II 

109TH CONGRESS 

1ST SESSION S. 5 

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 

JANUARY 25, 2005 

Mr. GRASSLEY (for himself, Mr. KOHL, Mr. HATCH, Mr. CARPER, Mr. FRIST, 

Mr. CHAFEE, Mr. DODD, Mrs. FEINSTEIN, Mr. HAGEL, Mr. KYL, Ms. 

LANDRIEU, Mrs. LINCOLN, Mr. LUGAR, Mr. MCCONNELL, Mr. SCHUMER, 

Mr. THUNE, Mr. VITTER, Mr. VOINOVICH, Mr. LOTT, Mr. ALEXANDER, 

Ms. SNOWE, Mr. SESSIONS, Mr. DEMINT, Mr. LIEBERMAN, Mr. MARTINEZ, and Mr. ENSIGN) introduced the following bill; which was read 

twice and referred to the Committee on the Judiciary 

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, 

3 SECTION 1. SHORT TITLE; REFERENCE; TABLE OF CON4 TENTS. 

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

6 ‘‘Class Action Fairness Act of 2005’’. 
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1 (b) REFERENCE.—Whenever in this Act reference is 

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

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

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

5 Code. 

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

7 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. Enactment of Judicial Conference recommendations. 

Sec. 8. Rulemaking authority of Supreme Court and Judicial Conference. 

Sec. 9. Effective date. 

8 SEC. 2. FINDINGS AND PURPOSES. 

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

10 (1) Class action lawsuits are an important and 

11 valuable part of the legal system when they permit 

12 the fair and efficient resolution of legitimate claims 

13 of numerous parties by allowing the claims to be ag14 gregated into a single action against a defendant 

15 that has allegedly caused harm. 

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

17 abuses of the class action device that have— 

18 (A) harmed class members with legitimate 

19 claims and defendants that have acted respon20 sibly; 
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1 (B) adversely affected interstate commerce; 

2 and 

3 (C) undermined public respect for our judi4 cial system. 

5 (3) Class members often receive little or no ben6 efit from class actions, and are sometimes harmed, 

7 such as where— 

8 (A) counsel are awarded large fees, while 

9 leaving class members with coupons or other 

10 awards of little or no value; 

11 (B) unjustified awards are made to certain 

12 plaintiffs at the expense of other class mem13 bers; and 

14 (C) confusing notices are published that 

15 prevent class members from being able to fully 

16 understand and effectively exercise their rights. 

17 (4) Abuses in class actions undermine the na18 tional judicial system, the free flow of interstate 

19 commerce, and the concept of diversity jurisdiction 

20 as intended by the framers of the United States 

21 Constitution, in that State and local courts are— 

22 (A) keeping cases of national importance 

23 out of Federal court; 
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1 (B) sometimes acting in ways that dem2 onstrate bias against out-of-State defendants; 

3 and 

4 (C) making judgments that impose their 

5 view of the law on other States and bind the 

6 rights of the residents of those States. 

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

8 (1) assure fair and prompt recoveries for class 

9 members with legitimate claims; 

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

11 United States Constitution by providing for Federal 

12 court consideration of interstate cases of national 

13 importance under diversity jurisdiction; and 

14 (3) benefit society by encouraging innovation 

15 and lowering consumer prices. 

16 SEC. 3. CONSUMER CLASS ACTION BILL OF RIGHTS AND IM17 PROVED PROCEDURES FOR INTERSTATE 

18 CLASS ACTIONS. 

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

20 after chapter 113 the following: 

21 ‘‘CHAPTER 114—CLASS ACTIONS 

‘‘Sec. 

‘‘1711. Definitions. 

‘‘1712. Coupon settlements. 

‘‘1713. Protection against loss by class members. 

‘‘1714. Protection against discrimination based on geographic location. 

‘‘1715. Notifications to appropriate Federal and State officials. 
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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. 

