[Congressional Record Volume 149, Number 176 (Tuesday, December 9, 2003)]
[Senate]
[Pages S16102-S16103]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   LOCAL LAW ENFORCEMENT ACT OF 2003

  Mr. SMITH. Mr. President, I wish to speak about the need for hate 
crimes legislation. On May 1, 2003, Senator Kennedy and I introduced 
the Local Law Enforcement Enhancement Act, a bill that would add new 
categories to current hate crimes law, sending a signal that violence 
of any kind is unacceptable in our society.
  On November 11, 2003, a religious fundamentalist was arrested as a 
suspect in an alleged plot to bomb abortion clinics and gay bars 
throughout the eastern United States. On the day of his arrest, the 
suspect had purchased gasoline cans, flares, propane tanks and starter 
fluids, in addition to pistols and silencers. Thankfully, the suspect 
was arrested before he was able to commit multiple crimes of hate.
  I believe that Government's first duty is to defend its citizens, to 
defend them against the harms that come out of hate. The Local Law 
Enforcement Enhancement Act is a symbol that can become substance. I 
believe that by passing this legislation and changing current law, we 
can change hearts and minds as well.
  Mr. DODD. Mr. President, I rise today to briefly discuss legislation 
to reform the rules governing class litigation. In October of this 
year, the majority leader sought to proceed to the Class Action 
Fairness Act, S. 1751.
  I joined forty of my colleagues in opposing the motion to proceed. I 
said at the time that while I supported some reform of class action 
procedures, I could not support S. 1751 in its current form. I also 
expressed concern about whether there would be any meaningful 
opportunity for interested Senators to negotiate changes to the bill in 
a bipartisan fashion.
  Subsequent to the vote in October, I joined with three of my 
colleagues in sending a letter to the majority leader on November 14, 
2003. In that letter, we reiterated our interest in class action reform 
and we outlined several areas where we believed revisions to S. 1751 
were in order.
  In November, Senators Landrieu, Schumer and I entered into 
discussions with Senators Frist, Hatch, Grassley, Kohl, and Carper. 
Those discussions have resulted in a compromise agreed to by our eight 
offices that I believe significantly improves upon S. 1751. I also ask 
unanimous consent that a summary of the compromise produced by my 
office be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. DODD. Lastly, Mr. President, I want to point out that in my view 
this is a delicate compromise, which addresses the shortcomings of 
current class action practice while at the same time protecting the 
right of citizens to join with fellow citizens to seek the redress of 
grievances in the courts of our Nation. As I and my colleagues said in 
our letter of November 14th, it is ``critical'' that this agreement 
``be honored as the bill moves forward--both in and beyond the 
Senate.''


                               exhibit 1

Summary of Changes to S. 1751 as Agreed to by Senators Frist, Grassley, 
            Hatch, Kohl, Carper, Dodd, Landrieu, and Schumer

     The Compromise Improves Coupon Settlement Procedures
       S. 1751 would have continued to allow coupon settlements 
     even though only a small percentage of coupons are actually 
     redeemed by class members in many cases.
       The compromise proposal requires that attorneys fees be 
     based either on (a) the proportionate value of coupons 
     actually redeemed by class members or (b) the hours actually 
     billed in prosecuting the class action. The compromise 
     proposal also adds a provision permitting federal courts to 
     require that settlement agreements provide for charitable 
     distribution of unclaimed coupon values.
     The Compromise Eliminates the So-Called Bounty Prohibition in 
         S. 1751
       S. 1751 would have prevented civil rights and consumer 
     plaintiffs from being compensated for the particular 
     hardships they endure as a result of initiating and pursuing 
     litigation.
       The compromise deletes the so-called ``bounty provision'' 
     in S. 1751, thereby allowing plaintiffs to receive special 
     relief for enduring special hardships as class members.
     The Compromise Eliminates the potential for Notification 
         Burden and Confusion
       S. 1751 would have created a complicated set of 
     unnecessarily burdensome notice requirements for notice to 
     potential class members. The compromise eliminates this 
     unnecessary burden and preserves current federal law related 
     to class notification.
     The Compromise Provides for Greater Judicial Discretion
       S. 1751 included several factors to be considered by 
     district courts in deciding whether to exercise jurisdiction 
     over class action

