69–006 

115TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 115–25 

FAIRNESS IN CLASS ACTION LITIGATION ACT OF 2017 

MARCH 7, 2017.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. GOODLATTE, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 985] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 985) 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, having considered the same, reports favorably thereon without amendment and recommends that the bill do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 2 

Background and Need for the Legislation ............................................................. 4 

Hearings ................................................................................................................... 6 

Committee Consideration ........................................................................................ 7 

Committee Votes ...................................................................................................... 7 

Committee Oversight Findings ............................................................................... 13 

New Budget Authority and Tax Expenditures ...................................................... 13 

Congressional Budget Office Cost Estimate .......................................................... 13 

Duplication of Federal Programs ............................................................................ 15 

Disclosure of Directed Rule Makings ..................................................................... 15 

Performance Goals and Objectives ......................................................................... 15 

Advisory on Earmarks ............................................................................................. 15 

Section-by-Section Analysis .................................................................................... 16 

Changes in Existing Law Made by the Bill, as Reported ..................................... 38 

Dissenting Views ..................................................................................................... 45 


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1See http://www.nortonrosefulbright.com/files/20150514-2015-litigation-trends-survey_v24- 

128746.pdf. 2Declaration of Deborah McComb Re Settlement Claims April 21, 2014, at 2, available at 

http://blogs.reuters.com/alison-frankel/files/2014/05/duracellclassaction-mccombdeclaration.pdf 3 AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1752 (2011); see also Castano v. American Tobacco Co., 84 F.3d at 746 (5th Cir. 1996) (‘‘[C]lass certification creates insurmountable 

pressure on defendants to settle, whereas individual trials would not. The risk of facing an allor-nothing verdict presents too high a risk, even when the probability of an adverse judgment 

is low.’’). 4Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 445 n.3 (2010) (Ginsburg, J., dissenting). 5 Hon. Diane Wood, Circuit Judge, Remarks at the FTC Workshop: Protecting Consumer Interests in Class Actions (Sept. 13–14, 2004), in Panel 2: Tools for Ensuring that Settlements 

are ‘‘Fair, Reasonable, and Adequate,’’ 18 Geo. J. Legal Ethics 1197, 1213 (2005). 6 In re Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1299 (7th Cir. 1995). 

Purpose and Summary 

Recently, an independent research firm surveyed companies in 

26 countries and found that 80 percent of those that were subject 

to a class action lawsuit were U.S. companies, putting those U.S. 

companies at a distinct economic disadvantage when competing 

with companies worldwide.1 The problem of overbroad class actions, however, does not just affect U.S. companies. It affects consumers in the United States, who are forced into lawsuits they do 

not want to be in. How do we know that? We know that because 

the median rate at which consumer class action members take the 

compensation offered in a settlement is an incredibly low two-hundredths of 1%.2 That’s right—only the tiniest fraction of consumer 

class action members bother to claim the compensation awarded 

them. That is clear proof that vastly large numbers of class members are satisfied with the product they purchased, do not want 

compensation, and do not want to be lumped into a gigantic class 

action lawsuit against their will. 

Federal judges are crying out for Congress to reform the class action system, which currently allows unscrupulous lawyers to fill 

classes with hundreds and thousands of unmeritorious claims and 

use those artificially inflated classes to force defendants to settle 

the case. As the Supreme Court has recognized, ‘‘even a small 

chance of a devastating loss’’ inherent in most decisions to certify 

a class produces an ‘‘in terrorem’’ effect that often forces settlement 

independent of the merits of a case.3 Liberal Justice Ruth Bader 

Ginsburg has recognized that ‘‘[a] court’s decision to certify a class 

. . . places pressure on the defendant to settle even unmeritorious 

claims.’’ 4 Judge Diane Wood of the Seventh Circuit Court of Appeals (appointed by President Clinton) has explained that class certification ‘‘is, in effect, the whole case.’’ 5 Then-Chief Judge of the 

Seventh Circuit Richard Posner explained that certification of a 

class action, even one lacking in merit, forces defendants ‘‘to stake 

their companies on the outcome of a single jury trial, or be forced 

by fear of the risk of bankruptcy to settle even if they have no legal 

liability.’’ 6 And in another Seventh Circuit decision the court 

wrote: 

One possible solution to this problem is requiring judges to 

do some threshold level of review of the merits of a class 

action before allowing certification [that is, approval] of a 

class . . . [I]t is cases like the one before us that demonstrate precisely why the courts, and Congress, ought to 

be on the lookout for ways to correct class action abuses. 


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7Manistee Apartments, LLC v. City of Chicago, 844 F.3d 630, 635 (7th Cir. 2016). State court 

judges are also asking for reforms in the class action system. Recently, a California judicial decision reported that in a class action consisting of over 230,000 people, only two of the 230,000 

wanted the coupons offered in the class action settlement. The judge in that case said the case 

produced ‘‘absolutely no benefit really to anybody.’’ Available at http://www.courts.ca.gov/opinions/nonpub/G049611.PDF. 

Given the complexity of our legal system, it is impossible 

to develop perfect standards for identifying and quickly 

disposing of frivolous claims. Inevitably this court and 

other courts will be faced with cases that waste the time 

and money of everybody. Beyond addressing the legal 

claims before us as we would in any ordinary case, we 

must frankly identify situations where we suspect the lawyers, rather than the claimants, are the only potential 

beneficiaries.7

So where is all the money going in these cases? To the lawyers 

who brought the lawsuits that hardly anyone wanted to be in. 

The provisions included in the Fairness in Class Action Litigation Act (‘‘FICALA’’) would enact much-needed reforms governing 

Federal court class action and mass tort multi-district litigation 

proceedings. The current class action and mass action lawsuit system is deeply flawed in many ways: 

Class members receive little: Most class actions (particularly class actions brought on behalf of consumers) produce 

no benefits for class members—some are dismissed by 

courts, some are voluntarily dismissed by counsel (with 

payments made only to counsel), and some are settled. In 

consumer cases, very few class members get any benefit 

(less than 5% of class members on average). 

Lawyers reap millions in fees: When cases are settled, the 

fees for lawyers representing the class take up a large 

share of the settlement, typically millions of dollars per 

case. Indeed, because so few class members receive settlement payments in most cases, the amount paid to lawyers 

is often many times the amount actually paid to class 

members. 

Multidistrict litigation has been transformed into a mechanism for abusive ‘‘mass actions’’: Congress created the 

multidistrict litigation (‘‘MDL’’) procedure to enable courts 

to fairly and efficiently administer individual cases involving the same subject. But mass tort proceedings using the 

MDL process have become magnets for advertising-driven, 

poorly investigated (and often patently invalid) personal 

injury claims. The resulting massive proceedings, often 

largely consisting of claims that should never have been 

filed, impose unfair burdens on courts and defendants and 

prevent plaintiffs with trial-worthy claims from timely getting their day in court. 

The fundamental problem is that far too many class actions and 

mass actions are initiated by opportunistic lawyers, and litigated 

primarily for the benefit of those lawyers, with any actual victims 

being used as a means of garnering vast fee awards. Who bears the 

cost of this litigation system? In the first instance, the businesses— 


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8 Even a Task Force of the American Bar Association has written that ‘‘When it comes to fees, 

class counsel and class members have a fundamental conflict of interest. Every dollar not spent 

on fees is a dollar that would go to the class members.’’ Report on Contingent Fees in Class 

Action Litigation January 11, 2006 Task Force on Contingent Fees, Tort Trial and Insurance 

Practice Section of the American Bar Association, 25 Rev. Litig. 459, 495 (2006). 

small and large—that are sued in these unjustified cases, forced to 

pay their own legal fees and, eventually, to pay settlements coerced 

even in meritless cases. But ultimately these costs are paid by consumers, workers, and investors, throughout the economy—because 

the diversion of hundreds of millions of dollars away from productive purposes, as well as the time and attention of entrepreneurs, 

means prices are higher, new products are not brought to market, 

and new jobs are not created. 

Two types of reforms are needed to fix our broken litigation system: protections against the abuse of consumers by unscrupulous 

lawyers, and protections against the filing of unjustified claims and 

other abusive litigation practices. Every single provision of H.R. 

985 would maximize recoveries by deserving victims and weed out 

unmeritorious claims that would otherwise siphon off resources 

from those deserving victims.8 And no provision of the bill prevents 

any claims from being brought as a class or mass action; the provisions simply set fair rules for bringing them. 

Background and Need for the Legislation 

House Judiciary Committee Chairman Bob Goodlatte introduced 

the Fairness in Class Action Litigation Act on February 9, 2017. 

Two types of reforms are needed to fix our broken litigation system: protections against the abuse of consumers by unscrupulous 

lawyers, and protections against the filing of unjustified claims and 

other abusive litigation practices. To that end, here is what 

FICALA’s provisions do (in the order in which they appear in the 

bill, with a more detailed explanation of each section following this 

summary in the section entitled ‘‘Section-by-Section Analysis’’): 

They prohibit Federal courts from certifying for class treatment 

an action seeking monetary relief for personal injury or economic 

loss absent an affirmative demonstration that each proposed class 

member suffered the same type and scope of alleged injury as the 

proposed class representative(s). 

They prohibit judges from approving class actions in which any 

proposed class representative (that is, a named plaintiff that will 

be representing everyone else in the class action) is a relative of, 

is a present or former employee of, is a present or former client of, 

or has any contractual relationship with the class action lawyer. 

This prevents incestuous litigation-factory arrangements that exist 

today. 

They require that, in a class action seeking monetary relief, a 

class cannot be certified unless the members of the class will be 

identifiable based on objective criteria, not simply a self-serving 

declaration, and that there is a ‘‘reliable and administratively feasible mechanism’’ for the court to determine who falls within the 

class and for distributing a monetary judgment to members of the 

class. This prevents situations we’ve seen in which classes are certified, only to find out at the end of the day that victims cannot 

be located or do not exist. 


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They require that class action lawyers should only get paid after 

the victims get paid, that the portion of attorneys’ fee awards to 

class action lawyers should be limited to a reasonable percentage 

of the money actually distributed to and received by the victims, 

and class action lawyers’ fees should never exceed the total amount 

of money received by all the victims. This ensures more compensation goes to victims, and reasonable amounts (in the discretion of 

the court) go to lawyers. 

They require that in any Federal court-approved class action settlement, the plaintiffs’ lawyers must provide the Administrative Office of United States Courts (the ‘‘AO’’) with an accounting of how 

all money paid by the defendants was distributed. The AO, in turn, 

would be charged with publishing annual aggregate reports on 

class settlement distributions derived from these data. 

They make clear that a plaintiff cannot certify an ‘‘issue’’ class 

unless the entire claim for relief (not just the issue standing alone) 

qualifies for class treatment under Rule 23. This will prevent, for 

example, the certification of huge classes under the common ‘‘issue’’ 

regarding who bought a product when in fact the relevant inquiry 

is which of those purchasers actually suffered any injury. 

They require Federal courts to stay expensive discovery pending 

resolution of Rule 12 motions (that is, motions to dismiss for failure 

to state a claim); motions to strike class allegations; motions to 

transfer; and other motions that would dispose of class allegations 

unless the court finds that particularized discovery is necessary to 

preserve evidence or to prevent undue prejudice to a party. 

They require that any third-party funding agreement be disclosed to the district court and all parties. That would allow the 

district court to take appropriate steps to protect class members’ 

interests by monitoring the influence of certain entities that are 

mere funders, not lawyers, nor parties to the litigation over lawsuits and help the court ensure victims are adequately represented. 

They provide that class certification decisions are appealable as 

of right. 

They require Federal courts to consider each plaintiff’s claims 

separately in assessing Federal jurisdiction over multi-plaintiff 

complaints asserting personal injury or wrongful death claims. The 

House Judiciary Committee recently reported out H.R. 725, the ‘‘Innocent Party Protection Act,’’ which prevents opportunistic lawyers 

from adding local defendants to a lawsuit simply to keep the case 

in a preferred state court. The misjoinder provision in FICALA 

similarly prevents these lawyers from adding certain plaintiffs just 

to keep the case in state court. 

Congress created the multidistrict litigation (‘‘MDL’’) procedure 

to enable courts to fairly and efficiently administer individual cases 

involving the same subject. But mass tort proceedings using the 

MDL process have become magnets for advertising-driven, poorly 

investigated (and often patently invalid) personal injury claims. 

The resulting massive proceedings, often largely consisting of 

claims that should never have been filed, impose unfair burdens on 

courts and defendants and prevent plaintiffs with trial-worthy 

claims from timely getting their day in court. FICALA requires 

that for each lawsuit filed in or transferred to a Federal MDL mass 

tort proceeding, plaintiffs’ lawyers must submit to the MDL court 

evidence that before filing, they properly investigated the asserted 


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claims. Specifically, they would be required to submit evidentiary 

support (including, but not limited to, medical records) for the factual contentions in each plaintiff’s complaint regarding the alleged 

injury, the exposure to the risk that allegedly caused the injury, 

and the alleged cause of the injury. Plaintiffs’ lawyers would be required to make the submission within the later of 45 days after the 

complaint is filed or transferred to an MDL proceeding. Within 30 

days thereafter, the MDL court would be required to rule on the 

sufficiency of the submission. If the MDL court finds a submission 

insufficient, the claim must be dismissed without prejudice. If within 30 days thereafter, the insufficiency is not corrected, the claim 

must be dismissed with prejudice. 

In enacting the MDL statute, Congress made clear that MDL 

courts were supposed to handle pre-trial proceedings only—and 

then send the cases back to the courts in which they were originally filed for trial. But some MDL courts pressure defendants to 

settle by insisting on ‘‘bellwether’’ trials—namely, pseudo-trials 

that supposedly test a claim’s suitability for settlement. Often, 

however, those trials are not fair tests of the plaintiffs’ claims. 

Rather, they’re unrepresentative claims hand-picked to maximize 

attorneys’ fees in a coerced settlement. FICALA therefore affirms 

Congress’s original intent that MDL proceedings are for pre-trial 

purposes only—and that no trial may be conducted by an MDL 

court unless all parties consent to a waiver of venue and personal 

jurisdiction for that particular trial. 

They authorize immediate appellate review of interlocutory MDL 

court orders where those rulings may apply to or affect multiple 

cases in the MDL proceeding or where immediate review may materially advance the ultimate termination of the MDL proceeding. 

When the cost-savings economies of scale of an MDL proceeding 

are used by class action plaintiffs’ lawyers, those savings should be 

passed on to the victims, and the savings enforced by the judges 

who take over the cases after the pre-trial MDL proceedings occur. 

So FICALA requires that in settlements of Federal court mass tort 

claims in MDL proceedings, 80% of all compensation paid must go 

directly to claimants. 

They make clear that nothing in the bill restricts the authority 

of the Judicial Conference and the Supreme Court from proposing 

their own rule changes under chapter 131 of title 28 of the U.S. 

Code, which sets out the procedures under which the courts themselves can create their own rules. 

Finally, they provide that the amendments made by the bill shall 

apply on the date of enactment. 

Hearings 

The Committee on the Judiciary held no hearings on H.R. 985. 

During the last Congress, the Committee’s Subcommittee on the 

Constitution and Civil Justice held a hearing on H.R. 1927 on April 

29, 2015 (which included some of the provisions contained in H.R. 

985), at which the following witnesses presented testimony at the 

hearing: John Beisner, Partner, the Skadden, Arps, Slate, 

Meagher, and Flom LLP; Mark A. Behrens, Shook, Hardy & Bacon; 

Andrew Trask, McGuire, Woods; and Alexandra D. Lahav, University of Connecticut School of Law. 


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Committee Consideration 

On February 15, 2017, the Committee met in open session and 

ordered the bill H.R. 985 favorably reported, without amendment, 

by a rollcall vote of 19 to 12, a quorum being present. 

Committee Votes 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the following 

rollcall votes occurred during the Committee’s consideration of H.R. 

985. 

1. An amendment offered by Mr. Conyers to provide an exception 

for civil rights claims from the bill’s class action provisions. The 

amendment was defeated by a rollcall vote of 11 to 14. 

ROLLCALL NO. 1 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................. X 

Mr. Sensenbrenner, Jr. (WI) .....................................

Mr. Smith (TX) .......................................................... X 

Mr. Chabot (OH) ........................................................ X 

Mr. Issa (CA) .............................................................. X 

Mr. King (IA) ............................................................. X 

Mr. Franks (AZ) .........................................................

Mr. Gohmert (TX) ......................................................

Mr. Jordan (OH) ........................................................ X 

Mr. Poe (TX) ...............................................................

Mr. Chaffetz (UT) ......................................................

Mr. Marino (PA) ........................................................ X 

Mr. Gowdy (SC) .........................................................

Mr. Labrador (ID) ...................................................... X 

Mr. Farenthold (TX) .................................................. X 

Mr. Collins (GA) ........................................................

Mr. DeSantis (FL) .....................................................

Mr. Buck (CO) ............................................................ X 

Mr. Ratcliffe (TX) ....................................................... X 

Mr. Bishop (MI) .........................................................

Ms. Roby (AL) ............................................................ X 

Mr. Gaetz (FL) ...........................................................

Mr. Johnson (LA) ....................................................... X 

Mr. Biggs (AZ) ........................................................... X 

Mr. Conyers, Jr. (MI), Ranking Member ................. X 

Mr. Nadler (NY) ......................................................... X 

Ms. Lofgren (CA) .......................................................

Ms. Jackson Lee (TX) ................................................ X 

Mr. Cohen (TN) .......................................................... X 

Mr. Johnson (GA) ...................................................... X 

Mr. Deutch (FL) ......................................................... X 

Mr. Gutierrez (IL) ......................................................

Ms. Bass (CA) ............................................................

Mr. Richmond (LA) ....................................................

Mr. Jeffries (NY) ........................................................

Mr. Cicilline (RI) ........................................................ X 


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ROLLCALL NO. 1—Continued 

Ayes Nays Present 

Mr. Swalwell (CA) ..................................................... X 

Mr. Lieu (CA) ............................................................. X 

Mr. Raskin (MD) ........................................................ X 

Ms. Jayapal (WA) ......................................................

Mr. Schneider (IL) ..................................................... X 

Total ............................................................. 11 14 

2. An amendment offered by Ms. Jackson Lee to delay the effective date until the Administrative Office of the U.S. Courts completes an assessment of the bill’s costs on litigants and the courts. 

The amendment was defeated by a rollcall vote of 12 to 17. 

ROLLCALL NO. 2 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................. X 

Mr. Sensenbrenner, Jr. (WI) .....................................

Mr. Smith (TX) .......................................................... X 

Mr. Chabot (OH) ........................................................ X 

Mr. Issa (CA) .............................................................. X 

Mr. King (IA) ............................................................. X 

Mr. Franks (AZ) ......................................................... X 

Mr. Gohmert (TX) ...................................................... X 

Mr. Jordan (OH) ........................................................ X 

Mr. Poe (TX) ...............................................................

Mr. Chaffetz (UT) ......................................................

Mr. Marino (PA) ........................................................ X 

Mr. Gowdy (SC) .........................................................

Mr. Labrador (ID) ...................................................... X 

Mr. Farenthold (TX) ..................................................

Mr. Collins (GA) ........................................................ X 

Mr. DeSantis (FL) ..................................................... X 

Mr. Buck (CO) ............................................................ X 

Mr. Ratcliffe (TX) ....................................................... X 

Mr. Bishop (MI) .........................................................

Ms. Roby (AL) ............................................................ X 

Mr. Gaetz (FL) ...........................................................

Mr. Johnson (LA) ....................................................... X 

Mr. Biggs (AZ) ........................................................... X 

Mr. Conyers, Jr. (MI), Ranking Member ................. X 

Mr. Nadler (NY) ......................................................... X 

Ms. Lofgren (CA) .......................................................

