[Congressional Record Volume 151, Number 17 (Wednesday, February 16, 2005)]
[House]
[Pages H643-H652]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 PROVIDING FOR CONSIDERATION OF S. 5, CLASS ACTION FAIRNESS ACT OF 2005

  Mr. GINGREY. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 96 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                               H. Res. 96

       Resolved, That upon the adoption of this resolution it 
     shall be in order without intervention of any point of order 
     to consider in the House the bill (S. 5) 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 bill shall be 
     considered as read. The previous question shall be considered 
     as ordered on the bill and on any amendment thereto to final 
     passage without intervening motion except: (1) 90 minutes of 
     debate on the bill equally divided and controlled by the 
     chairman and ranking minority member of the Committee on the 
     Judiciary; (2) the amendment in the nature of a substitute 
     printed in the report of the Committee on Rules accompanying 
     this resolution, if offered by Representative Conyers of 
     Michigan or his designee, which shall be in order without 
     intervention of any point of order, shall be considered as 
     read, and shall be separately debatable for 40 minutes 
     equally divided and controlled by the proponent and an 
     opponent; and (3) one motion to commit with or without 
     instructions.

  The SPEAKER pro tempore. The gentleman from Georgia (Mr. Gingrey) is 
recognized for 1 hour.
  Mr. GINGREY. Mr. Speaker, for the purpose of debate only, I yield the 
customary 30 minutes to the gentleman from Massachusetts (Mr. 
McGovern), pending which I yield myself such time as I may consume. 
During consideration of this resolution, all time yielded is for the 
purpose of debate only.
  Mr. Speaker, House Resolution 96 is a structured rule providing 90 
minutes of debate for consideration of S. 5, the Class Action Fairness 
Act of 2005. The rule waives all points of order against consideration 
of the bill, makes in order one amendment in the nature of a 
substitute, it waives all points of order against this amendment, and 
it provides one motion to recommit with or without instructions.
  Mr. Speaker, I urge support for the rule because we have before us a 
fair rule. I could say an excellent rule. The previous gentleman from 
Massachusetts was rating these rules. But this is fair in both senses 
of that term, a fair rule that gives Members on both sides of the aisle 
a chance to discuss their ideas on class action reform. I believe there 
is a general consensus that our system for class action litigation is 
flawed.
  As demonstrated by the other body, there is bipartisan support for 
the measure that will be coming before us. In fact, the other body 
passed this measure by a vote of 72 to 26 with strong bipartisan 
support. Even with that bipartisan support, however, there are 
differences of opinion on how to reform our class action system. This 
bill through granting consideration of a substitute amendment will 
allow us to openly discuss these opinions and ideas.
  Mr. Speaker, our general tort system costs American businesses $129 
billion each and every year. Even our smallest companies pay 
collectively about $33 billion a year, or 26 percent of the overall 
tort costs to businesses borne by our smallest companies. Class action 
reform is a first step in litigation reform aimed at providing relief 
for these small businesses. I am pleased that we are finally seeing the 
light at the end of the tunnel. This Chamber has passed class action 
litigation reform on four previous occasions. It is about time that we 
sent a reform package to the President's desk for his signature.
  The underlying bill will make several key reforms including expanding 
Federal jurisdiction over large interstate class actions as originally 
intended by our Founding Fathers, create exceptions that keep truly 
local disputes in State courts, provide an end to the harassment of 
local businesses as part of this forum shopping game, and create a 
consumer class action bill of rights.
  Mr. Speaker, I would like to again urge my colleagues to support this 
rule which passed out of the Committee on Rules without objection and 
to vote in favor of the underlying bill which will provide this much 
needed reform.
  Mr. Speaker, I reserve the balance of my time.
  Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume,

[[Page H644]]

and I thank the gentleman from Georgia (Mr. Gingrey) for yielding me 
the customary 30 minutes.
  Mr. Speaker, for years the Republican majority proposed so-called 
``reforms'' to class action lawsuits. Time after time, the House would 
pass legislation limiting class action plaintiffs only to see their 
attempts to dismantle the class action system die either with Senate 
inaction or in conference.
  Mr. Speaker, it looks as though the Republican leadership has finally 
gamed the system to the point where it appears that they will succeed 
in severely limiting the rights of many of the most vulnerable citizens 
in this country.
  Dismantling the class action lawsuit system has long been a big 
priority for big business groups. Last year, for instance, the Chamber 
spent $50 million in lobbying. Now they are getting what they paid for, 
because this bill obliterating the class action system is one of the 
first bills to be considered in this Congress.
  Mr. Speaker, it is clear to me that despite the McCain-Feingold 
Campaign Finance Reform law, we still have a pay-to-play system. The 
other body considered this bill first. The plan was that the House take 
up the Senate bill if the other body could pass a clean bill without 
any amendments. The Senate succeeded in passing a bad bill and the 
House is now following suit.
  Let me be clear. Despite the rhetoric on the other side, this is 
still a bad bill. Today, the other side will tell scary stories about 
greedy trial lawyers and how awful and unfair their practices are, but 
the Republican leadership will not talk about how this bill limits the 
rights of low-wage workers to seek justice from employers who have 
cheated them out of their wages or have discriminated against them. 
They will not talk about how they are limiting workers' rights and, 
with the passage of this bill, are encouraging the bad apples in the 
big business community to continue cheating their employees out of 
their hard-earned wages and rights.
  In most cases, State laws provide greater civil rights protections 
than Federal law. Every State has passed a law prohibiting 
discrimination on the basis of disability. Some States have laws that 
go beyond the Federal Americans with Disabilities Act.
  The same is true with age discrimination. There are also States that 
provide protections that are not covered by Federal law. These Federal 
laws are intended to be floors, not ceilings. We should commend States 
that extend further rights to their citizens, not punish them.
  This bill federalizes class action and mass torts, moving these cases 
from State to Federal courts. If the bill is signed into law, hard-
working Americans will be denied the right to use their own State 
courts to bring class actions against corporations that violate laws 
that are unique to their State.
  Consider, for example, a class action lawsuit brought against a 
national corporation by employees of a store in Massachusetts because 
that store discriminates on the basis of ancestry, place of birth, or 
citizenship status. Massachusetts provides protections afforded by 
State law, but not by Federal law. Under this bill, except in very rare 
instances, that case would be sent to a Federal court instead of State 
court, even though the case is based on a violation of State law.
  A class action lawsuit against Wal-Mart was recently filed in 
Massachusetts. The suit alleges that Wal-Mart failed to pay employees 
for the time worked and did not give them proper meal and rest breaks. 
These are serious charges. If the Class Action Fairness Act is signed 
into law, future cases like this would not be tried in Massachusetts 
court, but instead would be transferred to Federal court.
  Mr. Speaker, we know that the Federal courts are already over 
burdened, but we also know that the Federal courts are less likely to 
certify classes or provide relief for violations of State law. In 
effect, this bill is rigging the system on behalf of the corporations 
and against the interests of workers.
  We often hear a lot of lofty rhetoric on the other side about States 
rights. Apparently the other side only supports the rights of States if 
they agree with the laws of those States.
  Mr. Speaker, this bill is opposed by the Leadership Conference of 
Civil Rights; the Alliance for Justice; the National Conference of 
State Legislatures; 14 State Attorneys General; AFSCME; and 
environmental groups like Friends of the Earth, Greenpeace, the Sierra 
Club, and the National Environmental Trust. These are just a few of the 
groups who oppose this bill, and none of them represent the trial 
lawyers. They oppose this bill because it will limit fairness, it will 
limit justice, and it will ultimately hurt everyday Americans.
  Mr. Speaker, this is not about trial lawyers; it is about average 
citizens. The opponents of this bill are committed to fairness. We are 
committed to justice. And this bill robs the American people of their 
rights to fairness and justice in the judicial system. It closes the 
courthouse door in the face of people who need and deserve help.
  I oppose this bill, and I urge my colleagues to support the Conyers 
substitute.
  Mr. Speaker, I reserve the balance of my time.
  Mr. GINGREY. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
West Virginia (Mrs. Capito), my colleague on the Committee on Rules.
  Mrs. CAPITO. Mr. Speaker, I rise in support of the Class Action 
Fairness Act because we cannot act fast enough. We have been trying to 
act to address the dire needs of our Nation's judicial system.
  Today, predatory lawyers take advantage of class action law by 
shopping for venues where they can find sympathetic judges and juries. 
Each time a lawyer goes venue shopping, it costs taxpayers and it costs 
our economy by bogging down job creators with frivolous and excessive 
litigation.
  National Review magazine has called my home State of West Virginia 
one of the worst States because of its cruel legal climate. Data and 
statistics indicate that since 1978, legal costs in West Virginia have 
risen more than 10 times faster than the State economy as a whole. As a 
result, our economy has not grown as fast as the rest of the Nation, 
and the jobs that West Virginians seek to support their families are 
not as readily available as they are in other parts of our country.
  West Virginia's civil justice system has been ranked as one of the 
worst when it comes to the treatment of class actions. As a result of 
West Virginia's relaxation and less vigorous application of procedural 
rules, courts are generally viewed by lawyers as more favorable and 
advantageous to plaintiffs, and accordingly West Virginia has become a 
magnet of mass tort litigation. What is very alarming is when a victim 
receives little or no compensation.
  The Class Action Fairness Act aims to curb class settlements that 
provide significant fees to a lawyer with marginal benefits to victims. 
The Class Action Fairness Act takes strong steps to ensure injured 
consumers recoup real awards from victorious verdicts, rather than 
settlements that involve coupons, which largely benefit the lawyers.

