II 

Calendar No. 315

108TH CONGRESS 

1ST SESSION S. 1751

To amend the procedures that apply to consideration of interstate class 

actions to assure fairer outcomes for class members and defendants, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 17 (legislative day, OCTOBER 16), 2003

Mr. GRASSLEY (for himself, Mr. KOHL, Mr. HATCH, Mr. CARPER, Mr. SPECTER, Mr. MILLER, Mr. CHAFEE, and Mr. LUGAR) introduced the following bill; which was read the first time 

OCTOBER 17, 2003

Read the second time and placed on the calendar 

A BILL

To amend the procedures that apply to consideration of 

interstate class actions to assure fairer outcomes for 

class members and defendants, 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,
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1 SECTION 1. SHORT TITLE; REFERENCE; TABLE OF CON2 TENTS. 

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

4 ‘‘Class Action Fairness Act of 2003’’. 

5 (b) REFERENCE.—Whenever in this Act reference is 

6 made to an amendment to, or repeal of, a section or other 

7 provision, the reference shall be considered to be made to 

8 a section or other provision of title 28, United States 

9 Code. 

10 (c) TABLE OF CONTENTS.—The table of contents for 

11 this Act is as follows:

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

Sec. 2. Findings and purposes. 

Sec. 3. Consumer class action bill of rights and improved procedures for interstate class actions. 

Sec. 4. Federal district court jurisdiction for interstate class actions. 

Sec. 5. Removal of interstate class actions to Federal district court. 

Sec. 6. Report on class action settlements. 

Sec. 7. Effective date.

12 SEC. 2. FINDINGS AND PURPOSES. 

13 (a) FINDINGS.—Congress finds the following: 

14 (1) Class action lawsuits are an important and 

15 valuable part of the legal system when they permit 

16 the fair and efficient resolution of legitimate claims 

17 of numerous parties by allowing the claims to be ag18 gregated into a single action against a defendant 

19 that has allegedly caused harm. 

20 (2) Over the past decade, there have been 

21 abuses of the class action device that have—
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1 (A) harmed class members with legitimate 

2 claims and defendants that have acted respon3 sibly; 

4 (B) adversely affected interstate commerce; 

5 and 

6 (C) undermined public respect for our judi7 cial system. 

8 (3) Class members often receive little or no ben9 efit from class actions, and are sometimes harmed, 

10 such as where—

11 (A) counsel are awarded large fees, while 

12 leaving class members with coupons or other 

13 awards of little or no value; 

14 (B) unjustified awards are made to certain 

15 plaintiffs at the expense of other class mem16 bers; and 

17 (C) confusing notices are published that 

18 prevent class members from being able to fully 

19 understand and effectively exercise their rights. 

20 (4) Abuses in class actions undermine the na21 tional judicial system, the free flow of interstate 

22 commerce, and the concept of diversity jurisdiction 

23 as intended by the framers of the United States 

24 Constitution, in that State and local courts are—
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1 (A) keeping cases of national importance 

2 out of Federal court; 

3 (B) sometimes acting in ways that dem4 onstrate bias against out-of-State defendants; 

5 and 

6 (C) making judgments that impose their 

7 view of the law on other States and bind the 

8 rights of the residents of those States. 

9 (b) PURPOSES.—The purposes of this Act are to—

10 (1) assure fair and prompt recoveries for class 

11 members with legitimate claims; 

12 (2) restore the intent of the framers of the 

13 United States Constitution by providing for Federal 

14 court consideration of interstate cases of national 

15 importance under diversity jurisdiction; and 

16 (3) benefit society by encouraging innovation 

17 and lowering consumer prices. 

18 SEC. 3. CONSUMER CLASS ACTION BILL OF RIGHTS AND IM19 PROVED PROCEDURES FOR INTERSTATE 

20 CLASS ACTIONS. 

21 (a) IN GENERAL.—Part V is amended by inserting 

22 after chapter 113 the following:

23 ‘‘CHAPTER 114—CLASS ACTIONS

‘‘Sec. 

‘‘1711. Definitions. 

‘‘1712. Judicial scrutiny of coupon and other noncash settlements. 

‘‘1713. Protection against loss by class members. 

‘‘1714. Protection against discrimination based on geographic location. 
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‘‘1715. Prohibition on the payment of bounties. 

