[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 274 Reported in Senate (RS)]






                                                       Calendar No. 117
108th CONGRESS
  1st Session
                                 S. 274

To amend the procedures that apply to consideration of interstate class 
actions to assure fairer outcomes for class members and defendants, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            February 4, 2003

    Mr. Grassley (for himself, Mr. Kohl, Mr. Hatch, Mr. Carper, Mr. 
    Specter, Mr. Miller, Mr. Chafee, Mr. Lugar, Mr. Voinovich, Mr. 
 Chambliss, Mr. McConnell, Mr. Sessions, Mr. Allen, Mr. Domenici, Mr. 
   Ensign, Mr. Cornyn, Mr. Kyl, Mr. Bunning, Mr. Fitzgerald, and Mr. 
Hagel) introduced the following bill; which was read twice and referred 
                   to the Committee on the Judiciary

                              June 2, 2003

                 Reported by Mr. Hatch, with amendments
  [Omit the part struck through and insert the part printed in italic]

_______________________________________________________________________

                                 A BILL


 
To amend the procedures that apply to consideration of interstate class 
actions to assure fairer outcomes for class members and defendants, 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; REFERENCE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Class Action 
Fairness Act of 2003''.
    (b) Reference.--Whenever in this Act reference is made to an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of title 
28, United States Code.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

 Sec. 1. Short title; reference; table of contents.
 Sec. 2. Findings and purposes.
 Sec. 3. Consumer class action bill of rights and improved procedures 
                            for interstate class actions.
 Sec. 4. Federal district court jurisdiction for interstate class 
                            actions.
 Sec. 5. Removal of interstate class actions to Federal district court.
 Sec. 6. Report on class action settlements.
 Sec. 7. Effective date.

 SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) Class action lawsuits are an important and valuable 
        part of the legal system when they permit the fair and 
        efficient resolution of legitimate claims of numerous parties 
        by allowing the claims to be aggregated into a single action 
        against a defendant that has allegedly caused harm.
            (2) Over the past decade, there have been abuses of the 
        class action device that have--
                    (A) harmed class members with legitimate claims and 
                defendants that have acted responsibly;
                    (B) adversely affected interstate commerce; and
                    (C) undermined public respect for our judicial 
                system.
            (3) Class members often receive little or no benefit from 
        class actions, and are sometimes harmed, such as where--
                    (A) counsel are awarded large fees, while leaving 
                class members with coupons or other awards of little or 
                no value;
                    (B) unjustified awards are made to certain 
                plaintiffs at the expense of other class members; and
                    (C) confusing notices are published that prevent 
                class members from being able to fully understand and 
                effectively exercise their rights.
            (4) Abuses in class actions undermine the national judicial 
        system, the free flow of interstate commerce, and the concept 
        of diversity jurisdiction as intended by the framers of the 
        United States Constitution, in that State and local courts 
        are--
                    (A) keeping cases of national importance out of 
                Federal court;
                    (B) sometimes acting in ways that demonstrate bias 
                against out-of-State defendants; and
                    (C) making judgments that impose their view of the 
                law on other States and bind the rights of the 
                residents of those States.
    (b) Purposes.--The purposes of this Act are to--
            (1) assure fair and prompt recoveries for class members 
        with legitimate claims;
            (2) restore the intent of the framers of the United States 
        Constitution by providing for Federal court consideration of 
        interstate cases of national importance under diversity 
        jurisdiction; and
            (3) benefit society by encouraging innovation and lowering 
        consumer prices.

 SEC. 3. CONSUMER CLASS ACTION BILL OF RIGHTS AND IMPROVED PROCEDURES 
              FOR INTERSTATE CLASS ACTIONS.