                              {time}  1130

  The Class Action Fairness Act creates important reforms that will 
reduce lawsuit abuse and protect individuals. It is as simple as that. 
I urge support for this legislation, and for the fair and balanced rule 
before us.
  Mr. McGOVERN. Mr. Speaker, I include for the Record a letter signed 
by 14 Attorneys General, including Darrell McGraw, the Attorney General 
of the State of West Virginia, in opposition to this bill.
                                                State of New York,


                               Office of the Attorney General,

                                     Albany, NY, February 7, 2005.
     Hon. Bill Frist,
     Majority Leader, U.S. Senate, Dirksen Senate Office Building, 
         Washington, DC.
     Hon. Harry Reid,
     Minority Leader, U.S. Senate, Hart Senate Office Building, 
         Washington, DC.
       Dear Mr. Majority Leader and Mr. Minority Leader: On behalf 
     of the Attorneys General of California, Illinois, Iowa, 
     Kentucky, Maine, Maryland, Massachusetts, Minnesota, New 
     Jersey, New Mexico, New York, Oklahoma, Oregon, Vermont and 
     West Virginia, we are writing in opposition to S. 5, the so-
     called ``Class Action Fairness Act,'' which will be debated 
     today and is scheduled to be voted on this week. Despite 
     improvements over similar legislation considered in prior 
     years, we believe S. 5 still unduly limits the right of 
     individuals to seek redress for corporate wrongdoing in their 
     state courts. We therefore strongly recommend that this 
     legislation not be enacted in its present form.

[[Page H645]]

       As you know, under S. 5, almost all class actions brought 
     by private individuals in state court based on state law 
     claims would be removed to federal court, and, as explained 
     below, many of these cases may not be able to continue as 
     class actions. We are concerned with such a limitation on the 
     availability of the class action device because, particularly 
     in these times of tightening state budgets, class actions 
     provide an important ``private attorney general'' supplement 
     to the efforts of state Attorneys General to prosecute 
     violations of state consumer protection, civil rights, labor, 
     public health and environmental laws.
       We recognize that some class action lawsuits in both state 
     and federal courts have resulted in only minimal benefits to 
     class members, despite the award of substantial attorneys' 
     fees. While we support targeted efforts to prevent such 
     abuses and preserve the integrity of the class action 
     mechanism, we believe S. 5 goes too far. By fundamentally 
     altering the basic principles of federalism, S. 5, if enacted 
     in its present form, would result in far greater harm than 
     good. It therefore is not surprising that organizations such 
     as AARP, AFL-CIO, Consumer Federation of America, Consumers 
     Union, Leadership Conference on Civil Rights, NAACP and 
     Public Citizen all oppose this legislation in its present 
     form.


             1. class actions should not be ``federalized''

       S. 5 would vastly expand federal diversity jurisdiction, 
     and thereby would result in most class actions being filed in 
     or removed to federal court. This transfer of jurisdiction in 
     cases raising questions of state law will inappropriately 
     usurp the primary role of state courts in developing their 
     own state tort and contract laws, and will impair their 
     ability to establish consistent interpretations of those 
     laws. There is no compelling need or empirical support for 
     such a sweeping change in our long-established system for 
     adjudicating state law issues. In fact, by transferring most 
     state court class actions to an already overburdened federal 
     court system, this bill will delay (if not deny) justice to 
     substantial numbers of injured citizens. Moreover, S. 5 is 
     fundamentally flawed because under this legislation, most 
     class actions brought against a defendant who is not a 
     ``citizen'' of the state will be removed to federal court, no 
     matter how substantial a presence the defendant has in the 
     state or how much harm the defendant has caused in the state.


 2. clarification is needed that s. 5 does not apply to state attorney 
                            general actions

       State Attorneys General frequently investigate and bring 
     actions against defendants who have caused harm to our 
     citizens, usually pursuant to the Attorney General's parens 
     patriae authority under our respective state consumer 
     protection and antitrust statutes. In some instances, such 
     actions have been brought with the Attorney General acting as 
     the class representative for the consumers of the state. We 
     are concerned that certain provisions of S. 5 might be 
     misinterpreted to impede the ability of the Attorneys General 
     to bring such actions, thereby interfering with one means of 
     protecting our citizens from unlawful activity and its 
     resulting harm. That Attorney General enforcement actions 
     should proceed unimpeded is important to all our 
     constituents, but most significantly to our senior citizens 
     living on fixed incomes and the working poor. S. 5 therefore 
     should be amended to clarify that it does not apply to 
     actions brought by any State Attorney General on behalf of 
     his or her respective state or its citizens. We understand 
     that Senator Pryor will be offering an amendment on this 
     issue, and we urge that it be adopted.


  3. many multi-state class actions cannot be brought in federal court

       Another significant problem with S. 5 is that many federal 
     courts have refused to certify multi-state class actions 
     because the court would be required to apply the laws of 
     different jurisdictions to different plaintiffs--even if the 
     laws of those jurisdictions are very similar. Thus, cases 
     commenced as state class actions and then removed to federal 
     court may not be able to be continued as class actions in 
     federal court.
       In theory, injured plaintiffs in each state could bring a 
     separate class action lawsuit in federal court, but that 
     defeats one of the main purposes of class actions, which is 
     to conserve judicial resources. Moreover, while the 
     population of some states may be large enough to warrant a 
     separate class action involving only residents of those 
     states, it is very unlikely tbat similar lawsuits will be 
     brought on behalf of the residents of many smaller states. 
     This problem should be addressed by allowing federal courts 
     to certify nationwide class actions to the full extent of 
     their constitutional power--either by applying one state's 
     law with sufficient ties to the underlying claims in the 
     case, or by ensuring that a federal judge does not deny 
     certification on the sole ground that the laws of more than 
     one state would apply to the action. We understand that 
     Senator Jeff Bingaman will be proposing an amendment to 
     address this problem, and that amendment should be adopted.


           4. civil rights and labor cases should be exempted

       Proponents of S. 5 point to allegedly ``collusive'' 
     consumer class action settlements in which plaintiffs' 
     attorneys received substantial fee awards, while the class 
     members merely received ``coupons'' towards the purchase of 
     other goods sold by defendants. Accordingly, this ``reform'' 
     should apply only to consumer class actions. Class action 
     treatment provides a particularly important mechanism for 
     adjudicating the claims of low-wage workers and victims of 
     discrimination, and there is no apparent need to place 
     limitations on these types of actions. Senator Kennedy 
     reportedly will offer an amendment on this issue, which also 
     should be adopted.