24 ‘‘(6) PROPOSED SETTLEMENT.—The term ‘pro25 posed settlement’ means an agreement regarding a 

26 class action that is subject to court approval and 
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1 that, if approved, would be binding on some or all 

2 class members.

3 ‘‘§ 1712. Coupon settlements 

4 ‘‘(a) CONTINGENT FEES IN COUPON SETTLE5 MENTS.—If a proposed settlement in a class action pro6 vides for a recovery of coupons to a class member, the 

7 portion of any attorney’s fee award to class counsel that 

8 is attributable to the award of the coupons shall be based 

9 on the value to class members of the coupons that are 

10 redeemed. 

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

12 SETTLEMENTS.—

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

14 a class action provides for a recovery of coupons to 

15 class members, and a portion of the recovery of the 

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

17 to be paid to class counsel, any attorney’s fee award 

18 shall be based upon the amount of time class counsel 

19 reasonably expended working on the action. 

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

21 under this subsection shall be subject to approval by 

22 the court and shall include an appropriate attorney’s 

23 fee, if any, for obtaining equitable relief, including 

24 an injunction, if applicable. Nothing in this sub25 section shall be construed to prohibit application of 
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1 a lodestar with a multiplier method of determining 

2 attorney’s fees. 

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

4 MIXED BASIS IN COUPON SETTLEMENTS.—If a proposed 

5 settlement in a class action provides for an award of cou6 pons to class members and also provides for equitable re7 lief, including injunctive relief— 

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

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

10 the recovery of the coupons shall be calculated in ac11 cordance with subsection (a); and 

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

13 paid to class counsel that is not based upon a por14 tion of the recovery of the coupons shall be cal15 culated in accordance with subsection (b). 

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

17 class action involving the awarding of coupons, the court 

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

19 expert testimony from a witness qualified to provide infor20 mation on the actual value to the class members of the 

21 coupons that are redeemed. 

22 ‘‘(e) JUDICIAL SCRUTINY OF COUPON SETTLE23 MENTS.—In a proposed settlement under which class 

24 members would be awarded coupons, the court may ap25 prove the proposed settlement only after a hearing to de-
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1 termine whether, and making a written finding that, the 

2 settlement is fair, reasonable, and adequate for class mem3 bers. The court, in its discretion, may also require that 

4 a proposed settlement agreement provide for the distribu5 tion of a portion of the value of unclaimed coupons to 1 

6 or more charitable or governmental organizations, as 

7 agreed to by the parties. The distribution and redemption 

8 of any proceeds under this subsection shall not be used 

9 to calculate attorneys’ fees under this section. 

10 ‘‘§ 1713. Protection against loss by class members 

11 ‘‘The court may approve a proposed settlement under 

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

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

14 only if the court makes a written finding that nonmone15 tary benefits to the class member substantially outweigh 

16 the monetary loss. 

17 ‘‘§ 1714. Protection against discrimination based on 

18 geographic location 

19 ‘‘The court may not approve a proposed settlement 

20 that provides for the payment of greater sums to some 

21 class members than to others solely on the basis that the 

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

23 are located in closer geographic proximity to the court. 
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1 ‘‘§ 1715. 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 ac6 tion; 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 and looking at the totality of the circumstances, decline 

25 to exercise jurisdiction under paragraph (2) over a class 
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1 action in which greater than one-third but less than two2 thirds of the members of all proposed plaintiff classes in 

3 the aggregate and the primary defendants are citizens of 

4 the State in which the action was originally filed based 

5 on consideration of— 

6 ‘‘(A) whether the claims asserted involve mat7 ters of national or interstate interest; 

8 ‘‘(B) whether the claims asserted will be gov9 erned by laws of the State in which the action was 

10 originally filed or by the laws of other States; 

11 ‘‘(C) whether the class action has been pleaded 

12 in a manner that seeks to avoid Federal jurisdiction; 