‘‘1716. Clearer and simpler settlement information. 

‘‘1717. Notifications to appropriate Federal and State officials.

1 ‘‘§ 1711. Definitions 

2 ‘‘In this chapter: 

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

4 class members in a class action. 

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

6 means any civil action filed in a district court of the 

7 United States under rule 23 of the Federal Rules of 

8 Civil Procedure or any civil action that is removed 

9 to a district court of the United States that was 

10 originally filed under a State statute or rule of judi11 cial procedure authorizing an action to be brought 

12 by 1 or more representatives as a class action. 

13 ‘‘(3) CLASS COUNSEL.—The term ‘class coun14 sel’ means the persons who serve as the attorneys 

15 for the class members in a proposed or certified 

16 class action. 

17 ‘‘(4) CLASS MEMBERS.—The term ‘class mem18 bers’ means the persons (named or unnamed) who 

19 fall within the definition of the proposed or certified 

20 class in a class action. 

21 ‘‘(5) PLAINTIFF CLASS ACTION.—The term 

22 ‘plaintiff class action’ means a class action in which 

23 class members are plaintiffs.
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1 ‘‘(6) PROPOSED SETTLEMENT.—The term ‘pro2 posed settlement’ means an agreement regarding a 

3 class action that is subject to court approval and 

4 that, if approved, would be binding on some or all 

5 class members.

6 ‘‘§ 1712. Judicial scrutiny of coupon and other 

7 noncash settlements 

8 ‘‘The court may approve a proposed settlement under 

9 which the class members would receive noncash benefits 

10 or would otherwise be required to expend funds in order 

11 to obtain part or all of the proposed benefits only after 

12 a hearing to determine whether, and making a written 

13 finding that, the settlement is fair, reasonable, and ade14 quate for class members. 

15 ‘‘§ 1713. Protection against loss by class members 

16 ‘‘The court may approve a proposed settlement under 

17 which any class member is obligated to pay sums to class 

18 counsel that would result in a net loss to the class member 

19 only if the court makes a written finding that nonmone20 tary benefits to the class member substantially outweigh 

21 the monetary loss. 

22 ‘‘§ 1714. Protection against discrimination based on 

23 geographic location 

24 ‘‘The court may not approve a proposed settlement 

25 that provides for the payment of greater sums to some 
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1 class members than to others solely on the basis that the 

2 class members to whom the greater sums are to be paid 

3 are located in closer geographic proximity to the court. 

4 ‘‘§ 1715. Prohibition on the payment of bounties 

5 ‘‘(a) IN GENERAL.—The court may not approve a 

6 proposed settlement that provides for the payment of a 

7 greater share of the award to a class representative serv8 ing on behalf of a class, on the basis of the formula for 

9 distribution to all other class members, than that awarded 

10 to the other class members. 

11 ‘‘(b) RULE OF CONSTRUCTION.—The limitation in 

12 subsection (a) shall not be construed to prohibit a pay13 ment approved by the court for reasonable time or costs 

14 that a person was required to expend in fulfilling the obli15 gations of that person as a class representative. 

16 ‘‘§ 1716. Clearer and simpler settlement information 

17 ‘‘(a) PLAIN ENGLISH REQUIREMENTS.—Any court 

18 with jurisdiction over a plaintiff class action shall require 

19 that any written notice concerning a proposed settlement 

20 of the class action provided to the class through the mail 

21 or publication in printed media contain—

22 ‘‘(1) at the beginning of such notice, a state23 ment in 18-point or greater bold type, stating 

24 ‘LEGAL NOTICE: YOU ARE A PLAINTIFF IN 

25 A CLASS ACTION LAWSUIT AND YOUR 
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1 LEGAL RIGHTS ARE AFFECTED BY THE 

2 SETTLEMENT DESCRIBED IN THIS NO3 TICE.’; and 

4 ‘‘(2) a short summary written in plain, easily 

5 understood language, describing—

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

7 ‘‘(B) the members of the class; 

8 ‘‘(C) the legal consequences of being a 

9 member of the class action; 

10 ‘‘(D) if the notice is informing class mem11 bers of a proposed settlement agreement—

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

13 the class due to the settlement; 

14 ‘‘(ii) the rights that class members 

15 will lose or waive through the settlement; 

16 ‘‘(iii) obligations that will be imposed 

17 on the defendants by the settlement; 

18 ‘‘(iv) the dollar amount of any attor19 ney’s fee class counsel will be seeking, or 

20 if not possible, a good faith estimate of the 

21 dollar amount of any attorney’s fee class 

22 counsel will be seeking; and 

23 ‘‘(v) an explanation of how any attor24 ney’s fee will be calculated and funded; 

25 and 
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1 ‘‘(E) any other material matter. 

