[Congressional Record Volume 149, Number 148 (Tuesday, October 21, 2003)]
[Senate]
[Pages S12948-S12963]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CLASS ACTION FAIRNESS ACT OF 2003--MOTION TO PROCEED
The PRESIDING OFFICER. The Senate will resume consideration of the
motion to proceed to S. 1751.
The PRESIDING OFFICER. The Senator from Virginia.
Mr. WARNER. Madam President, parliamentary inquiry: Is it in order at
this point in time for the Senator to speak as in morning business for
about 10 minutes?
The PRESIDING OFFICER. The Senator should seek consent for that
purpose.
Mr. REID. I could not hear the Senator's request. I am sorry.
The PRESIDING OFFICER. The Senator from Virginia.
Mr. WARNER. The Senator from Virginia simply asked the parliamentary
situation, could I proceed as in morning business for 15 minutes?
The PRESIDING OFFICER. Is there objection? Without objection, it is
so ordered.
Remarks by Service Members
Mr. WARNER. Madam President, the press have reported comments made by
a general officer, General Boykin, and those remarks have been the
subject of considerable concern. They are also regrettably a subject of
great discussion in the Arab press.
I also am concerned, and I rise to advise my colleagues and others of
a recommended course of action. I do so by first reading a letter
signed by Senator Levin and myself dated last Friday. We wrote this
letter jointly in the course of the debate on this floor in response to
the request by the Commander in Chief, the President, for some $87
billion to support our military and to support our reconstruction
efforts in Iraq and elsewhere. I was a strong supporter and was happy
to vote for it. Fortunately, the measure has passed and is now subject
to the conferees.
It is interesting, at the very time that we were passing this
legislation, which are taxpayer funds in considerable amounts, the
object was to provide freedom and quality of life for the people of
Iraq. The people of Iraq largely follow the Muslim religion in
teaching, in tenets, and it is dear to their hearts. At the same time,
the coverage in the United States is about comments made by a
distinguished officer, a man who has shown great personal courage in
the profession as a soldier.
Nevertheless, there are allegations with regard to these remarks that
have been reported in the press. Senator Levin and I felt it was our
duty, as chairman and ranking member of the Armed Services Committee,
to make a recommendation to the Secretary of Defense.
I am about to read that letter we sent on Friday, because I think it
is a very responsible way to deal with a high-profile situation.
Dear Mr. Secretary:
Enclosed are copies of articles that have appeared in the press
recently about public statements allegedly made in uniform by LTG
William G. Boykin, U.S. Army, the Deputy Under Secretary of Defense for
Intelligence. In matters pertaining to religious beliefs, the practice
and expression, the Armed Forces have traditionally permitted as much
latitude as possible,
[[Page S12949]]
consistent with the requirement of good order and discipline in the
military's ability to accomplish its mission. We recognize the right of
every American to free speech. However, as is well established, in
part--I add, part in law--there are limits on the right of expression
for service members. Public statements by a senior military official of
an inflammatory, offensive nature that would denigrate another religion
and which could be construed as bigotry may easily be exploited by
enemies of the United States and contribute to an erosion of support
within the Arab world and perhaps--I underline perhaps--increased risk
for members of the U.S. Armed Forces serving in Muslim nations. It is
the responsibility of the United States Senate to render constitutional
``advice and consent'' with respect to the officer corps. Implicit in
this confirmation process is our judgment that officers, especially
those of flag and general rank, are persons possessing sound judgment
and respect for the rights and beliefs of others. We recommend,
therefore, that you refer this matter to the Department of Defense
Inspector General for a thorough review of the facts and a
determination as to whether or not there has been any inappropriate
behavior by Lieutenant General Boykin. Please advise the committee of
the results of this review.
I now read from a press account of today, which purportedly carries--
and I have to rely on the authenticity of the press reports. I have no
reason to disagree with them--an exchange between Secretary of Defense
Rumsfeld and members of the press corps. The question: Mr. Secretary,
last week here you were referring to Lieutenant General Boykin, you and
General Myers said in effect he has the right to freedom of speech and
the freedom of expression and yet, as we all know, we are responsible
for what we say. How can you keep a man in a senior position on your
staff whose views are so diametrically opposed to those of the
President and to yours? End of question.
Response by Secretary Rumsfeld: Let me make several hopefully
precisely put sentences on this subject. First of all, I appreciate
your question because it correctly indicated that the President's views
and my views, or the President's views are that this is not a war
against a religion. And all I did, despite the columnists and the press
reports to the contrary, all I did was precisely state what the
President and what I think are--I am having some difficulty reading
this but I just have to literally read it as printed. I have not seen
General Boykin's comments. I have since seen one of the network tapes
and it had a lot of very difficult to understand words and subtitles
which I was not able to verify. So I remain inexpert on precisely what
he said and I was told he used notes and not text. And so I will stop
there.
General Boykin has requested an Inspector General review of this
matter, and I have indicated if that is his request, I think it
appropriate.
I know that General Pace, who was apparently with the Secretary, has
talked to him more recently. You may want to comment as well.
General Pace: Yesterday, Jerry and I were just waiting for a meeting
to begin and he just mentioned to me how sad he was that his comments
have caused the furor that they have. There is no doubt in my mind, in
talking to him, that if he could pick his words more carefully he
would. There is also no doubt in my mind that he does not see this
battle as a battle between religions. He sees it as a battle between
good and evil. He sees it as the evil being the acts of individuals,
not the acts of any religion or affiliation with religion. So clearly,
in my very short conversation with Jerry, which he instigated, he is
sad that this is the way that it is, but he is anxious to have the
investigator do the investigator's job.
I commend the Secretary of Defense, and I commend General Boykin. I
think Senator Levin and I took the proper step. We had the option to
put this letter into the public domain on Friday, but purposely I said
to my colleague and to others--by the way, there were a number of
others, as Senator Levin and I just discussed, on his side of the aisle
and on my side of the aisle who expressed concern and asked of us, as
the chairman and the ranking member, what we intended to do. Well, we
made this recommendation and we purposely withheld it from public
delivery, public release, as a consideration to the Secretary, such
that he might take it into consideration as he dealt with this
matter. I just presume he saw it and that he did take it into
consideration. But I think at this point in time, while we have young
men and women patrolling the streets in Iraq, Afghanistan, and other
areas of the world, it is best we try to take this matter, hopefully,
off the front pages, with the representation to the American public and
others that the proper authorities are reviewing it--the Inspector
General of the Department of Defense, and I anticipate my committee and
indeed perhaps others here in the Senate will review the matter. But in
fairness to this distinguished officer, such that he can devote his
full time and attention to dealing with this issue, I am recommending--
not calling for, not demanding but recommending, having spent some time
in the Department of Defense myself--that without any prejudice this
officer be detailed from his present position, a position that deals
with the war on terrorism throughout the world, that he be detailed
elsewhere temporarily until such time as the Inspector General comes
back with his report, at which time we can have further deliberations.
That is in fairness to so many people who are deeply concerned about
this issue, and indeed the men and women of the Armed Forces, and
indeed the integrity of the military itself. When an officer wears that
uniform and he stands before the people of the United States, or
wherever he may be, and he makes remarks, people see in that uniform
that he has been appointed to that position by the President of the
United States of America and confirmed by the Senate of the United
States. In that confirmation process we look at the professional
credentials, we examine all the material that comes before us, but
implicit in our confirmation by this body, the Senate, pursuant to the
Constitution, implicit therein is that we feel this individual should
be promoted and given the rank to which the President has appointed him
because we have confidence in him that he has good, sound judgment--I
repeat that: good, sound judgment--in the exercise of his freedom to
speak.
That is the question that remains to be answered. He is in a very
high-profile position with global responsibilities on the war on
terrorism. I think temporarily, without any prejudice whatsoever,
asking him to take on another assignment until this matter is fully
examined and studied and a report made to the Secretary of Defense and
the Senate is in the interests of all concerned and indeed this
officer.
I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. Madam President, I want to express my appreciation for
the thoughtfulness of Senator Warner. He has served his country for
many years as a marine, a naval officer, as a Secretary of the Navy,
and now the Senate chairman of the Armed Services Committee. I know he
takes this issue very seriously.
I do believe this officer should be entitled to a hearing, have an
inspector general look at these very delicate matters. When we talk
about people's personal religious beliefs as to whether one theology is
valid and another one is not, we wouldn't expect a person of the
Islamic faith to ratify the Christian faith or other faiths to say they
validate the faith of someone else. That is just the way we see things,
as we deal with matters of personal faith.
But I think it is a delicate matter, particularly when a person is in
uniform. I think going forward with a look at this and some thoughtful
analysis as to what would be the right procedure would be appropriate.
I thank our chairman of the Armed Services Committee for his comments.
Mr. WARNER. I thank my colleague because you formerly served as
attorney general. You have full comprehension of the importance of
being fair to everyone. This recommendation I have is in the sense of
fairness. I think it is in the interest of all, and I thank the Senator
for his remarks.
Mr. SESSIONS. I think it would be good for all of us to think a bit
about the subject and what would be appropriate to ask of an officer in
a church proceeding and whether uniforms make a difference and those
kinds of things.
[[Page S12950]]
I was going to speak about the class action reform. Did the Senator
from Illinois have some comments?
Mr. DURBIN. If the Senator from Alabama would yield for a moment, I
would like to address the same issue and then yield back to him to
discuss class action reform.
Mr. SESSIONS. Would 5 minutes be sufficient? I am pleased to yield to
the Senator from Illinois.
The PRESIDING OFFICER. The Senator from Illinois.
Mr. DURBIN. Madam President, I commend the Senator from Virginia.
There are times when he and I have come together and I think good
things have happened. I think this may be such a moment. I hope it is.
I came to the floor to address this issue involving General Boykin,
fully cognizant of the great contribution which he has made to this
country in his military capacity over many years, risking his life and
serving our Nation well, but feeling at this moment in time important
questions need to be asked and answered about the things he said and
did. I believe the Senator from Virginia--I do not want to
mischaracterize his remarks--has suggested he be detailed to another
position while these important questions are asked and considered and
answers are brought forward. Am I correct in that conclusion?
Mr. WARNER. Madam President, the Senator is correct, to simply give
full and complete opportunity and have him temporarily detailed
elsewhere. I think until such time as this thing is resolved
factually--what did happen, what didn't happen--as the Secretary of
Defense said, he didn't fully have all the facts at his command at this
point in time and was asked a question. Although I must say I have read
press accounts where the general was trying to explain what he did say,
you and I know from experience in public life, when you try to explain
what you tried to say, you need time out to do a little study.
Mr. DURBIN. I thank the Senator from Virginia. I do say that is a
very judicious and thoughtful approach. We want to be fair to this man
who served his country well, but we also understand his remarks were
viewed by many in a very negative light at a very critical moment in
our history. I think what we should ask of everyone in the service of
our country is what the President has asked, and that is to keep it
very clear ours is a war against terrorism and not a war against the
Islamic faith or people who adhere to it. We could no more expect
General Boykin to embrace the Islamic faith and its principles than we
would expect someone of the Islamic faith to accept Christian
principles or Jewish principles and values. But we can expect every
member of our Government to be tolerant and sensitive of other people's
values and principles. I think that is a standard we should all live by
in public life, whether appointed or elected.
I think what the Senator from Virginia has done today is an important
step forward. I would say his extraordinary service to this country in
the military and as Secretary of the Navy and in the Senate I think
means his recommendation will be understood as a heartfelt
recommendation and taken seriously by the administration. I hope they
do. I hope they follow his counsel and follow it quickly. The sooner we
can defuse this matter the better for all, including the general, and I
think the sooner it will be that we can bring some stability and
perhaps some coherence to our position so we can fight this war on
terrorism in terms all Americans, including the President, agree with.
I thank the Senator from Virginia.
Mr. WARNER. I thank my colleague.
Muslims and Christians and people of other faiths all over this world
are united in this fight against terrorism. We must make it very clear
of our mutual respect for one another's faith.
I yield the floor.
Mr. DURBIN. I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. I thank the Senators for their comments. I fail, but I
attempt to take my faith seriously. I respect followers of the Islamic
faith who take their faith seriously, who study the scriptures and act
in accordance therewith. We may disagree, but we respect one another.
