[House Report 107-16]
[From the U.S. Government Publishing Office]



107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     107-16

======================================================================



 
                    ARBITRATION TECHNICAL AMENDMENTS

                                _______
                                

 March 12, 2001.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 861]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 861) to make technical amendments to section 10 of title 
9, United States Code, having considered the same, report 
favorably thereon without amendment and recommend that the bill 
do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for the Legislation..........................     1
Hearings.........................................................     2
Committee Consideration..........................................     2
Committee Oversight Findings.....................................     2
Performance Goals and Objectives.................................     2
New Budget Authority and Tax Expenditures........................     3
Congressional Budget Office Cost Estimate........................     3
Constitutional Authority Statement...............................     3
Section-by-Section Analysis and Discussion.......................     4
Changes in Existing Law Made by the Bill, as Reported............     4

                          Purpose and Summary

    H.R. 861 makes technical corrections to subsection 10(a) of 
title 9 of the United States Code.

                Background and Need for the Legislation

    On March 6, 2001, Representative George Gekas (R-Pa.) 
introduced H.R. 861 for the purpose of making certain technical 
amendments to subsection 10(a) of title 9 of the United States 
Code.
    Title 9 of the United States Code pertains to domestic and 
international arbitration law. Chapter 1 of title 9 contains 
the title's general provisions, including section 10. 
Subsection 10(a) enumerates the grounds for which a Federal 
district court may vacate an arbitration award.\1\ It also 
authorizes the court to order a rehearing, under certain 
circumstances.
---------------------------------------------------------------------------
    \1\ For example, the court, under this provision, may vacate an 
arbitrator's award procured by corruption, fraud, or undue means. 9 
U.S.C. Sec. 10 (a)(1). An arbitrator's award may also be vacated if 
there is evidence that the arbitrator was guilty of specified 
misconduct. 9 U.S.C. Sec. 10 (a)(3).
---------------------------------------------------------------------------
    As drafted, subsection 10(a) consists of five paragraphs, 
four of which enumerate the grounds for vacating an arbitration 
award. The fifth paragraph, however, is clearly intended to be 
a separate provision of subsection 10(a) as it specifies the 
basis of the court's authority to direct a rehearing by the 
arbitrator.
    H.R. 861 simply corrects this drafting error, which has 
existed from the legislation's original enactment in 1925.\2\ 
The bill simply converts the fifth paragraph into a separate 
subsection of section 10, namely, subsection 10(b), and makes 
conforming grammatical and technical revisions to section 10.
---------------------------------------------------------------------------
    \2\ Act of Feb. 12, 1925, ch. 213, Sec. 10, 43 Stat. 885.
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    H.R. 861 is identical to H.R. 916, which was introduced by 
Representative George W. Gekas on March 2, 1999. After the 
Committee reported H.R. 916 on June 10, 1999,\3\ the House 
passed the bill under suspension of the rules by voice vote on 
July 13, 1999 \4\ with an unrelated amendment. The Senate did 
not act upon the House measure. H.R. 2440, legislation 
identical to H.R. 861, was passed by the House in the 105th 
Congress. On the last day of the 105th Congress, the Senate 
passed H.R. 2440 with an unrelated amendment by unanimous 
consent.\5\ The House did not act on the Senate-passed measure.
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    \3\ H.R. Rep. No. 106-181 (1999).
    \4\ 145 Cong. Rec. H5375-77 (daily ed. July 13, 1999).
    \5\ 144 Cong. Rec. S12942-43 (daily ed. Oct. 21, 1998). The 
amendment pertained to various provisions of the Missing Children's 
Assistance Act, 42 U.S.C. Sec. Sec. 5771-80 (1994 & Supp. 1997).
---------------------------------------------------------------------------

                                Hearings

    No hearings were held on H.R. 861.

