The opinion of the court was delivered by: Baylson, J.
MEMORANDUM REGARDING TRIAL DE NOVO AND MOTIONS TO DISQUALIFY AND FOR SUMMARY JUDGMENT
This is a medical malpractice action originally filed in Pennsylvania state court and removed to this Court. Two issues have arisen which are somewhat novel, and one requires construction of this Court's local rules on trial de novo after arbitration, on which there is little precedent.
The first issue requires the Court to determine whether the trial de novo should proceed against all of the Defendants who were in the case at the time of the arbitration, or only against the one Defendant against whom the arbitrators made an award for damages. The second issue concerns the Plaintiff's allegation that defense counsel has a conflict of interest from representing more than one Defendant following an arbitration award in favor of the Plaintiff and against only one of those Defendants.
The procedural history of this case is lengthy and the Court has issued many Orders and several Memoranda on issues that have arisen throughout the litigation, which will not be repeated here, save for certain details relevant to the pending Motions. This matter proceeded to arbitration pursuant to Local Rule 53.2, resulting in an award of damages in favor of Plaintiff Bienvenido Quiles Ramos ("Ramos") and against Dr. Emmanuel Quien ("Dr. Quien"), but in favor of all the other Defendants. Dr. Quien, by his counsel, filed a timely Demand for Trial de Novo (ECF No. 131). Ramos did not demand a trial de novo. (ECF No. 126.) The parties have agreed to the trial de novo before Magistrate Judge David Strawbridge. (ECF No. 149.)
I. The Trial De Novo Shall Proceed Against All Defendants
On March 25, 2011, Ramos filed a Motion to Disqualify Counsel (Mot. to Disqualify, ECF No. 133), and on April 14, 2011 an Amended Motion to Disqualify Counsel (Am. Mot. to Disqualify, ECF No. 135), on grounds of a conflict of interest. In the briefing on Ramos's Amended Motion to Disqualify Counsel, Ramos has taken the position that the trial de novo must proceed against all Defendants pursuant to Local Rule 53.2(7) and that in view of this arbitration award, defense counsel cannot represent all Defendants at the trial de novo. Dr. Quien has responded, predicated on the assumption that the trial de novo will only take place as to Ramos versus Dr. Quien alone. Dr. Quien contends that Local Rule 53.2(6) permits a partial trial de novo on any segregable portion of the arbitration award in cases where there are multiple parties. Dr. Quien argues that he is permitted to seek a trial de novo alone, without disrupting the arbitration award on behalf of his co-defendants.
In support of his position that he should proceed to trial alone, Dr. Quien relies on Local Rule 53.2(6), which provides, in relevant part, "In a case involving multiple claims and parties, any segregable part of an arbitration award concerning which a trial de novo has not been demanded by the aggrieved party . . . shall become part of the final judgment . . . ." (emphases added). Both the Local Rule and the governing statute, 28 U.S.C. § 657(c)(2), further state that "once a trail de novo is demanded, the entire action is treated for all purposes as if arbitration never occurred." Dr. Quien contends that the liability of his co-defendants is a segregable part.
Further, he argues that Ramos could have filed his own demand for trial de novo as to the non-liable defendants.
The Court held a hearing on the outstanding Motions on May 25, 2011. On May 26, 2011, the Court entered an Order denying Ramos's Motion and Amended Motion, but concluding that the trial de novo shall proceed against all Defendants. The Court also denied Dr. Quien's Motion for Summary Judgment. This Memorandum will state the reasons.
A. History of Local Arbitration Rule
This District Court was a pioneer in court-mandated arbitration, and its pilot program, initiated by the late Judge Broderick and now supervised by Judge Dalzell, Chair of our Civil Business Committee, and has been a harbinger of what is now a national program. The scholarly and very useful annotation of our Local Rules by Peter Vaira, Esquire (Gann Law Books, periodically updated) (pp. 207-22) (2009) contains an excellent review of the history of the pilot program. To supplement the history provided by Mr. Vaira, my colleague Judge Dalzell has provided further details. In the original legislation, renewal of the arbitration program was required every three years. However, on October 6, 1997 Congress approved Public Law 105-53 which, in § 1, struck the old law's "for each of the fiscal years 1994 through 1997" and inserted "for each fiscal year." Thus Public Law 105-53 made what had been an experimental program, renewed every three years, permanent. It now appears that every U.S. District Court employs some form of alternative dispute resolution, following this Court's trail-blazing efforts.
There is one Third Circuit case which should be noted. In Sauter v. Ross Restaurants, Inc., 674 F.2d 194 (3d Cir. 1982), the Court concluded that it lacked appellate jurisdiction because there was no final judgment. Id. at 196. The third-party defendant's demand for a trial de novo nullified the entire arbitration award under the then-existing local rules. Id. Although the plaintiff and defendant were satisfied with their awards, the third-party defendant's demand nullified that award and thus there was no final judgment to appeal. Id. The Court noted the Local Rule at the time did not contemplate segregation of arbitration awards, but suggested the exact language the Eastern District later adopted as part of Local Rule 53.2(6). Id.; see E.D. Pa. LR 53.2(6).
Six years after Sauter, Congress authorized all federal courts to establish alternative dispute resolution programs. See 28 U.S.C. §§ 651(a), 658, Pub. L. No. 100-702, 102 Stat. 4664 (1988). The current statute, enacted as the Alternative Dispute Resolution Act of 1998 (the "Act"), permits "any party [to] file a demand for a trial de novo," 28 U.S.C. § 657(c)(1), and "[u]pon demand for a trial de novo, the action shall be restored to the docket for the court and treated for all purposes as if it had not been referred to arbitration," id. § 657(c)(2); see also 28 U.S.C. § 655(b) (1988) (first version of the Act, which included exact language of current § 657(c)(2)). There has never been a statutory provision for segmentation or segregation of arbitration awards, nor any provision explicitly permitting partial trial de novo.
Together with this historical background, it must be remembered that courts are entitled to deference in interpreting their own local rules. Gov't of V.I. v. Mills, 634 F.3d 746, 750 (3d Cir. 2011). But it is axiomatic that any interpretation of the Local Rules must be consistent with Acts of Congress. See D'Iorio v. Majestic Lanes, Inc., 370 F.3d 354, 357 (3d Cir. 2004); Fed. R. Civ. P. 83(a) ...