[Congressional Bills 105th Congress]
[From the U.S. Government Printing Office]
[H.R. 1689 Introduced in House (IH)]
105th CONGRESS
1st Session
H. R. 1689
To amend the Securities Act of 1933 and the Securities Exchange Act of
1934 to limit the conduct of securities class actions under State law,
and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 21, 1997
Mr. White (for himself, Ms. Eshoo, Mr. Barton of Texas, Mr. Brown of
Ohio, Mr. Bilbray, Mr. Dooley of California, Mr. Campbell, Mr. Fazio of
California, Mr. Coburn, Mr. Farr of California, Mr. Cox of California,
Mr. Frank of Massachusetts, Ms. Dunn, Ms. Harman, Mr. Klug, Mr. Kennedy
of Massachusetts, Mr. Nethercutt, Ms. Lofgren, Mr. Paxon, Mr. Roemer,
Ms. Pryce of Ohio, Mrs. Tauscher, Mr. Tauzin, Mr. Towns, and Mr.
Deutsch) introduced the following bill; which was referred to the
Committee on Commerce
_______________________________________________________________________
A BILL
To amend the Securities Act of 1933 and the Securities Exchange Act of
1934 to limit the conduct of securities class actions under State law,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Securities Litigation Uniform
Standards Act of 1997''.
SEC. 2. LIMITATION ON REMEDIES.
(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:
``SEC. 16. ADDITIONAL REMEDIES; LIMITATION ON REMEDIES.
``(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.
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