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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Alternative Dispute
Resolution and Settlement Encouragement Act’’.
SEC. 2. ARBITRATION IN DISTRICT COURTS.
(a) AUTHORIZATION OF APPROPRIATIONS.—Section
905 of the Judicial Improvements and Access to Justice
Act (28 U.S.C. 651 note) is amended in the first sentence
by striking ‘‘for each of the fiscal years 1994 through
1997’’.
(b) ARBITRATION TO BE ORDERED IN ALL DISTRICT
COURTS.—
(1) AUTHORIZATION OF ARBITRATION.—Section
651(a) of title 28, United States Code, is amended
to read as follows:
‘‘(a) AUTHORITY.—Each United States district court
shall authorize by local rule the use of arbitration in civil
actions, including adversary proceedings in bankruptcy, in
accordance with this chapter.’’.
(2) ACTIONS
REFERRED
TO
ARBITRATION.—
Section 652(a) of title 28, United States Code, is
amended—
(A) in paragraph (1)—
(i) in the matter preceding subpara-
graph (A) by striking ‘‘and section 901(c)’’
and all that follows through ‘‘651’’ and in-
serting ‘‘a district court’’; and
(ii) in subparagraph (B) by striking
‘‘$100,000’’ and inserting ‘‘$150,000’’;
and
(B) 
in 
paragraph 
(2) 
by 
striking
‘‘$100,000’’ and inserting ‘‘$150,000’’.
(3) CERTIFICATION OF ARBITRATORS.—Section
656(a) of title 28, United States Code, is amended
by striking ‘‘listed in section 658’’.
(4) REMOVAL OF LIMITATION.—Section 658 of
title 28, United States Code, and the item relating
to such section in the table of sections at the begin-
ning of chapter 44 of title 28, United States Code,
are repealed.
(c) CONFORMING AMENDMENT.—Section 901 of the
Judicial Improvements and Access to Justice Act (28
U.S.C. 652 note) is amended by striking subsection (c).
SEC. 3. AWARD OF REASONABLE COSTS AND ATTORNEY’S
FEES IN FEDERAL CIVIL DIVERSITY LITIGA-
TION AFTER AN OFFER OF SETTLEMENT.
Section 1332 of title 28, United States Code, is
amended by adding at the end the following:
‘‘(e)(1) In any action over which the court has juris-
diction under this section, any party may, at any time not
less than 10 days before trial, serve upon any adverse
party a written offer to settle a claim or claims for money
or property or to the effect specified in the offer, including
a motion to dismiss all claims, and to enter into a stipula-
tion dismissing the claim or claims or allowing judgment
to be entered according to the terms of the offer. Any such
offer, together with proof of service thereof, shall be filed
with the clerk of the court.
‘‘(2) If the party receiving an offer under paragraph
(1) serves written notice on the offeror that the offer is
accepted, either party may then file with the clerk of the
court the notice of acceptance, together with proof of serv-
ice thereof.
‘‘(3) The fact that an offer under paragraph (1) is
made but not accepted does not preclude a subsequent
offer under paragraph (1). Evidence of an offer is not ad-
missible for any purpose except in proceedings to enforce
a settlement, or to determine costs and expenses under
this subsection.
‘‘(4) At any time before judgment is entered, the
court, upon its own motion or upon the motion of any
party, may exempt from this subsection any claim that
the court finds presents a question of law or fact that is
novel and important and that substantially affects nonpar-
ties. If a claim is exempted from this subsection, all offers
made by any party under paragraph (1) with respect to
that claim shall be void and have no effect.
‘‘(5) If all offers made by a party under paragraph
(1) with respect to a claim or claims, including any motion
to dismiss all claims, are not accepted and the judgment,
verdict, or order finally issued (exclusive of costs, ex-
penses, and attorneys’ fees incurred after judgment or
trial) in the action under this section is not more favorable
to the offeree with respect to the claim or claims than the
last such offer, the offeror may file with the court, within
10 days after the final judgment, verdict, or order is is-
sued, a petition for payment of costs and expenses, includ-
ing attorneys’ fees, incurred with respect to the claim or
claims from the date the last such offer was made or, if
the offeree made an offer under this subsection, from the
date the last such offer by the offeree was made.
‘‘(6) If the court finds, pursuant to a petition filed
under paragraph (5) with respect to a claim or claims,
that the judgment, verdict, or order finally obtained is not
more favorable to the offeree with respect to the claim or
claims than the last offer, the court shall order the offeree
to pay the offeror’s costs and expenses, including attor-
neys’ fees, incurred with respect to the claim or claims
from the date the last offer was made or, if the offeree
made an offer under this subsection, from the date the
last such offer by the offeree was made, unless the court
finds that requiring the payment of such costs and ex-
penses would be manifestly unjust.
‘‘(7) Attorney’s fees under paragraph (6) shall be a
reasonable attorney’s fee attributable to the claim or
claims involved, calculated on the basis of an hourly rate
which may not exceed that which the court considers ac-
ceptable in the community in which the attorney practices
law, taking into account the attorney’s qualifications and
experience and the complexity of the case, except that the
attorney’s fees under paragraph (6) may not exceed—
‘‘(A) the actual cost incurred by the offeree for
an attorney’s fee payable to an attorney for services
in connection with the claim or claims; or
‘‘(B) if no such cost was incurred by the offeree
due to a contingency fee agreement, a reasonable
cost that would have been incurred by the offeree for
an attorney’s noncontingent fee payable to an attor-
ney for services in connection with the claim or
claims.
‘‘(8) This subsection does not apply to any claim
seeking an equitable remedy.’’.
SEC. 4. RELIABILITY OF EVIDENCE.
Rule 702 of the Federal Rules of Evidence (28 U.S.C.
App.) is amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ before
‘‘If ’’, and
(2) by adding at the end the following:
‘‘(b) ADEQUATE BASIS FOR OPINION.—Testimony in
the form of an opinion by a witness that is based on sci-
entific knowledge shall be inadmissible in evidence unless
the court determines that such opinion—
‘‘(1) is scientifically valid and reliable;
‘‘(2) has a valid scientific connection to the fact
it is offered to prove; and
‘‘(3) is sufficiently reliable so that the probative
value of such evidence outweighs the dangers speci-
fied in rule 403.
‘‘(c) DISQUALIFICATION.—Testimony by a witness
who is qualified as described in subdivision (a) is inadmis-
sible in evidence if the witness is entitled to receive any
compensation contingent on the legal disposition of any
claim with respect to which the testimony is offered.
‘‘(d) SCOPE.—Subdivision (b) does not apply to
criminal proceedings.’’.
SEC. 5. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) SECTION 2.—The amendments made by section
2 shall take effect on the date of the enactment of this
Act.
(b) SECTIONS 3 AND 4.—
(1) IN GENERAL.—Subject to paragraph (2),
the amendments made by sections 3 and 4 shall take
effect on the first day of the first month beginning
more than 180 days after the date of the enactment
of this Act.
(2) APPLICATION OF AMENDMENTS.—(A) The
amendment made by section 3 shall apply only with
respect to civil actions commenced after the effective
date set forth in paragraph (1).
(B) The amendments made by section 4 shall
apply only with respect to cases in which a trial be-
gins after the effective date set forth in paragraph
(1).
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