2 ‘‘(b) TABULAR FORMAT.—Any court with jurisdiction 

3 over a plaintiff class action shall require that the informa4 tion described in subsection (a)—

5 ‘‘(1) be placed in a conspicuous and prominent 

6 location on the notice; 

7 ‘‘(2) contain clear and concise headings for 

8 each item of information; and 

9 ‘‘(3) provide a clear and concise form for stat10 ing each item of information required to be disclosed 

11 under each heading. 

12 ‘‘(c) TELEVISION OR RADIO NOTICE.—Any notice 

13 provided through television or radio (including trans14 missions by cable or satellite) to inform the class members 

15 in a class action of the right of each member to be ex16 cluded from a class action or a proposed settlement, if 

17 such right exists, shall, in plain, easily understood lan18 guage—

19 ‘‘(1) describe the persons who may potentially 

20 become class members in the class action; and 

21 ‘‘(2) explain that the failure of a class member 

22 to exercise his or her right to be excluded from a 

23 class action will result in the person’s inclusion in 

24 the class action. 
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1 ‘‘§ 1717. Notifications to appropriate Federal and 

2 State officials 

3 ‘‘(a) DEFINITIONS.—

4 ‘‘(1) APPROPRIATE FEDERAL OFFICIAL.—In 

5 this section, the term ‘appropriate Federal official’ 

6 means—

7 ‘‘(A) the Attorney General of the United 

8 States; or 

9 ‘‘(B) in any case in which the defendant is 

10 a Federal depository institution, a State deposi11 tory institution, a depository institution holding 

12 company, a foreign bank, or a nondepository in13 stitution subsidiary of the foregoing (as such 

14 terms are defined in section 3 of the Federal 

15 Deposit Insurance Act (12 U.S.C. 1813)), the 

16 person who has the primary Federal regulatory 

17 or supervisory responsibility with respect to the 

18 defendant, if some or all of the matters alleged 

19 in the class action are subject to regulation or 

20 supervision by that person. 

21 ‘‘(2) APPROPRIATE STATE OFFICIAL.—In this 

22 section, the term ‘appropriate State official’ means 

23 the person in the State who has the primary regu24 latory or supervisory responsibility with respect to 

25 the defendant, or who licenses or otherwise author26 izes the defendant to conduct business in the State, 
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1 if some or all of the matters alleged in the class ac2 tion are subject to regulation by that person. If 

3 there is no primary regulator, supervisor, or licens4 ing authority, or the matters alleged in the class ac5 tion are not subject to regulation or supervision by

6 that person, then the appropriate State official shall 

7 be the State attorney general. 

8 ‘‘(b) IN GENERAL.—Not later than 10 days after a 

9 proposed settlement of a class action is filed in court, each 

10 defendant that is participating in the proposed settlement 

11 shall serve upon the appropriate State official of each 

12 State in which a class member resides and the appropriate 

13 Federal official, a notice of the proposed settlement con14 sisting of—

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

16 filed with the complaint and any amended com17 plaints (except such materials shall not be required 

18 to be served if such materials are made electronically 

19 available through the Internet and such service in20 cludes notice of how to electronically access such 

21 material); 

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

23 the class action; 

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

25 members of—
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1 ‘‘(A)(i) the members’ rights to request ex2 clusion from the class action; or 

3 ‘‘(ii) if no right to request exclusion exists, 

4 a statement that no such right exists; and 

5 ‘‘(B) a proposed settlement of a class ac6 tion; 

7 ‘‘(4) any proposed or final class action settle8 ment; 

9 ‘‘(5) any settlement or other agreement contem10 poraneously made between class counsel and counsel 

11 for the defendants; 

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

13 ‘‘(7)(A) if feasible, the names of class members 

14 who reside in each State and the estimated propor15 tionate share of the claims of such members to the 