    (a) In General.--Part V is amended by inserting after chapter 113 
the following:

                      ``CHAPTER 114--CLASS ACTIONS

``Sec.
``1711. Definitions.
``1712. Judicial scrutiny of coupon and other noncash settlements.
``1713. Protection against loss by class members.
``1714. Protection against discrimination based on geographic location.
``1715. Prohibition on the payment of bounties.
``1716. Clearer and simpler settlement information.
``1717. Notifications to appropriate Federal and State officials.
``Sec. 1711. Definitions
    ``In this chapter:
            ``(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 filed in a district court of the United States 
        under rule 23 of the Federal Rules of Civil Procedure or 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 as a class action.
            ``(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.
            ``(5) Plaintiff class action.--The term `plaintiff class 
        action' means a class action in which class members are 
        plaintiffs.
            ``(6) Proposed settlement.--The term `proposed settlement' 
        means an agreement regarding a class action that is subject to 
        court approval and that, if approved, would be binding on some 
        or all class members.
``Sec. 1712. Judicial scrutiny of coupon and other noncash settlements
    ``The court may approve a proposed settlement under which the class 
members would receive noncash benefits or would otherwise be required 
to expend funds in order to obtain part or all of the proposed benefits 
only after a hearing to determine whether, and making a written finding 
that, the settlement is fair, reasonable, and adequate for class 
members.
``Sec. 1713. Protection against loss by class members
    ``The court may approve a proposed settlement under which any class 
member is obligated to pay sums to class counsel that would result in a 
net loss to the class member only if the court makes a written finding 
that nonmonetary benefits to the class member substantially outweigh 
the monetary loss.
``Sec. 1714. Protection against discrimination based on geographic 
              location
    ``The court may not approve a proposed settlement that provides for 
the payment of greater sums to some class members than to others solely 
on the basis that the class members to whom the greater sums are to be 
paid are located in closer geographic proximity to the court.
``Sec. 1715. Prohibition on the payment of bounties
    ``(a) In General.--The court may not approve a proposed settlement 
that provides for the payment of a greater share of the award to a 
class representative serving on behalf of a class, on the basis of the 
formula for distribution to all other class members, than that awarded 
to the other class members.
    ``(b) Rule of Construction.--The limitation in subsection (a) shall 
not be construed to prohibit a payment approved by the court for 
reasonable time or costs that a person was required to expend in 
fulfilling the obligations of that person as a class representative.
``Sec. 1716. Clearer and simpler settlement information
    ``(a) Plain English Requirements.--Any court with jurisdiction over 
a plaintiff class action shall require that any written notice 
concerning a proposed settlement of the class action provided to the 
class through the mail or publication in printed media contain--
            ``(1) at the beginning of such notice, a statement in 18-
        point or greater bold type, stating `LEGAL NOTICE: YOU ARE A 
        PLAINTIFF IN A CLASS ACTION LAWSUIT AND YOUR LEGAL RIGHTS ARE 
        AFFECTED BY THE SETTLEMENT DESCRIBED IN THIS NOTICE.'; and
            ``(2) a short summary written in plain, easily understood 
        language, describing--
                    ``(A) the subject matter of the class action;
                    ``(B) the members of the class;
                    ``(C) the legal consequences of being a member of 
                the class action;
                    ``(D) if the notice is informing class members of a 
                proposed settlement agreement--
                            ``(i) the benefits that will accrue to the 
                        class due to the settlement;
                            ``(ii) the rights that class members will 
                        lose or waive through the settlement;
                            ``(iii) obligations that will be imposed on 
                        the defendants by the settlement;
                            ``(iv) the dollar amount of any attorney's 
                        fee class counsel will be seeking, or if not 
                        possible, a good faith estimate of the dollar 
                        amount of any attorney's fee class counsel will 
                        be seeking; and
                            ``(v) an explanation of how any attorney's 
                        fee will be calculated and funded; and
                    ``(E) any other material matter.
    ``(b) Tabular Format.--Any court with jurisdiction over a plaintiff 
class action shall require that the information described in subsection 
(a)--
            ``(1) be placed in a conspicuous and prominent location on 
        the notice;
            ``(2) contain clear and concise headings for each item of 
        information; and
            ``(3) provide a clear and concise form for stating each 
        item of information required to be disclosed under each 
        heading.
    ``(c) Television or Radio Notice.--Any notice provided through 
television or radio (including transmissions by cable or satellite) to 
inform the class members in a class action of the right of each member 
to be excluded from a class action or a proposed settlement, if such 
right exists, shall, in plain, easily understood language--
            ``(1) describe the persons who may potentially become class 
        members in the class action; and
            ``(2) explain that the failure of a class member to 
        exercise his or her right to be excluded from a class action 
        will result in the person's inclusion in the class action.
``Sec. 1717. Notifications to appropriate Federal and State officials
    ``(a) Definitions.--
            ``(1) Appropriate federal official.--In this section, the 
        term `appropriate Federal official' means--
                    ``(A) the Attorney General of the United States; or
                    ``(B) in any case in which the defendant is a 
                Federal depository institution, a State depository 
