I

105TH CONGRESS

1ST SESSION H. R. 903

To amend title 28, United States Code, with respect to arbitration in United

States district courts, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 3, 1997

Mr. COBLE (for himself and Mr. GOODLATTE) introduced the following bill;

which was referred to the Committee on the Judiciary

A BILL

To amend title 28, United States Code, with respect to

arbitration in United States district courts, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Alternative Dispute

5 Resolution and Settlement Encouragement Act’’.

6 SEC. 2. ARBITRATION IN DISTRICT COURTS.

7 (a) AUTHORIZATION OF APPROPRIATIONS.—Section

8 905 of the Judicial Improvements and Access to Justice

9 Act (28 U.S.C. 651 note) is amended in the first sentence
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1 by striking ‘‘for each of the fiscal years 1994 through

2 1997’’.

3 (b) ARBITRATION TO BE ORDERED IN ALL DISTRICT

4 COURTS.—

5 (1) AUTHORIZATION OF ARBITRATION.—Section

6 651(a) of title 28, United States Code, is amended

7 to read as follows:

8 ‘‘(a) AUTHORITY.—Each United States district court

9 shall authorize by local rule the use of arbitration in civil

10 actions, including adversary proceedings in bankruptcy, in

11 accordance with this chapter.’’.

12 (2) ACTIONS REFERRED TO ARBITRATION.—

13 Section 652(a) of title 28, United States Code, is

14 amended—

15 (A) in paragraph (1)—

16 (i) in the matter preceding subpara17 graph (A) by striking ‘‘and section 901(c)’’

18 and all that follows through ‘‘651’’ and in19 serting ‘‘a district court’’; and

20 (ii) in subparagraph (B) by striking

21 ‘‘$100,000’’ and inserting ‘‘$150,000’’;

22 and

23 (B) in paragraph (2) by striking

24 ‘‘$100,000’’ and inserting ‘‘$150,000’’.
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1 (3) CERTIFICATION OF ARBITRATORS.—Section

2 656(a) of title 28, United States Code, is amended

3 by striking ‘‘listed in section 658’’.

4 (4) REMOVAL OF LIMITATION.—Section 658 of

5 title 28, United States Code, and the item relating

6 to such section in the table of sections at the begin7 ning of chapter 44 of title 28, United States Code,

8 are repealed.

9 (c) CONFORMING AMENDMENT.—Section 901 of the

10 Judicial Improvements and Access to Justice Act (28

11 U.S.C. 652 note) is amended by striking subsection (c).

12 SEC. 3. AWARD OF REASONABLE COSTS AND ATTORNEY’S

13 FEES IN FEDERAL CIVIL DIVERSITY LITIGA14 TION AFTER AN OFFER OF SETTLEMENT.

15 Section 1332 of title 28, United States Code, is

16 amended by adding at the end the following:

17 ‘‘(e)(1) In any action over which the court has juris18 diction under this section, any party may, at any time not

19 less than 10 days before trial, serve upon any adverse

20 party a written offer to settle a claim or claims for money

21 or property or to the effect specified in the offer, including

22 a motion to dismiss all claims, and to enter into a stipula23 tion dismissing the claim or claims or allowing judgment

24 to be entered according to the terms of the offer. Any such
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1 offer, together with proof of service thereof, shall be filed

2 with the clerk of the court.

3 ‘‘(2) If the party receiving an offer under paragraph

4 (1) serves written notice on the offeror that the offer is

5 accepted, either party may then file with the clerk of the

6 court the notice of acceptance, together with proof of serv7 ice thereof.

8 ‘‘(3) The fact that an offer under paragraph (1) is

9 made but not accepted does not preclude a subsequent

10 offer under paragraph (1). Evidence of an offer is not ad11 missible for any purpose except in proceedings to enforce

12 a settlement, or to determine costs and expenses under

13 this subsection.

14 ‘‘(4) At any time before judgment is entered, the

15 court, upon its own motion or upon the motion of any

16 party, may exempt from this subsection any claim that

17 the court finds presents a question of law or fact that is

18 novel and important and that substantially affects nonpar19 ties. If a claim is exempted from this subsection, all offers

20 made by any party under paragraph (1) with respect to

21 that claim shall be void and have no effect.

