2:56 PM 15 Sep 1998
| from: |
Ingrid M. Schroeder |
| to: |
agc.llr, ao - courts - lrm, clrm, David J., Derek A., Elena Kagan, James, Julie A. Fernandes, justice.lrm, Michelle, Robert G., Sarah, seclegis, Steven D. Aitken |
| cc: |
Darlene O., Jeffrey A. Farkas |
Total Pages:
LRM ID: IMS419
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
Washington, D.C. 20503-0001
Tuesday, September 15, 1998
LEGISLATIVE REFERRAL MEMORANDUM
TO: Legislative Liaison Officer - See Distribution below
FROM: Jeffrey A. Weinberg (for) Assistant Director for Legislative
Reference
OMB CONTACT: Ingrid M. Schroeder
PHONE: (202) 395-3883 FAX: (202) 395 - 3109
SUBJECT: OMB Request for Views on HR3789 Class Action Jurisdiction
Act of 1998
DEADLINE: Noon Friday, September 18, 1998
In accordance with OMB Circular A-19, OMB requests the views of your
agency on the above subject before advising on its relationship to the
program of the President. Please advise us if this item will affect
direct spending or receipts for purposes of the "Pay-As-You-Go" provisions
of Title XIII of the Omnibus Budget Reconciliation Act of 1990.
COMMENTS: H.R. 3789 was reported (as amended) by the House Judiciary
Committee on September lOth.
DISTRIBUTION LIST
AGENCIES:
61-JUSTICE - L. Anthony Sutin - (202) 514-2141
11-Administrative Office of the U.S. Courts - Michael W. Blommer - (202)
273-1120
25-COMMERCE - Michael A. Levitt - (202) 482-3151
108-Securities and Exchange Commission - Susan M. Ochs - (202) 942-0016
118-TREASURY - Richard S. Carro - (202) 622-0650
EOP:
James Boden
David J. Haun
Steven D. Aitken
Robert G. Damus
Sarah Rosen
Julie A. Fernandes
Elena Kagan
Derek A. Chapin
Michelle Peterson
LRM ID: IMS419 SUBJECT: OMB Request for Views on HR3789 Class Action
Jurisdiction Act of 1998
RESPONSE TO
LEGISLATIVE REFERRAL
MEMORANDUM
If your response to this request for views is short (e.g., concur/no
comment), we prefer that you respond bye-mail or by faxing us this
response sheet. If the response is short and you prefer to call, please
call the branch-wide line shown below (NOT the analyst's line) to leave a
message with a legislative assistant.
You may also respond by:
(1) calling the analyst/attorney's direct line (you will be
connected to voice mail if the analyst does not answer); or
(2) sending us a memo or letter
Please include the LRM number shown above, and the subject shown below.
TO: Ingrid M. Schroeder Phone: 395 -3 883 Fax: 395-3109
Office of Management and Budget
Branch-Wide Line (to reach legislative assistant): 395-3454
FROM: (Date)
(Name)
(Agency)
(Telephone)
The following is the response of our agency to your request for views on
the above-captioned subject:
Concur
No Objection
No Comment
See proposed edits on pages
Other:
FAX RETURN of _____ pages, attached to this response sheet
union Calendar No. 397
105th CONGRESS
2d Session
H. R. 3789
[Report No. 105-702]
A BILL
To amend title 28, United States Code, to enlarge Federal Court
jurisdiction over purported class
actions.
September 10, 1998
Reported with an amendment, committed to the Committee of the Whole House
on the
State of the Union, and ordered to be printed
HR 3789 RH
union Calendar No. 397
105th CONGRESS
2d Session
H. R. 3789
[Report No. 105-702]
To amend title 28, United States Code, to enlarge Federal Court
jurisdiction over purported class
actions.
IN THE HOUSE OF REPRESENTATIVES
May 5, 1998
Mr. HYDE (for himself, Mr. MCCOLLUM, Mr. SMITH of Texas, Mr. CANADY of
Florida,
Mr. BRYANT, Mr. PEASE, and Mr. MORAN of Virginia) introduced the following
bill; which
was referred to the Committee on the Judiciary
September 10, 1998
Additional sponsors: Mr. FRANK of Massachusetts, Mr. INGLIS of South
Carolina, Mr.
SENSENBRENNER, and Mr. Rogan
September 10, 1998
Reported with an amendment, committed to the Committee of the Whole House
on the State of
the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part
printed in italic]
[For text of introduced bill, see copy of bill as introduced on May
5, 1998]
A BILL
To amend title 28, United States Code, to enlarge Federal Court
jurisdiction over purported 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 'Class Action
Jurisdiction Act of
1998' .
(b) REFERENCE- Whenever in this Act an amendment or repeal is
expressed in
terms of 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. 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,
regardless of the sum or value of the matter in controversy therein,
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
or a citizen or
subject of 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) In a civil action described in paragraph (1) in which--
'(i) the substantial majority of the members of all proposed
plaintiff classes are
citizens of a single State of which the primary defendants are
also citizens, and
'(ii) the claims asserted will be governed primarily by the laws
of that State,
the district court should abstain from hearing such action.
'(B) In a civil action described in paragraph (1) in which--
'(i) all matters in controversy asserted by the individual
members of all
proposed plaintiff classes in the aggregate do not exceed the
sum or value of
$1,000,000, exclusive of interest and costs,
-(ii) the number of members of all proposed plaintiff classes in
the aggregate is
less than 100, or
-(iii) the primary defendants are States, State officials, or
other governmental
entities against whom the district court may be foreclosed from
ordering relief,
the district court may, in its discretion, abstain from hearing such
action.
-(3) (A) Paragraph (1) and section 1453 shall not apply to any class
action that is
brought under the Securities Act of 1933.
-(B) Paragraph (1) and section 1453 shall not apply to a class action
described in
subparagraph (C) that is based upon the statutory or common law of
the State in
which the issuer concerned is incorporated (in the case of a
corporation) or
organized (in the case of any other entity).
-(C) A class action is described in this subparagraph if it involves--
-(i) the purchase or sale of securities by an issuer or an
affiliate of an issuer
exclusively from or to holders of equity securities of the
issuer; or
-(ii) any recommendation, position, or other communication with
respect to the
sale of securities of an issuer that--
-(I) is made by or on behalf of the issuer or an affiliate
of the issuer to
holders of equity securities of the issuer; and
-(II) concerns decisions of those equity holders with
respect to voting
their securities, acting in response to a tender or
exchange offer, or
exercising dissenters' or appraisal rights.
-(D) As used in this paragraph, the terms -issuer', -security', and
-equity security'
have the meanings given those terms in section 3 of the Securities
Exchange Act of
1934. ' .
(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. 3. 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, 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.
'(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 within 30 days after
receipt by such class
member, through service or otherwise, of the initial written notice
of the class action
provided at the district court's direction in accordance with Rule
23 (c) (2) of the
Federal Rules of Civil Procedure.'.
(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 2 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,
the court shall
strike the class allegations from the action and remand the action to
the State court.
Upon remand of the action, the period of limitations for any claim
that was asserted
in the action on behalf of any named or unnamed member of any
proposed class shall
be deemed tolled to the full extent provided under Federal law.'.
SEC. 4. 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. 5. 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.
END
