[House Report 107-375]
[From the U.S. Government Publishing Office]
107th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 107-375
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PROVIDING FOR CONSIDERATION OF H.R. 2341, CLASS ACTION FAIRNESS ACT OF
2002
_______
March 12, 2002.--Referred to the House Calendar and ordered to be
printed
_______
Ms. Pryce of Ohio, from the Committee on Rules, submitted the
following
R E P O R T
[To accompany H. Res. 367]
The Committee on Rules, having had under consideration
House Resolution 367, by a nonrecord vote, report the same to
the House with the recommendation that the resolution be
adopted.
summary of provisions of resolution
The resolution provides for the consideration of H.R. 2341,
the ``Class Action Fairness Act of 2002,'' under a structured
rule. The rule provides one hour of general debate equally
divided and controlled between the chairman and ranking
minority member of the Committee on the Judiciary. The rule
waives all points of order against consideration of the bill.
The rule provides that the amendment in the nature of a
substituted recommended by the Committee on the Judiciary now
printed in the bill be considered as an original bill for the
purpose of amendment. The rule makes in order only those
amendments printed in this report. The rule provides that each
amendment may be offered only in the order printed in this
report, may be offered only by a Member designated in this
report, shall be considered as read, shall be debatable for the
time specified in this report equally divided and controlled by
the proponent and an opponent, shall not be subject to
amendment, and shall not be subject to a demand for division of
the question in the House or in the Committee of the Whole. The
rule waives all points of order against such amendments.
Finally, the rule provides one motion to recommit with or
without instructions.
The waiver of all points of order against consideration of
the bill includes a waiver of clause 4(a) of rule XIII
(requiring a three-day layover of the committee report), which
is needed because the committee report was not filed until
Tuesday, March 12 and the bill may be considered by the House
as early as Wednesday, March 13.
summary of amendments made in order under the rule
Issa: Creates a new paragraph in Section 3, the ``Consumer
Class Action Bill of Rights,'' which would require class action
settlement notices to provide a good faith estimate of the
hourly rate that his or her lawyer will be paid. (20 min.)
Nadler/Delahunt/Johnson (TX): Prevents records of class
action cases from being sealed, if doing so would harm the
public health and safety. (20 min.)
Waters: Addresses parties that withheld or shred documents
related to court-ordered discovery. Such parties would be
deemed to have admitted to any fact relating to the discovery
order. (20 min.)
Keller: Ensures that when a class action judgment favors
the plaintiff that their attorneys must disclose the amount of
fees that they intend to collect. The amount must be disclosed
to all plaintiffs at the time of rendered judgment or at the
time that any award is transmitted to the plaintiffs. (20 min.)
Lofgren/Schiff: Seeks to federalize any state cause of
action that is brought on behalf of the general public
including civil law enforcement actions brought by local
prosecutors. Preserves the ability of local prosecutors to
enforce state antitrust and consumer protection laws. (20 min.)
Conyers/Jackson-Lee/Neal: Treats a foreign corporation
which acquires a domestic corporation in a corporate
repatriation transaction as being incorporated in the state
under whose laws the acquired domestic corporation was
organized. Ensures that a company cannot have a state class
action removed to federal court merely be changing its place of
incorporation abroad. (20 min.)
Jackson-Lee: Prohibits a party to a class action from
removing the case to a district court if that party destroys
material relating to the subject matter of the class action, or
makes a misrepresentation with respect to existence of such
materials. (20 min.)
Frank/Berman/Meehan: Provides that aspects of class actions
filed in state court that could not be maintained under
F.R.Civ.P. 23 in federal courts would still be heard by a state
court rather than either dismissed or removed and remanded.
Such an action refused to be heard by the federal court could
only be removed again to federal court if it met the diversity
standards of 28 U.S.C. Section 1332(a). (20 min.)
Hart: Creates a new section 7 which would require the
Judicial Conference of the United States to conduct a study and
issue a report, including recommendations, within 12 months,
detailing class action fee arrangements and ways they may be
improved to benefit class members. (20 min.)
Text of amendments made in order under the rule:
1. An Amendment To Be Offered by Representative Issa of California, or
a Designee, Debatable for 20 Minutes
Page 8, line 19, strike ``and''.
Page 8, insert the following after line 21:
``(vi) a good faith estimate of the
average hourly rate that counsel will
be paid if the amount of the attorney's
fee that class counsel will be seeking
is awarded; and
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2. An Amendment To Be Offered by Representative Nadler of New York, or
a Designee, Debatable for 20 Minutes
Page 9, insert the following after line 20 and redesignate
the succeeding section accordingly:
``Sec. 1716. Sunshine in court records
``No order, opinion, or record of the court in the
adjudication of a class action, including a record obtained
through discovery, whether or not formally filed with the
court, may be sealed or subjected to a protective order unless
the court makes a finding of fact--
``(1) that the sealing or protective order is
narrowly tailored, consistent with the protection of
public health and safety, and is in the public
interest; and
``(2) if the action by the court would prevent the
disclosure of information, that disclosing the
information is clearly outweighed by a specific and
substantial interest in maintaining the confidentiality
of such information.
Page 6, in the matter preceding line 1, strike the item
relating to section 1716 and insert the following:
``1716. Sunshine in court records.
``1717. Definitions.''.
