HR 1689 IH.
Securities Litigation Uniform Standards Act of 1997.
Source: Library of Congress.
A BILL
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
This Act may be cited as the `Securities Litigation Uniform Standards Act of 1997'.
(a) AMENDMENTS TO THE SECURITIES ACT OF 1933-
(1) AMENDMENT- Section 16 of the Securities Act of 1933 (15 U.S.C. 77p) is amended to read as follows:
`(a) REMEDIES ADDITIONAL- Except as provided in subsection (b), the rights and remedies provided by this title shall be in addition to any and all other rights and remedies that may exist at law or in equity.
`(b) CLASS ACTION LIMITATIONS- No class action based upon the statutory or common law of any State or subdivision thereof may be maintained in any State or Federal court by any private party alleging--
`(1) an untrue statement or omission of a material fact in connection with the purchase or sale of a covered security; or
`(2) that the defendant used or employed any manipulative or deceptive device or contrivance in connection with the purchase or sale of a covered security.
`(c) REMOVAL OF CLASS ACTIONS- Any class action brought in any State court involving a covered security as set forth in subsection (b) shall be removable to the Federal district court for the district in which the action is pending and shall be subject to subsection (b).
`(d) DEFINITIONS- For purposes of this section:
`(1) CLASS ACTION- A `class action' is any single lawsuit, or any group of lawsuits filed in or pending in the same court involving common questions of law or fact, in which--
`(A) damages are sought on behalf of more than 25 persons;
`(B) one or more named parties seek to recover damages on a representative basis on behalf of themselves and other unnamed parties similarly situated; or
`(C) one or more of the parties seeking to recover damages did not personally authorize the filing of the lawsuit.
`(2) COVERED SECURITY- A security is a `covered security' if the issuer of the security had outstanding any security that satisfied the standard for a covered security specified in section 18(b)(1) of this title at any time during which it is alleged that the misrepresentation, omission, or manipulative or deceptive conduct occurred.'.
(2) CONFORMING AMENDMENTS- Section 22(a) of the Securities Act of 1933 (15 U.S.C. 77v(a)) is amended--
(A) by striking `and, concurrent with State and Territorial courts,' and inserting `and, concurrent with State and Territorial courts except as provided in section 16 with respect to class actions,'; and
(B) by striking `No case arising under this title and brought in any State court of competent jurisdiction shall be removed' and inserting `Except as provided in section 16(c), no case arising under this title and brought in any State court of competent jurisdiction shall be removed'.
(b) AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934- Section 28 of the Securities Exchange Act of 1934 (15 U.S.C. 78bb) is amended--
(1) in subsection (a), by striking `The rights and remedies' and inserting `Except as provided in subsection (f), the rights and remedies'; and
(2) by adding at the end the following new subsection:
`(f) LIMITATIONS ON REMEDIES-
`(1) CLASS ACTION LIMITATIONS- No class action based upon the statutory or common law of any State or subdivision thereof may be maintained in any State or Federal court by any private party alleging--
`(A) a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security; or
`(B) that the defendant used or employed any manipulative or deceptive device or contrivance in connection with the purchase or sale of a covered security.
`(2) REMOVAL OF CLASS ACTIONS- Any class action brought in any State court involving a covered security as set forth in paragraph (1) shall be removable to the Federal district court for the district in which the action is pending and shall be subject to paragraph (1).
`(3) DEFINITIONS- For purposes of this subsection:
`(A) CLASS ACTION- A `class action' is any single lawsuit, or any group of lawsuits filed in or pending in the same court involving common questions of law or fact, in which--
`(i) damages are sought on behalf of more than 25 persons;
`(ii) one or more named parties seek to recover damages on a representative basis on behalf of themselves and other unnamed parties similarly situated; or
`(iii) one or more of the parties seeking to recover damages did not personally authorize the filing of the lawsuit.
`(B) COVERED SECURITY- A security is a `covered security' if the issuer of the security had outstanding any security that satisfied the standard for a covered security specified in section 18(b)(1) of the Securities Act of 1993 at any time during which it is alleged that the misrepresentation, omission, or manipulative or deceptive conduct occurred.'.
(c) APPLICABILITY- The amendments made by this section shall not affect or apply to any action commenced before and pending on the date of enactment of this Act.