The mediation order provided for no more than 100 hours of mediation at an hourly rate of $500.
Jeld-Wen, an uninsured "minor player," objected to the mediation order on the ground that a court may set only one mandatory settlement conference under Rule 3.1380 of the California Rules of Court. The court overruled the objection, but Jeld-Wen still refused to attend the mediation.
The trial court subsequently ordered Jeld-Wen to pay $200 in sanctions and attend the next mediation session. Jeld-Wen appealed from that order.
On appeal, the Court held that a California trial court does not have authority to order mediation over a party's objection where the amount in controversy exceeds $50,000. In reaching this holding, the Court reasoned that the California Rules of Court "emphasize the voluntary nature of mediation."
The Court further reasoned that "it serv[ed] no purpose to force Jeld-Wen, an uninsured litigant and minor player in this complex action, to attend mediation where the combined costs of the mediator and attorney fees expended to attend multiple mediation sessions could exceed the amount of the claim against it."
According to the Court, the California Rules of Court "emphasize the voluntary nature of mediation." However, Rule 3.874 requires all parties and attorneys of record to attend mediation even if they object to the procedure. In fact, just last year, Rule 3.784 was amended to clarify this requirement "with the goal of making these court-ordered ADR
processes more efficient and effective." See Discussion by the Civil and Small Claims Advisory Committee's Subcommittee on Alternative Dispute Resolution.
Of the four federal district courts located in California, three have authority to order mandatory arbitration regardless of any objection. See C.D. Cal. L.R. 16-15.3; N.D. Cal. ADR L.R. 6-2; S.D. Cal. Civ. L.R. 16.1(c)(2)(a); but see E.D. Cal. L.R. 16-271(c)(2).
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