[Congressional Record (Bound Edition), Volume 145 (1999), Part 2]
[Senate]
[Pages 3026-3029]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    DRAFT Y2K LIABILITY LEGISLATION

  Mr. McCAIN. Mr. President, the Senior Senator from Washington state, 
Slade Gorton, and I have committed to working on legislation to address 
liability issues arising out of Y2K problems. To this end, I introduced 
S. 96. As Senator Gorton and I agreed before the bill was filed, we 
have been listening to concerns and views of the varied constituencies 
interested in limiting wasteful litigation and encouraging prevention 
and timely remediation of Y2K problems. I am very pleased that today we 
are offering into the record a revised working draft for additional 
input and discussion.
  Mr. GORTON. Mr. President, the Y2K problem should not be 
underestimated. Before the session began, Senator McCain and I 
committed to working on legislation that will allow entities to focus 
their efforts on remediation and prevent unproductive litigation. We 
have solicited and obtained input from sources representing both 
potential plaintiffs and potential defendants in Y2K actions. We want 
to continue listening and working on this issue, but do not have much 
time--the countdown had begun. The draft measure that we are putting on 
the record today reflects principally the measure proposed by a large 
coalition of business groups including the Chamber of Commerce, the 
National Association of Manufacturers,

[[Page 3027]]

the National Federation of Independent Business, and many others. The 
draft will, I hope, invite more feedback, and focus the efforts of all 
interested parties. I invite our colleagues and all interested parties 
to continue to provide us with comments and suggestions so that we can 
improve the measure before it is marked up by the Commerce Committee on 
March 3.
  Mr. McCAIN. I intend to mark up Y2K liability legislation in the 
Commerce Committee next week so that it can be considered by the full 
Senate as soon as possible. If the bill is to serve the needs for which 
it is designed, it must be passed expeditiously. We cannot have the 
intended effect of encouraging businesses to be proactive in preventing 
Y2K failures if we delay action on this bill until later in the 
session. This bill addresses an immediate need, and the Senate must act 
on it accordingly. I ask unanimous consent that the draft measure be 
printed in the Congressional Record.
  There being no objection, the draft was ordered to be printed in the 
Record, as follows:

                              Amendment--

       Strike out all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; TABLE OF SECTIONS.

       (a) Short Title.--This Act may be cited as the ``Y2K Act''.
       (b) Table of Sections.--The table of sections for this Act 
     is as follows:

Sec. 1. Short title; table of sections.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.
Sec. 4. Application of Act.
Sec. 5. Punitive damages limitations.

              Title I--Opportunity to Resolve Y2K Problems

Sec. 101. Pre-filing notice.
Sec. 102. Pleading requirements.
Sec. 103. Duty to mitigate.
Sec. 104. Proportionate liability.

        Title II--Y2K Actions Involving Contract-related Claims

Sec. 201. Contracts enforced.
Sec. 202. Defenses.
Sec. 203. Damages limitation.
Sec. 204. Mixed actions.

              Title III--Y2K Actions Involving Tort Claims

Sec. 301. Damages in tort claims.
Sec. 302. Certain defenses.
Sec. 303. Liability of officers and directors.

                      Title IV--Y2K Class Actions

Sec. 401. Minimum injury requirement.
Sec. 402. Notification.
Sec. 403. Forum for Y2K class actions.

     SEC. 2. FINDINGS AND PURPOSES.