                        Committee Consideration

    On March 8, 2001, the Committee met in open session and 
ordered favorably reported the bill H.R. 861 without amendment 
by voice vote, a quorum being present.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

                    Performance Goals and Objectives

    H.R. 861 does not authorize funding. Therefore, clause 3(c) 
of rule XIII of the Rules of the House is inapplicable.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House is 
inapplicable because this legislation does not provide new 
budgetary authority or increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House, the Committee sets forth, with respect to the 
bill, H.R. 861, the following estimate and comparison prepared 
by the Director of the Congressional Budget Office under 
section 402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 9, 2001.
Hon. F. James Sensenbrenner Jr., Chairman
Committee on the Judiciary,
U.S. House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 861, a bill to 
make technical amendments to section 10 of title 9, United 
States Code.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Lanette J. 
Walker, who can be reached at 226-2860.
            Sincerely,
                                  Dan L. Crippen, Director.

Enclosure.

H.R. 861--A bill to make technical amendments to section 10 of title 9, 
        United States Code.

    CBO estimates that enacting H.R. 861 would not have any 
impact on the federal budget. Because enactment of the bill 
would not affect direct spending or receipts, pay-as-you-go 
procedures would not apply. H.R. 861 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act and would not affect the budgets 
of state, local, and tribal governments.
    H.R. 861 would correct punctuation errors and make other 
minor wording changes to section 10 of title 9, United States 
Code, which specifies the grounds under which a federal judge 
can vacate an arbitrator's award. Because these changes are 
technical and would make no substantive changes to the laws 
affecting arbitration, CBO estimates that enacting H.R. 861 
would not have any budgetary impact.
    The CBO staff contact for this estimate is Lanette J. 
Walker, who can be reached at 226-2860. This estimate was 
approved by Robert A. Sunshine, Assistant Director for Budget 
Analysis.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House, the Committee finds the authority for this legislation 
in Article I, section 8, of the Constitution.

               Section-by-Section Analysis and Discussion


                               Section 1.

    Vacation of Awards. Section 1 of the bill redesignates 
paragraph (5) of subsection 10(a) as subsection 10(b) and 
replaces the word ``Where'' with ``If'' in that provision. It 
also makes a conforming change by redesignating subsection (b) 
of section 10 as subsection (c). In addition, section 1 adjusts 
the indentation margins for paragraphs (1) through (4) of 
subsection (a); corrects punctuation and capitalization errors; 
and makes other minor conforming corrections.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

               SECTION 10 OF TITLE 9, UNITED STATES CODE

Sec. 10. Same; vacation; grounds; rehearing

    (a) In any of the following cases the United States court 
in and for the district wherein the award was made may make an 
order vacating the award upon the application of any party to 
the arbitration--
            (1) [Where] where the award was procured by 
        corruption, fraud, or undue means[.];
            (2) [Where] where there was evident partiality or 
        corruption in the arbitrators, or either of them[.];
            (3) [Where] where the arbitrators were guilty of 
        misconduct in refusing to postpone the hearing, upon 
        sufficient cause shown, or in refusing to hear evidence 
        pertinent and material to the controversy; or of any 
        other misbehavior by which the rights of any party have 
        been prejudiced[.]; or
            (4) [Where] where the arbitrators exceeded their 
        powers, or so imperfectly executed them that a mutual, 
        final, and definite award upon the subject matter 
        submitted was not made.
    [(5) Where] (b) If an award is vacated and the time within 
which the agreement required the award to be made has not 
expired, the court may, in its discretion, direct a rehearing 
by the arbitrators.
    [(b)] (c) The United States district court for the district 
wherein an award was made that was issued pursuant to section 
580 of title 5 may make an order vacating the award upon the 
application of a person, other than a party to the arbitration, 
who is adversely affected or aggrieved by the award, if the use 
of arbitration or the award is clearly inconsistent with the 
factors set forth in section 572 of title 5.