13 ‘‘(D) whether the action was brought in a 

14 forum with a distinct nexus with the class members, 

15 the alleged harm, or the defendants; 

16 ‘‘(E) whether the number of citizens of the 

17 State in which the action was originally filed in all 

18 proposed plaintiff classes in the aggregate is sub19 stantially larger than the number of citizens from 

20 any other State, and the citizenship of the other 

21 members of the proposed class is dispersed among a 

22 substantial number of States; and 

23 ‘‘(F) whether, during the 3-year period pre24 ceding the filing of that class action, 1 or more other 
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1 class actions asserting the same or similar claims on 

2 behalf of the same or other persons have been filed. 

3 ‘‘(4) A district court shall decline to exercise jurisdic4 tion under paragraph (2)— 

5 ‘‘(A)(i) over a class action in which— 

6 ‘‘(I) greater than two-thirds of the mem7 bers of all proposed plaintiff classes in the ag8 gregate are citizens of the State in which the 

9 action was originally filed; 

10 ‘‘(II) at least 1 defendant is a defendant— 

11 ‘‘(aa) from whom significant relief is 

12 sought by members of the plaintiff class; 

13 ‘‘(bb) whose alleged conduct forms a 

14 significant basis for the claims asserted by 

15 the proposed plaintiff class; and 

16 ‘‘(cc) who is a citizen of the State in 

17 which the action was originally filed; and 

18 ‘‘(III) principal injuries resulting from the 

19 alleged conduct or any related conduct of each 

20 defendant were incurred in the State in which 

21 the action was originally filed; and 

22 ‘‘(ii) during the 3-year period preceding the fil23 ing of that class action, no other class action has 

24 been filed asserting the same or similar factual alle-
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1 gations against any of the defendants on behalf of 

2 the same or other persons; or 

3 ‘‘(B) two-thirds or more of the members of all 

4 proposed plaintiff classes in the aggregate, and the 

5 primary defendants, are citizens of the State in 

6 which the action was originally filed. 

7 ‘‘(5) Paragraphs (2) through (4) shall not apply to 

8 any class action in which— 

9 ‘‘(A) the primary defendants are States, State 

10 officials, or other governmental entities against 

11 whom the district court may be foreclosed from or12 dering relief; or 

13 ‘‘(B) the number of members of all proposed 

14 plaintiff classes in the aggregate is less than 100. 

15 ‘‘(6) In any class action, the claims of the individual 

16 class members shall be aggregated to determine whether 

17 the matter in controversy exceeds the sum or value of 

18 $5,000,000, exclusive of interest and costs. 

19 ‘‘(7) Citizenship of the members of the proposed 

20 plaintiff classes shall be determined for purposes of para21 graphs (2) through (6) as of the date of filing of the com22 plaint or amended complaint, or, if the case stated by the 

23 initial pleading is not subject to Federal jurisdiction, as 

24 of the date of service by plaintiffs of an amended pleading, 
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1 motion, or other paper, indicating the existence of Federal 

2 jurisdiction. 

3 ‘‘(8) This subsection shall apply to any class action 

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

5 the court with respect to that action. 

6 ‘‘(9) Paragraph (2) shall not apply to any class action 

7 that solely involves a claim— 

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

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

10 U.S.C. 78p(f)(3)) and section 28(f)(5)(E) of the Se11 curities Exchange Act of 1934 (15 U.S.C. 

12 78bb(f)(5)(E)); 

13 ‘‘(B) that relates to the internal affairs or gov14 ernance of a corporation or other form of business 

15 enterprise and that arises under or by virtue of the 

16 laws of the State in which such corporation or busi17 ness enterprise is incorporated or organized; or 

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

19 fiduciary duties), and obligations relating to or cre20 ated by or pursuant to any security (as defined 

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

22 (15 U.S.C. 77b(a)(1)) and the regulations issued 

23 thereunder). 

