[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 5 Introduced in Senate (IS)]






109th CONGRESS
  1st Session
                                  S. 5

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

                            January 25, 2005

 Mr. Grassley (for himself, Mr. Kohl, Mr. Hatch, Mr. Carper, Mr. Frist, 
Mr. Chafee, Mr. Dodd, Mrs. Feinstein, Mr. Hagel, Mr. Kyl, Ms. Landrieu, 
  Mrs. Lincoln, Mr. Lugar, Mr. McConnell, Mr. Schumer, Mr. Thune, Mr. 
    Vitter, Mr. Voinovich, Mr. Lott, Mr. Alexander, Ms. Snowe, Mr. 
  Sessions, Mr. DeMint, Mr. Lieberman, Mr. Martinez, and Mr. Ensign) 
introduced the following bill; which was read twice and referred to the 
                       Committee on the Judiciary

_______________________________________________________________________

                                 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 2005''.
    (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. Enactment of Judicial Conference recommendations.
 Sec. 8. Rulemaking authority of Supreme Court and Judicial Conference.
 Sec. 9. 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. Coupon settlements.
``1713. Protection against loss by class members.
``1714. Protection against discrimination based on geographic location.
``1715. 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. Coupon 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 award to class counsel 
that is attributable to the award 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 class members, and 
        a portion of the recovery of the coupons is not used to 
        determine the attorney's fee to be paid to class counsel, any 
        attorney's fee award shall be based upon the amount of time 
        class counsel reasonably 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, if any, 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 class members 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 in accordance with 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 in accordance with 
        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 to the class members of the 
coupons that are redeemed.
    ``(e) Judicial Scrutiny of Coupon Settlements.--In a proposed 
settlement under which class members would be awarded coupons, the 
court may approve the 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. The court, in its 
discretion, may also require that a proposed settlement agreement 
provide for the distribution of a portion of the value of unclaimed 
coupons to 1 or more charitable or governmental organizations, as 
agreed to by the parties. The distribution and redemption of any 
proceeds under this subsection shall not be used to calculate 
attorneys' fees under this section.
``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. 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 $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.
    ``(3) A district court may, in the interests of justice and looking 
at the totality of the circumstances, 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--
            ``(A) whether the claims asserted involve matters of 
        national or interstate interest;
            ``(B) whether the claims asserted will be governed by laws 
        of the State in which the action was originally filed or by the 
        laws of other States;
            ``(C) whether the class action has been pleaded in a manner 
        that seeks to avoid Federal jurisdiction;
            ``(D) whether the action was brought in a forum with a 
        distinct nexus with the class members, the alleged harm, or the 
        defendants;
            ``(E) 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
            ``(F) whether, during the 3-year period preceding the 
        filing of that class action, 1 or more other class actions 
        asserting the same or similar claims on behalf of the same or 
        other persons have been filed.
    ``(4) A district court shall decline to exercise jurisdiction under 
paragraph (2)--
            ``(A)(i) over a class action in which--
                    ``(I) greater than two-thirds of the members of all 
                proposed plaintiff classes in the aggregate are 
                citizens of the State in which the action was 
                originally filed;
                    ``(II) at least 1 defendant is a defendant--
                            ``(aa) from whom significant relief is 
                        sought by members of the plaintiff class;
                            ``(bb) whose alleged conduct forms a 
                        significant basis for the claims asserted by 
                        the proposed plaintiff class; and
                            ``(cc) who is a citizen of the State in 
                        which the action was originally filed; and
                    ``(III) principal injuries resulting from the 
                alleged conduct or any related conduct of each 
                defendant were incurred in the State in which the 
                action was originally filed; and
            ``(ii) during the 3-year period preceding the filing of 
        that class action, no other class action has been filed 
        asserting the same or similar factual allegations against any 
        of the defendants on behalf of the same or other persons; or
            ``(B) 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.
    ``(5) Paragraphs (2) through (4) shall not apply to any class 
action in which--
            ``(A) the primary defendants are States, State officials, 
        or other governmental entities against whom the district court 
        may be foreclosed from ordering relief; or
            ``(B) the number of members of all proposed plaintiff 
        classes in the aggregate is less than 100.
    ``(6) 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 $5,000,000, exclusive of 
interest and costs.
    ``(7) Citizenship of the members of the proposed plaintiff classes 
shall be determined for purposes of paragraphs (2) through (6) as of 
the date of filing of the complaint or amended complaint, or, if the 
