Title: Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2017
Policy area: Law

Summary:
Fairness in Class Action Litigation Act of 2017
This bill amends the federal judicial code to prohibit federal courts from certifying certain class actions unless: (1) each proposed class member suffered the same type and scope of injury as the named class representatives; (2) no class representatives or named plaintiffs are relatives of, present or former employees or clients of, or contractually related to class counsel; and (3) a reliable and administratively feasible mechanism is demonstrated to determine whether putative class members fall within the class definition and to distribute any monetary relief directly to a substantial majority of class members.
The bill limits attorney's fees to a reasonable percentage of the payments received by class members or the value of equitable relief. No attorney's fees may: (1) be paid until distribution of any monetary recovery to class members has been completed, or (2) exceed the total amount distributed to all class members.
Class counsel must submit an accounting of the disbursement of funds paid by defendants in class action settlements. The Judicial Conference of the United States must use the accountings to prepare an annual summary for Congress and the public on how funds paid by defendants in class actions have been distributed.
A stay of discovery is required during preliminary motions in class action proceedings unless necessary to preserve evidence or to prevent undue prejudice.
Class counsel must disclose any person or entity who has a contingent right to receive compensation from any settlement, judgment, or relief obtained in the action.
Appeals courts must permit appeals from an order granting or denying class certification.
Federal courts must apply diversity of citizenship jurisdictional requirements to the claims of each plaintiff individually (as though each plaintiff were the sole plaintiff in the action) when deciding a motion to remand a case back to a state court in a civil action in which: (1) two or more plaintiffs assert personal injury or wrongful death claims, (2) the action was removed from state court to federal court on the basis of a diversity of citizenship among the parties, and (3) a motion to remand is made on the ground that one or more defendants are citizens of the same state as one or more plaintiffs. A court must: (1) sever, and remand to state court, claims that do not satisfy the jurisdictional requirements; and (2) retain jurisdiction over claims that satisfy the diversity requirements.
In coordinated or consolidated pretrial proceedings for personal injury claims conducted by judges assigned by the judicial panel on multidistrict litigation, plaintiffs must: (1) submit medical records and other evidence for factual contentions regarding the alleged injury, the exposure to the risk that allegedly caused the injury, and the alleged cause of the injury; and (2) receive not less than 80% of any monetary recovery. Trials may not be conducted in multidistrict litigation proceedings unless all parties consent to the specific case sought to be tried.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 985 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 985

    To amend the procedures used in Federal court class actions and 
 multidistrict litigation proceedings to assure fairer, more efficient 
     outcomes for claimants and defendants, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 9, 2017

Mr. Goodlatte introduced the following bill; which was referred to the 
                       Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
    To amend the procedures used in Federal court class actions and 
 multidistrict litigation proceedings to assure fairer, more efficient 
     outcomes for claimants and defendants, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; REFERENCE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Fairness in Class 
Action Litigation Act of 2017''.
    (b) Reference.--Whenever, in this Act, reference is made to an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of title 
28, United States Code.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; reference; table of contents.
Sec. 2. Purposes.
Sec. 3. Class action procedures.
Sec. 4. Misjoinder of plaintiffs in personal injury and wrongful death 
                            actions.
Sec. 5. Multidistrict litigation proceedings procedures.
Sec. 6. Rulemaking authority of Supreme Court and Judicial Conference.
Sec. 7. Effective date.

SEC. 2. PURPOSES.

    The purposes of this Act are to--
            (1) assure fair and prompt recoveries for class members and 
        multidistrict litigation plaintiffs with legitimate claims;
            (2) diminish abuses in class action and mass tort 
        litigation that are undermining the integrity of the U.S. legal 
        system; and
            (3) restore the intent of the framers of the United States 
        Constitution by ensuring Federal court consideration of 
        interstate controversies of national importance consistent with 
        diversity jurisdiction principles.

SEC. 3. CLASS ACTION PROCEDURES.

