[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2393 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 2393

  To amend chapter 85 of title 28, United States Code, to provide for 
 greater fairness in legal fees payable in civil diversity litigation 
                     after an offer of settlement.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 17, 2005

  Mr. Chocola (for himself, Mr. Bartlett of Maryland, Ms. Ginny Brown-
 Waite of Florida, Mr. Calvert, Mrs. Kelly, Mr. Kennedy of Minnesota, 
 Mr. Kline, Mr. Mack, Mr. McCaul of Texas, Mr. Miller of Florida, Mrs. 
   Musgrave, Mrs. Myrick, Mr. Neugebauer, Mr. Norwood, Mr. Paul, Mr. 
  Souder, Mr. Turner, and Mrs. Cubin) introduced the following bill; 
          which was referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
  To amend chapter 85 of title 28, United States Code, to provide for 
 greater fairness in legal fees payable in civil diversity litigation 
                     after an offer of settlement.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Frivolous Lawsuit Reduction Act''.

SEC. 2. AWARD OF COSTS AND ATTORNEY'S FEES IN FEDERAL CIVIL DIVERSITY 
              LITIGATION 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 jurisdiction 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 
stipulation 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 service 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 admissible 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 
nonparties. 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 or order finally issued 
(exclusive of costs, expenses, 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 or order is issued, a petition for payment of 
costs and expenses, including 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, under a petition filed under paragraph 
(5) with respect to a claim or claims, that the judgment 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 attorneys' 
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 
expenses 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 acceptable 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 attorney for services in connection with the 
        claim or claims.
    ``(8) This subsection does not apply to any claim seeking an 
equitable remedy.''.

SEC. 3. EFFECTIVE DATE AND APPLICATION.

    (a) Effective Date.--Subject to subsection (b), the amendment made 
by this Act 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.
    (b) Application of Amendment.--The amendment made by section 2 
shall apply only with respect to civil actions filed on or after the 
effective date of this Act.
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