[Congressional Record Volume 149, Number 149 (Wednesday, October 22, 2003)]
[Senate]
[Pages S12999-S13008]
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. Under the previous order, the hour of 11:30
having arrived, the Senate will resume consideration of the motion to
proceed to the consideration of S. 1751, with the time until 12:30 p.m.
equally divided between the two leaders or their designees. The clerk
will report.
The legislative clerk read as follows:
Motion to proceed to the consideration of S. 1751, a bill
to amend the procedures that apply to consideration of
interstate class actions to assure fairer outcomes for class
members and defendants, and for other purposes.
The PRESIDING OFFICER. The Senator from Texas is recognized.
Mr. CORNYN. Mr. President, I ask unanimous consent that the 5
additional minutes of morning business just consumed by the
distinguished assistant majority leader be charged against the
Republican time for debate on the motion to proceed to S. 1751.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CORNYN. Mr. President, in a moment, I am going to ask that the
Chair recognize the distinguished Senator from Nevada for comments that
he may care to make on the motion to proceed and on the upcoming vote
at 12:30 on cloture regarding that issue. I want to perhaps tee it up a
little bit and talk about why I think this motion to proceed is so
important. I am only going to do so for a few minutes, and I will talk
some more after the Senator from Nevada has had a chance to speak, and
perhaps someone on the other side who wishes to speak.
I worry that our system of litigation has simply become too expensive
and too time-consuming to serve the needs of consumers and the public.
Those of us who have represented people in court, whether they be a
plaintiff or a defendant in a lawsuit, know that sometimes after the
lawsuit is over, even though lawsuits invariably have winners and
losers, sometimes it is hard to tell the difference between the two
because the process, as I say, costs so much and takes so much time.
Unfortunately, because of that, a lot of people with valid claims,
who have been dealt an injustice and should have access to our courts
or some means to vindicate those claims, are simply frozen out. That is
something we need to work on not just on this bill, on this day, but
going forward. I hope we will.
This bill, I believe, is very important because, indeed, I think the
purpose of a class action lawsuit is a good one. It does, as originally
intended, serve the purpose of providing individuals with relatively
small claims an opportunity to get access to the court to get justice,
even though it may not be economically sustainable because, of course,
they have to hire a lawyer, pay court costs, and all the like.
The purpose, I believe, is laudable, but as in a lot of areas,
experience and scholarship by the Nation's leading thinkers and just
plain common sense tell us that, with the circumstances that confront
us today when it comes to class action lawsuits, the system is not just
broken but that it is falling completely apart.
Mr. President, I reserve any remaining comments that I may have and,
according to the time that has been split between the parties on this
issue, recognize the Senator from Nevada for comments he may care to
make at this time.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. LEAHY. I thank the Chair. Mr. President, I do not want to
interfere with my friend from Nevada, but I understood we were going
back and forth; is that correct?
Mr. CORNYN. That is certainly fine.
The PRESIDING OFFICER. There is no agreement to that effect.
Mr. LEAHY. Has there been time reserved under the order for the
Senator from Vermont?
The PRESIDING OFFICER. There is time reserved.
Mr. CORNYN. Mr. President, if I may inquire of my colleague from
Vermont, Senator Ensign was here when I started, and then Senator Leahy
came in after I started, so I apologize. May I inquire approximately
how long the Senator from Vermont wishes to speak?
Mr. LEAHY. Mr. President, how much time is reserved under the order
for the Senator from Vermont?
The PRESIDING OFFICER. About 30 minutes.
Mr. LEAHY. I will not use the 30 minutes. I am going to use
approximately 5 minutes of my 30 minutes.
Mr. CORNYN. I certainly ask that the Senator from Vermont be
recognized for that purpose.
The PRESIDING OFFICER. The Senator from Vermont is recognized.
Mr. LEAHY. I thank the Chair. Mr. President, I do take my time under
the order.
As I stated before, I do oppose this bill, a bill that has not had
hearings, has not had a vote in the committee, but when you review it,
you realize--let me be parochial for a moment--this legislation would
deprive Vermonters of the right to band together to protect themselves
against violations of State civil rights, consumer, health, and
environmental protection laws in their own State courts.
That is unacceptable to this Vermonter. The same could be said of all
the other 49 States, and it ought to be unacceptable to the Senators
from each of the other 49 States.
In fact, the country might ask what it says about our priorities that
we are even having this debate. Of the many pressing issues already on
the Senate's plate awaiting action and awaiting time on the floor, all
the appropriations bills that we are required by law to pass by
September 30 and have yet to even be taken up for a vote or debate
should be among our highest priorities. If we are going to tell how the
laws should be made and how the courts should be run, we ought to at
least demonstrate to the American people that we, in the Senate, can
follow the law and do our appropriations bills at the time we are
supposed to.
Instead, we set aside those issues that by law we are required to do,
those issues that are the priorities of the American people, to take up
another priority. We ask: Whose priority is this bill? The bill is a
top priority to special interests that include big polluters and big
violators of the American people's consumer rights and civil rights
past, present, and future.
Class actions are one remaining tool available to the average
American in seeking justice, and some special interests want nothing
more than to weaken the public's hand in class action proceedings.
While the Senate is spending several days debating this bill, think
of those appropriations bills that by law we should have brought up
weeks ago and what is in those bills: not special interests but
American interests, such as funding for the Department of Justice to
provide bulletproof vests for law enforcement officers, the same law
enforcement officers who protect all of us, or how about the money to
put more cops on the streets and to implement the prevention programs
of the Violence Against Women Act? Those are not special interests;
they are American interests.
Despite the fact the fiscal year began 3 weeks ago, we are dallying
with this special interest legislation that benefits large corporate
interests at the expense of individuals harmed by these corporations.
At its core, this bill deprives citizens of the right to sue on State
law claims in their own State courts if the principal defendant is a
citizen of another State, even if that defendant has a substantial
presence in the plaintiffs' home State, and even if the harm done was
in the plaintiffs' home State.
Less than a week ago, with no hearings before our committee, mass
tort actions were included in the bill along with true class actions,
despite the fact
[[Page S13000]]
that when we actually did vote on it in the Judiciary Committee, both
Republicans and Democrats voted to take that out. This simply amplifies
the harm done to citizens' rights, and to the possibility of
vindicating those rights in their own State courts.
It also shows how special interest legislation comes on the floor.
Here is legislation bypassing the committee, legislation that is dumped
on the floor and provisions added to it that had been voted down by a
majority of the committee of jurisdiction, a majority requiring both
Republicans and Democrats to vote for it.
Special interests groups are distorting the state of class action
litigation by relying on a few anecdotes in an ends-oriented attempt to
impede plaintiffs bringing class action cases. There are problems in
class action litigation. There are ways of taking care of that. But
simply shoving most suits into Federal court with new one-sided rules
will not correct the real problems faced by plaintiffs and defendants.
After all, our State-based tort system remains one of the greatest
and most powerful vehicles for justice anywhere in the world. I think
of when the Soviet Union broke up, as I said before on the floor, and
members of the new governing body came to the United States to study
how we do things. I recall a group coming to my office and saying: We
have heard that people in the United States in your States can sue the
Government, sue the State.
I said: That's right.
They said: We have heard further that they actually could win, and
the State could lose.
I said: It happens all the time.
They said: You mean, you don't fire the judges; you don't start over
again?
I said: Absolutely not; this is our system. We set it up that way so
people can go to their State courts and sue.
If this is passed, I would hate to have to explain to those people
from the former Soviet Union that we have taken such a step backward.
One reason that our State-based tort systems are so great is that
there is an availability of class action litigation that lets ordinary
people band together to take on powerful corporations or even their own
Government. Defrauded investors, deceived consumers, victims of
defective products, and environmental torts, and thousands of other
ordinary people have been able to rely on class action lawsuits in our
State court systems to seek and receive justice.
