Appellate Mediation Programs: Rule 33, Attendance, and Confidentiality

Under Federal Rule of Appellate Procedure 33, a circuit court can direct attorneys and parties into one or more conferences to discuss settlement or narrow the issues before briefing and argument. Rule 33 appellate mediation is run by court-employed mediators who operate separately from the panel that would decide the appeal, and a significant share of civil appeals resolve through these programs without ever reaching full briefing. The rule itself is only four sentences long; each circuit builds the operational details on top of it through local rules.¹

What Rule 33 Authorizes

The text lets the court direct attorneys, and when appropriate the parties themselves, to attend conferences on “any matter that may aid in disposing of the proceedings, including simplifying the issues and discussing settlement.” A judge or a designee may preside, in person or by phone. Before any settlement conference, attorneys must consult with their clients and obtain as much settlement authority as feasible. After the conference, the court may enter an order “controlling the course of the proceedings or implementing any settlement agreement.”¹

The breadth is deliberate. Rule 33 is a framework, not a manual. Which cases get selected, what you file, who must attend, and what happens if you don’t cooperate all come from each circuit’s local rules and program guidelines, so appellate mediation looks somewhat different depending on where your appeal sits.

How Your Appeal Gets Into Mediation

Most circuits screen new civil appeals shortly after docketing. The court’s mediation office, not the merits panel, decides which cases to pull in. Selection turns on things like the nature of the dispute, the number of parties, and whether a realistic settlement range exists. Criminal cases are universally excluded, and most circuits also exclude prisoner petitions, habeas corpus cases, immigration appeals, and certain government-agency cases.²

Cases with a party who has no attorney are rarely selected. Mediators worry an unrepresented party might treat the mediator as an advisor or feel pressured into a deal. A few circuits refer such cases in limited situations, but as a practical matter both sides need counsel for the process to work.²

Voluntary Referral

If the court doesn’t select your case, you can ask in. At the Federal Circuit, attorneys may jointly submit a confidential request to the Office of General Counsel.³ Other circuits have comparable mechanisms. The sooner mediation begins, the more briefing cost it can save.

When Selection Is Mandatory

When the court orders your case into mediation, you participate. The Fourth Circuit’s local rule authorizes the court to assess reasonable expenses including attorney fees, assess appellate costs, dismiss the appeal entirely, or take any other action the circumstances warrant for noncompliance.⁴ Other circuits have similar enforcement provisions.

Whether Briefing Deadlines Pause

Entering mediation does not automatically stop the clock. The D.C. Circuit states plainly that referral to mediation does not stay or alter the briefing schedule and that parties must adhere to all deadlines as though no mediation were happening.⁵ The Federal Circuit takes the same approach, keeping cases in mediation subject to normal scheduling for briefs and oral argument.³

You can move for an extension. The motion typically has to state that all parties and the mediator consent, say that the extension is to accommodate a pending mediation, and specify the number of additional days needed. The Federal Circuit disfavors extensions exceeding 150 days after referral. Keep your briefs on track; if talks stall, you will need them.

What to Prepare and Submit

Preparation is what makes appellate mediation work. You need a thorough grasp of the trial record, the specific legal errors on appeal, and a realistic read on how the panel might rule. The Sixth Circuit describes its approach as a candid examination of the probabilities for various possible outcomes on appeal, to help parties evaluate whether settlement makes sense.⁶

Most circuits require confidential settlement statements or mediation briefs before the session. These usually ask for a summary of the facts, the legal issues on appeal, the history of any prior settlement discussions, and a realistic proposal. Forms live on each circuit’s website. The statements go to the mediator only, not to opposing counsel and not to the merits panel.

Bring concrete numbers. Know your total litigation costs so far, the projected cost of full briefing and oral argument, and the realistic range of outcomes if the appeal goes to decision. Vague interest in “exploring resolution” without a dollar figure is how sessions end without a deal.

Who Must Attend and With What Authority

Rule 33 requires attorneys to consult with their clients and obtain “as much authority as feasible” to settle before a settlement conference.¹ In practice, circuits read that to mean the person at the table can agree to a deal without stepping out to call someone. Lead counsel must attend, ready to discuss both merits and settlement value.

When a party is a corporation, government agency, or other organization, a representative who knows the dispute and can commit funds must participate. If an insurance carrier is involved, the mediation order often requires an insurance representative too. The Second Circuit requires representatives to come with “as much settlement authority as feasible,” since mediation can shift the calculus and follow-up sessions may be needed.⁷

Remote appearance by video or phone is sometimes allowed with advance approval from the mediator. Showing up without authority, or sending someone who cannot make binding commitments, invites sanctions, including paying the other side’s expenses for the wasted session.

What the Mediator Does

Many circuits start with a preliminary phone call between the mediator and each side, often separately. The call is not a negotiation. The mediator uses it to understand the procedural posture, the key issues, and each party’s view of settlement. The Sixth Circuit frames this stage as an inquiry about procedural questions before moving to the issues on appeal, with the mediator working to understand how the court might decide the case if it is not resolved through mediation.⁶

The calls also let the mediator judge whether mediation has a realistic chance. If both sides are dug in and the gap is unbridgeable, the mediator may wrap up quickly. If the case looks workable, a full session follows, often with private caucuses to generate and test proposals.

