‘‘(1) at the beginning of such notice, a statement
in 18-point Times New Roman type or other func-
tionally similar type, stating ‘LEGAL NOTICE:
YOU ARE A PLAINTIFF IN A CLASS ACTION
LAWSUIT AND YOUR LEGAL RIGHTS ARE AF-
FECTED BY THE SETTLEMENT DESCRIBED
IN THIS NOTICE.’; and
‘‘(2) a short summary written in plain, easily
understood language, describing—
‘‘(A) the subject matter of the class action;
‘‘(B) the members of the class;
‘‘(C) the legal consequences of being a mem-
ber of the class;
‘‘(D) if the notice is informing class mem-
bers of a proposed settlement agreement—
‘‘(i) the benefits that will accrue to the
class due to the settlement;
‘‘(ii) the rights that class members will
lose or waive through the settlement;
‘‘(iii) obligations that will be imposed
on the defendants by the settlement;
‘‘(iv) the dollar amount of any attor-
ney’s fee class counsel will be seeking, or if
not possible, a good faith estimate of the
dollar amount of any attorney’s fee class
counsel will be seeking; and
‘‘(v) an explanation of how any attor-
ney’s fee will be calculated and funded; and
‘‘(E) any other material matter.
‘‘(b) TABULAR FORMAT.—Any court with jurisdiction
over a plaintiff class action shall require that the informa-
tion described in subsection (a)—
‘‘(1) be placed in a conspicuous and prominent
location on the notice;
‘‘(2) contain clear and concise headings for each
item of information; and
‘‘(3) provide a clear and concise form for stating
each item of information required to be disclosed
under each heading.
‘‘(c) TELEVISION OR RADIO NOTICE.—Any notice pro-
vided through television or radio (including transmissions
by cable or satellite) to inform the class members in a class
action of the right of each member to be excluded from the
class action or a proposed settlement of the class action,
if such right exists, shall, in plain, easily understood
language—
‘‘(1) describe the persons who may potentially
become class members in the class action; and
‘‘(2) explain that the failure of a class member
to exercise his or her right to be excluded from a class
action will result in the person’s inclusion in the class
action or settlement.
‘‘§ 1716. Definitions
‘‘In this chapter—
‘‘(1) CLASS
ACTION.—The term ‘class action’
means any civil action filed in a district court of the
United States pursuant to rule 23 of the Federal
Rules of Civil Procedure or any civil action that is
removed to a district court of the United States that
was originally filed pursuant to a State statute or
rule of judicial procedure authorizing an action to be
brought by one or more representatives on behalf of
a class.
‘‘(2) CLASS COUNSEL.—The term ‘class counsel’
means the persons who serve as the attorneys for the
class members in a proposed or certified class action.
‘‘(3) CLASS MEMBERS.—The term ‘class mem-
bers’ means the persons who fall within the definition
of the proposed or certified class in a class action.
‘‘(4) 
PLAINTIFF
CLASS
ACTION.—The 
term
‘plaintiff class action’ means a class action in which
class members are plaintiffs.
‘‘(5) PROPOSED SETTLEMENT.—The term ‘pro-
posed settlement’ means an agreement that resolves
claims in a class action, that is subject to court ap-
proval and that, if approved, would be binding on the
class members.’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—The
table of chapters for part V is amended by inserting after
the item relating to chapter 113 the following:
‘‘114. Class Actions .................................................................................. 1711’’.
SEC. 4. FEDERAL DISTRICT COURT JURISDICTION OF
INTERSTATE CLASS ACTIONS.
(a) APPLICATION OF FEDERAL DIVERSITY JURISDIC-
TION.—Section 1332 is amended—
(1) by redesignating subsection (d) as subsection
(e); and
(2) by inserting after subsection (c) the fol-
lowing:
‘‘(d)(1) In this subsection—
‘‘(A) the term ‘class’ means all of the class mem-
bers in a class action;
‘‘(B) the term ‘class action’ means any civil ac-
tion filed pursuant to rule 23 of the Federal Rules of
Civil Procedure or similar State statute or rule of ju-
dicial procedure authorizing an action to be brought
by one or more representative persons on behalf of a
class;
‘‘(C) the term ‘class certification order’ means an
order issued by a court approving the treatment of a
civil action as a class action; and
‘‘(D) the term ‘class members’ means the persons
who fall within the definition of the proposed or cer-
tified class in a class action.