If they cannot, that is what the cheaters count on. We are only
cheating you $5 or $6 or $10 or $15. Why would you sue for that? But if
there are millions being cheated, then you have a chance to do
something. Class actions allow the little guys to band together.
Whether it is to force manufacturers to recall and correct dangerous
products, as we saw with the Bridgestone/Firestone tire recall, or to
clean up after devastating environmental harms, as we saw with Monsanto
in Alabama, or to vindicate the basic civil rights they are entitled to
as citizens of our great country, they are using class actions, and
they should continue to do so.
The so-called Class Action Fairness Act is something that appeared on
the Senate desk with no hearings. It almost looks as if it has been
drafted in the legal section of one of the major polluters of this
country. It would leave injured parties who have valid claims with no
effective way to seek relief.
Class action suits have helped win justice and exposed wrongdoing by
corporate and Government wrongdoers. They have given average Americans
at least a chance for justice. We should not take that away.
I reserve the remainder of my time.
The PRESIDING OFFICER. The Senator from Texas.
Mr. CORNYN. Mr. President, first I inquire as to the remaining time
on the Republican side.
The PRESIDING OFFICER. For the majority, there are 21\1/2\ minutes
remaining.
Mr. CORNYN. I ask unanimous consent that of that time, the last 10
minutes before the vote be reserved for the Senator from Iowa, the
sponsor of the bill, or his designee; that following this UC request we
go to the Senator from Nevada for 5 minutes; thereafter, that the
Senator from Delaware be recognized for 5 minutes for any comments he
may make; and then that the remainder of the time be reserved for me or
my designee.
The PRESIDING OFFICER. Is there objection? Without objection, it is
so ordered.
The Senator from Nevada.
Mr. ENSIGN. Mr. President, I thank the Senator from Texas for
yielding.
We just heard that what class action lawsuits are really about is the
little guys in our system. That may have been the way it was intended,
but unfortunately trial lawyers have abused this system where now--I am
from the State of Nevada where we have these megabucks jackpots--what
this system has become is the megabucks jackpots for the trial lawyers.
It is not about the little guys anymore.
I have several examples I will cite to show exactly how out of
control this system is. Between 1997 and the year 2000, American
corporations reported a 300-percent increase in Federal class actions,
and a 1,000-percent increase in State class actions filed against them.
Class action lawsuits were conceived as an expeditious way for people
with the same grievances to join in a common suit and seek justice in
instances where it would be difficult to do so individually.
Unfortunately, what has evolved now is a means for a select set of
trial attorneys to abuse the class action litigation system and to seek
absurd financial rewards. Whether or not these lawsuits are successful,
the cost of these lawsuits hurts the very people the lawyers claim to
protect, the consumer.
Oftentimes, the so-called clients of these class action attorneys end
up with token awards in the form of coupons or rebates, while the
attorneys pocket millions of dollars.
Just a few examples: In 1997, lawyers got nearly $2 million in fees
and settlement with Cheerios over a food additive where there was no
evidence any consumer had been injured. There was nearly $2,000 an hour
charged for this case for personal injury lawyers. Consumers received a
coupon for a free box of Cheerios. That is really protecting the
consumer.
Southwestern Bell customers were told they would benefit from a class
action lawsuit. Instead, they ended up with three optional phone
services for 3 months or a $15 credit if they already subscribed to
those services. The trial lawyers received $4.5 million in fees.
In a class action lawsuit against Chase Manhattan Bank--and this one
is really good--a State court awarded the plaintiffs a multimillion-
dollar judgment. The trial lawyers walked away with over $4 million in
attorney's fees. Each plaintiff was awarded, get this, a settlement
check of 33 cents. Since the plaintiffs had to claim their check by
mail at the then-cost of a 34-cent stamp, the class action ``win'' for
the consumer was a net loss of one penny.
It is obvious there is a need to reform our class action system. We
need to take it where we have the best jurists in the Federal system.
A couple of years ago, one of the best trial attorneys in Las Vegas
came to me. He actually makes his living doing these things. He said:
If you want to reform the system, take it out of the State courts where
you can just select the cheapest State that there is to sue, and take
it where you have the most talented jurists in the Federal system. That
way the legitimate lawsuits will go forward. Those cases where the
consumer really does need protection will go forward, but we will get
rid of a lot of the frivolous, outrageous lawsuits that are happening
at the State court level.
So I urge that this Senate would proceed to the debate. If there are
amendments, let us have the amendments, but let us at least proceed to
the debate on reforming our broken class action system.
I thank the Senator for yielding me the time. I yield the floor.
The PRESIDING OFFICER. Who yields time? The Senator from Delaware is
recognized for 5 minutes.
Mr. CARPER. Mr. President, I thank the Senator for yielding. This is
an important vote. I think in some ways this may be the most important
vote we have cast in the 2\1/2\ years I have been here. I want to speak
to Democrats first and then to Republicans. I suggest to my colleagues,
my Democrat friends, why it is important for us to vote for the motion
to proceed to take
[[Page S13001]]
up this bill and to improve this legislation before we end up voting
for it and sending it to conference.
First, I say to my Democrat colleagues, the status quo is not
acceptable. We cannot feel good about the system of justice which
exists today. There are many who disparage the trial bar, but I will
say a kind word toward the efforts of many members of the trial bar.
They do important work. They make sure when the little people are
damaged or hurt that there is a way for them to have their grievances
addressed, and when people are harmed to be compensated. That is
important. It is important we preserve that right.
The system that has evolved over the last 200 years with the class
actions, and what I think everyone regards as venue shopping too often
between different State courts and the Federal courts, is a system that
is just out of balance today. We can do better than this. It is
important that we do better than this.
I want to go back and talk about the evolution of the legislation.
When this bill was first introduced and talked about in the 105th
Congress, there were a lot of people who thought that class action
reform ought to be tort reform; that we ought to put caps on attorney's
fees, caps on pain and suffering, caps on punitive damages, dismember
joint and several liability. That is what a lot of people thought we
ought to do 6, 7, 8 years ago. This legislation does not look like that
at all. This is a modest, measured approach to fixing what I believe is
a real problem.
I am not going to get into the weeds and talk about one aspect of the
bill or the other. Some concerns have been raised about it. Some are
legitimate, some are not. I say to my colleagues, particularly
Democrats, the bill is not perfect. This bill can be improved. If it is
not perfect, make it better. We can make this bill better. In the end,
in order for us to have the opportunity to make this bill better, we
have to move to the bill. We have to vote affirmatively for the motion
to proceed. If we do that, we will have the opportunity for me to offer
amendments, as well as other colleagues to whom I have talked on our
side. A number of our colleagues have very good ideas for amendments.
And I invite not only Democrats to support them but our Republican
friends as well.
Republican leadership has indicated in a number of these instances
they will support the amendments that are being prepared to be offered.
Back to my Democrats, as the minority we have three bites out of this
apple to protect our position as the minority. One, we can filibuster
and not vote for the motion to proceed. That is one protection. The
second protection comes when we reach cloture on the bill and the
decision comes do we actually vote on the bill, do we go to cloture.
That is a second bite out of the apple. The third bite out of the apple
is if there is a conference report between the House and the Senate,
and the conference report comes back, and the Republicans have not
acted in good faith, the majority has not acted in good faith, we have
a third bite out of the apple. I believe we have those protections down
the road and especially the second, on the motion to proceed.
I say straight out to our Republican friends, if we approve the
motion to proceed today, we actually get to the bill today, and have
the opportunity in the next days and week to offer amendments, if my
Republican friends do not act in good faith--and I believe they will--
but if they do not act in good faith, not only will I oppose cloture on
the bill, I will help lead a fight against cloture.
I want us to be able to offer our amendments. I want to see a lot of
those amendments adopted. If that happens, we can improve this bill
further and then go to conference further down the line.