    (a) In General.--Chapter 114 is amended by inserting after section 
1715 the following:
``Sec. 1716. Class action injury allegations
    ``(a) In General.--A Federal court shall not issue an order 
granting certification of a class action seeking monetary relief for 
personal injury or economic loss unless the party seeking to maintain 
such a class action affirmatively demonstrates that each proposed class 
member suffered the same type and scope of injury as the named class 
representative or representatives.
    ``(b) Certification Order.--An order issued under Rule 23(c)(1) of 
the Federal Rules of Civil Procedure that certifies a class seeking 
monetary relief for personal injury or economic loss shall include a 
determination, based on a rigorous analysis of the evidence presented, 
that the requirement in subsection (a) of this section is satisfied.
``Sec. 1717. Conflicts of interest
    ``(a) Required Disclosures.--In a class action complaint, class 
counsel shall state whether any proposed class representative or named 
plaintiff in the complaint is a relative of, is a present or former 
employee of, is a present or former client of (other than with respect 
to the class action), or has any contractual relationship with (other 
than with respect to the class action) class counsel. In addition, the 
complaint shall describe the circumstances under which each class 
representative or named plaintiff agreed to be included in the 
complaint and shall identify any other class action in which any 
proposed class representative or named plaintiff has a similar role.
    ``(b) Prohibition of Conflicts.--A Federal court shall not issue an 
order granting certification of any class action in which any proposed 
class representative or named plaintiff is a relative of, is a present 
or former employee of, is a present or former client of (other than 
with respect to the class action), or has any contractual relationship 
with (other than with respect to the class action) class counsel.
    ``(c) Definition.--For purposes of this section, `relative' shall 
be defined by reference to section 3110(a)(3) of title 5, United States 
Code.
``Sec. 1718. Class member benefits
    ``(a) Distribution of Benefits to Class Members.--A Federal court 
shall not issue an order granting certification of a class action 
seeking monetary relief unless the class is defined with reference to 
objective criteria and the party seeking to maintain such a class 
action affirmatively demonstrates that there is a reliable and 
administratively feasible mechanism (a) for the court to determine 
whether putative class members fall within the class definition and (b) 
for distributing directly to a substantial majority of class members 
any monetary relief secured for the class.
    ``(b) Attorneys' Fees in Class Actions.--
            ``(1) Fee distribution timing.--In a class action seeking 
        monetary relief, no attorneys' fees may be determined or paid 
        pursuant to Rule 23(h) of the Federal Rules of Civil Procedure 
        or otherwise until the distribution of any monetary recovery to 
        class members has been completed.
            ``(2) Fee determinations based on monetary awards.--Unless 
        otherwise specified by Federal statute, if a judgment or 
        proposed settlement in a class action provides for a monetary 
        recovery, the portion of any attorneys' fee award to class 
        counsel that is attributed to the monetary recovery shall be 
        limited to a reasonable percentage of any payments directly 
        distributed to and received by class members. In no event shall 
        the attorneys' fee award exceed the total amount of money 
        directly distributed to and received by all class members.
            ``(3) Fee determinations based on equitable relief.--Unless 
        otherwise specified by Federal statute, if a judgment or 
        proposed settlement in a class action provides for equitable 
        relief, the portion of any attorneys' fee award to class 
        counsel that is attributed to the equitable relief shall be 
        limited to a reasonable percentage of the value of the 
        equitable relief, including any injunctive relief.
``Sec. 1719. Money distribution data
    ``(a) Settlement Accountings.--In any settlement of a class action 
that provides for monetary benefits, the court shall order class 
counsel to submit to the Director of the Federal Judicial Center and 
the Director of the Administrative Office of the United States Courts 
an accounting of the disbursement of all funds paid by the defendant 
pursuant to the settlement agreement. The accounting shall state the 
total amount paid directly to all class members, the actual or 
estimated total number of class members, the number of class members 
who received payments, the average amount (both mean and median) paid 
directly to all class members, the largest amount paid to any class 
member, the smallest amount paid to any class member and, separately, 
each amount paid to any other person (including class counsel) and the 
purpose of the payment. In stating the amounts paid to class members, 
no individual class member shall be identified. No attorneys' fees may 
be paid to class counsel pursuant to Rule 23(h) of the Federal Rules of 
Civil Procedure until the accounting has been submitted.
    ``(b) Annual Settlement Distribution Reports.--Commencing not later 
than 12 months after the date of enactment of this Act, the Judicial 
Conference of the United States, with the assistance of the Director of 
the Federal Judicial Center and the Director of the Administrative 
Office of the United States Courts, shall annually prepare and transmit 
to the Committees on the Judiciary of the Senate and the House of 
Representatives for public dissemination a report summarizing how funds 
paid by defendants in class actions have been distributed, based on the 
settlement accountings submitted pursuant to subsection (a).
``Sec. 1720. Issues classes
    ``(a) In General.--A Federal court shall not issue an order 
granting certification of a class action with respect to particular 
issues pursuant to Rule 23(c)(4) of the Federal Rules of Civil 
Procedure unless the entirety of the cause of action from which the 
particular issues arise satisfies all the class certification 
prerequisites of Rule 23(a) and Rule 23(b)(1), Rule 23(b)(2), or Rule 
23(b)(3).
    ``(b) Certification Order.--An order issued under Rule 23(c)(4) of 
the Federal Rules of Civil Procedure that certifies a class with 
respect to particular issues shall include a determination, based on a 
rigorous analysis of the evidence presented, that the requirement in 
subsection (a) of this section is satisfied.
``Sec. 1721. Stay of discovery
    ``In any class action, all discovery and other proceedings shall be 
stayed during the pendency of any motion to transfer, motion to 
dismiss, motion to strike class allegations, or other motion to dispose 
of the class allegations, unless the court finds upon the motion of any 
party that particularized discovery is necessary to preserve evidence 
or to prevent undue prejudice to that party.
``Sec. 1722. Third-party litigation funding disclosure
    ``In any class action, class counsel shall promptly disclose in 
writing to the court and all other parties the identity of any person 
or entity, other than a class member or class counsel of record, who 
has a contingent right to receive compensation from any settlement, 
judgment, or other relief obtained in the action.
``Sec. 1723. Appeals
    ``A court of appeals shall permit an appeal from an order granting 
or denying class-action certification under Rule 23 of the Federal 
Rules of Civil Procedure.''.