____________________________________________________
3. An Amendment To Be Offered by Representative Waters of California,
or a Designee, Debatable for 20 Minutes
Page 9, insert the following after line 20 and redesignate
the succeeding section accordingly:
``Sec. 1716. Withholding or destruction of material
``If the court in a class action issues a discovery order and
a party to which the order is directed withholds or destroys
material subject to the order or makes a misrepresentation with
respect to the existence of such material, such action by that
party shall be deemed an admission of any fact with respect to
which the order was issued.
Page 6, in the matter preceding line 1, strike the item
relating to section 1716 and insert the following:
``1716. Withholding or destruction of material.
``1717. Definitions.''.
____________________________________________________
4. An Amendment To Be Offered by Representative Keller of Florida, or a
Designee, Debatable for 20 Minutes
Page 9, insert the following after line 20 and redesignate
the succeeding section accordingly:
``Sec. 1716. Disclosure of attorney's fees
``Any court with jurisdiction over a plaintiff class action
shall require that, if there is a settlement of the class
action or a judgment for the plaintiffs, the attorneys for the
plaintiffs shall disclose to each plaintiff--
``(1) at the time when any payment or other award is
transmitted to the plaintiff in accordance with the
settlement of judgment, or
``(2) in a case in which no such payment or award is
made to a plaintiff, at the time when notice of the
final settlement or judgment is transmitted to such
plaintiff,
the full amount of the attorney's fees charged by the attorneys
for services rendered in the action.
Page 6, in the matter preceding line 1, strike the item
relating to section 1716 and insert the following:
``1716. Disclosure of attorney's fees.
``1717. Definitions.''.
____________________________________________________
5. An Amendment To Be Offered by Representative Lofgren of California,
or a Designee, Debatable for 20 Minutes
Page 15, line 6, strike ``if--'' and all that follows through
line 17 and insert the following: ``if 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.''.
Page 15, line 21, strike ``The'' and all that follows through
``subparagraph (A).'' on line 24.
Page 16, line 2, strike ``subparagraph (B)'' and insert
``this paragraph''.
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6. An Amendment To Be Offered by Representative Conyers of Michigan, or
a Designee, Debatable for 20 Minutes
Page 16, line 2, strike the quotation marks and second
period.
Page 16, insert the following after line 2:
``(10)(A) For purposes of this subsection and section 1453 of
this title, a foreign corporation which acquires a domestic
corporation in a corporate repatriation transaction shall be
treated as being incorporated in the State under whose laws the
acquired domestic corporation was organized.
``(B) In this paragraph, the term `corporate repatriation
transaction' means any transaction in which--
``(i) a foreign corporation acquires substantially
all of the properties held by a domestic corporation;
``(ii) shareholders of the domestic corporation, upon
such acquisition, are the beneficial owners of
securities in the foreign corporation that are entitled
to 50 percent or more of the votes on any issue
requiring shareholder approval; and
``(iii) the foreign corporation does not have
substantial business activities (when compared to the
total business activities of the corporate affiliated
group) in the foreign country in which the foreign
corporation is organized.''.
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7. An Amendment To Be Offered by Representative Jackson-Lee of Texas,
or a Designee, Debatable for 20 Minutes
Page 18, line 14, strike the quotation marks and second
period.
Page 18, insert the following after line 14:
``(g) Certain Actions Not Removable.--A party to a class
action may not remove the class action to a district court
under this section if that party has been found by a court to
have knowingly altered, destroyed, mutilated, concealed,
falsified, or made a false entry in, any record, document, or
tangible object in connection with that class action.''.
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8. An Amendment To Be Offered by Representative Frank of Massachusetts,
or a Designee, Debatable for 20 Minutes
Page 18, line 14, strike the quotation marks and second
period.
Page 18, insert the following after line 14:
``(g) Procedure After Removal.--If, after an action is
removed under this section, the court determines that any
aspect of the action that is subject to its jurisdiction solely
under the provisions of section 1332(d) may not be maintained
as a class action under Rule 23 of the Federal Rules of Civil
Procedure, the court shall remand all such aspects of the
action to the State court from which the action was removed. In
such event, the State court may certify the action or any part
thereof as a class action pursuant to the laws of that State,
and such action may not be removed to Federal court unless it
meets the requirements of section 1332(a).''.
----------
9. An Amendment To Be Offered by Representative Hart of Pennsylvania,
or a Designee, Debatable for 20 Minutes
Page 19, insert the following after line 11 and redesignate
the succeeding section accordingly:
SEC. 7. REPORT ON CLASS ACTION SETTLEMENTS.
(a) In General.--Not later than 12 months after the date of
the 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 prepare and transmit
to the Committees on the Judiciary of the Senate and House of
Representatives a report on class action settlements in the
Federal courts.
(b) Content.--The report under subsection (a) shall contain--
(1) recommendations on the best practices that courts
can use to ensure that proposed class action
settlements are fair to the class members whom the
settlements are supposed to benefit;
(2) recommendations on the best practices that courts
can use to ensure that--
(A) the fees and expenses awarded to counsel
in connection with a class action settlement
appropriately reflect the extent to which
counsel succeeded in obtaining full redress for
the injuries alleged and the time, expense, and
risk that counsel devoted to the litigation;
and
(B) the class members on whose behalf the
settlement is proposed are the primary
beneficiaries of the settlement; and
(3) the actions that the Judicial Conference of the
United States has taken and intends to take toward
having the Federal judiciary implement any or all of
the recommendations contained in the report.
(c) Authority of Federal Courts.--Nothing in this section
shall be construed to alter the authority of the Federal courts
to supervise attorney's fees.