[Congressional Record Volume 149, Number 86 (Thursday, June 12, 2003)]
[House]
[Page H5348]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           LITIGATION REFORM

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Texas (Mr. Hensarling) is recognized for 5 minutes.
  Mr. HENSARLING. Mr. Speaker, today the House passed landmark 
legislation in the passage of the Class Action Fairness Act of 2003. 
Lawsuit abuse is everywhere. It is harming American businesses, 
consumers, and families.
  Mr. Speaker, there is something wrong with our legal system when it 
is easier to sue a doctor than it is to see a doctor. There is 
something wrong with our legal system when a plaintiff can be awarded 
millions of dollars because McDonald's serves hot coffee and not 
lukewarm coffee. There is something wrong with our legal system when 
people can sue Kentucky Fried Chicken for their weight gain because 
they ate too much fried chicken. And, Mr. Speaker, there is definitely 
something wrong with our legal system when the awards and settlements 
from class action lawsuits more often than not benefit the trial 
attorneys and not the purported victims.

                              {time}  1915

  That is right, studies show that over half of all tort liability 
costs go to trial lawyers and administrative expenses, not the victims, 
real or imagined. In one egregious example, a Bank of Boston settlement 
ordered $8.64 to each class member, but then turned right around and 
assessed each of those members $90 in trial lawyer fees.
  In a case against Blockbuster, the attorneys took home $9.25 million 
in fees, while customers got a $1-off coupon for future video rentals.
  In a suit against Cheerios, the trial lawyers were paid nearly $2 
million in fees, while the customers from the suit received coupons for 
a free box of cereal.
  Mr. Speaker, the examples go on and on and on; millions for trial 
lawyers, pennies for purported and real victims.
  In recent years, State courts have been flooded with interstate class 
action lawsuits, many without merit. In fact, more than 15 million 
civil lawsuits were filed in 1999 alone. That is one lawsuit for every 
18 people in our country.
  Over the last 10 years alone, class action filings in State courts 
have increased 1,000 percent. That is right, 1,000 percent. Why is this 
happening? Well, with so many class action suits and so much at stake, 
most companies are deciding to settle these suits, even if they do not 
have merit, enriching trial lawyers and giving little or nothing to 
victims and costing the rest of us dearly.
  How does it cost us, Mr. Speaker? The cost of litigation accounts for 
one-third of the price of an 8-foot aluminum ladder, it doubles the 
price of a football helmet, it adds $500 to the sticker price of a new 
car, and it increases the cost of a pacemaker by $3,000.
  Mr. Speaker, the American people may not realize it, but they are 
paying $1,200 a year more for goods and services because of lawsuit 
abuse. That is enough to pay a couple of months of day care, purchase a 
home computer for a child, or buy 9 months of prescription drugs for a 
senior citizen. That is what each of us is losing.
  It costs us in other ways as well. Another survey has found that for 
fear of product liability, almost half of small businesses have had to 
withdraw products from the marketplace, and 39 percent decided not to 
introduce new products. Litigation concerns have led several companies 
to postpone or cancel promising AIDS vaccines.
  Class action lawsuit abuse especially hurts small businesses, because 
small businesses are often named as defendants in these suits so that 
the suits can be kept in trial-lawyer-friendly local courts.
  These suits cause huge increases in insurance premiums, causing many 
small businesses to either pay up or go belly up. What a loss, Mr. 
Speaker, because two out of three jobs in America are created by small 
business.
  Mr. Speaker, we must make the class action process more fair. The 
Class Action Fairness Act of 2003 will implement several important 
changes to dramatically improve our judicial system. By expanding 
Federal jurisdiction for truly multistate lawsuits, the Class Action 
Fairness Act will reduce the number of frivolous lawsuits and help 
prevent venue shopping by trial attorneys for favorable rulings. The 
judicial review and approval process will prohibit courts from awarding 
larger settlements to plaintiffs based solely on their proximity to the 
courthouse, and, very, very important, it will provide a much-needed 
safeguard for plaintiffs from being shortchanged by trial attorneys.
  Mr. Speaker, many class action lawsuits are valid, meritorious, and 
address legitimate grievances by groups of people with similar claims. 
But the abuse of this legal tool is overwhelming. It is costing us 
jobs, bankrupting businesses, depleting businesses, and gouging 
consumers. We must have reform.

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