In re Atlantic Pipe Corp.

In 1996, Thames-Dick Superaqueduct Partners (Thames-Dick) (defendant) obtained a contract from the Puerto Rico Aqueduct and Sewer Authority (PRASA) (plaintiff) to erect and maintain an aqueduct project in Puerto Rico. Thames-Dick enlisted several subcontractors to assist in completing the project, including the Atlantic Pipe Corp. (APC) (third-party plaintiff). After installing the aqueduct, a pipe burst causing significant damage. Thames-Dick sued some of its subcontractors in order to recover costs. PRASA’s insurer then filed a suit in Puerto Rican state court seeking a declaratory judgment to ascertain if Thames-Dick’s claims were within the ambit of its insurance policy. The state court case grew and eventually spilled over into federal court, where a suit was filed in the United States District Court for the District of Puerto Rico. In the federal case, several parties to the construction contract sued Thames-Dick to recover costs associated with the accident. The federal case grew significantly with several cross-claims, counter-claims, and third-party complaints amongst various parties. During the course of the federal litigation, Thames-Dick petitioned the court to require non-binding mediation amongst the parties to be presided over by Professor Eric Green. The district court agreed and filed an order requiring every party to submit to the mediation. APC objected to the order on the grounds that the district court did not have the authority to order non-consenting parties to participate in mediation. The district court denied APC’s motion. APC appealed.