Ms. Jackson Lee (TX) ................................................ X 

Mr. Cohen (TN) .......................................................... X 

Mr. Johnson (GA) ...................................................... X 

Mr. Deutch (FL) ......................................................... X 

Mr. Gutierrez (IL) ......................................................

Ms. Bass (CA) ............................................................

Mr. Richmond (LA) ....................................................


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ROLLCALL NO. 2—Continued 

Ayes Nays Present 

Mr. Jeffries (NY) ........................................................

Mr. Cicilline (RI) ........................................................ X 

Mr. Swalwell (CA) ..................................................... X 

Mr. Lieu (CA) ............................................................. X 

Mr. Raskin (MD) ........................................................ X 

Ms. Jayapal (WA) ...................................................... X 

Mr. Schneider (IL) ..................................................... X 

Total ............................................................. 12 17 

3. An amendment offered by Mr. Deutch to strike the bill’s stay 

of discovery provision. The amendment was defeated by a rollcall 

vote of 12 to 19. 

ROLLCALL NO. 3 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................. X 

Mr. Sensenbrenner, Jr. (WI) ..................................... X 

Mr. Smith (TX) .......................................................... X 

Mr. Chabot (OH) ........................................................ X 

Mr. Issa (CA) .............................................................. X 

Mr. King (IA) ............................................................. X 

Mr. Franks (AZ) ......................................................... X 

Mr. Gohmert (TX) ...................................................... X 

Mr. Jordan (OH) ........................................................ X 

Mr. Poe (TX) ...............................................................

Mr. Chaffetz (UT) ...................................................... X 

Mr. Marino (PA) ........................................................ X 

Mr. Gowdy (SC) .........................................................

Mr. Labrador (ID) ...................................................... X 

Mr. Farenthold (TX) ..................................................

Mr. Collins (GA) ........................................................ X 

Mr. DeSantis (FL) ..................................................... X 

Mr. Buck (CO) ............................................................ X 

Mr. Ratcliffe (TX) ....................................................... X 

Mr. Bishop (MI) .........................................................

Ms. Roby (AL) ............................................................ X 

Mr. Gaetz (FL) ...........................................................

Mr. Johnson (LA) ....................................................... X 

Mr. Biggs (AZ) ........................................................... X 

Mr. Conyers, Jr. (MI), Ranking Member ................. X 

Mr. Nadler (NY) ......................................................... X 

Ms. Lofgren (CA) .......................................................

Ms. Jackson Lee (TX) ................................................ X 

Mr. Cohen (TN) .......................................................... X 

Mr. Johnson (GA) ...................................................... X 

Mr. Deutch (FL) ......................................................... X 

Mr. Gutierrez (IL) ......................................................

Ms. Bass (CA) ............................................................


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ROLLCALL NO. 3—Continued 

Ayes Nays Present 

Mr. Richmond (LA) ....................................................

Mr. Jeffries (NY) ........................................................

Mr. Cicilline (RI) ........................................................ X 

Mr. Swalwell (CA) ..................................................... X 

Mr. Lieu (CA) ............................................................. X 

Mr. Raskin (MD) ........................................................ X 

Ms. Jayapal (WA) ...................................................... X 

Mr. Schneider (IL) ..................................................... X 

Total ............................................................. 12 19 

4. An amendment offered by Mr. Cicilline to provide an exception from to bill for actions, to the extent authorized by law, arising 

from injury caused by a firearm. The amendment was defeated by 

a rollcall vote of 12 to 19. 

ROLLCALL NO. 4 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................. X 

Mr. Sensenbrenner, Jr. (WI) ..................................... X 

Mr. Smith (TX) .......................................................... X 

Mr. Chabot (OH) ........................................................ X 

Mr. Issa (CA) .............................................................. X 

Mr. King (IA) ............................................................. X 

Mr. Franks (AZ) ......................................................... X 

Mr. Gohmert (TX) ...................................................... X 

Mr. Jordan (OH) ........................................................ X 

Mr. Poe (TX) ...............................................................

Mr. Chaffetz (UT) ...................................................... X 

Mr. Marino (PA) ........................................................ X 

Mr. Gowdy (SC) .........................................................

Mr. Labrador (ID) ...................................................... X 

Mr. Farenthold (TX) ..................................................

Mr. Collins (GA) ........................................................ X 

Mr. DeSantis (FL) ..................................................... X 

Mr. Buck (CO) ............................................................ X 

Mr. Ratcliffe (TX) ....................................................... X 

Mr. Bishop (MI) .........................................................

Ms. Roby (AL) ............................................................ X 

Mr. Gaetz (FL) ...........................................................

Mr. Johnson (LA) ....................................................... X 

Mr. Biggs (AZ) ........................................................... X 

Mr. Conyers, Jr. (MI), Ranking Member ................. X 

Mr. Nadler (NY) ......................................................... X 

Ms. Lofgren (CA) .......................................................

Ms. Jackson Lee (TX) ................................................ X 

Mr. Cohen (TN) .......................................................... X 

Mr. Johnson (GA) ...................................................... X 

Mr. Deutch (FL) ......................................................... X 


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ROLLCALL NO. 4—Continued 

Ayes Nays Present 

Mr. Gutierrez (IL) ......................................................

Ms. Bass (CA) ............................................................

Mr. Richmond (LA) ....................................................

Mr. Jeffries (NY) ........................................................

Mr. Cicilline (RI) ........................................................ X 

Mr. Swalwell (CA) ..................................................... X 

Mr. Lieu (CA) ............................................................. X 

Mr. Raskin (MD) ........................................................ X 

Ms. Jayapal (WA) ...................................................... X 

Mr. Schneider (IL) ..................................................... X 

Total ............................................................. 12 19 

5. An amendment offered by Ms. Jayapal to strike the bill’s provision governing issue classes. The amendment was defeated by a 

rollcall vote of 12 to 19. 

ROLLCALL NO. 5 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................. X 

Mr. Sensenbrenner, Jr. (WI) ..................................... X 

Mr. Smith (TX) .......................................................... X 

Mr. Chabot (OH) ........................................................ X 

Mr. Issa (CA) .............................................................. X 

Mr. King (IA) ............................................................. X 

Mr. Franks (AZ) ......................................................... X 

Mr. Gohmert (TX) ...................................................... X 

Mr. Jordan (OH) ........................................................ X 

Mr. Poe (TX) ...............................................................

Mr. Chaffetz (UT) ...................................................... X 

Mr. Marino (PA) ........................................................ X 

Mr. Gowdy (SC) .........................................................

Mr. Labrador (ID) ...................................................... X 

Mr. Farenthold (TX) ..................................................

Mr. Collins (GA) ........................................................ X 

Mr. DeSantis (FL) ..................................................... X 

Mr. Buck (CO) ............................................................ X 

Mr. Ratcliffe (TX) ....................................................... X 

Mr. Bishop (MI) .........................................................

Ms. Roby (AL) ............................................................ X 

Mr. Gaetz (FL) ...........................................................

Mr. Johnson (LA) ....................................................... X 

Mr. Biggs (AZ) ........................................................... X 

Mr. Conyers, Jr. (MI), Ranking Member ................. X 

Mr. Nadler (NY) ......................................................... X 

Ms. Lofgren (CA) .......................................................

Ms. Jackson Lee (TX) ................................................ X 

Mr. Cohen (TN) .......................................................... X 

Mr. Johnson (GA) ...................................................... X 


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ROLLCALL NO. 5—Continued 

Ayes Nays Present 

Mr. Deutch (FL) ......................................................... X 

Mr. Gutierrez (IL) ......................................................

Ms. Bass (CA) ............................................................

Mr. Richmond (LA) ....................................................

Mr. Jeffries (NY) ........................................................

Mr. Cicilline (RI) ........................................................ X 

Mr. Swalwell (CA) ..................................................... X 

Mr. Lieu (CA) ............................................................. X 

Mr. Raskin (MD) ........................................................ X 

Ms. Jayapal (WA) ...................................................... X 

Mr. Schneider (IL) ..................................................... X 

Total ............................................................. 12 19 

6. Motion to report H.R. 985 favorably to the House of Representatives. The motion was agreed to by a rollcall vote of 19 to 

12. 

ROLLCALL NO. 6 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................. X 

Mr. Sensenbrenner, Jr. (WI) ..................................... X 

Mr. Smith (TX) .......................................................... X 

Mr. Chabot (OH) ........................................................ X 

Mr. Issa (CA) .............................................................. X 

Mr. King (IA) ............................................................. X 

Mr. Franks (AZ) ......................................................... X 

Mr. Gohmert (TX) ...................................................... X 

Mr. Jordan (OH) ........................................................ X 

Mr. Poe (TX) ...............................................................

Mr. Chaffetz (UT) ...................................................... X 

Mr. Marino (PA) ........................................................ X 

Mr. Gowdy (SC) .........................................................

Mr. Labrador (ID) ...................................................... X 

Mr. Farenthold (TX) ..................................................

Mr. Collins (GA) ........................................................ X 

Mr. DeSantis (FL) ..................................................... X 

Mr. Buck (CO) ............................................................ X 

Mr. Ratcliffe (TX) ....................................................... X 

Mr. Bishop (MI) .........................................................

Ms. Roby (AL) ............................................................ X 

Mr. Gaetz (FL) ...........................................................

Mr. Johnson (LA) ....................................................... X 

Mr. Biggs (AZ) ........................................................... X 

Mr. Conyers, Jr. (MI), Ranking Member ................. X 

Mr. Nadler (NY) ......................................................... X 

Ms. Lofgren (CA) .......................................................

Ms. Jackson Lee (TX) ................................................ X 

Mr. Cohen (TN) .......................................................... X 


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ROLLCALL NO. 6—Continued 

Ayes Nays Present 

Mr. Johnson (GA) ...................................................... X 

Mr. Deutch (FL) ......................................................... X 

Mr. Gutierrez (IL) ......................................................

Ms. Bass (CA) ............................................................

Mr. Richmond (LA) ....................................................

Mr. Jeffries (NY) ........................................................

Mr. Cicilline (RI) ........................................................ X 

Mr. Swalwell (CA) ..................................................... X 

Mr. Lieu (CA) ............................................................. X 

Mr. Raskin (MD) ........................................................ X 

Ms. Jayapal (WA) ...................................................... X 

Mr. Schneider (IL) ..................................................... X 

Total ............................................................. 19 12 

Committee Oversight Findings 

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

New Budget Authority and Tax Expenditures 

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

Congressional Budget Office Cost Estimate 

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 985, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, March 6, 2017. 

Hon. BOB GOODLATTE, CHAIRMAN, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 985, the ‘‘Fairness in 

Class Action Litigation Act of 2017.’’ 


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If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Robert Reese, who can 

be reached at 226–2860. 

Sincerely, 

KEITH HALL, DIRECTOR. 

Enclosure 

cc: Honorable John Conyers, Jr. 

Ranking Member 

H.R. 985—Fairness in Class Action Litigation Act of 2017. 

As ordered reported by the House Committee on the Judiciary 

on February 15, 2017. 

H.R. 985 would amend the Federal judicial code to update the 

standards by which a court determines whether a case meets the 

requirements to be heard as a class-action suit. The bill also would 

require the Judicial Conference of the United States to submit an 

annual report to the Congress on payments from class-action settlements. Finally, the bill would amend the procedures that Federal 

courts use when considering certain multi-plaintiff claims and 

multi-district litigation proceedings. 

The effect that H.R. 985 would have on litigation strategy is uncertain and could lead to an increase or decrease in the number of 

cases brought to Federal courts. Based on an analysis of information from the Administrative Office of the United States Courts 

(AOUSC) and research regarding class-actions suits, CBO estimates that imposing new requirements on the courts for the consideration of class-action cases would cost $2 million over the 

2018–2022 period; such spending would be subject to the availability of appropriated funds. Those additional administrative expenses to determine whether cases qualify to be considered as 

class-action suits would be incurred whether or not overall caseloads increased or decreased under the bill. 

Under the bill, the Judicial Conference would be required to submit to the Congress an annual report summarizing the disbursement of settlement payments to class members for all ongoing 

class-action settlements. Based on an analysis of information from 

the AOUSC on the amount of work necessary to analyze the relevant data and complete the report, CBO estimates that implementing this requirement would cost less than $500,000 over the 

2018–2022 period. 

Enacting H.R. 985 would not affect direct spending or revenues; 

therefore, pay-as-you-go procedures do not apply. CBO estimates 

that enacting H.R. 985 would not increase net direct spending or 

on-budget deficits in any of the four consecutive 10-year periods beginning in 2028. 

H.R. 985 contains no intergovernmental mandates as defined in 

the Unfunded Mandates Reform Act (UMRA) and would not affect 

the budgets of state, local, or tribal governments. 

H.R. 985 would impose private-sector mandates, as defined in 

UMRA, by limiting the timing and amount of fees attorneys could 


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receive in class-action lawsuits and multi-district litigation. For example, the bill would: 

• Prohibit fee awards to attorneys that exceed the total 

amount of money distributed to all class members; 

• Prohibit the payment of fee awards to attorneys in class-action cases until the distribution of any monetary recovery to 

class members has been completed; and 

• Limit the fees to attorneys in multi-district proceedings to no 

more than 20 percent of the total recovery. 

The limits on attorney fees would be a mandate because it would 

restrict amounts that attorneys might otherwise be able to collect 

from their clients. The direct cost of the mandates is measured as 

the annual loss of net income that attorneys would experience in 

both pending and future cases. Based on information from legal 

scholars about how attorney’s fees are currently structured in such 

cases and the possible number of cases that could be affected (some 

research suggests about 1,000 annually), CBO estimates that the 

annual cost of the mandates would exceed the threshold established in UMRA for private-sector mandates ($156 million in 2017, 

adjusted annually for inflation) in each of the first 5 years the 

mandates are in effect. 

The CBO staff contacts for this estimate are Robert Reese (for 

Federal costs) and Paige Piper/Bach (for private-sector mandates). 

The estimate was approved by H. Samuel Papenfuss, Deputy Assistant Director for Budget Analysis. 

Duplication of Federal Programs 

No provision of H.R. 985 establishes or reauthorizes a program 

of the Federal Government known to be duplicative of another Federal program, a program that was included in any report from the 

Government Accountability Office to Congress pursuant to section 

21 of Public Law 111–139, or a program related to a program identified in the most recent Catalog of Federal Domestic Assistance. 

Disclosure of Directed Rule Makings 

The Committee estimates that H.R. 985 specifically directs to be 

completed no specific rule makings within the meaning of 5 U.S.C. 

§ 551. 

Performance Goals and Objectives 

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 985 will provide 

greater fairness in class action litigation. 

Advisory on Earmarks 

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 985 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(e), 9(f), or 9(g) of Rule XXI. 


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9 Rule 23(c)(1) prescribes the rules for Federal court certification orders. 

10 Carrera v. Bayer Corp., 727 F.3d 307, 310 (3d Cir. 2013). 

Section-by-Section Analysis 

The following discussion describes the bill as reported by the 

Committee. 

Sec. 1. Short title; Reference; Table of Contents. Section 1 sets 

forth the short title of the bill as the ‘‘Fairness in Class Action Litigation Act of 2017.’’ 

Sec. 2. Purposes. Section 2 sets forth the purposes of the bill. 

Sec. 3. Class Action Procedures. 

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)9 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. 

The purpose of a class action is to provide a fair, efficient means 

of litigating like claims, not to provide a way for unscrupulous lawyers to artificially inflate the size of a class to extort a larger settlement value for themselves, and in the process increase the prices 

of goods and services for everyone. Claims seeking monetary relief 

for personal injury or economic loss should be grouped in classes 

in which those who are the most injured receive the most compensation. No one should be forced into a class action with other 

uninjured or minimally injured members, only to see their own 

compensation reduced. 

Unscrupulous lawyers work the system today in the following 

way. They file lawsuits, for example, against a company that sells 

a washing machine. Some very small percentage of those washing 

machines do not work the way they are supposed to, but the vast 

majority of them do. But the lawyers file a class action lawsuit that 

includes everyone who ever purchased a washing machine from the 

company, even the large number of people who are completely satisfied with their purchase. When these lawyers lump injured or 

non-comparably injured people into the same class action lawsuit, 

the limited resources of the parties are wastefully spent weeding 

through hundreds of thousands of class members in order to find 

those with actual or significant injuries. That’s money that could 

have been spent compensating deserving victims. As the Third Circuit Court of Appeals said in a recent opinion, ‘‘It is unfair to absent class members if there is a significant likelihood their recovery 

will be diluted by fraudulent or inaccurate claims.’’ 10

Sometimes, because judges do not separate the injured from the 

non-injured in class actions early enough in the proceedings, they 

end up throwing out settlements because it turns out hardly any 

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11Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350–51 (2011) (‘‘A party seeking class certification must affirmatively demonstrate his compliance with the Rule . . . We [have] recognized 

. . . that certification is proper only if the trial court is satisfied, after a rigorous analysis, that 

the prerequisites of Rule 23(a) have been satisfied’’) (internal quotations and citations omitted). 12 Black’s Law Dictionary defines ‘‘personal injury’’ as ‘‘In a negligence action, any harm 

caused to a person, such as a broken bone, a cut, or a bruise; bodily injury.’’ ‘‘Economic loss’’ 

is defined by Black’s Law Dictionary as ‘‘A monetary loss such as lost wages or lost profits . . . 

[I]n a products-liability suit, economic loss includes the cost of repair or replacement of defective 

property, as well as commercial loss for the property’s inadequate value and consequent loss of 

profits or use.’’ 

tion. Other times, when judges realize they have created an 

overbroad class, they justify their actions by coming up with novel 

theories to provide some compensation to people who are entirely 

satisfied with the product, and do not want compensation. Either 

way, the solution is to direct judges to determine as best they can, 

early in the proceedings, which proposed class members are significantly and comparably injured, and those who are not, and to treat 

them accordingly. That’s fair to everyone. 

FICALA would simply make clear what already should be clear 

to the Federal courts, namely that uninjured class members are incompatible with Rule 23(b)(3)’s current requirement that classes 

should not be certified unless common legal and factual issues predominate in the class action. This subsection’s requirement that 

those seeking to bring a class action ‘‘affirmatively demonstrate’’ 

that each proposed class member suffered the same type and scope 

of injury as the named class representatives, as well as its requirement that the Federal court conduct ‘‘a rigorous analysis’’ of the 

evidence presented that the requirements of this subsection have 

been met, are both drawn from existing Supreme Court precedent.11

Opponents of the bill may claim this provision will somehow 

interfere with the class action process. But this section of the bill 

does not prohibit the filing of any class actions at all. It simply requires that if class actions are filed, similarly injured people should 

be grouped with other similarly injured people in their own class 

action. Claims seeking monetary relief for personal injury or economic loss 12 should be grouped in classes in which those who are 

most injured receive the most compensation. No one should be 

forced into a class action with other uninjured or minimally injured 

members, only to see their own compensation reduced. 

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 of, 

is a present or former employee of, is a present or former client of 


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13 5 U.S.C. § 3110(a)(3) (prohibiting the employment of relatives by Federal public officials) 

provides that ‘‘ ‘relative’ means, with respect to a public official, an individual who is related 

to the public official as father, mother, son, daughter, brother, sister, uncle, aunt, first cousin, 

nephew, niece, husband, wife, father-in-law, mother-in-law, son-in-law, daughter-in-law, brotherin-law, sister-in-law, stepfather, stepmother, stepson, stepdaughter, stepbrother, stepsister, half 

brother, or half sister.’’ 14 Available at http://quod.lib.umich.edu/l/lincoln/lincoln2/1:134.1?rgn=div2;view=fulltext. 15 Available at http://www.forbes.com/sites/danielfisher/2015/11/17/collapse-of-5-hour-energycase-reveals-secrets/#475a827a1aa4. 