       The Congress finds that:
       (1) The majority of responsible business enterprises in the 
     United States are committed to working in cooperation with 
     their contracting partners towards the timely and cost-
     effective resolution of the many technological, business, and 
     legal issues associated with the Y2K date change.
       (2) Congress seeks to encourage businesses to concentrate 
     their attention and resources in short time remaining before 
     January 1, 2000, on addressing, assessing, remediating, and 
     testing their Y2K problems, and to minimize any possible 
     business disruptions associated with the Y2K issues.
       (3) It is appropriate for the Congress to enact legislation 
     to assure that Y2K problems do not unnecessarily disrupt 
     interstate commerce or create unnecessary caseloads in 
     Federal courts and to provide initiatives to help businesses 
     prepare and be in a position to withstand the potentially 
     devastating economic impact of Y2K.
       (4) Y2K issues will potentially affect practically all 
     business enterprises to at least some degree, giving rise 
     possibly to a large number of disputes.
       (5) Resorting to the legal system for resolution of Y2K 
     problems is not feasible for many businesses, particularly 
     small businesses, because of its complexity and expense.
       (6) The delays, expense, uncertainties, loss of control, 
     adverse publicity and animosities that frequently accompany 
     litigation of business disputes can only exacerbate the 
     difficulties associated with the Y2K date change, and work 
     against the successful resolution of those difficulties.
       (7) Congress recognizes that every business in the United 
     States should be concerned that widespread and protracted Y2K 
     litigation may threaten the network of valued and trusted 
     business relationships that are so important to the effective 
     functioning of the world economy, and which may put 
     unbearable strains on an overburdened and sometime 
     ineffective judicial system.
       (8) A proliferation of frivolous Y2K lawsuits by 
     opportunistic parties may further limit access to courts by 
     straining the resources of the legal system and depriving 
     deserving parties of their legitimate rights to relief.
       (9) Congress encourages businesses to approach their Y2K 
     disputes responsibly, and to avoid unnecessary, time-
     consuming and costly litigation about Y2K failures, 
     particularly those that are not material. Congress supports 
     good faith negotiations between parties when there is a 
     dispute over a Y2K problem, and, if necessary, urges the 
     parties to enter into voluntary, non-binding mediation rather 
     than litigation.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Y2K action.--The term ``Y2K action'' means a civil 
     action commenced in any Federal or State court in which the 
     plaintiff's alleged harm or injury resulted directly or 
     indirectly from an actual or potential Y2K failure, or a 
     claim or defense of a defendant is related directly or 
     indirectly to an actual or potential Y2K failure.
       (2) Y2K failure.--The term ``Y2K failure'' means failure by 
     any device or system (including any computer system and any 
     microchip or integrated circuit embedded in another device or 
     product), or any software, firmware, or other set or 
     collection of processing instructions to process, to 
     calculate, to compare, to sequence, to display, to store, to 
     transmit, or to receive date-related data, including 
     failures--
       (A) to deal with or account for transitions or comparisons 
     from, into, and between the years 1999 and 2000 accurately;
       (B) to recognize or accurately process any specific date in 
     1999, 2000, or 2001; or
       (C) accurately to account for the year 2000's status as a 
     leap year, including recognition and processing of the 
     correct date on February 29, 2000.
       (3) Actual damages.--The term ``actual damages'' means 
     direct damages for injury to tangible property, and the cost 
     of repairing or replacing products that have a material 
     defect.
       (4) Economic loss.--Except as otherwise specifically 
     provided in a written contract between the plaintiff and the 
     defendant in a Y2K action (and subject to applicable State 
     law), the term ``economic loss''--
       (A) means amounts awarded to compensate an injured party 
     for any loss other than for personal injury or damage to 
     tangible property (other than property that is the subject of 
     the contract); and
       (B) includes amounts awarded for--
       (i) lost profits or sales;
       (ii) business interruption;
       (iii) losses indirectly suffered as a result of the 
     defendant's wrongful act or omission;
       (iv) losses that arise because of the claims of third 
     parties;
       (v) losses that must be pleaded as special damages; and
       (vi) consequential damages (as defined in the Uniform 
     Commercial Code or analogous State commercial law); but
       (C) does not include actual damages.
       (5) Material defect.--The term ``material defect'' means a 
     defect in any item, whether tangible or intangible, or in the 
     provision of a service, that substantially prevents the item 
     or service from operating or functioning as designed or 
     intended. The term ``material defect'' does not include a 
     defect that--
       (A) has an insignificant or de minimis effect on the 
     operation or functioning of an item or computer program;
       (B) affects only on a component of an item or program that, 
     as a whole, substantially operates or functions as designed; 
     or
       (C) has an insignificant or de minimis effect on the 
     efficacy of the service provided.
       (6) Personal injury.--The term ``personal injury''--
       (A) means any physical injury to a natural person, 
     including death of the person; but
       (B) does not include mental suffering, emotional distress, 
     or like elements of injury that do not constitute physical 
     harm to a natural person.
       (7) State.--The term ``State'' means any State of the 
     United States, the District of Columbia, Commonwealth of 
     Puerto Rico, the Northern Mariana Islands, the United States 
     Virgin Islands, Guam, American Samoa, and any other territory 
     or possession of the United States, and any political 
     subdivision thereof.
       (8) Contract.--The term ``contract'' means a contract, 
     tariff, license, or warranty.
       (9) Person.--
       (A) In general.--The term ``person'' has the meaning given 
     to that term by section 1 of title 1, United States Code.
       (B) Government entities.--The term ``person'' includes an 
     agency, instrumentality, or other entity of Federal, State, 
     or local government (including multijurisdictional agencies, 
     instrumentalities, and entities) when that agency, 
     instrumentality, or other entity is a plaintiff or a 
     defendant in a Y2K action.
       (10) Alternative dispute resolution.--The term 
     ``alternative dispute resolution'' means any process or 
     proceeding, other than adjudication by a court or 
     administrative proceeding, in which a neutral third party 
     participates to assist in the resolution of issues in 
     controversy, through processes such as early neutral 
     evaluation, mediation, minitrial, and arbitration.

