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S. 1769 (108th): National Class Action Act of 2003


The text of the bill below is as of Oct 21, 2003 (Introduced). The bill was not enacted into law.


S 1769 IS

108th CONGRESS

1st Session

S. 1769

To provide for class action reform, and for other purposes.

IN THE SENATE OF THE UNITED STATES

October 21, 2003

Mr. BREAUX introduced the following bill; which was read twice and referred to the Committee on the Judiciary


A BILL

To provide for class action reform, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) SHORT TITLE- This Act may be cited as the ‘National Class Action Act of 2003’.

    (b) TABLE OF CONTENTS- The table of contents for this Act is as follows:

      Sec. 1. Short title; reference; table of contents.

      Sec. 2. Coupon settlements in class action cases.

      Sec. 3. Federal district court jurisdiction for national class actions.

      Sec. 4. Removal of national class actions to Federal court.

      Sec. 5. Effective date.

SEC. 2. COUPONS SETTLEMENTS IN CLASS ACTION CASES.

    (a) IN GENERAL- Part V of title 28, United States Code, is amended by inserting after chapter 113 the following:

‘CHAPTER 114--CLASS ACTIONS

‘Sec.

      ‘1711. Definitions.

      ‘1712. Coupons settlements.

‘Sec. 1711. Definitions

    ‘In this chapter, the following definitions shall apply:

      ‘(1) CLASS- The term ‘class’ means all of the class members in a class action.

      ‘(2) CLASS ACTION- The term ‘class action’ means any civil action--

        ‘(A) filed in a district court of the United States under rule 23 of the Federal Rules of Civil Procedure; or

        ‘(B) any civil action that is removed to a district court of the United States that was originally filed under a State statute or rule of judicial procedure authorizing an action to be brought by 1 or more representatives on behalf of a class.

      ‘(3) CLASS COUNSEL- The term ‘class counsel’ means the persons who serve as the attorneys for the class members in a proposed or certified class action.

      ‘(4) CLASS MEMBERS- The term ‘class members’ means the persons (named or unnamed) who fall within the definition of the proposed or certified class in a class action.

‘Sec. 1712. Coupons settlements

    ‘(a) CONTINGENT FEES IN COUPON SETTLEMENTS- If a proposed settlement in a class action provides for a recovery of coupons to a class member, the portion of any attorney’s fee to be paid to class counsel based on the recovery of the coupons shall be based on the value to class members of the coupons that are redeemed.

    ‘(b) OTHER ATTORNEY’S FEE AWARDS IN COUPON SETTLEMENTS-

      ‘(1) IN GENERAL- If a proposed settlement in a class action provides for a recovery of coupons to a class member, and a portion of the recovery of the coupons is not used to determine the attorney’s fee to be paid to class counsel, the attorney’s fee shall be based upon the amount of time class counsel expended working on the action.

      ‘(2) COURT APPROVAL- Any attorney’s fee under this subsection shall be subject to approval by the court and shall include an appropriate attorney’s fee for obtaining equitable relief, including an injunction, if applicable. Nothing in this subsection shall be construed to prohibit application of a lodestar with a multiplier method of determining attorney’s fees.

    ‘(c) ATTORNEY’S FEE AWARDS CALCULATED ON A MIXED BASIS IN COUPON SETTLEMENTS- If a proposed settlement in a class action provides for an award of coupons to a class member and also provides for equitable relief, including injunctive relief--

      ‘(1) that portion of the attorney’s fee to be paid to class counsel that is based upon a portion of the recovery of the coupons shall be calculated according to subsection (a); and

      ‘(2) that portion of the attorney’s fee to be paid to class counsel that is not based upon a portion of the recovery of the coupons shall be calculated according to subsection (b).

    ‘(d) SETTLEMENT VALUATION EXPERTISE- In a class action involving the awarding of coupons, the court may in its discretion, upon the motion of a party, receive expert testimony from a witness qualified to provide information on the actual value of the settlement.

    ‘(e) JUDICIAL SCRUTINY OF COUPON SETTLEMENTS- In a class action that provides for a recovery of coupons to a class member, the court may approve a proposed settlement only after a hearing to determine whether, and making a written finding that, the settlement is fair, reasonable, and adequate for class members.’.

    (b) TECHNICAL AND CONFORMING AMENDMENT- The table of chapters for part V of title 28, United States Code, is amended by inserting after the item relating to chapter 113 the following:

1711’.

SEC. 3. FEDERAL DISTRICT COURT JURISDICTION FOR NATIONAL CLASS ACTIONS.

