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FOR EDUCATIONAL USE ONLY Copr. (C) West 1999 No Claim to Orig. U.S. Govt.
Works 1999
CONG US HR 1875 106th CONGRESS, 1st Session United States Library of Congress HR 1875 Engrossed in House September 23, 1999 H. R. 1875
AN ACT To amend title 28, United States Code, to allow the application of the principles of Federal diversity jurisdiction to interstate class actions. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
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 ((28 USCA 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)
((28 USCA 1603)). '
(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
((15 USCA 77p)) and section 28(f)(5)(E) of the Securities Exchange Act of
1934 ((15 USCA 78bb)). '
(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 ((15 USCA 77b)) and the regulations issued thereunder).'.
(b) CONFORMING AMENDMENT- Section 1332(c) ((28 USCA 1332)) (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 ((28 USCA 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.'.
[removal language omitted]
What impact do you think this would have on the number of filings?
Does this solve the jurisdictional amount problem?