     SEC. 4. APPLICATION OF ACT.

       (a) General Rule.--This Act applies to any Y2K action 
     brought in a State or Federal court after February 22, 1999.
       (b) No New Cause of Action Created.--Nothing in this Act 
     creates a new cause of action under Federal or State law.
       (c) Actions for Personal Injury or Wrongful Death 
     Excluded.--This Act does

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     not apply to a claim for personal injury or for wrongful 
     death.
       (d) Written Contract Controls.--The provisions of this Act 
     do not supersede a valid, enforceable written contract 
     between a plaintiff and a defendant in a Y2K action.
       (e) Preemption of State Law.--This Act supersedes State law 
     to the extent that it establishes a rule of law applicable to 
     a Y2K action that is inconsistent with State law.

     SEC. 5. PUNITIVE DAMAGES LIMITATIONS.

       (a) In General.--In any Y2K action in which punitive 
     damages may be awarded under applicable State law, the 
     defendant shall not be liable for punitive damages unless the 
     plaintiff proves by clear and convincing evidence that the 
     defendant acted with conscious and flagrant disregard for the 
     rights and property of others.
       (b) Caps on Punitive Damages.--
       (1) In general.--Punitive damages against a defendant in 
     such a Y2K action may not exceed the larger of--
       (A) 3 times the amount awarded for actual damages; or
       (B) $250,000.
       (2) Special rule.--In the case of a defendant--
       (A) who--
       (i) is sued in his or her capacity as an individual; and
       (ii) whose net worth does not exceed $500,000; or
       (B) that is an unincorporated business, a partnership, 
     corporation, association, unit of local government, or 
     organization with fewer than 25 full-time employees,

     paragraph (1) shall be applied by substituting ``smaller'' 
     for ``larger''.
       (c) Government Entities.--Punitive damages in such a Y2K 
     action may not be awarded against a person described in 
     section 3(8)(B).

              TITLE I--OPPORTUNITY TO RESOLVE Y2K PROBLEMS

     SEC. 101. PRE-FILING NOTICE.

