II

104TH CONGRESS

1ST SESSION S. 1501

To amend part V of title 28, United States Code, to require that the

Department of Justice and State attorneys general are provided notice

of a class action certification or settlement, and for other purposes.

IN THE SENATE OF THE UNITED STATES

DECEMBER 22, 1995

Mr. COHEN (for himself and Mr. NUNN) introduced the following bill; which

was read twice and referred to the Committee on the Judiciary

A BILL

To amend part V of title 28, United States Code, to require

that the Department of Justice and State attorneys general are provided notice of a class action certification

or settlement, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Protecting Class Ac5 tion Plaintiffs Act of 1995’’.
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1 SEC. 2. NOTIFICATION REQUIREMENT OF CLASS ACTION

2 CERTIFICATION OR SETTLEMENT.

3 (a) IN GENERAL.—Part V of title 28, United States

4 Code, is amended by inserting after chapter 113 the fol5 lowing new chapter:

6 ‘‘CHAPTER 114—CLASS ACTIONS

‘‘Sec.

‘‘1711. Notification of class action certifications and settlements.

7 ‘‘§ 1711. Notification of class action certifications and

8 settlements

9 ‘‘(a) For purposes of this section, the term—

10 ‘‘(1) ‘class’ means a group of similarly situated

11 individuals, defined by a class certification order,

12 that comprise a party in a class action lawsuit;

13 ‘‘(2) ‘class action’ means a lawsuit filed pursu14 ant to rule 23 of the Federal Rules of Civil Proce15 dure or similar State rules of procedure authorizing

16 a lawsuit to be brought by 1 or more representative

17 individuals on behalf of a class;

18 ‘‘(3) ‘class certification order’ means an order

19 issued by a court approving the treatment of a law20 suit as a class action;

21 ‘‘(4) ‘class member’ means a person that falls

22 within the definition of the class;

23 ‘‘(5) ‘class counsel’ means the attorneys rep24 resenting the class in a class action;
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1 ‘‘(6) ‘electronic legal databases’ means com2 puter services available to subscribers containing

3 text of judicial opinions and other legal materials,

4 such as LEXIS or WESTLAW;

5 ‘‘(7) ‘official court reporter’ means a publicly

6 available compilation of published judicial opinions;

7 ‘‘(8) ‘plaintiff class action’ means a class action

8 in which the plaintiff is a class; and

9 ‘‘(9) ‘proposed settlement’ means a settlement

10 agreement between the parties in a class action that

11 is subject to court approval before it becomes bind12 ing on the parties.

13 ‘‘(b) This section shall apply to—

14 ‘‘(1) all plaintiff class actions filed in Federal

15 court; and

16 ‘‘(2) all plaintiff class actions filed in State

17 court in which—

18 ‘‘(A) any class member resides outside the

19 State in which the action is filed; and

20 ‘‘(B) the transaction or occurrence that

21 gave rise to the lawsuit occurred in more than

22 one State.

23 ‘‘(c) No later than 10 days after a proposed settle24 ment in a class action is filed in court, class counsel shall

25 serve the State attorney general of each State in which
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1 a class member resides and the Department of Justice as

2 if they were parties in the class action with—

3 ‘‘(1) a copy of the complaint and any materials

4 filed with the complaint;

5 ‘‘(2) notice of any scheduled judicial hearing in

6 the class action;

7 ‘‘(3) any proposed or final notification to class

8 members of—

9 ‘‘(A) their rights to request exclusion from

10 the class action; and

11 ‘‘(B) a proposed settlement of a class ac12 tion;

13 ‘‘(4) any proposed or final class action settle14 ment;

15 ‘‘(5) any settlement or other agreement contem16 poraneously made between class counsel and counsel

17 for the defendants;

18 ‘‘(6) any final judgment or notice of dismissal;

19 and

20 ‘‘(7) any written judicial opinion relating to the

21 materials described under paragraphs (3) through

22 (6).

23 ‘‘(d) A hearing to consider final approval of a pro24 posed settlement may not be held earlier than 120 days

25 after the date on which the State attorney generals and
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1 the Department of Justice are served notice under sub2 section (c).

3 ‘‘(e) A class member may refuse to comply with and

4 may choose not be bound by a settlement agreement or

5 consent decree in a class action lawsuit if the class mem6 ber resides in a State where the State attorney general

7 has not been provided notice and materials under sub8 section (c). The rights created by this subsection shall

9 apply only to class members or any person acting on their

10 behalf.

11 ‘‘(f) Any court order certifying a class, approving a

12 proposed settlement in a class action, or entering a con13 sent decree in a class action, and any written opinions con14 cerning such court orders and decrees, shall be made avail15 able for publication in official court reporters and elec16 tronic legal databases.

17 ‘‘(g) Any court with jurisdiction over a plaintiff class

18 action shall require that—

19 ‘‘(1) any written notice provided to the class

20 through the mail or publication in printed media

21 contain a short summary written in plain, easily un22 derstood language, describing—

23 ‘‘(A) the subject matter of the class action;

24 ‘‘(B) the legal consequences of joining the

25 class action;
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1 ‘‘(C) if the notice is informing class mem2 bers of a proposed settlement agreement—

3 ‘‘(i) the benefits that will accrue to

4 the class due to the settlement;

5 ‘‘(ii) the rights that class members

6 will lose or waive through the settlement;

7 ‘‘(iii) obligations that will be imposed

8 on the defendants by the settlement;

9 ‘‘(iv) a good faith estimate of the dol10 lar amount of any attorney’s fee if pos11 sible; and

12 ‘‘(v) an explanation of how any attor13 ney’s fee will be calculated and funded;

14 and

15 ‘‘(D) any other material matter; and

16 ‘‘(2) any notice provided through television or

17 radio to inform the class of its rights to be excluded

18 from a class action or a proposed settlement shall,

19 in plain, easily understood language—

20 ‘‘(A) describe the individuals that may po21 tentially become class members in the class ac22 tion; and

23 ‘‘(B) explain that the failure of individuals

24 falling within the definition of the class to exer25 cise their right to be excluded from a class ac-
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1 tion will result in the individual’s inclusion in

2 the class action.

3 ‘‘(h) Compliance with this section shall not immunize

4 any party from any legal action under Federal or State

5 law, including actions for malpractice or fraud.’’.

6 (b) TECHNICAL AND CONFORMING AMENDMENT.—

7 The table of chapters for part V of title 28, United States

8 Code, is amended by inserting after the item relating to

9 chapter 113 the following:

‘‘114. Class Actions ............................................................................ 1711’’.

10 SEC. 3. APPLICABILITY.

11 This Act and the amendments made by this Act shall

12 apply to all class action lawsuits filed after or pending on

13 the date of enactment of this Act.

Æ