(other than with respect to the class action), or has any contractual 

relationship with (other than with respect to the class action) 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.13

Abraham Lincoln left behind pages of notes on a lecture he was 

to give to lawyers. They say ‘‘Never stir up litigation. A worse man 

can scarcely be found than one who does this. Who can be more 

nearly a fiend than he who habitually overhauls the register of 

deeds in search of defects in titles, whereon to stir up strife, and 

put money in his pocket?’’ 14

That was Lincoln in the 1850’s. Here’s Forbes magazine just a 

couple years ago: 

The lead plaintiff in the 5-Hour case . . . worked in marketing for a cosmetic surgery center in California. But in 

a grueling, 5-hour deposition, [she] admitted she had been 

recruited to serve as a plaintiff by her cousin, who worked 

for a Texas lawyer[;] had purchased two bottles of 5-Hour 

Energy specifically to sue the manufacturer; had never 

complained to the company or sought a refund; and had 

signed a backdated retainer agreement with [trial lawyer] 

Rubinstein [the fellow seen here at his own deposition] 

. . . [A]nother one of Rubinstein’s clients . . . admitted 

she had served as a plaintiff for Rubinstein in at least four 

class actions over products like Swanson pot pies and lipstick . . . E-mails and other communications 5-Hour’s lawyers uncovered in their suit showed that Rubinstein belonged to a loose affiliation of lawyers who ran an assembly-line process of identifying companies to sue and then 

helping each other find plaintiffs.15

Lawsuits are supposed to be initiated by truly injured plaintiffs 

seeking redress, not invented by lawyers who hunt for a plaintiff 

to assert a supposed injury made up by the lawyer. Few class members bother to collect the payments available in class action settlements in large part because they do not feel injured by the supposedly wrongful conduct in the first place. In too many cases, opportunistic lawyers come up with an idea for a lawsuit and then 

search for a person who has bought the product—or they send a 

relative or employee to buy the product—so they’ll have someone 

who can sue on behalf of a proposed class of all other buyers. No 

product purchaser has actually complained or feels cheated. That’s 

a major reason why so few class members bother to collect the payments available in class action settlements—they do not feel injured by the supposedly wrongful conduct in the first place. This 

abuse of class actions—lawyer-driven lawsuits—must end. FICALA 

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16 In re Nexium Antitrust Litigation, 777 F.3d 9, 32–33 (1st Cir. 2015) (Kayatta, Circuit 

Judge, dissenting). 17 Id. at 35. 18See Carrera v. Bayer Corp., 727 F. 3d 300, 305, 306 (3d Cir. 2013) (‘‘Many courts and commentators have recognized that an essential prerequisite of a class action, at least with respect 

to actions under Rule 23(b)(3), is that the class must be currently and readily ascertainable 

based on objective criteria . . . If class members are impossible to identify without extensive 

Continued 

atives became involved in the class action. Further, it prohibits 

class actions in which any proposed class representative (that is, a 

named plaintiff that will be representing everyone else in the class 

action) is a relative of, is a present or former employee of, is a 

present or former client of, or has any contractual relationship with 

the class action lawyer. 

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. 

Because the whole purpose of class actions is to redress the injuries sustained by class members, the system should ensure that 

any benefits obtained in such cases can actually be delivered to 

those class members. And it should ensure that class members, not 

their lawyers, get most of those benefits. Consequently, FICALA’s 

section on ‘‘Class member benefits’’ includes the following provisions: a requirement that, in a class action seeking monetary relief, 

a class cannot be certified unless counsel can demonstrate that 

there is a ‘‘reliable and administratively feasible mechanism’’ for 

the court to identify who falls within the class (through something 

other than a self-serving declaration) and for distributing any monetary award that’s obtained to a substantial majority of the class 

members. In short, counsel have to demonstrate that the use of the 

class action device in a particular controversy would actually serve 

the purpose of compensating class members for their alleged injuries, if the class proves its case. 

As one appeals court judge (nominated by President Obama) 

wrote in his dissent in a recent class action case, ‘‘The chief difficulty we confront in this case arises from the fact that some of 

the members of the class have not suffered the . . . injury upon 

which this entire case is predicated [and that] could constitute as 

many as 24,000 consumers who would have no valid claim against 

the defendants under the state [] laws even if the named plaintiffs 

win on the merits.’’ 16 He went on to chastise the other judges who 

allowed the class action to proceed, writing ‘‘if the district court 

does not identify a culling method to ensure that the class, by judgment, includes only members who were actually injured, this court 

has no business simply hoping that one will work.’’ 17

Some courts of appeals have imposed this sort of ‘‘ascertainability’’ requirement.18 But other courts, such as the Ninth Circuit, 


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and individualized fact-finding or ‘mini-trials,’ then a class action is inappropriate.’’) (also holding that a plaintiff seeking class certification ‘‘must show, by by a preponderance of the evidence, that the class is ‘currently and readily ascertainable based on objective criteria,’ and the 

trial court must evaluate this showing by employing a ‘‘rigorous analysis.’’). Several other Circuits have joined that view. See In re Nexium Antitrust Litig., 777 F.3d 9 (1st Cir. 2015); 

Brecher v. Republic of Argentina, 806 F.3d 22 (2d Cir. 2015), EQT Prod. Co. v. Adair, 764 F.3d 

347 (4th Cir. 2014); Karhu v. Vital Pharmaceuticals, Inc.,—Fed. App’x—, 2015 WL 3560722, at 

*2–3 (11th Cir 2015). 19See Rikos v. Procter & Gamble Co., 799 F.3d 497, 525 (6th Cir. 2015); Mullins v. Direct 

Digital, LLC, 795 F.3d 654, 658 (7th Cir. 2015); and Brieseno v. Conagra Foods, Inc., __ F.3d __ (9th Cir., Jan. 3, 2017). 

20 Black’s Law Dictionary (10th ed. 2014) defines ‘‘equitable remedy’’ as ‘‘A remedy, usu. a 

nonmonetary one such as an injunction or specific performance, obtained when available legal 

remedies, usu. monetary damages, cannot adequately redress the injury.’’ 21 Black’s Law Dictionary (10th ed. 2014) defines ‘‘injunction’’ as ‘‘A court order commanding 

or preventing an action.’’ 22 Available at http://www.fjc.gov/public/home.nsf/autoframe?openagent&url_l=/public/ 

home.nsf/inavgeneral?openpage&url_r=/public/home.nsf/pages/524. 

have rejected this rule.19 America needs a rule that ensures class 

actions are used only where they will serve to actually get compensation to class members, where deserved. Cases that do nothing 

more than get lawyers lots of money are not consistent with the legitimate purposes of class actions. FICALA would establish that 

rule. 

(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,20 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.21

The Manual for Complex Litigation (4th ed. 2004)22 is a treatise 

published by the Federal Judicial Center, which is operated by the 

Federal judiciary. It was written by a group of well-respected 

judges, most of whom are still active. Section 21.71 of the Manual 

states as follows: ‘‘Compensating counsel for the actual benefits 

conferred on the class members is the basis for awarding attorney 

fees. The fundamental focus is the result actually achieved for class 

members. That approach is premised on finding a tangible benefit 

actually obtained by the class members . . . In cases involving a 

claims procedure or a distribution of benefits over time, the court 

should not base the attorney fee award on the amount of money set 

aside to satisfy potential claims. Rather, the fee awards should be 

based only on the benefits actually delivered.’’ However, for the 


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23Declaration of Deborah McComb Re Settlement Claims April 21, 2014, at 2, available at 

http://blogs.reuters.com/alison-frankel/files/2014/05/duracellclassaction-mccombdeclaration.pdf. 24 Available at http://blogs.reuters.com/alison-frankel/files/2013/12/mayerbrownclassaction 

study.pdf. 25In re Subway Footlong Sandwich Marketing and Sales Practices Litigation, MDL No. 13– 

02439, available at http://www.wied.uscourts.gov/sites/wied/files/documents/Subway%20MDL% 

20Final%20’settlement%20Approval%20Order.pdf. 26See http://www.abajournal.com/magazine/article/subway_sandwich_class_action. 27 Volz v. Coca Cola Co., No. 1:10–cv–00879 (S.D. Ohio 2014). 

most part, Federal courts are not following this directive. Congress 

needs to enforce what the some Federal courts are not enforcing. 

Taking a step back, it’s important to realize that in class actions, 

no one asks the class members if they want a lawsuit brought on 

their behalf. Lawyers can sue for them without getting their permission. And there’s good reason to suspect most people do not 

want to be part of most of these cases. According to a sworn declaration of a professional who administers class action settlements, 

the median rate at which consumer class action members take the 

compensation offered in a settlement is an incredibly low 0.023 percent. 23

That’s right—only the tiniest fraction of a percent of consumer 

class action members bother to claim the compensation awarded 

them. Another study of the limited publicly available distributions 

to class members for cases filed in or removed to Federal court in 

2009 found that ‘‘few class members ever even see those paltry benefits—particularly in consumer class actions. Unfortunately, because information regarding the distribution of class action settlements is rarely available, the public almost never learns what percentage of a settlement is actually paid to class members. But of 

the six cases in our [2009] data set for which settlement distribution data was public, five delivered funds to only miniscule percentages of the class: 0.000006%, 0.33%,1.5%, 9.66%, and 12%. Those 

results are consistent with other available information about settlement distribution in consumer class actions.’’ 24 Further examples 

can be found in that report’s Appendix A. 

What that means is that the primary beneficiaries of consumer 

class actions are the lawyers—not the allegedly injured class members. Lawyers tend to reap millions, while the alleged victims get 

little or nothing. Here are a few examples: 

The Subway sandwich chain was sued in a class action because 

trial lawyers complained their ‘‘foot-long’’ subs usually were not a 

full foot-long. As part of the settlement, Subway agreed to pay 

small amounts to the ten class representatives, but the millions of 

other class members received nothing. Not a dime. Meanwhile, the 

lawyers were awarded $520,000 in fees.25 The settlement was appealed to the Seventh Circuit Court of Appeals. During oral arguments in September, 2016, Judge Diane Sykes remarked that ‘‘[a] 

class action that seeks only worthless benefits for the class should 

be dismissed out of hand. . . . That’s what should have happened 

here. . . . This is a racket.’’ 26

The Coca Cola Company was sued in a class action lawsuit for 

allegedly implying in its advertising that a product called 

‘‘vitaminwater’’ was healthy.27 Class members received zero dollars 

in the settlement. The lawyers were awarded $1.2 million in fees. 

In Lane v. Facebook, Inc., which arose out of alleged privacy violations by Facebook, the company agreed to settle the case by 

spending $6.5 million to establish a new charity called the Digital 


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28Lane v. Facebook, Inc., 696 F.3d 811, 828 (9th Cir. 2013) (Kleinfeld, J., dissenting). 29See Marek v. Lane, 134 S. Ct. 8 (2013). 30 Id. at 9. 31 42 U.S.C. § 1988 provides that ‘‘(b) Attorney’s fees. In any action or proceeding to enforce 

a provision of sections 1981, 1981a, 1982, 1983, 1985, and 1986 of this title, title IX of Public 

Law 92–318 [20 U.S.C.A. § 1681 et seq.], the Religious Freedom Restoration Act of 1993 [42 

U.S.C.A. § 2000bb et seq.], the Religious Land Use and Institutionalized Persons Act of 2000 [42 

U.S.C.A. § 2000cc et seq.], title VI of the Civil Rights Act of 1964 [42 U.S.C.A. § 2000d et seq.], 

or section 13981 of this title, the court, in its discretion, may allow the prevailing party, other 

than the United States, a reasonable attorney’s fee as part of the costs, except that in any action 

brought against a judicial officer for an act or omission taken in such officer’s judicial capacity 

such officer shall not be held liable for any costs, including attorney’s fees, unless such action 

was clearly in excess of such officer’s jurisdiction. (c) Expert fees. In awarding an attorney’s fee 

under subsection (b) of this section in any action or proceeding to enforce a provision of section 

1981 or 1981a of this title, the court, in its discretion, may include expert fees as part of the 

attorney’s fee.’’ 

Trust Foundation (‘‘DTF’’) whose purpose was to educate users on 

protection of identity and personal information online. Facebook 

agreed to pay class counsel $3 million. Zero dollars were paid to 

class members. The Ninth Circuit affirmed this deal, but in a withering dissent, Judge Kleinfeld observed that ‘‘Facebook users who 

had suffered damages . . . got no money, not a nickel from the defendants . . . [while] [c]lass counsel, on the other hand, got millions.’’ 28 While the U.S. Supreme Court declined to review the 

Facebook settlement, 29 Chief Justice Roberts issued an unusual 

statement with respect to the Court’s denial of certiorari, stating 

that these charitable donation provisions (also known as cy pres 

awards) are a ‘‘growing feature’’ of class action settlements that 

warranted monitoring.30

The class action system is supposed to primarily benefit victims, 

not lawyers. Class action lawyers should only get paid after the victims get paid, and FICALA requires just that in the subsection entitled ‘‘Fee Distribution Timing.’’ Also, the portion of attorneys’ fee 

awards to class action lawyers should be limited to a reasonable 

percentage of the money actually distributed to and received by the 

victims, and class action lawyers’ fees should never exceed the total 

amount of money received by all the victims. FICALA requires that 

as well in the subsection entitled ‘‘Fee Determinations Based on 

Monetary Awards.’’ 

Insofar as a class action seeks equitable relief (that is, non-monetary relief, including any injunctive relief that seeks to stop the defendant from doing something wrong), the portion of any class action lawyers’ fee award should be limited to a reasonable percentage of the value of that relief, as determined by the court. FICALA 

requires that in the subsection entitled ‘‘Fee Determinations Based 

on Equitable Relief.’’ 

This provision will not affect fee awards in civil rights cases because both the monetary and equitable relief attorneys’ fees provisions in FICALA are qualified with the initial phrase ‘‘Unless otherwise specified by Federal statute.’’ The Civil Rights Attorney’s 

Fee Award Act of 1976, 42 U.S.C. § 1988,31 allows a court, in its 

discretion, to award reasonable attorneys’ fees as part of the costs 

to a prevailing party in Federal civil rights lawsuits, including 

cases brought under 28 U.S.C. § 1983—the statute most commonly 

used to assert civil rights claims. Consequently, FICALA will not 

affect attorneys’ fees in civil rights class actions at all. 

Regarding other equitable relief cases that do not involve civil 

rights claims, Federal courts routinely determine the value of intangible relief such as equitable or injunctive relief for purposes of 


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32See Packard v. Provident Nat’l Bank, 994 F.2d 1039, 1050 (3d Cir. 1993) (valuing right to 

enjoin bank from charging fees); Massachusetts State Pharm. Ass’n v. Federal Prescription 

Serv., 431 F.2d 130, 131 (8th Cir. 1970) (valuing right to enjoin solicitation of business). 33See 14AA Fed. Prac. & Proc. Juris. § 3703 (4th ed.) (April 2016 Update). 34See id. 35See id. 36 Rule 23(h) sets out the rules for the award of attorneys’ fees in class actions. 

determining whether the amount in controversy requirement (currently $75,000 to get into Federal court) is met.32 A majority of 

courts consider only the value of the injunctive relief from the 

plaintiff’s perspective or viewpoint.33 Some courts determine the jurisdictional amount by evaluating the claim from the perspective of 

the party seeking Federal court jurisdiction.34 Others have adopted 

the ‘‘either viewpoint’’ rule, which allows the court to look to either 

the plaintiff’s or the defendant’s viewpoint in establishing the 

amount in controversy in cases seeking some form of injunctive relief.35 The bottom line is that, under FICALA, Federal courts will 

be able to use any method they deem best for reasonably assessing 

reasonable attorneys’ fee awards in equitable relief class action settlements. This provision, of course, does not alter in any way the 

relief that would be granted to civil rights class action members, 

or to any other equitable relief class action members. 

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)36 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 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 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). 

Here’s the way attorneys’ fees in class actions generally work. 

Assume that to settle a class action, a defendant agrees to pay up 

to $10 million—$10 to each of one million purported class members. Under current practice, the court may award the class counVerDate Sep 11 2014 21:40 Mar 07, 2017 Jkt 069006 PO 00000 Frm 00023 Fmt 6659 Sfmt 6601 E:\HR\OC\HR025.XXX HR025

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37Mirfasihi v. Fleet Mortg. Corp., 356 F.3d 781, 784 (7th Cir. 2004). 38 In re Baby Prods. Antitrust Litig., Nos. 12–1165, et al., 708 F.3d 163, 173 (3d Cir. 2013), 

available at http://www2.ca3.uscourts.gov/opinarch/121165p.pdf. 

sel $2.5 million (25% of the maximum potential settlement amount) 

without waiting to find out how much money actually gets to class 

members themselves. The court may award more or less, but 25% 

is a frequently used percentage. If, as usually happens, only 2.5% 

of the class members (2,500 persons) claim their settlement payments (for a total of $25,000), the attorneys will receive 100 times 

the cash received by all class members combined: $2.5 million to 

the lawyers, $25,000 to all of the allegedly injured consumers. 

Because lawyers and Federal courts are not required to make 

public exactly how class action settlement funds are distributed, 

and to whom, and in what amounts, the public and Congress is 

largely in the dark regarding the extent of potential abuses. To 

remedy that situation, FICALA requires that in any Federal courtapproved class action settlement, the trial lawyers must provide 

the Administrative Office of United States Courts (the ‘‘AO’’) with 

an accounting of how all money paid by the defendants was distributed. The AO, in turn, would be charged with publishing annual 

aggregate reports on class settlement distributions derived from 

these data. This data would show whether class actions are actually providing benefits to class members. 

This would let the public and Congress know what comes out of 

its class action litigation system. Transparency in this regard 

would be particularly helpful in exposing the extent of the abuse 

of so-called cy pres awards. Class actions include large numbers of 

consumers who were satisfied with the product or service at issue 

and therefore have zero motivation to obtain compensation. In response to this growing reality in consumer class actions, many 

courts have resorted to cy pres, the practice of distributing money 

in class actions that is not claimed by real people to third-party 

charities that supposedly work in the interest of the public in the 

abstract. While the use of cy pres in class action settlements has 

benefited numerous organizations, the practice is troubling because 

it raises serious questions about the purpose of the class action device. As one court put it, ‘‘[t]here is no indirect benefit to the class 

from the defendant’s giving the money to someone else.’’ 37 And as 

the Third Circuit Court of Appeals stated in another case, ‘‘inclusion of a cy pres distribution may increase a settlement fund, and 

with it attorneys’ fees, without increasing the direct benefit to the 

class.’’ 38 And cy pres diminishes any incentive to identify class 

members since the lawyer will receive the same amount of fees 

even if hardly anyone gets any compensation. 

In sum, consumers in many class action lawsuits are not receiving any benefits. Rather, the bulk of the money ends up going to 

lawyers and uninjured third-party organizations, or both. Given 

this troubling trend, Congress should help at least expose the extent of this abuse by requiring transparency in the allocation of 

class action settlement funds, including cy pres awards. 

Issues Classes: 

(a) IN GENERAL.—A Federal court shall not issue an order granting certification of a class action with respect to particular issues 


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39 84 F.3d 734 (5th Cir. 1996). 

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. 

Rule 23 of the Federal Rules of Civil Procedure—and the Supreme Court’s recent interpretations of Rule 23 in Wal-Mart Stores, 

Inc. v. Dukes and Comcast Corp. v. Behrend—recognize that class 

actions are an exception to the ordinary rules of litigation, and that 

the class action system may be used only when the Rule’s requirements are satisfied, particularly that issues common to all class 

members predominate over individualized issues that must be resolved on a plaintiff-by-plaintiff basis. Some lower courts, however, 

encouraged by opportunistic lawyers, are circumventing these rulings by permitting the certification of so-called ‘‘issues classes’’ in 

which a single legal or factual issue may be determined for the 

whole class even though the claims are dominated by individualized issues that require case-by-case evaluations. 

