Class Action Fairness Act of 2003

Class Action Fairness Act of 2003 - (Sec. 3) Amends the Federal judicial code to prohibit a Federal district court from approving a proposed class action settlement under which: (1) members would receive non-cash benefits or would be required to expend funds in order to obtain proposed benefits unless the court finds, after a hearing, that the settlement is fair, reasonable, and adequate; (2) any member is obligated to pay sums to class counsel that would result in a net loss to the member unless the court finds that non-monetary benefits to the member outweigh the monetary loss; (3) greater sums would be paid to some class members than to others solely on the basis of their closer geographic proximity to the court; or (4) a greater share would be paid to a class representative than to other class members (with an exception for any court approved payment for reasonable time or costs for fulfilling representative obligations).

(Sec. 4) Grants Federal district courts original jurisdiction of any civil action in which the matter in controversy exceeds $5 million, exclusive of interest and costs, and is a class action in which any member of a class of plaintiffs is: (1) a citizen of a State different from any defendant; (2) a foreign state or a citizen or subject of a foreign state and any defendant is a citizen of a State; or (3) a citizen of a State and any defendant is a foreign state or a citizen or subject of a foreign state.

Authorizes a district court to decline to exercise jurisdiction over a class action in which greater than one-third but less than two-thirds of the members of all 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 asserted involve matters of national or interstate interest; (2) the claims asserted will be governed by laws other than those of the State in which the action was originally filed; (3) in the case of a class action originally filed in a State court, the class action has been pleaded in a manner that seeks to avoid Federal jurisdiction; (4) the number of citizens of the State in which the action was originally filed in all proposed plaintiff classes in the aggregate is substantially larger than the number of citizens from any other State, and the citizenship of the other members of the proposed class is dispersed among a substantial number of States; and (5) one or more class actions asserting the same or similar claims on behalf of the same or other persons have been or may be filed.

Makes exceptions where: (1) two-thirds or more of the members of all proposed plaintiff classes in the aggregate and the primary defendants are citizens of the State in which the action was originally filed; (2) the primary defendants are States, State officials, or other governmental entities against whom the district court may be foreclosed from ordering relief; or (3) the number of members of all proposed plaintiff classes in the aggregate is less than 100. Lists other exceptions, including class actions involving certain securities claims and claims involving the internal affairs or governance of a corporation that arise under the laws of the State of incorporation.

(Sec. 5) Sets forth provisions governing the removal of interstate class actions to U.S. district court. Permits removal 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 without the consent of all class members (after a class certification order has been entered). Provides for review by appeal of orders remanding class actions to State courts.

(Sec. 6) Grants the courts of appeals jurisdiction for appeals of U.S. district court orders granting or denying class certification if notice of appeal is filed within ten days after entry of the order.

(Sec. 7) Directs that the amendments to rule 23 of the Federal Rules of Civil Procedure by the order entered by the U.S. Supreme Court on March 27, 2003 (pertaining to the manner in which Federal courts handle class actions, including a requirement that class certification notices to class members present specified information in plain, easily understood language) take effect on the date of this Act's enactment or on December 1, 2003, whichever occurs first.

(Sec. 8) Makes this Act applicable to any civil action commenced: (1) on or after this Act's enactment date; and (2) before such date if a class certification order is entered on or after such date.

Written by the nonpartisan Congressional Research Service. All summary versions on Congress.gov