       (a) In General.--Before commencing a Y2K action, except an 
     action that seeks only injunctive relief, a prospective 
     plaintiff with a Y2K claim shall serve on each prospective 
     defendant in that action a written notice that identifies 
     with particularity--
       (1) the manifestations of any material defect alleged to 
     have caused harm or loss;
       (2) the harm or loss allegedly suffered by the prospective 
     plaintiff;
       (3) the remedy sought by the prospective plaintiff;
       (4) the basis upon which the prospective plaintiff seeks 
     that remedy; and
       (5) the name, title, address, and telephone number of any 
     individual who has authority to negotiate a resolution of the 
     dispute on behalf of the prospective plaintiff.
       (b) Delay of Action.--Except as provided in subsection (d), 
     a prospective plaintiff may not commence a Y2K action in 
     Federal or State court until the expiration of 90 days from 
     the date of service of the notice required by subsection (a).
       (c) Response to Notice.--Within 30 days after receipt of 
     the notice specified in subsection (a), each prospective 
     defendant shall serve on each prospective plaintiff a written 
     statement acknowledging receipt of the notice, and proposing 
     the actions it has taken or will take to address the problem 
     identified by the prospective plaintiff. The written 
     statement shall state whether the prospective defendant is 
     willing to engage in alternative dispute resolution.
       (d) Failure to Respond.--if a prospective defendant--
       (1) fails to respond to a notice provided pursuant to 
     subsection (a) within the 30 days specified in subsection 
     (c); or
       (2) does not describe the action, if any, the prospective 
     defendant will take to address the problem identified by the 
     prospective plaintiff, then the 90-day period specified in 
     subsection (a) will terminate at the end of the 30-day period 
     at to that prospective defendant and the prospective 
     plaintiff may commence its action against that prospective 
     defendant.
       (e) Failure to Provide Notice.--If a defendant determines 
     that a plaintiff has filed a Y2K action without providing the 
     notice specified in subsection (a) and without awaiting the 
     expirations of the 90-day period specified in subsection (a), 
     the defendant may treat the plaintiff's complaint as such a 
     notice by so informing the court and the plaintiff. If any 
     defendant elects to treat the complaint as such a notice--
       (1) the court shall stay all discovery and all other 
     proceedings in the action for 90 days after filing of the 
     complaint; and
       (2) the time for filing answers and all other pleadings 
     shall be tolled during this 90-day period.
       (f) Effect of Contractual Waiting Periods.--In cases in 
     which a contract requires notice of non-performance and 
     provides for a period of delay prior to the initiation of 
     suit for breach or repudiation of contract, the period of 
     delay provided in the contract is controlling over the 
     waiting period specified in subsections (a) and (e).
       (g) State Law Controls Alternative Methods.--Noting in this 
     section supersedes or otherwise preempts any State law or 
     rule of civil procedure with respect to the use of 
     alternative dispute resolution for Y2K actions.

     SEC. 102. PLEADING REQUIREMENTS.

       (A) Nature and Amount of Damages.--In all Y2K actions in 
     which damages are requested, the complaint shall provide 
     specific information as to the nature and amount of each 
     element of damages and the factual basis for the damages 
     calculation.
       (b) Material Defects.--In any Y2K action in which the 
     plaintiff alleges that a product or service defective, the 
     complaint shall contain specific information regarding the 
     manifestations of the material defects and the facts 
     supporting a conclusion that the defects are material.
       (c) Required State of Mind.--In any Y2K action in which a 
     claim is asserted on which the plaintiff may prevail only on 
     proof that the defendant acted with a particular state of 
     mind, the complaint shall, with respect to each element of 
     that claim, state with particularity the facts giving rise to 
     a strong inference that the defendant acted with the required 
     state of mind.

     SEC. 103. DUTY TO MITIGATE.

       Damages awarded in any Y2K action shall exclude 
     compensation for damages the plaintiff could reasonably have 
     avoided in light of any disclosure or other information of 
     which the plaintiff was, or reasonably could have been, 
     aware, including reasonable efforts made by a defendant to 
     make information available to purchasers or users of the 
     defendant's product or services concerning means of remedying 
     or avoiding Y2K failure.

     SEC. 104. PROPORTIONATE LIABILITY.

