text: SECTION 1. SHORT TITLE AND REFERENCE.
  
      (a) Short Title.--This Act may be cited as the ``Interstate Class 
  Action Jurisdiction Act of 1999''.
      (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.
  
  SEC. 2. FINDINGS.
  
      The Congress finds that--
              (1) as recently noted by the United States Court of Appeals 
          for the Third Circuit, interstate class actions are ``the 
          paradigm for Federal diversity jurisdiction because, in a 
          constitutional sense, they implicate interstate commerce, 
          invite discrimination by a local State, and tend to attract 
          bias against business enterprises'';
              (2) most such cases, however, fall outside the scope of 
          current Federal diversity jurisdiction statutes;
              (3) that exclusion is an unintended technicality, inasmuch 
          as those statutes were enacted by Congress before the rise of 
          the modern class action and therefore without recognition that 
          interstate class actions typically are substantial 
          controversies of the type for which diversity jurisdiction was 
          designed;
              (4) Congress is constitutionally empowered to amend the 
          current Federal diversity jurisdiction statutes to permit most 
          interstate class actions to be brought in or removed to Federal 
          district courts; and
              (5) in order to ensure that interstate class actions are 
          adjudicated in a fair, consistent, and efficient manner and to 
          correct the unintended, technical exclusion of such cases from 
          the scope of Federal diversity jurisdiction, it is appropriate 
          for Congress to amend the Federal diversity jurisdiction and 
          related statutes to allow more interstate class actions to be 
          brought in or removed to Federal court.
  
  SEC. 3. JURISDICTION OF DISTRICT COURTS.
  
      (a) Expansion of Federal Jurisdiction.--Section 1332 is amended by 
  redesignating subsections (b), (c), and (d) as subsections (c), (d), 
  and (e), respectively, and by inserting after subsection (a) the 
  following:
      ``(b)(1) The district courts shall have original jurisdiction of 
  any civil action which is brought as a class action and in which--
              ``(A) any member of a proposed plaintiff class is a citizen 
          of a State different from any defendant;
              ``(B) any member of a proposed plaintiff class is a foreign 
          state and any defendant is a citizen of a State; or
              ``(C) any member of a proposed plaintiff class is a citizen 
          of a State and any defendant is a citizen or subject of a 
          foreign state.
  As used in this paragraph, the term `foreign state' has the meaning 
  given that term in section 1603(a).
      ``(2)(A) The district courts shall not exercise jurisdiction over a 
  civil action described in paragraph (1) if the action is--
              ``(i) an intrastate case;
              ``(ii) a limited scope case; or
              ``(iii) a State action case.
      ``(B) For purposes of subparagraph (A)--
              ``(i) the term `intrastate case' means a class action in 
          which the record indicates that--
                      ``(I) the claims asserted therein will be governed 
                  primarily by the laws of the State in which the action 
                  was originally filed; and
                      ``(II) the substantial majority of the members of 
                  all proposed plaintiff classes, and the primary 
                  defendants, are citizens of the State in which the 
                  action was originally filed;
              ``(ii) the term `limited scope case' means a class action 
          in which the record indicates that all matters in controversy 
          asserted by all members of all proposed plaintiff classes do 
          not in the aggregate exceed the sum or value of $1,000,000, 
          exclusive of interest and costs, or a class action in which the 
          number of members of all proposed plaintiff classes in the 
          aggregate is less than 100; and
              ``(iii) the term `State action case' means a class action 
          in which the primary defendants are States, State officials, or 
          other governmental entities against whom the district court may 
          be foreclosed from ordering relief.
      ``(3) Paragraph (1) shall not apply to any claim concerning a 
  covered security as that term is defined in section 16(f)(3) of the 
  Securities Act of 1933 and section 28(f)(5)(E) of the Securities 
  Exchange Act of 1934.
      ``(4) Paragraph (1) shall not apply to any class action solely 
  involving a claim that relates to--
              ``(A) the internal affairs or governance of a corporation 
          or other form of business enterprise and that arises under or 
          by virtue of the laws of the State in which such corporation or 
          business enterprise is incorporated or organized; or
              ``(B) the rights, duties (including 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) Conforming Amendment.--Section 1332(c) (as redesignated by this 
  section) is amended by inserting after ``Federal courts'' the 
  following: ``pursuant to subsection (a) of this section''.
      (c) Determination of Diversity.--Section 1332, as amended by this 
  section, is further amended by adding at the end the following:
      ``(f) For purposes of subsection (b), a member of a proposed class 
  shall be deemed to be a citizen of a State different from a defendant 
  corporation only if that member is a citizen of a State different from 
  all States of which the defendant corporation is deemed a citizen.''.
  
  SEC. 4. REMOVAL OF CLASS ACTIONS.
  
