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We present a novel polarization diversity receiver for mitigating polarization-mode dispersion (PMD). We show that with simple fixed optics and electronics we can significantly decrease the outage probability due to PMD and can achieve better performance than an electronic equalization solution using no diversity. By incorporating equalization into the diversity receiver structure, further performance improvements can be achieved and the intersymbol interference due to higher order PMD distortions can be reduced. We demonstrate the performance advantages of the proposed diversity receiver using importance sampling to accurately calculate the outage probability due to PMD.