‘‘(2) The district courts shall have original jurisdiction
of any civil action in which the matter in controversy ex-
ceeds the sum or value of $2,000,000, exclusive of interest
and costs, and is a class action in which—
‘‘(A) any member of a class of plaintiffs is a cit-
izen of a State different from any defendant;
‘‘(B) any member of a class of plaintiffs is a for-
eign state or a citizen or subject of a foreign state and
any defendant is a citizen of a State; or
‘‘(C) any member of a class of plaintiffs is a cit-
izen of a State and any defendant is a foreign state
or a citizen or subject of a foreign state.
‘‘(3) Paragraph (2) shall not apply to any civil action
in which—
‘‘(A)(i) the substantial majority of the members
of the proposed plaintiff class and the primary de-
fendants are citizens of the State in which the action
was originally filed; and
‘‘(ii) the claims asserted therein will be governed
primarily by the laws of the State in which the action
was originally filed;
‘‘(B) the primary defendants are States, State
officials, or other governmental entities against whom
the district court may be foreclosed from ordering re-
lief; or
‘‘(C) the number of proposed plaintiff class mem-
bers is less than 100.
‘‘(4) In any class action, the claims of the individual
class members shall be aggregated to determine whether the
matter in controversy exceeds the sum or value of
$2,000,000, exclusive of interest and costs.
‘‘(5) This subsection shall apply to any class action
before or after the entry of a class certification order by
the court with respect to that action.
‘‘(6)(A) A district court shall dismiss any civil action
that is subject to the jurisdiction of the court solely under
this subsection if the court determines the action may not
proceed as a class action based on a failure to satisfy the
requirements of rule 23 of the Federal Rules of Civil Proce-
dure.
‘‘(B) Nothing in subparagraph (A) shall prohibit
plaintiffs from filing an amended class action in Federal
court or filing an action in State court, except that any
such action filed in State court may be removed to the ap-
propriate district court if it is an action of which the dis-
trict courts of the United States have original jurisdiction.
‘‘(C) In any action that is dismissed under this para-
graph and is filed by any of the original named plaintiffs
therein in the same State court venue in which the dis-
missed action was originally filed, the limitations periods
on all reasserted claims shall be deemed tolled for the period
during which the dismissed class action was pending. The
limitations periods on any claims that were asserted in a
class action dismissed under this paragraph that are subse-
quently asserted in an individual action shall be deemed
tolled for the period during which the dismissed action was
pending.
‘‘(7) Paragraph (2) shall not apply to any class action
brought by shareholders that solely involves a claim that
relates to—
‘‘(A) a claim concerning a covered security as
defined under section 16(f)(3) of the Securities Act of
1933 and section 28(f)(5)(E) of the Securities Ex-
change Act of 1934;
‘‘(B) the internal affairs or governance of a cor-
poration or other form of business enterprise and
arises under or by virtue of the laws of the State in
which such corporation or business enterprise is in-
corporated or organized; or
‘‘(C) the rights, duties (including fiduciary du-
ties), and obligations relating to or created by or pur-
suant to any security (as defined under section
2(a)(1) of the Securities Act of 1933 and the regula-
tions issued thereunder).
‘‘(8) For purposes of this subsection and section 1453
of this title, an unincorporated association shall be deemed
to be a citizen of the State where it has its principal place
of business and the State under whose laws it is organized.
‘‘(9) For purposes of this section and section 1453 of
this title, a civil action that is not otherwise a class action
as defined in paragraph (1)(B) of this subsection shall nev-
ertheless be deemed a class action if—
‘‘(A) the named plaintiff purports to act for the
interests of its members (who are not named parties
to the action) or for the interests of the general public,
seeks a remedy of damages, restitution, disgorgement,
or any other form of monetary relief, and is not a
State attorney general; or
‘‘(B) monetary relief claims in the action are
proposed to be tried jointly in any respect with the
claims of 100 or more other persons on the ground
that the claims involve common questions of law or
fact.
In any such case, the persons who allegedly were injured
shall be treated as members of a proposed plaintiff class
and the monetary relief that is sought shall be treated as
the claims of individual class members. The provisions of
paragraphs (3) and (6) of this subsection and subsections
(b)(2) and (d) of section 1453 shall not apply to civil ac-
tions described under subparagraph (A). The provisions of
paragraph (6) of this subsection, and subsections (b)(2) and
(d) of section 1453 shall not apply to civil actions described
under subparagraph (B).’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 1335(a)(1) is amended by inserting
‘‘(a) or (d)’’ after ‘‘1332’’.
(2) Section 1603(b)(3) is amended by striking
‘‘(d)’’ and inserting ‘‘(e)’’.