The last thing I want to say, in my view, there is more at stake than
the motion to proceed, and I have suggested this to Majority Leader
Frist. What is at stake is whether we are going to be able to work
together on a difficult and contentious issue; whether or not in this
instance we are going to be able to maybe take what could be a very
good experience, very positive experience of walking together across
party lines on a tough issue, and maybe apply that on other difficult
issues we face.
So there is a responsibility on both sides: for us as Democrats to
offer reasonable amendments, to join in good faith in the debate, but
also for our Republican colleagues to support those good amendments and
act in good faith on their own. If they and we act in good faith, we
could end up with good policy, which is what makes good politics. That
is the potential. It is important we all realize that.
The PRESIDING OFFICER. The minority leader.
Mr. DASCHLE. Mr. President, I would like to pick up where the
distinguished Senator from Delaware left off because I could not agree
more. This is an issue that should not divide us politically or even
philosophically. This is an opportunity for us to find common ground
and work together. That is what many of us have sought to do from the
very beginning, what we have tried to do with our colleagues on the
other side and with others, because we believe there is ample
opportunity to find common ground if we only seek it.
I don't know the number of times I have offered to sit down, along
with many of our colleagues, with Senators on the other side in an
effort to find the common ground we are looking for. For whatever
reason, none of those offers have been accepted. So we find ourselves
in a very difficult situation this morning. If I had the same
confidence the Senator from Delaware had that we could offer amendments
and they would truly be considered and perhaps some of them adopted, I
would have no hesitation to support the motion to proceed.
Unfortunately, on too many occasions now, especially involving tort,
that has been an elusive goal, to say the least. We have not had the
opportunity to have amendments offered in good faith. They have been
rejected, one after the other, on a party line vote. As a result, we
are left with no recourse but to simply say: Look, let's find a way to
resolve this matter. Let's negotiate a bipartisan solution and let's
resolve this issue.
I would even use the current circumstances as an illustration of what
it is I am talking about. The Judiciary Committee passed a bill that
enjoyed bipartisan support, signed by several of our colleagues on this
side. They sent it to the floor. We fully expected the debate would be
about that committee bill.
But that is not what the issue is this morning. The issue is whether
we should support a motion to proceed to a bill that was ``rule XIVed''
onto the calendar in spite of what the Judiciary Committee did; I would
say in direct conflict with what the Judiciary Committee did.
This bill is not just a class action bill. This bill is also a mass
tort bill. The committee voiced its opinion on mass tort. They
objected. On a unanimous vote, mass tort was excluded from the class
action bill.
Lo and behold, it is right back in the legislation today. So we will
be voting on the motion to proceed not only to class action but to mass
tort, and mass tort for many of us is a woman's issue. It is the Dalkon
shield, it is silicon breast implants, it is fen/phen. It is a lot of
issues that would not have been addressed had this legislation been in
law when those cases were taken up. It is that simple. Mass tort is
something most of our colleagues did not bargain for, but it is in this
bill.
The second issue has to do with the right of removal. Defendants now
have an opportunity to remove a case from State court within a 30-day
snapshot. They do that. Everyone understands that is their opportunity
to move to a different venue. Under this legislation, they strip that
legislation. At any time during the consideration of a case they can
remove themselves from that particular court's jurisdiction. That is
unprecedented. You talk about forum shopping. I can't think of a better
invitation to forum shopping than the right of removal at any time up
to the time the verdict is about to be announced. That is in this
legislation.
This is bad legislating. It is bad legislating because it overrides
the rules of the committee, because it overrides the voice, the
opinion, the position of the committee on some of these key questions.
Frankly, it overrides the consensus that I know we can establish
together.
I have said as late as yesterday to the majority leader, I want to
sit down with you. I want to negotiate some way
[[Page S13002]]
to resolve these issues. Do we recognize there is abuse? Absolutely.
But this legislation is killing a housefly with a shotgun. There is a
lot of collateral damage that is going to be done if it passes.
I am very hopeful we all recognize the distinguished Senator from
Louisiana has offered a viable alternative that recognizes there are
times when class actions ought to be held in State court, but there are
times when class actions ought to be held at the Federal court level.
We can recognize that there are those times when there is a Federal
jurisdictional question.
Whether it is his language or something like it, we can work with our
colleagues on the other side. But the only way that is going to happen
is if we sit down and do this together. That is what I am offering.
That is why I opposed the motion to proceed, because that has not
happened yet. I am hopeful it will.
Whether or not we can succeed in establishing that important priority
with this vote remains to be seen. I am hoping my colleagues will join
me.
I yield the floor.
The PRESIDING OFFICER. The Senator from Texas.
Mr. CORNYN. How much time remains for the Republican side?
The PRESIDING OFFICER. Eleven minutes.
Mr. CORNYN. I ask unanimous consent to revise the previous unanimous
consent agreement to provide for 7 minutes for Senator Grassley or his
designee, 3 minutes for Senator Kohl, the Senator from Wisconsin, and I
reserve the remaining time for myself, such as remains.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Wisconsin.
Mr. KOHL. Mr. President, I rise in support of the Class Action
Fairness bill. What those of us who are supportive of this bill are
trying to do is simply get it to the floor where it can be debated,
amended, and even filibustered, so I do not understand the objections
of those who want to prevent the bill from even reaching the floor.
Those who do not support the final bill as it would emerge can vote
against it and can even filibuster it, which would require 60 votes at
that time.
My fear is those people who do not even want the bill to reach the
floor in fact do not want--and I will bet we will not have--any class
action reform. I believe many of those on the other side on this issue
want to put this whole question of class action reform to bed and not
address it at all. I would be willing to bet any of them we will not
have any class action reform if in fact this bill we are proposing is
prevented from even reaching the floor at this time.
The bill that is being voted upon at 12:30 is a bill that has gone
through the committee process in the most fair and democratic of ways.
It has been years in the making. It has been amended at the committee
level by Democrats as well as Republicans, and finally voted out of the
committee on a bipartisan basis. This is the way bills are supposed to
reach the floor for debate and amendment and final approval or
disapproval. I cannot understand legitimate motivations of those who
are in opposition, as they have expressed themselves, except as it may
be their motivations are to kill class action reform entirely in this
session of the Congress and for as long as we can look ahead and
foresee.
I urge my colleagues who want to see class action reform to allow
this bill to reach the floor where it can be, as I said, fully debated
and fully amended. I point out to them once again if in fact there is
that kind of opposition to the bill that would finally emerge for final
vote, they can require 60 votes. So all of their concerns as they have
been expressed in this debate can still be addressed in that final
vote, which could be, in fact, a filibuster vote.
I urge my colleagues to vote yes on the motion to proceed. I hope
very much that we will have a chance to debate class action reform.
I thank the Chair.
The PRESIDING OFFICER. The Senator from Louisiana.
Mr. BREAUX. Mr. President, I yield myself 5 minutes under the time
remaining.
Mr. President, my colleagues, I am for reforming the so-called class
action litigation system we have in place. I think a strong majority of
the Members of the Senate also favor a reform piece of legislation
passing this body and ultimately being signed into law. But this is a
two-way street, as everything we have to do in this body has to be. A
51-to-49 Senate means that neither side has the ability to do whatever
they want without negotiating with the other half of the Senate. Either
side has the potential to stop anything. That is what happens so many
times in this body during this period of time we are in now where both
sides can say, we are not going to do it this way, or, do it my way or
don't do it at all. The clear result of that is nothing gets done. The
end result is that both sides can blame the other side for failure in
getting anything accomplished.
For those who truly want to get something done and worry less about
who gets the credit, it is obvious that the way to do it is to sit down
and negotiate and try to reach an agreement. I am absolutely convinced
that an agreement that addresses the real problems dealing with class
action could be reached in short order and allow us to get as many as
70 to 75 votes for a real class action reform bill. But that has not
happened. It has not happened because my colleagues on the Republican
side have generally said, we have what we want and we want to pass the
bill that we wrote, even though they wrote much of it after it had
already left the committee, as the distinguished Democratic leader
talked about just a moment ago.
