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[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 985 Referred in Senate (RFS)]

<DOC>
115th CONGRESS
  1st Session
                                H. R. 985

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 13, 2017

   Received; read twice and referred to the Committee on the Judiciary

_______________________________________________________________________

                                 AN ACT

 
    To amend the procedures used in Federal court class actions and 
 multidistrict litigation proceedings to assure fairer, more efficient 
     outcomes for claimants and defendants, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Fairness in Class 
Action Litigation and Furthering Asbestos Claim Transparency Act of 
2017''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
              TITLE I--FAIRNESS IN CLASS ACTION LITIGATION

Sec. 101. Short title; reference; table of contents.
Sec. 102. Purposes.
Sec. 103. Class action procedures.
Sec. 104. Misjoinder of plaintiffs in personal injury and wrongful 
                            death actions.
Sec. 105. Multidistrict litigation proceedings procedures.
Sec. 106. Rulemaking authority of Supreme Court and Judicial 
                            Conference.
Sec. 107. Effective date.
            TITLE II--FURTHERING ASBESTOS CLAIM TRANSPARENCY

Sec. 201. Short title.
Sec. 202. Amendments.
Sec. 203. Effective date; application of amendments.

              TITLE I--FAIRNESS IN CLASS ACTION LITIGATION

SEC. 101. SHORT TITLE; REFERENCE; TABLE OF CONTENTS.

    (a) Short Title.--This title may be cited as the ``Fairness in 
Class Action Litigation Act of 2017''.
    (b) Reference.--Whenever, in this title, reference is made to an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of title 
28, United States Code.
    (c) Table of Contents.--The table of contents of this title is as 
follows:

Sec. 101. Short title; reference; table of contents.
Sec. 102. Purposes.
Sec. 103. Class action procedures.
Sec. 104. Misjoinder of plaintiffs in personal injury and wrongful 
                            death actions.
Sec. 105. Multidistrict litigation proceedings procedures.
Sec. 106. Rulemaking authority of Supreme Court and Judicial 
                            Conference.
Sec. 107. Effective date.

SEC. 102. PURPOSES.

    The purposes of this title are to--
            (1) assure fair and prompt recoveries for class members and 
        multidistrict litigation plaintiffs with legitimate claims;
            (2) diminish abuses in class action and mass tort 
        litigation that are undermining the integrity of the U.S. legal 
        system; and
            (3) restore the intent of the framers of the United States 
        Constitution by ensuring Federal court consideration of 
        interstate controversies of national importance consistent with 
        diversity jurisdiction principles.

SEC. 103. CLASS ACTION PROCEDURES.