              5. the notification provisions are misguided

       S. 5 requires that federal and state regulators, and in 
     many cases state Attorneys General, be notified of proposed 
     class action settlements, and be provided with copies of the 
     complaint, class notice, proposed settlement and other 
     materials. Apparently this provision is intended to protect 
     against ``collusive'' settlements between defendants and 
     plaintiffs' counsel, but those materials would be unlikely to 
     reveal evidence of collusion, and thus would provide little 
     or no basis for objecting to the settlement. Without clear 
     authority in the legislation to more closely examine 
     defendants on issues bearing on the fairness of the proposed 
     settlement (particularly out-of-state defendants over whom 
     subpoena authority may in some circumstances be limited), the 
     notification provision lacks meaning. Class members could be 
     misled into believing that their interests are being 
     protected by their government representatives, simply because 
     the notice was sent to the Attorney General of the United 
     States, State Attorneys General and other federal and state 
     regulators.
       Equal access to the American system of justice is a 
     foundation of our democracy. S. 5 would effect a sweeping 
     reordering of our nation's system of justice that will 
     disenfranchise individual citizens from obtaining redress for 
     harm, and thereby impede efforts against egregious corporate 
     wrongdoing. Although we ful1y support the goal of preventing 
     abusive class action settlements, and would be willing to 
     provide assistance in your effort to implement necessary 
     reforms, we are likewise committed to maintaining our federal 
     system of justice and safeguarding the interests of the 
     public. For these reasons, we oppose S. 5 in its present 
     form.
           Sincerely,
         Eliot Spitzer, Attorney General of the State of New York; 
           W.A. Drew Edmondson, Attorney General of the State of 
           Oklahoma; Bill Lockyer, Attorney General of the State 
           of California; Lisa Madigan, Attorney General of the 
           State of Illinois; Tom Miller, Attorney General of the 
           State of Iowa; Gregory D. Stumbo, Attorney General of 
           the State of Kentucky; G. Steven Rowe, Attorney General 
           of the State of Maine; J. Joseph Curran, Attorney 
           General of the State of Maryland; Tom Reilly, Attorney 
           General of the State of Massachusetts; Mike Hatch, 
           Attorney General of the State of Minnesota; Patricia A. 
           Madrid, Attorney General of the State of New Mexico; 
           Hardy Myers, Attorney General of the State of Oregon; 
           William H. Sorrell, Attorney General of the State of 
           Vermont; Darrell McGraw, Attorney General of the State 
           of West Virginia.

  Mr. McGOVERN. Mr. Speaker, I yield 7 minutes to the gentleman from 
Massachusetts (Mr. Markey), the dean of our delegation.
  Mr. MARKEY. Mr. Speaker, I thank the gentleman for his excellent work 
on this very important piece of legislation. I rise in opposition to 
this rule and I rise in opposition to the underlying legislation.
  In the 1960s, President Kennedy used to say, ``Ask not what your 
country can do for you, but what you can do for your country.'' Today, 
Republican leaders in Washington have issued a new challenge: ``Ask not 
what your country can do for you, but what you can do for the country 
club.''
  That is what this bill is all about. It is protecting the country 
club members from the responsibility for the harm which they 
potentially inflict from their corporate perspectives on ordinary 
citizens within our society.
  The class-action bill is part of an overall strategy which the 
Republican Party has put in place in order to harm consumers all across 
our country, to repeal the protections that have been placed upon the 
books for two generations that ensure that the individual in our 
society is given the protection which they need. Here is their 
strategy. It is a simple, four-part strategy.
  Number one, first is the ``borrow and spend'' strategy. That is all 
part of this idea that Paul O'Neill mentioned, the former Secretary of 
Treasury for George Bush, when he said that Dick Cheney said to him, 
``Reagan proved that deficits don't matter.''
  Of course, the reason they do not matter is that, as Grover Norquist 
has pointed out quite clearly, the architect of this Republican 
strategy, the key goal has to be to starve the beast; the beast, of 
course, being the Federal Government's ability to help ordinary people, 
to help ordinary citizens, to help

[[Page H646]]

ordinary consumers in our country when they are being harmed.
  So this idea that there is less and less money then starves the 
Federal agencies given the responsibility for protecting the public, 
the Federal Drug Administration, the Consumer Product Safety 
Commission; agency after agency left with not enough resources to 
protect the consumer, which they were intended to do.
  Secondly, there is the grim reaper of regulatory relief, where the 
Office of Management and Budget inside of the Bush administration 
ensures that any regulation that is meant to protect the consumer is 
tied up in endless rounds of peer review and cost-benefit analysis, 
weighing the lives of ordinary consumers against the money that 
corporations might have to spend in order to make sure that their 
products are not defective, that they do not harm ordinary citizens 
across our country.
  Then there is stage three, the fox in the hen house. This is where 
the Bush administration then appoints somebody from the industry that 
is meant to be regulated as the head of the agency, knowing that that 
individual has no likelihood of actually putting on the books the kinds 
of protections which are needed.
  Then, finally, after the Federal Government is not capable of really 
protecting ordinary citizens, their safety, their health, then what 
they say to the citizen is, by the way, now we are going to make it 
almost impossible for you to go to court to protect yourself, to bring 
a case.
  That is what this bill is all about, that final step. You cannot even 
as an individual partner with other people to go to court. And here is 
what it says. It says that all of these cases are going to Federal 
Court, unless a significant defendant is in fact a citizen of the 
State.
  Well, think about this. Let us go to New Hampshire. New Hampshire is 
a perfect example. New Hampshire has a suit which it has brought 
against 22 oil and chemical companies because of the pollution in the 
State's waterways with MTBE, a deadly, dangerous material which has 
harmed people all across our country, but New Hampshire is the best 
example.
  Under this new law, because the principal defendant in the case is 
Amerada Hess and because it is headquartered in New York and it is the 
principal defendant, not only Amerada Hess but the other 22 companies, 
not only is Amerada Hess, this big company, and the other 22 companies 
who have arrived in New Hampshire, polluting the State, given the 
relief of not having the case be held in the State of New Hampshire, 
with New Hampshire judges and New Hampshire citizens, instead it is 
removed to the Federal Court, so the Republicans can name judges who 
they know are going to be sympathetic to the companies, not the State 
of New Hampshire, not their judges, not their people.
  That is what this is all about. It is making sure that ordinary 
citizens in New Hampshire, whose families have been harmed, whose 
health is permanently ruined, cannot bring a case against large 
corporations.
  Who gets the benefit of this? The defendant. The defendant. They come 
in from out-of-state, they pollute, they harm, they ruin the lives of 
people, and then the defendant says, ``I don't want to be tried in New 
Hampshire. I don't want to be tried in Texas. I don't want to be tried 
in that State. I want to go some other place.''
  What about the plaintiffs? What about the people who have been 
harmed? What about the mothers? What about the children? What about the 
people who have lost their health?
  This is the final nail that the Republicans are putting in the coffin 
of the rights of ordinary citizens to be able to protect themselves. 
All of these cases should be brought in the State courts where the 
large corporation caused the harm, not in a Federal Court away from the 
closest people who know what is right and wrong inside of that State.
  Mr. Speaker, vote no on this critical bill. Vote no on the rule. Vote 
to protect the consumers, the families, the children, the seniors in 
our country who the Republicans are going to allow to be jeopardized by 
moving the cases from where they live to places where the defendants, 
the largest corporations, will be able to protect their own selfish 
self-interests.
  Mr. GINGREY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, in response to some of the comments that were made by 
the gentleman from Massachusetts, I want to share with my colleagues 
some facts.
  The Class Action Fairness Act contains several provisions 
specifically designed to ensure that class members, not their 
attorneys, class members, not their attorneys, are the primary 
beneficiaries of the class-action process.
  For example, the act, number one, requires that judges carefully 
review all coupon settlements and limit attorney's fees paid in such 
settlements to the value actually received by the class members.
  Second, it requires careful scrutiny of ``net loss'' settlements in 
which the class members end up losing money.
  Thirdly, it bans settlements that award some class members a larger 
recovery just because they live closer to the court.
  Lastly, it allows Federal courts to maximize the benefits of class-
action settlements by requiring that unclaimed coupons or settlement 
funds be donated to charitable organizations.
  In addition, the bill would require that notice of proposed 
settlements be provided to appropriate State and Federal officials, 
such as State Attorneys General.
  Let me also address one other issue raised, and I think this is very 
important.
  This myth is being circulated that the Class Action Fairness Act 
would move all or virtually all class actions to Federal courts, 
overwhelming Federal judges and denying State courts the ability to 
resolve local disputes. Well, a recent study examined class actions in 
the State courts of Connecticut, Delaware, Maine, Massachusetts, New 
York and Rhode Island, to determine what effect the bill would have on 
the class actions filed in those respective States.
  Here is what they found in regard to the State of Massachusetts. 
Sixty-one percent, 30 out of 49 of the reported class actions, would 
have presumedly remained in State court. At least 10 of the 19 
Massachusetts cases that would be affected by this bill, the Class 
Action Fairness Act, involved nationwide classes, cases primarily 
involving citizens living in other states.
  Mr. Speaker, I am proud to yield 2 minutes to the gentlewoman from 
Tennessee (Mrs. Blackburn) a former member of the Committee on the 
Judiciary and an original cosponsor of this bill in the 108th Congress.
  Mrs. BLACKBURN. Mr. Speaker, I thank the gentleman from Georgia for 
providing some of that information. It seems that our colleagues 
probably are so wrong on this bill they cannot even talk about it. They 
want to come down here and talk about all sorts of other things that 
are not involved in class action.
  They are talking about protection. Well, I would like the American 
people to know and our colleagues to know we are talking about 
protection. We are talking about protecting Americans' pockets books, 
because our constituents know somebody is going to pay, and if greedy 
lawyers are getting big settlements, they are going to be paying more 
at the cash register every single time they go buy something.
  An entire industry has grown up over attorneys seeking cash in these 
class-action lawsuits. Our courts are to be designed for fairness, a 
forum of fairness and justice, but they have become a virtual ATM for 
greedy lawyers when it comes to class-action lawsuits. Lawyers go file 
a class-action lawsuit and collect millions of dollars, just as the 
gentleman from Georgia was saying; and the clients, who they barely 
know, most times they have never even met most of these folks, those 
clients are receiving pennies.
  Mr. Speaker, my colleague spoke saying this would not help the 
victims. I would like people to know the Class Action Fairness Act does 
not restrict true victims from filing class-action lawsuits. It will 
prevent attorneys from choosing which State to file in, because we know 
sometimes they choose where they think they can get the biggest 
monetary award. We are putting the focus back on justice, back on 
justice in this bill.
  In addition, the reform provides greater consumer protection by 
allowing our courts to scrutinize those settlements that provide 
victims with

[[Page H647]]

coupons while those attorneys are getting millions and millions and 
millions of dollars.
  Mr. Speaker, this is an overdue reform. We have worked tirelessly on 
this in the House, and I urge everyone to support it.
  Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, my colleague from Georgia had kind of quoted from a 
study implying that most of these class-action cases would remain in 
States, that the whole purpose of this bill is to try to move them to 
Federal courts.
  Let me quote from a CBO cost estimate which says that under this 
bill, most class-action lawsuits would be heard in Federal District 
Court, rather than in the State court.
  Mr. Speaker, I yield 5 minutes to the gentlewoman from Texas (Ms. 
Jackson-Lee).
  (Ms. JACKSON-LEE of Texas asked and was given permission to revise 
and extend her remarks.)
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I am always amazed to hear the 
remarks of my colleagues, and I welcome those remarks, because it is 
well-known that free and open debate lies at the very heart of the 
democratic process. But I wonder if we rephrased the terminology 
``greedy lawyers'' and made the American people truly understand what 
the give and take of the judicial process is all about.

                              {time}  1145

  I wonder, if we said the lawyers that represented the 9/11 families 
could be considered greedy lawyers, thousands who lost loved ones, and 
their engagement in seeking to have redress of their grievances done in 
a class-action manner, is that evidence of greedy lawyers? Or maybe the 
thalidomide families, babies who were born deformed in the 1950s and 
class actions were utilized, is that a signal of greedy lawyers?
  Frankly, Mr. Speaker, what we have here is a complete abuse of the 
democratic process. Why do we not think about a situation where you are 
a college student enrolled in a world history class, you enter the 
first day and the professor says, welcome, it is now time to take the 
final exam. No discussion, no notes, no teaching, no nothing. This is 
what this rule represents. It is to walk on this floor and take the 
final exam. It is to close the door of the opportunity for the American 
people to go into the courthouse and to have a jury of their peers 
decide whether or not, as a collective class, they have been injured.
  If my friends would tell the truth, they would know that plaintiffs 
prevail in such a small percentage of times all over America that this 
is ridiculous and ludicrous legislation. They would also refer you to 
the Cato Institute in 1983 when they talked about attacking liberal 
legal opportunities, or liberal bills. They said, this is guerilla 
warfare. We are going after tort litigation, we are going after Social 
Security, we are going after Medicare. Guerilla warfare.
  The reason why this is guerilla warfare is because we have a process, 
Mr. Speaker. These actions come to our committee, the Committee on the 
Judiciary and a number of other committees; we have opportunity for 
amendment, give and take, hearings. This legislation has seen no light 
of day in any committee. It did not see the light of day on the Senate 
side, no hearings, no markup; it did not see the light of day on the 
House side, no hearings, no markup. So the American people are being 
fooled by the fact that they think we are doing business as the 
Constitution would want us to do, that we are open to the rules of this 
House, that we understand that we must have the oversight of this 
House. And frankly, Mr. Speaker, shame on us, for we are shaming the 
process, and the American people should rightly be ashamed of this and 
of us.
  I ask my Republicans, we know you have the overwhelming majority, you 
have the two-thirds, in essence, you have the bully pulpit, and you use 
it. But the bad thing about it is that you are using it to overwhelm 
the rules of this House. Mr. Speaker, you are literally ignoring the 
Rules of the House. And some people would say to me, Congresswoman 
Jackson-Lee, this is inside the ball game, inside the ballpark, inside 
the Beltway. The American people are not interested in process. I 
believe they are. Because the American people know about school boards 
and process, they know about the parent-teacher meetings and process, 
they know about their places of faith and process, and they know that 
process is to be respected. Here in this House we are not respecting 
process.
  I argue that the one amendment that we have as the manager's 
amendment should be the amendment that should be accepted, and that is 
the one that includes the idea of protecting civil rights and wage-and-
hour carve-outs and prohibits those companies that have formulated 
their companies in another country, United States companies 
incorporated elsewhere, in order to be able to participate in this 
abusive process.
  Let me read what the New York Times said. ``Instead of narrowly 
focusing on real abuses of the system, the measure that is before us 
today reconfigures the civil justice system to achieve a significant 
rollback of corporate accountability and people's rights. The main 
impact of the bill, which has a sort of propagandistic title normally 
assigned to such laws as the Class Action Fairness Act will be to 
funnel nearly all major class-action lawsuits out of State courts and 
into all overburdened Federal courts. That will inevitably make it 
harder for Americans to pursue legitimate claims successfully against 
companies that violate State consumer, health, civil rights, and 
environmental protection laws.''
  Mr. and Mrs. America, let me tell you something. When this 
legislation passes on the Republican clock, I am going to tell you that 
the doors of the courthouse will be closed to you; and if you have 
Johnny Jones, the country lawyer, trying to bring justice to rural 
America, Johnny Jones will have to take his small-time practice and 
mortgage his house to get into the Federal court. And not only that, 
you might get there 50 years from the time that action occurs.
  This is the greatest abomination and insult to justice that I have 
ever seen. It is an outrage, and I ask my colleagues to vote down the 
rule, vote for the Democratic substitute, and put this terrible bill 
where it needs to go, packing out of the door.
  Mr. Speaker, free and open debate lies at the heart of the democratic 
process. Without it, true democracy will surely wither away to nothing. 
It is in this light that I rise to support H. Res. 96--only insofar as 
it allows consideration of the Democratic substitute that was ruled in 
order by the Committee on Rules and offered by the distinguished 
Ranking Member of the Judiciary Committee, Mr. Conyers. We should have 
an open rule on this important issue, however.
  For real and honest debate to take place on such an important issue 
as defining diversity jurisdiction in the Federal courts for class 
actions, we must have available an alternate option to S. 5, the 
legislation that is before the committee of the whole House. The 
Democratic substitute creates that option. I congratulate the Rules 
committee for their foresight in enabling this open debate.
  This bill, despite its name, is not fair to all complainants who come 
to the courts for relief. In addition, it fails to render 
accountability to parties who are in the best financial position. One 
issue that I planned to address by way of amendment was that of 
punishing fraudulent parties to class action proceedings by preventing 
them from removing the matter to Federal court.
  I am a co-sponsor of the amendment in nature of a substitute that 
will be offered by my colleagues. With the provisions that it contains, 
requirements for Federal diversity jurisdiction will not be watered 
down resulting in the removal of nearly all class actions to Federal 
court. A wholesale stripping of jurisdiction from the State courts 
should not be supported by this body. Therefore, it needs to be made 
more stringent as to all parties and it needs to contain provisions to 
protect all claimants and their right to bring suit.
  Contained within the amendment in nature of a substitute is a section 
that I proposed in the context of the Terrorist Penalties Enhancement 
Act that was included in the bill passed into law. This section relates 
to holding ``Benedict Arnold corporations'' accountable for their 
terrorist acts. With respect to S. 5, the right to seek removal to 
Federal courts will be precluded for Benedict Arnold corporations.
  The ``Benedict Arnold corporation'' refers to a company that, in bad 
faith, takes advantage of loopholes in our tax code to establish bank 
accounts or to ship jobs abroad for the main purpose of tax avoidance. 
A tax-exempt group that monitors corporate influence called ``Citizen 
Works'' has compiled a list of 25 Fortune

[[Page H648]]

500 Corporations that have the most offshore tax-haven subsidiaries. 
The percentage of increase in the number of tax havens held by these 
corporations since 1997 ranges between 85.7 percent and 9,650 percent.
  This significant increase in the number of corporate tax havens is no 
coincidence when we look at the benefits that can be found in doing 
sham business transactions. Some of these corporations are ``Benedict 
Arnolds'' because they have given up their American citizenship; 
however, they still conduct a substantial amount of their business in 
the United States and enjoy tax deductions of domestic corporations.
  The provision in the substitute amendment will preclude these 
corporations from enjoying the benefit of removing State class actions 
to Federal court. Forcing these corporate entities to defend themselves 
in State courts will ensure that these class action claims will be 
fairly and fully litigated.
  I support the amendment in nature of a substitute.
  Mr. GINGREY. Mr. Speaker, I yield myself such time as I may consume.
  I want to address the remarks of the gentlewoman from Texas. I want 
to remind her that the Committee on Rules voted unanimously in favor of 
this rule and granted an amendment in order in the form of a substitute 
that includes each and every one of the provisions that she just spoke 
of. I also would like to remind my colleagues that each and every one 
of those amendments were also proffered in the other body, and each and 
every one of those amendments were voted down in a strong bipartisan 
vote.
  So to suggest, Mr. Speaker, that this is something that had not been 
looked at and we have not talked about, I would remind my colleague 
that it was addressed in the 105th Congress, in the 106th Congress, in 
the 107th Congress, in the 108th Congress, and finally we are here, and 
we are going to get this rule passed and this bill passed and on to the 
President for his signature.
  Mr. Speaker, I yield 3 minutes to the gentleman from Oklahoma (Mr. 
Cole), my colleague on the Committee on Rules.
  Mr. COLE of Oklahoma. Mr. Speaker, I thank the gentleman from Georgia 
for yielding me this time and, frankly, for making that important 
point, that this matter is proceeding to this floor under a bipartisan 
unanimous vote by the Committee on Rules; and the suggestion that the 
process was unfair or defective is not borne out by both the nature of 
the debate in the Committee on Rules and by the unanimous vote that 
sent this rule to the floor.
  Let me move now, Mr. Speaker, to my prepared remarks. I rise today in 
support of the rule for S. 5, the Class Action Fairness Act of 2005. I 
believe it to be a fair rule and one that allows us to fully explore 
the issues surrounding this legislation. Furthermore, it makes in order 
a substantive amendment in the nature of a substitute that the 
gentleman from Michigan (Mr. Conyers) has worked hard to produce. I 
believe that this will allow a spirited debate and one that will fully 
explore the many complex issues surrounding class-action reform while 
still enabling the House to act in an expeditious fashion.
  Mr. Speaker, while I fully agree that class-action lawsuits are a 
legitimate tool in civil procedure, these lawsuits are a tool that has 
been frequently abused over the past years. There exist a certain small 
subset of attorneys who do not represent the best traditions of their 
colleagues in the legal profession and primarily are concerned with 
lining their pockets by abusing the class-action process. Often, this 
is done through the popular so-called coupon settlement process, where 
the class of plaintiffs only receive coupons to use from the very same 
companies they are suing, while the attorneys walk away from the table 
with millions in cash.
  Mr. Speaker, this legislation is a necessary step to better ensure 
and protect our citizens' rights. The ongoing flood of meritless labor 
and employment litigation has often destroyed reputable companies and 
has resulted in thousands of layoffs and business restructurings that 
hurt innocent workers and shareholders alike.
  This legislation would incentivize only those who have legitimate 
class-action claims to move forward in the legal process and, at the 
same time, it would disincentivize lawyers from filing meritless claims 
by increasing sanctions against those who do so.
  Mr. Speaker, this legislation is a necessary first step and the rule 
that accompanies it is one that I believe all Members should support. 
Those who support another approach have the full opportunity to explore 
it in the minority's amendment in the nature of a substitute. 
Therefore, I urge all Members to support the rule and the underlying 
legislation.
  Mr. McGOVERN. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, it is interesting to hear the 
distinguished gentleman from Georgia mention the Committee on Rules, 
and I respect the power of the Committee on Rules. The Committee on 
Rules is not a jurisdictional committee. This bill did not go through 
the committee process on the Senate side or on the House side.
  I might also say when we talk about coupons and the amount of dollars 
that lawyers may receive, might I remind the body that we are talking 
about thousands upon thousands of plaintiffs in a class action who 
would never have their grievances addressed and the corporate culprit 
would have never been punished had it not been for this class action. 
So to manipulate it to suggest that it is abused is manipulation, just 
that.
  This did not go through the committee process. We are avoiding the 
committee process. Therefore, we are stamping on democracy and this 
rule and this bill should be voted down enthusiastically.
  Mr. GINGREY. Mr. Speaker, I yield myself such time as I may consume.
  In response to the gentlewoman from Texas, the Committee on Rules has 
jurisdiction, and anybody that knows the history of this body knows and 
understands that the Committee on Rules certainly has jurisdiction.
  Let me just give a little history for my colleagues and particularly 
for the gentlewoman from Texas in regard to this bill. Again, in the 
105th Congress, Senate bill 2083, the Class Action Fairness Act, Senate 
held hearing, reported by subcommittee. House Resolution 3789, Class 
Action Jurisdiction Act of 1998, committee hearing and markup held, 
reported from the House Committee on the Judiciary, 17 to 12.
  Mr. Speaker, in the 106th Congress, H.R. 1875, Interstate Class 
Action Jurisdiction Act of 1999. Committee hearing and markup held, 
passed floor 222 to 207.
  In the 107th Congress, H.R. 2341, Class Action Fairness Act of 2001. 
Committee hearing and markup held; passed floor, 233 to 190.
  In the 108th Congress, H.R. 1115, Class Action Fairness Act of 2003, 
committee hearing and markup held, passed floor, 253 to 170.
  No hearings? Indeed.
  Mr. Speaker, I yield 3 minutes to the gentleman from Florida (Mr. 
Keller).
  Mr. KELLER. Mr. Speaker, I thank the gentleman from Georgia for 
yielding me this time.
  Mr. Speaker, I rise today in strong support of both the rule and the 
underlying class-action reform legislation.
  Mr. Speaker, the bottom line is that class-action reform is badly 
needed. Currently, certain crafty lawyers are able to game the system 
by filing large, nationwide class-action suits in certain preferred 
State courts such as Madison County, Illinois, where judges are quick 
to certify classes and quick to approve settlements that give millions 
of dollars to attorneys and only worthless coupons to their clients.
  Looking at this chart, for example, we can see the history of Madison 
County, Illinois, which has been called the number one judicial 
hellhole in the United States. There were 77 class-action filings in 
2002, and 106 class-action lawsuits filed in 2003. Now, the movie 
Bridges of Madison County was a love story. ``The Judges of Madison 
County'' would be a horror flick.
  Unfortunately, all too often, it is the lawyers who drive these 
class-action suits and not the individuals who allegedly have been 
injured. For example, in a suit against Blockbuster over late fees, the 
attorneys received $9.25 million; their clients got a $1 off coupon for 
their next video rental. Similarly, in a lawsuit against the company 
that makes Cheerios, the attorneys received $2 million for themselves, 
while their clients received a coupon for a free box of Cheerios. In a 
nutshell, these out-of-control class-action lawsuits are killing jobs, 
they are hurting small business people who cannot afford to defend

[[Page H649]]

themselves, and they are hurting consumers who have to pay a higher 
price for goods and services.
  Fortunately, this legislation provides much-needed reform in 2 key 
areas. First, it eliminates much of the forum shopping by requiring 
that most of the nationwide class-action suits be filed in Federal 
court. Second, it cracks down on these coupon-based class-action 
settlements by requiring that attorney fee awards be based on either 
the value of the coupons actually redeemed, or by the hours actually 
billed by the attorney prosecuting the case.
  Mr. Speaker, this legislation will and should comfortably pass the 
House of Representatives. Last week, this exact bill received 72 votes 
in the U.S. Senate, and last year we passed a similar bill with 253 
votes. I urge my colleagues to vote yes on the bill and vote yes on the 
rule.

                              {time}  1200

  Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I guess it is politically popular to attack lawyers and 
judges, but what I am concerned about is what this bill will do to 
average people who are seeking remedies for being mistreated.
  I want to read an excerpt from the Leadership Conference on Civil 
Rights, AFL/CIO, and the Alliance for Justice statement. One of things 
they point out is that nowhere has a case been made that abuses exist 
in anti-discrimination and wage and hour class action litigation.
  They point out by allowing dozens of employees to bring one lawsuit 
together, the class action device is frequently the only means for low-
wage workers who have been denied mere dollars a day to recover their 
lost wages. Moreover, class actions are also often the only means to 
effectively change a policy of discrimination.
  Wage and hour class actions are most often brought in States under 
the law of the State in which the claim arises. The reason is that 
State wage and hour laws typically provide more complete remedies for 
victims of wage and hour violations than the Federal wage and hour 
statute. For instance, the Federal Fair Labor Standards Act offers no 
protection, no protection for a worker who works 30 hours and is paid 
for 20, so long as the worker's total pay for the 30 hours worked 
exceeds the Federal minimum wage. However, many States have payment of 
wage laws that would require that the workers be fully paid for those 
additional 10 hours of work.
  Also, Federal law provides no remedy for part-time workers who often 
work 10- to 16-hour days, yet earn no overtime because they work less 
than 40 hours per week. At least six States and territories, however, 
including California and Alaska, require payment of overtime after a 
prescribed number of hours of work in a single day. Likewise, State 
laws increasingly provide greater civil rights protections than Federal 
laws. For example, every State has passed a law prohibiting 
discrimination on the basis of disability. Some of these State statutes 
provide a broader definition of disability and a greater range of 
protection in comparison to the Federal Americans with Disabilities 
Act, including California, Minnesota, New Jersey, New York, Rhode 
Island, Washington, and West Virginia.
  In addition, every State has enacted a law prohibiting age 
discrimination in employment. Some of these State laws, including those 
in California, Michigan, Ohio and the District of Columbia, contain 
provisions affording greater protection to older workers than 
comparable provisions of the Federal Age Discrimination and Employment 
Act. In addition, many State laws provide protections to 
classifications not covered by Federal law. For example, many States 
provide expanded benefits based on marital status, and I could go on 
and on and on.
  The point of the matter here is that this legislation is basically 
denying people the rights and the protections that many of them have 
fought so hard to earn in their States, and it leads to more injustice 
and more unfairness.

         Leadership Conference on Civil Rights, Alliance for 
           Justice, AFL-CIO,
                                 Washington, DC, February 2, 2005.

         Exempt Civil Rights and Wage and Hour Cases From S. 5

       Dear Senators, On behalf of the undersigned civil rights 
     and labor organizations, we write to urge you to support an 
     amendment being offered by Senators Kennedy and Cantwell to 
     the Class Action Fairness Act (S. 5), which would exempt 
     civil rights and wage and hour state law cases. The amendment 
     is necessary in order to ensure that S. 5 does not adversely 
     impact the workplace and civil rights of ordinary Americans 
     by making it extremely difficult to enforce civil rights and 
     labor rights.
       During Congress' extensive examination of the merits of 
     class action lawsuits, nowhere has a case been made that 
     abuses exist in anti-discrimination and wage and hour class-
     action litigation. By allowing dozens of employees to bring 
     one lawsuit together, the class-action device is frequently 
     the only means for low wage workers who have been denied mere 
     dollars a day to recover their lost wages. Moreover, class 
     actions also are often the only means to effectively change a 
     policy of discrimination. These suits level the playing field 
     between individuals and those with more power and resources, 
     and permit courts to decide cases more efficiently.
       Wage and hour class actions are most often brought in state 
     courts under the law of the state in which the claims arise. 
     The reason is that state wage and hour laws typically provide 
     more complete remedies for victims of wage and hour 
     violations than the federal wage and hour statute. For 
     instance, the federal Fair Labor Standards Act (FLSA) offers 
     no protection for a worker who works 30 hours and is paid for 
     20, so long as the worker's total pay for the 30 hours worked 
     exceeds the federal minimum wage. However, many states have 
     ``payment of wage'' laws that would require that the worker 
     be fully paid for those additional 10 hours of work. Also, 
     federal law provides no remedy for part-time workers who 
     often work 10-16 hour days, yet earn no overtime because they 
     work less than 40 hours per week. At least six states and 
     territories, however, including California and Alaska, 
     require payment of overtime after a prescribed number of 
     hours are worked in a single day.
       Likewise, state laws increasingly provide greater civil 
     rights protection than federal law. For example, every state 
     has passed a law prohibiting discrimination on the basis of 
     disability. Some of these states statutes provide a broader 
     definition of disability and a greater range of protection in 
     comparison to the federal Americans with Disabilities Act, 
     including California, Minnesota, New Jersey, New York, Rhode 
     Island, Washington, and West Virginia. In addition, every 
     state has enacted a law prohibiting age discrimination in 
     employment, and some of these state laws--including those of 
     California, Michigan, Ohio and the District of Columbia--
     contain provisions affording greater protection to older 
     workers than comparable provisions of the federal Age 
     Discrimination in Employment Act (ADEA).
       In addition, many state laws provide protections to 
     classifications not covered by federal law. For example, the 
     following states provide protection for marital status: 
     Alaska, California, Connecticut, Delaware, Florida, Hawaii, 
     Illinois, Maryland, Michigan, Minnesota, Montana, Nebraska, 
     New Hampshire, New Jersey, New York, North Dakota, Oregon, 
     Virginia, Washington, and Wisconsin. Moreover, several states 
     have expanded Title VII's ban on national origin 
     discrimination to prohibit discrimination on the basis of 
     ancestry, or place of birth, or citizenship status. These 
     states include Arkansas, California, Colorado, Connecticut, 
     Hawaii, Illinois, Indiana, Kansas, Maine, Massachusetts, 
     Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, South 
     Dakota, Vermont, West Virginia, Wisconsin, Wyoming, and the 
     Virgin Islands.
       Finally, 31 states have enacted legislation prohibiting 
     genetic discrimination in the workplace--an important 
     protection given the rapid increase in the ability to gather 
     this type of information. The 31 states are Arizona, 
     Arkansas, California, Connecticut, Delaware, Hawaii, Iowa, 
     Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, 
     Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New 
     Jersey, New York, North Carolina, Oklahoma, Oregon, Rhode 
     Island, South Dakota, Texas, Utah, Vermont, Virginia, 
     Washington, and Wisconsin. In addition, Florida and Illinois 
     have enacted more limited protections against genetic 
     discrimination.
       Under S. 5, citizens are denied the right to use their own 
     state courts to bring class actions against corporations that 
     violate these state wage and hour and state civil rights 
     laws, even where that corporation has hundreds of employees 
     in that state. Moving these state law cases into federal 
     court will delay and likely deny justice for working men and 
     women and victims of discrimination. The federal courts are 
     already overburdened. Additionally, federal courts are less 
     likely to certify classes or provide relief for violations of 
     state law.
       In light of the lack of any compelling need to sweep state 
     wage and hour and civil rights claims into the scope of the 
     bill, we urge you to support an amendment to exempt 
     these claims from the provisions of S. 5. If you have any 
     questions, or need further information, please call Nancy 
     Zirkin, Deputy Director of the Leadership Conference on 
     Civil Rights (202-263-2880); Sandy Brantley, Legislative 
     Counsel, Alliance for Justice (202-822-6070); or Bill 
     Samuel, Legislative Director, AFL-CIO (202-637-5320).
           Sincerely,
       AARP.

[[Page H650]]

       AFL-CIO.
       Alliance for Justice.
       American-Arab Anti-Discrimination Committee.
       American Association of People with Disabilities.
       American Association of University Women.
       American Civil Liberties Union.
       American Federation for the Blind.
       American Federation of Government Employees.
       American Federation of School Administrators.
       American Federation of State, County & Municipal Employees.
       American Federation of Teachers.
       American Jewish Committee.
       Americans for Democratic Action.
       The Arc of the United States.
       Association of Flight Attendants.
       Bazelon Center for Mental Health Law.
       Center for Justice and Democracy.
       Coalition of Black Trade Unionists.
       Communications Workers of America.
       Consortium for Citizens with Disabilities Civil Rights Task 
     Force.
       Department for Professional Employees, AFL-CIO.
       Disability Rights Education and Defense Fund.
       Epilepsy Foundation.
       Federally Employed Women.
       Federally Employed Women's Legal & Education Fund, Inc.
       Food & Allied Service Trades Department, AFL-CIO.
       Human Rights Campaign.
       International Association of Machinists and Aerospace 
     Workers.
       International Brotherhood of Boilermakers, Iron Ship 
     Builders, Blacksmiths, Forgers and Helpers.
       International Brotherhood of Electrical Workers.
       International Brotherhood of Teamsters.
       International Federation of Professional & Technical 
     Engineers.
       International Union of Bricklayers and Allied Craftworkers.
       International Union of Painters and Allied Trades of the 
     United States and Canada.
       International Union, United Automobile, Aerospace & 
     Agricultural Workers of America.
       Jewish Labor Committee.
       Lawyers' Committee for Civil Rights Under Law.
       Leadership Conference on Civil Rights.
       Legal Momentum.
       Mexican American Legal Defense and Educational Fund.
       NAACP.
       NAACP Legal Defense & Educational Fund, Inc.
       National Alliance of Postal and Federal Employees.
       National Asian Pacific American Legal Consortium.
       National Association for Equal Opportunity in Higher 
     Education.
       National Association of Protection and Advocacy Systems.
       National Association of Social Workers.
       National Employment Lawyers Association.
       National Fair Housing Alliance.
       National Organization for Women.
       National Partnership for Women and Families.
       National Women's Law Center.
       Paper, Allied-Industrial, Chemical and Energy Workers 
     International Union.
       Paralyzed Veterans of America.
       People For the American Way.
       Pride At Work, AFL-CIO.
       Service Employees International Union.
       Transport Workers Union of America.
       Transportation Communications International Union.
       UAW.
       Unitarian Universalist Association of Congregations.
       UNITE!
       United Cerebral Palsy.
       United Food and Commercial Workers International Union.
       United Steelworkers of America.
       Utility Worker Union of America.
       Women Employed.

  Mr. Speaker, I reserve the balance of my time.
  Mr. GINGREY. Mr. Speaker, I yield 2 minutes to the gentleman from 
Georgia (Mr. Westmoreland), the former minority leader of the Georgia 
House of Representatives.
  Mr. WESTMORELAND. Mr. Speaker, I rise today to support the rule and 
the underlying legislation; and I want to thank my colleague from 
Georgia for yielding me time.
  Mr. Speaker, we have all received the class action settlement notices 
in our mail boxes, I know I have, not even realizing we were part of a 
class action lawsuit nor ever asking to be part of the lawsuit. And not 
only that, but you never get to meet this attorney who will represent 
you.
  As consumers, we need to know that we will eventually bear the cost 
of these companies that have to settle large class actions because it 
is easier to settle than to try to litigate against the trial lawyers.
  Earlier this week, the Georgia General Assembly moved forward with 
major legislation to reform the legal system, something I fought for 
during my time there. This legislation continues that effort and takes 
a huge step forward to protect consumers by limiting these huge 
interstate class action lawsuits.
  Mr. Speaker, Federal courts have had jurisdiction over substantial 
cases between citizens of different States since the founding of this 
Nation. But due to the interpretations of the laws, State courts have 
had to bear the brunt of class action lawsuits in this country.
  This legislation is a fantastic bipartisan effort to reform the legal 
system and is a good first step toward addressing the costs of 
litigation on small businesses, large businesses, and all Americans. I 
encourage my colleagues to support this effort; and I appreciate the 
leadership shown by the Speaker, the majority leader, and the chairman 
of the Committee on the Judiciary towards getting this legislation 
passed through the Senate and on the desk of the President.
  I urge my colleagues to support this measure, the rule and the 
legislation.
  Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would like to read a couple of cases here.
  Mrs. Higgins of Tennessee was a 39-year-old woman who died of a 
sudden heart attack after taking Vioxx. She was the mother of a 9-year-
old son. When she was diagnosed with the early onset of rheumatoid 
arthritis, Vioxx was prescribed. She had no former cardiac problems or 
family history. According to her medical records, Mrs. Higgins was in 
otherwise excellent health; but on September 25, 2004, she died of a 
sudden heart attack, less than a month after she started taking Vioxx. 
She was buried on the very day in September that Merck took Vioxx off 
the market.
  On October 28, 2004, her husband, Monty, filed a claim against Merck 
in the Superior Court of New Jersey, Atlantic City Division.
  Why New Jersey? This couple is from Tennessee. Because that is the 
State where Merck is headquartered. In an interview on ``60 Minutes,'' 
Mr. Higgins said, ``I believe my wife would be here if Merck had 
decided to take Vioxx off the market just 1 month earlier.''
  Then there is Richard ``Dickie'' Irvin of Florida who was a 53-year-
old former football coach and president of the Athletic Booster 
Association. He had received his college football scholarship and was 
inducted into the school's football hall of fame. He went on to play in 
Canadian league football until suffering a career-ending injury. In 
addition to coaching, he worked at a family-owned seafood shop where he 
was constantly moving crates of seafood. He rarely went to see a doctor 
and had no major medical problems.
  In April of 2001, Mr. Irvin was prescribed Vioxx for his football 
knee injury from years ago. Approximately 23 days after he began taking 
Vioxx, Mr. Irvin died from a sudden, unexpected heart attack. An 
autopsy revealed that his heart attack was caused by a sudden blood 
clot. This is the exact type of injury that has been associated with 
Vioxx use. Mr. Irvin and his wife of 31 years had four children and 
three grandchildren.
  I could read more cases involving Vioxx, but most people in this 
House, Mr. Speaker, probably agree with me that Merck should be held 
accountable if they knew about the harmful effects of Vioxx.
  The class action section of this bill, however, would allow Merck and 
other corporate defendants to delay their day of reckoning for years 
and years and years; and justice for these individuals' families would 
be delayed; and justice delayed is justice denied. Again, this bill 
should be defeated.
  Mr. Speaker, I reserve the balance of my time.
  Mr. GINGREY. Mr. Speaker, how much time do I have remaining?
  The SPEAKER pro tempore (Mr. LaTourette). The gentleman from Georgia 
(Mr. Gingrey) has 10 minutes remaining.
  Mr. GINGREY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, the gentleman from Massachusetts (Mr. McGovern) 
presented that case; and I want to present the real crux of this 
problem, and let me read a suit, Shields, et al v. Bridgestone/
Firestone, Incorporated in Texas, a suit in Texas.