    (a) IN GENERAL- Chapter 85 of title 28, United States Code, is amended by adding at the end the following:

‘Sec. 1370. National class actions

    ‘(a) In addition to the jurisdiction conferred under this chapter, a district court of the United States shall have jurisdiction over a class action in which 1/3 or fewer of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed.

    ‘(b) A district court of the United States may, in the interests of justice, decline to exercise jurisdiction over a class action in which greater than 1/3 but less than 2/3 of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed based on consideration of--

      ‘(1) whether the claims asserted involve matters of State or local interest;

      ‘(2) whether the claims asserted will be governed by laws other than those of the State in which the action was originally filed;

      ‘(3) whether the forum for the class action was chosen frivolously or in bad faith;

      ‘(4) whether the number of citizens of the State in which the action was originally filed in all proposed plaintiff classes in the aggregate is substantially larger than the number of citizens from any other State, and the citizenship of the other members of the proposed class is dispersed among a substantial number of States; and

      ‘(5) whether the State claims asserted by class members of the State in which the action was filed would be preempted by a Federal class action.

    ‘(c) A district court of the United States shall not exercise jurisdiction over a class action in which--

      ‘(1) 2/3 or more of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed;

      ‘(2) the primary defendants are States, State officials, or other governmental entities against whom the district court may be foreclosed from ordering relief; or

      ‘(3) the number of members of all proposed plaintiff classes in the aggregate is less than 100.

    ‘(d) Citizenship of proposed class members in subsection (a), (b), and (c) shall be determined on the date of filing the proposed class action in Federal district court or State court.

    ‘(e) This section shall not apply to any class action that soley involves a claim--

      ‘(1) concerning a covered security as defined under 16(f)(3) of the Securities Act of 1933 (15 U.S.C. 77p(f)(3));

      ‘(2) that relates to the internal affairs or governance of a corporation or other form of business enterprise and that arises under or by virtue of the laws of the State in which such corporation or business enterprise is incorporated or organized; or

      ‘(3) that relates to the rights, duties (including fiduciary duties), and obligations relating to or created by or pursuant to any security (as defined under section 2(a)(1) of the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) and the regulations issued thereunder).

    (f) Nothing in this section shall be construed to limit Federal jurisdiction over any class action that meets diversity of citizenship requirements under section 1332.’.

    (b) CLERICAL AMENDMENT- The table of sections at the beginning of chapter 85 of title 28, United States Code, is amended by adding at the end the following:

      ‘1370. National class actions.’.

SEC. 4. REMOVAL OF NATIONAL CLASS ACTIONS TO FEDERAL COURT.

    (a) IN GENERAL- Chapter 89 of title 28, United States Code, is amended by adding at the end the following:

‘Sec. 1453. Removal of national class actions

    ‘(a) A class action over which a district court would have jurisdiction under section 1370 may be removed to a district court of the United States, in accordance with this chapter, by--

      ‘(1) any defendant without the consent of all defendants; or

      ‘(2) any plaintiff class member who has intervened, seeks to be designated as a representative class member, and is not a named or representative class member without the consent of all members of such class.

    ‘(b) The Federal district court which receives a class action removed in accordance with this section shall make a determination regarding the jurisdiction of the proposed class action before deciding a motion to transfer to any other court under--

      ‘(1) section 1391; or

      ‘(2) section 1407.

    ‘(c) Section 1446 (relating to a defendant removing a case) shall apply to a plaintiff removing a case under this section, except that the application of section 1446(b) (relating to the 30-day filing period requirement) shall be met if a plaintiff class member files notice of removal not later than 30 days after the receipt by such class member, through service or otherwise, of the initial written notice of class action.

    ‘(d) This section shall not apply to any class action that solely involves a claim--

      ‘(1) concerning a covered security (as defined under section 16(f)(3) of the Securities Act of 1933 (15 U.S.C. 77p(f)(3));

      ‘(2) that relates to the internal affairs or governance of a corporation or other form of business enterprise and that arises under or by virtue of the laws of the State in which such corporation or business enterprise is incorporated or organized; or

      ‘(3) that relates to the rights, duties (including fiduciary duties), and obligations relating to or created by or pursuant to any security (as defined under section 2(a)(1) of the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) and the regulations issued thereunder).’.

    (b) CLERICAL AMENDMENT- The table of sections at the beginning of chapter 89 of title 28, United States Code, is amended by adding at the end the following:

      ‘1453. Removal of national class actions.’.

SEC. 5. EFFECTIVE DATE.

    The amendments made by this Act shall apply to any civil action commenced on or after the date of enactment of this Act.