    (a) In General.--Chapter 114 is amended by inserting after section 
1715 the following:
``Sec. 1716. Class action injury allegations
    ``(a) In General.--A Federal court shall not issue an order 
granting certification of a class action seeking monetary relief for 
personal injury or economic loss unless the party seeking to maintain 
such a class action affirmatively demonstrates that each proposed class 
member suffered the same type and scope of injury as the named class 
representative or representatives.
    ``(b) Certification Order.--An order issued under Rule 23(c)(1) of 
the Federal Rules of Civil Procedure that certifies a class seeking 
monetary relief for personal injury or economic loss shall include a 
determination, based on a rigorous analysis of the evidence presented, 
that the requirement in subsection (a) of this section is satisfied.
``Sec. 1717. Conflicts of interest
    ``(a) Required Disclosures.--In a class action complaint, class 
counsel shall state whether any proposed class representative or named 
plaintiff in the complaint is a relative of, is a present or former 
employee of, is a present or former client of (other than with respect 
to the class action), or has any contractual relationship with (other 
than with respect to the class action) class counsel. In addition, the 
complaint shall describe the circumstances under which each class 
representative or named plaintiff agreed to be included in the 
complaint and shall identify any other class action in which any 
proposed class representative or named plaintiff has a similar role.
    ``(b) Prohibition of Conflicts.--A Federal court shall not issue an 
order granting certification of any class action in which any proposed 
class representative or named plaintiff is a relative or employee of 
class counsel.
    ``(c) Definition.--For purposes of this section, `relative' shall 
be defined by reference to section 3110(a)(3) of title 5, United States 
Code.
    ``(d) Exception.--This section shall not apply to a private action 
brought as a class action that is subject to section 27(a) of the 
Securities Act of 1933 (15 U.S.C. 77z-1(a)) or section 21D(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78u-4(a)).
``Sec. 1718. Class member benefits
    ``(a) Distribution of Benefits to Class Members.--A Federal court 
shall not issue an order granting certification of a class action 
seeking monetary relief unless the class is defined with reference to 
objective criteria and the party seeking to maintain such a class 
action affirmatively demonstrates that there is a reliable and 
administratively feasible mechanism (a) for the court to determine 
whether putative class members fall within the class definition and (b) 
for distributing directly to a substantial majority of class members 
any monetary relief secured for the class.
    ``(b) Attorneys' Fees in Class Actions.--
            ``(1) Fee distribution timing.--In a class action seeking 
        monetary relief, no attorneys' fees may be determined or paid 
        pursuant to Rule 23(h) of the Federal Rules of Civil Procedure 
        or otherwise until the distribution of any monetary recovery to 
        class members has been completed.
            ``(2) Fee determinations based on monetary awards.--Unless 
        otherwise specified by Federal statute, if a judgment or 
        proposed settlement in a class action provides for a monetary 
        recovery, the portion of any attorneys' fee award to class 
        counsel that is attributed to the monetary recovery shall be 
        limited to a reasonable percentage of any payments directly 
        distributed to and received by class members. In no event shall 
        the attorneys' fee award exceed the total amount of money 
        directly distributed to and received by all class members.
            ``(3) Fee determinations based on equitable relief.--Unless 
        otherwise specified by Federal statute, if a judgment or 
        proposed settlement in a class action provides for equitable 
        relief, the portion of any attorneys' fee award to class 
        counsel that is attributed to the equitable relief shall be 
        limited to a reasonable percentage of the value of the 
        equitable relief, including any injunctive relief.
``Sec. 1719. Money distribution data
    ``(a) Settlement Accountings.--In any settlement of a class action 
that provides for monetary benefits, the court shall order class 
counsel to submit to the Director of the Federal Judicial Center and 
the Director of the Administrative Office of the United States Courts 
an accounting of the disbursement of all funds paid by the defendant 
pursuant to the settlement agreement. The accounting shall state the 
total amount paid directly to all class members, the actual or 
estimated total number of class members, the number of class members 
who received payments, the average amount (both mean and median) paid 
directly to all class members, the largest amount paid to any class 
member, the smallest amount paid to any class member and, separately, 
each amount paid to any other person (including class counsel) and the 
purpose of the payment. In stating the amounts paid to class members, 
no individual class member shall be identified. No attorneys' fees may 
be paid to class counsel pursuant to Rule 23(h) of the Federal Rules of 
Civil Procedure until the accounting has been submitted.
    ``(b) Annual Settlement Distribution Reports.--Commencing not later 
than 12 months after the date of enactment of this section, the 
Judicial Conference of the United States, with the assistance of the 
Director of the Federal Judicial Center and the Director of the 
Administrative Office of the United States Courts, shall annually 
prepare and transmit to the Committees on the Judiciary of the Senate 
and the House of Representatives for public dissemination a report 
summarizing how funds paid by defendants in class actions have been 
distributed, based on the settlement accountings submitted pursuant to 
subsection (a).
``Sec. 1720. Issues classes
    ``(a) In General.--A Federal court shall not issue an order 
granting certification of a class action with respect to particular 
issues pursuant to Rule 23(c)(4) of the Federal Rules of Civil 
Procedure unless the entirety of the cause of action from which the 
particular issues arise satisfies all the class certification 
prerequisites of Rule 23(a) and Rule 23(b)(1), Rule 23(b)(2), or Rule 
23(b)(3).
    ``(b) Certification Order.--An order issued under Rule 23(c)(4) of 
the Federal Rules of Civil Procedure that certifies a class with 
respect to particular issues shall include a determination, based on a 
rigorous analysis of the evidence presented, that the requirement in 
subsection (a) of this section is satisfied.
``Sec. 1721. Stay of discovery
    ``In any class action, all discovery and other proceedings shall be 
stayed during the pendency of any motion to transfer, motion to 
dismiss, motion to strike class allegations, or other motion to dispose 
of the class allegations, unless the court finds upon the motion of any 
party that particularized discovery is necessary to preserve evidence 
or to prevent undue prejudice to that party. This section shall not 
apply to a private action brought as a class action that is subject to 
section 27(a) of the Securities Act of 1933 (15 U.S.C. 77z-1(a)) or 
section 21D(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78u-
4(a)).
``Sec. 1722. Third-party litigation funding disclosure
    ``In any class action, class counsel shall promptly disclose in 
writing to the court and all other parties the identity of any person 
or entity, other than a class member or class counsel of record, who 
has a contingent right to receive compensation from any settlement, 
judgment, or other relief obtained in the action.
``Sec. 1723. Appeals
    ``A court of appeals shall permit an appeal from an order granting 
or denying class-action certification under Rule 23 of the Federal 
Rules of Civil Procedure.''.
    (b) Conforming Amendment.--The table of sections for such chapter 
is amended by inserting after the item pertaining to section 1715 the 
following:

``Sec. 1716. Class action injury allegations.
``Sec. 1717. Conflicts of interest.
``Sec. 1718. Class member benefits.
``Sec. 1719. Money distribution data.
``Sec. 1720. Issues classes.
``Sec. 1721. Stay of discovery.
``Sec. 1722. Third-party litigation funding disclosure.
``Sec. 1723. Appeals.''.

SEC. 104. MISJOINDER OF PLAINTIFFS IN PERSONAL INJURY AND WRONGFUL 
              DEATH ACTIONS.

    Section 1447 is amended by inserting after subsection (e) the 
following:
    ``(f) Misjoinder of Plaintiffs in Personal Injury and Wrongful 
Death Actions.--
            ``(1) This subsection shall apply to any civil action 
        commenced in a State court in which--
                    ``(A) two or more plaintiffs assert personal injury 
                or wrongful death claims;
                    ``(B) the action is removed on the basis of the 
                jurisdiction conferred by section 1332(a); and
                    ``(C) a motion to remand is made on the ground that 
                one or more plaintiffs are citizens of the same State 
                as one or more defendants.
            ``(2) In deciding the remand motion in any such case, the 
        court shall apply the jurisdictional requirements of section 
        1332(a) to the claims of each plaintiff individually, as though 
        that plaintiff were the sole plaintiff in the action.
            ``(3) Except as provided in paragraph (4), the court shall 
        sever the claims that do not satisfy the jurisdictional 
        requirements of section 1332(a) and shall remand those claims 
        to the State court from which the action was removed. The court 
        shall retain jurisdiction over the claims that satisfy the 
        jurisdictional requirements of section 1332(a).
            ``(4) The court shall retain jurisdiction over a claim that 
        does not satisfy the jurisdictional requirements of section 
        1332(a) if--
                    ``(A) the claim is so related to the claims that 
                satisfy the jurisdictional requirements of section 
                1332(a) that they form part of the same case or 
                controversy under Article III of the United States 
                Constitution; and
                    ``(B) the plaintiff consents to the removal of the 
                claim.''.

SEC. 105. MULTIDISTRICT LITIGATION PROCEEDINGS PROCEDURES.

