[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 985 Referred in Senate (RFS)]
<DOC>
115th CONGRESS
1st Session
H. R. 985
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 13, 2017
Received; read twice and referred to the Committee on the Judiciary
_______________________________________________________________________
AN ACT
To amend the procedures used in Federal court class actions and
multidistrict litigation proceedings to assure fairer, more efficient
outcomes for claimants 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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Fairness in Class
Action Litigation and Furthering Asbestos Claim Transparency Act of
2017''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--FAIRNESS IN CLASS ACTION LITIGATION
Sec. 101. Short title; reference; table of contents.
Sec. 102. Purposes.
Sec. 103. Class action procedures.
Sec. 104. Misjoinder of plaintiffs in personal injury and wrongful
death actions.
Sec. 105. Multidistrict litigation proceedings procedures.
Sec. 106. Rulemaking authority of Supreme Court and Judicial
Conference.
Sec. 107. Effective date.
TITLE II--FURTHERING ASBESTOS CLAIM TRANSPARENCY
Sec. 201. Short title.
Sec. 202. Amendments.
Sec. 203. Effective date; application of amendments.
TITLE I--FAIRNESS IN CLASS ACTION LITIGATION
SEC. 101. SHORT TITLE; REFERENCE; TABLE OF CONTENTS.
(a) Short Title.--This title may be cited as the ``Fairness in
Class Action Litigation Act of 2017''.
(b) Reference.--Whenever, in this title, 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 of this title is as
follows:
Sec. 101. Short title; reference; table of contents.
Sec. 102. Purposes.
Sec. 103. Class action procedures.
Sec. 104. Misjoinder of plaintiffs in personal injury and wrongful
death actions.
Sec. 105. Multidistrict litigation proceedings procedures.
Sec. 106. Rulemaking authority of Supreme Court and Judicial
Conference.
Sec. 107. Effective date.
SEC. 102. PURPOSES.
The purposes of this title are to--
(1) assure fair and prompt recoveries for class members and
multidistrict litigation plaintiffs with legitimate claims;
(2) diminish abuses in class action and mass tort
litigation that are undermining the integrity of the U.S. legal
system; and
(3) restore the intent of the framers of the United States
Constitution by ensuring Federal court consideration of
interstate controversies of national importance consistent with
diversity jurisdiction principles.
SEC. 103. CLASS ACTION PROCEDURES.
(a) In General.--Chapter 114 is amended by inserting after section
1715 the following:
``Sec. 1716. Class action injury allegations
``(a) In General.--A Federal court shall not issue an order
granting certification of a class action seeking monetary relief for
personal injury or economic loss unless the party seeking to maintain
such a class action affirmatively demonstrates that each proposed class
member suffered the same type and scope of injury as the named class
representative or representatives.
``(b) Certification Order.--An order issued under Rule 23(c)(1) of
the Federal Rules of Civil Procedure that certifies a class seeking
monetary relief for personal injury or economic loss shall include a
determination, based on a rigorous analysis of the evidence presented,
that the requirement in subsection (a) of this section is satisfied.
``Sec. 1717. Conflicts of interest
``(a) Required Disclosures.--In a class action complaint, class
counsel shall state whether any proposed class representative or named
plaintiff in the complaint is a relative of, is a present or former
employee of, is a present or former client of (other than with respect
to the class action), or has any contractual relationship with (other
than with respect to the class action) class counsel. In addition, the
complaint shall describe the circumstances under which each class
representative or named plaintiff agreed to be included in the
complaint and shall identify any other class action in which any
proposed class representative or named plaintiff has a similar role.
``(b) Prohibition of Conflicts.--A Federal court shall not issue an
order granting certification of any class action in which any proposed
class representative or named plaintiff is a relative or employee of
class counsel.
``(c) Definition.--For purposes of this section, `relative' shall
be defined by reference to section 3110(a)(3) of title 5, United States
Code.
``(d) Exception.--This section shall not apply to a private action
brought as a class action that is subject to section 27(a) of the
Securities Act of 1933 (15 U.S.C. 77z-1(a)) or section 21D(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78u-4(a)).
``Sec. 1718. Class member benefits
``(a) Distribution of Benefits to Class Members.--A Federal court
shall not issue an order granting certification of a class action
seeking monetary relief unless the class is defined with reference to
objective criteria and the party seeking to maintain such a class
action affirmatively demonstrates that there is a reliable and
administratively feasible mechanism (a) for the court to determine
whether putative class members fall within the class definition and (b)
for distributing directly to a substantial majority of class members
any monetary relief secured for the class.
``(b) Attorneys' Fees in Class Actions.--
``(1) Fee distribution timing.--In a class action seeking
monetary relief, no attorneys' fees may be determined or paid
pursuant to Rule 23(h) of the Federal Rules of Civil Procedure
or otherwise until the distribution of any monetary recovery to
class members has been completed.