16 entire settlement to that State’s appropriate State 

17 official; or 

18 ‘‘(B) if the provision of information under sub19 paragraph (A) is not feasible, a reasonable estimate 

20 of the number of class members residing in each 

21 State and the estimated proportionate share of the 

22 claims of such members to the entire settlement; and 

23 ‘‘(8) any written judicial opinion relating to the 

24 materials described under subparagraphs (3) 

25 through (6). 
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1 ‘‘(c) DEPOSITORY INSTITUTIONS NOTIFICATION.—

2 ‘‘(1) FEDERAL AND OTHER DEPOSITORY INSTI3 TUTIONS.—In any case in which the defendant is a 

4 Federal depository institution, a depository institu5 tion holding company, a foreign bank, or a non-de6 pository institution subsidiary of the foregoing, the 

7 notice requirements of this section are satisfied by 

8 serving the notice required under subsection (b) 

9 upon the person who has the primary Federal regu10 latory or supervisory responsibility with respect to 

11 the defendant, if some or all of the matters alleged 

12 in the class action are subject to regulation or super13 vision by that person. 

14 ‘‘(2) STATE DEPOSITORY INSTITUTIONS.—In 

15 any case in which the defendant is a State deposi16 tory institution (as that term is defined in section 3 

17 of the Federal Deposit Insurance Act (12 U.S.C. 

18 1813)), the notice requirements of this section are 

19 satisfied by serving the notice required under sub20 section (b) upon the State bank supervisor (as that 

21 term is defined in section 3 of the Federal Deposit 

22 Insurance Act (12 U.S.C. 1813)) of the State in 

23 which the defendant is incorporated or chartered, if 

24 some or all of the matters alleged in the class action 
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1 are subject to regulation or supervision by that per2 son, and upon the appropriate Federal official. 

3 ‘‘(d) FINAL APPROVAL.—An order giving final ap4 proval of a proposed settlement may not be issued earlier 

5 than 90 days after the later of the dates on which the 

6 appropriate Federal official and the appropriate State offi7 cial are served with the notice required under subsection 

8 (b). 

9 ‘‘(e) NONCOMPLIANCE IF NOTICE NOT PROVIDED.—

10 ‘‘(1) IN GENERAL.—A class member may refuse 

11 to comply with and may choose not to be bound by 

12 a settlement agreement or consent decree in a class 

13 action if the class member demonstrates that the no14 tice required under subsection (b) has not been pro15 vided. 

16 ‘‘(2) LIMITATION.—A class member may not 

17 refuse to comply with or to be bound by a settlement 

18 agreement or consent decree under paragraph (1) if 

19 the notice required under subsection (b) was directed 

20 to the appropriate Federal official and to either the 

21 State attorney general or the person that has pri22 mary regulatory, supervisory, or licensing authority 

23 over the defendant. 

24 ‘‘(3) APPLICATION OF RIGHTS.—The rights cre25 ated by this subsection shall apply only to class 
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1 members or any person acting on a class member’s 

2 behalf, and shall not be construed to limit any other 

3 rights affecting a class member’s participation in the 

4 settlement. 

5 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec6 tion shall be construed to expand the authority of, or im7 pose any obligations, duties, or responsibilities upon, Fed8 eral or State officials.’’. 

9 (b) TECHNICAL AND CONFORMING AMENDMENT.—

10 The table of chapters for part V is amended by inserting 

11 after the item relating to chapter 113 the following:

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

12 SEC. 4. FEDERAL DISTRICT COURT JURISDICTION FOR 

13 INTERSTATE CLASS ACTIONS. 

14 (a) APPLICATION OF FEDERAL DIVERSITY JURISDIC15 TION.—Section 1332 is amended—

16 (1) by redesignating subsection (d) as sub17 section (e); and 

18 (2) by inserting after subsection (c) the fol19 lowing: 

20 ‘‘(d)(1) In this subsection—

21 ‘‘(A) the term ‘class’ means all of the class 

22 members in a class action; 

23 ‘‘(B) the term ‘class action’ means any civil ac24 tion filed under rule 23 of the Federal Rules of Civil 

25 Procedure or similar State statute or rule of judicial 
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1 procedure authorizing an action to be brought by 1 

2 or more representative persons as a class action; 

3 ‘‘(C) the term ‘class certification order’ means 

4 an order issued by a court approving the treatment

5 of some or all aspects of a civil action as a class 

6 action; and 

7 ‘‘(D) the term ‘class members’ means the per8 sons (named or unnamed) who fall within the defini9 tion of the proposed or certified class in a class ac10 tion. 