       (a) In General.--A person against whom a final judgment is 
     entered in a Y2K action shall be liable solely for the 
     portion of the judgment that corresponds to the relative and 
     proportional liability of that person. In determining the 
     percentage of responsibility of any defendant, the trier of 
     fact shall determine that percentage as a percentage of the 
     total fault of all persons, including the plaintiff, who 
     caused or contributed to the total loss incurred by the 
     plaintiff.
       (b) Several Liability.--Liability in a Y2K action shall be 
     several but not joint.

        TITLE II--Y2K ACTIONS INVOLVING CONTRACT-RELATED CLAIMS

     SEC. 201. CONTRACTS ENFORCED.

       In any Y2K action, any written term or condition of a valid 
     and enforceable contract between the plaintiff and the 
     defendant, including limitations or exclusions of liability 
     and disclaimers of warranty, is fully enforceable, unless the 
     court determines that the contract as a whole is 
     unenforceable. If the contract is silent with respect to any 
     matter, the interpretation of the contract with respect to 
     that matter shall be determined by applicable law in force at 
     the time the contract was executed.

     SEC. 202. DEFENSES.

       (a) Reasonable Efforts.--In any Y2K action in which breach 
     of contract is alleged, in addition to any other rights 
     provided by applicable law, the party against whom the claim 
     of breach is asserted shall be allowed to offer evidence that 
     its implementation of the contract, or its efforts to 
     implement the contract, were reasonable in light of the 
     circumstances for the purpose of limiting or eliminating the 
     defendant's liability.
       (b) Impossibility or Commercial Impracticability.--In any 
     Y2K action in which breach of contract is alleged, 
     applicability of the doctrines of impossibility and 
     commercial impracticability shall be determined by applicable 
     law in existence on January 1, 1999, and nothing in this Act 
     shall be construed as limiting or impairing a party's right 
     to assert defenses based upon such doctrines.

     SEC. 203. DAMAGES LIMITATION.

       In any Y2K action for breach or repudiation of contract, no 
     party may claim, nor be awarded, consequential or punitive 
     damages unless such damages are allowed--
       (1) by the express terms of the contract; or
       (2) if the contract is silent on such damages, by operation 
     of State law at the time the contract was executed or by 
     operation of Federal law.

     SEC. 204. MIXED ACTIONS.

       If a Y2K action includes claims based on breach of contract 
     and tort or other noncontract claims, then this title shall 
     apply to the contract-related claims and title III shall 
     apply to the tort or other noncontract claims.

              TITLE III--Y2K ACTIONS INVOLVING TORT CLAIMS

     SEC. 301. DAMAGES IN TORT CLAIMS.

       A party to a Y2K action making a tort claim may not recover 
     damages for economic loss unless--
       (1) the recovery of such losses is provided for in a 
     contract to which the party seeking to recover such losses is 
     a party;
       (2) such losses result directly from a personal injury 
     claim resulting from the Y2K failure; or
       (3) such losses result directly from damage to tangible 
     property caused by the Y2K failure (other than damage to 
     property that is the subject of the contract),

     and such damages are permitted under applicable Federal or 
     State law.

     SEC. 302. CERTAIN DEFENSES.

       (a) Good Faith; Reasonable Efforts.--In any Y2K action 
     except an action for breach or repudiation of contract, the 
     party against whom the claim is asserted shall be entitled

[[Page 3029]]

