Brief Summary of Class Action Fairness Act of 2005
(Sec. 1) Title of Act, etc.
(Sec. 2) Findings and Purposes.
(Sec. 3) Amends the Federal judicial code to specify the calculation
of contingent and other attorney's fees in proposed class action
settlements that provide for the award of coupons to class
members.
Prohibits a Federal district court from approving:
(1) a proposed coupon settlement absent a finding that the
settlement is fair,
reasonable, and adequate; (2) a proposed settlement involving
payments to class counsel that would result in a net monetary
loss to class members, absent a finding that the loss is
substantially outweighed by nonmonetary benefits; or (3) a
proposed settlement
that provides greater sums to some class members solely because
they are closer geographically to the court.
Specifies requirements
for serving notices of proposed settlements on appropriate
State and Federal officials. Prohibits issuance
of an order giving final approval to a proposed settlement
earlier than 90 days after such service. Allows class members
to refuse compliance with settlement agreements or consent
decrees absent notice.
(Sec. 4) Grants district courts original
jurisdiction of any civil action in which the matter in controversy
exceeds
$5
million, exclusive of interest and costs, and that is
between citizens of different States, or citizens of a State
and
a foreign State or its citizens or subjects.
Lists those
factors pursuant to which a district court may, in the interests
of justice and based on the totality
of
the circumstances, decline to exercise jurisdiction
over a class
action in which more than one-third but less than two-thirds
of the members of the proposed plaintiff classes in
the aggregate and the primary defendants are citizens of
the State in which
the action was originally filed, based on consideration
of whether: (1) the claims involve matters of national
or interstate
interest; (2) the claims will be governed by laws of
the State where the action was originally filed or
by the laws
of other
States; (3) the class action has been pleaded in a
manner that seeks to avoid Federal jurisdiction; (4) the action
was brought
in a forum with a distinct nexus with the class members,
the alleged harm, or the defendants; (5) the number
of
citizens of the State of original filing in all proposed
plaintiff
classes
in the aggregate is substantially larger than the number
of citizens from any other State and the citizenship
of other proposed class members is dispersed; and (6)
during
the three-year
period preceding filing, one or more other class actions
asserting
the same or similar claims on behalf of the same persons
have been filed.
Specifies those circumstances in which
a district court must decline jurisdiction, including
those class actions
in which:
(1) more than two-thirds of the members of the proposed
plaintiff classes in the aggregate are citizens of
the State where
the action was originally filed, at least one defendant
is a defendant
from whom significant relief is sought, whose alleged
conduct forms a significant basis for the claims
asserted, and
who is a citizen of the State where the action was
originally filed, and principal injuries resulting
from the alleged
or related
conduct were incurred in such State; and (2) during
the three-year
period preceding filing, no other class action has
been filed asserting the same or similar factual
allegations against
any of the defendants on behalf of the same or other
persons; or
(3) two-thirds or more of the members of all proposed
plaintiff classes in the aggregate, and the primary
defendants,
are
citizens of the State where the action was originally
filed.
Makes provisions of this Act concerning the
application of Federal diversity jurisdiction applicable
to any
class action
before or after entry of a class certification
order.
(Sec. 5) Sets forth provisions governing the removal
of interstate class actions to Federal district
court and
the review on
appeal of remand orders.
(Sec. 6) Directs the
Judicial Conference of the United States to report on class
action settlements,
incorporating
recommendations
for best court practices to ensure fairness
for class members and appropriate fees for counsel.
(Sec. 7)
States that amendments to Federal Rule of Civil Procedure
23 (governing class
actions)
set
forth in the
Supreme Court
order entered on March 27, 2003, shall take
effect on the date of enactment of this Act
or on December
1, 2003,
whichever
occurs first.
(Sec. 8) Retains the authority
of the Supreme Court and Judicial Conference to propose
and prescribe
general rules of practice
and procedure.
(Sec. 9) Effective date:
applies to actions commenced on or after enactment.
Source: S. 5
Congressional Research Service
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