                            BUSINESS MEETING

                        THURSDAY, MARCH 8, 2001

                  House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m., in Room 
2141, Rayburn House Office Building, Hon. F. James 
Sensenbrenner (chairman of the committee) presiding.
    Pursuant to Notice, I call up the bill H.R. 861, a bill 
making technical corrections to Section 10 of Title 9 of the 
United States Code for purposes of markup, and move its 
favorable recommendation to the House.
    [H.R. 861 follows:]
    
    
    Chairman Sensenbrenner. Without objection, the bill will be 
considered as read and open for amendment at any point, and I 
recognize myself.
    H.R. 861 makes technical corrections to Section 10 of Title 
9 of the U.S. Code, the title of the Federal Code dealing with 
arbitration. This bill is identical to legislation reported by 
the committee during the last two congresses. In the 105th 
Congress the bill was passed by the House, and then a non-
germane amendment was attached by the Senate. The House did not 
act on the amended bill. In the last Congress, the version 
ultimately considered and passed by the House, under suspension 
of the rules, contained unrelated provisions concerning the 
Communications Assistant for Law Enforcement Act. The Senate 
did not act on the House-passed bill, and we have taken this 
other unrelated stuff out of it.
    I now yield to Mr. Gekas, the sponsor of the bill, for 
further explanation, and the Chair recognizes the gentleman 
from Pennsylvania for 5 minutes.
    Mr. Gekas. I thank the Chair. The Chairman is correct, this 
probably is much ado about something, in that the last two 
congresses did have to consider it. Attention to it was brought 
to us by the gentleman from New York, Mr. Nadler, whose 
constituent, an attorney--I will let Mr. Nadler elucidate on 
this--but the point is that this is a correction that much be 
made for the predictable future, and so we support the bill and 
ask that the members cast a favorable vote. I would yield to 
the gentleman from New York.
    Mr. Nadler. Thank you. I thank the gentleman for yielding. 
The necessity for this bill, and for those in the audience who 
may still be in school, this bill illustrates the necessity of 
placing a comma in the right place. The entire purpose of this 
bill is to move a comma, which having been placed by Congress 
or perhaps by the typographer in the wrong place in the 
sentence, changed the meaning of the law from what it was 
intended to be, and has created a lot of confusion over the 
years. This whole bill is designed to move the comma. I don't, 
frankly, remember what the confusion was or even what the 
subject matter containing it was, but it was brought to my 
attention by a constituent a number of years ago. Everybody who 
has looked at it agrees that the comma being in the wrong place 
distorts the intention of the law and causes confusion, and I 
urge the committee to pass this very necessary measure. Thank 
you.
    Chairman Sensenbrenner. And let me say this bill has a 
better chance of becoming law than most of what we talk about 
around here.
    [Laughter.]
    Chairman Sensenbrenner. Are there any amendments to the 
bill?
    Ms. Jackson Lee. Mr. Chairman?
    Chairman Sensenbrenner. The gentlewoman from Texas.
    Ms. Jackson Lee. Thank you very much, Mr. Chairman. Let me 
first of all acknowledge the good work of the members of this 
committee, and thank the Chairman for amendments that we have 
already gotten in to the legislation, includes amendments 
dealing with--I am sorry.
    Excuse me, Mr. Chairman. Let me get refreshed. Have we 
moved to our budget priorities?
    Chairman Sensenbrenner. No, we are not quite there yet. We 
are----
    Ms. Jackson Lee. I am rushing to judgment.
    Chairman Sensenbrenner. We are dealing with how many angels 
can dance on the head of a comma.
    Ms. Jackson Lee. I am telling, Mr. Chairman, I can't count 
those, but I am waiting on those budget priorities. Thank you 
very much.
    Chairman Sensenbrenner. Okay. Are there amendments to this 
bill?
    Hearing none, the question is on the motion to report the 
bill H.R. 861 favorably. All those in favor will say aye.
    Opposed, no.
    The ayes clearly have it, and the motion to report 
favorably is adopted.
    Without objection, the Chairman is authorized to move to go 
to conference pursuant to House rules.
    Without objection, the staff is directed to make any 
technical and conforming changes, and all members will be given 
2 days, as provided by the House rules, in which to submit 
additional dissenting, supplemental or minority views.
    Now, pursuant to notice, I call up the committee's budget 
views and estimates as for purposes of markup, and move as 
favorable recommendation to the House Budget Committee.

                                  
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