                institution, a depository institution holding company, 
                a foreign bank, or a nondepository institution 
                subsidiary of the foregoing (as such terms are defined 
                in section 3 of the Federal Deposit Insurance Act (12 
                U.S.C. 1813)), the person who has the primary Federal 
                regulatory or supervisory responsibility with respect 
                to the defendant, if some or all of the matters alleged 
                in the class action are subject to regulation or 
                supervision by that person.
            ``(2) Appropriate state official.--In this section, the 
        term `appropriate State official' means the person in the State 
        who has the primary regulatory or supervisory responsibility 
        with respect to the defendant, or who licenses or otherwise 
        authorizes the defendant to conduct business in the State, if 
some or all of the matters alleged in the class action are subject to 
regulation by that person. If there is no primary regulator, 
supervisor, or licensing authority, or the matters alleged in the class 
action are not subject to regulation or supervision by that person, 
then the appropriate State official shall be the State attorney 
general.
    ``(b) In General.--Not later than 10 days after a proposed 
settlement of a class action is filed in court, each defendant that is 
participating in the proposed settlement shall serve upon the 
appropriate State official of each State in which a class member 
resides and the appropriate Federal official, a notice of the proposed 
settlement consisting of--
            ``(1) a copy of the complaint and any materials filed with 
        the complaint and any amended complaints (except such materials 
        shall not be required to be served if such materials are made 
        electronically available through the Internet and such service 
        includes notice of how to electronically access such material);
            ``(2) notice of any scheduled judicial hearing in the class 
        action;
            ``(3) any proposed or final notification to class members 
        of--
                    ``(A)(i) the members' rights to request exclusion 
                from the class action; or
                    ``(ii) if no right to request exclusion exists, a 
                statement that no such right exists; and
                    ``(B) a proposed settlement of a class action;
            ``(4) any proposed or final class action settlement;
            ``(5) any settlement or other agreement contemporaneously 
        made between class counsel and counsel for the defendants;
            ``(6) any final judgment or notice of dismissal;
            ``(7)(A) if feasible, the names of class members who reside 
        in each State and the estimated proportionate share of the 
        claims of such members to the entire settlement to that State's 
        appropriate State official; or
            ``(B) if the provision of information under subparagraph 
        (A) is not feasible, a reasonable estimate of the number of 
        class members residing in each State and the estimated 
        proportionate share of the claims of such members to the entire 
        settlement; and
            ``(8) any written judicial opinion relating to the 
        materials described under subparagraphs (3) through (6).
    ``(c) Depository Institutions Notification.--
            ``(1) Federal and other depository institutions.--In any 
        case in which the defendant is a Federal depository 
        institution, a depository institution holding company, a 
        foreign bank, or a non-depository institution subsidiary of the 
        foregoing, the notice requirements of this section are 
        satisfied by serving the notice required under subsection (b) 
        upon the person who has the primary Federal regulatory or 
        supervisory responsibility with respect to the defendant, if 
        some or all of the matters alleged in the class action are 
        subject to regulation or supervision by that person.
            ``(2) State depository institutions.--In any case in which 
        the defendant is a State depository institution (as that term 
        is defined in section 3 of the Federal Deposit Insurance Act 
        (12 U.S.C. 1813)), the notice requirements of this section are 
        satisfied by serving the notice required under subsection (b) 
        upon the State bank supervisor (as that term is defined in 
        section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
        1813)) of the State in which the defendant is incorporated or 
        chartered, if some or all of the matters alleged in the class 
        action are subject to regulation or supervision by that person, 
        and upon the appropriate Federal official.
    ``(d) Final Approval.--An order giving final approval of a proposed 
settlement may not be issued earlier than 90 days after the later of 
the dates on which the appropriate Federal official and the appropriate 
State official are served with the notice required under subsection 
(b).
    ``(e) Noncompliance if Notice Not Provided.--
            ``(1) In general.--A class member may refuse to comply with 
        and may choose not to be bound by a settlement agreement or 
        consent decree in a class action if the class member 
        demonstrates that the notice required under subsection (b) has 
        not been provided.
            ``(2) Limitation.--A class member may not refuse to comply 
        with or to be bound by a settlement agreement or consent decree 
        under paragraph (1) if the notice required under subsection (b) 
        was directed to the appropriate Federal official and to either 
        the State attorney general or the person that has primary 
        regulatory, supervisory, or licensing authority over the 
        defendant.
            ``(3) Application of rights.--The rights created by this 
        subsection shall apply only to class members or any person 
        acting on a class member's behalf, and shall not be construed 
        to limit any other rights affecting a class member's 
        participation in the settlement.
    ``(f) Rule of Construction.--Nothing in this section shall be 
construed to expand the authority of, or impose any obligations, 
duties, or responsibilities upon, Federal or State officials.''.
    (b) Technical and Conforming Amendment.--The table of chapters for 
part V is amended by inserting after the item relating to chapter 113 
the following:

