John D'iorio; Diane D'iorio v. Majestic Lanes Inc., a New Jersey Corporation

PRECEDENTIAL
UNITED STATES COURT OF
APPEALS FOR THE THIRD CIRCUIT
___________
No. 03-1788
___________
JOHN D'IORIO;
DIANE D'IORIO
v.
MAJESTIC LANES INC.,
a New Jersey Corporation,
Appellant
___________
APPEAL FROM THE UNITED
STATES DISTRICT COURT
FOR THE DISTRICT
OF NEW JERSEY
(D.C. No. 01-cv-00809)
District Judge: The Honorable
Harold A. Ackerman
___________
ARGUED MARCH 9, 2004
Before: SLOVITER and
NYGAARD, Circuit Judges, and
OBERDORFER, District Judge*
(Filed June 3, 2004)
___________
Anthony S. McCaskey, Esq. (Argued)
Peter B. Van Deventer, Jr., Esq.
St. John & Wayne
Two Penn Plaza East
Newark, NJ 07105
Counsel for Appellant
Scott K. McClain, Esq. (Argued)
Winne, Banta, Hetherington & Basralian
25 Main Street
Court Plaza North
Hackensack, NJ 07602
Counsel for Appellee
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OPINION OF THE COURT
___________
NYGAARD, Circuit Judge.
Under Alternative Dispute Resolution
Act of 1998 (“the Act”), 28 U.S.C. § 651
et seq., District Courts must enact local
rules authorizing “the use of alternative
dispute resolution processes in all civil
actions” in accordance with the Act’s
provisions. 28 U.S.C. § 651(b). The
District of New Jersey complied with this
command and enacted N.J. L. Civ. R.
201.1(h)(1), which reads:
Any party may demand a trial de
novo in the District Court by filing
with the Clerk a written demand,
containing a short and plain
statement of each ground in support
thereof, and serving a copy upon all
counsel of record or other parties.
*. Hon. Louis F. Oberdorfer, Senior
District Judge, United States District
Court for the District of Columbia,
sitting by designation.

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Such a demand must be filed within
30 days after the arbitration award
is filed and service is accomplished
by a party pursuant to 28 U.S.C.
§[657], or by the Clerk (whichever
occurs first) . . . . Withdrawal of a
demand for a trial de novo shall
reinstate the arbitrator’s award.
(emphasis added).
Section 657(c) of the Act reads:
Trial de novo of arbitration awards. --
(1) Time for filing demand. –
Within 30 days after the filing of an
arbitration award with a district
court under subsection (a), any
party may file a written demand for
a trial de novo in the district court.
(2) Action restored to court docket.
– Upon a demand for a trial de
novo, the action shall be restored to
the docket of the court and treated
for all purposes as if it had not
been referred to arbitration.
28 U.S.C. § 657(c) (emphasis added)
Majestic argues that by allowing
D’Iorio to resurrect his arbitration award
by withdrawing his demand for a trial de
novo, the emphasized portion of Rule
201.1(h)(1) is inconsistent with § 657(c)’s
requirement that once a demand for a trial
is made, the action be treated “for all
purposes as if it had not been referred to
arbitration.” We agree, hold that it is
inconsistent, and in so holding will reverse
the judgment of the District Court.
I.
John D’Iorio alleges that he slipped
and fell at a bowling alley owned by
Majestic Lanes and sued Majestic in the
United States District Court for the District
of New Jersey. The Court referred the
lawsuit to compulsory arbitration pursuant
to New Jersey Local Rule 201.1.
D’Iorio prevailed in arbitration and was
awarded $274,488. The award was filed in
the District Court on May 2, 2002. The
very next day, D’Iorio filed a demand for
a trial de novo. Following the passage of
the thirty-day limitation on demands for
arbitration, D’Iorio filed a document styled
as a “Notice of Withdrawal of Demand for
Trial De Novo,” requesting that the District
Court withdraw his demand for a trial de
novo and reinstate the arbitration award.
Majestic sent a letter to the District Court
objecting to the reinstatement of the
arbitration award. However, the District
Court had already granted D’Iorio’s
motions, and had entered judgment in his
favor in the amount of the arbitrator’s
award.
Then, Majestic filed its own demand
for a trial de novo to which D’Iorio
objected. Upon instructions from the
District Court, Majestic also filed a formal
motion to strike the reinstatement of the
arbitration award and the entry of
judgment. The District Court denied this
motion, but granted D’Iorio’s cross-motion
to strike Majestic’s demand for a trial de
novo, because Majestic had not filed it

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“within thirty days after the filing of [the]
arbitration award.” It is from this order
that Majestic appeals.1
II.
We need not labor long on this issue.
It is axiomatic that the local rules of a
District Court must be consistent with Acts
of Congress. Fed. R. Civ. P. 83(a)(1); see
also In re Kool, Mann, Coffee & Co., 23
F.3d 66, 68 (3d Cir. 1994). The plain
language of § 657(c) is that once “a
demand for a trial de novo” is made, “the
action shall be restored to the docket of the
court and treated for all purposes as if it
had not been referred to arbitration.” 28
U.S.C. § 657(c)(2) (emphasis added).
Local Rule 201.1(h)(1) permits a party to
demand a trial de novo and then withdraw
that demand at any time. Such a
withdrawal results in the reinstatement of
the arbitration award. N.J. L. Civ. R.
201.1(h)(1). Clearly, this procedure does
not treat the action as if it had never been
referred to arbitration, as required by §
657, and contravenes the plain language of
§ 657(c)(2) as well as the clear intent of
that Section to prevent an arbitration
award from having any effect on a
subsequent trial de novo. See 28 U.S.C. §
657(c)(3) (“The court shall not admit at the
trial de novo any evidence that there has
been an arbitration proceeding, the nature
or amount of any award, or any other
matter concerning the conduct of the
arbitration proceeding [unless that
evidence is otherwise admissible or is
stipulated to by the parties.]”).
D’Iorio attempts to elide this patent
inconsistency by arguing that all Majestic
had to do to make this situation equitable
was file its own demand for a trial de novo
within the thirty-day period provided in
both the local rules and § 657(c)(1). This
argument is true, but misses the point.
First, Majestic is entitled to the assurances
of the Act that once D’Iorio filed his
demand for a trial de novo, the arbitration
award was a nullity, and the cause would
be tried. Second and equally as important,
that Majestic may have been able to
protect itself from the inequitable situation
created by the operation of Rule
201.1(h)(1) by filing a prophylactic
demand for a trial de novo does not
address the simple fact that Rule
201.1(h)(1) is fundamentally inconsistent
with the plain language of § 657(c)(2).
We hold, as did the Court of Appeals for
the Eleventh Circuit, that “[the language of
Section 657(c)(2)] implies that all parties
to the arbitration are treated as if the
arbitration never occurred; thus, once [one
party] filed a demand for a trial de novo,
[the remaining party] was relieved of the
obligation to file such a demand.” CNA
Fin. Corp. v. Brown, 162 F.3d 1334, 1337
n.3 (11th Cir. 1998).
In summary, we hold that the District
Court erred by denying Majestic’s motion
to strike D’Iorio’s request to withdraw his
1. We have jurisdiction from this final
order under 28 U.S.C. § 1291 and
exercise plenary review over the District
Court’s interpretation of the local rules at
issue. In re Paoli R.R. Yard PCB Litig.,
221 F.3d 449, 458 (3d Cir. 2000).

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demand for a trial de novo, and by failing
to vacate both the reinstatement of the
arbitration award and the entry of
judgment. We will reverse and remand for
a trial de novo.

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