11 ‘‘(2) The district courts shall have original jurisdic12 tion of any civil action in which the matter in controversy 

13 exceeds the sum or value of $5,000,000, exclusive of inter14 est and costs, and is a class action in which—

15 ‘‘(A) any member of a class of plaintiffs is a 

16 citizen of a State different from any defendant; 

17 ‘‘(B) any member of a class of plaintiffs is a 

18 foreign state or a citizen or subject of a foreign state 

19 and any defendant is a citizen of a State; or 

20 ‘‘(C) any member of a class of plaintiffs is a 

21 citizen of a State and any defendant is a foreign 

22 state or a citizen or subject of a foreign state. 

23 ‘‘(3) A district court may, in the interests of justice, 

24 decline to exercise jurisdiction under paragraph (2) over 

25 a class action in which greater than one-third but less than 
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1 two-thirds of the members of all proposed plaintiff classes 

2 in the aggregate and the primary defendants are citizens 

3 of the State in which the action was originally filed based 

4 on consideration of the following factors: 

5 ‘‘(A) Whether the claims asserted involve mat6 ters of national or interstate interest. 

7 ‘‘(B) Whether the claims asserted will be gov8 erned by laws other than those of the State in which 

9 the action was originally filed. 

10 ‘‘(C) In the case of a class action originally 

11 filed in a State court, whether the class action has 

12 been pleaded in a manner that seeks to avoid Fed13 eral jurisdiction. 

14 ‘‘(D) Whether the number of citizens of the 

15 State in which the action was originally filed in all 

16 proposed plaintiff classes in the aggregate is sub17 stantially larger than the number of citizens from 

18 any other State, and the citizenship of the other 

19 members of the proposed class is dispersed among a 

20 substantial number of States. 

21 ‘‘(E) Whether 1 or more class actions asserting 

22 the same or similar claims on behalf of the same or 

23 other persons have been or may be filed. 

24 ‘‘(4) Paragraph (2) shall not apply to any class action 

25 in which—
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1 ‘‘(A) two-thirds or more of the members of all 

2 proposed plaintiff classes in the aggregate and the 

3 primary defendants are citizens of the State in 

4 which the action was originally filed; 

5 ‘‘(B) the primary defendants are States, State 

6 officials, or other governmental entities against 

7 whom the district court may be foreclosed from or8 dering relief; or 

9 ‘‘(C) the number of members of all proposed 

10 plaintiff classes in the aggregate is less than 100.

11 ‘‘(5) In any class action, the claims of the individual 

12 class members shall be aggregated to determine whether 

13 the matter in controversy exceeds the sum or value of 

14 $5,000,000, exclusive of interest and costs. 

15 ‘‘(6) This subsection shall apply to any class action 

16 before or after the entry of a class certification order by 

17 the court with respect to that action. 

18 ‘‘(7)(A) A district court shall dismiss any civil action 

19 that is subject to the jurisdiction of the court solely under 

20 this subsection if the court determines the action may not 

21 proceed as a class action based on a failure to satisfy the 

22 prerequisites of rule 23 of the Federal Rules of Civil Pro23 cedure. 

24 ‘‘(B) Nothing in subparagraph (A) shall prohibit 

25 plaintiffs from filing an amended class action in Federal 
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1 court or filing an action in State court, except that any 

2 such action filed in State court may be removed to the 

3 appropriate district court if it is an action of which the 

4 district courts of the United States have original jurisdic5 tion. 

6 ‘‘(C) In any action that is dismissed under this para7 graph and is filed by any of the original named plaintiffs 

8 therein in the same State court venue in which the dis9 missed action was originally filed, the limitations periods 

10 on all reasserted claims shall be deemed tolled for the pe11 riod during which the dismissed class action was pending. 

12 The limitations periods on any claims that were asserted 

13 in a class action dismissed under this paragraph that are 

14 subsequently asserted in an individual action shall be 

15 deemed tolled for the period during which the dismissed 

16 action was pending. 

