[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.

                          ____________________