II 

108TH CONGRESS 

1ST SESSION S. 1769

To provide for class action reform, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 21, 2003

Mr. BREAUX introduced the following bill; which was read twice and referred 

to the Committee on the Judiciary 

A BILL

To provide for class action reform, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘National Class Action Act of 2003’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows:

Sec. 1. Short title; reference; table of contents. 

Sec. 2. Coupon settlements in class action cases. 

Sec. 3. Federal district court jurisdiction for national class actions. 

Sec. 4. Removal of national class actions to Federal court. 

Sec. 5. Effective date.
2

•S 1769 IS 

1 SEC. 2. COUPONS SETTLEMENTS IN CLASS ACTION CASES. 

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

3 Code, is amended by inserting after chapter 113 the fol4 lowing:

5 ‘‘CHAPTER 114—CLASS ACTIONS

‘‘Sec. 

‘‘1711. Definitions. 

‘‘1712. Coupons settlements.

6 ‘‘§ 1711. Definitions 

7 ‘‘In this chapter, the following definitions shall apply: 

8 ‘‘(1) CLASS.—The term ‘class’ means all of the 

9 class members in a class action. 

10 ‘‘(2) CLASS ACTION.—The term ‘class action’ 

11 means any civil action—

12 ‘‘(A) filed in a district court of the United 

13 States under rule 23 of the Federal Rules of 

14 Civil Procedure; or 

15 ‘‘(B) any civil action that is removed to a 

16 district court of the United States that was 

17 originally filed under a State statute or rule of 

18 judicial procedure authorizing an action to be 

19 brought by 1 or more representatives on behalf 

20 of a class. 

21 ‘‘(3) CLASS COUNSEL.—The term ‘class coun22 sel’ means the persons who serve as the attorneys 

23 for the class members in a proposed or certified 

24 class action. 
3

•S 1769 IS 

1 ‘‘(4) CLASS MEMBERS.—The term ‘class mem2 bers’ means the persons (named or unnamed) who 

3 fall within the definition of the proposed or certified 

4 class in a class action. 

5 ‘‘§ 1712. Coupons settlements 

6 ‘‘(a) CONTINGENT FEES IN COUPON SETTLE7 MENTS.—If a proposed settlement in a class action pro8 vides for a recovery of coupons to a class member, the 

9 portion of any attorney’s fee to be paid to class counsel 

10 based on the recovery of the coupons shall be based on 

11 the value to class members of the coupons that are re12 deemed. 

13 ‘‘(b) OTHER ATTORNEY’S FEE AWARDS IN COUPON

14 SETTLEMENTS.—

15 ‘‘(1) IN GENERAL.—If a proposed settlement in 

16 a class action provides for a recovery of coupons to 

17 a class member, and a portion of the recovery of the 

18 coupons is not used to determine the attorney’s fee 

19 to be paid to class counsel, the attorney’s fee shall 

20 be based upon the amount of time class counsel ex21 pended working on the action. 

22 ‘‘(2) COURT APPROVAL.—Any attorney’s fee 

23 under this subsection shall be subject to approval by 

24 the court and shall include an appropriate attorney’s 

25 fee for obtaining equitable relief, including an in-
4

•S 1769 IS 

1 junction, if applicable. Nothing in this subsection 

2 shall be construed to prohibit application of a 

3 lodestar with a multiplier method of determining at4 torney’s fees. 

5 ‘‘(c) ATTORNEY’S FEE AWARDS CALCULATED ON A

6 MIXED BASIS IN COUPON SETTLEMENTS.—If a proposed 

7 settlement in a class action provides for an award of cou8 pons to a class member and also provides for equitable 

9 relief, including injunctive relief—

10 ‘‘(1) that portion of the attorney’s fee to be 

11 paid to class counsel that is based upon a portion of 

12 the recovery of the coupons shall be calculated ac13 cording to subsection (a); and 

14 ‘‘(2) that portion of the attorney’s fee to be 

15 paid to class counsel that is not based upon a por16 tion of the recovery of the coupons shall be cal17 culated according to subsection (b). 

18 ‘‘(d) SETTLEMENT VALUATION EXPERTISE.—In a 

19 class action involving the awarding of coupons, the court 

20 may in its discretion, upon the motion of a party, receive 

21 expert testimony from a witness qualified to provide infor22 mation on the actual value of the settlement. 

23 ‘‘(e) JUDICIAL SCRUTINY OF COUPON SETTLE24 MENTS.—In a class action that provides for a recovery of 

25 coupons to a class member, the court may approve a pro-
5

•S 1769 IS 

1 posed settlement only after a hearing to determine wheth2 er, and making a written finding that, the settlement is 

3 fair, reasonable, and adequate for class members.’’. 

4 (b) TECHNICAL AND CONFORMING AMENDMENT.—

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

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

7 chapter 113 the following:

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

8 SEC. 3. FEDERAL DISTRICT COURT JURISDICTION FOR NA9 TIONAL CLASS ACTIONS. 

10 (a) IN GENERAL.—Chapter 85 of title 28, United 

11 States Code, is amended by adding at the end the fol12 lowing: 

13 ‘‘§ 1370. National class actions 

14 ‘‘(a) In addition to the jurisdiction conferred under 

15 this chapter, a district court of the United States shall 

have jurisdiction over a class action in which 1 16 ⁄3 or fewer 

17 of the members of all proposed plaintiff classes in the ag18 gregate are citizens of the State in which the action was 

19 originally filed. 