``114. Class Actions........................................    1711''.

 SEC. 4. FEDERAL DISTRICT COURT JURISDICTION FOR INTERSTATE CLASS 
              ACTIONS.

    (a) Application of Federal Diversity Jurisdiction.--Section 1332 is 
amended--
            (1) by redesignating subsection (d) as subsection (e); and
            (2) by inserting after subsection (c) the following:
    ``(d)(1) In this subsection--
            ``(A) the term `class' means all of the class members in a 
        class action;
            ``(B) the term `class action' means any civil action filed 
        under rule 23 of the Federal Rules of Civil Procedure or 
        similar State statute or rule of judicial procedure authorizing 
an action to be brought by 1 or more representative persons as a class 
action;
            ``(C) the term `class certification order' means an order 
        issued by a court approving the treatment of some or all 
aspects of a civil action as a class action; and
            ``(D) 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.
    ``(2) The district courts shall have original jurisdiction of any 
civil action in which the matter in controversy exceeds the sum or 
value of <DELETED>$2,000,000</DELETED> $5,000,000, exclusive of 
interest and costs, and is a class action in which--
            ``(A) any member of a class of plaintiffs is a citizen of a 
        State different from any defendant;
            ``(B) any member of a class of plaintiffs is a foreign 
        state or a citizen or subject of a foreign state and any 
        defendant is a citizen of a State; or
            ``(C) any member of a class of plaintiffs is a citizen of a 
        State and any defendant is a foreign state or a citizen or 
        subject of a foreign state.
<DELETED>    ``(3) Paragraph (2) shall not apply to any civil action in 
which--</DELETED>
        <DELETED>    ``(A)(i) the substantial majority of the members 
        of the proposed plaintiff class and the primary defendants are 
        citizens of the State in which the action was originally filed; 
        and</DELETED>
        <DELETED>    ``(ii) the claims asserted therein will be 
        governed primarily by the laws of the State in which the action 
        was originally filed;</DELETED>
        <DELETED>    ``(B) the primary defendants are States, State 
        officials, or other governmental entities against whom the 
        district court may be foreclosed from ordering relief; 
        or</DELETED>
        <DELETED>    ``(C) the number of members of all proposed 
        plaintiff classes in the aggregate is less than 100.</DELETED>
            ``(3) A district court may, in the interests of justice, 
        decline to exercise jurisdiction under paragraph (2) over a 
        class action in which greater than one-third but less than two-
        thirds of the members of all proposed plaintiff classes in the 
        aggregate and the primary defendants are citizens of the State 
        in which the action was originally filed based on consideration 
        of the following factors:
                    ``(A) Whether the claims asserted involve matters 
                of national or interstate interest.
                    ``(B) Whether the claims asserted will be governed 
                by laws other than those of the State in which the 
                action was originally filed.
                    ``(C) In the case of a class action originally 
                filed in a State court, whether the class action has 
                been pleaded in a manner that seeks to avoid Federal 
                jurisdiction.
                    ``(D) 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.
                    ``(E) Whether 1 or more class actions asserting the 
                same or similar claims on behalf of the same or other 
                persons have been or may be filed.
            ``(4) Paragraph (2) shall not apply to any class action in 
        which--
                    ``(A) two-thirds or more of the members of all 
                proposed plaintiff classes in the aggregate and the 
                primary defendants are citizens of the State in which 
                the action was originally filed;
                    ``(B) the primary defendants are States, State 
                officials, or other governmental entities against whom 
                the district court may be foreclosed from ordering 