That is the way I was raised as an American, to respect one another's
faith. I think respect for one another's faith makes me somewhat
sympathetic to General Boykin, who goes to a church and shares some of
his insights and beliefs. But then again he is an officer of the United
States and has a position in a time of conflict, in a sensitive period,
and maybe at one point apparently he may have worn the uniform while he
made those remarks.
I think it is appropriate for us to take some time out and look at
this. I thank the chairman for that.
Madam President, we are now to undertake and begin debate on the
motion to proceed to the Class Action Fairness bill, S. 1751.
Unfortunately, we are seeing a trend in which there are more and more
pieces of legislation that deserve an up-or-down vote being subjected
to a filibuster and 60-vote procedural hurdles. That is unfortunate. We
should proceed with this legislation and discuss it and not be
obstructive about going forward with it.
The Class Action Fairness Act represents modest reform. It is a
restrained bill that will address a number of very serious problems
with the current status of class action lawsuits such as the plaintiff
receiving coupons while trial lawyers pocket millions of dollars in
fees.
This body has a duty to address problems with the legal system. It is
something we are required to do and should not have to overcome 60-vote
hurdles. I am disappointed we may have to overcome another filibuster
as we move forward.
Obstructionism is always available, but I don't believe there is
strong opposition to this bill. There is bipartisan support. If we let
the debate go forward and people honestly consider whether it ought to
be law or not, we would be willing to accept an up-or-down vote. That
is a concern I express.
The distinguished Senator from Delaware is here. He is very
thoughtful on these matters. I know he would like to speak for
approximately 15 minutes. I yield the floor.
The PRESIDING OFFICER (Mr. Alexander). The Senator from Delaware.
Mr. CARPER. I express my thanks to the Senator from Alabama for his
kind words. I appreciate the opportunity to work with him on these and
other issues. Tomorrow morning around 11 o'clock, an important vote
will occur in the Senate. At the heart of this vote, for me, is to
determine whether or not we go forward, Democrats and Republicans, to
actually take up and debate the way we allow people who are harmed,
hurt, or injured--in many cases, by business--to be compensated.
Most would agree that if you or I, as individuals, are damaged by the
actions of another or by the actions of a business, we should be made
whole. I believe the same protection should inure to a group of people
or a class of people who may be harmed or damaged in some way by the
actions or products of some business.
Over time we seem to have lost our sense of balance in the way we
litigate class actions. When our Founding Fathers came up with our
Federal courts, we did not have class actions. We did not have mass
actions. We did not have private attorneys general actions. We did not
have any of that. We had a concern on the part of our Founding Fathers
that if a group of people in one State were harmed by a business or
person in another State, maybe we ought to have a Federal court system,
to ensure that the case is not heard by the potentially biased judges
in the injured party's home state.
The trial bar gets a bad rap in a lot of quarters, but I believe they
play a very helpful and constructive role in this country. They
sometimes do not get credit for that. One of the things they do is try
to make sure, where people are harmed, they get compensated.
Our system has lost the right kind of balance. Too often today--not
always but too often--we end up debating national class action not in a
Federal court but in a local court--in some cases, in a court where the
judges are locally elected and the defendant is placed at a
real disadvantage. I will give an example because this does not make
much sense to me.
Say I were poisoned by food we bought from a fast food restaurant.
Say I decided to sue. If the amount in dispute were less than $75,000,
my case could be heard in State court. If I sue for more than $75,000;
it would be heard in a Federal court.
On the other hand, if thousands of people, or tens of thousands of
people,
[[Page S12951]]
bring a class action against that same restaurant for some alleged sin
they have committed--and it may involve tens of millions of dollars--it
may well end up in a State court, not in a Federal court. That does not
seem right to me.
There has been an effort to try to establish or reestablish the sense
of balance in these kinds of cases. It started about 5 years ago, in
the 105th Congress. Over time, I believe a more thoughtful approach has
evolved and has led to the introduction of a bill this year, S. 274,
called the Class Action Fairness Act. That bill has gone through
hearings, I think in the last Congress, and hearings in this Congress.
It has been through regular order. The Senate Judiciary Committee has
had an opportunity to hold hearings, to debate the bill, to vote on
amendments to the bill and ultimately to report the bill out.
There are a number of aspects of the legislation that recommend it to
me. I am a cosponsor of the legislation, and it enjoys bipartisan
support. Among the original cosponsors are Senator Grassley and Senator
Kohl of Wisconsin. The bill was reported out on a bipartisan vote. More
Republicans voted for it than Democrats, but it had some bipartisan
support.
I will discuss how the class action system will work in our country
if this legislation or something akin to it becomes law. First, it is
not a perfect bill. I have an amendment or two that I want to offer to
perfect the legislation. I noticed Senator Lieberman does as well. I
have talked to other colleagues, including Senator Landrieu, who have
ideas for amendments they want to offer. It is a work in progress. It
is one that can be improved and should be improved.
In order for us to be able to offer our amendments to the bill to
perfect and improve it, we have to go through a vote tomorrow at 11
o'clock on the motion to proceed, which, understandably but
unfortunately, is opposed by leadership on my side. The fear, the
concern, is we will get on to the bill and the opportunity for those
who would like to offer amendments may not end up to be realized; the
opportunity for us to offer amendments, to be fairly heard and vote
will not occur. Therefore, they are reluctant to go to the bill without
some further assurance.
In the end, the only way we know for sure if our amendments are going
to get a fair hearing, and have the opportunity to be debated and
adopted, is to go to the bill, to take it up. I hope tomorrow, when we
vote, that is what we will vote to do.
Let me talk briefly about how I understand our legal system would
work a little differently if this were to become the law of the land.
First, the question is, Is this litigation going to be heard in State
court or Federal court? Under the legislation, for a matter to be heard
in Federal court or for the defendant in the case to be able to argue
successfully that a case ought to be in Federal court as opposed to a
State court, there would have to be a certain dollar amount at stake,
and it would be $5 million. If it is under $5 million, it will be in
State court.
Second is the number of people in the plaintiff class. If you have
less than 100 people in your plaintiff class, this litigation is going
to be heard in a State court.
Third, if a case is filed in a State court, and the defendant says,
no, this ought to be in a Federal court, and they go to Federal court
to try to get it removed to the Federal court, and the Federal court
says, no, this remains in the State court, then it goes back to the
State court. And unless the plaintiffs change the plaintiff class, or
unless the plaintiffs somehow change their complaint, it is going to
stay in State court.
There are no caps on pain and suffering, no caps on punitive damages,
no caps on noneconomic damages, no caps on attorney fees. We leave
joint and several alone.
In some States they apparently do not have class actions; they have
mass actions--a few States such as West Virginia, Mississippi--where
they aggregate a number of individual claims. The question is whether
those are more properly heard in a Federal court or a State court.
I think Senator Specter has negotiated a pretty good compromise in
those instances. In some cases, if it were a major incident, such as an
explosion or a fire or a catastrophic incident that involves people in
one State, then it would basically be handled in State court; if not,
it would be in a Federal court.
Senator Feinstein had an issue on these private attorneys general
cases, which apparently you or I could stand up or any citizen can
stand up and say they represent a group of people on a particular wrong
that has been committed. In some cases that is the way they really go
about class action. Her amendment was adopted as part of the final
agreement. If the bill comes to the floor, the private attorneys
general agreement would be within the purview of State courts, not the
Federal court.
Senator Feinstein also offered I think quite a thoughtful amendment
and one that addresses a concern raised by the Judicial Conference that
we heard discussed earlier. My colleagues will recall the Judicial
Conference is actually headed up by the Chief Justice of the United
States, Chief Justice Rehnquist. But they, from time to time, will
opine on things that are before us and maybe share their opinions with
us. They suggested, when asked back in March, that there were some real
concerns that they had with S. 274, and that it would cause a lot of
cases that are now heard in State courts to end up flooding the Federal
courts. They suggested that we ought to do something about it, that the
Judiciary Committee ought to do something about it.
Well, the Judiciary Committee did something about it. What they did
is they adopted the Feinstein amendment in their markup back in April.
The Feinstein amendment says basically this. It says: The plaintiff
class, the people who are bringing the grievance, if two-thirds or more
are from the same State of the defendant, automatically that case is
heard in the State court. It says, if fewer than one-third of the
plaintiff class are from the same State as the defendant, automatically
it is heard in a Federal court. If the percentage of the plaintiff
class is somewhere between one-third and two-thirds who are from the
same State as the defendant, then it is up to a Federal judge in that
area to make the final decision based on criteria. There are five
pieces of criteria spelled out in the bill.
So, again, if there are more than two-thirds of the plaintiff class
in the same State as the defendant, it is a State matter; if fewer than
a third of the plaintiffs from the same State as the defendant, it is
in the Federal court; and between one-third and two-thirds are from the
same State as the defendant, it is kind of a jump ball. The Federal
judge in the area is asked to make the decision based on the criteria
spelled out in the bill.
Interestingly, the Judicial Conference came back after this amendment
was adopted and the legislation was about to be reported out and they
seemed to suggest, in a letter that they sent to the ranking Democrat
on the Judiciary Committee, that their earlier concerns had been
addressed. I think the Judicial Conference sent a similar letter to the
folks in the House of Representatives suggesting the same thing in the
month of May.
A concern has been raised, a legitimate concern, about what
percentage of cases are now going to end up in Federal court as opposed
to State court under this bill. Some pretty smart people actually took
the data from the last 5 years in States where they collected this data
to look to see--in States such as New York, Massachusetts, Maine, where
data is available--what percentage of cases in those States over the
last 5 years would have ended up in a Federal court as opposed to a
State court. Sixty percent or more of the cases in those states in the
last 5 years would still have ended up in a State court. I think that
is a good point to be mindful of.
I do not know if any of us going forward could say what the future is
going to be, but we should sure look back over the last 5 years and say
if this were the law of the land, again, 60 percent or more of the
cases would have stayed in State court.
Let me close with this thought, if I could. Senator Lieberman is
prepared to offer an amendment, I think a real good amendment, to the
bill that addresses an issue for Connecticut. It is
[[Page S12952]]
similar to an issued raised for Indiana, and similar to an issue I have
heard raised, I think, for New Mexico.
This is the issue that was raised. Let's say in Connecticut you have
a river that has been polluted by a plant that damages people in
Connecticut under Connecticut law. The plant is in Connecticut but
owned by a company in another State. Again, the people who are damaged,
the plaintiff class, if you will, are in Connecticut. The damage was in
Connecticut and there are two defendants, one in Connecticut--the plant
that did the pollution--and the owner of the plant that is in another
State.
What Senator Lieberman has come forth with and said is, in a case
such as that, it ought to really be in a Connecticut court. I think he
is right.
Senator Lieberman will offer an amendment that says in those cases
State law should prevail. They should not be moved someplace else.
State law should prevail. He will offer that amendment if we have the
opportunity--if we have the opportunity--to actually go to the bill,
take it up, and debate it. In order to do that, we have to vote
tomorrow for the motion to proceed.
There is a real test that is going to take place here. If we actually
vote for the motion to proceed and go to the bill, there is a burden of
proof that rests on our colleagues on the other side of the aisle. They
need to act in good faith. We need to actually have the opportunity to
offer our amendments. We need to have the opportunity for a fair and
open debate on reasonable perfecting amendments. If we do, then I think
it may act as a confidence builder and maybe establish a measure of
trust around here where, frankly, there is not too much. On the other
hand, if our Republican colleagues take a different course and seek to
cut off debate and reasonable amendments and not support reasonable
amendments, perfecting amendments, then that sends a different message.
I think there is more at stake for this body than just whether or not
we are going to take up a class action bill. There is a whole lot more
at stake. My hope is tomorrow, when we vote, if we vote to proceed,
that our colleagues on the other side will keep that in mind and that
their actions in the days or week or so ahead will reflect as much.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. VOINOVICH. Mr. President, I rise today to speak on behalf of the
Class Action Fairness Act, a bill to stop unfair and abusive class
action settlements that ignore the best interests of injured
plaintiffs. It tickles the cockles of my heart that this is the first
time I can recall that my colleague from the State of Delaware and I
have spoken out on the same position on a bill before the Senate.
Senator Carper and I have worked together for many years in the
National Governors Association. We have been looking for an opportunity
to collaborate and support legislation on the floor of the Senate. It
is a particular pleasure for me to follow the Senator from Delaware. We
both believe this is good legislation for the people in our districts
and for our country.
This legislation is sorely needed to help people understand their
rights in class action lawsuits and protect them from unfair
settlements. It is also needed to reform the class action process which
has been so manipulated in recent years that U.S. companies are being
driven into bankruptcy to escape a rising tide of frivolous lawsuits
and has resulted in the loss of countless numbers of jobs, especially
in the manufacturing sector.
I believe that for the system to work, we must strike a delicate
balance between the rights of the aggrieved parties to bring lawsuits
and the rights of society to be protected against frivolous lawsuits
and outrageous judgments that are disproportionate to compensating the
injured and made at the expense of society as a whole. I believe that
is what this legislation does, and I am proud to be a cosponsor of it.
Since my days as Governor of Ohio, I have been very concerned with
what I call the ``litigation tornado'' that has been sweeping through
the economy of my State and throughout the United States. Ohio's civil
justice system is in a state of crisis. Ohio doctors are leaving the
State, and too many have stopped delivering babies because they cannot
afford liability insurance. Ohio businesses are going bankrupt as a
result of runaway asbestos litigation. Today, one of my fellow Ohioans
can be a plaintiff in a class action lawsuit that she doesn't even know
about that is taking place in a State she has never visited.
In 1996, as Governor of Ohio, I was proud to sign H.B. 350, strong
tort reform legislation that became law in Ohio for a while. It might
have helped today's liability crisis, but it never got a chance. In
1999, the Supreme Court of Ohio, in a politically motivated decision,
struck down Ohio's civil justice reform law, even though the only
plaintiff in the case was the Ohio Academy of Trial Lawyers, the
personal injury bar's trade group. Their reason for challenging the
law: They claimed their association would lose members and lose money
due to the civil justice reform laws that were enacted. That is how
they got standing in court. It was an incredible situation that I hope
we never see again.
While we were frustrated at the State level, I am proud to have
continued my fight for a fair, strong civil justice system in the U.S.
Senate. To this end, I worked with the American Tort Reform Association
to produce a study titled ``Lawsuit Abuse in Ohio'' that captured the
impact of this rampant litigation on Ohio's economy with a goal of
educating the public on the issue and sparking change. Can you imagine
what this study found? In Ohio, the litigation crisis costs every
Ohioan $636 per year, and every Ohio family of four $2,500 per year.
These are alarming numbers. This study was released on August 8, 2002.
Imagine how these numbers have risen in 1 year. In tough economic
times, families cannot afford to pay over $2,500 to cover other
people's litigation costs. Something needs to be done, and the passage
of this bill will help.
This legislation is intended to amend the Federal judicial code to
streamline and curb abuse of class action lawsuits, a procedural device
through which people with identical claims are permitted to merge them
and be heard at one time in court. In particular, this legislation
contains safeguards that provide for judicial scrutiny of the terms of
the class action settlements in order to eliminate unfair and
discriminatory distribution of awards for damages and prevent class
members from suffering a net loss as a result of a court victory.
This bill is designed to improve the handling of massive U.S. class
action lawsuits while preserving the rights of citizens to bring such
actions. Class action lawsuits have spiraled out of control with the
threat of large overreaching verdicts holding corporations hostage for
years and years. In fact, America's civil justice system had a direct
cost in 2001 of $205.4 billion or almost 2.5 percent of GDP. That is a
14.3-percent jump from the year before, the largest percentage increase
since 1986. Thousands of jobs have been impacted by that litigation.
I emphasize to my colleagues that this is not a bill to end all class
action lawsuits. It is a bill to identify those lawsuits with merit and
to ensure that plaintiffs in legitimate lawsuits are treated fairly
through the litigation process. It is a bill to protect class members
from settlements that give their lawyers millions while they only see
pennies. It is a bill to rectify the fact that over the past decade,
State court class action filings increased over 1,000 percent. It is a
bill to fix a broken judicial system.
I am a strong supporter of this bill, and I urge my colleagues to do
the same.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. Mr. President, I understand the Senator from Illinois
would like to speak on this subject. First, I ask unanimous consent
that Senator Voinovich be added as a cosponsor to S. 1751, the Class
Action Fairness Act.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SESSIONS. I ask the Senator from Illinois how much time he thinks
he might need?
Mr. DURBIN. Twenty minutes.
Mr. SESSIONS. I thank the Chair and yield the floor.
The PRESIDING OFFICER. The Senator from Illinois.
Mr. DURBIN. Mr. President, this is an important debate. The average
person listening to it may wonder why.
[[Page S12953]]
First you have to understand what a class action lawsuit is. I will try
to define it in the simplest of terms. It is when not just one person
but a group of people believe that they have been wronged, either
financially or otherwise, and go to court and bring a lawsuit against a
corporation, for example. So you have a large group of plaintiffs
bringing the lawsuit, usually suing one defendant, a corporation. And
oftentimes, this large group of people who have been harmed don't live
in the same State. They may be from across the Nation. And so they have
to decide where they are going to file the lawsuit. And that is what
this comes down to.
You say to yourself: Why is it so important to understand where you
are going to file a lawsuit? Well, when I explain it from my point of
view, perhaps you will understand why so much time and so much lobbying
is going on behind this whole question about where you can file your
lawsuit.
First understand this: In my State of Illinois and virtually every
other State in the Union, if you are a business and you want to do
business in Tennessee or Illinois or Alabama or South Carolina, you
can't just start up your business. The laws of your State will require
you to register in that State that you are going to do business in. In
my State of Illinois you register so they know you are there, who you
are, what your home headquarters happens to be, and where it is
located. Then you also have to do something in my State and most other
States: You have to say where you can be served process. In other
words, if you are sued by someone in the State of Illinois, and you are
a registered corporation, you have already told the State of Illinois
where they can find you.
Why is that? Because the understanding is, if you want to have the
advantage of selling your product in Illinois to Illinois citizens, you
also have to submit yourself to the jurisdiction of Illinois law. That
law will govern your business in the State of Illinois.
It is very basic. If, in fact, someone believes that your product is
defective, or you have done something wrong, they have to know where to
find you. You don't want a situation where the corporation is
unidentifiable, unapproachable. So every company--major companies in
particular--understands the rules. If you want to do business in
Illinois, you submit yourself to the jurisdiction of Illinois law.
Now let's go back to the earlier example. This group of plaintiffs,
this class, decides they are going to sue XYZ Corporation for something
wrong. Where will they sue them? The corporation has already said, by
virtue of doing business in Illinois, that we are prepared to be served
process. We are prepared to submit ourselves to Illinois laws. We are
prepared to go before Illinois courts. That is a pretty simple outcome.
If you do your business in Illinois, you submit to that jurisdiction.
You submit to those courts. And if people want to sue you, they know
exactly where to find you to bring you into an Illinois court and let
the court decide whether the plaintiff recovers or doesn't recover.
Now, that is the simplest explanation of jurisdiction that I can
remember from law school so many years ago and how it applies to
States. In Federal courts it is a little different. If you have a
defendant from one State and a plaintiff from another State, if you
have a certain amount in controversy--I think it is $75,000--you have
diversity of jurisdiction, so you can go into the Federal courts.
In this case, this whole bill is about in which court you can file a
class action lawsuit. You say to yourself, why does it make any
difference if you are going to go into a State court in Illinois or
into the Federal court in Illinois for your class action lawsuit? Why
would it make any difference? The substantive law is supposed to be the
same Illinois law. Why do you want to go to Federal court?
Therein lies the reason for the bill. The people who are pushing this
legislation understand that Federal courts are more conservative, less
likely to let people have a lawsuit, to certify a class. When it comes
to liability, Federal courts are more restrictive in liability than
State courts.
Don't take my word for that. I will tell you about several cases.
This one is Birchler v. Gehl. Federal law discourages Federal judges
from providing remedies for violation of State law. The Seventh
Circuit--where Illinois sits--stated:
When we are faced with opposing plausible interpretations
of State law, we generally choose the narrower interpretation
which restricts liability, rather than the more expansive
interpretation which creates substantially more liability.
That was a 1996 case. Go to Federal court and it is less likely your
class will be certified and you will receive any damages.
Another case is Accord Werwinski v. Ford Motor Company, a 2002 case.
A class action was brought by purchasers of Ford vehicles. The cars
Ford sold had defective transmissions that cracked prematurely and
inadequately lubricated gears that caused numerous car failures such as
sudden acceleration or shifts into reverse. Plaintiffs who bought the
cars presented evidence that Ford knew about this defect long before it
was corrected but continued selling the cars. The case was originally
filed in State court, but Ford Motor Company removed it to Federal
court which dismissed the claims of the people who bought the Fords. In
affirming the court's decision to dismiss the class action, the Third
Circuit stated that when faced with two competing interpretations of
State law, a Federal court ``should opt for the interpretation that
restricts liability, rather than expands it. . . .''
Those are two cases in the Federal law that explain why we are here
today. The idea is to move the cases out of State court in the hopes
that the defendant corporation that has been sued will have the case
dismissed or, if there are damages, they will be reduced. It is not a
question of whether they are liable or guilty; it is a question of
where they are going to get the best deal.
So the bill before us is an effort on behalf of the corporation
defendants across America to push these cases into the Federal court.
So for all the good reasons given for this class action reform, the
real reason is that defendant corporations don't want to be held
responsible for their misconduct. If held responsible, they want to pay
less money. That is what it comes down to. That is what this is all
about. They want to protect themselves and limit their liability.
Under current law, Federal diversity jurisdiction for a class action
doesn't exist unless every member of the class is a citizen of a
different State from every defendant, and every member of the class is
seeking damages in excess of $75,000.
This bill would create a ``minimal diversity'' standard in two ways.
In other words, you can get into Federal court. First, the amount-in-
controversy requirement is met if the total amount of the damages at
stake exceeds $5 million, notwithstanding the amount of damage suffered
by each individual plaintiff.
Second, diversity can be achieved one of three ways: any member of a
class of plaintiffs is a citizen of a State different from any
defendant; two, any member of a class of plaintiffs is a foreign state
or a citizen or a subject of a foreign state and any defendant is a
citizen of a State; three, any member of a class of plaintiffs is a
citizen of a State and any defendant is a foreign state or a citizen or
subject of a foreign state.
This is what it gets down to. We are trying to find, through this
bill, ways to move more cases into Federal court. So what does the
Federal court system think of this idea?
Well, the man who is at the top of the Federal court system, Chief
Justice William Rehnquist, in a rare, rare occurrence, sent a letter to
Congress saying: Don't do this; don't push these cases into Federal
court. We don't have the expertise, the judges, or the time to consider
the class action cases coming out of State courts into Federal court.
It is understandable.
The Federal court's first responsibility is in criminal cases, such
as on the war on terrorism, and all the concerns we have about criminal
procedure and criminal prosecution. That is their first responsibility.
Then they have their own civil docket, where you have individuals
suing one another, and companies suing one another. Chief Justice
Rehnquist says: Do me no favors, U.S. Senate; don't push all these
class action cases into the Federal courts; we cannot handle them.
[[Page S12954]]
You would think, would you not, that some of the Members of the
Senate, when coaxed by the Chief Justice of the Supreme Court not to
push all these cases into Federal court, might stop. But they will not.
The reason they are pushing this bill is they have their eye on the
prize. The prize is that the corporate defendants found guilty and
liable want to be protected from liability or want their liability
reduced. They don't care what the Chief Justice has to say. They
certainly don't care what the consumers have to say.
I have some examples of class action cases so you can understand for
a minute why these cases should be of concern to everybody. These are
not cases that involve large corporations alone; they involve a lot of
ordinary citizens.
To give you an example, do you remember the Jack-in-the-Box
restaurant scandal a few years back? In that scandal, it was found that
Jack-in-the-Box restaurants were selling products which had been
undercooked and, because of this, they were adulterated, dangerous, and
there were children dying as a result. So a class action lawsuit was
brought against the company that owned Jack-in-the-Box, Foodmaker,
Inc., on behalf of some 500 victims--mainly children who had been to
Jack-in-the-Box and got sick. Those 500 victims came together to hold
Jack-in-the-Box, a Washington State corporation, liable. The court
decided, yes, it should be held liable to the tune of $14 million for
500 plaintiffs.
Now, what this bill tries to do is to move that case out of the State
court in Washington and into a Federal court so the amount of the
verdict--if there was one--would be considerably less. That is good for
the bottom line of that corporation. Is it fair to the families who
went to the Jack-in-the-Box restaurants in States across America and
thought they were going to get a wholesome product, safe for their
children to eat, and then the parents watched their children die from
E. coli, and not have their day in State court, where Jack-in-the-Box
said they were submitting to the jurisdiction? I don't think so.
There was a class action lawsuit in California against Beech-Nut
Corporation and its parent company, Nestle. They were guilty of selling
something they called apple juice which, after being examined, turned
out to be nothing more than sugar water. Parents were buying what they
thought was nutritious apple juice for their infants, and the company
was selling them fraudulently a product marked apple juice but was
literally sugar water and a little coloration. Blame went back and
forth between companies and suppliers, and the court ultimately decided
these two companies, Beech-Nut and Nestle, were liable to the tune of
$3.5 million to be reimbursed to consumers across America.
What companies such as Nestle are trying to do with this bill is
reduce their liability and make it even more difficult for parents,
each of which may have been out only $10 or $20, but each had given a
product to their children that was misrepresented and fraudulently
labeled. This is designed to help those powerful special interest
groups and corporations at the expense of consumers such as those
parents whose children were receiving this adulterated product.
Ford Motor Company had a class action to replace defective ignition
systems in millions of cars that stalled often on the highways.
Mobil Corporation entered into a $14 million settlement agreement in
a class action suit because a fire at a refinery in New Orleans
resulted in sending volatile and hazardous compounds into the air and
it caused great health damage to the people living around them.
Blue Cross and Blue Shield paid a $14.6 million settlement in a class
action suit because they fraudulently billed individuals and failed to
pass on savings to consumers. They ended up paying for it.
American Airlines breached a contract with frequent fliers when it
retroactively changed rules for redeeming mileage awards.
The point is that each and every one of these lawsuits, for each
plaintiff, may seem small. But compounded, they represent a large
amount of liability for the corporation and they represent, in fact, a
large number of people, each with a small recovery.
Frankly, I think there are things we can and should do to make class
action suits better in this country. John Breaux of Louisiana, who has
been a friend of business and has worked with them over the years, has
a good substitute bill. Many who have called me from the business
community say I urge you, for goodness' sake, to take a look at the
Breaux substitute. It is a sensible bill. It will clean up some of the
worst abuses in class action lawsuits. But it is not going to get into
this game-playing that is suggested in this bill that allows defendant
corporations to literally pick the Federal court they want to go into
in the hopes they will have reduced liability or no liability. That is
what it comes down to.
I think this debate before us is a lot more important than some lead
to believe. Some suggest we are merely modifying and reforming tort law
in America. It is much more. It is a question of whether the courthouse
door is open for the average citizen. It is a question of whether those
people, wronged by giant corporations, have an opportunity for a day in
court. Those who back this bill want to close that courthouse door and
make it difficult to open. They want these plaintiffs to end up in a
Federal court where they are less likely to succeed, and if they do
succeed, they will have less in compensation. That to me is unjust and
that is the reason we should oppose this legislation.
I hope my colleagues will think long and hard before they sign on to
this bill thinking it has no impact. It has a great impact on a lot of
innocent people who deserve a day in court. Justice is at stake here. I
urge my colleagues not to accept the easy argument that this is a
simple reform. It goes to the heart of justice in this country, and it
does not affect the real abuses in the system which I believe the
Breaux bill does.
I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. Mr. President, I want to make one thing crystal clear:
I am not here to provide any unfair benefit to any corporation or any
defendant. We want fairness and justice in the legal system. But in a
major class action case, under the current state of the law, a
plaintiff lawyer who represents perhaps potential plaintiffs all over
America--let's say it is a national case--can virtually choose any
county in America to file the lawsuit. He can choose some counties that
have only one judge, and perhaps he knows precisely what that judge
thinks about plaintiff lawsuits. Or maybe he thinks that county has a
most favorable jury.
Let me state what the Constitution says about it. Sure, a corporation
has to register to do business in a State, but the Constitution, in
article III, section 2 of the courts' power says this:
The judicial Power shall extend to all Cases, in Law and
Equity . . . between Citizens of different States. . . .
And corporations are considered domiciled in that place of domicile.
Fundamentally, what has happened over the years is we have eroded the
constitutional protection of diversity by rulings that allow plaintiffs
to sue not only the foreign corporation from another State, but to sue
some entity also as a defendant in that State, and the courts have
concluded you have to have total diversity before you can remove it to
Federal court. That has been a problem, allowing the real payor, the
real target to be subject to jurisdiction in virtually any county in
the country.
I am not here for any injustice. I think we have a pattern of
injustice going on in class action lawsuits. We can make them better.
They would be better in a more objective tribunal of Federal court
where judges have lifetime appointments. They are not so tied to the
plaintiff lawyer who may go to church with them or have contributed to
their campaign or the jurors might not be buddies with some of the
folks, and you have a more objective court. That is just a fact. That
is why the Founding Fathers said what they said.
In sports we talk about home cooking. I know the hometown the
Presiding Officer is from in Tennessee. It is such a wonderful place.
It would treat foreigners just as fairly as local people, but most
communities tend to favor the local guy from somebody
[[Page S12955]]
from out of town. That is why we have it set up so Federal judges hear
these cases and give a little more objectivity, although the judge is
from the local community, at least from the State, and the jurors are
from the region. That is what we are about.
This bill would also fix some other situations. It would eliminate
the coupon settlements. It would eliminate class notices that cannot be
understood. The letter goes out to all the class members in language so
complex nobody can understand. It eliminates negative awards. We have
actually had cases in which the so-called plaintiffs, not even knowing
they are plaintiffs, get a bill for attorneys fees and costs. It would
protect against high awards for one group because they are from one
area of the country, and it would eliminate the payment of bounties for
lawsuits and help knock down some of the blackmail that has been going
on: Filing these huge lawsuits costing so much money and embarrassing a
defendant so they feel forced to pay rather than litigate for years at
a very high cost.
Mr. President, those are the remarks I wish to make at this time. I
will have some more later. I see the distinguished Senator from South
Carolina is here, Senator Graham, who is an experienced litigator in
his own right. I know he wants to speak on this subject.
The PRESIDING OFFICER. The Senator from South Carolina.
Mr. GRAHAM of South Carolina. Mr. President, I will be brief. I wish
to speak about class actions and echo what my friend from Alabama said.
I have tried very hard during my time being a legislator at the State
and Federal level to make sure when legal reform is accomplished it is
done so in a balanced way.
I am not a big fan--I think many of my colleagues know this--of the
Federal Government taking over State legal systems. If you can do it at
home, it is better to do it at home. I am not a big fan of deciding
what is fair before the jury meets. We have honest differences on some
of those issues.
Having said all that, there is a huge need for legal reform. I cannot
tell you one system in America that really doesn't need to be reformed,
the legal system included. My friend from Alabama is absolutely right.
What we are trying to do today is correct an abuse. The Constitution,
as he read to us, envisioned a dynamic where we would have two people
from different States and we would not want to put one person in the
other person's backyard. The Constitution has survived so long and so
well, and it spoke to that and said: Let's take that into Federal
court, a neutral side.
As the diversity clause of the Constitution has been interpreted, it
requires complete diversity of all plaintiffs and all defendants. About
100 years later, maybe 200 years later--I don't know when class action
lawsuits came into being--there is another way of suing people. It has
its place in our society to bring a bunch of people affected by a
similar event in different places to try as a unit rather than doing
hundreds or thousands of individual cases. But this class action
concept flies in the face of why the Constitution speaks about
diversity.
My friend from Alabama is exactly right. It is being abused. We have
a situation where you may have many plaintiffs throughout the country
with a single defendant, and it allows people to go into an area that
is equivalent to home cooking. It really destroys the purpose of the
diversity provisions in the Constitution. What we are trying to do is
correct that. There are no damage limitations. There are no limitations
on anybody making a claim at all. If you buy the idea this is unfair,
then you buy the idea that the Federal court is unfair; that you can't
get a good hearing by a Federal judge. I think that is absolutely
wrong.
Justice Rehnquist has a problem on his hands. He has a lot of cases.
He has a lot of overworked judges, and I am going to get to that in a
minute. I have a way to help Justice Rehnquist. There are a bunch of
people who need to help him, and I will talk about that in a moment.
Mr. SESSIONS. Mr. President, will the Senator yield for a question?
Mr. GRAHAM of South Carolina. Yes.
Mr. SESSIONS. Is the Senator aware that the letter I believe the
Senator from Illinois was referring to is actually a letter from the
Judicial Conference, not from the Chief Justice and, in fact, they have
written another letter on March 26 of this year in which they actually
warm up to this idea, and that the legislation, as we are now
proceeding, answers a number of the questions they had originally?
Frankly, I know they don't want any more work. Nobody does, I guess.
But I think many of these problems may have been solved.
Mr. GRAHAM of South Carolina. Mr. President, I am more informed than
when I began this debate. That is good for me and good for the public.
I did not know that. It makes a lot of sense. I find it a little odd
that people would be opposed to the level that was being portrayed.
The idea that we should not do this in Federal court, I think we can
accommodate it. I am all for having more Federal judges, and we will
talk about that in just a moment, but the bottom line, and the reason I
am voting for this particular legislation is I think it corrects an
abuse. It gets us back to the constitutional model that everyone
envisioned where if you have a diversity--and this is what class action
is all about, bringing a lot of people together from disparate places
and groups to try it at one time, in a place that is convenient to
everybody and in a logical way, that one would want a fair forum. I
think Senator Feinstein's amendment was perfect. If there are two-
thirds of the plaintiffs in any one State, it stays in State court. If
there are half the people in one State, the judge can decide whether to
remove it. If less than a third are in a particular State, then it goes
to Federal court. To me, that is a perfect compromise. It makes a lot
of sense.
I have no problem voting for this because we are correcting abuses.
This is one way to reform our State legal system.
Let me give a quick statement about home cooking. I am sure, as the
Presiding Officer said, in Tennessee people will treat you fairly. I am
sure that is true in Alabama, and in South Carolina I am sure that is
true. But there are places that one does need to know who they are up
in front of. I can remember very well one of the first cases I had as a
young lawyer getting out of law school. It involved a speeding ticket
of a friend of mine. We were going to go to magistrate's court. I was
going to be Perry Mason, and we were going to make this great injustice
right.
The highway patrolman was getting ready to testify and he said:
Hello. And then he said: How are you doing, uncle?
So the judge was the uncle of the police officer. That struck me as
not being quite right, and I said: Your Honor, nothing personal, but do
you mind if we have a jury trial?
He said: Well, Lord, no.
He called his wife out, the aunt of the police officer, and she
called up some of the cousins and we had a jury trial.
The point is, that was not a good experience. Part of it is true and
part of it is embellished, but I do not want anybody to go into a
situation, businesspeople or otherwise, where they believe they are
being dragged to a place that is unfair, and that is what is going on.
There is a group of plaintiffs attorneys out there and they have a
right to use the law to their benefit, and they are using it very
cleverly to their benefit but in a way that is unfair and is hurting
our economy. I am glad and proud to support this reform measure because
I believe it does more good than harm, and that is what we in the
Senate are all up here to do.
I ask unanimous consent to go into morning business or speak as if I
was in morning business.
The PRESIDING OFFICER. Is there objection?
Mr. SESSIONS. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The Senator from South Carolina has the floor.
Mr. GRAHAM of South Carolina. I am trying to change subjects. May I
make an inquiry to the Presiding Officer? Can I speak about Mr. Pryor's
nomination as a judge now? Is that appropriate?
The PRESIDING OFFICER. The Senator is free to speak on any subject he
wishes.
Mr. GRAHAM of South Carolina. Mr. President, I am liking these rules.
Nomination of William Pryor
When we are speaking about judges and whether or not we need judges,
we
[[Page S12956]]
really do. There is a backlog in this country in certain courts, and
one of the people being nominated by President Bush is William Pryor
from Alabama. He has been nominated to a seat that has been declared a
judicial emergency by the Judicial Conference of the United States.
All I can say about this case is that my friend from Alabama should
be very proud of the nominee who has been put forward by President
Bush. Bill Pryor is the attorney general of Alabama. That is a
political job, and ofttimes the hardest thing for lawyers to do is to
be a good lawyer when politics are involved because the thing I love
most about the law is that it is a place to go to where polling does
not matter and where the popular cause does not always win out.
Sometimes the unpopular cause has its day and would win in a forum it
could never win otherwise. Our Founding Fathers were brilliant in
creating a system where popularity meant a lot in the area that we
live, but a courtroom is a place where it should be quiet, and there
are good men and women who are listening to the facts of one's case and
no matter whether someone is rich, poor, regardless of their
background, it is a place they can go to be listened to, where maybe
the crowd would not listen to them. That is what I love so much about
the law. It is a place where people who could not get a fair shake in
the popularity world of politics could get a fair shake where people
would actually listen to their individual claim, where the unpopular
may have its day.
When one is attorney general, they get elected by their people, but
they are also required to enforce the law, and the concept of the law
is to give people who are not popular their day in court. What I am
looking for in a judicial nominee is someone who can be very passionate
about life's issues and questions but can also be very fair. President
Bush has done us a great favor to send Bill Pryor forward. I have met
him. I have talked to him. He is the kind of young man I think most of
us would want our child to grow up to be, the son we would love to
have. He is academically qualified, rated by the American Bar
Association as extremely qualified. People from all walks of life who
know him like him. If my colleagues met him, they would find he is a
charming young man. He seems to be somebody who is sure of who he is
and what he believes.
A lot of this filibustering that is going on now has behind it the
issue of abortion. Special interest politics is very strong in America,
and it has its place. Groups need to ban together and speak out about
things they have in common. I think our job as Senators, when it comes
time to look at judges, is not to judge somebody on whether they are
just pro-choice or pro-life. I am a pro-life person, and I agree with
Bill Pryor. He is a very passionate man. He is a very honest man about
his pro-life beliefs.
There will come a day when there will be a Democratic President and
maybe I will be in the Senate and that Democratic President may send up
a pro-choice person. I think my job is to see whether or not they can
take their beliefs on that issue and put them aside when it comes time
to be a judge.
All I can say about Bill Pryor is that when he was attorney general
he had the obligation to review a statute that the State of Alabama
passed--the Senator may correct me if I am wrong--about partial-birth
abortion, something we just did today. This is an emotional area.
People are very emotional about partial-birth abortion. We are evenly
divided on early-stage abortions, abortions in the early stages of
pregnancy. It is about 50/50. But when it gets to the seventh, eighth,
and ninth month, about 75 to 80 percent of Americans say we should not
be having abortions on unborn children at that stage in pregnancy
unless the mother's life is at stake.
We had about 60 Senators today vote for that. For 8 years now, we
have been voting on that concept. So it is an extremely popular
concept. A lot of people buy into it who are not strictly pro-life.
There are some pro-choice people today who voted to ban partial-birth
abortion. So that is an issue that has a lot of emotion and a lot of
momentum behind it.
He read the statute and he issued an opinion that had to make him the
skunk of the garden party. He issued an opinion that said: I read the
statute and I do not think it will meet constitutional muster.
If anyone has talked to him at all, they know he is a very serious,
pro-life person. So I argue to my colleagues, this is exactly the kind
of young man or woman they would be looking for to promote, to be able
to take the politically popular event, put a good legal analysis on the
event, and make a decision that is not going to sell well. That is
exactly what I am looking for in somebody to be a judge, and the
Senators from Alabama should be very proud they have sent a very noble
person forward.
There are other examples of doing things that just are tough. My
State of South Carolina had in our constitution for the longest time a
ban on interracial marriage. One does not have to be a rocket scientist
to figure out how that all came about. Those of us in the South who
have grown up in the South have had tremendous struggles to be fair to
African-American citizens. There is a legacy there that no one should
be proud of, but things are getting better, thank God. When we look
into the past--and it is in other parts of the country, but it is
particularly true in the South--when that is put into a State
constitution, one can only imagine the passion that went into placing
something like that in the constitution.
Well, now, later on in life, all of us realize that is unfair, that
should never happen, but who wants to be the person to step forward and
get that argument started all over again because it really was never
used?
Well, Bill Pryor, as attorney general, had the courage to tell
everyone, whether they agreed with him or not, that there is no place
in our constitution for this kind of prohibition, and he led a charge
to get rid of it, something I think tells a lot about the young man.
The bottom line is, we are going to have a lot of time to talk about
Bill Pryor because there is a movement to keep him from being on the
Federal bench, a movement that is driven by politics, a movement that,
if it continues, will change over 200 years of how the Senate and the
executive branch work.
The worst thing we could do, in my opinion, is to take the political
disagreements we have in the early part of the 21st century and change
the constitutional process, probably forever, the consequence being
that good young men and women such as Bill Pryor can't become judges
because a few special interest groups don't like them.
If Bill Pryor can't be a Federal judge, given his academic
background, the way he has lived his life, and the qualifications he
brings to the job, then America is hurting because we have let politics
get into the judicial process in an unhealthy way.
There will be many more days and many more hours to talk about this.
I look forward to talking to anybody who will listen about why I
believe so strongly that we should allow the nomination of this young
man to be voted on on the Senate floor--he has come out of committee--
and why he would make a fine Federal judge.
I, again, let the Senator from Alabama know I am sorry that he and
his colleagues from Alabama have to go through this. I am sorry for Mr.
Pryor's family, that they have to go through this. But there will be
some fighting back going on. I urge my colleagues on the other side of
the aisle, if you continue to do this, inevitably here is what will
happen.
The next time there is a Democratic President there will be special
interest pressure placed on our party over here on the Republican side
to do exactly the same thing to some other nominee who may be equally
qualified. The next thing you know, we are going to have a situation
where good men and women will not put themselves through this. They are
going to say it is not worth it.
One of the things that came up in the hearing about Bill Pryor was
that he and his wife were going to take their daughters, I believe, to
Disney World. Disney World had Gay Pride Day that day, and they made a
decision not to go on that particular day.
It is uncomfortable for me to talk about that. I imagine it is very
uncomfortable for Bill Pryor to have to talk about things like that.
That has no
[[Page S12957]]
place in the evaluation process, because what is the purpose of that?
``Yes, we got you now. You must hate gay people because you and your
wife decided not to go to Disney World on a particular day.''
His answer was: It was a family decision that my wife and myself
made. But I promise you that if anybody comes before me as a judge,
that I will honestly and fairly deal with him.
We are getting into areas of people's personal beliefs and family
decisions that are unhealthy, that will drive good men and women away
if that is what you are going to have to put up with to try to serve
your country.
The bottom line is, we are going to have some fussing and fighting
about what is right for Bill Pryor and others, but if we don't wake up
we are going to ruin 200 years of history that has worked and we are
going to drive good men and women away from wanting to serve their
country as a judge and all of us lose then.
I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. Mr. President, I thank the Senator from South Carolina.
I, too, have some very strong feelings about Bill Pryor. He is one of
the finest nominees ever to be submitted to this body. I have no doubt
about that. He needs an up-or-down vote. If he receives one, he will be
confirmed.
We started out the debate tonight talking about the class action
reform bill that is before us. We are seeking to consider the bill, but
we are still debating the motion to proceed to the class action bill. I
see the distinguished chairman of the Finance Committee is here,
Senator Grassley, to speak on that legislation. I will be speaking on
it further tonight, also.
I am pleased to yield to him.
The PRESIDING OFFICER (Mr. Coleman). The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I would like to address my colleagues,
as I did last night, on a bill of which I am the sponsor. It came out
of the Senate Judiciary Committee on which I serve with very broad
bipartisan support. It is called the class action lawsuit reform
legislation. There has been a lot said about that legislation today
that I would like to address.
I did listen with great interest, yesterday and today, to speeches
made by my colleagues across the aisle, and I fear they greatly
misrepresent the bill and the problems facing the class action system,
so I will spend a few minutes setting the record straight.
First, my colleagues are trying to characterize this bill as special
interest legislation and are suggesting that the President is pushing
this as part of some rightwing agenda.
Given that I introduced this bill with my Democratic colleague from
Wisconsin 6 years ago, I am surprised that my colleagues think that
this President Bush's idea is bad and part of some rightwing special
interest agenda because Senator Kohl, a Democrat from Wisconsin, would
not be interested in participating in any effort of a rightwing
conspiracy.
Anyway, Senator Kohl and I put this bill together because there is
unfairness in the current class action system. Lawyers are getting rich
while consumers and plaintiffs are getting worthless certificates and
coupons. The current system has select State county courts deciding
policies and interpreting laws for people that ought to be decided on
the Federal level, in the Federal court, when they affect all 50
States. Some county judge in Illinois should not be making a decision
that is going to affect consumer law of 49 other States.
That flips, as you know, the Federal system on its head, and it needs
to be fixed. Our legislation fixes it. I think that wanting to fix this
problem makes sense. It is not part of some rightwing agenda. It is a
very key economic issue in our country.
This term ``special interest legislation'' is amusing in several
other ways. The real special interest here is the plaintiffs bar; they
are fighting this bill with everything they have. Crafty class action
lawyers who are making out like bandits by bringing frivolous class
action lawsuits and settling cases where they get all the money are the
ones with the big special interest in this legislation because, if this
bill passes, judges will have to scrutinize settlements to make sure
that lawyers are not unfairly getting more money for their professional
services than they ought to get.
Also, if this legislation passes, these very same lawyers will not be
able to do what we call forum shopping--finding the best county judge
someplace in the country who is sympathetic to their cause, before whom
they can go and win for sure.
Of course, we have the Judicial Conference. In this bill, it would be
required to figure out a way to make attorney's fees more reasonable
and settlements more fair. So it looks like the biggest special
interest with a dog in this fight is the plaintiffs bar.
I heard a lot of talk on the floor about how critical class actions
are, and I would be the first to suggest that there is a place in our
legal system for class action suits. They are a great, important tool
to help injured people collectively recover for their injuries in cases
where it might not be worthwhile for an individual to do that by
himself or herself.
Somehow, my Democratic colleagues think this bill is the end of class
action suits, and that is entirely wrong. Our bill leaves the important
tool of class actions right where it is, in rule 23 of the Federal
Rules of Procedure, and similar rules in most of the individual States.
But the bill just allows more class actions, those that ought to be
nationally viewed and obviously national in scope, to be heard in the
Federal courts. In-state class actions will continue right along in
State courts and large national class actions will continue right along
in the Federal courts. Consumers will still have their day in court.
That is very important. Our bill does not take away their ability to
sue as an individual or to sue as a class.
Another claim I heard yesterday was that our bill allows defendants
to remove a case to Federal court at any time, even on the eve of a
trial. Senator Breaux says he is worried about this problem and his
alternative would fix it. The claim is just plain wrong. Our bill does
not change the current removal rule. Under that rule, a defendant can
remove a case within 30 days of receiving notice that a case is
removable. That is a good rule and one we do not need to change. I do
not appreciate people saying we are changing it when we are not
changing it. Our bill will function under that rule so a defendant can
move only a case within 30 days of receiving a complaint or an amended
complaint. To say a defendant under our bill can willy-nilly remove a
case at any time or even while a jury is deliberating a case is just
not true. That is not the case under the current rule. It is not the
case with this bill which does not change the current rule.
There are some other potential problems with the proposal by my
friend Senator Breaux that he talked about yesterday, but I will be
happy to look at any amendments he has available. One thing he said
sticks out in my mind. Senator Breaux suggested if a class of
plaintiffs is all from Louisiana and a class is injured by an out-of-
state meatpacker--that was the example he used--they should be able to
sue the meatpacker in the State court. He describes a pure diversity
case which under the Constitution belongs in the Federal court. He is
proposing to turn constitutional diversity jurisdiction on its very
head. That does not sound like a very good idea to me. His approach
would allow the same rampant forum shopping we currently see in the
system. Senator Breaux's alternative would not fix any of these abuses
and, in fact, his alternative plan makes things much worse.
Another misstatement that concerned me is this claim that the bill
before the Senate is not the same bill that came out of committee; that
the mass action language materialized out of thin air; that we are
trying to pull the wool over our colleagues' eyes. Not true, again.
First, the Class Action Fairness Act--the bill before the Senate, the
bill I am sponsoring--included a provision dealing with mass actions
when it was first introduced. If my colleagues look at the transcript
of the committee markup, they would find, and I think they would
probably remember this, that Chairman Hatch of the Judiciary Committee
agreed to strip the mass action provision in committee on the condition
that Senator Specter and Senator Feinstein worked on compromise
language to be included in the
[[Page S12958]]
bill when it got to the Senate floor. It is in the Record. Nobody is
pulling any wool over anybody's eyes.
Chairman Hatch, Senator Specter, and I collaboratively reworked the
mass action language, had Senator Feinstein look it over and sign off
on it. In fact, we made modifications she requested and then we ran it
by all of the original cosponsors of the Class Action Fairness Act. So
the claim this bill is somehow unexpected and that we are hiding the
ball is an unfair, untrue statement.
I also heard opponents of the bill claim this bill will hurt
consumers, will hurt civil rights litigants, will hurt tobacco
plaintiffs, and will hurt gun victims. The reality is these class
actions will continue to be brought in both Federal and State court
after this bill becomes law. I don't understand what the big fear is
about the Federal courts deciding some of these cases. In fact, I
remind my colleagues many of these cases against tobacco plaintiffs and
gun manufacturers and civil rights violations have for years been
routinely filed in the Federal courts of America. The claim that
somehow taking a big national class action out of State court will hurt
these folks just does not hold water.
Another claim we heard yesterday was Chief Justice Rehnquist opposes
this bill. For months we have been hearing this claim, that the Chief
Justice opposes the bill, and for months we have asked for proof of the
claim. There is no proof. Why continue to quote him? Maybe this claim
comes from a letter the Judicial Conference sent to the last Congress
criticizing certain aspects of the older version of the bill. Justice
Rehnquist is the de facto chair of the Judicial Conference. They must
be making a gigantic leap to claim he had problems with parts of that
old bill. The fact of the matter is, currently the Judicial Conference,
which Chief Justice Rehnquist chairs, supports many things about this
bill and has publicly thanked the Congress for taking up this issue. It
offered a few ideas last spring for determining which cases should stay
in the State courts and which ones should go to the Federal courts, and
our Feinstein compromise addressed some of those very ideas suggested
by the Judicial Conference Chief Justice Rehnquist chairs.
We are going to hear a lot about class actions during this debate.
Many of them will be important cases. Two things I ask my colleagues to
remember regarding a good, necessary class action: First, it is very
possible our bill will not have any effect whatever on the case.
Second, the only effect our bill might have is just to make the case
eligible for Federal court where the case was filed. In fact, many of
the cases discussed yesterday sounded to me as if they would either be
unaffected by the bill or could be proceeded to in Federal court.
I know there are Members of this body who will not ever support this
bill. They will never go up against the plaintiffs bar. They will never
go up against those personal injury lawyers. They would say the present
system, even though it gives lawyers millions of dollars and little old
consumers a coupon for some product they will never want to buy, or for
some part of an airplane ticket for some place they are never going to
go, somehow is OK. I hope they will check their facts before they make
statements against this bill even though they may never vote for it.
They ought to be intellectually correct as they make their points.
I have taken this opportunity to set the record straight. That ought
to give us the number of votes it takes to get beyond a Democrat
filibuster and move forward on a bill that has passed the House three
times in 6 years and ought to pass the Senate and ought to go to the
President. We ought to have fairness in our court system. When
consumers need to be protected, we ought to have consumers getting the
benefit of winning the case, not their lawyer.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. I thank the distinguished chairman of the Finance
Committee, a senior member of the Judiciary Committee, for his
leadership on this legislation for quite a number of years. He is a
champion of commonsense fairness in the legal system. That is all we
are talking about.
I agree with Senator Grassley. I cannot imagine why somebody thinks
that Federal courts, which have been the champion of liberties for
Americans for years and years, are somehow now not fit to handle
complex interstate class action lawsuits. It just boggles the mind. It
is not sound logic. That argument is driven by the objections being
made by the plaintiff lawyers who are interested in these cases. They
want to be able to file them where they choose. They want no erosion of
their ability to do so, and they are calling in their friends on the
other side of the aisle, and some of them are responding.
It was referred to earlier that these are big corporations that need
to be dealt with and we ought to be able to sue them, presumably, in
any county in America you choose to sue them in. I do not believe that
is what was contemplated by our Founding Fathers.
Let me tell you about another major industry in this country, the
industry that is driving the objections to this bill; the plaintiff
trial lawyer industry. A recent Tillinghast--I believe is the name of
it--study showed their income last year was $37 billion. The income of
the ``Trial Lawyers, Inc.'' is larger than that of Microsoft, Coca-
Cola, and other companies of that size. It is a huge industry. They
contribute aggressively to political campaigns, and they promote their
agenda aggressively. It is a free country, and they have every right to
do so. But I would just suggest that those who would argue that the
only wonderful people in this deal are the plaintiff lawsuits may not
be so correct.
Another study has shown 2 percent of the gross domestic product of
this country goes to litigation costs. That is double what the other
countries in the industrialized world are paying for litigation costs,
and it is an extraordinary figure. It is a figure that is paid for not
by just big corporations, it is paid for by every single American when
they take out insurance.
I wish it were not so. If someone makes an error in America today,
and you sue them, and then you seek punitive damages to punish them,
the unfortunate reality is, probably they have insurance or the case
would not have even gone forward. The lawyer would not proceed,
probably, if they did not have money to pay and did not have insurance.
They have insurance, so the punitive damage verdict gets rendered, and
the insurance company pays it. What does the insurance company do? They
raise the rates on everybody who is paying premiums. Innocent people
are paying the penalty imposed by the litigation.
So we really need to think about how this system is working. I want
it to work better. This is a modest step. As I noted earlier, the
Constitution contemplates that lawsuits between people from two
different States would be in Federal court. That is the diversity
clause in the Constitution which has been the way things work for a
long time. But the way things are working now, if you can name one
defendant to be an in-State defendant, then in many instances you can
make the case stay in State court. This process is allows a plaintiff
to essentially pick the forum they want to pick.
If you are suing McDonald's for a problem in their entire system that
affects people all over America, then that case ought to be in Federal
court, unless you are located in the State where McDonald's is
headquartered. That is what I think clearly was contemplated by the
Founders. But by using the device of naming in-State plaintiffs for
suing a defendant in the state he does business in, plaintiff lawyers
have been able to break the diversity and keep it in State court.
We want people who have been injured to be compensated, and we want
to make sure they are adequately compensated and that their
compensation is legitimate and fair, and that the attorneys get paid a
legitimate fee, and not get a huge fee and little or no compensation to
the victims. The ugly truth is, in a lot of these cases, the
corporations really just want the lawsuit to go away and have to take
the plaintiff lawyer's word for what the plaintiff class wants in a
settlement agreement. If the plaintiffs' lawyer says his clients--many
of whom, virtually all of whom, he may never have met--would accept a
coupon for a Blockbuster video, as long as the defendant pays the
plaintiff lawyer's fees totaling $10 million, the defendant may be
willing to pay that to get rid of the lawsuit.
[[Page S12959]]
So the clients get paid little and the attorney gets paid a lot.
There is a conflict of interest and a tension there for people who are
sensitive to it. We are seeing that in these cases. That is what
Senator Grassley was talking about. We are seeing that as a pattern.
This legislation will help deal with that problem, help bring more
integrity to the system, allow the courts to monitor it more closely,
and ensure more fairness for the victims of wrongdoing.
Don't misunderstand me, class actions can be an effective and
legitimate tool. Some people are so frustrated by the abuses that they
just want to attack all class actions. That is not what we are doing
with this bill. Class actions are effective tools for a large number of
people who may have been wronged by a single defendant or by defendants
acting in concert. This can happen in a bank. Banks have been known to
overcharge people. For example, a bank does not pay proper interest on
an escrow account, and they owe each depositor $2 in interest. But
there are 1 million depositors, and it has been going on for 5 years.
The calculations get worked out. It is appropriate that those people
get the interest they are entitled to and often a class action is the
appropriate way to get this done. They ought to be paid fully what the
law says you ought to be paid on the escrow account. The question is,
however, are those plaintiffs always getting the money, and are these
cases being handled in a way that is fair and just? How it works is
what we are talking about. Certainly, 100,000 lawsuits--and they can be
brought that way--each brought individually for a $2 misappropriation
in an escrow account is not an efficient way for lawsuits to be
settled. That is why we allow them all to be brought in one court. Then
all plaintiffs are bound by the result as well as the defendant.
Too often, in recent years, however, these lawsuits have become a
vehicle by which some trial lawyers are cashing in at the expense of
the plaintiff class. The most troublesome aspect is that in many of
these class actions the lawyer does not even know the clients, and in
some cases does not even have a client. In these situations a lawyer
first discovers a potential claim he or she thinks is a good one, and
then runs around and finds a client to be the named client as a vehicle
for the lawsuit. The end result is often not justice for the
plaintiffs, and enrichment for the attorney. I know of a case in which
the client--the named plaintiff--in the case died, and the lawsuit went
on with no real party there for months before the attorney discovered
his client had died. The attorneys were running the lawsuit, proceeding
as they chose, with so little communication with their supposed client
that they did not even know the person had died.
Not always. This is not always the case. A lot of these lawsuits are
handled fairly and objectively, but we are seeing abuses there on a
regular basis.
For some cases they have not even been able to show any damages, yet
the lawyers have still received huge amounts of money. For example, the
Toshiba case. In this case, a class action suit was filed in Texas. It
complained of an entirely theoretical defect in the ``floppy disk
controllers'' of Toshiba laptops. There were no allegations that the
asserted defect had resulted in injury to any user, and not one
customer had ever reported a problem attributable to the defect. Facing
potential liability of $10 billion, Toshiba decided they needed to
settle this claim. They were willing to pay. The class members received
as their payment between $200 and $400 off any future purchases of
Toshiba products. In other words, they got a settlement--a discount on
future purchases of a Toshiba product--only if they bought products
from the defendant again in the future. The two named plaintiffs, the
ones who were working with the attorneys, presumably, got $25,000, and
the plaintiffs' attorneys received $147 million. That is a lot of
money. The fact that most class members only benefitted from the
lawsuit if did business with the defendant in the future is not good.
It seems to me the company was wanting the lawsuit to be over, they
were willing to pay the lawyers whatever fee they asked for, and give
some sort of token settlement to the class members, and get out of this
thing, just to make the suit go away, even though no real damages had
happened to the class members as of that date.
Lawyers are supposed to represent real clients who have been truly
harmed. They are ethically bound to represent the clients' interests
foremost, far above their own interests.
Class action lawsuits are designed to be available when lawyers
realize that an entire class of people have been harmed in the same way
that his client has been harmed. However, class actions should not
become a feeding trough for attorneys. Class actions should not be a
situation where good advocates figure out a way, by adding unrelated
defendants, to file actions in friendly circuits or to use other
methods to utterly maximize the benefit from their side of the
litigation, while ignoring the fairness overall.
I respect lawyers. I believe in them. I have litigated, many cases. I
believe lawyers should maximize the ability to protect their clients.
In my comments about some of these lawyers that say they are protecting
their client's interests but are really protecting their own pockets, I
mean to be critical. Some of the lawyers, in fact, deserve no real
criticism because they are simply choose to file the lawsuit in the
forum most favorable to their client, and they are not supposed to look
at whether that forum is fair to the defendant or not. You have to
admire lawyers that are genuinely seeking to protect their client's
best interests.
But we must, as a legislative body, monitor these cases. We must, as
a legislative body, work to make sure that fairness is occurring in our
courts.
Let me cite the Bank of Boston case filed in my State of Alabama. I
was attorney general of Alabama during part of this time and I heard
about some of these complaints. It is a good example of the class
action system and how it is broken.
In this case a class action was filed by a Chicago attorney in the
circuit court, the county court of Mobile, AL. A Chicago attorney
looked all over the country, and decided to file the lawsuit in Mobile.
The case alleged that the Bank of Boston, MA, did not promptly post
interest to the escrow accounts of its members. The settlement that was
agreed to limited the maximum recovery for each individual class member
to $9 each. However the class action attorneys received over $8 million
in legal fees, an amount approved by the State court. It is shocking
that the legal fees the class action attorneys received, were debited
from the plaintiff class' bank accounts, averaging 5.3 percent of the
balance in each account. Many of the bank members did not even know
they were members of the plaintiff class, did not even know that
attorneys were representing them, and most of all, had no idea that
money would come out of their accounts to pay those attorneys. Imagine
not even knowing you were involved in a class action until you realize
that money has been taken out of your bank account to pay their legal
fees.
What is even worse is that for a number of the accounts, the debit to
the account exceeded the credit they obtained from the settlement,
meaning that after the settlement, more money came out of their account
than went back in.
Dexter Kamowitz of Maine--a plaintiff in Maine that is being bound by
a county judge in Alabama--was one of those plaintiffs. He did not
initiate the class action against the Bank of Boston. However, he
received a credit of $2.19 to his account after the settlement. At the
same time, the class action attorney debited Mr. Kamowitz's account for
$91.33 in legal fees, producing a net loss of $89.14. Such results, as
might be expected, produced outrage from class members in other States.
Judge Frank Easterbrook, reviewing the case as a Federal judge on the
Seventh Circuit Court of Appeals asked: What right does Alabama have to
instruct financial institutions [headquartered] in Florida to debit the
accounts of citizens in Maine and other States?
I do believe that we need to be careful about expanding Federal
jurisdiction. We don't want to do this willy-nilly. But we also need to
be careful to ensure that State courts cannot unfairly include class
members from all over the country and bind them by the verdict they
render.
Federal jurisdiction is currently allowed in cases where there is a
de minimis interstate commerce nexus. We
[[Page S12960]]
know that from civil rights cases and plaintiffs cases and civil cases.
If there is a Federal nexus, you can file it in certain cases in
Federal court. I believe it is certainly appropriate, when we are
dealing with a national corporation, dealing with clients in every
State in America.
The bill offered by Senators Grassley and Kohl would help eliminate
some of these class action abuses. We have talked about class action
problems for a very long time. I believe it is time to stop talking and
get moving and pass a bill that will help class action plaintiffs be
treated fairly in this entire process. I hope we can have a healthy
debate and move this legislation that reforms class action forward.
I am also pleased to see, as I conclude these remarks, the
distinguished chairman of the Senate Judiciary Committee, Senator Orrin
Hatch. He has wrestled with the class actions issues from the
beginning. As a skilled lawyer himself, he understands the issues ably.
He is able to discuss them in a very intelligent way. He understands
the history of this entire proceeding. It is a pleasure for me to serve
with him on the Judiciary Committee. I know at this time he would like
to share some remarks.
I yield the floor.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Mr. President, I am sorry to keep the body a little bit
later, but I do think we need to make some points that really need to
be made. We should be debating the Class Action Fairness Act of 2003
rather than squandering away the Senate's time debating a motion to
proceed to the bill. That has become typical around here. Anything that
can delay, anything that can make it miserable, anything that can make
it difficult to pass legislation or even consider legislation, we are
finding the other side is doing to us.
Yesterday, my colleague from Vermont, the ranking member of the
Judiciary Committee, observed accurately that the days remaining in
this session are numbered and that floor time is indeed precious. But
what puzzles me is if there is such a premium for time, then why in the
world are we faced with a Democrat filibuster on the motion to proceed
to a bill? Usually, if you are going to filibuster, you filibuster the
bill. So we all know what is going on here.
From what I know, based on the remarks yesterday from the ranking
member and others, I understand that there is an objection to
proceeding to S. 1751 because it has been characterized by some as
``special interest legislation.'' What ``special interest'' are we
talking about? Are we talking about the ``special interest'' of
millions of consumers throughout the country who are affected every day
by class action abuses, or are we talking about the ``special
interest'' of the everyday American worker who stands to lose because
his or her employer can't increase wages or offer better health
benefits because of the commercial uncertainties created by
uncontrolled class action litigation, or are we talking about the
``special interest'' of the general American public that is losing
faith in the American civil justice system because of the outrageous
class action coupon settlements that only benefit the attorneys?
On this whole special interest point, I would like to direct your
attention to a recent poll showing that the overwhelming majority of
Americans believe that class action lawsuits benefit lawyers at the
expense of their clients.
Look at this chart. ``Opinions on class action lawsuits; who benefits
most from class action lawsuits.'' Lawyers for the plaintiffs, the
public says--47 percent believe the lawyers benefit the most. They are
right, especially in these frivolous suits we have been referring to.
Buyers of products, 5 percent; companies being sued, 7 percent; 9
percent of the American people think the plaintiffs benefit the most
from class action lawsuits--the ones they are bringing the suits for.
Only 9 percent of the American public think the injured parties, the
so-called victims, are the ones who benefit; 12 percent don't know; 20
percent say the lawyers for companies. So of the total opinion of the
American people in a poll conducted, with an error margin of plus or
minus 3.5 percentage points, a total 67 percent of the American people
believe the lawyers are the ones who benefit from these class action
suits; 67 percent believe class action lawsuits are a virtual bonanza
for lawyers. The public is not too dumb; they are right.
In stark contrast, the poll shows only 9 percent of Americans believe
the class action lawsuits benefit the victims or the plaintiffs
themselves. When the public perception of class action lawsuits in our
civil justice system is so negatively skewed, I find it difficult to
say with a straight face this bill somehow advances ``a special
interest.''
Perhaps the ``special interest'' we are really talking about is that
belonging to one Hilda Bankston. Who is Hilda Bankston? This is Hilda
in the photo. A beautiful woman, a decent person. I can tell you with
certainty she is not a tobacco company. She is not a gun manufacturer
or somebody who pollutes the environment. Hilda Bankston and her
husband Mitch owned Bankston Drugstore in Fayette, MS, a small local
pharmacy where Mitch worked as a pharmacist. The Bankstons were dragged
into hundreds of lawsuits filed by class action attorneys in the State
of Mississippi by virtue of owning the only drugstore in Jefferson
County. Their small business became a prime target for forum-shopping
class action attorneys in pharmaceutical cases.
The Bankstons' nightmare began in 1999 when Bankston Drugstore was
named a defendant in the fen-phen diet drug class action lawsuit simply
for filling a prescription written by a doctor--something they were
supposed to do. Since then, plaintiffs lawyers have filed hundreds of
pharmaceutical lawsuits against Bankston Drugstore. Every time a big
drug maker was sued, even if the company was located in New York, or
California, the plaintiffs' lawyers added Hilda Bankston and her
husband as defendants--this hard-working owner of a single drugstore--
just because she sold that drug from her neighborhood drugstore, which
was her obligation to do.
Even though Mrs. Bankston no longer owns the drugstore, she continues
to be named a defendant in these lawsuits today and is buried under a
mountain of discovery requests because of the litigation. On a more
personal level, Mrs. Bankston describes to us the toll this ordeal has
taken on her both personally and professionally. She testified that,
``no small business should have to endure the nightmares I have
experienced. . . . I have spent many sleepless nights wondering if my
business would survive the tidal wave of lawsuits cresting over it.''
Mrs. Bankston also suffered the loss of her husband when, within
three weeks of being named as a defendant in the fen-phen case, her
husband died of a heart attack. It is stories like Mrs. Bankston's--an
every-day citizen just trying to fulfill the American dream--that makes
this bill so compelling. I think to characterize this bill as appeasing
``special interests'' is not only disingenuous but it ignores the
extensive mountain of evidence showing otherwise. It is pure,
unmitigated bunk and they know it.
I also understand the ranking member expressed surprise and concern
over the lone difference between S. 274 as reported out of the
committee and the rule XIV version of the bill, S. 1751, that we are
now trying to move forward. To set the record straight, we are simply
invoking Senate rule XIV, which is procedurally proper, to simply
accommodate the revised mass actions provision the committee had
removed from the bill during markup on the condition that it would be
modified and replaced in the bill before floor consideration. That is
what we agreed to do. That is all we did. The rule XIV version of the
bill, which is numbered S. 1751, is the identical bill we voted
favorably out of committee, except for the return of the revised mass
actions provision the members on the Judiciary Committee knew or should
have known would be restored into the bill before floor consideration.
Just on Friday, the majority leader asked unanimous consent to bring
up S. 274, substituting with the text of what is now S. 1751. There was
an objection from the other side of the aisle which forced the majority
leader to bring up S. 1751 under rule XIV. To now hear we are somehow
not acting in
[[Page S12961]]
good faith is, at best, a misunderstanding and at worst a deliberate
attempt to mislead. You make the decision, you make the judgment on
that. I know what I think.
By way of background, I want to explain what happened with this
provision. When the original bill, S. 274, was marked up during
committee last April, the committee members agreed to an amendment
offered by Senators Feinstein and Specter striking two provisions from
the bill only with the understanding that the language would be
modified and replaced before floor consideration. The first provision
defined private State attorneys general actions as class actions within
the meaning of the bill. These are statutory actions a private citizen
can bring on behalf of the general public. My colleague from
California, Senator Feinstein, expressed specific concern over this
provision because she believed it would interfere with an existing
California statute permitting such representative actions. This
provision has remained out of the bill.
It is the second provision that necessitated the rule XIV
alternative. This second provision is what we commonly refer to now as
the mass actions provision. A mass action is a civil action seeking to
try the claims en masse of all plaintiffs and defendants in a single
trial, but pursued without the procedural due process prerequisites for
litigating such a matter as a class action. Mass actions are used
heavily in certain States such as West Virginia and have been used to
unfairly consolidate for trial diverse claims of as many as 8,000
plaintiffs from over 35 States against over 250 defendants. These
actions are especially problematic because they proceed without
satisfying any of the standard class action prerequisites, such as
commonality and typicality of claims.
Although the original bill contained a provision that defined mass
actions to qualify as class actions, my colleague Senator Specter
raised a specific concern over the scope of the provision and moved it
be stricken. Because the committee didn't have a meaningful opportunity
to evaluate the Senator's concerns before markup, I, as chairman,
agreed to strike this provision, but only with the understanding that
we would modify the provision and replace it before the bill reached
the floor, which is exactly what we did.
After the extensive post-markup negotiations and other discussions
among my staff and the staff of Senators Specter, Feinstein, Kohl, and
Grassley, we were able to reach consensus on a revised mass actions
provision in early September.
Let me stress there are no surprises here on what we were going to do
with the mass actions provision. Everybody who appeared that day in the
Judiciary Committee markup was aware the bill sponsors would work with
the sponsors of the amendment, Senators Specter and Feinstein, to
develop compromise language. Indeed, we called specific attention to
this understanding in our committee report on S. 274, which has been
widely and publicly available since last July.
As for using rule XIV, which is an effective rule in the Senate, a
rule that can be legitimately used, and has been used in this case, we
gave advance notice to our Democratic counterparts, Senators Feinstein
and Kohl, over a month ago that there was a possibility we would have
to use this procedural device to ensure the operative text reflected
the understanding when the bill was reported out of committee.
I also understand from my staff that these offices then informed,
among others, the ranking member on our committee about the potential
use of the rule when we introduced S. 1751 last week. Simply put, we
were open and above board. We didn't have to be, but we were. We didn't
have to be because the rule is the rule. We are entitled to use it. The
Democrats have used it time after time, as have Republicans. There are
no surprises here. I was the most shocked to find claims that something
somehow or another was askew and not properly handled. Again, that is
pure bunk, and everybody knows it. But I suppose when we have
television in the Senate, we are going to see that type of argument
made from time to time, even though it doesn't hold water and can't
stand the light of day.
We provided advance notice and opportunity to review the text to our
Democratic sponsors and the sponsors of the amendment so they could all
verify that no other changes were made. That is good faith, in my view.
We gave advance notice of our intended use of this device for a
provision we made clear to everyone we intended to modify. So I am
particularly baffled as to why the ranking member of our committee is
calling this a mystery. This is no mystery. We did exactly what we said
we would do when we marked up this bill in committee, and the bill was
voted out with a partisan vote of 12 to 7, but, of course, the
distinguished Senator from Vermont didn't vote for the bill in
committee. That may be what is behind these types of comments. He never
has been for this bill.