[[Page S16103]]

     in which between one-third and two-thirds of the proposed 
     class members and all primary defendants are citizens of the 
     same state.
       The compromise provides for broader discretion by 
     authorizing federal courts to consider any ``distinct'' nexus 
     between (a) the forum where the action was brought and (b) 
     the class members, the alleged harm, or the defendants. The 
     proposal also limits a court's authority to base federal 
     jurisdiction on the existence of similar class actions filed 
     in other states by disallowing consideration of other cases 
     that are more than three years old.
     The Compromise Expands the Local Class Action Exception
       S. 1751 established an exception to prevent removal of a 
     class action to federal court when 2/3 of the plaintiffs are 
     from the state where the action was brought and the ``primary 
     defendants'' are also from that state (the Feinstein 
     formula). The compromise retains the Feinstein formula and 
     creates a second exception that allows cases to remain in 
     state court if: (1) more than 2/3 of class members are 
     citizens of the forum state; (2) there is at least one in-
     state defendant from whom significant relief is sought and 
     who contributed significantly to the alleged harm; (3) the 
     principal injuries happened within the state where the action 
     was filed; and (4) no other class action asserting the same 
     or similar factual allegations against any of the defendants 
     on behalf of the same or other persons has been filed during 
     the preceding three years.
     The Compromise Creates a Bright Line for Determining Class 
         Composition
       S. 1751 was silent on when class composition could be 
     measured and arguably would have allowed class composition to 
     be challenged at any time during the life of the case. The 
     compromise clarifies that citizenship of proposed class 
     members is to be determined on the date plaintiffs filed 
     the original complaint, or if there is no federal 
     jurisdiction over the first complaint, when plaintiffs 
     serve an amended complaint or other paper indicating the 
     existence of federal jurisdiction.
     The Compromise Eliminates the ``Merry-Go-Round'' Problem
       S. 1751 would have required federal courts to dismiss class 
     actions if the court determined that the case did not meet 
     Rule 23 requirements. The compromise eliminates the dismissal 
     requirement, giving federal courts discretion to handle Rule 
     23-ineligible cases appropriately. Potentially meritorious 
     suits will thus not be automatically dismissed simply because 
     they fail to comply with the class certification requirements 
     of Rule 23.
     The Compromise Improve Treatment of Mass Actions
       S. 1751 would have treated all mass actions involving over 
     100 claimants as if they were class actions. The compromise 
     makes several changes to treat mass actions more like 
     individual cases than like class actions when appropriate.
       The compromise changes the jurisdictional amount 
     requirement. Federal jurisdiction shall only exist over those 
     persons whose claims satisfy the normal diversity 
     jurisdictional amount requirement for individual actions 
     under current law (presently $75,000).
       The compromise expands the ``single sudden accident'' 
     exception so that federal jurisdiction shall not exist over 
     mass actions in which all claims arise from any ``event or 
     occurrence'' that happened in the state where the action was 
     filed and that allegedly resulted in injuries in that state 
     or in a contiguous state. The proposal also added a provision 
     clarifying that there is no federal jurisdiction under the 
     mass action provision for claims that have been consolidated 
     solely for pretrial purposes.
     The Compromise Eliminates the Potential for Abusive Plaintiff 
         Class Removals
       S. 1751 would have changed current law by allowing any 
     plaintiff class member to remove a case to federal court even 
     if all other class members wanted the case to remain in state 
     court. The compromise retains current law--allowing 
     individual plaintiffs to opt out of class actions, but not 
     allowing them to force entire classes into federal court.
     The Compromise Eliminates the Potential for Abusive Appeals 
         of Remand Orders
       S. 1751 would have allowed defendants to seek unlimited 
     appellate review of federal court orders remanding cases to 
     state courts. If a defendant requested an appeal, the federal 
     courts would have been required to hear the appeal and the 
     appeals could have taken months or even years to complete.
       The compromise makes two improvements: (1) grants the 
     federal courts discretion to refuse to hear an appeal if the 
     appeal is not in the interest of justice; (2) Establishes 
     tight deadlines for completion of any appeals so that no case 
     can be delayed more than 77 days, unless all parties agree to 
     a longer period.
     The Compromise Preserves the Rulemaking Authority of Supreme 
         Court and Judicial Conference
       The compromise clarifies that nothing in the bill restricts 
     the authority of the Judicial Conference and Supreme Court to 
     implement new rules relating to class actions.
     The Compromise is Not Retroactive
       Unlike the House Bill, the compromise will not 
     retroactively change the rules governing jurisdiction over 
     class actions.

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