24 ‘‘(10) For purposes of this subsection and section 

25 1453, an unincorporated association shall be deemed to 
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1 be a citizen of the State where it has its principal place 

2 of business and the State under whose laws it is organized. 

3 ‘‘(11)(A) For purposes of this subsection and section 

4 1453, a mass action shall be deemed to be a class action 

5 removable under paragraphs (2) through (10) if it other6 wise meets the provisions of those paragraphs. 

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

8 action’ means any civil action (except a civil action within 

9 the scope of section 1711(2)) in which monetary relief 

10 claims of 100 or more persons are proposed to be tried 

11 jointly on the ground that the plaintiffs’ claims involve 

12 common questions of law or fact, except that jurisdiction 

13 shall exist only over those plaintiffs whose claims in a 

14 mass action satisfy the jurisdictional amount requirements 

15 under subsection (a). 

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

17 action’ shall not include any civil action in which— 

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

19 an event or occurrence in the State in which the ac20 tion was filed, and that allegedly resulted in injuries 

21 in that State or in States contiguous to that State; 

22 ‘‘(II) the claims are joined upon motion of a de23 fendant; 

24 ‘‘(III) all of the claims in the action are as25 serted on behalf of the general public (and not on 
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1 behalf of individual claimants or members of a pur2 ported class) pursuant to a State statute specifically 

3 authorizing such action; or 

4 ‘‘(IV) the claims have been consolidated or co5 ordinated solely for pretrial proceedings. 

6 ‘‘(C)(i) Any action(s) removed to Federal court pur7 suant to this subsection shall not thereafter be transferred 

8 to any other court pursuant to section 1407, or the rules 

9 promulgated thereunder, unless a majority of the plaintiffs 

10 in the action request transfer pursuant to section 1407. 

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

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

13 the Federal Rules of Civil Procedure; or 

14 ‘‘(II) if plaintiffs propose that the action pro15 ceed as a class action pursuant to rule 23 of the 

16 Federal Rules of Civil Procedure. 

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

18 in a mass action that is removed to Federal court pursu19 ant to this subsection shall be deemed tolled during the 

20 period that the action is pending in Federal court.’’. 

21 (b) CONFORMING AMENDMENTS.— 

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

23 ‘‘subsection (a) or (d) of’’ before ‘‘section 1332’’. 

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

25 ‘‘(d)’’ and inserting ‘‘(e)’’. 
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1 SEC. 5. REMOVAL OF INTERSTATE CLASS ACTIONS TO FED2 ERAL DISTRICT COURT. 

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

4 after section 1452 the following: 

5 ‘‘§ 1453. Removal of class actions 

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

7 ‘class action’, ‘class certification order’, and ‘class mem8 ber’ shall have the meanings given such terms under sec9 tion 1332(d)(1). 

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

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

12 section 1446 (except that the 1-year limitation under sec13 tion 1446(b) shall not apply), without regard to whether 

14 any defendant is a citizen of the State in which the action 

15 is brought, except that such action may be removed by 

16 any defendant without the consent of all defendants. 

17 ‘‘(c) REVIEW OF REMAND ORDERS.— 

18 ‘‘(1) IN GENERAL.—Section 1447 shall apply to 

19 any removal of a case under this section, except that 

20 notwithstanding section 1447(d), a court of appeals 

21 may accept an appeal from an order of a district 

22 court granting or denying a motion to remand a 

23 class action to the State court from which it was re24 moved if application is made to the court of appeals 

25 not less than 7 days after entry of the order. 
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1 ‘‘(2) TIME PERIOD FOR JUDGMENT.—If the 

2 court of appeals accepts an appeal under paragraph 

3 (1), the court shall complete all action on such ap4 peal, including rendering judgment, not later than 

5 60 days after the date on which such appeal was 

6 filed, unless an extension is granted under para7 graph (3). 