17 ‘‘(8) Paragraph (2) shall not apply to any class action 

18 that solely involves a claim—

19 ‘‘(A) concerning a covered security as defined 

20 under 16(f)(3) of the Securities Act of 1933 and 

21 section 28(f)(5)(E) of the Securities Exchange Act 

22 of 1934; 

23 ‘‘(B) that relates to the internal affairs or gov24 ernance of a corporation or other form of business 

25 enterprise and that arises under or by virtue of the 
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1 laws of the State in which such corporation or busi2 ness enterprise is incorporated or organized; or 

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

4 fiduciary duties), and obligations relating to or cre5 ated by or pursuant to any security (as defined 

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

7 and the regulations issued thereunder). 

8 ‘‘(9) For purposes of this subsection and section 

9 1453 of this title, an unincorporated association shall be 

10 deemed to be a citizen of the State where it has its prin11 cipal place of business and the State under whose laws 

12 it is organized.

13 ‘‘(10)(A) For purposes of this section and section 

14 1453 of this title, a mass action shall be deemed to be 

15 a class action. 

16 ‘‘(B)(i) As used in subparagraph (A), the term ‘mass 

17 action’ shall mean any civil action(s) (except a civil action 

18 within the scope of section 1711(2) of this title) in which 

19 monetary relief claims of 100 or more persons are pro20 posed to be tried jointly in any respect on the ground that 

21 the claims involve common questions of law or fact.

22 ‘‘(ii) This subparagraph shall not apply to any civil 

23 action in which— 

24 ‘‘(I) all of the claims in the action arise from 

25 a single sudden accident that occurred in the State 
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1 in which the action was filed, and that allegedly re2 sulted in injuries in that State or in States contig3 uous thereto; 

4 ‘‘(II) the claims are joined upon motion of a de5 fendant; or 

6 ‘‘(III) all of the claims in the action are as7 serted on behalf of the general public (and not on 

8 behalf of individual claimants or members of a pur9 ported class) pursuant to a State statute specifically 

10 authorizing such action. 

11 ‘‘(C)(i) Any action(s) removed to Federal court pur12 suant to this subsection shall not thereafter be transferred 

13 to any other court pursuant to 28 U.S.C. 1407, or the 

14 rules promulgated thereunder, unless a majority of the 

15 plaintiffs in the action request transfer pursuant to 28 

16 U.S.C. 1407. 

17 ‘‘(ii) This subparagraph will not apply—

18 ‘‘(I) to cases certified pursuant to rule 23 of 

19 the Federal Rules of Civil Procedure; or 

20 ‘‘(II) if plaintiffs propose that the action pro21 ceed as a class action pursuant to rule 23 of the 

22 Federal Rules of Civil Procedure. 

23 ‘‘(D) The limitations periods on any claims asserted 

24 in a mass action that is removed to Federal court pursu-
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1 ant to this subsection shall be deemed tolled during the 

2 period that the action is pending in Federal court. 

3 ‘‘(E) Paragraph (7) of this subsection, and sub4 sections (b)(2) and (d) of section 1453 shall not apply to 

5 any civil action described in this paragraph.’’. 

6 (b) CONFORMING AMENDMENTS.—

7 (1) Section 1335(a)(1) is amended by inserting 

8 ‘‘(a) or (d)’’ after ‘‘1332’’. 

9 (2) Section 1603(b)(3) is amended by striking 

10 ‘‘(d)’’ and inserting ‘‘(e)’’. 

11 SEC. 5. REMOVAL OF INTERSTATE CLASS ACTIONS TO FED12 ERAL DISTRICT COURT. 

13 (a) IN GENERAL.—Chapter 89 is amended by adding 

14 after section 1452 the following: 

15 ‘‘§ 1453. Removal of class actions 

16 ‘‘(a) DEFINITIONS.—In this section, the terms ‘class’, 

17 ‘class action’, ‘class certification order’, and ‘class mem18 ber’ shall have the meanings given such terms under sec19 tion 1332(d)(1). 

20 ‘‘(b) IN GENERAL.—A class action may be removed 

21 to a district court of the United States in accordance with 

22 this chapter, without regard to whether any defendant is 

23 a citizen of the State in which the action is brought, except 

24 that such action may be removed—
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1 ‘‘(1) by any defendant without the consent of 

2 all defendants; or 

3 ‘‘(2) by any plaintiff class member who is not 

4 a named or representative class member without the 

5 consent of all members of such class. 