      (a) In General.--Chapter 89 is amended by adding after section 1452 
  the following:
  ``Sec. 1453. Removal of class actions
      ``(a) In General.--A class action may be removed to a district 
  court of the United States in accordance with this chapter, but without 
  regard to whether any defendant is a citizen 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 of the action for which removal is 
          sought, without the consent of all members of such class.
      ``(b) When Removable.--This section shall apply to any class action 
  before or after the entry of any order certifying a class, except that 
  a plaintiff class member 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.
      ``(c) Procedure for Removal.--The provisions of section 1446(a) 
  relating to a defendant removing a case shall apply to a plaintiff 
  removing a case under this section. With respect to 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 who is not a 
  named or representative class member of the action for which removal is 
  sought files notice of removal no later than 30 days after receipt by 
  such class member, through service or otherwise, of the initial written 
  notice of the class action provided at the court's direction.
      ``(d) Exceptions.--
              ``(1) Covered securities.--This section shall not apply to 
          any claim concerning a covered security as that term is defined 
          in section 16(f)(3) of the Securities Act of 1933 and section 
          28(f)(5)(E) of the Securities Exchange Act of 1934.
              ``(2) Internal governance of business entities.--This 
          section shall not apply to any class action solely involving a 
          claim that relates to--
                      ``(A) the internal affairs or governance of a 
                  corporation or other form of business enterprise and 
                  that arises under or by virtue of the laws of the State 
                  in which such corporation or business enterprise is 
                  incorporated or organized; or
                      ``(B) the rights, duties (including 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 Limitations.--Section 1446(b) is amended in the second 
  sentence--
              (1) by inserting ``, by exercising due diligence,'' after 
          ``ascertained''; and
              (2) 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.''.
      (d) Application of Substantive State Law.--Nothing in this section 
  or the amendments made by this section shall alter the substantive law 
  applicable to an action to which the amendments made by section 3 of 
  this Act apply.
      (e) Procedure After Removal.--Section 1447 is amended by adding at 
  the end the following new subsection:
      ``(f) If, after removal, the court determines that no aspect of an 
  action that is subject to its jurisdiction solely under the provisions 
  of section 1332(b) may be maintained as a class action under Rule 23 of 
  the Federal Rules of Civil Procedure, it shall dismiss the action. An 
  action dismissed pursuant to this subsection may be amended and filed 
  again in a State court, but any such refiled action may be removed 
  again if it is an action of which the district courts of the United 
  States have original jurisdiction. In any action that is dismissed 
  pursuant to this subsection and that is refiled by any of the named 
  plaintiffs therein in the same State court venue in which the dismissed 
  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 pursuant to this subsection 
  that are subsequently asserted in an individual action shall be deemed 
  tolled for the period during which the dismissed class action was 
  pending.''.
  
  SEC. 5. APPLICABILITY.
  
      The amendments made by this Act shall apply to any action commenced 
  on or after the date of the enactment of this Act.
  
  SEC. 6. GAO STUDY.
  
      The Comptroller General of the United States shall, by not later 
  than 1 year after the date of the enactment of this Act, conduct a 
  study of the impact of the amendments made by this Act on the workload 
  of the Federal courts and report to the Congress on the results of the 
  study.
  
              Passed the House of Representatives September 23, 1999.
  
              Attest:
  
                                                   JEFF TRANDAHL,
  
                                                                   Clerk.
target: Prohibits the district courts from exercising jurisdiction over: (1) a civil action if the action is an intrastate case, a limited scope case, or a State action case; (2) any claim concerning a covered security; and (3) any class action solely involving a claim that relates to the internal affairs or governance of a corporation or other form of business enterprise that arises under or by virtue of the laws of the State in which such enterprise is incorporated or organized, or the rights, duties, and obligations relating to or created by or pursuant to any security.Provides that, for purposes of a determination of diversity of citizenship, a member of a proposed class shall be deemed to be a citizen of a State different from a defendant corporation only if that member is a citizen of a State different from all States of which the defendant corporation is deemed a citizen.(Sec. 4) Allows a class action to be removed to a U.S. district court, but without regard to whether any defendant is a citizen of the State in which the action is brought, except that such action may be removed by: (1) any defendant without the consent of all defendants; or (2) any plaintiff class member who is not a named or representative class member of the action for which removal is sought, without the consent of all members of such class. Specifies that this section shall apply to any class action before or after the entry of any order certifying a class, except that a plaintiff class member 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.Makes provisions relating to a defendant removing a case applicable to a plaintiff removing a case under this section. Specifies that the requirement relating to the 30-day filing period shall be met if a plaintiff class member who is not a named or representative class member of the action for which removal is sought files notice of removal no later than 30 days after receipt by such class member of the initial written notice of the class action provided at the court's direction. Makes this section inapplicable to any: (1) claim concerning a covered security; and (2) class action solely involving a claim that relates to the internal affairs or governance of a corporation or other form of business enterprise that arises under or by virtue of the laws of the State in which it is incorporated or organized, or the rights, duties, and obligations relating to or created by or pursuant to any security.Provides that if the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant of a copy of an amended paper from which it may first be ascertained (current law) by exercising due diligence that the case is one which is or has become removable, with an exception.Requires the court to dismiss the action if, after removal, it determines that no aspect of an action that is subject to its jurisdiction solely under this Act may be maintained as a class action under rule 23 of the Federal Rules of Civil Procedure. Permits an action so dismissed to be amended and filed again in a State court, but allows any such re-filed action to be removed again if it is an action of which the U.S. district courts have original jurisdiction. Specifies that in any action dismissed pursuant to this section that is re-filed by any of the named plaintiffs therein in the same State court venue in which the dismissed action was originally filed, the period of limitations on all reasserted claims shall be deemed tolled for the period during which the dismissed class action was pending. Deems the limitations periods on any claims that were asserted in a class action dismissed pursuant to this section that are subsequently asserted in an individual action to be tolled for the period during which the dismissed class action was pending.Directs the Comptroller General of the United States to conduct a study of the impact of this Act on the workload of the Federal courts and report to Congress.
feat_title: Interstate Class Action Jurisdiction Act of 1999