As the U.S. Court of Appeals for the Fifth Circuit explained in 

a case called Castano,39 ‘‘Reading [R]ule 23(c)(4) as allowing a 

court to sever issues . . . would eviscerate the predominance requirement of [R]ule 23(b)(3); the result would be automatic certification in every case where there is a common issue, a result that 

could not have been intended.’’ 

That unintended result has manifested itself in the decisions of 

some courts, which have certified class actions to resolve general 

‘‘issues’’ regarding a product when the result is to create a huge 

class in which the vast majority of class members have no complaint against the product. 

In some circuits, class certification is ordered over the issue of 

whether the product was defective before there was any evaluation 

of whether the class members actually experienced a problem with 

their products. That’s incompatible with Rule 23(b), which requires 

that ‘‘questions of law or fact common to class members predominate over any questions affecting only individual members, and 

that a class action is superior to other available methods for fairly 

and efficiently adjudicating the controversy.’’ Issues of law or fact 

cannot be held in common by a class if the class consists largely 

of people who do not have any injuries at all, and consequently 

have no legal or factual basis for being in the class. 

Congress must ensure that class action standards are not circumvented through the use of ‘‘issues classes.’’ The subsection of 

FICALA entitled ‘‘Issues classes’’ therefore makes clear—as the 

Fifth Circuit made clear in Castano—that plaintiffs’ attorneys cannot certify an ‘‘issue’’ class unless the entire claim for relief (not 

just the issue standing alone) qualifies for class treatment under 

Rule 23. 


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40George Socha & Tom Gelbmann, Climbing Back: Revenue Climbing Back for EDD Industry, 

Law Tech. News (Aug. 1, 2010), http://www.law.com/jsp/lawtechnologynews/PubArticle 

LTN.jsp?id=1202463900292. 41See Nicholas Pace & Laura Zakaras, Rand Institute for Civil Justice, Where the Money Goes: 

Understanding Litigant Expenditures for Producing Electronic Discovery, 17 (2012); see also 

Laura Hunt, Trending: Proportionality in Electronic Discovery in Common Law Countries and 

the United States’ Federal and State Courts, 43 U. Balt. L. Rev. 279, 279 (2014) (similar). 42Martin H. Redish, Electronic Discovery and the Litigation Matrix, 51 Duke L.J. 561, 603 

(2001). 43See John H. Beisner, Discovering a Better Way: The Need for Effective Civil Litigation Reform, 60 Duke L.J. 547, 549 (2010) (‘‘Plaintiffs’ attorneys routinely burden defendants with 

costly discovery requests and engage in open-ended ‘fishing expeditions’ in the hope of coercing 

a quick settlement.’’). 44 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 559 (2007). 

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. 

The discovery process (the pre-trial process in a lawsuit in which 

parties demand documents and other things from other parties in 

the lawsuit) imposes huge costs on litigants—particularly because 

of the astronomical costs associated with the discovery of electronic 

information, such as emails. Law Technology News has reported 

that the total cost of electronic discovery rose from $2 billion in 

2006 to $2.8 billion in 2009 and estimated that the total cost would 

rise ten to fifteen percent annually over the next few years.40 In 

a more recent case study of Fortune 500 companies, the RAND Institute found that the median total cost for electronic discovery 

among participants totaled $1.8 million per case.41 And these costs 

are asymmetric: while defendants typically are subject to gigantic 

discovery costs, because they are large organizations possessing 

large amounts of data, plaintiffs have little information in their 

possession and therefore are subject to a relatively small financial 

burden during the discovery process. Moreover, discovery conducted 

before a motion to dismiss is decided is unfair: why should defendants bear the burden of paying for discovery before a complaint is 

held legally sufficient, especially when the threat of huge costs may 

coerce an unjustified settlement? 

The reality for most civil litigation is that the defendants’ obligation to bear these exorbitant discovery costs incentivizes unscrupulous plaintiffs’ attorneys to serve burdensome discovery requests on 

defendants with zero downside risk to themselves. As Professor 

Martin Redish has explained, ‘‘the fact that a party’s opponent will 

have to bear the financial burden of preparing the discovery response actually gives litigants an incentive to make discovery requests, and the bigger the expense to be borne by the opponent, the 

bigger the incentive to make the request.’’ 42 And because defendants seek to avoid these exorbitant costs, discovery is all too often 

used as a weapon to coerce settlement of claims, regardless of their 

merit.43 Even the Supreme Court has recognized this problem, lamenting that ‘‘the threat of discovery expense will push cost-conscious defendants to settle even anemic cases before reaching’’ 

trial.44


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45 Examples of ‘‘undue prejudice’’ could relate to the potential loss or spoliation of evidence, 

such as situations in which, unless documents are collected they may be destroyed. There may 

also be circumstances in which witnesses may become unavailable (due to health, or leaving employment). There could also be class actions in which emergency injunctive relief is being sought 

where discovery might be justifiable. This provision mirrors 15 U.S.C. § 78u-4(b)(3)(B), which relates to private securities litigation and provides that ‘‘In any private action arising under this 

chapter, all discovery and other proceedings shall be stayed during the pendency of any motion 

to dismiss, 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.’’ 

For example, assume that a defendant moves to dismiss a class 

action because it does not assert any valid claims. Under current 

law, plaintiffs’ attorneys can serve massive discovery requests that 

force defendants to spend $10 million to collect the requested documents. A rational decision for that defendant is to settle the case 

for millions, even if, 4 months later, the court grants the motion 

to dismiss, finding the class claims to be totally without merit. 

That’s because, without a stay in discovery, the defendants will in 

the meantime have been required to spend all or part of the $10 

million costs complying with the discovery requests—for, it turns 

out, no legitimate reason. Trial lawyers pursue discovery in this 

circumstance primarily in an effort to pressure the defendant to 

settle invalid claims. 

Congress addressed this very same issue 20 years ago in the context of securities class actions. It found in the House Report for the 

Private Securities Litigation Reform Act that ‘‘[t]he cost of discovery often forces innocent parties to settle frivolous securities 

class actions,’’ and enacted a provision limiting discovery prior to 

a decision resolving the legal sufficiency of the complaint. The rationale underlying that legislation applies equally to class actions 

outside the securities context, and Congress should enact the same 

provision for class actions generally. Consequently, the subsection 

of FICALA entitled ‘‘Stay of discovery’’ would stop the use of discovery to coerce unjustified settlements by requiring Federal courts 

to stay discovery pending resolution of Rule 12 motions (that is, 

motions to dismiss for failure to state a claim); motions to strike 

class allegations; motions to transfer; and other motions that would 

dispose of class allegations unless the court finds that particularized discovery is necessary to preserve evidence or to prevent 

undue prejudice to a party.45

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. 

An agreement for third-party funding of a class action was recently ordered produced by a Federal court in a case involving an 

oil rig explosion off the Nigerian coast. Under this agreement, a 

third-party funder agreed to provide financing to counsel for prosecuting a putative class action seeking damages for individuals allegedly incurring economic loss. There are provisions in the agreement that clearly reveal the third-party funder’s influence over the 

case. For example, the agreement refers to a ‘‘Project 0Plan’’ for the 

litigation developed by counsel and the funder, with restrictions on 


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46Gbarabe v. Chevron Corp., No. 14-cv-00173-SI, 2016 U.S. Dist. LEXIS 103594, at *6 (N.D. 

Cal. Aug. 5, 2016). 47Gbarabe Litigation Funding Agreement, ¶ 3.1.3 (emphasis added). 48Maya Steinitz, The Litigation Finance Contract, 54 Wm. & Mary L. Rev. 455, 472 (2012) 

(emphasis added). 49 Id. 50 Available at http://www.theamazonpost.com/wp-content/uploads/Chevron-Ecuador-Opinion3.4.14.pdf. 

the ability of the class action lawyer to deviate from it, particularly 

with respect to hiring only certain, identified experts. According to 

the same document, the funder agreed to provide class counsel with 

financing, and in exchange the class action lawyer committed, in 

the event of a recovery, to repay that amount plus a ‘‘Success Fee’’ 

(to the extent recovered) of six times the financed amount to be 

paid from attorneys’ fees—plus 2% of the total amount recovered 

by the putative class members. That last part is very important, 

because counsel are agreeing to hand over class member money 

without telling the class members or getting their permission. 

FICALA would require in every such case the disclosure of this sort 

of information, which is information the court needs in deciding 

whether the class representative is adequate, which involves determining who is really running the show. 

This case underscores that the issue of funder control over litigation strategy is particularly troublesome in putative class actions. 

As Judge Susan Illston (of the Northern District of California) explained in ordering the disclosure of the third-party litigation funding arrangement at issue in that litigation, the ‘‘funding agreement 

is relevant to the adequacy [of representation] determination [required for class certification] and should be produced to [the] defendant.’’ 46 Judge Illston’s concerns proved well-founded. In addition to the provisions described above, the funding agreement provides that the lawyers shall endeavor to ‘‘recover the maximum 

possible Contingency Fee,’’ 47 a requirement that may conflict with 

class member interests. 

Another example of substantial control by a funder was the 

elaborate funding agreement used in litigation against Chevron 

filed in an Ecuadorian court alleging environmental contamination 

in Ecuador. The litigation was financed in part by $4 million from 

Burford, one of the largest third-party financing companies in the 

world. The funding agreement at issue in that case ‘‘provide[d] control to the Funders’’ through the ‘‘installment of ‘Nominated Lawyers’ ’’—lawyers ‘‘selected by the Claimants with the Funder’s approval.’’ 48 In addition to exerting control, it was clear that the 

Nominated Lawyers, who among other things controlled the purse 

strings and served as monitors, supervised the costs and course of 

the litigation.49 In 2014, the U.S. District Court for the Southern 

District of New York ruled 50 that the $9.5 billion Ecuadorian judgment was the product of fraud and racketeering activity, finding it 

unenforceable. 

These kinds of provisions inappropriately vest the funder with 

substantial control over key litigation decisions, undermining the 

primacy of the attorney-client relationship. In addition, these arrangements also undermine the adequacy of representation requirement under Rule 23, which requires that attorneys adequately 

represent the interests of class members in order to advance a case 

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51 Ben Hancock, Northern District, First in Nation, Mandates Disclosure of Third-Party Funding in Class Actions, The Recorder, Jan. 23, 2017, http://www.therecorder.com/id=120277 

7487488/Northern-District-First-in-Nation-Mandates-Disclosure-of-ThirdParty-Funding-in-ClassActions?slreturn=20170101100404. 52 Hon. Diane Wood, Circuit Judge, Remarks at the FTC Workshop: Protecting Consumer Interests in Class Actions (Sept. 13–14, 2004), in Panel 2: Tools for Ensuring that Settlements 

are ‘‘Fair, Reasonable, and Adequate,’’ 18 Geo. J. Legal Ethics 1197, 1213 (2005). As Justice 

Ruth Bader Ginsburg has also explained, ‘‘[a] court’s decision to certify a class . . . places pressure on the defendant to settle even unmeritorious claims.’’ Shady Grove Orthopedic Assocs., 

P.A. v. Allstate Ins. Co., 559 U.S. 393, 445 n.3 (2010) (Ginsburg, J., dissenting). 53Skadden, Arps, Slate, Meagher & Flom LLP, Study Reveals US Courts of Appeal Are Less 

Receptive to Reviewing Class Certification Rulings at 1 (April 2014), available at https:// 

www.skadden.-com/sites/default/files/publications/Study_Reveals_US_Courts_of%20Appeal_Are_ Less_Receptive_to_Reviewing_Class_Certification_Rulings.pdf. 54 Id. at 1–2. 55 Id. 

dressed is to require disclosure of these arrangements at the outset 

of civil litigation. Indeed, the U.S. District Court for the Northern 

District of California has now issued a rule mandating the disclosure of such information in all class and representative actions,51

providing an important precedent for making the practice more 

transparent. 

In these situations, the third-party funders of the lawsuit do not 

represent the interests of the class members. They’re in the lawsuits solely to make money for themselves, possibly including taking money away from the victims’ own recovery. A lawyer should 

not be allowed to enter into secret agreements signing away the 

class members’ funds. Consequently, the subsection of FICALA entitled ‘‘Third-party litigation funding disclosure’’ requires that any 

such third-party funding agreement be disclosed to the district 

court and all parties. That would allow the district court to take 

appropriate steps to protect class members’ interests. 

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. 

The certification decision in a class action as a practical matter 

disposes of the case, because virtually every case in which a class 

is certified is settled. That’s why Federal judges consistently characterize class certification as ‘‘in effect, the whole case.’’ 52 But district courts’ class certification decisions are not automatically appealable. Federal Rule of Civil Procedure 23(f) gives Federal courts 

of appeals discretionary authority to grant permission to appeal a 

class certification ruling. A study of class certification appeals filed 

over 7 years (from October 31, 2006 through December 31, 2013) 

found that less than 25% of the petitions to appeal were granted— 

a one-third decline in the grant rate from the prior 8-year period.53

And the grant rate varied dramatically among the circuits, from 

5.4% to 46.4%.54 Importantly, a significant share of district court 

decisions are reversed—more than one-third.55

The provision in the bill is even-handed, as it allows an appeal 

as of right of a class certification decision, whether that decision 

went against the plaintiff or the defendant. Promoting correctness 

and uniformity of class certification decisions is essential given the 

critical role of certification in these lawsuits. And the differing 

treatment based on geographic location is something Congress 

should remedy. Consequently, FICALA’s appeals provision helps 


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56 28 U.S.C. § 1332(a) is the general Federal diversity statute that sets out the criteria cases 

must meet in order to be heard in a Federal court. It provides as follows: ‘‘(a) The district courts 

shall have original jurisdiction of all civil actions where the matter in controversy exceeds the 

sum or value of $75,000, exclusive of interest and costs, and is between—(1) citizens of different 

States; (2) citizens of a State and citizens or subjects of a foreign state, except that the district 

courts shall not have original jurisdiction under this subsection of an action between citizens 

of a State and citizens or subjects of a foreign state who are lawfully admitted for permanent 

residence in the United States and are domiciled in the same State; (3) citizens of different 

States and in which citizens or subjects of a foreign state are additional parties; and (4) a foreign state, defined in section 1603(a) of this title, as plaintiff and citizens of a State or of different States.’’ 

ensure the correctness of class action certification rulings by providing that class certification decisions are appealable as of right. 

Getting class certification questions correctly decided is essential to 

fixing the current class action system, and that will not happen unless appellate courts weigh in. 

Sec. 4. Misjoinder of Plaintiffs in Personal Injury and Wrongful 

Death Actions. 

(d) MISJOINDER OF PLAINTIFFS IN PERSONAL INJURY AND 

WRONGFUL DEATH ACTIONS.—(1) This subsection shall apply 

to any civil action 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)56; and (C) 

a motion to remand is made on the ground that one or more defendants are citizens of the same State as one or more plaintiffs. (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) 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). 

Congress enacted the Class Action Fairness Act in 2005 to address a serious problem: certain ‘‘magnet’’ state courts were handling many (if not most) class actions with national ramifications, 

effectively dictating results for residents of all 50 states. Now, the 

same problem has arisen with mass tort claims, claims in which 

lots of individual lawsuits are joined together into one big one. 

Aggressive trial lawyers are managing to establish what are effectively full-blown, nationwide mass tort proceedings in state 

courts by designing their lawsuits with the goal of preventing removal of their cases to Federal court. They do this by adding parties to defeat diversity jurisdiction, even though the claims should 

be subject to Federal diversity jurisdiction. A few state courts have 

effectively become national mass tort courts, deciding cases with no 

relationship to the venue. The principal reason lawyers can engage 

in this abusive practice is that the Federal courts are divided on 

whether to adopt the fraudulent misjoinder doctrine—the principle 

that in assessing Federal subject matter jurisdiction, Federal 

courts should not defer to plaintiffs’ grouping of multiple claims in 

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57 Compare Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1360 (11th Cir. 1996) (applying 

fraudulent misjoinder doctrine) with In re Prempro Prods. Liab. Litig., 591 F.3d 613 (8th Cir. 

2010) (declining to adopt or reject fraudulent misjoinder doctrine). 58Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1360 (11th Cir. 1996), abrogated on other 

grounds by Cohen v. Office Depot, Inc., 204 F.3d 1069, 1076 (11th Cir. 2000). 59See, e.g., In re Propecia (Finasteride) Prod. Liab. Litig., Nos. 12–MD–2331 (JG) (VVP), 12– 

CV–2049 (JG) (VVP), 2013 U.S. Dist. LEXIS 117375, at *71 (E.D.N.Y. May 17, 2013) (‘‘[T]he 

court concludes that the doctrine of fraudulent misjoinder should be applied to the claims here. 

There is no basis for joining, in a single action, fifty-four plaintiffs from twenty-four jurisdictions 

who purchased different products at different times from unidentified sources.’’), adopted, 2013 

U.S. Dist. LEXIS 118155 (E.D.N.Y. June 6, 2013). 60 In re Boston Sci. Corp., 2015 U.S. Dist. LEXIS 133665, at *4. 61See Ryan Tacher, Civil Justice Ass’n of Cal., Out-of-State Plaintiffs: Are Out-of-State Plaintiffs Clogging California Courts? 2 (2016), http://cjac.org/what/research/CJAC_Out_of_ State_Plaintiffs_Exec_Summary.pdf. 62 Id. 63 2010 WL 148628 (S.D. Ill. Jan. 13, 2010). 

terest are from different states have a Federal forum for their dispute.57

Congress needs to prevent abusive mass action litigation by ensuring Federal court jurisdiction over nationwide mass tort proceedings. That is why FICALA’s section on misjoinder codifies the 

fraudulent misjoinder doctrine in the mass tort context by requiring Federal courts to consider each plaintiff’s claims separately in 

assessing Federal jurisdiction over multi-plaintiff complaints asserting personal injury or wrongful death claims. The House Judiciary Committee recently reported out H.R. 725, the Innocent Party 

Protection Act, which prevents lawyers from adding local defendants with the same citizenship as the plaintiff to a lawsuit simply 

to keep the case in a preferred state court. The fraudulent 

misjoinder provision in FICALA similarly prevents lawyers from 

adding plaintiffs with the same citizenship as the out-of-state defendant to a mass torts case simply to keep the case in state court. 

This provision addresses the flip side of the same coin. 

In Tapscott v. MS Dealer Service Corp., the Eleventh Circuit held 

that a district court had jurisdiction over a lawsuit removed to Federal court where certain parties were ‘‘egregious[ly] misjoined and 

‘‘ha[d] no real connection’’ to each other.58 Relying on this doctrine, 

a number of courts have applied fraudulent misjoinder where 

plaintiffs attempt to join their factually dissimilar personal injury 

claims in a single action in an attempt to defeat diversity jurisdiction.59 But many others have not, including Federal courts in California, based largely on the fact that the Ninth Circuit has never 

expressly adopted the fraudulent misjoinder doctrine.60 A recent 

study of more than 2,900 cases filed against companies in Los Angeles and San Francisco counties between 2010 and 2016 found 

that the cases involved 25,000 individual plaintiffs, and that only 

10.1% of the plaintiffs were California residents.61 The remaining 

89.9%—representing over 20,000 individual plaintiffs—were residents of another state.62 This provision of FICALA would prevent 

such abuse. 

Two cases provide good illustrations of the need for this 

misjoinder provision. Bancroft v. Bayer Corp.63 involved a products 

liability lawsuit filed in St. Clair County, Illinois (adjoining the notorious Madison County). The complaint joined the claims of 45 

plaintiffs, one of whom (and apparently only one) was a co-citizen 

of the defendant. Other plaintiffs came from all over the country. 

The defendant removed, asserting fraudulent misjoinder under the 

Eleventh Circuit’s decision in Tapscott v. MS Dealer Service 


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64 77 F.3d 1353 (11th Cir. 1996). 65 2016 WL 7230433 (E.D. Mo. Dec. 14, 2016). 66 28 U.S.C. § 1407. 