                relief; or
                    ``(C) the number of members of all proposed 
                plaintiff classes in the aggregate is less than 100.
    ``<DELETED>(4)</DELETED> (5) In any class action, the claims of the 
individual class members shall be aggregated to determine whether the 
matter in controversy exceeds the sum or value of <DELETED>$2,000,000</DELETED> 
$5,000,000, exclusive of interest and costs.
    ``<DELETED>(5)</DELETED> (6) This subsection shall apply to any 
class action before or after the entry of a class certification order 
by the court with respect to that action.
    ``<DELETED>(6)</DELETED> (7)(A) A district court shall dismiss any 
civil action that is subject to the jurisdiction of the court solely 
under this subsection if the court determines the action may not 
proceed as a class action based on a failure to satisfy the 
prerequisites of rule 23 of the Federal Rules of Civil Procedure.
    ``(B) Nothing in subparagraph (A) shall prohibit plaintiffs from 
filing an amended class action in Federal court or filing an action in 
State court, except that any such action filed in State court may be 
removed to the appropriate district court if it is an action of which 
the district courts of the United States have original jurisdiction.
    ``(C) In any action that is dismissed under this paragraph and is 
filed by any of the original named plaintiffs therein in the same State 
court venue in which the dismissed action was originally filed, the 
limitations periods on all reasserted claims shall be deemed tolled for 
the period during which the dismissed class action was pending. The 
limitations periods on any claims that were asserted in a class action 
dismissed under this paragraph that are subsequently asserted in an 
individual action shall be deemed tolled for the period during which 
the dismissed action was pending.
    ``<DELETED>(7)</DELETED> (8) Paragraph (2) shall not apply to any 
class action that solely involves a claim--
            ``(A) concerning a covered security as defined under 
        16(f)(3) of the Securities Act of 1933 and section 28(f)(5)(E) 
        of the Securities Exchange Act of 1934;
            ``(B) 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
            ``(C) 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 and the regulations issued thereunder).
    ``<DELETED>(8)</DELETED> (9) For purposes of this subsection and 
section 1453 of this title, an unincorporated association shall be 
deemed to be a citizen of the State where it has its principal place of 
business and the State under whose laws it is organized.
    ``<DELETED>(9)</DELETED> (10) <DELETED>(A) For purposes of this 
section and section 1453 of this title, a civil action that is not 
otherwise a class action as defined in paragraph (1)(B) shall 
nevertheless be deemed a class action if--
        <DELETED>    ``(i) the named plaintiff purports to act for the 
        interests of its members (who are not named parties to the 
        action) or for the interests of the general public, seeks a 
        remedy of damages, restitution, disgorgement, or any other form 
        of monetary relief, and is not a State attorney general; 
        or</DELETED>
        <DELETED>    ``(ii) monetary relief claims in the action are 
        proposed to be tried jointly in any respect with the claims of 
        100 or more other persons on the ground that the claims involve 
        common questions of law or fact.</DELETED>
    ``(B)(i) In any civil action described under subparagraph 
<DELETED>(A)(ii)</DELETED> (A)(i), the persons who allegedly were 
injured shall be treated as members of a proposed plaintiff class and 
the monetary relief that is sought shall be treated as the claims of 
individual class members.
    ``(ii) <DELETED>Paragraphs (3) and (6)</DELETED> Paragraph (7) of 
this subsection and subsections (b)(2) and (d) of section 1453 shall 
not apply to any civil action described under subparagraph (A)(i).
    ``(iii) Paragraph <DELETED>(6)</DELETED> (7) of this subsection, 
and subsections (b)(2) and (d) of section 1453 shall not apply to any 
civil action described under subparagraph (A)(ii).''.
    (b) Conforming Amendments.--
            (1) Section 1335(a)(1) is amended by inserting ``(a) or 
        (d)'' after ``1332''.
            (2) Section 1603(b)(3) is amended by striking ``(d)'' and 
        inserting ``(e)''.