     to establish, as a complete defense to any claim for damages, 
     that it acted in good faith and took measures that were 
     reasonable under the circumstances to prevent the Y2K failure 
     from occurring or from causing the damages upon which the 
     claim is based.
       (b) Defendant's State of Mind.--In a Y2K action making a 
     claim for money damages in which the defendant's actual or 
     constructive awareness of an actual or potential a Y2K 
     failure is an element of the claim, the defendant is not 
     liable unless the plaintiff, in addition to establishing all 
     other requisite elements of the claim, proves by clear and 
     convincing evidence that the defendant knew, or recklessly 
     disregarded a known and substantial risk, that the failure 
     would occur in the specific facts and circumstances of the 
     claim.
       (c) Foreseeability.--In a Y2K action making a claim for 
     money damages, the defendant is not liable unless the 
     plaintiff proves by clear and convincing evidence, in 
     addition to all other requisite elements of the claim, that 
     the defendant knew, or should have known, that the 
     defendant's action or failure to act would cause harm to the 
     plaintiff in the specific facts and circumstances of the 
     claim.
       (d) Control Not Determinative of Liability.--The fact that 
     a Y2K failure occurred in an entity, facility, system, 
     product, or component that was within the control of the 
     party against whom a claim for money damages is asserted in a 
     Y2K action shall not constitute the sole basis for recovery 
     of damages in that action.
       (e) Preservation of Existing Law.--The provisions of this 
     section are in addition to, and not in lieu of, any 
     requirement under applicable law as to burdens of proof and 
     elements necessary for prevailing in a claim for money 
     damages.

     SEC. 303. LIABILITY OF OFFICERS AND DIRECTORS.

       (a) In General.--A director, officer, trustee, or employee 
     of a business or other organization (including a corporation, 
     unincorporated association, partnership, or non-profit 
     organization) shall not be personally liable in any Y2K 
     action making a tort or other noncontract claim in that 
     person's capacity as a director, officer, trustee, or 
     employee of the business or organization for more than the 
     greater of--
       (1) $100,000; or
       (2) the amount of pre-tax compensation received by the 
     director, officer, trustee, or employee from the business or 
     organization during the 12 months immediately preceding the 
     act or omission for which liability was imposed.
       (b) Exception.--Subsection (a) does not apply in any Y2K 
     action in which it is found by clear and convincing evidence 
     that the director, officer, trustee, or employee--
       (1) intentionally made misleading statements regarding any 
     actual or potential year 2000 problem; or
       (2) intentionally withheld from the public significant 
     information there was a legal duty to disclose to the public 
     regarding any actual or potential year 2000 problem of that 
     business or organization which would likely result in 
     actionable Y2K failure.
       (c) State Law, Charter, or Bylaws.--Nothing in this section 
     supersedes any provision of State law, charter, or a bylaw 
     authorized by State law, in existence on January 1, 1999, 
     that establishes lower limits on the liability of a director, 
     officer, trustee, or employee of such a business or 
     organization.

                      TITLE IV--Y2K CLASS ACTIONS

     SEC. 401. MINIMUM INJURY REQUIREMENT.

       In any Y2K action involving a claim that a product or 
     service is defective, the action may be maintained as a class 
     action in Federal or State court as to that claim only if--
       (1) it satisfies all other prerequisites established by 
     applicable Federal or State law or applicable rules of civil 
     procedure; and
       (2) the court finds that the alleged defect in a product or 
     service is material as to the majority of the members of the 
     class.

     SEC. 402. NOTIFICATION.

       (a) Notice by Mail.--In any Y2K action that is maintained 
     as a class action, the court, in addition to any other notice 
     required by applicable Federal or State law, shall direct 
     notice of the action to each member of the class by United 
     States mail, return receipt requested. Persons whose receipt 
     of the notice is not verified by the court or by counsel for 
     one of the parties shall be excluded from the class unless 
     those persons inform the court in writing, on a date no later 
     than the commencement of trial or entry of judgment, that 
     they wish to join the class.
       (b) Contents of Notice.--In addition to any information 
     required by applicable Federal or State law, the notice 
     described in this subsection shall--
       (1) concisely and clearly describe the nature of the 
     action;
       (2) identify the jurisdiction where the case is pending; 
     and
       (3) describe the fee arrangement of class counsel.

     SEC. 403. FORUM FOR Y2K CLASS ACTIONS.