Corp., 64 but the district court rejected Tapscott and refused to 

adopt the fraudulent misjoinder doctrine. The Bancroft case shows 

how current law allows plaintiffs to defeat removal that is otherwise proper by finding a single plaintiff among many (here, one out 

of 45) who is a co-citizen of the defendant. The misjoinder provision 

of the bill would allow the defendant to remove the 44 plaintiffs’ 

claims that individually satisfy all the requirements for diversity 

jurisdiction. 

An even more recent egregious illustration is Jones v. Bayer 

Corp.65 In Jones, 99 plaintiffs filed a single lawsuit in the Circuit 

Court of St. Louis, Missouri, asserting products liability claims 

against Bayer and other defendants. The number 99 was hardly a 

coincidence; with fewer than 100 plaintiffs, the defendants could 

not remove the case under the ‘‘mass action’’ provision of the Class 

Action Fairness Act. The defendants argued for removal under 

§ 1332(a), but the plaintiffs’ lawyers anticipated that and made 

sure 3 of the 99 plaintiffs were co-citizens with one or more of the 

corporate defendants. The district court rejected the defendants’ attempt to invoke the fraudulent misjoinder doctrine and ordered remand even though the case (minus the 3 co-citizen defendants) belonged in Federal court. The misjoinder provision in the bill would 

remedy that. 

Sec. 5. Multidistrict Litigation Proceedings Procedures. 

Allegations Verification: 

(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 30 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. 

Congress created multi-district litigation ‘‘MDL’’ proceedings as a 

special Federal legal procedure designed to speed the process of 

handling complex cases when ‘‘civil actions involving one or more 

common questions of fact are pending in different districts.’’ 66 The 

Judicial Panel on Multidistrict Litigation decides whether cases 

should be consolidated under MDL, and if so, where the cases 

should be transferred. Cases subject to MDL are sent from one 

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67Order, In re Mentor Corp. (MDL Docket No. 2004, 4:08–MD–2004 (CDL)), Document 1039 

(filed September 7, 2016) (U.S. District Judge Clay D. Land, M.D.Ga.). 68Order, In re Mentor Corp. (MDL Docket No. 2004, 4:08-MD-2004 (CDL)), Document 1039 

(filed September 7, 2016) (U.S. District Judge Clay D. Land, M.D.Ga.). 69 In re Mentor Corp. Obtape Transobturator Sling Prods. Liab. Litig., MDL No. 2004, slip op. 

at 4 (M.D. Ga. Sept. 17, 2016). 

feree, for all pretrial proceedings and discovery. If a case is not settled or dismissed in the transferee court, it is remanded (that is, 

sent back) to the transferor court for trial. The MDL proceedings 

concept, however, has become subject to great abuse. 

Last year, one Federal MDL judge—Chief Judge Clay Land of 

the U.S. District Court for the Middle District of Georgia—became 

so disgusted with the breakdown of the MDL process as it exists 

today that he issued an opinion that included the following comments: 

Some lawyers seem to think that their cases will be swept 

into the MDL where a global settlement will be reached, 

allowing them to obtain recovery without the individual 

merit of their case being scrutinized as closely as it would 

if it proceeded as a separate individual action. This attitude explains why many cases are filed . . . with so little 

pre-filing preparation that counsel apparently has no idea 

whether or how she will prove causation. . . . [B]ased on 

fifteen years on the Federal bench and a front row seat as 

an MDL transferee judge [I am] convinced that MDL consolidation for products liability actions does have the unintended consequence of producing more new case filings of 

marginal merit in Federal court, many of which would not 

have been filed otherwise.67

When a mass tort MDL proceeding is created, a helter-skelter 

‘‘gold rush’’ ensues. Opportunistic lawyers launch advertising campaigns that result in the rapid filing of poorly investigated—and 

often frivolous or fraudulent—claims that otherwise would never 

have been filed. As Chief Judge Land noted in his decision, ‘‘The 

MDL [here] began with twenty-two cases. Due to subsequent tag 

along transfers, it exploded to more than 850 cases, which explosion appears to have been fueled, at least in part, by an onslaught 

of lawyers television solicitations.’’ 68 The allegation verification 

provisions of FICALA would help change that. 

Because of the lack of screening of these mass tort claims, they 

are taking over the Federal court system. Astoundingly, there are 

around 120,000 lawsuits pending in those MDL proceedings. That’s 

35% of all civil lawsuits currently pending in all Federal courts nationwide (which number about 342,000). FICALA would correct 

that problem by making plaintiffs’ counsel demonstrate up front 

that they’ve performed an adequate investigation of each claim before filing it. 

Many claims filed in MDL proceedings are bogus: there is no apparent evidence of injury or exposure to the alleged risk. As MDL 

Judge Land noted, MDL proceedings encourage ‘‘case filings of 

marginal merit’’—cases ‘‘that otherwise could not be filed if they 

had to stand on their own.’’ 69 In the silica litigation, Judge Janis 

Graham Jack oversaw an MDL proceeding encompassing thousands of lawsuits alleging that plaintiffs had been harmed by 


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70 Julie Creswell, Testing for Silicosis Comes Under Scrutiny in Congress, N.Y. Times, Mar. 

8, 2006, http://www.nytimes.com/2006/03/08/business/08silica.html?pagewanted=print&_r=0. 71 Victor E. Schwartz et al., Getting the Sand Out of the Eyes of the Law: The Need for a Clear 

Rule for Sand Suppliers in Texas after Humble Sand & Gravel, Inc. v. Gomez, 37 St. Mary’s 

L.J. 283, 291 (2006). 72 In re Silica Prods. Liab. Litig., 398 F. Supp. 2d 563, 632, 634 (S.D. Tex. 2005) (citation omitted). 73 Id. at 635. 74Lester Brickman, The Use of Litigation Screenings in Mass Torts: A Formula for Fraud?, 

61 SMU L. Rev. 1221, 1316 n.512 (2008) (quoting In re Silica, 398 F. Supp. 2d at 676). 75Order, In re Mentor Corp. (MDL Docket No. 2004, 4:08–MD–2004 (CDL)), Document 1039 

(filed September 7, 2016) (U.S. District Judge Clay D. Land, M.D.Ga.). 76 28 U.S.C. § 1407(b) sets out the procedures for MDL proceedings, providing that ‘‘Such coordinated or consolidated pretrial proceedings shall be conducted by a judge or judges to whom 

such actions are assigned by the judicial panel on multidistrict litigation. For this purpose, upon 

request of the panel, a circuit judge or a district judge may be designated and assigned temporarily for service in the transferee district by the Chief Justice of the United States or the chief 

judge of the circuit, as may be required, in accordance with the provisions of chapter 13 of this 

title. With the consent of the transferee district court, such actions may be assigned by the panel 

to a judge or judges of such district. The judge or judges to whom such actions are assigned, 

the members of the judicial panel on multidistrict litigation, and other circuit and district judges 

designated when needed by the panel may exercise the powers of a district judge in any district 

for the purpose of conducting pretrial depositions in such coordinated or consolidated pretrial 

proceedings.’’ 

breathing in crystalline silica, a substance similar to sand, but 

smaller. She wrote, ‘‘Because of silica’s widespread use, some plaintiffs’ lawyers viewed it as the source of the next big mass tort’’ 

after asbestos.70 But in the end, Judge Jack, who presided over the 

silica MDL proceeding, recommended that all but one of the 10,000 

claims on the MDL docket should be dismissed on remand because 

the diagnoses were fraudulently prepared.71 In a sharp ruling finding litigation screening fraud, Judge Jack resolved that the ‘‘ ‘epidemic’ of some 10,000 cases of silicosis ‘is largely the result of misdiagnosis’ ’’ and that ‘‘the failure of the challenged doctors to observe the same standards for a ‘legal diagnosis’ as they do for a 

‘medical diagnosis’ renders their diagnoses . . . inadmissible[.]’’ 72

According to Judge Jack, ‘‘the diagnoses were . . . manufactured 

for money,’’ 73 and ‘‘in [the] hopes of extracting mass nuisance-value 

settlements because [defendants] are financially incapable of examining the merits of each individual claim in the usual manner.’’ 74

Meritless claims are clogging the system, diverting judicial attention away from more valid claims. And because they create the 

misimpression that thousands have been injured, they create improper, indiscriminate pressure on defendants to settle. Thus, as 

Chief Judge Land observed, there is a need for ‘‘approaches that 

weed out non-meritorious cases early, efficiently, and justly.’’ 75

The allegations verification provision of FICALA is just such an 

approach. It would require that for each lawsuit filed in or transferred to a Federal MDL mass tort proceeding, plaintiffs’ lawyers 

must submit to the MDL court evidence that before filing, they 

properly investigated the asserted claims. Specifically, they would 

be required to submit evidentiary support (including, but not limited to, medical records) for the factual contentions in each plaintiff’s complaint regarding the alleged injury, the exposure to the 

risk that allegedly caused the injury, and the alleged cause of the 

injury. 

Trial Prohibition: 

(j) TRIAL PROHIBITION.—In any coordinated or consolidated pretrial proceedings conducted pursuant to subsection (b),76 the judge 

or judges to whom actions are assigned by the Judicial Panel on 


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77 28 U.S.C. § 1407(a). 78 28 U.S.C. § 1407(b) sets out the procedures for MDL proceedings, providing that ‘‘Such coordinated or consolidated pretrial proceedings shall be conducted by a judge or judges to whom 

such actions are assigned by the judicial panel on multidistrict litigation. For this purpose, upon 

request of the panel, a circuit judge or a district judge may be designated and assigned temporarily for service in the transferee district by the Chief Justice of the United States or the chief 

judge of the circuit, as may be required, in accordance with the provisions of chapter 13 of this 

title. With the consent of the transferee district court, such actions may be assigned by the panel 

to a judge or judges of such district. The judge or judges to whom such actions are assigned, 

the members of the judicial panel on multidistrict litigation, and other circuit and district judges 

designated when needed by the panel may exercise the powers of a district judge in any district 

for the purpose of conducting pretrial depositions in such coordinated or consolidated pretrial 

proceedings.’’ 79 Black’s Law Dictionary (10th ed. 2014) defines ‘‘material’’ as ‘‘Of such a nature that knowledge of the item would affect a person’s decision-making; significant; essential.’’ 

Multidistrict Litigation may not conduct any trial in any civil action transferred to or directly filed in the proceedings unless all parties to the civil action consent to trial of the specific case sought to 

be tried. 

28 U.S.C. § 1407(a), which authorizes MDL proceedings, explicitly states that ‘‘When civil actions involving one or more common 

questions of fact are pending in different districts, such actions 

may be transferred to any district for coordinated or consolidated 

pretrial proceedings.’’ The repeated use of the word ‘‘pretrial’’ 

throughout the rest of § 1407 makes clear that trials are not authorized to be conducted by MDL courts. But while the MDL statute provides only for consolidated pre-trial proceedings, some MDL 

courts pressure defendants to agree to so-called ‘‘bellwether’’ 

trials—namely, pseudo-trials that supposedly test a claim’s suitability for settlement—in order to pressure a settlement in the 

case. Often, however, those trials are not fair tests of the plaintiffs’ 

claims because they consist of claims hand-picked by plaintiffs’ 

counsel that do not fairly represent the claims of all the plaintiffs 

in the MDL proceedings. 

In enacting the MDL statute, Congress made clear that MDL 

courts were supposed to handle pre-trial proceedings only—and 

then send the cases back to the courts in which they were originally filed for trial: ‘‘Each action so transferred shall be remanded 

by the panel at or before the conclusion of such pretrial proceedings 

to the district from which it was transferred unless it shall have 

been previously terminated.’’ 77 The MDL trial prohibition in 

FICALA would prevent the unfair, improper use of the MDL process to deprive defendants of their due process right to individual 

trials by affirming Congress’s original intent that MDL proceedings 

are for pre-trial purposes only—and that no trial may be conducted 

by an MDL court unless all parties consent to a waiver of venue 

and personal jurisdiction for that particular trial. 

Review of Orders: 

(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),78 provided that an immediate appeal from the order 

may materially 79 advance the ultimate termination of one or more 

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80 28 U.S.C. § 1447(d), which will become § 1447(e) if FICALA becomes law, states ‘‘An order 

remanding a case to the State court from which it was removed is not reviewable on appeal 

or otherwise, except that an order remanding a case to the State court from which it was removed pursuant to section 1442 or 1443 of this title shall be reviewable by appeal or otherwise.’’ 

The text of FICALA makes clear that discretionary review by an appeals court of jurisdictional 

remand rulings by an MDL court are authorized, notwithstanding the prohibitions on such review in 28 U.S.C. § 1447(d). 81 In re E. I. du Pont de Nemours & Co., MDL 2433, 2016 U.S. Dist. LEXIS 43337, at *1198 

(S.D. Ohio Mar. 29, 2016). 82 Id. at *1198–99. 83 28 U.S.C. § 1407(b) sets out the procedures for MDL proceedings, providing that ‘‘Such coordinated or consolidated pretrial proceedings shall be conducted by a judge or judges to whom 

such actions are assigned by the judicial panel on multidistrict litigation. For this purpose, upon 

request of the panel, a circuit judge or a district judge may be designated and assigned temporarily for service in the transferee district by the Chief Justice of the United States or the chief 

judge of the circuit, as may be required, in accordance with the provisions of chapter 13 of this 

title. With the consent of the transferee district court, such actions may be assigned by the panel 

to a judge or judges of such district. The judge or judges to whom such actions are assigned, 

the members of the judicial panel on multidistrict litigation, and other circuit and district judges 

designated when needed by the panel may exercise the powers of a district judge in any district 

standing section 1447(e),80 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. 

Some MDL judges have issued questionable rulings on pivotal 

issues that are not subject to immediate appellate review, including 

the admissibility of expert evidence and the appropriateness of 

multi-plaintiff trials. Given the high stakes of these cases, and the 

likelihood of a coerced settlement based on incorrect legal rulings, 

interlocutory review is critical. Moreover, greater appellate court 

attention to mass tort MDL proceedings is warranted, because 

these proceedings now encompass more than 35% of all civil cases 

pending in the Federal court system nationwide. 

Indeed, MDL courts have sometimes forced defendants to proceed 

with consecutive trials without the benefit of appellate review, even 

though the same judicial errors will likely be repeated. For example, in In re E. I. du Pont de Nemours & Co., the MDL judge recognized that ‘‘some issues on appeal may impact the cases that are 

not yet tried in th[e] MDL.’’ 81 Nonetheless, the court refused to 

stay further trials pending the resolution of the appeal, reasoning 

that bellwether ‘‘trials are meant not only for determination of the 

rights and obligations of the litigants, but for a special purpose 

. . . information gathering that may lead to a global settlement.’’ 82

But that does not make sense, because if the information gathered 

is a result of uncorrected legal errors, then any resulting settlement is tainted. 

To help prevent these problems, the ‘‘review of orders’’ provision 

in FICALA would authorize immediate appellate review of interlocutory MDL court orders where immediate review may materially 

advance the ultimate conclusion of one or more cases in the MDL 

proceeding. 

Ensuring Proper Recovery for Plaintiffs: 

(l) ENSURING PROPER RECOVERY FOR PLAINTIFFS.—The 

claimants in any civil action asserting a claim for personal injury 

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for the purpose of conducting pretrial depositions in such coordinated or consolidated pretrial 

proceedings.’’ 84 In re Snyder, 472 U.S. 634, 644 (1985). 85 9 Statutes at Large of Virginia 529 (Hening ed. 1823). 

ceive not less than 80 percent of any monetary recovery obtained in 

that action by settlement, judgment or otherwise. 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. 

When the cost-savings economies of scale are achieved by trial 

lawyers in an MDL proceeding, those savings should be passed on 

to the victims. But unfortunately, mass tort litigation matters suffer from the same problem as class actions: lawyers manipulate the 

system to take an unfair share of settlement payments. Even 

though trial lawyers may be handling thousands of copycat individual cases asserting similar personal injury or wrongful death 

claims and theories—and thereby realizing substantial economies 

of scale—they still demand a 33–40% fee, which is standard for a 

standalone case, but a huge windfall when the lawyer is handling 

a large number of copycat mass tort cases under the streamlined 

MDL process. 

The provision of FICALA entitled ‘‘Ensuring Proper Recovery for 

Plaintiffs’’ therefore requires that in settlements of Federal court 

mass tort claims in MDL proceedings, 80% of all compensation paid 

must go directly to claimants, regardless of what the lawyer-client 

fee arrangement may provide. Plaintiffs’ lawyers who file lawsuits 

do not operate in a free market environment. Instead, they have 

the unique ability to simply give another party a piece of paper— 

a legal complaint—which requires the other party to spend money 

in their defense, regardless of the merits of the complaint against 

them, or else risk a default judgment for not defending themselves. 

Unscrupulous lawyers can then simply point out to the parties 

served that the costs of paying off the lawyers will be less than the 

costs of the other parties’ defending themselves. And so innocent 

parties served with complaints are pressured to settle. 

The Supreme Court has also noted the institutionally coercive 

role lawyers are allowed to play in society, stating in one case ‘‘As 

an officer of the court, a member of the bar enjoys singular powers 

that others do not possess; by virtue of admission, members of the 

bar share a kind of monopoly granted only to lawyers. . . . [A]s an 

officer of the court, a lawyer can cause persons to drop their private affairs and be called as witnesses in court, and for depositions 

and other pretrial processes that, while subject to the ultimate control of the court, may be conducted outside courtrooms. The license 

granted by the court requires members of the bar to conduct themselves in a manner compatible with the role of courts in the administration of justice.’’ 84

This understanding has a long history in America. Indeed, fear 

that the legal profession would abuse its power to generate lawsuits led to limits on attorneys’ fees in all the states at the Founding of our country. In 1778, in Virginia, attorneys’ fees were fixed 

by statute in the General Court and the High Court of Chancery 

depending on the nature of the action.85 Delaware had its own 

unique method for reducing litigiousness. In 1793, Delaware passed 


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86 2 Laws of the State of Delaware 1116, c. 27 (1797). 

the Act for Regulating and Establishing Fees providing that for all 

pleadings in an action subsequent to a declaration, the fee would 

be one cent for every written line, twelve words to a line.86

Given the unique power of lawyers filing lawsuits to coerce settlements, it’s reasonable to require that when lawyers use the Federal MDL system to consolidate multiple, identical claims while 

streamlining their own lawsuit costs, Federal rules should require 

them to pass along those savings to victims. Because if they do not, 

the MDL system will continue to incentivize lawyers to treat it less 

as a means of efficiently resolving claims for victims, and more as 

a means of allowing unscrupulous lawyers to increase their coercive settlement leverage and thereby pad their own bank accounts. 

Sec. 6. Rulemaking Authority of Supreme Court and Judicial Conference. 

This section makes clear that nothing in the bill restricts the authority of the Judicial Conference and the Supreme Court to propose their own rule changes under chapter 131 of title 28 of the 

U.S. Code, which sets out the procedures under which the courts 

themselves can create their own rules. 

Sec. 7. Effective Date. 

This section provides that the amendments made by the bill shall 

apply on the date of enactment. 

Changes in Existing Law Made by the Bill, as Reported 

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

and existing law in which no change is proposed is shown in 

roman): 

TITLE 28, UNITED STATES CODE 

* * * * * * * 

PART IV—JURISDICTION AND VENUE 

* * * * * * * 

CHAPTER 87—DISTRICT COURTS; VENUE 

* * * * * * * 

§ 1407. Multidistrict litigation 

(a) When civil actions involving one or more common questions 

of fact are pending in different districts, such actions may be transferred to any district for coordinated or consolidated pretrial proceedings. Such transfers shall be made by the judicial panel on 

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ience of parties and witnesses and will promote the just and efficient conduct of such actions. Each action so transferred shall be 

remanded by the panel at or before the conclusion of such pretrial 

proceedings to the district from which it was transferred unless it 

shall have been previously terminated: Provided, however, That the 

panel may separate any claim, cross-claim, counter-claim, or thirdparty claim and remand any of such claims before the remainder 

of the action is remanded. 