    Section 1407 is amended by adding at the end the following:
    ``(i) Allegations Verification.--In any coordinated or consolidated 
pretrial proceedings conducted pursuant to subsection (b), counsel for 
a plaintiff asserting a claim seeking redress for personal injury whose 
civil action is assigned to or directly filed in the proceedings shall 
make a submission sufficient to demonstrate that there is evidentiary 
support (including but not limited to medical records) for the factual 
contentions in plaintiff's complaint regarding the alleged injury, the 
exposure to the risk that allegedly caused the injury, and the alleged 
cause of the injury. The submission must be made within the first 45 
days after the civil action is transferred to or directly filed in the 
proceedings. That deadline shall not be extended. Within 90 days after 
the submission deadline, the judge or judges to whom the action is 
assigned shall enter an order determining whether the submission is 
sufficient and shall dismiss the action without prejudice if the 
submission is found to be insufficient. If a plaintiff in an action 
dismissed without prejudice fails to tender a sufficient submission 
within the following 30 days, the action shall be dismissed with 
prejudice.
    ``(j) Trial Prohibition.--In any coordinated or consolidated 
pretrial proceedings conducted pursuant to subsection (b), the judge or 
judges to whom actions are assigned by the Judicial Panel on 
Multidistrict Litigation may not conduct a trial in a civil action 
transferred to or directly filed in the proceedings unless all parties 
to that civil action consent.
    ``(k) Review of Orders.--
            ``(1) In general.--The Court of Appeals having jurisdiction 
        over the transferee district shall permit an appeal to be taken 
        from any order issued in the conduct of coordinated or 
        consolidated pretrial proceedings conducted pursuant to 
        subsection (b), provided that the order is applicable to one or 
        more civil actions seeking redress for personal injury and that 
        an immediate appeal from the order may materially advance the 
        ultimate termination of one or more civil actions in the 
        proceedings.
            ``(2) Remand orders.--Notwithstanding section 1447(d), a 
        court of appeals may accept an appeal from an order issued in 
        any coordinated or consolidated proceedings conducted pursuant 
        to subsection (b) granting or denying a motion to remand a 
        civil action to the State court from which it was removed if 
        application is made to the court of appeals within 14 days 
        after the order is entered.
    ``(l) Ensuring Proper Recovery for Plaintiffs.--A plaintiff who 
asserts personal injury claims in any civil action transferred to or 
directly filed in coordinated or consolidated pretrial proceedings 
conducted pursuant to subsection (b) shall receive not less than 80 
percent of any monetary recovery obtained for those claims by 
settlement, judgment, or otherwise, subject to the satisfaction of any 
liens for medical services provided to the plaintiff related to those 
claims. The judge or judges to whom the coordinated or consolidated 
pretrial proceedings have been assigned shall have jurisdiction over 
any disputes regarding compliance with this requirement.''.

SEC. 106. RULEMAKING AUTHORITY OF SUPREME COURT AND JUDICIAL 
              CONFERENCE.

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

SEC. 107. EFFECTIVE DATE.

    The amendments made by the title shall apply to any civil action 
pending on the date of enactment of this title or commenced thereafter.

            TITLE II--FURTHERING ASBESTOS CLAIM TRANSPARENCY

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Furthering Asbestos Claim 
Transparency (FACT) Act of 2017''.

SEC. 202. AMENDMENTS.

    Section 524(g) of title 11, United States Code, is amended by 
adding at the end the following:
    ``(8) A trust described in paragraph (2) shall, subject to section 
107--
            ``(A) file with the bankruptcy court, not later than 60 
        days after the end of every quarter, a report that shall be 
        made available on the court's public docket and with respect to 
        such quarter--
                    ``(i) describes each demand the trust received 
                from, including the name and exposure history of, a 
                claimant and the basis for any payment from the trust 
                made to such claimant; and
                    ``(ii) does not include any confidential medical 
                record or the claimant's full social security number; 
                and
            ``(B) upon written request, and subject to payment 
        (demanded at the option of the trust) for any reasonable cost 
        incurred by the trust to comply with such request, provide in a 
        timely manner any information related to payment from, and 
        demands for payment from, such trust, subject to appropriate 
        protective orders, to any party to any action in law or equity 
        if the subject of such action concerns liability for asbestos 
        exposure.''.

SEC. 203. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

    (a) Effective Date.--Except as provided in subsection (b), this 
title and the amendments made by this title shall take effect on the 
date of the enactment of this title.
    (b) Application of Amendments.--The amendments made by this title 
shall apply with respect to cases commenced under title 11 of the 
United States Code before, on, or after the date of the enactment of 
this title.

            Passed the House of Representatives March 9, 2017.

            Attest:

                                                 KAREN L. HAAS,

                                                                 Clerk.
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