Confidentiality

Confidentiality is what lets anyone negotiate honestly. Rule 33 itself is silent on it, but every circuit’s local rules fill the gap. The Fourth Circuit’s rule is representative: statements and comments made during mediation, along with any papers or electronic information generated in the process, are not included in court files, cannot be disclosed to the judges deciding the appeal, and cannot be shared outside the mediation participants. Violations can go to the court’s disciplinary panel.⁸

Federal Rule of Evidence 408 adds a separate layer, making evidence of settlement negotiations generally inadmissible to prove or disprove the validity or amount of a disputed claim.⁹ Together, these rules build a wall between the mediation office and the merits panel. The judges who would decide your appeal if mediation fails will not learn what was said or offered.

If You Reach a Settlement

Dismissing a settled appeal is governed by Federal Rule of Appellate Procedure 42, not the trial-court dismissal rules. Under Rule 42(b), the circuit clerk must dismiss a docketed appeal when the parties file a signed dismissal agreement specifying how costs will be paid and any court fees due have been paid.¹⁰ Filing fees already paid are generally nonrefundable.

The court may also enter an order implementing the settlement under its Rule 33 authority, giving the appellate court a basis to enforce the agreement.¹ The Fourth Circuit’s local rule specifically allows the mediator, through the Clerk of Court, to enter orders disposing of the case upon the parties’ agreement.¹¹

If No Deal Is Reached

When mediation does not produce a deal, the mediator notifies the court that the process was unsuccessful without disclosing what was discussed or why it failed. The appeal returns to the active calendar, and the court issues a briefing schedule if one was stayed. You file briefs, prepare for argument, and litigate as though mediation never happened. The mediator’s report contains only the fact that mediation occurred and the outcome status.

Tax Treatment of a Mediated Settlement

Settling at the appellate stage does not change how the IRS classifies the money. Taxability depends on what the payment is meant to replace.¹²

Payments for physical injuries or physical sickness are generally tax-free. Under 26 U.S.C. § 104(a)(2), damages received on account of personal physical injuries or physical sickness, whether by suit or settlement and whether paid as a lump sum or periodically, are excluded from gross income. The exclusion does not cover punitive damages.¹³

Settlements for non-physical injuries such as emotional distress, defamation, lost wages, or discrimination are taxable. The statute explicitly provides that emotional distress alone is not a physical injury. One narrow carve-out: you can exclude amounts that reimburse you for actual medical expenses attributable to emotional distress, but only if you did not already deduct those expenses in a prior year.¹³

Attorney Fees

Under Commissioner v. Banks, plaintiffs in contingent-fee arrangements must generally report the full settlement amount as gross income, including the portion paid to the attorney. For employment discrimination, civil rights, and whistleblower claims, 26 U.S.C. § 62(a)(20) gives an above-the-line deduction for attorney fees, so you effectively pay tax only on your net recovery. The deduction cannot exceed the income you received from the litigation in the same tax year.¹⁴

For other case types, such as contract disputes, business torts, and property claims, the Tax Cuts and Jobs Act eliminated the miscellaneous itemized deduction for legal fees starting in 2018. That suspension expires on December 31, 2025, meaning for 2026 individual taxpayers who itemize may once again deduct legal fees as a miscellaneous itemized deduction subject to a 2% adjusted-gross-income floor.¹⁵ Whether Congress extends the suspension is unresolved, so check current law before finalizing any settlement that turns on the deductibility of legal fees.

Allocation in the Agreement

If the settlement agreement does not specify how the payment should be characterized, the IRS will look at the payor’s intent, and the defendant or its insurer will issue a Form 1099 for any taxable portion. Allocating the recovery in the agreement itself, between physical injury, lost wages, emotional distress, and anything else, is one of the most consequential and most commonly overlooked steps in any mediated settlement.¹²

1
Office of the Law Revision Counsel. Federal Rules of Appellate Procedure Rule 33 – Appeal Conferences
2
Federal Judicial Center. Mediation and Conference Programs in the Federal Courts of Appeals
3
United States Court of Appeals for the Federal Circuit. Appellate Mediation Program Guidelines
4
United States Court of Appeals for the Fourth Circuit. FAQs – Mediation
5
United States Court of Appeals for the District of Columbia Circuit. USCA Mediation FAQs
6
United States Court of Appeals for the Sixth Circuit. About Mediation Conferences
7
United States Court of Appeals for the Second Circuit. Mediation (CAMP) FAQ
8
United States Court of Appeals for the Fourth Circuit. Local Rule 33 – Appeal Conferences
9
Legal Information Institute. Federal Rules of Evidence Rule 408 – Compromise Offers and Negotiations
10
Office of the Law Revision Counsel. Federal Rules of Appellate Procedure Rule 42 – Voluntary Dismissal
11
United States Court of Appeals for the Fourth Circuit. Federal Rule 33 and Local Rule 33 Establishing the Mediation Program
12
Internal Revenue Service. Tax Implications of Settlements and Judgments
13
Office of the Law Revision Counsel. 26 U.S. Code 104 – Compensation for Injuries or Sickness
14
Office of the Law Revision Counsel. 26 U.S. Code 62 – Adjusted Gross Income Defined
15
Congress.gov. Expiring Provisions in the Tax Cuts and Jobs Act