(b) Such coordinated or consolidated pretrial proceedings shall 

be conducted by a judge or judges to whom such actions are assigned by the judicial panel on multidistrict litigation. For this purpose, upon request of the panel, a circuit judge or a district judge 

may be designated and assigned temporarily for service in the 

transferee district by the Chief Justice of the United States or the 

chief judge of the circuit, as may be required, in accordance with 

the provisions of chapter 13 of this title. With the consent of the 

transferee district court, such actions may be assigned by the panel 

to a judge or judges of such district. The judge or judges to whom 

such actions are assigned, the members of the judicial panel on 

multidistrict litigation, and other circuit and district judges designated when needed by the panel may exercise the powers of a 

district judge in any district for the purpose of conducting pretrial 

depositions in such coordinated or consolidated pretrial proceedings. 

(c) Proceedings for the transfer of an action under this section 

may be initiated by— 

(i) the judicial panel on multidistrict litigation upon its 

own initiative, or 

(ii) motion filed with the panel by a party in any action in 

which transfer for coordinated or consolidated pretrial proceedings under this section may be appropriate. A copy of such 

motion shall be filed in the district court in which the moving 

party’s action is pending. 

The panel shall give notice to the parties in all actions in which 

transfers for coordinated or consolidated pretrial proceedings are 

contemplated, and such notice shall specify the time and place of 

any hearing to determine whether such transfer shall be made. Orders of the panel to set a hearing and other orders of the panel 

issued prior to the order either directing or denying transfer shall 

be filed in the office of the clerk of the district court in which a 

transfer hearing is to be or has been held. The panel’s order of 

transfer shall be based upon a record of such hearing at which material evidence may be offered by any party to an action pending 

in any district that would be affected by the proceedings under this 

section, and shall be supported by findings of fact and conclusions 

of law based upon such record. Orders of transfer and such other 

orders as the panel may make thereafter shall be filed in the office 

of the clerk of the district court of the transferee district and shall 

be effective when thus filed. The clerk of the transferee district 

court shall forthwith transmit a certified copy of the panel’s order 

to transfer to the clerk of the district court from which the action 


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is being transferred. An order denying transfer shall be filed in 

each district wherein there is a case pending in which the motion 

for transfer has been made. 

(d) The judicial panel on multidistrict litigation shall consist of 

seven circuit and district judges designated from time to time by 

the Chief Justice of the United States, no two of whom shall be 

from the same circuit. The concurrence of four members shall be 

necessary to any action by the panel. 

(e) No proceedings for review of any order of the panel may be 

permitted except by extraordinary writ pursuant to the provisions 

of title 28, section 1651, United States Code. Petitions for an extraordinary writ to review an order of the panel to set a transfer 

hearing and other orders of the panel issued prior to the order either directing or denying transfer shall be filed only in the court 

of appeals having jurisdiction over the district in which a hearing 

is to be or has been held. Petitions for an extraordinary writ to review an order to transfer or orders subsequent to transfer shall be 

filed only in the court of appeals having jurisdiction over the transferee district. There shall be no appeal or review of an order of the 

panel denying a motion to transfer for consolidated or coordinated 

proceedings. 

(f) The panel may prescribe rules for the conduct of its business not inconsistent with Acts of Congress and the Federal Rules 

of Civil Procedure. 

(g) Nothing in this section shall apply to any action in which 

the United States is a complainant arising under the antitrust 

laws. ‘‘Antitrust laws’’ as used herein include those acts referred to 

in the Act of October 15, 1914, as amended (38 Stat. 730; 15 U.S.C. 

12), and also include the Act of June 19, 1936 (49 Stat. 1526; 15 

U.S.C. 13, 13a, and 13b) and the Act of September 26, 1914, as 

added March 21, 1938 (52 Stat. 116, 117; 15 U.S.C. 56); but shall 

not include section 4A of the Act of October 15, 1914, as added July 

7, 1955 (69 Stat. 282; 15 U.S.C. 15a). 

(h) Notwithstanding the provisions of section 1404 or subsection (f) of this section, the judicial panel on multidistrict litigation may consolidate and transfer with or without the consent of 

the parties, for both pretrial purposes and for trial, any action 

brought under section 4C of the Clayton Act. 

(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 30 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 


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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 any trial in any civil action transferred to or directly filed in the proceedings unless all parties to the civil action consent to trial of the specific case sought to 

be tried. 

(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 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(e), 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.—The claimants in any civil action asserting a claim for personal injury 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 in that action by 

settlement, judgment or otherwise. 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. 

* * * * * * * 

CHAPTER 89—DISTRICT COURTS; REMOVAL OF CASES 

FROM STATE COURTS 

* * * * * * * 

§ 1447. Procedure after removal generally 

(a) In any case removed from a State court, the district court 

may issue all necessary orders and process to bring before it all 

proper parties whether served by process issued by the State court 

or otherwise. 

(b) It may require the removing party to file with its clerk copies of all records and proceedings in such State court or may cause 

the same to be brought before it by writ of certiorari issued to such 

State court. 

(c) A motion to remand the case on the basis of any defect 

other than lack of subject matter jurisdiction must be made within 

30 days after the filing of the notice of removal under section 

1446(a). If at any time before final judgment it appears that the 

district court lacks subject matter jurisdiction, the case shall be remanded. An order remanding the case may require payment of just 


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costs and any actual expenses, including attorney fees, incurred as 

a result of the removal. A certified copy of the order of remand 

shall be mailed by the clerk to the clerk of the State court. The 

State court may thereupon proceed with such case. 

(d) MISJOINDER OF PLAINTIFFS IN PERSONAL INJURY AND

WRONGFUL DEATH ACTIONS.— (1) This subsection shall apply to any civil action 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 defendants are citizens of the same State as one or 

more plaintiffs. 

(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) 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). 

ø(d)¿ (e) An order remanding a case to the State court from 

which it was removed is not reviewable on appeal or otherwise, except that an order remanding a case to the State court from which 

it was removed pursuant to section 1442 or 1443 of this title shall 

be reviewable by appeal or otherwise. 

ø(e)¿ (f) If after removal the plaintiff seeks to join additional 

defendants whose joinder would destroy subject matter jurisdiction, 

the court may deny joinder, or permit joinder and remand the action to the State court. 

* * * * * * * 

PART V—PROCEDURE 

* * * * * * * 

CHAPTER 114—CLASS ACTIONS 

* * * * * * * 

§ 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 


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presented, that the requirement in subsection (a) of this section is 

satisfied. 

§ 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 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. 

(c) DEFINITION.—For purposes of this section, ‘‘relative’’ shall be 

defined by reference to section 3110(a)(3) of title 5, United States 

Code. 

§ 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 


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is attributed to the equitable relief shall be limited to a reasonable percentage of the value of the equitable relief, including 

any injunctive relief. 

§ 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 

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 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). 

§ 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. 

§ 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. 


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§ 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. 

§ 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. 

* * * * * * * 

Dissenting Views 

H.R. 985, the ‘‘Fairness in Class Action Litigation Act of 2017,’’ 

represents the latest attempt to tilt the civil justice playing field 

in favor of corporate defendants and to deny consumers and members of the public access to justice. The bill aims to eliminate the 

use of class actions by imposing numerous new and unnecessary requirements for the certification and consideration of class action 

lawsuits and also by creating new onerous requirements for multidistrict litigation. In addition, the bill amends the remand statute 

in a way that could make it easier for defendants to have certain 

personal injury and wrongful death actions be heard in Federal 

court. 

Class actions are a critical tool for allowing those injured by corporate wrongdoing to receive some measure of justice by making it 

economically feasible to pursue claims that are too small or too 

burdensome to pursue on an individual basis, but are nonetheless 

meritorious. Class actions are also an important enforcement mechanism and are particularly vital in consumer protection, civil 

rights, antitrust, personal injury, and employment cases. Finally, 

they promote the efficient consideration of numerous cases raising 

substantially the same factual and legal questions, thereby lessening burdens on courts. By making most class actions very difficult if not impossible to pursue, H.R. 985 undermines these important goals. 

H.R. 985 is highly problematic for many reasons. To begin with, 

the bill is a solution in search of a problem because it appears to 

be based on the false premise—offered with no supporting evidence—that Federal courts are routinely failing to comply with the 

rigorous requirements for certifying class actions specified in Federal Rule of Civil Procedure 23. Indeed, the false notion that many 

class actions and multidistrict proceedings are somehow inherently 

fraudulent or improper is implicit throughout the bill. In fact, what 

proponents appear to be concerned with is not the fact that the requirements of class certification and multidistrict litigation are unfair, but that they are not skewed decisively in corporate defendants’ favor. 

In addition, H.R. 985 undermines the core purpose of class actions and multidistrict litigation, which is to ensure efficiency in 

the disposition of numerous but substantially the same claims or 

factual questions and to provide access to courts for parties that, 


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1 28 U.S.C. §§ 2071 et seq. (2017). 2Letter from Daniel G. Campbell, U.S. District Judge, D. Ariz., Chair, Comm. on Rules of 

Practice and Procedure, & John D. Bates, U.S. District Judge, D.D.C., Chair, Advisory Comm. 

on Civil Rules, Judicial Conference of the United States, to Bob Goodlatte (R-VA), Chair, H. 

Comm. on the Judiciary (Feb. 14, 2017) (on file with H. Comm. on the Judiciary Democratic 

staff) [hereinafter ‘‘Judicial Conference Letter’’]. 3 Id. 

4Letter from Thomas M. Susman, Director, Governmental Affairs Office, American Bar Association to Bob Goodlatte (R-VA), Chair, H. Comm. on the Judiciary (Feb. 14, 2017) (on file with 

H. Comm. on the Judiciary Democratic staff) [hereinafter ‘‘ABA Letter’’]. 5Letter from 72 consumer rights, public interest, and labor groups to Bob Goodlatte (R-VA), 

Chair, & John Conyers, Jr. (D-MI), Ranking Member, H. Comm. on the Judiciary (Feb. 14, 2017) 

(on file with H. Comm. on the Judiciary Democratic staff) [hereinafter ‘‘Groups Letter’’]; Letter 

from the National Association of Shareholder & Consumer Attorneys to Paul Ryan, Speaker of 

the House, et al. (Feb. 16, 2017) (on file with H. Comm. on the Judiciary Democratic staff); Letter from National Association of Consumer Advocates to Bob Goodlatte (R-VA), Chair, & John 

Conyers, Jr. (D-MI), Ranking Member, H. Comm. on the Judiciary (Feb. 15, 2017) (on file with 

H. Comm. on the Judiciary Democratic staff). 

individually, would not have the incentive or resources to pursue 

otherwise meritorious claims. Rather, the bill’s numerous, vague or 

impossible-to-meet certification and other requirements will only 

foster more litigation, increase burdens and costs that would fall 

disproportionately on plaintiffs, and allow more opportunities for 

corporate defendants to have a case dismissed or to engage in dilatory tactics. Also, its attorneys’ fee and ‘‘conflict of interest’’ provisions aimed specifically at class counsel appear designed to make 

it harder for plaintiffs to obtain legal representation in the first 

place. 

Finally, the bill would substantially and needlessly increase resource burdens on the Federal courts, significantly reduce judicial 

discretion in many respects, and unnecessarily circumvent the 

careful and thorough Rules Enabling Act process for amending 

Federal civil procedure rules.1 In fact, the Judicial Conference of 

the United States reports that it has been ‘‘studying class action 

for the last five years’’ and ‘‘has considered many of the issues addressed in H.R. 985.’’ 2 Accordingly, the Judicial Conference 

‘‘strongly urge[s] Congress not to amend the class action procedures 

found in Rule 23 outside the Rules Enabling Act process.’’ 3

We are also concerned that the Majority has failed to accord any 

deliberative process to this legislation, which was introduced only 

days before the Committee considered it for markup. No hearings 

have been held this Congress and the version of the bill considered 

last Congress only consisted of one section of H.R. 985. Indeed, the 

Committee’s markup of H.R. 985 represented the first vetting of 

any kind for most of these provisions. In its opposition to this 

measure, the American Bar Association correctly notes the many 

shortcomings of ‘‘advancing comprehensive class action reform 

without a hearing to examine all the complicated issues involved 

with so many rule changes.’’ 4

In recognition of these many concerns, numerous labor, consumer 

rights, and public interest groups oppose H.R. 985, including the 

AFL-CIO, the Alliance for Justice, the American Antitrust Institute, the Center for Science in the Public Interest, Consumer Federation of America, Consumers Union, the Committee to Support 

the Antitrust Laws, the NAACP, the National Association of Consumer Advocates, the National Consumer Law Center, the National Employment Law Project, Public Citizen, Public Justice, and 

the Southern Poverty Law Center.5 The bill is also opposed by a 

coalition of 121 civil rights groups as well as a coalition of 37 disVerDate Sep 11 2014 21:40 Mar 07, 2017 Jkt 069006 PO 00000 Frm 00046 Fmt 6659 Sfmt 6601 E:\HR\OC\HR025.XXX HR025

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6Letter from 121 civil rights groups to Bob Goodlatte (R-VA), Chair, & John Conyers, Jr. (DMI), Ranking Member, H. Comm. on the Judiciary (Feb. 15, 2017) (on file with H. Comm. on 

the Judiciary Democratic staff) [hereinafter ‘‘Civil Rights Letter’’]; Undated letter from 37 disability rights groups to Bob Goodlatte (R-VA), Chair, & John Conyers, Jr. (D-MI), Ranking 

Member, H. Comm. on the Judiciary (on file with H. Comm. on the Judiciary Democratic staff) 

[hereinafter ‘‘Disability Rights Letter’’]. 7 Executive Office of the President, Office of Management and Budget, Statement of Administration Policy on H.R. 1927, the ‘‘Fairness in Class Action Litigation and Furthering Asbestos 

Claim Transparency Act of 2015,’’ Jan. 6, 2016. 

ability rights groups.6 In addition, the Obama Administration 

threatened to veto legislation last Congress that consisted of just 

one section of H.R. 985 because ‘‘it would impair the enforcement 

of important Federal laws [and] constrain access to the courts.’’ 7

Finally, Professor Arthur Miller, the Nation’s foremost scholar of 

Federal civil practice and procedure, wrote in opposition to this 

earlier iteration of the bill because it violated the central mandate 

of the class action device, which is to promote judicial efficiency 

through the use of class representatives to establish injury on behalf of all similarly situated. Rather than addressing these concerns, the current version of H.R. 985 greatly exacerbates them. 

For the foregoing reasons and those discussed below, we must respectfully oppose H.R. 985. 

DESCRIPTION AND BACKGROUND

DESCRIPTION

H.R. 985 would impose a series of new and burdensome statutory 

requirements for the certification and consideration of class actions. 

In addition, with respect to multidistrict litigation, it would, among 

other things, impose a heightened burden on plaintiffs in personal 

injury actions to demonstrate evidentiary support for their factual 

allegations. Finally, the bill amends the remand statute to require 

Federal courts in diversity cases involving two or more plaintiffs in 

personal injury or wrongful death cases to consider each plaintiff 

separately when determining whether they have met the requirements of the Federal diversity statute. All of these provisions will 

have the effect of fueling increased litigation and costs for plaintiffs 

with the apparent goal of dissuading future plaintiffs from filing 

suit, even when they have meritorious claims. The following described provisions will be the primary focus of these views. 

Section 3(a) amends chapter 114 of title 28 of the United States 

Code by adding after section 1715 several new sections governing 

class actions. For example, new section 1716 would prohibit a Federal court from certifying any proposed class seeking monetary relief for personal injury or economic loss unless the party seeking 

the class action proves that each proposed class member suffered 

the same type and scope of injury as the putative class representative. The terms ‘‘economic loss’’ and ‘‘scope of injury’’ are undefined. 

Section 1716 further requires a court, in issuing a class certification order for any class subject to subsection 2(a), to also certify 

that the requirements of subsection 2(a) have been met ‘‘based on 

a rigorous analysis of the evidence presented[.]’’ 

New section 1717 prohibits a Federal court from certifying any 

class action in which a proposed class representative or named 

plaintiff is a relative of, a present or former client of (other than 

with respect to the class action), a present or former employee of, 

or has any contractual relationship (other than with respect to the 


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class action) with class counsel. Section 1717 requires that in a 

class action complaint, the attorney for the class representative or 

named plaintiff disclose the existence of such a relationship, describe the circumstances under which each class representative or 

named plaintiff agreed to be included in the complaint, and identify 

any other class action to which the class representative or named 

plaintiff has a similar role. 

New section 1718 imposes an ‘‘ascertainability’’ requirement for 

class action certification. Specifically, it prohibits class certification 

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.’’ The bill offers no guidance as to the 

meaning of terms such as ‘‘reference to objective criteria,’’ ‘‘affirmatively demonstrates,’’ ‘‘reliable and administratively feasible mechanism,’’ and ‘‘substantial majority.’’ There is currently a circuit split 

on whether such a standard as would be codified in new section 

1718—which reflects the most corporate-defendant friendly view— 

should be imposed. 

Section 1718(b)(1) prohibits attorneys’ fees from being determined or paid until any monetary recovery is distributed to all 

class members, even when it is impossible to identify or find all 

class members. This provision contains no ‘‘good faith’’ or ‘‘honest 

efforts’’ exception, nor does it impose a graduated scheme, such as 

partial payment of fees pending complete payment to class members. Rather, it takes an absolutist approach, leaving open the real 

possibility that many class counsel will not be paid at all. 

Section 1718(b)(2) specifies that in class actions where a judgment or proposed settlement provides for monetary recovery, attorneys’ fee awards must be limited to ‘‘a reasonable percentage of any 

payments directly distributed to and received by class members’’ 

and, in no case may the fee award exceed the total amount of 

money distributed to and received by all class members. Section 

1718(b)(3) similarly limits attorneys’ fees in cases seeking equitable 

relief to ‘‘a reasonable percentage of the value of the equitable relief, including any injunctive relief.’’ The bill fails to offer any guidance as to what would constitute a ‘‘reasonable percentage’’ as used 

in the foregoing subsections, nor is there any guidance regarding 

how to monetize equitable relief. Moreover, there is no ‘‘good faith’’ 

or ‘‘honest efforts’’ exception from the prohibition on payment of attorneys’ fees where an attorney makes honest and exhaustive efforts to find all class members, but is unable to do so, thereby potentially resulting in an unduly harsh outcome. 

New section 1719, among other things, prohibits the payment of 

attorneys’ fees to class counsel until they submit certain information regarding the distribution of monetary awards and settlements 

to the Federal Judicial Center and the Administrative Office of the 

United States Courts. As with the attorneys’ fee provision in section 1718, there is no ‘‘good faith’’ or ‘‘honest efforts’’ exception from 

the prohibition on attorneys’ fees being paid for less-than-full compliance with this requirement. 


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New section 1720 prohibits a Federal court from certifying a 

class action with respect to particular issues unless the entire 

cause of action from which the particular issues arise satisfies all 

of the class certification requirements of Rule 23. Under current 

law in all circuits, such ‘‘issue’’ class actions need not satisfy all of 

the certification requirements of Rule 23. 

New section 1721 provides that in any class action, discovery 

must be stayed whenever any motion to transfer, motion to dismiss, motion to strike class allegations, or other motion to dispose 

of class allegations, is pending. Discovery is not stayed when any 

party files a motion asking the court to find that ‘‘particularlized 

discovery is necessary to preserve evidence or to prevent undue 

prejudice to that party.’’ The bill does not define or provide guidance as to the meaning of the terms ‘‘particularlized discovery’’ and 

‘‘undue prejudice.’’ Under current law, a court has discretion 

whether to stay discovery in response to a motion. This provision 

effectively makes a stay on discovery the default outcome absent 

certain circumstances that are not well defined. 