``(2) Fee determinations based on monetary awards.--Unless
otherwise specified by Federal statute, if a judgment or
proposed settlement in a class action provides for a monetary
recovery, the portion of any attorneys' fee award to class
counsel that is attributed to the monetary recovery shall be
limited to a reasonable percentage of any payments directly
distributed to and received by class members. In no event shall
the attorneys' fee award exceed the total amount of money
directly distributed to and received by all class members.
``(3) Fee determinations based on equitable relief.--Unless
otherwise specified by Federal statute, if a judgment or
proposed settlement in a class action provides for equitable
relief, the portion of any attorneys' fee award to class
counsel that is attributed to the equitable relief shall be
limited to a reasonable percentage of the value of the
equitable relief, including any injunctive relief.
``Sec. 1719. Money distribution data
``(a) Settlement Accountings.--In any settlement of a class action
that provides for monetary benefits, the court shall order class
counsel to submit to the Director of the Federal Judicial Center and
the Director of the Administrative Office of the United States Courts
an accounting of the disbursement of all funds paid by the defendant
pursuant to the settlement agreement. The accounting shall state the
total amount paid directly to all class members, the actual or
estimated total number of class members, the number of class members
who received payments, the average amount (both mean and median) paid
directly to all class members, the largest amount paid to any class
member, the smallest amount paid to any class member and, separately,
each amount paid to any other person (including class counsel) and the
purpose of the payment. In stating the amounts paid to class members,
no individual class member shall be identified. No attorneys' fees may
be paid to class counsel pursuant to Rule 23(h) of the Federal Rules of
Civil Procedure until the accounting has been submitted.
``(b) Annual Settlement Distribution Reports.--Commencing not later
than 12 months after the date of enactment of this section, 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 annually
prepare and transmit to the Committees on the Judiciary of the Senate
and the House of Representatives for public dissemination a report
summarizing how funds paid by defendants in class actions have been
distributed, based on the settlement accountings submitted pursuant to
subsection (a).
``Sec. 1720. Issues classes
``(a) In General.--A Federal court shall not issue an order
granting certification of a class action with respect to particular
issues pursuant to Rule 23(c)(4) of the Federal Rules of Civil
Procedure unless the entirety of the cause of action from which the
particular issues arise satisfies all the class certification
prerequisites of Rule 23(a) and Rule 23(b)(1), Rule 23(b)(2), or Rule
23(b)(3).
``(b) Certification Order.--An order issued under Rule 23(c)(4) of
the Federal Rules of Civil Procedure that certifies a class with
respect to particular issues shall include a determination, based on a
rigorous analysis of the evidence presented, that the requirement in
subsection (a) of this section is satisfied.
``Sec. 1721. Stay of discovery
``In any class action, all discovery and other proceedings shall be
stayed during the pendency of any motion to transfer, motion to
dismiss, motion to strike class allegations, or other motion to dispose
of the class allegations, unless the court finds upon the motion of any
party that particularized discovery is necessary to preserve evidence
or to prevent undue prejudice to that party. This section shall not
apply to a private action brought as a class action that is subject to
section 27(a) of the Securities Act of 1933 (15 U.S.C. 77z-1(a)) or
section 21D(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78u-
4(a)).
``Sec. 1722. Third-party litigation funding disclosure
``In any class action, class counsel shall promptly disclose in
writing to the court and all other parties the identity of any person
or entity, other than a class member or class counsel of record, who
has a contingent right to receive compensation from any settlement,
judgment, or other relief obtained in the action.
``Sec. 1723. Appeals
``A court of appeals shall permit an appeal from an order granting
or denying class-action certification under Rule 23 of the Federal
Rules of Civil Procedure.''.
(b) Conforming Amendment.--The table of sections for such chapter
is amended by inserting after the item pertaining to section 1715 the
following:
``Sec. 1716. Class action injury allegations.
``Sec. 1717. Conflicts of interest.
``Sec. 1718. Class member benefits.
``Sec. 1719. Money distribution data.
``Sec. 1720. Issues classes.
``Sec. 1721. Stay of discovery.
``Sec. 1722. Third-party litigation funding disclosure.
``Sec. 1723. Appeals.''.
SEC. 104. MISJOINDER OF PLAINTIFFS IN PERSONAL INJURY AND WRONGFUL
DEATH ACTIONS.
Section 1447 is amended by inserting after subsection (e) the
following:
``(f) Misjoinder of Plaintiffs in Personal Injury and Wrongful
Death Actions.--
``(1) This subsection shall apply to any civil action
commenced in a State court in which--
``(A) two or more plaintiffs assert personal injury
or wrongful death claims;
``(B) the action is removed on the basis of the
jurisdiction conferred by section 1332(a); and
``(C) a motion to remand is made on the ground that
one or more plaintiffs are citizens of the same State
as one or more defendants.
``(2) In deciding the remand motion in any such case, the
court shall apply the jurisdictional requirements of section
1332(a) to the claims of each plaintiff individually, as though
that plaintiff were the sole plaintiff in the action.
``(3) Except as provided in paragraph (4), the court shall
sever the claims that do not satisfy the jurisdictional
requirements of section 1332(a) and shall remand those claims
to the State court from which the action was removed. The court
shall retain jurisdiction over the claims that satisfy the
jurisdictional requirements of section 1332(a).
