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108th CONGRESS
2d Session
H. R. 4430
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.
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IN THE HOUSE OF REPRESENTATIVES
May 20, 2004
Mr. Chocola (for himself, Mr. Akin, Mr. Barrett of South Carolina, Mr.
Beauprez, Ms. Ginny Brown-Waite of Florida, Mr. Burgess, Mr. Carter,
Mr. Cole, Mrs. Cubin, Mr. Cunningham, Mr. DeMint, Mr. Flake, Mr.
Hensarling, Mr. Hoekstra, Mr. Jones of North Carolina, Mrs. Kelly, Mr.
King of Iowa, Mr. Kline, Mr. Lewis of Kentucky, Mrs. Miller of
Michigan, Mrs. Musgrave, Mrs. Myrick, Mr. Neugebauer, Mrs. Northup, Mr.
Norwood, Mr. Paul, Mr. Pearce, Mr. Pence, Mr. Pitts, Mr. Rogers of
Michigan, Mr. Shadegg, Mr. Smith of Michigan, Mr. Souder, Mr. Sullivan,
Mr. Tancredo, Mr. Toomey, and Mr. Weldon of Florida) introduced the
following bill; which was referred to the Committee on the Judiciary
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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 ``Legal Expense Equity Act of 2004''.
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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