United States District Court - Northern District Court of California

Claudia Wilken, Chief Judge

Richard W. Wieking, Clerk of Court

Early Neutral Evaluation (ENE)

Governing rule: ADR Local Rule 5 (.pdf).

Goals:

The goals of Early Neutral Evaluation (ENE) are to:

  • enhance direct communication between the parties about their claims and supporting evidence,
  • provide an assessment of the merits of the case by a neutral expert,
  • provide a “reality check” for clients and lawyers,
  • identify and clarify the central issues in dispute,
  • assist with discovery and motion planning or with an informal exchange of key information, and 
  • facilitate settlement discussions, when requested by the parties.

ENE aims to position the case for early resolution by settlement, dispositive motion or trial. It may serve as a cost-effective substitute for formal discovery and pretrial motions. Although settlement is not the major goal of ENE, the process can lead to settlement.

See ADR LR 5-1 (.pdf).

Process:

The evaluator, an experienced attorney with expertise in the case's subject matter, hosts an informal meeting of clients and counsel at which the following occurs:

  1. each side — through counsel, clients or witnesses -- presents the evidence and arguments supporting its case (without regard to the rules of evidence and without direct or cross-examination of witnesses),
  2. the evaluator identifies areas of agreement, clarifies and focuses the issues and encourages the parties to enter procedural and substantive stipulations.
  3. the evaluator writes an evaluation in private that includes:
    • an estimate, where feasible, of the likelihood of liability and the dollar range of damages;
    • an assessment of the relative strengths and weaknesses of each party's case; and
    • the reasoning that supports these assessments.
  4. The evaluator offers to present the evaluation to the parties, who may then ask either to hear the evaluation (which must be presented if any party requests it), or postpone hearing the evaluation to:
    • engage in settlement discussions facilitated by the evaluator, often in separate meetings with e ach side, or
    • conduct focused discovery or make additional disclosures.
  5. If settlement discussions do not occur or do not resolve the case, the evaluator may:
    • help the parties devise a plan for sharing additional information and/or conducting the key discovery that will expeditiously equip them to enter meaningful settlement discussions or  position  the case for resolution by motion or trial,
    • help the parties realistically assess litigation costs, and/or
    • determine whether some form of follow up to the session would contribute to case development or settlement.

See ADR LR 5-11 (.pdf).

Preservation of right to trial:

The evaluator has no power to impose settlement and does not attempt to coerce a party to accept any proposed terms. The parties' formal discovery, disclosure and motion practice rights are fully preserved. The confidential evaluation is non-binding and is not shared with the trial judge. The parties may agree to a binding settlement. If no settlement is reached, the case remains on the litigation track.

The neutral:

The court's ADR staff appoints an ENE evaluator with expertise in the substantive legal area of the lawsuit, who is available and has no apparent conflict of interest. The parties may object to the evaluator if they perceive a conflict of interest.

All evaluators on the court's panel have the following qualifications:

  • admission to the practice of law for at least 15 years
  • experience with civil litigation in federal court
  • expertise in the substantive law of the case
  • training by the court
  • Some evaluators also have received the court's mediation training. 

See ADR LR 2-5(b) (.pdf).

Attendance:

The following individuals are required to attend in person:

  • clients with settlement authority and knowledge of the facts
  • the lead trial attorney for each party
  • insurers of parties, if their agreement would be necessary to achieve a settlement

Requests to permit attendance by phone rather than in person, which will be granted only under extraordinary circumstances, may be made to the ADR Magistrate Judge. Clients are strongly encouraged to participate actively in the ENE session.

See ADR LR-5-10 (.pdf).

Confidentiality:

Communications made in connection with an ENE session ordinarily may not be disclosed to the assigned judge or to anyone else not involved in the litigation, unless otherwise agreed.

See ADR LR 5-12 (.pdf).

Timing:

An ENE session may be requested at any time. The deadline for conducting the ENE session is presumptively 90 days after the order of referral, unless another deadline is fixed by the court. The evaluator contacts counsel to schedule an initial telephone conference to set the date, time and location of the ENE session and to discuss how to maximize the utility of session. 

See ADR LR 5-4, ADR LR 5-5 and ADR LR 5-7 (.pdf).

Written submissions:

Counsel exchange and submit written statements to the evaluator at least 10 days before the ENE session. ADR Local Rule 5-9 lists special requirements for intellectual property cases. The statements are not filed with the court.

See ADR LR 5-8 (.pdf).

Appropriate cases/circumstances:

All civil cases in which the parties are represented by counsel are eligible if the court has an available evaluator with the appropriate subject matter expertise. Cases with the following characteristics may be particularly appropriate:

  • counsel or the parties are far apart on their view of the law and/or value of the case
  • the case involves technical or specialized subject matter — and it is important to have a neutral with expertise in that subject
  • case planning assistance would be useful
  • communication across party lines (about merits or procedure) could be improved
  • equitable relief is sought — if parties, with the aid of a neutral expert, might agree on the terms of an injunction or consent decree.

See ADR LR 5-2 (.pdf).

Cost:

The evaluator volunteers preparation time and the first four hours of the ENE session. After four hours of ENE, the evaluator may either (1) continue to volunteer his or her time or (2) give the parties the option of concluding the procedure or paying the evaluator for additional time at an hourly rate of $300, to be split among the parties as they determine. The procedure continues only if all parties and the evaluator agree. After eight hours in one or more ENE sessions, if all parties agree, the evaluator may charge his or her hourly rate or such other rate that the parties agree to pay.

See ADR LR 5-3(b) and 5-3(c) (.pdf).