``(4) The court shall retain jurisdiction over a claim that
does not satisfy the jurisdictional requirements of section
1332(a) if--
``(A) the claim is so related to the claims that
satisfy the jurisdictional requirements of section
1332(a) that they form part of the same case or
controversy under Article III of the United States
Constitution; and
``(B) the plaintiff consents to the removal of the
claim.''.
SEC. 105. MULTIDISTRICT LITIGATION PROCEEDINGS PROCEDURES.
Section 1407 is amended by adding at the end the following:
``(i) Allegations Verification.--In any coordinated or consolidated
pretrial proceedings conducted pursuant to subsection (b), counsel for
a plaintiff asserting a claim seeking redress for personal injury whose
civil action is assigned to or directly filed in the proceedings shall
make a submission sufficient to demonstrate that there is evidentiary
support (including but not limited to medical records) for the factual
contentions in plaintiff's complaint regarding the alleged injury, the
exposure to the risk that allegedly caused the injury, and the alleged
cause of the injury. The submission must be made within the first 45
days after the civil action is transferred to or directly filed in the
proceedings. That deadline shall not be extended. Within 90 days after
the submission deadline, the judge or judges to whom the action is
assigned shall enter an order determining whether the submission is
sufficient and shall dismiss the action without prejudice if the
submission is found to be insufficient. If a plaintiff in an action
dismissed without prejudice fails to tender a sufficient submission
within the following 30 days, the action shall be dismissed with
prejudice.
``(j) Trial Prohibition.--In any coordinated or consolidated
pretrial proceedings conducted pursuant to subsection (b), the judge or
judges to whom actions are assigned by the Judicial Panel on
Multidistrict Litigation may not conduct a trial in a civil action
transferred to or directly filed in the proceedings unless all parties
to that civil action consent.
``(k) Review of Orders.--
``(1) In general.--The Court of Appeals having jurisdiction
over the transferee district shall permit an appeal to be taken
from any order issued in the conduct of coordinated or
consolidated pretrial proceedings conducted pursuant to
subsection (b), provided that the order is applicable to one or
more civil actions seeking redress for personal injury and that
an immediate appeal from the order may materially advance the
ultimate termination of one or more civil actions in the
proceedings.
``(2) Remand orders.--Notwithstanding section 1447(d), a
court of appeals may accept an appeal from an order issued in
any coordinated or consolidated proceedings conducted pursuant
to subsection (b) granting or denying a motion to remand a
civil action to the State court from which it was removed if
application is made to the court of appeals within 14 days
after the order is entered.
``(l) Ensuring Proper Recovery for Plaintiffs.--A plaintiff who
asserts personal injury claims in any civil action transferred to or
directly filed in coordinated or consolidated pretrial proceedings
conducted pursuant to subsection (b) shall receive not less than 80
percent of any monetary recovery obtained for those claims by
settlement, judgment, or otherwise, subject to the satisfaction of any
liens for medical services provided to the plaintiff related to those
claims. The judge or judges to whom the coordinated or consolidated
pretrial proceedings have been assigned shall have jurisdiction over
any disputes regarding compliance with this requirement.''.
SEC. 106. RULEMAKING AUTHORITY OF SUPREME COURT AND JUDICIAL
CONFERENCE.
Nothing in this title 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. 107. EFFECTIVE DATE.
The amendments made by the title shall apply to any civil action
pending on the date of enactment of this title or commenced thereafter.
TITLE II--FURTHERING ASBESTOS CLAIM TRANSPARENCY
SEC. 201. SHORT TITLE.
This title may be cited as the ``Furthering Asbestos Claim
Transparency (FACT) Act of 2017''.
SEC. 202. AMENDMENTS.
Section 524(g) of title 11, United States Code, is amended by
adding at the end the following:
``(8) A trust described in paragraph (2) shall, subject to section
107--
``(A) file with the bankruptcy court, not later than 60
days after the end of every quarter, a report that shall be
made available on the court's public docket and with respect to
such quarter--
``(i) describes each demand the trust received
from, including the name and exposure history of, a
claimant and the basis for any payment from the trust
made to such claimant; and
``(ii) does not include any confidential medical
record or the claimant's full social security number;
and
``(B) upon written request, and subject to payment
(demanded at the option of the trust) for any reasonable cost
incurred by the trust to comply with such request, provide in a
timely manner any information related to payment from, and
demands for payment from, such trust, subject to appropriate
protective orders, to any party to any action in law or equity
if the subject of such action concerns liability for asbestos
exposure.''.
SEC. 203. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--Except as provided in subsection (b), this
title and the amendments made by this title shall take effect on the
date of the enactment of this title.
(b) Application of Amendments.--The amendments made by this title
shall apply with respect to cases commenced under title 11 of the
United States Code before, on, or after the date of the enactment of
this title.
Passed the House of Representatives March 9, 2017.
Attest:
KAREN L. HAAS,
Clerk.