Manufacturers and Traders Trust Company v. First Tennessee Bank National Association

Filing 11

DECISION AND ORDER DENYING Petitioner's 7 Motion to Opt Out of ADR as specified. Signed by William M. Skretny, Chief Judge U.S.D.C. on 10/18/2013. (CMD)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

MANUFACTURERS AND TRADERS TRUST
COMPANY,

Petitioner,
v.

DECISION AND ORDER

FIRST TENNESSEE BANK NATIONAL
ASSOCIATION,

13-CV-977S

Respondent.

Petitioner has filed a motion to opt out of alternative dispute resolution (“ADR”)
pursuant to Section 2.2 A of the court’s Alternative Dispute Resolution Plan.
This action was commenced in this federal district court by Notice of Removal filed
September 27, 2013. (Docket 1.) According to the Notice, the underlying action was
commenced in New York Supreme Court, Erie County, on September 7, 2013. The
asserted basis for removal is diversity of citizenship.
As a newly filed civil case in the Western District of New York, the action was
automatically referred to mediation on October 2, 2013 (Docket 3) pursuant to Section
2.1 A of the court’s ADR Plan.
Motions to opt out of an ADR referral must be made within fourteen days from the
date of the first discovery conference conducted under Local Rule 16. The first discovery
conference has not yet been conducted and, therefore, the motion is premature.

Treating the motion as having been timely filed, the Court observes that the state
court petition was filed pursuant to New York’s Civil Practice Law and Rules to confirm an
arbitration determination. In its Response to Petition filed contemporaneously with its
Notice of Removal, respondent contends, inter alia, that the arbitration panel’s award
contains numerous errors and that it is subject to being vacated or modified. According
to the Petition and the Response to Petition, the underlying arbitration proceeding was
commenced in May 2009, and the extensive record filed with this removed case
establishes that the issues raised and the substantial sums of money involved have been
the subject of significant and protracted legal effort and expense. Paragraphs 17 and 18
of the Declaration of counsel in support of the motion provides information concerning the
magnitude of the arbitration proceedings.
The fundamental purpose of the Court’s ADR Plan is to provide “quicker, less
expensive and potentially more satisfying alternatives to continuing litigation . . . . ” (ADR
Plan §1.2 A.) Furthermore, motions to opt out may be granted only upon a showing of
good cause and by setting forth the reasons why ADR has no reasonable chance of being
productive.

(ADR Plan §2.2 C.)

Here, petitioner submits that because settlement

discussions were not productive before and during (but perhaps not since) the arbitration
hearings, and because the action “has been fully adjudicated on the merits,” there is little
chance for a settlement agreement. (Docket 7-1, ¶¶ 18, 20.)
Petitioner’s pessimistic view of settlement prospects, while understandable, is not
dispositive and does not satisfy the criteria for relief from mediation referral. Nor does its

2

contention that the issues have been fully adjudicated elsewhere, given that respondent’s
Response to Petition asserts denial and disagreement with the claim for judicial
confirmation of the arbitration determinations.
Without in any way addressing the merits of the case, there appears to be a
potential for further lengthy and expensive litigation here. Furthermore, although many
referred cases are resolved, the mediation process does not require settlement. It requires
only participation in good faith. And in the hands of a skilled federal court neutral,
mediation is often productive even where settlement is not achieved.
The motion to opt out of alternative dispute resolution is DENIED.

IT HEREBY IS SO ORDERED.

Dated:

October 18, 2013
Buffalo, New York

s/William M. Skretny
WILLIAM M. SKRETNY
Chief Judge
United States District Court

3