[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1769 Introduced in Senate (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:

``114. Class Actions........................................    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.
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