22 ‘‘(5) If all offers made by a party under paragraph

23 (1) with respect to a claim or claims, including any motion

24 to dismiss all claims, are not accepted and the judgment,
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1 verdict, or order finally issued (exclusive of costs, ex2 penses, and attorneys’ fees incurred after judgment or

3 trial) in the action under this section is not more favorable

4 to the offeree with respect to the claim or claims than the

5 last such offer, the offeror may file with the court, within

6 10 days after the final judgment, verdict, or order is is7 sued, a petition for payment of costs and expenses, includ8 ing attorneys’ fees, incurred with respect to the claim or

9 claims from the date the last such offer was made or, if

10 the offeree made an offer under this subsection, from the

11 date the last such offer by the offeree was made.

12 ‘‘(6) If the court finds, pursuant to a petition filed

13 under paragraph (5) with respect to a claim or claims,

14 that the judgment, verdict, or order finally obtained is not

15 more favorable to the offeree with respect to the claim or

16 claims than the last offer, the court shall order the offeree

17 to pay the offeror’s costs and expenses, including attor18 neys’ fees, incurred with respect to the claim or claims

19 from the date the last offer was made or, if the offeree

20 made an offer under this subsection, from the date the

21 last such offer by the offeree was made, unless the court

22 finds that requiring the payment of such costs and ex23 penses would be manifestly unjust.

24 ‘‘(7) Attorney’s fees under paragraph (6) shall be a

25 reasonable attorney’s fee attributable to the claim or
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1 claims involved, calculated on the basis of an hourly rate

2 which may not exceed that which the court considers ac3 ceptable in the community in which the attorney practices

4 law, taking into account the attorney’s qualifications and

5 experience and the complexity of the case, except that the

6 attorney’s fees under paragraph (6) may not exceed—

7 ‘‘(A) the actual cost incurred by the offeree for

8 an attorney’s fee payable to an attorney for services

9 in connection with the claim or claims; or

10 ‘‘(B) if no such cost was incurred by the offeree

11 due to a contingency fee agreement, a reasonable

12 cost that would have been incurred by the offeree for

13 an attorney’s noncontingent fee payable to an attor14 ney for services in connection with the claim or

15 claims.

16 ‘‘(8) This subsection does not apply to any claim

17 seeking an equitable remedy.’’.

18 SEC. 4. RELIABILITY OF EVIDENCE.

19 Rule 702 of the Federal Rules of Evidence (28 U.S.C.

20 App.) is amended—

21 (1) by inserting ‘‘(a) IN GENERAL.—’’ before

22 ‘‘If ’’, and

23 (2) by adding at the end the following:
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1 ‘‘(b) ADEQUATE BASIS FOR OPINION.—Testimony in

2 the form of an opinion by a witness that is based on sci3 entific knowledge shall be inadmissible in evidence unless

4 the court determines that such opinion—

5 ‘‘(1) is scientifically valid and reliable;

6 ‘‘(2) has a valid scientific connection to the fact

7 it is offered to prove; and

8 ‘‘(3) is sufficiently reliable so that the probative

9 value of such evidence outweighs the dangers speci10 fied in rule 403.

11 ‘‘(c) DISQUALIFICATION.—Testimony by a witness

12 who is qualified as described in subdivision (a) is inadmis13 sible in evidence if the witness is entitled to receive any

14 compensation contingent on the legal disposition of any

15 claim with respect to which the testimony is offered.

16 ‘‘(d) SCOPE.—Subdivision (b) does not apply to

17 criminal proceedings.’’.

18 SEC. 5. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

19 (a) SECTION 2.—The amendments made by section

20 2 shall take effect on the date of the enactment of this

21 Act.

22 (b) SECTIONS 3 AND 4.—

23 (1) IN GENERAL.—Subject to paragraph (2),

24 the amendments made by sections 3 and 4 shall take

25 effect on the first day of the first month beginning
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1 more than 180 days after the date of the enactment

2 of this Act.

3 (2) APPLICATION OF AMENDMENTS.—(A) The

4 amendment made by section 3 shall apply only with

5 respect to civil actions commenced after the effective

6 date set forth in paragraph (1).

7 (B) The amendments made by section 4 shall

8 apply only with respect to cases in which a trial be9 gins after the effective date set forth in paragraph

10 (1).

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