20 ‘‘(b) A district court of the United States may, in 

21 the interests of justice, decline to exercise jurisdiction over 

a class action in which greater than 1⁄3 but less than 2 22 ⁄3

23 of the members of all proposed plaintiff classes in the ag24 gregate are citizens of the State in which the action was 

25 originally filed based on consideration of—
6

•S 1769 IS 

1 ‘‘(1) whether the claims asserted involve mat2 ters of State or local interest; 

3 ‘‘(2) whether the claims asserted will be gov4 erned by laws other than those of the State in which 

5 the action was originally filed; 

6 ‘‘(3) whether the forum for the class action was 

7 chosen frivolously or in bad faith; 

8 ‘‘(4) whether the number of citizens of the 

9 State in which the action was originally filed in all 

10 proposed plaintiff classes in the aggregate is sub11 stantially larger than the number of citizens from 

12 any other State, and the citizenship of the other 

13 members of the proposed class is dispersed among a 

14 substantial number of States; and 

15 ‘‘(5) whether the State claims asserted by class 

16 members of the State in which the action was filed 

17 would be preempted by a Federal class action. 

18 ‘‘(c) A district court of the United States shall not 

19 exercise jurisdiction over a class action in which—

‘‘(1) 2 20 ⁄3 or more of the members of all proposed 

21 plaintiff classes in the aggregate are citizens of the 

22 State in which the action was originally filed; 

23 ‘‘(2) the primary defendants are States, State 

24 officials, or other governmental entities against 
7

•S 1769 IS 

1 whom the district court may be foreclosed from or2 dering relief; or 

3 ‘‘(3) the number of members of all proposed 

4 plaintiff classes in the aggregate is less than 100. 

5 ‘‘(d) Citizenship of proposed class members in sub6 section (a), (b), and (c) shall be determined on the date 

7 of filing the proposed class action in Federal district court 

8 or State court. 

9 ‘‘(e) This section shall not apply to any class action 

10 that soley involves a claim—

11 ‘‘(1) concerning a covered security as defined 

12 under 16(f)(3) of the Securities Act of 1933 (15 

13 U.S.C. 77p(f)(3)); 

14 ‘‘(2) that relates to the internal affairs or gov15 ernance of a corporation or other form of business 

16 enterprise and that arises under or by virtue of the 

17 laws of the State in which such corporation or busi18 ness enterprise is incorporated or organized; or 

19 ‘‘(3) that relates to the rights, duties (including 

20 fiduciary duties), and obligations relating to or cre21 ated by or pursuant to any security (as defined 

22 under section 2(a)(1) of the Securities Act of 1933 

23 (15 U.S.C. 77b(a)(1)) and the regulations issued 

24 thereunder). 
8

•S 1769 IS 

1 (f) Nothing in this section shall be construed to limit 

2 Federal jurisdiction over any class action that meets diver3 sity of citizenship requirements under section 1332.’’. 

4 (b) CLERICAL AMENDMENT.—The table of sections 

5 at the beginning of chapter 85 of title 28, United States 

6 Code, is amended by adding at the end the following:

‘‘1370. National class actions.’’.

7 SEC. 4. REMOVAL OF NATIONAL CLASS ACTIONS TO FED8 ERAL COURT. 

9 (a) IN GENERAL.—Chapter 89 of title 28, United 

10 States Code, is amended by adding at the end the fol11 lowing: 

12 ‘‘§ 1453. Removal of national class actions 

13 ‘‘(a) A class action over which a district court would 

14 have jurisdiction under section 1370 may be removed to 

15 a district court of the United States, in accordance with 

16 this chapter, by—

17 ‘‘(1) any defendant without the consent of all 

18 defendants; or 

19 ‘‘(2) any plaintiff class member who has inter20 vened, seeks to be designated as a representative 

21 class member, and is not a named or representative 

22 class member without the consent of all members of 

23 such class. 

24 ‘‘(b) The Federal district court which receives a class 

25 action removed in accordance with this section shall make 
9

•S 1769 IS 

1 a determination regarding the jurisdiction of the proposed 

2 class action before deciding a motion to transfer to any 

3 other court under—

4 ‘‘(1) section 1391; or 

5 ‘‘(2) section 1407. 

6 ‘‘(c) Section 1446 (relating to a defendant removing 

7 a case) shall apply to a plaintiff removing a case under 

8 this section, except that the application of section 1446(b) 

9 (relating to the 30-day filing period requirement) shall be 

10 met if a plaintiff class member files notice of removal not 

11 later than 30 days after the receipt by such class member, 

12 through service or otherwise, of the initial written notice 

13 of class action. 

14 ‘‘(d) This section shall not apply to any class action 

15 that solely involves a claim—

16 ‘‘(1) concerning a covered security (as defined 

17 under section 16(f)(3) of the Securities Act of 1933 

18 (15 U.S.C. 77p(f)(3)); 

19 ‘‘(2) that relates to the internal affairs or gov20 ernance of a corporation or other form of business 

21 enterprise and that arises under or by virtue of the 

22 laws of the State in which such corporation or busi23 ness enterprise is incorporated or organized; or 

24 ‘‘(3) that relates to the rights, duties (including 

25 fiduciary duties), and obligations relating to or cre-
10

•S 1769 IS 

1 ated by or pursuant to any security (as defined 

2 under section 2(a)(1) of the Securities Act of 1933 

3 (15 U.S.C. 77b(a)(1)) and the regulations issued 

4 thereunder).’’. 

5 (b) CLERICAL AMENDMENT.—The table of sections 

6 at the beginning of chapter 89 of title 28, United States 

7 Code, is amended by adding at the end the following:

‘‘1453. Removal of national class actions.’’.

8 SEC. 5. EFFECTIVE DATE. 

9 The amendments made by this Act shall apply to any 

10 civil action commenced on or after the date of enactment 

11 of this Act.

Æ