I have introduced a bill--S. 1769--which I think addresses all of the
concerns people have raised about any potential abuses dealing with
class action litigation. The idea would be for us to sit down with our
colleagues and negotiate between their version and the version I have
introduced to see if we can reach common ground and pass this in less
than an hour with a substantial three-fourths of the Senate probably
voting for it.
Many people have said the problem is forum shopping; many plaintiffs
try to find the best forum they can possibly find and litigate in that
forum for the best judgment they can get. My legislation says, no, we
are going to follow principally the same rules the committee set out.
If a third or fewer of the plaintiffs are from one single State, it
belongs not in State court but in Federal court. That is the same
situation that the committee has reported out. We are in agreement. If
between one-third of the plaintiffs are from one State and two-thirds
are from one State--if between one-third and two-thirds have been
injured in Louisiana and filed suit--then Federal court decides whether
it belongs in Federal court or State court.
That is principally the same finding that the committee bill has. We
are in principle agreement in that regard. The Federal court makes the
decision. For those who want it in Federal court, a Federal judge
looking at all of the particulars of the litigation will decide whether
it belongs in his or her court on the Federal level or whether the
State has a greater interest in trying it on the State level. There is
no disagreement.
But one area of disagreement I would like to point out is the
situation of what happens if over two-thirds of the plaintiffs happen
to be from one State, such as Louisiana. It is a big difference in what
we do here. If two-thirds or more of the plaintiffs suffer injuries in
my State, or any particular State, by the alleged defendant who is
doing business in that State, who sells products in that State, and who
must follow the law of that State passed by the State legislature, my
proposal says that belongs in State court.
In the committee bill as drafted, they say even if every single
person has been injured or has allegedly been injured in my State of
Louisiana by a defendant allegedly in violation of the laws of
Louisiana, passed by the State Legislature of Louisiana, if the
defendant who caused the injury--even though they do business in my
State and sell their products in my State, even if they have multiple
stores in my State and are doing business and taking money out of my
State for the things they sell, and if the defendant happens to have
citizenship of Delaware, where many corporations are incorporated, or
any other State, that doesn't belong in State court anymore; we are
going to
[[Page S13003]]
put that in Federal court, which is already overburdened. The Federal
judiciary says they don't want that jurisdiction.
Justice Rehnquist says he is opposed to it for that reason, among
others.
This legislation says: No, we are going to put it in Federal court,
even if everybody who is hurt and who is residing in the State, and the
injuries were caused in violation of State law passed by the State
legislature, because the defendant happens to have citizenship and is
incorporated in another State, we will send it to Federal court.
People much more articulate than I have talked about this. One of the
distinguished writers who has looked at this, Professor Arthur Miller
from Harvard Law School, said the following:
S. 274 goes too far in broadening Federal diversity
jurisdiction. S. 274 would place in Federal courts most class
actions if the defendant is a citizen of a State that is
different from any member of the plaintiff class. I can find
no justification for denying State courts the right to hear
cases primarily involving its own citizens who claim they
have been harmed by a violation of their State's laws.
That is what the committee bill does. That is a principal reason
their great expansion of Federal jurisdiction is so wrong.
I had a case in Louisiana. There are many crawfish farmers in
Louisiana, probably the only State that has crawfish farmers--and maybe
a few in the State of Texas. But they allege injuries because some
chemical manufacturer had sold them pesticides and killed all of the
crawfish in Louisiana. Every single plaintiff was from Louisiana. The
injuries occurred in Louisiana. They sold the product in Louisiana.
They were doing business in Louisiana selling the products. The State
law of Louisiana said what they did was illegal and wrong and the
plaintiffs deserved some compensation for the injuries they received.
But no; under the committee bill, just because the defendant chemical
manufacturer happens to be out of State the Federal court is going to
be brought in to interpret State law that has been interpreted by the
State supreme court and passed by the State legislature applying it to
every State resident of my State.
That is not a legitimate way of handling cases that are uniquely a
State concern, covered by State law and affecting only State injured
plaintiffs in these cases. That is not what we want to do.
Our legislation also says that one of the abuses is these coupon
sellers. We solved that problem in the past. Attorneys were filing on
the number of coupons that may have been issued in settling a case for
a defective product. You could go to the store and buy the product for
a discount. The lawyers were being paid on the total number of coupons
issued--not the ones actually redeemed. The attorney fees would be
based only on those who exercised the right of buying the product with
the use of their coupon.
As many people said, this is forum shopping, which the distinguished
minority leader, Senator Daschle, talked about. They don't want forum
shopping for plaintiffs, but they don't mind giving it to the defendant
because the defendant, under this legislation, could ask that the case
be removed out of State court at any time. Before the jury gets the
case, if they think it may not go well, they will file a motion to move
it to another court.
That is not right. How many times do they have a bite at the apple?
Things aren't going very well anymore; we had better try another court.
Let's go to the Federal court because we may lose in State court. If
forum shopping is bad for plaintiffs--which we correct--it is no more
justifiable for defendants to be able to do it, which is what this
committee bill does.
I am only saying we need to say no to bringing this bill up until we
have had a chance to talk about these issues in a serious form.
If I offer my amendment and the bill is brought up, they will move to
table it, and, bingo, it is all over with, and we all go home. That is
not the way to legislate on something as important as this. We need to
negotiate. We need to talk about it.
What we are trying to say is, don't bring this bill up now. Vote
against the motion to invoke cloture and let us see if we cannot sit
down and talk about the differences that are not that great but hugely
important--not that many but very important--between the two versions
of the bill. I think we can put them together and get 75 votes, call it
a day and everyone can be proud of the product we have produced.
I reserve the remaining time.
The PRESIDING OFFICER. There are 5 minutes remaining.
The Senator from Texas.
Mr. CORNYN. How much time is on the Republican side?
The PRESIDING OFFICER. Seven minutes.
Mr. CORNYN. I commend the Senator from Louisiana for his constructive
efforts to get involved in class action reform. He has made a good
contribution to the debate by offering some additional ideas for those
that were considered in the Judiciary Committee when we voted this
Class Action Fairness Act out of the committee.
It makes no sense to me to say vote against bringing the bill up in
order to fix class action abuse. If people are serious about class
action reform, then they would want us to bring up the bill. They would
vote in favor of cloture and we would simply have a debate, as we do on
all legislation on the merits of the bill, as voted out of committee or
at least brought up for consideration here with whatever amendments may
be offered.
The Senator from Louisiana has some constructive amendments, no
doubt, and he has shown himself to be a master at bridging the gaps in
this body and achieving consensus. He is to be commended for it. We
need more people willing to look at the merits of legislation and vote
on those merits. That is all we are asking.
I point out that, while there are a lot of different newspapers in
the country, one that watches what happens in Washington, in
particular, is the Washington Post which has observed that:
. . . ``clients'' in class action lawsuits get token payments
while the lawyers get enormous fees. This is not justice. It
is an extortion racket that only Congress can fix.
Very strong words. Not mine but those of the editorial board of the
Washington Post.
Others who should be in a position to know a lot about this subject--
for example, the Judicial Conference of the United States, chaired by
the Chief Justice of the U.S. Supreme Court--have acknowledged problems
with the class action system. While they are not in the business of
lobbying for specific language, certainly we want to pay attention to
some of the suggestions they may have about ways we can correct some of
those problems. That is what this is all about.
This is some of the language I was referring to, obviously, speaking
of the Judicial Conference:
. . . thanked Congress for ``working to resolve the serious
problems generated by overlapping and competing class
actions.''