New section 1723 provides for mandatory appeal from an order 

granting or denying class certification. Current Rule 23(f) already 

provides for discretionary appeals from such orders, but at any rate 

any appeal must be made within 14 days of the order. 

Section 4 of the bill amends the remand statute, 28 U.S.C. 

§ 1447, by adding a new subsection (d). New subsection 1447(d)(1) 

applies to any civil action with two or more plaintiffs alleging personal injury or wrongful death claims where the action is removed 

to Federal court on the basis of diversity jurisdiction and a motion 

to remand is made on the ground that one or more defendants is 

a citizen of the same state as one or more plaintiffs. 

Subsection 1447(d)(2) requires a court considering a remand motion to apply the diversity statute’s various requirements for establishing diversity jurisdiction to each plaintiffs’ claims individually, 

as if each plaintiff was the sole plaintiff in the civil action. Subsection 1447(d)(3) requires a court, in such circumstances, to sever 

claims and remand to state court only the claims of those plaintiffs 

that do not meet the diversity statute’s requirements. The practical 

effect could be to make it easier to establish diversity jurisdiction 

in multi-plaintiff cases involving personal injury or wrongful death 

claims, increasing the number of diversity cases in Federal court 

where diversity might otherwise be defeated because of the lack of 

complete diversity. 

Section 5 of the bill adds new subsections to 28 U.S.C. § 1407, 

which governs multidistrict litigation. Section 1407(b) provides that 

a judge or judges may be assigned by the Judicial Panel on Multidistrict Litigation to preside over coordinated or consolidated pretrial proceedings in cases where civil actions involving one or more 

common questions of fact are pending in different districts. Proposed new section 1407(i) requires that, in any such proceeding involving redress for personal injury, plaintiff’s counsel must 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.’’ 


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8For outlines of the policy reasons supporting the existence of the class action mechanism, 

see Fairness in Class Action Litigation Act of 2015: Hearing on H.R. 1927 Before the Subcomm. 

on the Constitution and Civil Justice of the H. Comm. on the Judiciary, 114th Cong. (2015) 

[hereinafter ‘‘Subcommittee Hearing’’] (statement of Alexandra Lahav, Joel Barlow Professor, 

University of Connecticut Law School, at 2); The State of Class Actions Ten Years After The Enactment of the Class Action Fairness Act: Hearing Before the Subcomm. on the Constitution and 

Civil Justice of the H. Comm. on the Judiciary, 114th Cong. (2015) [hereinafter ‘‘CAFA Hearing’’] (statement of Patricia W. Moore, Professor of Law, St. Thomas University School of Law, 

at 2). 

Additionally, section 1407(i) requires that such submission be 

made within 45 days after the civil action is transferred to or filed 

in the consolidated pretrial proceedings, with no extensions. The 

presiding judge must, within 30 days of the submission deadline, 

determine whether the submission is ‘‘sufficient’’ and must dismiss 

the action without prejudice if it is not. If a plaintiff whose action 

is dismissed does not tender a ‘‘sufficient’’ submission within 30 

days following dismissal, the action must be dismissed with prejudice. The bill does not provide any guidance as to what would constitute a ‘‘sufficient’’ submission to ‘‘demonstrate . . . evidentiary 

support’’ for factual contentions regarding an alleged injury. New 

section 1407(i) essentially codifies a practice that some courts use 

at their discretion in certain cases. This provision would essentially 

mandate that every court impose this standard in every personal 

injury multidistrict proceeding. 

New subsection 1407(l) requires that claimants in a multidistrict 

proceeding receive no less than 80 percent of any monetary recovery obtained by judgment, settlement, or otherwise. It also provides 

judges assigned to the multidistrict proceeding with jurisdiction 

over any disputes regarding compliance with this requirement. In 

essence, this provision codifies a 20 percent cap on attorneys’ contingency fees, which may present an insurmountable disincentive 

for counsel to undertake such litigation. It also overrides state laws 

governing such fees in personal injury and wrongful death cases. 

Moreover, the provision fails to define or offer any guidance as to 

how the 80 percent monetary recovery is to be calculated or who 

qualifies as a ‘‘claimant’’ under this provision. 

Section 7 of the bill provides, among other things, that its provisions will apply to any civil action pending on the date of enactment. 

BACKGROUND

H.R. 985 pertains to class actions and multidistrict litigation. A 

class action is a type of lawsuit filed by one or more individuals on 

behalf of a larger group of people. Class actions can be beneficial 

to consumers and courts. They are beneficial to consumers because 

they give a potentially large group of individuals who are injured 

in the same manner by the same defendants the ability to hold the 

wrongdoers accountable. Class actions make it economically feasible for these plaintiffs to seek justice for smaller, but not inconsequential, injuries in areas as diverse as products liability, wage 

and hour litigation, and employment discrimination. As a result, 

class actions help level the playing field between injured consumers 

and powerful corporate defendants. They also help promote private 

enforcement of public policy, particularly when there is large-scale 

wrong-doing by an institutional actor.8


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9 Id. 

10Fed. R. Civ. P. 23(a). 11Fed. R. Civ. P. 23(b). Rule 23 contains a number of other provisions that are not relevant 

to this bill. 12 28 U.S.C. § 1407(a) (2017) (‘‘When civil actions involving one or more common questions of 

fact are pending in different districts, such actions may be transferred to any district for coordinated or consolidated pretrial proceedings.’’). 13 Id. 14 Id. 15 Id. at § 1407(c)(i)-(ii). 

Additionally, class actions can be beneficial for courts because 

they promote judicial efficiency. The class action is an efficient 

mechanism to deal with what would otherwise be a large number 

of small and repetitive cases involving common legal and factual 

questions. Through class certification, courts can consolidate similar cases and conserve judicial resources.9

Federal Rule of Civil Procedure 23 governs class actions filed in 

Federal courts. Rule 23(a) specifies four prerequisites necessary for 

the certification of a class: 

(1) the class is so numerous that joinder of all members is 

impracticable; 

(2) there are questions of law or fact common to the class; 

(3) the claims or defenses of the representative parties are 

typical of the claims or defenses of the class; and 

(4) the representative parties will fairly and adequately 

protect the interests of the class.10

Additionally, Rule 23(b) specifies the findings that a court must 

make prior to certifying a class action, assuming that the requirements of Rule 23(a) have been met. These findings include, among 

other things, whether the prosecution of separate actions by or 

against individual class members would create the risk of inconsistent or varying adjudications, whether the party opposing the 

class has acted or refused to act on grounds that apply generally 

to the class such that relief would be appropriate for the class as 

a whole, and whether common questions of law or fact predominate 

over any other questions affecting only individual class members 

and that a class action would be superior to other methods of adjudicating the controversy fairly and efficiently.11

Multidistrict litigation is a Federal legal procedure allowing 

cases that have one or more common factual questions to be consolidated and transferred from one court, the transferor, to another 

court, the transferee, ‘‘for the convenience of parties and witnesses’’ 

and to ‘‘promote the just and efficient conduct of such actions.’’ 12

The Judicial Panel on Multidistrict Litigation decides whether 

cases should be consolidated and transferred.13 Cases are sent from 

one court to another for all pretrial proceedings and discovery and 

are remanded to the transferor court at or before the conclusion of 

such proceedings.14 Proceedings for transfer may be initiated by 

the Judicial Panel on its own initiative or by a motion filed with 

the Panel by any party.15


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CONCERNS WITH H.R. 985

I. H.R. 985 IS A SOLUTION IN SEARCH OF A PROBLEM

There is no need for H.R. 985 because plaintiffs already must 

satisfy many rigorous requirements in order to pursue a class action, and the bill’s proponents offer no evidence that the Federal 

courts systematically fail to apply these standards. As explained 

above, Rule 23 requires plaintiffs seeking class action certification 

to make substantial showings, including commonality of factual 

and legal questions and typicality of the putative representative’s 

claims compared to those of putative class members. Moreover, 

case law demonstrates that the Federal courts vigorously enforce 

Rule 23’s requirements. Pursuing a class action also requires extensive discovery and motion practice, which mandate a significant expenditure of time and resources. H.R. 985 would only make these 

procedural hurdles even more burdensome and potentially cost-prohibitive. Indeed, the real aim of the bill does not seem to be to 

make class actions fairer, but to tilt the playing field decisively in 

defendants’ favor. 

Much of the initial justification of this bill from the 114th Congress was based on the false notion that too many class actions 

were fraudulent or otherwise improper because most putative class 

members suffered no actual injury. In support of this allegation, 

the bill’s proponents cited ‘‘benefit of the bargain’’ cases and cases 

asserting statutory damages for violations of consumer protection 

statutes. In fact, however, these are not ‘‘no injury’’ cases. As Professor Alexandra Lahav explained in testimony before the Subcommittee on the Constitution and Civil Justice in the 114th Congress, plaintiffs in such cases have suffered a real injury. In ‘‘benefit of the bargain’’ cases, for instance, plaintiffs have suffered financial injury in the form of paying a price for what turned out to 

be a defective product that is, in reality, worth less than what the 

plaintiff bargained for. Similarly, in many state consumer protection statutes, and in civil rights, employment, or privacy statutes, 

the injury, while very real, is difficult to quantify in monetary 

terms. Legislatures, therefore, set statutory damage levels to simplify the process of quantifying damages, to deter corporate wrongdoing, and to encourage access to the courts. 

Other than proposed new section 1716, the Judiciary Committee 

has held no hearing on any of the other provisions of H.R. 985. As 

a result, none of these provisions or the purported justifications for 

them has ever been vetted by our Committee. For instance, the 

bill’s proponents offer absolutely no evidence warranting H.R. 985’s 

so-called ‘‘conflict of interest’’ provision, which prohibits class certification where a class representative or named plaintiff is a relative of, current or former client of, current or former employee of, 

or has a contractual relationship with the plaintiffs’ counsel. We 

are unaware of any justification supporting the implication that 

such relationships are per se problematic. As it is, courts must exercise judgment as to whether a particular relationship with class 

counsel poses a conflict of interest pursuant to Rule 23(a)(4), which 


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16Fed. R. Civ. P. 23(a)(4). Professor John C. Coffee, Jr. of Columbia Law School has written 

that H.R. 985’s conflict of interest provision arguably is unconstitutional, as the Fifth Amendment’s Due Process Clause has been interpreted to preclude the government in a civil case from 

unreasonably interfering with a citizen’s choice of hired counsel. John C. Coffee, Jr., How Not 

to Write a Class Action ‘‘Reform’’ Bill, The CLS Blue Sky Blog, Feb. 21, 2017, available at http:// 

clsbluesky.law.columbia.edu/2017/02/21/how-not-to-write-a-class-action-reform-bill/. 

requires a court to consider whether class counsel ‘‘will fairly and 

adequately protect the interests of the class.’’ 16

II. H.R. 985 UNDERMINES THE ABILITY OF PLAINTIFFS TO PURSUE MOST

CLASS ACTIONS AND MULTIDISTRICT LITIGATION BY IMPOSING NUMEROUS BURDENSOME REQUIREMENTS

H.R. 985 presents many obstacles to the pursuit of class actions 

and multidistrict litigation. These include: (1) requiring that a putative class representative prove that every class member suffered 

the ‘‘same type and scope of injury;’’ (2) requiring a putative class 

representative to ascertain all class members at the certification 

stage; (3) effectively eliminating courts’ ability to certify ‘‘issue’’ 

class actions; (4) a default stay of discovery in response to any motion to dispose of class allegations absent a finding by a court on 

the need for ‘‘particularized’’ discovery in certain circumstances; (5) 

providing for mandatory appeal from any order granting or denying 

a motion for class certification; (6) imposing a significant threshold 

of proof and draconian deadlines on plaintiffs and courts in multidistrict personal injury litigation, and (7) imposing harsh attorneys’ 

fee and ‘‘conflict of interest’’ provisions aimed specifically at class 

counsel. Taken together, these provisions undermine the core purpose of class actions and multidistrict litigation, which is to provide 

for efficiency in the disposition of numerous, but substantially the 

same claims or factual questions and to provide access to courts for 

parties that, individually, would not have the incentive or resources 

to pursue otherwise meritorious claims. 

A. Section 1716 Imposes Impossible Standard to Establish Same 

Type and Scope of Injury 

H.R. 985’s requirement that a plaintiff show that, for class actions seeking monetary relief for personal injury or economic loss, 

each proposed class member suffered the exact same ‘‘type and 

scope’’ of injury would be virtually impossible to meet as a practical 

matter, especially for many types of claims where the exact ‘‘scope’’ 

of an injury, such as in antitrust, employment discrimination, or 

privacy matters, cannot be measured with any precision. Moreover, 

by requiring a putative class representative to make such showings 

at the certification stage—a nascent stage of litigation, before there 

has been any substantial discovery—H.R. 985 effectively requires 

a decision on the merits before trial and before appropriate class 

members can even be identified, an extremely difficult if not impossible standard to meet. 

To prove injury, a plaintiff would have to prove the alleged violation that caused the injury for each possible class member—i.e., 

litigation on the merits. As Professor Arthur Miller, the Nation’s 

foremost expert of Federal practice and procedure, noted in a letter 

in opposition to prior legislation that was nearly identical to H.R. 

985’s proposed section 1716: 


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17Letter from Arthur R. Miller, University Professor, New York University School of Law, to 

Trent Franks (R-AZ), Chair, & Steve Cohen (D-TN), Ranking Member, Subcomm. on the Constitution and Civil Justice of the H. Comm. on the Judiciary (Apr. 27, 2015) (on file with H. 

Comm. on the Judiciary Democratic staff) [hereinafter ‘‘Miller Letter’’]. 18Miller Letter at 3. 19 Id. 20Memorandum Regarding A Brief and Selective Overview of the ‘‘Fairness in Class Action 

Litigation Act of 2017’’ from John C. Coffee, Jr., Adolf A. Berle Professor of Law, Columbia Law 

School, to Democratic Staff, H. Comm. on the Judiciary Democratic Staff, at 1-2 (Feb. 13, 2017) 

[hereinafter ‘‘Coffee Memo’’]. 21Letter from Elizabeth Chamblee Burch, Charles H. Kirbo Chair of Law, The University of 

Georgia School of Law, to Democratic Staff, H. Comm. on the Judiciary, at 1 (Feb. 13, 2017) 

[hereinafter ‘‘Burch Letter’’]. 22Letter from Myriam Gilles, Vice Dean, & Paul R. Verkuil Research Chair Professor of Law, 

Benjamin N. Cardozo Law School, to Democratic Staff, H. Comm. on the Judiciary, at 2 (Feb. 

13, 2017) (quoting Kohen v. Pacific Inv. Mgmt. Co. LLC, 571 F.3d 672, 677 (7th Cir. 2009)) 

[hereinafter ‘‘Gilles Letter’’]. 23 Id. 24 Id. at 3. 

[the] core function of a class representative is to try to establish injury on behalf of similarly situated persons. Thus 

the bill effectively wipes out Rule 23, under which class 

representatives litigate common questions on behalf of the 

class. The represented persons are absent until after entry 

of a judgment that binds them, at which point (upon a favorable judgment) they are asked to come forward to prove 

their damages. Until that time, the identity of many of the 

class members is unknown, indeed possibly even unknowable.17

Professor Miller further noted that the Supreme Court has rejected 

the notion that a class representative must first establish that it 

will win on the merits in order to obtain class certification.18 He 

observed that class membership does not equate to entitlement to 

damages, a distinction that H.R. 985’s proponents appear deliberately to be trying to blur.19

Other civil procedure experts concur. For example, Professor 

John C. Coffee, Jr., wrote that this provision only adds unnecessary 

‘‘ambiguity’’ to current law, noting that ‘‘under this proposed standard, a person who suffered a slightly different economic or personal 

injury from the class representative might have to be excluded’’ 

from a class.20 Professor Elizabeth Chamblee Burch wrote that 

‘‘this proposal demands a degree of similarity that is both ill defined and unnecessary,’’ and noted that the Supreme Court held 

last year that ‘‘parties should be able to enjoy the benefits of class 

actions even when damages vary’’ and that ‘‘[p]ersonal injury and 

economic losses will inevitably affect class members differently.’’ 21

Professor Myriam Gilles noted that ‘‘it is impossible to exclude 

zero-damage plaintiffs from a class because ‘many of the members 

of the class may be unknown, or if they are known still the facts 

bearing on their claims may be unknown.’ ’’ 22 Moreover, excluding 

‘‘zero-damage plaintiffs from class actions . . . serves no policy purpose’’ because the ‘‘presence of uninjured members within a defined 

class does not increase the aggregate damages that the defendant 

must pay.’’ 23 Also, ‘‘the ‘scope’ requirement would eliminate damages class actions, period’’ because ‘‘the amount of damage always 

(or almost always) varies across class members.’’ 24

The American Bar Association, writing in opposition to H.R. 985, 

noted that the ‘‘same type and scope of injury’’ requirement ‘‘places 

a nearly insurmountable burden for people who have suffered perVerDate Sep 11 2014 21:40 Mar 07, 2017 Jkt 069006 PO 00000 Frm 00054 Fmt 6659 Sfmt 6601 E:\HR\OC\HR025.XXX HR025

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25 ABA Letter. 26 Civil Rights Letter. 27Groups Letter. 28Plaintiffs’ counsel typically define class members in terms of people harmed by the defendant’s conduct, employ a mix of subjective and objective criteria, and invoke criteria dependent 

on the merits. Plaintiffs’ counsel often revise their class definition after receiving class discovery 

from defendants. Burch Letter at 2 and fn.2. 

sonal injury or economic loss at the hands of large institutions with 

vast resources, effectively barring them from bringing class actions.’’ 25 Similarly, a coalition of 121 civil rights groups observed 

that at the class certification stage of a civil rights class action, ‘‘it 

is frequently impossible to identify all of the victims or the precise 

nature of each of their injuries’’ and that ‘‘even if this information 

were knowable, class members’ injuries would not be ‘the same,’ ’’ 

thereby precluding most civil rights class actions were this requirement to be enacted.26 Indeed, as another coalition of consumer 

rights, labor, environmental, and public interest groups explained, 

‘‘virtually never does every member of the class suffer the same 

‘scope’ of injury from the same wrongdoing’ ’’ and that this requirement ‘‘alone would sound the death knell for most class actions.’’ 27

B. Section 1718(a)’s Ascertainability Requirement Has Been Rejected by Most Courts for Good Reason 

Proposed section 1718(a) creates a statutory ‘‘ascertainability’’ requirement in money damages class actions, under which a plaintiff 

must identify every class member in order to obtain class certification, a virtual impossibility in most consumer cases where individual claims may be small, where consumers who purchased a 

product at issue may not come forward or may not have kept a receipt or other evidence of purchase. The kind of rigid ‘‘ascertainability’’ requirement contained in H.R. 985 has been debated 

among the Federal courts of appeals, and most courts of appeals 

have rejected it. This provision essentially codifies the more corporate-defendant-friendly view that classes are ascertainable at the 

certification stage, with the practical effect that in many smallclaim consumer cases, where class members are inherently difficult 

to identify, defendants can escape liability because the class is not 

ascertainable even if there is overwhelming evidence of the defendant’s wrongdoing.28 Moreover, section 1718(a)’s vague requirement 

that the class be ‘‘defined with reference to objective criteria’’ and 

that the putative class representative ‘‘affirmatively demonstrate[] 

that there is a reliable and administratively feasible mechanism’’ 

for the court to determine whether putative class members fall 

within the class and for distributing monetary relief to a substantial majority of such class members is unnecessary, cumbersome, 

costly, and invites further litigation over their meaning. 