       (a) Jurisdiction.--The District Courts of the United States 
     have original jurisdiction of any Y2K action, without regard 
     to the sum or value of the matter in controversy involved, 
     that is brought as a class action if--
       (1) any member of the proposed plaintiff class is a citizen 
     of a State different from the State of which any defendant is 
     a citizen;
       (2) any member of the proposed plaintiff class is a foreign 
     Nation or a citizen of a foreign Nation and any defendant is 
     a citizen or lawful permanent resident of the United States; 
     or
       (3) any member of the proposed plaintiff class is a citizen 
     or lawful permanent resident of the United States and any 
     defendant is a citizen or lawful permanent resident of a 
     foreign Nation.
       (b) Predominant State Interest.--A United States District 
     Court in an action described in subsection (a) may abstain 
     from hearing the action if--
       (1) a substantial majority of the members of all proposed 
     plaintiff classes are citizens of a single State;
       (2) the primary defendants are citizens of that State; and
       (3) the claims asserted will be governed primarily by the 
     laws of that State.
       (c) Limited Controversies.--A United States District Court 
     in an action described in subsection (a) may abstain from 
     hearing the action if--
       (1) the value of all matters in controversy asserted by the 
     individual members of all proposed plaintiff classes in the 
     aggregate does not exceed $1,000,000, exclusive of interest 
     and costs;
       (2) the number of members of all proposed plaintiff classes 
     in the aggregate in less than 100; or
       (3) the primary defendants are States, State officials, or 
     other governmental entities against whom the district court 
     may be foreclosed from ordering relief.
       (d) Diversity Determination.--For purposes of applying 
     section 1322(b) of title 28, United States Code, to actions 
     described in subsection (a) of this section, a member of a 
     proposed class is deemed to be a citizen of a State different 
     from a corporation that is a defendant if that member is a 
     citizen of a State different from each State of which that 
     corporation is deemed a citizen.
       (e) Removal.--
       (1) In general.--A class action described in subsection (a) 
     may be removed to a district court of the United States in 
     accordance with chapter 89 of title 28, United States Code, 
     except that the action may be removed--
       (A) by any defendant without the consent of all defendants; 
     or
       (B) any plaintiff class member who is not a named or 
     representative class member of the action for which removal 
     is sought, without the consent of all members of the class.
       (2) Timing.--This subsection applies to any class before or 
     after the entry of any order certifying a class.
       (3) Procedure.--
       (A) In general.--Section 1446(a) of title 28, United States 
     Code, shall be applied to a plaintiff removing a case under 
     this section by treating the 30-day filing period as met if a 
     plaintiff class member who is not a named or representative 
     class member of the action for which removal is sought files 
     notice of removal within 30 days after receipt by such class 
     member of the initial written notice of the class action 
     provided at the trial court's direction.
       (B) Application of section 1446.--Section 1446 of title 28, 
     United States Code, shall be applied--
       (i) to the removal of a case by a plaintiff under this 
     section by substituting the term ``plaintiff'' for the term 
     ``defendant'' each place it appears; and
       (ii) to the removal of a case by a plaintiff or a defendant 
     under this section--
       (I) by inserting the phrase ``by exercising due diligence'' 
     after ``ascertained'' in the second paragraph of subsection 
     (b); and
       (II) by treating the reference to ``jurisdiction conferred 
     by section 1332 of this title'' as a reference to subsection 
     (a) of this section.
       (f) Application of Substantive State Law.--Nothing in this 
     section alters the substantive law applicable to an action 
     described in subsection (a).
       (g) Procedure After Removal.--If, after removal, the court 
     determines that no aspect of an action that is subject to its 
     jurisdiction solely under the provisions of section 1332(b) 
     of title 28, United States Code, may be maintained as a class 
     action under Rule 23 of the Federal Rules of Civil Procedure, 
     the court shall strike the class allegations from the action 
     and remand the action to the State court. Upon remand of the 
     action, the period of limitations for any claim that was 
     asserted in the action on behalf of any named or unnamed 
     member of any proposed class shall be deemed tolled to the 
     full extent provided under Federal law.

                          ____________________