 SEC. 5. REMOVAL OF INTERSTATE CLASS ACTIONS TO FEDERAL DISTRICT COURT.

    (a) In General.--Chapter 89 is amended by adding after section 1452 
the following:
``Sec. 1453. Removal of class actions
    ``(a) Definitions.--In this section, the terms `class', `class 
action', `class certification order', and `class member' shall have the 
meanings given such terms under section 1332(d)(1).
    ``(b) In General.--A class action may be removed to a district 
court of the United States in accordance with this chapter, without 
regard to whether any defendant is a citizen of the State in which the 
action is brought, except that such action may be removed--
            ``(1) by any defendant without the consent of all 
        defendants; or
            ``(2) by any plaintiff class member who is not a named or 
        representative class member without the consent of all members 
        of such class.
    ``(c) When Removable.--This section shall apply to any class action 
before or after the entry of a class certification order in the action.
    ``(d) Procedure for Removal.--Section 1446 relating to a defendant 
removing a case shall apply to a plaintiff removing a case under this 
section, except that in the application of subsection (b) of such 
section the requirement relating to the 30-day filing period shall be 
met if a plaintiff class member files notice of removal within 30 days 
after receipt by such class member, through service or otherwise, of 
the initial written notice of the class action.
    ``(e) Review of Orders Remanding Class Actions to State Courts.--
Section 1447 shall apply to any removal of a case under this section, 
except that notwithstanding section 1447(d), an order remanding a class 
action to the State court from which it was removed shall be reviewable 
by appeal or otherwise.
    ``(f) Exception.--This section shall not apply to any class action 
that solely involves--
            ``(1) a claim concerning a covered security as defined 
        under section 16(f)(3) of the Securities Act of 1933 and 
        section 28(f)(5)(E) of the Securities Exchange Act of 1934;
            ``(2) a claim that relates to the internal affairs or 
        governance of a corporation or other form of business 
        enterprise and arises under or by virtue of the laws of the 
        State in which such corporation or business enterprise is 
        incorporated or organized; or
            ``(3) a claim 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 and the regulations issued 
        thereunder).''.
    (b) Removal Limitation.--Section 1446(b) is amended in the second 
sentence by inserting ``(a)'' after ``section 1332''.
    (c) Technical and Conforming Amendments.--The table of sections for 
chapter 89 is amended by adding after the item relating to section 1452 
the following:

``1453. Removal of class actions.''.

SEC. 6. REPORT ON CLASS ACTION SETTLEMENTS.

    (a) In General.--Not later than 12 months after the date of 
enactment of this Act, the Judicial Conference of the United States, 
with the assistance of the Director of the Federal Judicial Center and 
the Director of the Administrative Office of the United States Courts, 
shall prepare and transmit to the Committees on the Judiciary of the 
Senate and the House of Representatives a report on class action 
settlements.
    (b) Content.--The report under subsection (a) shall contain--
            (1) recommendations on the best practices that courts can 
        use to ensure that proposed class action settlements are fair 
        to the class members that the settlements are supposed to 
        benefit;
            (2) recommendations on the best practices that courts can 
        use to ensure that--
                    (A) the fees and expenses awarded to counsel in 
                connection with a class action settlement appropriately 
                reflect the extent to which counsel succeeded in 
                obtaining full redress for the injuries alleged and the 
                time, expense, and risk that counsel devoted to the 
                litigation; and
                    (B) the class members on whose behalf the 
                settlement is proposed are the primary beneficiaries of 
                the settlement; and
            (3) the actions that the Judicial Conference of the United 
        States has taken and intends to take toward having the Federal 
        judiciary implement any or all of the recommendations contained 
        in the report.
    (c) Authority of Federal Courts.--Nothing in this section shall be 
construed to alter the authority of the Federal courts to supervise 
attorneys' fees.

SEC. 7. 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.




                                                       Calendar No. 117

108th CONGRESS

  1st Session

                                 S. 274

_______________________________________________________________________

                                 A BILL

To amend the procedures that apply to consideration of interstate class 
actions to assure fairer outcomes for class members and defendants, and 
                          for other purposes.

_______________________________________________________________________

                              June 2, 2003

                        Reported with amendments