Ultimately, I think we are all interested in the same thing; that is,
that people who are hurt due to the wrongful conduct of others have a
means to redress those injuries and make sure the wrongful actor pays.
But we are not in the business of making sure that a few benefit at the
expense of many. That is what happens now with an abusive class action
system which enriches entrepreneurial class lawyers who find a so-
called class representative and are then able to manufacture a huge
lawsuit where they reap millions of dollars in fees and the consumer
gets a coupon.
There is an old country and western song ``she gets the gold mine and
he gets the shaft.'' In this instance, it is the lawyers who get the
gold mine and consumers get the shaft in modern class action
litigation. We ought to be about fixing that. We cannot fix it until
this matter comes up on the motion to proceed and at least 60 Senators
vote on the motion to proceed.
I hope my colleagues will heed the eloquent words of the Senator from
Delaware, Mr. Carper, and Senator Kohl, my colleague on the Judiciary
Committee, and vote to bring the matter up.
I reserve the remainder of our time.
The PRESIDING OFFICER. The Senator from Louisiana.
Mr. BREAUX. Mr. President, I yield myself the time I consume.
I echo the remarks of the distinguished Democratic leader which
indicate another reason why we should not be voting for cloture on this
bill; that is, the changes that were made to the bill after it got out
of committee. I refer to it as being the ``committee
[[Page S13004]]
bill,'' but the bill before the Senate is not the committee bill. A
funny thing happened on the way to the forum: the committee bill was
changed. You report one thing out of committee, you expect that will be
the thing that comes to the floor--maybe some technical changes, a
period here, a paragraph there--but they changed the substance of the
bill from the time it left the committee.
If we were dealing with a committee bill, you could make a legitimate
argument that you should proceed to the bill that the committee
reported. But what they are asking us to do is proceed to a bill that
the committee did not report. In fact, it is substantially different
from the committee bill. That is not normal procedure.
That is why the Democratic leader has suggested what we ought to do
is say: Time out. Put together the heads of the people interested in
this and see if we cannot produce a package where we could get three-
fourths of all the Senators voting for it. It has substantial changes
made by the committee managers. They certainly have a legal right to do
it, but from the terms of policy and how we legislate, if you have a
clear vote in the committee to do one thing and then come out and do
something entirely different on a key part of the bill, that is a
substantial change that did not come through the committee process.
What I am saying is we ought to be talking together, both sides
talking together, in order to get a substantial vote to enact this
legislation.
I support class action reform. I think our bill, S. 1769, has, in
fact, clearly addressed the issues of forum shopping and the coupon
settlements. We clearly spelled out when cases would be in State court
and when cases would be in Federal court. We do not reach out and say
that even if every single injured party was from one State and was
injured in violation of the State laws passed by the State legislature
and previously interpreted by the State supreme court, that just
because a defendant happens to be incorporated in the State of
Delaware, for instance, that somehow yanks that case out of State court
which is best suited for interpreting State law and brought into
Federal court which the Federal Judiciary Conference already says they
do not want because they have more business than they can handle,
resulting in further delays. That is not what this bill should be all
about.
Therefore, I suggest we say no to the cloture vote and that we sit
down and work out the minor differences but important differences
between S. 1769 and the bill in the Senate which has never come through
the committee process. That is unfortunate. That is the main reason we
should say no to cloture at this time.
Mr. GRASSLEY. Mr. President, I rise to ask my colleagues to vote in
support of the motion to proceed to S. 1751, the Class Action Fairness
Act of 2003. This bill is a fair and balanced solution to the growing
problem of class action abuses, and it has solid bipartisan support.
The process that was used to get to the floor was open and fair. The
bill deserves to be debated, and my colleagues should support cloture
on the motion to proceed so that we can get on the bill and consider
amendments.
This modest bill will preserve class action lawsuits as an important
tool that brings representation to the unrepresented. But it will also
go a long way toward ending class action lawsuit abuses where the
plaintiffs receive coupons of little or no value, while their lawyers
receive millions. It makes you wonder who benefits from these class
actions: the consumers or their lawyers? Given the trial lawyers'
opposition to this bill, I think we know the answer to that question.
Both forum-shopping plaintiffs' lawyers and corporate defense lawyers
are abusing the system. Lawyers are choosing plaintiff-friendly county
courts to hear national class action cases, and defendants are shopping
around for the best settlement deal regardless of whether it is the
right thing to do. The lawyers file competing class actions, and enter
into collusive settlements.
Some class action lawyers manipulate pleadings to avoid the removal
of cases to the Federal courts, even if it hurts their clients. Some
even name an innocent local defendant just to beat Federal
jurisdiction. In the end, it is the consumer that is the big loser.
This just isn't right.
The Class Action Fairness Act of 2003 tries to fix the more egregious
abuses. The bill includes a number of provisions to help protect class
members. It requires that notice of proposed settlements in all class
actions, as well as all class notices, must be in clear, easily
understood English. It requires that State attorneys general be
notified of any proposed class settlement that would affect residents
of their States so that they can act as watchdogs for fairness.
The bill includes provisions to help ensure that there are fair
settlements. For example, it disallows cash bounty payments to lead
plaintiffs so lawyers looking for victims can't promise them
unwarranted payoffs to be their excuses for filing suit. It requires
that judges to carefully scrutinize settlements where the plaintiffs
get only coupons or noncash awards, and the lawyers get money. The bill
requires a court to make a written finding that the settlement is fair
and reasonable for class members.
Finally, the bill injects some rationality in terms of where large,
nationwide class actions can be heard. It allows more class action
lawsuits to be removed from State court to Federal court, either by a
defendant or an unnamed class member. A class action would qualify for
Federal jurisdiction if the total damages exceed $5,000,000 and parties
included citizens from multiple states. But if a case really belongs in
State court because it is a local problem or the class members and
defendants are in-State, the case won't be decided in Federal court.
This is a good bill. It is fair and balanced. We have been working
with Senators on both sides of the aisle to try to get it right. There
is no question that there are serious problems with the current class
action system and we need to deal with these abuses. So I urge all my
colleagues to join me in supporting cloture on the motion to proceed so
that we can finally get to the bill and debate this legislation.
Ms. CANTWELL. Mr. President, as a former business person and
technology executive who has direct experience with class action
litigation, I agree with the proponents of this bill that class action
cases that impact Americans in every State ought to be litigated in
Federal court. American business should be focused on developing
innovative technologies, growing and creating jobs, and securing our
economic future. American businesses should not be forced to defend
themselves simultaneously in the exact same case in as many as seven
different States at the same time.
I believe the current consolidation mechanism in Federal court offers
both consumers and businesses a fair and efficient means of having
their claims heard, and I support allowing more cases to be tried in
Federal courts.
Unfortunately, I cannot support the bill before us today. While some
positive changes have been made to the bill, the bill would close the
State courthouse doors to almost all class action cases and move those
cases to Federal court. The bill could overwhelm our Federal court
system and cause delay not just in the cases that are being removed,
but in the important class action matters that are already in Federal
court.
I come from a State that is ranked as having the third best civil
justice system in the country, according to the Chamber of Commerce. I
recognize the rights of my constituents to have their claims heard in
our own State courts and according to our own State laws. In 1993,
hundreds of people in my State became critically ill and several died
as a result of eating Jack-in-the-Box hamburgers tainted with deadly E-
coli bacteria. Five hundred of those victims and family members came
together and filed a class action lawsuit in State court for damages as
a result of the injuries they sustained. The case was settled for $12
million. This is not frivolous litigation.
In fact, not one of the hundreds of businesses I have talked to about
this bill has ever suggested that any abusive or frivolous class action
litigation had occurred in Washington State. However, even though most
of the plaintiffs in this class action were from Washington, and the
case was about personal injury, a claim traditionally heard by State
courts, if this lawsuit
[[Page S13005]]
were to be filed in the future, this bill would give defendants the
right to remove the case to Federal court causing additional expense
and grievances for the victims in this case.