C. Section 1720 Will Have a Particularly Devastating Impact on 

Civil Rights Class Actions 

Proposed section 1720 in H.R. 985 further threatens to undermine class actions, particularly in civil rights cases. This provision 

would prohibit certification of ‘‘issue’’ class actions unless the entire 

cause of action meets all of Rule 23’s class action certification requirements, changing current law dramatically and effectively barring or at least severely limiting issue class actions. Rule 23(c)(4) 

provides that ‘‘when appropriate, an action may be brought or 


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29Fed. R. Civ. P. 23(c)(4). 30Gilles Letter at 7. 31 Civil Rights Letter at 2. 

maintained as a class action with respect to particular issues.’’ 29

Currently, all Federal circuit courts read Rule 23(c)(4) to permit 

courts to certify a class for the limited purpose of deciding an issue 

common to a group of plaintiffs within a case even when the putative class has not yet been certified. This allows a court, for example, to decide the issue of liability only, rather than also consider 

damages and other questions in the case. Being able to decide common questions within a case while allowing other issues to be decided on an individual basis would be in keeping with one of the 

purposes of class actions, namely, promoting judicial efficiency. Yet, 

as Professor Gilles noted, H.R. 985 ‘‘would abolish such issue classes’’ using an approach that ‘‘is maximalist and harsh’’ and not justified by any evidence that defendants’ due process rights are threatened by the use of issue classes.30

In particular, making issue class actions harder to pursue would 

have an especially adverse impact on civil rights class actions, 

which depend on issue class actions to a greater extent than other 

kinds of claims. Doing so would have a devastating impact on race 

and gender class actions that often can only be maintained as to 

particular issues such as liability. Requiring that an entire cause 

of action be certified as a class before any common issue can be decided will have the practical effect of denying many such plaintiffs 

their day in court, where it may not be practicable for individual 

plaintiffs to pursue individual cases on their own. As a coalition of 

civil rights groups has written in opposition to H.R. 985, ‘‘the bill’s 

limitation on ‘issue classes’ will impede the enforcement of civil 

rights laws’’ because such classes ‘‘can promote both efficiency and 

fairness’’ by allowing ‘‘class certification for the core question of liability (often a complex proceeding).’’ 31

For the foregoing reasons, and, in particular, because of the potentially disproportionate impact that this provision would have on 

civil rights cases, including legal challenges to President Donald 

Trump’s Executive Order banning refugees and travelers from certain majority-Muslim countries, Representative Pramila Jayapal 

(D-WA) offered an amendment to strike the bill’s ‘‘issue classes’’ 

provision. The Committee, however, rejected her amendment by a 

party-line vote of 12 to 19. 

D. Section 1721’s Default Stay of Discovery Will Exponentially Increase Litigation 

Proposed section 1721 in H.R. 985 would needlessly extend class 

action litigation, which is already an expensive and cumbersome 

process. The provision would stay discovery and other proceedings 

while any motion to dispose of the class allegations is pending, including motions to strike class allegations, motions to dismiss, and 

motions to transfer unless the court finds, on motion of a party, 

that ‘‘particularlized discovery’’ is needed to preserve evidence or to 

prevent undue prejudice to that party. Currently, motions to stay 

discovery may be granted at the discretion of the district court. 

Section 1721 appears to significantly reduce this discretion, making 

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32 Coffee Memorandum at 5. 33 Burch Letter at 5. 34Fed. R. Civ. P. 23(f). 

covery up to that point in the case, or satisfy the vague standard 

that it would suffer ‘‘undue prejudice.’’ Even under such circumstances, discovery can only be ‘‘particularized,’’ though the bill 

provides no guidance as to what this term means in this context. 

The effect of this provision would be to increase litigation burdens 

and costs on plaintiffs, provide another opportunity for corporate 

defendants to engage in dilatory tactics by filing multiple motions 

each of which would trigger a stay of discovery and litigation over 

whether discovery should then be permitted, and dissuade future 

plaintiffs from pursuing meritorious claims. 

As Professor Coffee wrote, the bill’s stay of discovery ‘‘provision 

can easily be exploited by defendants to delay class litigation indefinitely by making each of these motions [to dispose of class allegations] in seriatim fashion. Predictably, motions will follow motions in order to delay discovery.’’ 32 Professor Burch noted that 

this ‘‘proposal will unduly prolong litigation that is already protracted’’ and ‘‘would make it difficult for the court and the parties 

to conduct discovery and make informed decisions about whether to 

certify the class.’’ 33

For the foregoing reasons, Representative Ted Deutch (D-FL) offered an amendment to strike the bill’s stay of discovery provision. 

The Committee, however, rejected the amendment by a party-line 

vote of 12 to 19. 

E. Section 1723’s Mandatory Right of Appeal Provides More 

Chances for Delay and Increases Burdens and Costs 

Proposed new section 1723 establishes a mandatory right of appeal to a Federal court of appeals of the grant or denial of a motion 

to certify a class. Under current Rule 23(f), such appeals may be 

heard at the discretion of the appeals court and must be filed within 14 days of the entry of such order.34 As with most other provisions in H.R. 985, this mandatory appeal provision would give defendants yet another opportunity to delay consideration of class actions and thereby further increase litigation burdens and costs for 

plaintiffs. 

F. The Bill Imposes Unreasonable Restrictions on Class Counsel 

Various provisions in H.R. 985 appear intended to target class 

counsel and threaten the ability of plaintiffs to obtain legal representation in class actions. For instance, several provisions, including proposed sections 1718(b) and 1719, would delay the payment of any attorneys’ fees under certain strict conditions or until 

class counsel complies with certain settlement information accounting requirements, respectively. These provisions, which do not 

apply to defense counsel, appear to be unduly harsh and aimed at 

discouraging lawyers from taking the risk of representing class action plaintiffs by creating a strong financial disincentive. 

Section 1718(b)(1) delays payment of attorneys’ fees until all 

monetary recovery has been paid to class members. Yet some class 

settlements may take many years to distribute, and under this provision, plaintiffs’ counsel would have to wait potentially years before receiving any payment. Moreover, as discussed earlier, someVerDate Sep 11 2014 21:40 Mar 07, 2017 Jkt 069006 PO 00000 Frm 00057 Fmt 6659 Sfmt 6601 E:\HR\OC\HR025.XXX HR025

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35 Civil Rights Letter at 3. 36 Id. 37 Id.; see also Disability Rights Letter at 1 (‘‘By severely limiting attorneys’ fees in cases seeking only injunctive relief, [H.R. 985] would remove class actions as an essential tool for those 

who seek to improve the systems that serve people with disabilities.’’). 

times it is simply impossible to identify all class members. Under 

this provision, which makes no exception for honest, good faith efforts by class counsel to identify and ensure payment to all class 

members, it is possible that counsel will not be paid at all. While 

ensuring class members are paid is an important goal, H.R. 985’s 

proponents appear to be more interested in disincentivizing plaintiffs’ lawyers, rather than fashioning a reasonable solution, such as 

an interim fee distribution or some other less draconian approach. 

Similarly, although section 1718(b)(2) limits payments to class 

counsel to a reasonable percentage of the class members’ monetary 

recovery, it fails to account for situations where funds may remain 

because class members may be difficult to identify, monetary 

awards are too small to distribute to individual class members, or 

funds are simply unclaimed. As with other provisions, this ambiguity could lead to further litigation and increased costs, as well as 

disincentivizing attorneys from representing class plaintiffs. 

A similar concern arises with respect to section 1718(b)(3), which 

applies a similar ‘‘reasonable percentage’’ standard in cases where 

the class members are awarded or agree to equitable relief, such 

as in many civil rights cases. In these cases, there is the additional 

ambiguity of determining how to monetize equitable relief for purposes of determining a reasonable attorneys’ fee award, further 

heightening concerns about the ability of plaintiffs to obtain adequate legal representation in such cases. 

Finally, the already-discussed ‘‘conflict of interest’’ provision of 

section 1717(b) would deny class certification in all cases where the 

class representative or named plaintiff is a relative of, present or 

former client of, present or former employee of, or has a contractual 

relationship with the class counsel, without exception. This unnecessary provision wrongly assumes that all of these relationships 

raise impermissible conflicts of interest per se and, based on this 

false premise, effectively denies plaintiffs the right to choose their 

counsel. 

H.R. 985’s class action provisions aimed at class counsel will 

have a particularly adverse impact on civil rights plaintiffs. As civil 

rights organizations opposing H.R. 985 note, the bill’s ‘‘reasonable 

percentage of equitable relief’’ standard is arbitrary and unworkable.35 These organizations rightly ask ‘‘how is a judge to determine the cash value of an integrated school, a well-operating foster 

care system, the deinstitutionalization of individuals with disabilities, or myriad other forms of equitable relief secured by civil 

rights class actions?’’ 36 The ultimate result, they explain, is that 

‘‘[n]on-profit organizations cannot bear the risk of these long and 

expensive cases if, at the end, their fees are calculated under this 

incoherent and capricious standard. Indeed, the bill creates an incentive for defendants to prolong the litigation so as to make it economically impossible for plaintiffs’ attorneys to continue to prosecute the litigation.’’ 37

For the foregoing reasons, Ranking Member John Conyers, Jr. 

(D-MI) offered an amendment that would have exempted all civil 


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38 28 U.S.C. § 1332(a) (2017). Under this provision, in order for a Federal court to exercise diversity jurisdiction over what would otherwise be a state law case, there must be at least 

$75,000 amount in controversy and the plaintiff and the defendant must be citizens of different 

states. 

rights cases from H.R. 985’s class action provisions. The Committee, however, rejected his amendment by a party-line vote of 11 

to 14. 

The bill’s various class action provisions would similarly stifle 

the ability of plaintiffs in a wide spectrum of cases to pursue justice. For instance, those injured by fraudulent conduct, including 

the former students of Trump University who sued President Donald Trump for allegedly bilking thousands of dollars out of students 

while never providing the University’s advertised educational services, would effectively be precluded from having their day in court. 

To address this particular shortcoming of the bill, Representative 

Hank Johnson (D-GA) offered an amendment that would have exempted all fraud cases from all of the bill’s class action provisions. 

The Committee, however, rejected this amendment as well by voice 

vote. 

G. Section 4’s Remand Provisions Would Unnecessarily Burden 

Federal Courts 

Section 4 of the bill would amend the remand statute, 28 U.S.C. 

§ 1447, to add a new provision that applies: (1) in personal injury 

or wrongful death cases; (2) where there are two or more plaintiffs; 

(3) the case has been removed to Federal court on the basis of diversity jurisdiction; and (4) a motion to remand the case is made 

on the ground that one or more plaintiffs is a citizen of the same 

state as one or more defendants. In such a case, the court deciding 

the remand motion must apply the requirements of the Federal diversity statute 38 to the claims of each plaintiff individually and remand only those claims of the plaintiff that does not satisfy the diversity statute’s requirements. 

While it is unclear exactly what problem the bill’s sponsors intend for this provision to address, it seems that in cases where one 

plaintiff is a citizen of the same state as one defendant and another 

plaintiff is a citizen of a different state as that defendant, this provision would make it easier for defendants to keep at least one of 

the plaintiffs’ cases in Federal court, even if the plaintiffs assert 

the same legal claims arising from the same set of operative facts. 

This would seem to unnecessarily burden Federal courts with parallel consideration of a case at the same time that a proceeding on 

the same facts and legal claims takes place in state court. 

H. Section 5’s Multidistrict Litigation Evidentiary Support Requirement Is Unreasonable and Unjustified and Its Arbitrary Cap on 

Attorneys’ Fees Could Undermine the Ability of Plaintiffs to Obtain Representation 

Section 5 of the bill amends 28 U.S.C. § 1407, the statutory provision governing multidistrict litigation. Under that provision, cases 

in different districts raising common issues of fact may be transferred to a designated judge or judges for pretrial proceedings. H.R. 

985 would add a new section 1407(i) requiring plaintiffs to produce 

proof of their allegations early on in such proceedings. Specifically, 

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39Professor Burch further notes that, in addition to denying courts the necessary flexibility 

to adapt case management orders to specific circumstances, this provision may also raise federalism concerns to the extent that it conflicts with state law that may not require an allegation 

of specific cause of harm. Burch Letter at 6-7. 

sion ‘‘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’’ within the extremely strict deadline of 

45 days after the civil action is transferred to or filed in the consolidated pretrial proceedings, with no extensions. The presiding 

judge must, within 30 days of the submission deadline, determine 

whether the submission is ‘‘sufficient’’ and must dismiss the action 

without prejudice if it is not. If the action is dismissed, a plaintiff 

would then have only 30 days to make a ‘‘sufficient’’ submission or 

the case must be dismissed with prejudice. 

This provision places a significant burden on plaintiffs to prove 

their allegations to a considerable degree at the beginning of their 

case, denying them the ability to further develop their claims 

through the discovery process. It also codifies a procedure that 

some courts have adopted in some cases, but, as with the ‘‘ascertainability’’ requirement, there is no consensus among courts as to 

whether it is even appropriate to impose such a high burden at 

such an early stage on plaintiffs.39

New section 1407(j) would prohibit trials in multidistrict proceedings unless all the parties consent. This provision may be 

aimed at preventing ‘‘bellwether trials,’’ or trials of randomly selected cases in multidistrict litigation to test the parties’ arguments 

and help to resolve the overall litigation. The requirement that all 

parties consent to trial means that it is unlikely that any such 

cases would go to trial, meaning further cost and delay for plaintiffs. 

Section 5 would also add a new section 1407(l) to title 28, United 

States Code, which would require that 80 percent of any monetary 

recovery in personal injury multidistrict litigation be paid to plaintiffs, effectively codifying a 20 percent cap on attorneys’ contingent 

fees in personal injury multidistrict litigation. By codifying a 20 

percent cap on attorneys’ contingency fees, this provision may 

present an insurmountable disincentive for counsel to undertake 

such litigation. It also may conflict with state laws governing such 

fees in personal injury and wrongful death cases. The provision is 

also ambiguous in some respects, leaving unclear, for example, who 

would pay for experts or reimburse insurers on plaintiffs’ medical 

bills. It is not even clear who might be a ‘‘claimant’’ entitled to part 

of the 80 percent of the monetary recovery. As with other provisions in the bill, this ambiguity opens the door to more litigation, 

cost, and delay. 

I. H.R. 985’s Will Impose New Burdens on Pending Cases 

Section 7 makes the bill’s various provisions applicable to all 

cases pending on the date of enactment. In this way, the bill unjustly changes class action and other procedural rules on cases in 

the midst of litigation, burdening plaintiffs with new requirements 

they had no way of preparing for. 


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40 Coffee Memorandum at 6. 

Given the tremendous costs and increased burdens of the bill’s 

various provisions on litigants and courts, Representative Sheila 

Jackson Lee (D-TX) offered an amendment to delay the bill’s effective date until the Administrative Office of the United States 

Courts completed an assessment of the costs the bill would impose 

on litigants and the courts. The Committee, however, rejected this 

sensible amendment by a party-line vote of 12 to 17. 

Because the bill would impose onerous requirements on plaintiffs 

and effectively make much civil litigation cost-prohibitive in Federal court, Representative David Cicilline (D-RI) offered an amendment that would have exempted from the entire bill all civil actions, to the extent permitted by law, concerning injuries caused by 

a firearm. The Committee, however, rejected this amendment by a 

party-line vote of 12 to 19. 

III. H.R. 985 WOULD STRAIN LIMITED JUDICIAL RESOURCES, OVERRIDE

JUDICIAL DISCRETION, AND CIRCUMVENT THE RULES ENABLING ACT

PROCESS

H.R. 985 would strain already-limited judicial resources. Without 

doubt, the bill’s numerous new and vaguely-worded standards 

would foster extensive litigation to resolve their meaning and application. This would be in addition to the already resource-intensive 

process that courts must follow when considering class action certification motions. For instance, as Professor Coffee noted, the bill’s 

mandatory appeal provision alone could substantially increase the 

burdens on appellate courts possibly by as much as five-fold because appeals courts currently permit relatively few appeals under 

Rule 23(f).40 Similarly, the automatic third-party litigation funding 

disclosure requirement in proposed section 1722 will needlessly 

burden Federal courts by creating more chances for discovery disputes. 

The bill also significantly reduces judicial discretion in a number 

of ways. For example, its stay of discovery provision significantly 

reduces the discretion that courts currently have to stay, or to 

allow, discovery in response to a motion. Similarly, the bill’s mandatory appeal provision adds to the burden of appellate courts 

while taking away their authority to determine when an appeal of 

a class certification order might be warranted. Likewise, the bill’s 

‘‘conflict of interest’’ provision denies courts any discretion to determine whether certain relationships actually pose a conflict of interest, imposing instead a per se rule requiring denial of class certification if certain relationships exist between class counsel and a 

named plaintiff or class representative. Finally, the bill’s multidistrict litigation provision imposes draconian deadlines on both plaintiffs and courts to make determinations about the sufficiency of a 

plaintiff’s factual allegations, with no ‘‘good cause’’ or other exception to allow a court some flexibility in setting deadlines. It also requires dismissal by the court if it makes certain findings, rather 

than leaving that decision to the court’s discretion. 

Finally, H.R. 985 circumvents the highly prudential and deliberative Rules Enabling Act process, a process that reflects input 

not only from the Federal judiciary, but also from other interested 


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41 28 U.S.C. §§ 2071 et seq. (2017). 42 Judicial Conference Letter. 43 Id. 

parties and the public generally.41 In fact, the Judicial Conference 

of the United States is in the midst of a multi-year study of Rule 

23 that ‘‘has considered many of the issues addressed in H.R. 

985.’’ 42 Accordingly, the Conference has ‘‘strongly urge[d] Congress 

not to amend the class action procedures found in Rule 23.’’ 43 Although H.R. 985 includes a provision stating that nothing in the 

bill should be interpreted to prohibit the Supreme Court or the Judicial Conference from using the Rules Enabling Act process, the 

measure nonetheless clearly circumvents that process. Indeed, several provisions contained in H.R. 985, such as the bill’s ‘‘ascertainability’’ standard and its changes to consideration of ‘‘issue’’ class 

actions, have already been considered and rejected by the Advisory 

Committee on Civil Rules as part of the Judicial Conference’s consideration of Rule 23 amendments. 

CONCLUSION

H.R. 985 purports to help plaintiffs, but it will in fact deny plaintiffs any justice by greatly diminishing the availability of class actions and multidistrict litigation. The bill’s proponents offer no 

credible evidence that such draconian legislation is needed and, in 

the absence of any hearing to assess most of the bill’s provisions, 

the justifications for those provisions are unclear at best. If anything, the bill is so skewed in favor of corporate defendants’ interests that the obvious inference is that its aim is to rig the procedural rules governing class actions and multidistrict litigation to 

ensure defendant-friendly outcomes rather than to guarantee fairness or address abuses. In addition, H.R. 985’s various requirements are so vague or impossible to meet that they would provide 

numerous opportunities for defendants to engage in dilatory tactics, 

raising litigation costs and burdens for plaintiffs to the point of dissuading future plaintiffs from even filing suit. Finally, the bill 

would substantially and needlessly increase resource burdens on 

the Federal courts, significantly reduce judicial discretion in many 

respects, and unnecessarily circumvent the Rules Enabling Act 

process. 

For all of the foregoing reasons, we respectfully dissent and we 

urge our colleagues to oppose H.R. 985. 

MR. CONYERS, JR. 

MR. NADLER. 

MS. LOFGREN. 

MS. JACKSON LEE. 

MR. COHEN. 

MR. JOHNSON, JR. 

MR. DEUTCH. 

MR. GUTIERREZ. 

MS. BASS. 

MR. RICHMOND. 

MR. JEFFRIES. 

MR. CICILLINE. 

MR. SWALWELL. 

MR. LIEU. 


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MR. RASKIN. MS. JAYAPAL. 

Æ 


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