6 ‘‘(c) WHEN REMOVABLE.—This section shall apply to 

7 any class action before or after the entry of a class certifi8 cation order in the action. 

9 ‘‘(d) PROCEDURE FOR REMOVAL.—Section 1446 re10 lating to a defendant removing a case shall apply to a 

11 plaintiff removing a case under this section, except that 

12 in the application of subsection (b) of such section the re13 quirement relating to the 30-day filing period shall be met 

14 if a plaintiff class member files notice of removal within 

15 30 days after receipt by such class member, through serv16 ice or otherwise, of the initial written notice of the class 

17 action. 

18 ‘‘(e) REVIEW OF ORDERS REMANDING CLASS AC19 TIONS TO STATE COURTS.—Section 1447 shall apply to 

20 any removal of a case under this section, except that not21 withstanding section 1447(d), an order remanding a class 

22 action to the State court from which it was removed shall 

23 be reviewable by appeal or otherwise. 

24 ‘‘(f) EXCEPTION.—This section shall not apply to any 

25 class action that solely involves—
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1 ‘‘(1) a claim concerning a covered security as 

2 defined under section 16(f)(3) of the Securities Act 

3 of 1933 and section 28(f)(5)(E) of the Securities 

4 Exchange Act of 1934; 

5 ‘‘(2) a claim that relates to the internal affairs 

6 or governance of a corporation or other form of busi7 ness enterprise and arises under or by virtue of the 

8 laws of the State in which such corporation or busi9 ness enterprise is incorporated or organized; or 

10 ‘‘(3) a claim that relates to the rights, duties 

11 (including fiduciary duties), and obligations relating 

12 to or created by or pursuant to any security (as de13 fined under section 2(a)(1) of the Securities Act of 

14 1933 and the regulations issued thereunder).’’. 

15 (b) REMOVAL LIMITATION.—Section 1446(b) is 

16 amended in the second sentence by inserting ‘‘(a)’’ after 

17 ‘‘section 1332’’. 

18 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

19 The table of sections for chapter 89 is amended by adding 

20 after the item relating to section 1452 the following:

‘‘1453. Removal of class actions.’’.

21 SEC. 6. REPORT ON CLASS ACTION SETTLEMENTS. 

22 (a) IN GENERAL.—Not later than 12 months after 

23 the date of enactment of this Act, the Judicial Conference 

24 of the United States, with the assistance of the Director 

25 of the Federal Judicial Center and the Director of the Ad-
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1 ministrative Office of the United States Courts, shall pre2 pare and transmit to the Committees on the Judiciary of 

3 the Senate and the House of Representatives a report on 

4 class action settlements. 

5 (b) CONTENT.—The report under subsection (a) shall 

6 contain—

7 (1) recommendations on the best practices that 

8 courts can use to ensure that proposed class action 

9 settlements are fair to the class members that the 

10 settlements are supposed to benefit; 

11 (2) recommendations on the best practices that 

12 courts can use to ensure that—

13 (A) the fees and expenses awarded to 

14 counsel in connection with a class action settle15 ment appropriately reflect the extent to which 

16 counsel succeeded in obtaining full redress for 

17 the injuries alleged and the time, expense, and 

18 risk that counsel devoted to the litigation; and 

19 (B) the class members on whose behalf the 

20 settlement is proposed are the primary bene21 ficiaries of the settlement; and 

22 (3) the actions that the Judicial Conference of 

23 the United States has taken and intends to take to24 ward having the Federal judiciary implement any or 

25 all of the recommendations contained in the report. 
26

•S 1751 PCS 

1 (c) AUTHORITY OF FEDERAL COURTS.—Nothing in 

2 this section shall be construed to alter the authority of 

3 the Federal courts to supervise attorneys’ fees. 

4 SEC. 7. EFFECTIVE DATE. 

5 The amendments made by this Act shall apply to any 

6 civil action commenced on or after the date of enactment 

7 of this Act.

Calendar No. 315

108TH CONGRESS 

1ST SESSION S. 1751

A BILL

To amend the procedures that apply to consideration of interstate class actions to assure fairer 

outcomes for class members and defendants, and for other purposes. 

OCTOBER 17, 2003

Read the second time and placed on the calendar