I have three concerns about the bill. We need a better balance
between cases being heard in State and Federal court. We need better
protections for civil rights cases and a time deadline for moving cases
to Federal courts.
First, we need to have the proper balance between addressing lawsuits
in State and Federal courts. Currently, virtually all class actions are
tried in State court. However, by moving virtually all of the lawsuits
to Federal courts, this bill does not provide that balance. I support
an approach that provides for keeping some cases in State courts and
improving the flexibility to try more cases in Federal courts.
I have heard from many of the business leaders in my State who have
expressed their concerns about the increasing challenges of defending
themselves against the same claims in multiple states. I have heard
their frustrations about seeing the claims dismissed in one State only
to have them filed in another. I have heard from some of the oldest
established businesses in my State to the newest. From Weyerhaeuser to
Microsoft to AT&T Wireless, Intel, Amazon, the Madrona Group, Expedia,
and Starbucks.
These employers have been forced to defend class action suits that
are either dismissed or settled in a manner that provides little
benefit to the class but great financial benefit to the lawyers. That
isn't right, and that is why I have asked these companies in my State
to analyze what the effects would be of removing any case to Federal
court in which less than one third of the plaintiffs were from the
State where the case was filed. I have committed to each of these
businesses that I will continue to work with them to find a way to move
more cases to Federal court while keeping cases that primarily affect a
group of consumers in a State in that State's court.
While I believe that finding a better balance between class action
lawsuits in State and Federal court is critical, I also cannot support
this bill in the absence of protections that allow higher portions of
settlement awards to be made to those individuals who agree to act as
lead plaintiffs in class action cases. In addition, I believe that
there needs to be a fixed date for defendants to seek to move a class
action case to Federal court. As the bill is written now, a class
action case can be proceeded all the way through trial and into jury
deliberations--and defendants can still seek to remove it to Federal
court even at this late date. I do not believe this serves the
interests of justice. This provision should be fixed.
I have communicated my three concerns to supporters of the bill. I am
disappointed that these straightforward changes, which are in the
interests of both consumers and businesses, were not included in the
bill. Absent these improvements to the bill, I cannot vote for the
measure before us today.
Mr. FEINGOLD. Mr. President, I oppose the Class Action Fairness Act,
and I will vote against the motion to proceed. The main reason for my
opposition is that notwithstanding its title, I do not think this bill
is fair. I do not think it is fair to citizens who are injured by
corporate wrongdoers and are entitled to prompt and fair resolution of
their claims in a court of law. I do not think it is fair to our State
courts, which are treated by this bill as if they cannot be trusted to
issue fair judgments in cases brought before them. I do not think it is
fair to State legislatures, which are entitled to have the laws that
they pass to protect their citizens interpreted and applied by their
own courts. This bill is not only misnamed, it is bad policy. It should
be defeated.
First, let me note that S. 1751 is a different bill than was reported
by the Judiciary Committee. It includes a new and potentially very
significant provision concerning mass torts. A provision on this topic
was in the original bill, but was stricken in committee. Now it is
back, but with some complicated exceptions. The ramifications of this
provision are not apparent on first reading, and it certainly would
have been preferable for this kind of fine tuning to have been
considered by the Judiciary Committee.
Make no mistake, by loosening the requirements for Federal diversity
jurisdiction over class actions, S. 1751 will result in nearly all
class actions being removed to Federal court. This is a radical change
in our Federal system of justice. We have 50 States in this country
with their own laws and courts. State courts are an integral part of
our system of justice. They have worked well for our entire history. It
is hard to imagine why this Senate, which includes many ardent
defenders of federalism and the prerogatives of State courts and State
lawmakers, would support such a wholesale stripping of jurisdiction
from the States over class actions. In my opinion, the need for such a
radical step has not been demonstrated.
Yes, there are abuses in some class actions suits. Some of the most
disturbing have to do with class action settlements that offer only
discount coupons to the members of the class and a big payoff to the
plaintiffs' lawyers. But those abuses have occurred in Federal as well
as State class actions. This bill does nothing to address those
problems; it just moves them all to Federal court.
I note that a substitute amendment being crafted by the senior
Senator from Louisiana will include a provision to address discount
coupons. It is puzzling to me that such a provision is not contained in
the underlying bill. Could it be that these coupon settlements, so
often held up as the poster child for what is wrong with class actions,
are actually something that the defendants' bar that is promoting this
bill wants to preserve? We will find out if the Senate does proceed to
the bill and an amendment is offered on that issue.
Class actions are an extremely important tool in our justice system.
They allow plaintiffs with very small claims to band together to seek
redress. Lawsuits are expensive. Without the opportunity to pursue a
class action, an individual plaintiff often simply cannot not afford
his or her day in court. But through a class action, justice can be
done and compensation can be obtained.
There are three possible outcomes of this bill being enacted. Either
the State courts will be deluged with individual claims, since class
actions can no longer be maintained there, or there will be a huge
increase in the workload of the Federal courts, resulting in delays and
lengthy litigation over procedural issues rather than the substance of
the claims, or many injured people will never get redress for their
injuries. I don't believe any of these three choices are acceptable.
Particularly troubling is the increase in the workload of the Federal
courts. These courts are already overloaded. The Congress has led the
way in bringing more and more litigation to the Federal courts,
particularly criminal cases. Criminal cases, of course, take precedence
in the Federal courts because of the Speedy Trial Act. So the net
result of removing virtually all class actions to Federal court will be
to delay those cases.
There is an old saying with which I am sure we are all familiar:
justice delayed is justice denied. I hope my colleagues will think
about that aphorism before voting for this bill. Think about the real
world of Federal court litigation and the very real possibilities that
long procedural delays in overloaded Federal courts will mean that
legitimate claims may not ever be heard. At the very least, we should
provide in this bill some priority to class certification motions
brought in Federal class actions.
One little noticed provision of this bill illustrates the
possibilities for delay that this bill provides, even to defendants who
are not entitled to have a case removed to Federal court under the
bill's relaxed diversity jurisdiction standards. Under current law, if
a Federal court decides that a removed case should be remanded to State
court, that decision is not appealable. The only exception is for civil
rights cases removed under the special authority of 28 U.S.C. Sec.
1443. But this bill allows defendants to immediately appeal a decision
by a Federal district court that a case does not qualify for removal.
That means that a plaintiff class that is entitled even under this bill
to have a case heard by a State court may still have to endure years of
delay while the appeal of a procedural ruling is heard. Where is the
fairness in that?
[[Page S13006]]
Some in the business community have expressed concern about resolving
nationwide class actions, like some of the tobacco litigation, in a
single State court. I can understand why that might seem unfair to
some. But this bill does not just address that situation. It also
prevents a group of plaintiffs who are all from the same State from
pursuing a class action in their own State courts if even one defendant
is from another State. The proponents of this bill have chosen a remedy
that goes far beyond the alleged problem. That raises questions about
what the intent behind this bill really is.
It is important to remember that this debate is not about resolving
questions of Federal law in the Federal courts. Federal question
jurisdiction already exists for that. Any case involving a Federal
statute can be removed to Federal court under current law. This bill
takes cases that are brought in State court solely under State laws
passed by State legislatures and throws them into Federal court. This
bill is about making it more time consuming and more costly for
citizens of a State to get the redress that their elected
representatives have decided they are entitled to if the laws of their
State are violated.
Diversity jurisdiction in cases between citizens of different States
has been with us for our entire history. Article III, section 2 of the
Constitution provides: ``The judicial Power shall extend . . . to
Controversies between Citizens of different States.'' This is the
constitutional basis for giving the Federal courts diversity
jurisdiction over cases that involved only questions of State law.