SEC. 4. MISJOINDER OF PLAINTIFFS IN PERSONAL INJURY AND WRONGFUL DEATH 
              ACTIONS.

    Section 1447 is amended--
            (1) by redesignating subsection (d) as subsection (e);
            (2) by redesignating subsection (e) as subsection (f); and
            (3) by inserting after subsection (c) the following:
    ``(d) Misjoinder of Plaintiffs in Personal Injury and Wrongful 
Death Actions.--
            ``(1) This subsection shall apply to any civil action in 
        which--
                    ``(A) two or more plaintiffs assert personal injury 
                or wrongful death claims;
                    ``(B) the action is removed on the basis of the 
                jurisdiction conferred by section 1332(a); and
                    ``(C) a motion to remand is made on the ground that 
                one or more defendants are citizens of the same State 
                as one or more plaintiffs.
            ``(2) In deciding the remand motion in any such case, the 
        court shall apply the jurisdictional requirements of section 
        1332(a) to the claims of each plaintiff individually, as though 
        that plaintiff were the sole plaintiff in the action.
            ``(3) The court shall sever the claims that do not satisfy 
        the jurisdictional requirements of section 1332(a) and shall 
        remand those claims to the State court from which the action 
        was removed. The court shall retain jurisdiction over the 
        claims that satisfy the jurisdictional requirements of section 
        1332(a).''.

SEC. 5. MULTIDISTRICT LITIGATION PROCEEDINGS PROCEDURES.

    (a) In General.--Chapter 87 is amended by adding to section 1407 
the following:
    ``(i) Allegations Verification.--In any coordinated or consolidated 
pretrial proceedings conducted pursuant to subsection (b), counsel for 
a plaintiff asserting a claim seeking redress for personal injury whose 
civil action is assigned to or directly filed in the proceedings shall 
make a submission sufficient to demonstrate that there is evidentiary 
support (including but not limited to medical records) for the factual 
contentions in plaintiff's complaint regarding the alleged injury, the 
exposure to the risk that allegedly caused the injury, and the alleged 
cause of the injury. The submission must be made within the first 45 
days after the civil action is transferred to or directly filed in the 
proceedings. That deadline shall not be extended. Within 30 days after 
the submission deadline, the judge or judges to whom the action is 
assigned shall enter an order determining whether the submission is 
sufficient and shall dismiss the action without prejudice if the 
submission is found to be insufficient. If a plaintiff in an action 
dismissed without prejudice fails to tender a sufficient submission 
within the following 30 days, the action shall be dismissed with 
prejudice.
    ``(j) Trial Prohibition.--In any coordinated or consolidated 
pretrial proceedings conducted pursuant to subsection (b), the judge or 
judges to whom actions are assigned by the Judicial Panel on 
Multidistrict Litigation may not conduct any trial in any civil action 
transferred to or directly filed in the proceedings unless all parties 
to the civil action consent to trial of the specific case sought to be 
tried.
    ``(k) Review of Orders.--
            ``(1) In general.--The Court of Appeals having jurisdiction 
        over the transferee district shall permit an appeal to be taken 
        from any order issued in the conduct of coordinated or 
        consolidated pretrial proceedings conducted pursuant to 
        subsection (b), provided that an immediate appeal from the 
        order may materially advance the ultimate termination of one or 
        more civil actions in the proceedings.
            ``(2) Remand orders.--Notwithstanding section 1447(e), a 
        court of appeals may accept an appeal from an order issued in 
        any coordinated or consolidated proceedings conducted pursuant 
        to subsection (b) granting or denying a motion to remand a 
        civil action to the State court from which it was removed if 
        application is made to the court of appeals within 14 days 
        after the order is entered.
    ``(l) Ensuring Proper Recovery for Plaintiffs.--The claimants in 
any civil action asserting a claim for personal injury transferred to 
or directly filed in coordinated or consolidated pretrial proceedings 
conducted pursuant to subsection (b) shall receive not less than 80 
percent of any monetary recovery obtained in that action by settlement, 
judgment or otherwise. The judge or judges to whom the coordinated or 
consolidated pretrial proceedings have been assigned shall have 
jurisdiction over any disputes regarding compliance with this 
requirement.''.

SEC. 6. RULEMAKING AUTHORITY OF SUPREME COURT AND JUDICIAL CONFERENCE.

    Nothing in this Act shall restrict in any way the authority of the 
Judicial Conference and the Supreme Court to propose and prescribe 
general rules of practice and procedure under chapter 131 of title 28, 
United States Code.

SEC. 7. EFFECTIVE DATE.

    The amendments made by the Act shall apply to any civil action 
pending on the date of enactment of this Act or commenced thereafter.
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