I suspect all is fair in love and war. This being war, they can say
whatever they want on the floor of the Senate, even though it is
totally wrong.
I believe rule XIV is the most appropriate way of handling the unique
set of circumstances leading to the revision of the class action
provisions, especially in light of the limited number of days remaining
in this session. Given the number of pressing appropriations issues
facing the Senate in the coming months, I think it makes little sense
to waste valuable floor time debating as a separate amendment a
provision that the key Republican and Democratic members have already
worked out in good faith. It is even more absurd to be forced to debate
a motion to proceed to this bill.
There is only one reason for that. That is to delay, delay, delay,
and hopefully bollix up everything at the end of this session so
nothing good gets done. I ask my colleagues to support the motion to
proceed to S. 1751, the rule XIV version, the Class Action Fairness Act
of 2003.
A Senator got on the floor and made a number of what I thought were
outrageous comments as well pertaining to this being a special interest
piece of legislation. This is a people's bill. The biggest losers under
the current system are the people. Lawyers sue companies and negotiate
settlements in which they get all the money. So consumers get ripped
off twice: Their lawyers rip them off by taking the settlement money
that is supposed to go to them, and then they have to pay for the
payoff to the lawyers at higher prices.
How about tax cuts for the wealthy? That was an argument made
yesterday. The class action bill would not protect the wealthy. It is
the opponents of the bill who are trying to protect the wealthy--the
wealthy trial lawyers in this case. Although not all class action
lawyers are to be criticized, some actually are good lawyers who
actually do what is right within the law in fair class actions that
really are brought to help people. We are talking about the ones who
need to be reformed. Some of these wealthy lawyers who need reform
amass their riches by ripping off consumers in bad settlements. We have
shown that throughout this debate.
Senators raised the issue of defective products, protecting gun
manufacturers. The only successful class action against gun
manufacturers, the only case in which any relief was awarded was in
Federal court. That is what we are trying to do here, and they act as
if the Federal courts are not capable of handling these cases? This
doesn't stop legitimate class actions. It just says there is no longer
going to be these phony forum-shopped cases in corrupt jurisdictions
where there are corrupt judges and where jurors don't realize they are
saddling all of America with these outrageous verdicts that pay off the
attorneys but do very little for consumers or for the plaintiffs who
are supposedly the real victims.
We heard the argument yesterday that Justice Rehnquist is opposed to
this bill. Opponents keep saying Chief Justice Rehnquist opposes the
bill, but whenever we ask for a citation to that opposition, we get
absolutely nothing. They talk about the Judicial Conference letters,
but those letters do not express opposition to the bill that was
reported out of committee.
How about forum shopping? Defendants cannot forum shop. The plaintiff
always gets to choose where to file the lawsuit. If they file in State
court, they can often choose precisely the judge who will hear the
case. All the defendant can do is remove to Federal
[[Page S12962]]
court where the case will be heard by a randomly selected judge, not a
stacked, forum-shopped deal with a corrupt judge or maybe not even a
corrupt judge, but one who just believes the plaintiffs should win no
matter what the facts are. Again, I think that is corruption. It is
nonsense to say defendants can forum shop or that forum shopping is the
purpose of this bill. That is nonsense. Yet that is what one of our
distinguished Senators was saying yesterday.
How about the scalpel argument? Any suggestion that this class action
problem is concentrated in a handful of State courts is wrong. It is a
problem in many places, and if you fix it in one place, the party moves
to some other court in some other town.
How about Madison County, IL, by the way? We had the two Senators
from Illinois speak: One just found Madison County to be the most
circumspect county in the world. The other basically called the judges
and the lawyers, many of whom never practiced law in Madison County,
people who were abusing the system. He even implied some of them were
corrupt.
The figures in Madison County do indicate a problem. Look at the
dramatic increase in the number of class actions, virtually all of
which were nationwide class actions over a short period, an increase
from 2 in 1998 up to over 75 last year. Why are all these people, all
these attorneys from other States flocking to the middle of nowhere to
file lawsuits in which none of the claimants and none of the defendants
are from the area? Do we really need to ask why? We know why. Because
of corruption--corrupt judges, or should we say misconceived judges, to
be nice about it, or judges who always find for the plaintiffs or steer
everything in favor of the plaintiffs or always find class actions to
exist when they really shouldn't. That is corruption.
We hear statistics indicating half of the class actions have been
certified, but what the distinguished Senator from Illinois should have
said was ``certified so far.''
What I find curious is that the distinguished Senator from Illinois
didn't give the number of class actions that were denied. What happens
in Madison County is that the case is filed, and when the lawyer
decides he wants to put the squeeze on the defendant to settle, he
starts moving toward getting a class certified, but sometimes it takes
a while.
By the way, just moving to get a class certified in Madison County
where it is almost granted at will is enough to scare any corporation
because once that happens, that corporation is in real trouble, and so
are that corporation's employees who are likely to lose their jobs,
their income, their health care, and their pensions if the company gets
thrown into bankruptcy.
We have heard allegations that under the class action bill, a
defendant can remove a case at any time, even on the eve of trial. The
current removal statute, 28 USC section 1446(b), provides that a case
must be removed to Federal court ``within 30 days after the defendant's
receipt . . . of a copy of the [complaint] in the action.''
This class action bill would not change that rule. The allegation
that a class action bill would allow a case to be removed to Federal
court at any time is ridiculous. But that is what we are getting used
to from those who argue against this issue.
Now why do they do that? Why can they not see these simple, easy to
see facts of life? Well, I hate to say it but I think it comes down to
the fact these trial lawyers are the biggest hard money funders of many
of these people who will vote against this bill. They get whatever they
pay for. They can rely on their friends in the Congress to ignore what
really should be ethical and good changes in the law and to stand in
the way of those changes. That is what is happening here.
That is taking the sugar coat off, but that is what is happening. The
fact is that we have people in this body who will vote for the trial
lawyers no matter how wrong they may be.
Now, when I say trial lawyers, I am speaking about this select group
of trial lawyers who really are giving the legal profession a bad name,
who are in it for the money so they can support their own political
candidates, live in high style, be influential in their respective
communities, most all of which are outside of Madison County, by the
way, and who can just about afford to do anything they want to do and
are used to doing anything they want to do.
I happen to know a lot of good trial lawyers who are honest and
decent, who really fight hard for their plaintiffs, for people who were
wronged, for victims, and who are disgusted with these trial lawyers
who are taking procedural advantage, monetary advantage, of forum
shopping in this country. It is coming to the point where even the
American Trial Lawyers Association is starting to get split on these
types of issues because they realize that some of these people are
giving trial lawyers who are good, honest, decent, hard-working trial
lawyers a bad name, because they are getting lumped into the term
``trial lawyers'' all the time with these people who are bad actors,
who are in it for the money.
Now, they paint a very big picture about how they are in it for the
little consumers, but look at the coupon settlements. Look at the
amount of money they are getting in fees. Look at the way the consumers
have been ripped off. Look at the cost to society. Look at the
companies that are in shambles and can no longer employ people. Look at
the unfairness of forum shopping. Look at the unfairness of corruption.
I commend trial lawyers who are honest and decent and who bring
decent class actions. They know they can win in Federal court just as
much as they can win in State court, but they also know they cannot
forum shop as well in Federal courts.
Now, one can still forum shop but not nearly like they can in a
number of jurisdictions in this country in certain counties where, as I
say, judges are owned lock, stock, and barrel by various political
interests.
Well, I have kept us long enough, but this is an important bill and
to filibuster even the motion to proceed to the bill, at this late
date, leads only to one conclusion and that is unfairness, delay, win
at any cost, fear to debate this bill straight up and down, fear to
have votes straight up and down. The reason they are afraid is because
they know if Senators were permitted to vote their consciences this
bill would pass overwhelmingly, if it were not for the untold influence
of big class action money.
I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. If the Senator will yield, based on his experience, it
is indeed an unusual thing that we have a filibuster of a motion to
proceed to a bill that has this kind of bipartisan support. Is it not?
Mr. HATCH. No question that we usually do not have a filibuster on a
motion to proceed, because if any of my colleagues are going to
filibuster, they should filibuster the bill. By filibustering the
motion to proceed, they can delay a vote on that for 3 days. Then they
can filibuster the bill and delay that for another 3 days, which eats
up 6 days at a crucial time of the year when we are trying to do all of
the appropriations bills, a prescription drug benefit and Medicare
reform, asbestos reform, judges, a whole raft of other very important
issues, including the Energy bill. So by eating up all this time it
makes it difficult to pass any of these matters, and it makes one
wonder what in the world is behind all of this.
Mr. SESSIONS. I think it is particularly telling, I say to the
Senator, because this is not like the circumstances we had when the
Democrats were in the majority and Senator Daschle called up the entire
Agriculture bill, or the entire Energy bill, which were huge bills,
under rule XIV, that had not been addressed in the committee. This bill
had hearings in committee and we voted for it 12 to 7. There was only
one basic change to the bill.
Mr. HATCH. It was a bipartisan supported bill. Democrats and
Republicans support this bill. It will pass if Senators are permitted
to vote their consciences and are permitted to vote up or down without
the phony delays of a filibuster, especially a filibuster on the motion
to proceed.
By the way, rule XIV is an effective rule of the Senate. Both sides
have
[[Page S12963]]
used that in order to expedite consideration of matters and everybody
understands that, and everybody can then debate.
Mr. SESSIONS. I just recall when Senator Daschle was the majority
leader, he brought up huge legislation outside of the committee that
could not have been passed in the committee. We were forced to debate
that legislation on the floor under rule XIV. To say there is some
procedural problem here, when Senator Hatch has managed the bill
through the committee process, when we have debated the bill, and when
we have voted on the bill in committee, it came out 12 to 7, is
baffling. As far as rule XIV is concerned, everybody was given notice
of what would happen, this is just pure obstructionism. This is just an
excuse to delay, delay, obstruct, obstruct.
We are coming to the end of this legislative session. We have a lot
of things to do. One of the things we absolutely ought to do is to move
this bipartisan bill to fix class action litigation in America. It is
the right thing to do. It has the overwhelming majority support of the
Members of this body. Yes, it has the opposition of a small but
powerful little group of trial lawyers who put a lot of money in the
political campaigns, but it is the right thing to do, and we ought to
move forward with it.
I think there is every reason for those who believe in improving the
legal system to be upset at the obstructionism that we are facing by a
majority leader who has approved this. I think if we had some
leadership on the other side by Senator Daschle, we could move this
bill. To lay back is to allow the trial lawyers to control this matter.
There are a lot of reasons why we ought not have a single state judge
in Madison County, as the Senator said, trying cases that have impact
all over America. That is not good. A Federal court, with a Federal
judge, with a quality group of law clerks, a fine staff, and by far a
smaller caseload than most State judges have--I would say on the
average, in my experience, that the State judges would carry maybe 10
times as many cases on their docket as a Federal judge has on the
Federal court docket. The Federal judges give more attention to the
cases and they have more ability to focus on a case. There is the
ability to issue subpoenas nationwide and make things happen in ways
that are more difficult in State court. So a major class action
involving millions of dollars and thousands of plaintiffs from
different states ought to be tried in Federal court when there is a
majority of the people involved who are out of State.
This reform fixes some of the problems associated with class actions.
It sets up legislation that gives special scrutiny for those abused
coupon-related settlements, where the victims get coupons and lawyers
get big fees.
It guarantees that notifications to class Members to be in plain
English. It scrutinizes against a negative awards, where plaintiffs who
may not have even known they were plaintiffs end up having to pay
attorney's fees in a case they never authorized to go forward. It
provides protection against unwarranted higher awards for certain class
members, just because they are in a certain area of the country. And
there are prohibitions on the payment of bounties.
It makes it more difficult, when you are facing a fair judge who you
believe will rule on the law and give you a fair shake, not in a county
that has a reputation of just hammering defendants in favor of the
attorneys who file the cases. That allows defendants to litigate with
integrity, and not feel they must just pay up, almost in the form of
blackmail, to get the matter away so they can go on about their
business. This is not a fair way to do business.
This bill has a lot of good things in it that will make this area of
the law, class actions, better, more fair, and more objective.
I thank the chair and I yield the floor.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. SESSIONS. Mr. President, I ask unanimous consent the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________