The very first Judiciary Act, passed in 1789, gave the Federal courts
jurisdiction over civil suits between citizens of different States
where over $500 was at issue. In 1806, in the case of Strawbridge v.
Curtiss, the Supreme Court held that this act required complete
diversity between the parties--in all other instances, the Court said,
a case based on State law should be heard by the State courts. So this
bill changes a nearly 200-year-old practice in this country of
preserving the Federal courts for cases involving Federal law or where
no defendant is from the State of any plaintiff in a case involving
only State law.
Why is such a drastic step necessary? Why do we need to prevent State
courts from interpreting and applying their own State laws in cases of
any size or significance? One argument we hear is that the trial
lawyers are extracting huge and unjustified settlements in State
courts, which has become a drag on the economy. We also hear that
plaintiffs' lawyers are taking the lion's share of judgments or
settlements to the detriment of consumers. But a recent empirical study
contradicts these arguments. Theodore Eisenberg of Cornell Law School
and Geoffrey Miller of NYU Law School recently published the first
empirical study of class action settlements. Their conclusions, which
are based on data from 1993-2002, may surprise some of the supporters
of this bill.
First, the study found that attorneys' fees in class action
settlements are significantly below the standard 33 percent contingency
fee charged in personal injury cases. The average class action
attorney's fee is actually 21.9 percent. In addition, the attorneys'
fees awarded in class action settlements in Federal court are actually
higher than in State court settlements. Attorney fees as a percent of
class recovery were found to be between 1 and 6 percentage points
higher in Federal court class actions than in State court class
actions.
A final finding of the study is that there has been no appreciable
increase in either the amount of settlements or the amount of
attorneys' fees awarded in class actions over the past 10 years. The
study indicates that there is no crisis here. No explosion of huge
judgments. No huge fleecing of consumers by their lawyers. This bill is
a solution in search of a problem. It is a great piece of legislation
for wrongdoers who would like to put off their day of reckoning by
moving cases to courts that are less convenient, slower, and more
expensive for those who have been wronged. It is a bad bill for
consumers, for State legislatures, and for State courts.
Mr. President, if the motion to proceed is adopted, I expect there
will be many amendments offered. In an area like this the details
matter, and if we are going to have class action reform we need a full
and fair debate on the details with the opportunity to offer
amendments. But the best result is for the Senate not to consider this
bill at this time. I do not believe this unfair Class Action Fairness
Act is ready to be considered on the floor, and I will vote no on the
motion to proceed.
Mr. KYL. Mr. President, I rise today to address the Class Action
Fairness Act of 2003. This legislation first was introduced and
reported by a Judiciary subcommittee 5 years ago, during the 105th
Congress. It is time to enact this legislation into law.
There is no need to recount the parade of horribles that makes the
need for this legislation manifest. Suffice to say that even the
liberal Washington Post has noted that ``national class actions can be
filed just about anywhere and are disproportionately brought in a
handful of State courts whose judges get elected with lawyers' money.''
And as one study has noted, ``[v]irtually every sector of the United
States economy is on trial in Madison County [Illinois], Palm Beach
County [Florida], and Jefferson County [Texas].''
The problem has grown much worse in recent years. Over the course of
the 1990s, class-action filings increased by over 1,300 percent. What
this suggests is that class-action litigation has become unhinged from
actual events. These lawsuits are not being filed because businesses
are injuring consumers 13 times more frequently than they did at the
beginning of the last decade. Rather, these numbers reflect a breakdown
in the litigation system itself. That system no longer bars frivolous
suits that are brought purely for attorneys' own gain.
I would like to address several points about this year's bill. First,
there has been much argument from the opponents of this bill that its
sponsors are doing something sneaky by employing rule XIV to bring a
modified bill to the floor. The bill that we currently are considering
includes a restored, modified version of the original bill's provision
governing mass actions--which provision had been stripped out of the
bill by a last-minute amendment in the Judiciary Committee. Bill
opponents seem to suggest that whatever damage was done by that
amendment they secured fair and square, and that bill supporters have
no business undoing the damage on the Senate floor.
It is true that the committee amendment stripping the mass-action
provision damaged the bill. The State of Mississippi, among others,
entertains actions that are class actions in all but name--these suits
technically are not class actions, but they function as their
equivalent. And as any lawyer who has observed patterns of class-action
litigation can tell you, a reform bill that did not apply in
Mississippi would hardly be much of a reform at all.
If anything is improper about the way that the mass-action provision
has been handled, it is the way that the original provision was
stripped from the bill in the Judiciary Committee. I know, because I
was there when it happened and saw it all. The stripping amendment was
not circulated to Judiciary members in advance of the Committee's
executive session--in contravention of the Committee's own self-imposed
rules governing additional amendments to the bill. Most of us had not
even had an opportunity to read the amendment. Chairman Hatch already
had shown great indulgence toward bill opponents by allowing an
additional day's markup of the bill, when he could have insisted on a
final vote earlier. An additional amendment nevertheless was allowed,
and was adopted once it was clear that it had the support of
swing voters on the Committee--as well as the support of all Members
who are hostile to the bill. The rest of us who support the underlying
bill were forced to accept the amendment, without an opportunity to
even learn what it would do.
By contrast to the way that the original amendment was handled,
everyone has been afforded ample notice of the modified mass-action
provision included in the current bill. This modified provision was
negotiated among the bipartisan group of supporters of the original
bill--including those whose support led to the adoption of
[[Page S13007]]
the original amendment. When a compromise finally was reached, it was
announced during an executive session of the Judiciary Committee and
reported in the newspapers. And if that was not adequate notice,
Chairman Hatch provided a detailed description of the modified
provision in the committee report for this bill, which was published
last July. Yet to hear bill opponents tell the story, you would think
that the modified proposal had been hidden from all members until this
bill was introduced. This is simply absurd--a stealth amendment is not
one that is announced months beforehand in a committee report.
I would also note today--speaking about the bill more generally--that
it is hardly a radical reform. As two Democratic cosponsors of the bill
recently emphasized in a letter to all Senators, the current bill
``does not contain any tort reform whatsoever. There are no caps on
damages or attorney's fees, no limits on joint and several liability,
and no new pleading requirements.'' These Senators also point out that
as a result of a Democratic amendment added to the bill in the
Judiciary Committee, ``federal jurisdiction does not extend to cases in
which the claims involved less than $5 million or in which two-thirds
or more of the plaintiffs are from the same state as the defendant.''
This last provision substantially dilutes the bill. The plaintiffs'
lawyers who routinely file these class actions are among the wiliest
members of the profession--I expect that they will have little
difficulty structuring their plaintiff class such that more than two-
thirds of plaintiffs are from the state in which the principal
defendants are located and the action is filed. If this loophole is
exploited to the extent that I fear that it will be, the principal
effect of today's bill will be not to remove cases to federal court,
but rather to keep them in the courts of the state where the defendants
and most plaintiffs are located. Of course, such a reform would not be
without its advantages. At the very least, those states that tolerate
predatory class actions in their courts would be forced to bear the
consequences of such litigation, because the suits would be directed at
local businesses. This change might yet alleviate the collective-action
problems and indulgence of regional prejudice that underlie much of the
current class-action crisis.
Finally, in closing I would remark on the strange new federalism that
this bill appears to have evoked in some of its opponents. In a
statement of additional views in the committee report for this bill,
all seven Judiciary Committee members who voted against the bill have
denounced it as a violation of the high principle of States' rights.
They describe the bill as raising ``serious constitutional issues'' by
``undermin[ing] James Madison's vision of a Federal government `limited
to certain enumerated objects, which concern all the members of the
republic.' '' These opponents even invoke the U.S. Supreme Court's
decision in United States v. Morrison (2000), which struck down as
beyond Congress's power a Federal law regulating violent crime that is
unrelated to commercial activity. As bill opponents remind us, Morrison
requires Congress to respect the distinction between what is truly
national and what is truly local.