8 ‘‘(3) EXTENSION OF TIME PERIOD.—The court 

9 of appeals may grant an extension of the 60-day pe10 riod described in paragraph (2) if— 

11 ‘‘(A) all parties to the proceeding agree to 

12 such extension, for any period of time; or 

13 ‘‘(B) such extension is for good cause 

14 shown and in the interests of justice, for a pe15 riod not to exceed 10 days. 

16 ‘‘(4) DENIAL OF APPEAL.—If a final judgment 

17 on the appeal under paragraph (1) is not issued be18 fore the end of the period described in paragraph 

19 (2), including any extension under paragraph (3), 

20 the appeal shall be denied. 

21 ‘‘(d) EXCEPTION.—This section shall not apply to 

22 any class action that solely involves— 

23 ‘‘(1) a claim concerning a covered security as 

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

25 of 1933 (15 U.S.C. 78p(f)(3)) and section 
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1 28(f)(5)(E) of the Securities Exchange Act of 1934 

2 (15 U.S.C. 78bb(f)(5)(E)); 

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

4 or governance of a corporation or other form of busi5 ness enterprise and arises under or by virtue of the 

6 laws of the State in which such corporation or busi7 ness enterprise is incorporated or organized; or 

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

9 (including fiduciary duties), and obligations relating 

10 to or created by or pursuant to any security (as de11 fined under section 2(a)(1) of the Securities Act of 

12 1933 (15 U.S.C. 77b(a)(1)) and the regulations 

13 issued thereunder).’’. 

14 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

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

16 after the item relating to section 1452 the following: 

‘‘1453. Removal of class actions.’’. 

17 SEC. 6. REPORT ON CLASS ACTION SETTLEMENTS. 

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

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

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

21 of the Federal Judicial Center and the Director of the Ad22 ministrative Office of the United States Courts, shall pre23 pare and transmit to the Committees on the Judiciary of 

24 the Senate and the House of Representatives a report on 

25 class action settlements. 
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1 (b) CONTENT.—The report under subsection (a) shall 

2 contain— 

3 (1) recommendations on the best practices that 

4 courts can use to ensure that proposed class action 

5 settlements are fair to the class members that the 

6 settlements are supposed to benefit; 

7 (2) recommendations on the best practices that 

8 courts can use to ensure that— 

9 (A) the fees and expenses awarded to 

10 counsel in connection with a class action settle11 ment appropriately reflect the extent to which 

12 counsel succeeded in obtaining full redress for 

13 the injuries alleged and the time, expense, and 

14 risk that counsel devoted to the litigation; and 

15 (B) the class members on whose behalf the 

16 settlement is proposed are the primary bene17 ficiaries of the settlement; and 

18 (3) the actions that the Judicial Conference of 

19 the United States has taken and intends to take to20 ward having the Federal judiciary implement any or 

21 all of the recommendations contained in the report. 

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

23 this section shall be construed to alter the authority of 

24 the Federal courts to supervise attorneys’ fees. 
26 

•S 5 IS 

1 SEC. 7. ENACTMENT OF JUDICIAL CONFERENCE REC2 OMMENDATIONS. 

3 Notwithstanding any other provision of law, the 

4 amendments to rule 23 of the Federal Rules of Civil Pro5 cedure, which are set forth in the order entered by the 

6 Supreme Court of the United States on March 27, 2003, 

7 shall take effect on the date of enactment of this Act or 

8 on December 1, 2003 (as specified in that order), which9 ever occurs first. 

10 SEC. 8. RULEMAKING AUTHORITY OF SUPREME COURT 

11 AND JUDICIAL CONFERENCE. 

12 Nothing in this Act shall restrict in any way the au13 thority of the Judicial Conference and the Supreme Court 

14 to propose and prescribe general rules of practice and pro15 cedure under chapter 131 of title 28, United States Code. 

16 SEC. 9. EFFECTIVE DATE. 

17 The amendments made by this Act shall apply to any 

18 civil action commenced on or after the date of enactment 

19 of this Act. 

Æ