case stated by the initial pleading is not subject to Federal 
jurisdiction, as of the date of service by plaintiffs of an amended 
pleading, motion, or other paper, indicating the existence of Federal 
jurisdiction.
    ``(8) 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.
    ``(9) 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 (15 U.S.C. 78p(f)(3)) 
        and section 28(f)(5)(E) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78bb(f)(5)(E));
            ``(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 (15 U.S.C. 77b(a)(1)) and the 
        regulations issued thereunder).
    ``(10) For purposes of this subsection and section 1453, 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.
    ``(11)(A) For purposes of this subsection and section 1453, a mass 
action shall be deemed to be a class action removable under paragraphs 
(2) through (10) if it otherwise meets the provisions of those 
paragraphs.
    ``(B)(i) As used in subparagraph (A), the term `mass action' means 
any civil action (except a civil action within the scope of section 
1711(2)) in which monetary relief claims of 100 or more persons are 
proposed to be tried jointly on the ground that the plaintiffs' claims 
involve common questions of law or fact, except that jurisdiction shall 
exist only over those plaintiffs whose claims in a mass action satisfy 
the jurisdictional amount requirements under subsection (a).
    ``(ii) As used in subparagraph (A), the term `mass action' shall 
not include any civil action in which--
            ``(I) all of the claims in the action arise from an event 
        or occurrence in the State in which the action was filed, and 
        that allegedly resulted in injuries in that State or in States 
        contiguous to that State;
            ``(II) the claims are joined upon motion of a defendant;
            ``(III) all of the claims in the action are asserted on 
        behalf of the general public (and not on behalf of individual 
        claimants or members of a purported class) pursuant to a State 
        statute specifically authorizing such action; or
            ``(IV) the claims have been consolidated or coordinated 
        solely for pretrial proceedings.
    ``(C)(i) Any action(s) removed to Federal court pursuant to this 
subsection shall not thereafter be transferred to any other court 
pursuant to section 1407, or the rules promulgated thereunder, unless a 
majority of the plaintiffs in the action request transfer pursuant to 
section 1407.
    ``(ii) This subparagraph will not apply--
            ``(I) to cases certified pursuant to rule 23 of the Federal 
        Rules of Civil Procedure; or
            ``(II) if plaintiffs propose that the action proceed as a 
        class action pursuant to rule 23 of the Federal Rules of Civil 
        Procedure.
    ``(D) The limitations periods on any claims asserted in a mass 
action that is removed to Federal court pursuant to this subsection 
shall be deemed tolled during the period that the action is pending in 
Federal court.''.
    (b) Conforming Amendments.--
            (1) Section 1335(a)(1) is amended by inserting ``subsection 
        (a) or (d) of'' before ``section 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 section 1446 (except that 
the 1-year limitation under section 1446(b) shall not apply), 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 by any 
defendant without the consent of all defendants.
    ``(c) Review of Remand Orders.--
            ``(1) In general.--Section 1447 shall apply to any removal 
        of a case under this section, except that notwithstanding 
        section 1447(d), a court of appeals may accept an appeal from 
        an order of a district court granting or denying a motion to 
        remand a class action to the State court from which it was 
        removed if application is made to the court of appeals not less 
        than 7 days after entry of the order.
            ``(2) Time period for judgment.--If the court of appeals 
        accepts an appeal under paragraph (1), the court shall complete 
        all action on such appeal, including rendering judgment, not 
        later than 60 days after the date on which such appeal was 
        filed, unless an extension is granted under paragraph (3).
            ``(3) Extension of time period.--The court of appeals may 
        grant an extension of the 60-day period described in paragraph 
        (2) if--
                    ``(A) all parties to the proceeding agree to such 
                extension, for any period of time; or
                    ``(B) such extension is for good cause shown and in 
                the interests of justice, for a period not to exceed 10 
                days.
            ``(4) Denial of appeal.--If a final judgment on the appeal 
        under paragraph (1) is not issued before the end of the period 
        described in paragraph (2), including any extension under 
        paragraph (3), the appeal shall be denied.
    ``(d) 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 (15 U.S.C. 
        78p(f)(3)) and section 28(f)(5)(E) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78bb(f)(5)(E));
            ``(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 (15 U.S.C. 77b(a)(1)) and the 
        regulations issued thereunder).''.
    (b) 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. ENACTMENT OF JUDICIAL CONFERENCE RECOMMENDATIONS.

    Notwithstanding any other provision of law, the amendments to rule 
23 of the Federal Rules of Civil Procedure, which are set forth in the 
order entered by the Supreme Court of the United States on March 27, 
2003, shall take effect on the date of enactment of this Act or on 
December 1, 2003 (as specified in that order), whichever occurs first.

SEC. 8. RULEMAKING AUTHORITY OF SUPREME COURT AND JUDICIAL CONFERENCE.

    Nothing in this Act shall restrict in any way the authority of the 
Judicial Conference and the Supreme Court to propose and prescribe 
general rules of practice and procedure under chapter 131 of title 28, 
United States Code.

SEC. 9. 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.
                                 <all>