intent of the framers of the Constitution in creating 
diversity jurisdiction, in that county and State courts 
are—
(A) handling interstate class actions that 
affect parties from many States;
(B) sometimes acting in ways that dem-
onstrate bias against out-of-State defendants; 
and 
(C) making judgments that impose their 
view of the law on other States and bind the 
rights of the residents of those States.
(6) Abusive interstate class actions have harmed 
society as a whole by forcing innocent parties to settle 
cases rather than risk a huge judgment by a local 
jury, thereby costing consumers billions of dollars in 
increased costs to pay for forced settlements and exces-
sive judgments. 
(b) PURPOSES.—The purposes of this Act are—
(1) to assure fair and prompt recoveries for class 
members with legitimate claims; 
(2) to protect responsible companies and other 
institutions against interstate class actions in State 
courts;
(3) to restore the intent of the framers of the 
Constitution by providing for Federal court consider-
ation of interstate class actions; and 
(4) to benefit society by encouraging innovation 
and lowering consumer prices. 
SEC. 3. CONSUMER CLASS ACTION BILL OF RIGHTS AND IM-
PROVED 
PROCEDURES 
FOR 
INTERSTATE 
CLASS ACTIONS. 
(a) IN GENERAL.—Part V is amended by inserting 
after chapter 113 the following:
‘‘CHAPTER 114—CLASS ACTIONS
‘‘Sec. 
‘‘1711. Judicial scrutiny of coupon and other noncash settlements. 
‘‘1712. Protection against loss by class members. 
‘‘1713. Protection against discrimination based on geographic location. 
‘‘1714. Prohibition on the payment of bounties. 
‘‘1715. Definitions.
‘‘§ 1711. Judicial scrutiny of coupon and other 
noncash settlements 
‘‘The court may approve a proposed settlement under 
which the class members would receive noncash benefits or 
would otherwise be required to expend funds in order to 
obtain part or all of the proposed benefits only after a hear-
ing to determine whether, and making a written finding 
that, the settlement is fair, reasonable, and adequate for 
class members.
‘‘§ 1712. Protection against loss by class members 
‘‘The court may approve a proposed settlement under 
which any class member is obligated to pay sums to class 
counsel that would result in a net loss to the class member 
only if the court makes a written finding that nonmonetary 
benefits to the class member outweigh the monetary loss. 
‘‘§ 1713. Protection against discrimination based on 
geographic location 
‘‘The court may not approve a proposed settlement 
that provides for the payment of greater sums to some class 
members than to others solely on the basis that the class 
members to whom the greater sums are to be paid are lo-
cated in closer geographic proximity to the court. 
‘‘§ 1714. Prohibition on the payment of bounties 
‘‘(a) IN GENERAL.—The court may not approve a pro-
posed settlement that provides for the payment of a greater 
share of the award to a class representative serving on be-
half of a class, on the basis of the formula for distribution 
to all other class members, than that awarded to the other 
class members. 
‘‘(b) RULE
OF CONSTRUCTION.—The limitation in 
subsection (a) shall not be construed to prohibit any pay-
ment approved by the court for reasonable time or costs that 
a person was required to expend in fulfilling his or her obli-
gations as a class representative.
‘‘§ 1715. 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. ENACTMENT OF JUDICIAL CONFERENCE REC-
OMMENDATIONS. 
Notwithstanding any other provision of law, the 
amendments to Rule 23 of the Federal Rules of Civil Proce-
dure which are embraced by the order entered by the Su-
preme Court of the United States on March 27, 2003, shall 
take effect on the date of the enactment of this Act or on 
December 1, 2003 (as specified in that order), whichever 
occurs first.
SEC. 8. EFFECTIVE DATE.
(a) IN GENERAL.—The amendments made by this Act 
shall apply to—
(1) any civil action commenced on or after the 
date of the enactment of this Act; and 
(2) any civil action commenced before such date 
of enactment in which a class certification order (as 
defined in section 1332(d)(1)(C) of title 28, United 
States Code, as amended by section 4 of this Act) is 
entered on or after such date of enactment. 
(b) FILING OF NOTICE OF REMOVAL.—In the case of 
any civil action to which subsection (a)(2) applies, the re-
quirement relating to the 30-day period for the filing of a 
notice of removal under section 1446(b) and section 1453(d) 
of title 28, United States Code, shall be met if the notice 
of removal is filed within 30 days after the date on which 
the class certification order referred to in subsection (a)(2) 
is entered.
Union Calendar No. 73
108TH CONGRESS 
1ST SESSION 
H. R. 1115
[Report No. 108–144] 
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. 
JUNE 9, 2003
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed