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DRAFT Y2K LIABILITY LEGISLATION -- (Senate - February 24, 1999)

(c) STATE LAW, CHARTER, OR BYLAWS.--Nothing in this section supersedes any provision of State law, charter, or a bylaw authorized by State law, in existence on January 1, 1999, that establishes lower limits on the liability of a director, officer, trustee, or employee of such a business or organization.

[Page: S1916]  GPO's PDF

   

TITLE IV--Y2K CLASS ACTIONS

   SEC. 401. MINIMUM INJURY REQUIREMENT.

   In any Y2K action involving a claim that a product or service is defective, the action may be maintained as a class action in Federal or State court as to that claim only if--

   (1) it satisfies all other prerequisites established by applicable Federal or State law or applicable rules of civil procedure; and

   (2) the court finds that the alleged defect in a product or service is material as to the majority of the members of the class .

   SEC. 402. NOTIFICATION.

   (a) NOTICE BY MAIL.--In any Y2K action that is maintained as a class action , the court, in addition to any other notice required by applicable Federal or State law, shall direct notice of the action to each member of the class by United States mail, return receipt requested. Persons whose receipt of the notice is not verified by the court or by counsel for one of the parties shall be excluded from the class unless those persons inform the court in writing, on a date no later than the commencement of trial or entry of judgment, that they wish to join the class .

   (b) CONTENTS OF NOTICE.--In addition to any information required by applicable Federal or State law, the notice described in this subsection shall--

   (1) concisely and clearly describe the nature of the action ;

   (2) identify the jurisdiction where the case is pending; and

   (3) describe the fee arrangement of class counsel.

   SEC. 403. FORUM FOR Y2K CLASS ACTIONS.

   (a) JURISDICTION.--The District Courts of the United States have original jurisdiction of any Y2K action , without regard to the sum or value of the matter in controversy involved, that is brought as a class action if--

   (1) any member of the proposed plaintiff class is a citizen of a State different from the State of which any defendant is a citizen;

   (2) any member of the proposed plaintiff class is a foreign Nation or a citizen of a foreign Nation and any defendant is a citizen or lawful permanent resident of the United States; or

   (3) any member of the proposed plaintiff class is a citizen or lawful permanent resident of the United States and any defendant is a citizen or lawful permanent resident of a foreign Nation.

   (b) PREDOMINANT STATE INTEREST.--A United States District Court in an action described in subsection (a) may abstain from hearing the action if--

   (1) a substantial majority of the members of all proposed plaintiff classes are citizens of a single State;

   (2) the primary defendants are citizens of that State; and

   (3) the claims asserted will be governed primarily by the laws of that State.

   (c) LIMITED CONTROVERSIES.--A United States District Court in an action described in subsection (a) may abstain from hearing the action if--

   (1) the value of all matters in controversy asserted by the individual members of all proposed plaintiff classes in the aggregate does not exceed $1,000,000, exclusive of interest and costs;

   (2) the number of members of all proposed plaintiff classes in the aggregate in less than 100; or

   (3) the primary defendants are States, State officials, or other governmental entities against whom the district court may be foreclosed from ordering relief.

   (d) DIVERSITY DETERMINATION.--For purposes of applying section 1322(b) of title 28, United States Code, to actions described in subsection (a) of this section, a member of a proposed class is deemed to be a citizen of a State different from a corporation that is a defendant if that member is a citizen of a State different from each State of which that corporation is deemed a citizen.

   (e) REMOVAL.--

   (1) IN GENERAL.--A class action described in subsection (a) may be removed to a district court of the United States in accordance with chapter 89 of title 28, United States Code, except that the action may be removed--

   (A) by any defendant without the consent of all defendants; or

   (B) 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 the class .

   (2) TIMING.--This subsection applies to any class before or after the entry of any order certifying a class .

   (3) PROCEDURE.--

   (A) IN GENERAL.--Section 1446(a) of title 28, United States Code, shall be applied to a plaintiff removing a case under this section by treating the 30-day filing period as 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 of the initial written notice of the class action provided at the trial court's direction.

   (B) APPLICATION OF SECTION 1446.--Section 1446 of title 28, United States Code, shall be applied--

   (i) to the removal of a case by a plaintiff under this section by substituting the term ``plaintiff'' for the term ``defendant'' each place it appears; and

   (ii) to the removal of a case by a plaintiff or a defendant under this section--

   (I) by inserting the phrase ``by exercising due diligence'' after ``ascertained'' in the second paragraph of subsection (b); and

   (II) by treating the reference to ``jurisdiction conferred by section 1332 of this title'' as a reference to subsection (a) of this section.

   (f) APPLICATION OF SUBSTANTIVE STATE LAW.--Nothing in this section alters the substantive law applicable to an action described in subsection (a).

   (g) PROCEDURE AFTER REMOVAL.--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) of title 28, United States Code, 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.


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