What may strike the casual observer as unusual is that the very
members who invoke Morrison against this bill recently have denounced
that very decision--and any judicial nominee suspected of harboring
views in line with the Supreme Court majority in that case--in the
course of the judicial-confirmation process. On this very day, the
Judiciary Committee will hold a hearing for one of the President's
nominees to the U.S. Court of Appeals for the District of Columbia. I
would not be surprised to learn that the same Judiciary Committee
members denouncing this bill on the Senate floor today will then
proceed down the Capitol elevators, take the shuttle to the large
Judiciary hearing room, and denounce the President's nominee as a
secret supporter of United States v. Morrison.
To conclude, I would simply note that it is beyond argument that the
interstate commerce clause and Article III's authorization for
diversity jurisdiction were included in the Constitution in order to
empower Congress to protect both interstate commerce and out-of-State
defendants from local prejudice. Nothing could be a more appropriate
application of these congressional powers than the legislation that we
are considering today. Yet to listen to this bill's opponents, one
might come away with the impression that the interstate commerce clause
was designed to allow Congress to regulate all violent crime, and any
other subject that touches Congress's fancy and that happens to poll
well--any subject, that is, except for interstate commerce. The
opponents of this bill can play at either John Paul Stevens or John
Calhoun. They cannot play at both--or at the very least, they ought not
do so on the same day.
I look forward to Congress's enactment of the important legislation
before us today.
The PRESIDING OFFICER (Mr. Smith). The Senator from Texas.
Mr. CORNYN. Mr. President, the Senator from Louisiana has made an
eloquent plea for class action reform. Unless we have cloture, there
will be no class action reform anytime in the near future. We know the
Senate has a very busy calendar of conference committees working on an
Energy bill, on Medicare, prescription drug reform, and many other
issues. The time is ripe, and I suggest to my colleagues the time for
reform is now.
Finally, this is not a matter of lawyer bashing. This is about jobs.
This is about added cost to consumers. When frivolous litigation is
filed which, in essence, once a class action is certified becomes legal
blackmail because class action lawsuits are rarely, if ever, tried with
a jury because the risks are so enormous, it literally becomes a ``bet
the ranch'' or I should say ``bet the company'' lawsuit. So what
happens is they are almost always settled but under unequal terms and
really amount to, in too many instances, legal coercion. But what
happens is, when that money is paid, that cost is not necessarily
absorbed by that company, that job creator, but is passed on to
consumers; and consumers pay and, ultimately, job loss occurs.
So, Mr. President, I urge my colleagues who believe we need to
address this tremendous problem, we need to address job loss, we need
to address consumer cost, we need to address this abuse, to vote for
cloture.
The PRESIDING OFFICER. The Senator's time has expired.
Cloture Motion
The PRESIDING OFFICER. Under the previous order, pursuant to rule
XXII, the Chair lays before the Senate the pending cloture motion,
which the clerk will state.
The assistant legislative clerk read as follows:
Cloture Motion
We, the undersigned Senators, in accordance with the
provisions of Rule XXII of the Standing Rules of the Senate,
do hereby move to bring to a close debate on the motion to
proceed to S. 1751, a bill to amend the procedures that apply
to consideration of interstate class actions to assure fairer
outcomes for class members and defendants, and for other
purposes.
Bill Frist, Orrin G. Hatch, Charles Grassley, George
Allen, Kay Bailey Hutchison, Rick Santorum, Susan M.
Collins, Elizabeth Dole, Lindsey Graham of South
Carolina, Wayne Allard, Pat Roberts, John Ensign, Thad
Cochran, John Warner, Jon Kyl, John E. Sununu, Saxby
Chambliss.
The PRESIDING OFFICER. By unanimous consent, the mandatory quorum
call has been waived.
The question is, Is it the sense of the Senate that debate on the
motion to proceed to S. 1751 shall be brought to a close? The yeas and
nays are mandatory under the rule. The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. REID. I announce that the Senator from North Carolina (Mr.
Edwards) and the Senator from Massachusetts (Mr. Kerry) are necessarily
absent.
I further announce that, if present and voting, the Senator from
Massachusetts (Mr. Kerry) would vote ``nay.''
The PRESIDING OFFICER (Mr. Hagel). Are there any other Senators in
the Chamber desiring to vote?
The yeas and nays resulted--yeas 59, nays 39, as follows:
[[Page S13008]]
[Rollcall Vote No. 403 Leg.]
YEAS--59
Alexander
Allard
Allen
Bayh
Bennett
Bond
Brownback
Bunning
Burns
Campbell
Carper
Chafee
Chambliss
Cochran
Coleman
Collins
Cornyn
Craig
Crapo
DeWine
Dole
Domenici
Ensign
Enzi
Feinstein
Fitzgerald
Frist
Graham (SC)
Grassley
Gregg
Hagel
Hatch
Hutchison
Inhofe
Jeffords
Kohl
Kyl
Lieberman
Lincoln
Lott
Lugar
McCain
McConnell
Miller
Murkowski
Nelson (NE)
Nickles
Roberts
Santorum
Sessions
Smith
Snowe
Specter
Stevens
Sununu
Talent
Thomas
Voinovich
Warner
NAYS--39
Akaka
Baucus
Biden
Bingaman
Boxer
Breaux
Byrd
Cantwell
Clinton
Conrad
Corzine
Daschle
Dayton
Dodd
Dorgan
Durbin
Feingold
Graham (FL)
Harkin
Hollings
Inouye
Johnson
Kennedy
Landrieu
Lautenberg
Leahy
Levin
Mikulski
Murray
Nelson (FL)
Pryor
Reed
Reid
Rockefeller
Sarbanes
Schumer
Shelby
Stabenow
Wyden
NOT VOTING--2
Edwards
Kerry
The PRESIDING OFFICER. On this vote, the yeas are 59, the nays are
39. Three-fifths of the Senators duly chosen and sworn not having voted
in the affirmative, the motion is rejected.
The majority leader.
Mr. FRIST. Mr. President, I am clearly disappointed we have been
denied the opportunity to proceed to this very important legislation, a
bill we very much want to discuss, to debate, and to appropriately
amend. It is important to the American people. Thus, I believe we just
witnessed a missed opportunity to address a critically and vitally
important issue.
With that, for my colleagues, let me say we are making some progress
on other issues in terms of how the afternoon will be spent. We are in
discussion with regard to the antispam legislation, and I believe we
will be able to proceed with that early this afternoon.
Again, let me state my disappointment. We are very committed to
addressing this particular issue for the American people, and we will
be trying, once again, to pull together and do what the American people
deserve.
The PRESIDING OFFICER. The minority leader.
Mr. DASCHLE. Mr. President, the message in this vote is that now is
the time for us to sit down and negotiate. I have said on several
occasions, as late as this morning, that we are prepared to work with
the majority. I will certainly work with the majority leader to bring
to the floor a bill that will enjoy much broader support than 59 votes.
We can do that. We recognize the need for reform, but we also recognize
we have to do it right. I would like to start this afternoon. I will do
it tomorrow. I will do it whenever the majority is prepared to do it,
but we are prepared to do it, and I look forward to further discussions
on this issue in the days ahead.
After that, I hope we can move to other issues that divide us. I
think there is an opportunity on asbestos as well, but it takes real
negotiation. I am prepared to enter into those negotiations anytime the
majority is prepared to do so as well.
I yield the floor.
The PRESIDING OFFICER. The majority leader.
Mr. FRIST. Mr. President, you just heard a willingness to work
together. There were 59 Members who spoke just a few moments ago who
said, Let's proceed and do it right now on the floor of the Senate. We
were one vote short. I accept that. I think we do need to proceed
directly to address this issue, and we will work in good faith to do
just that.
As I mentioned earlier, I think we are very close on the antispam
legislation that we talked about yesterday and today.
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