SEC. 5. REMOVAL OF INTERSTATE CLASS ACTIONS TO FED-
ERAL DISTRICT COURT.
(a) IN GENERAL.—Chapter 89 is amended by adding
after section 1452 the following:
‘‘§ 1453. Removal of class actions
‘‘(a) DEFINITIONS.—In this section, the terms ‘class’,
‘class action’, ‘class certification order’, and ‘class member’
have the meanings given these terms in section 1332(d)(1).
‘‘(b) IN GENERAL.—A class action may be removed to
a district court of the United States in accordance with this
chapter, without regard to whether any defendant is a cit-
izen of the State in which the action is brought, except that
such action may be removed—
‘‘(1) by any defendant without the consent of all
defendants; or
‘‘(2) by any plaintiff class member who is not a
named or representative class member without the
consent of all members of such class.
‘‘(c) WHEN REMOVABLE.—This section shall apply to
any class action before or after the entry of a class certifi-
cation order in the action, except that a plaintiff class mem-
ber who is not a named or representative class member of
the action may not seek removal of the action before an
order certifying a class of which the plaintiff is a class
member has been entered.
‘‘(d) PROCEDURE FOR REMOVAL.—The provisions of
section 1446 relating to a defendant removing a case shall
apply to a plaintiff removing a case under this section, ex-
cept that in the application of subsection (b) of such section
the requirement relating to the 30-day filing period shall
be met if a plaintiff class member files notice of removal
within 30 days after receipt by such class member, through
service or otherwise, of the initial written notice of the class
action.
‘‘(e) REVIEW OF ORDERS REMANDING CLASS ACTIONS
TO STATE COURTS.—The provisions of section 1447 shall
apply to any removal of a case under this section, except
that, notwithstanding the provisions of section 1447(d), an
order remanding a class action to the State court from
which it was removed shall be reviewable by appeal or oth-
erwise.
‘‘(f) EXCEPTION.—This section shall not apply to any
class action brought by shareholders that solely involves—
‘‘(1) a claim concerning a covered security as de-
fined under section 16(f)(3) of the Securities Act of
1933 and section 28(f)(5)(E) of the Securities Ex-
change Act of 1934;
‘‘(2) a claim that relates to the internal affairs
or governance of a corporation or other form of busi-
ness enterprise and arises under or by virtue of the
laws of the State in which such corporation or busi-
ness enterprise is incorporated or organized; or
‘‘(3) a claim that relates to the rights, duties (in-
cluding fiduciary duties), and obligations relating to
or created by or pursuant to any security (as defined
under section 2(a)(1) of the Securities Act of 1933
and the regulations issued thereunder).’’.
(b) 
REMOVAL
LIMITATION.—Section 
1446(b) 
is
amended in the second sentence by inserting ‘‘(a)’’ after
‘‘section 1332’’.
(c) TECHNICAL AND CONFORMING AMENDMENTS.—The
table of sections for chapter 89 is amended by adding after
the item relating to section 1452 the following:
‘‘1453. Removal of class actions.’’.
SEC. 6. APPEALS OF CLASS ACTION CERTIFICATION OR-
DERS.
(a) IN GENERAL.—Section 1292(a) is amended by in-
serting after paragraph (3) the following:
‘‘(4) Orders of the district courts of the United
States granting or denying class certification under
rule 23 of the Federal Rules of Civil Procedure, if no-
tice of appeal is filed within 10 days after entry of
the order.’’.
(b) DISCOVERY STAY.—All discovery and other pro-
ceedings shall be stayed during the pendency of any appeal
taken pursuant to the amendment made by subsection (a),
unless the court finds upon the motion of any party that
specific discovery is necessary to preserve evidence or to pre-
vent undue prejudice to that party.
SEC. 7. EFFECTIVE DATE.
The amendments made by this Act shall apply to any
civil action commenced on or after the date of the enactment
of this Act.
Union Calendar No. 213
107TH CONGRESS
2D SESSION
H. R. 2341
[Report No. 107–370]
A BILL
To amend the procedures that apply to consider-
ation of interstate class actions to assure fairer
outcomes for class members and defendants, to
outlaw certain practices that provide inadequate
settlements for class members, to assure that at-
torneys do not receive a disproportionate amount
of settlements at the expense of class members,
to provide for clearer and simpler information in
class action settlement notices, to assure prompt
consideration of interstate class actions, to
amend title 28, United States Code, to allow the
application of the principles of Federal diversity
jurisdiction to interstate class actions, and for
other purposes.
MARCH 12, 2002
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union,
and ordered to be printed