[[Page H651]]

  This suit involves customers who had Firestone tires that were among 
those that the National Highway Traffic Safety Administration 
investigated or recalled but who did not suffer any personal injury or 
property damage. After a Federal appeals court rejected class 
certification, plaintiffs' counsel and Firestone negotiated a 
settlement which has now been approved by a Texas State court. Under 
the settlement, the company has agreed to redesign certain tires, a 
move that was already underway irrespective of the suit, and to develop 
a 3-year consumer education and awareness campaign, but the members of 
the class received nothing. The lawyers, they got $19 million.
  Mr. Speaker, I yield 2 minutes to the gentlewoman from Pennsylvania 
(Ms. Hart), a former member for 4 years of the Committee on the 
Judiciary and an original co-sponsor of H.R. 1115.
  (Ms. HART asked and was given permission to revise and extend her 
remarks.)
  Ms. HART. Mr. Speaker, I would like to thank the gentleman for the 
opportunity to speak on this bill today. He has been leading a very 
important discussion and one that I am very pleased has finally come to 
fruition.
  Mr. Speaker, there has been a lot of discussion today about class 
actions and what they do to the economy; class actions, what they have 
done to law, because State courts are making national law. But I think 
the most important point about a class action is that a class action's 
purpose is to award the plaintiffs who have been injured. The intent of 
these suits is to allow large groups who were similarly harmed by 
something to recover damages.
  Unfortunately, it is the attorneys who have been recovering more 
money. The injured plaintiffs in many cases are recovering basically 
nothing. First, they are denied real relief, and then the attorneys 
pocket huge amounts of money. Examples, Bank of Boston case, the 
lawyers got 8.5 million. The plaintiffs actually lost money. In the 
Blockbuster case, the lawyers, 9.25 million. The plaintiffs got $1 off 
their next movie. The Coca-Cola case, the lawyers got 1.5 million; the 
plaintiffs, a 50-cent coupon.
  Obviously, these lawsuits are not helping their intended 
beneficiaries. This act will create a consumer class action bill of 
rights. It will protect consumers from the egregious abuses of the 
class action practice today. The plan will require the judges carefully 
review the settlement and limit the attorneys fees when the value of 
the settlement received by those class members is minor in comparison 
or when there is a net loss in the settlement, such as this example 
where the class members could end up losing money.
  It also will ban settlements that award some class members a large 
recovery because they live closer to the court. It will also allow 
Federal courts to maximize the benefit of class action settlements by 
requiring that unclaimed settlement funds be donated to charitable 
organizations.
  Mr. Speaker, it is just obvious to me that this is a long-overdue 
bill. I encourage my colleagues to support it. I encourage my 
colleagues to ensure that the plaintiffs actually receive their due in 
these cases.
  Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.
  Let me close by saying, this bill is not about lawyers. It is about 
people, and it is about State governments and attorney generals being 
able to pass laws in their own States to better protect their people. 
And it is ironic and it is almost kind of laughable that the majority, 
which has made it a point to argue on behalf of States right, is 
basically turning its back on what States have done to protect their 
people.
  The previous speaker talked about making sure that the plaintiffs got 
what they deserved. Well, we are concerned about making sure that the 
plaintiffs get their day in court. And under this bill it makes it more 
difficult, especially for low-wage workers, for people who are battling 
discrimination to be able to have their day in court.
  The system clearly can be improved. Nobody is arguing that. What I am 
saying here is that the bill before us does not provide the justice and 
the fairness that I think is appropriate. So I would urge my colleagues 
to oppose this bill.

                                               National Conference


                                        of State Legislatures,

                                                 February 2, 2005.
     U.S. Senate,
     Washington, DC.
       Dear Senator: On behalf of the National Conference of State 
     Legislatures (NCSL), I am urging you to oppose passage of S. 
     5, the ``Class Action Fairness Act of 2005.'' This 
     legislation will federalize class actions involving only 
     state law claims. S. 5 undermines our system of federalism, 
     disrespects our state court system, and clearly preempts 
     carefully crafted state judicial processes which have been in 
     place for decades regarding the treatment of class action 
     lawsuits. The overall tenor of S. 5 sends a disturbing 
     message to the American people that state court systems are 
     somehow inferior or untrustworthy.
       S. 5 amends the Federal Rules of Civil Procedure to grant 
     federal district courts original diversity jurisdiction over 
     any class action lawsuit where the amount in controversy 
     exceeds $5,000,000 or where any plaintiff is a citizen of a 
     different state than any defendant, or in other words, any 
     class action lawsuit. The effect of S. 5 on state 
     legislatures is that state laws in the areas of consumer 
     protection and antitrust which were passed to protect the 
     citizens of a particular state against fraudulent or illegal 
     activities will almost never be heard in state courts. 
     Ironically, state courts, whose sole purpose is to interpret 
     state laws, will be bypassed and the federal judiciary will 
     be asked to render judgment in these cases. The impact of S. 
     5 is that state processes will be preempted by federal ones 
     which aren't necessarily better.
       NCSL opposes the passage of federal legislation, such as S. 
     5 which preempts established state authority. State courts 
     have traditionally and correcdy been the repository for most 
     class action lawsuits because state laws, not federal ones, 
     are at issue. Congress should proceed cautiously before 
     permitting the federal government to interfere with the 
     authority of states to set their own laws and procedures in 
     their own courts.
       NCSL urges Congress to remember that state policy choices 
     should not be overridden without a showing of compelling 
     national need. We should await evidence demonstrating that 
     states have broadly overreached or are unable to address the 
     problems themselves. There must be evidence of harm to 
     interests of national scope that require a federal response, 
     and even with such evidence, federal preemption should be 
     limited to remedying specific problems with tailored 
     solutions, something that S. 5 does not do.
       I urge you to oppose this legislation. Please contact Susan 
     Parnas Frederick
     at the National Conference of State
     Legislatures at 202-624-3566 or
     [email protected] for further information.
           Sincerely,

                                              Michael Blaboni,

                                New York State Senator; and Chair,
     NCSL Law and Criminal Justice Committee.
                                  ____

     Re environmental harm cases do not belong in class action 
         bill.

                                                 February 7, 2005.
       Dear Senator: Our organizations are opposed to the 
     sweepingly drawn and misleadingly named ``Class Action 
     Fairness Act of 2005.'' This bill is patently unfair to 
     citizens harmed by toxic spills, contaminated drinking water, 
     polluted air and other environmental hazards involved in 
     class action cases based on state environmental or public 
     health laws. S. 5 would allow corporate defendants in many 
     pollution class actions and ``mass tort'' environmental cases 
     to remove these kinds of state environmental matters from 
     state court to federal court, placing the cases in a forum 
     that could be more costly, more time-consuming, and 
     disadvantageous to your constituents harmed by toxic 
     pollution. State law environmental harm cases do not belong 
     in this legislation and we urge you to exclude such pollution 
     cases from the class action bill.
       Class actions protect the public's health and the 
     environment by allowing people with similar injuries to join 
     together for more efficient and cost-effective adjudication 
     of their cases. All too often, hazardous spills, water 
     pollution, or other toxic contamination from a single source 
     affects large numbers of people, not all of whom may be 
     citizens or residents of the same state as that of the 
     defendants who caused the harm. In such cases, a class action 
     lawsuit in state court based on state common law doctrines of 
     negligence, nuisance or trespass, or upon rights and duties 
     created by state statutes in the state where the injuries 
     occur, is often the best way of fairly resolving these 
     claims.
       For example, thousands of families around the country are 
     now suffering because of widespread groundwater contamination 
     caused by the gasoline additive MTBE, which the U.S. 
     government considers a potential human carcinogen. According 
     to a May, 2002 GAO report, 35 states reported that they find 
     MTBE in groundwater at least 20 percent of the time they 
     sample for it, and 24 states said that they find it at least 
     60 percent of the time. Some communities and individuals have 
     brought or soon will bring suits to recover damages for MTBE 
     contamination and hold the polluters accountable, but under 
     this bill, MTBE class actions or ``mass actions'' based on 
     state law could be removed to federal court by the oil and 
     gas companies in many of these cases.

[[Page H652]]

       This could not only make these cases more expensive, more 
     time-consuming and more difficult for injured parties, but 
     could also result in the dismissal of legitimate cases by 
     federal judges who are unfamiliar with, or less respectful 
     of, state-law claims. For example, in at least one MTBE class 
     action, a federal court dismissed the case based on oil 
     companies' claims that the action was barred by the federal 
     Clean Air Act (even though that law contains no tort 
     liability waiver for MTBE). Yet a California state court 
     rejected a similar federal preemption argument and let the 
     case go to a jury, which found oil refineries, fuel 
     distributors, and others liable for damages. These cases 
     highlight how a state court may be more willing to uphold 
     legitimate state law claims. Other examples of state-
     law cases that would be weakened by this bill include lead 
     contamination cases, mercury contamination, perchlorate 
     pollution and other ``toxic tort'' cases.
       In a letter to the Senate last year, the U.S. Judicial 
     Conference expressed their continued opposition to such 
     broadly written class action removal legislation. Notably, 
     their letter states that, even if Congress determines that 
     some ``significant multi-state class actions'' should be 
     brought within the removal jurisdiction of the federal 
     courts, Congress should include certain limitations and 
     exceptions, including for class actions ``in which plaintiff 
     class members suffered personal injury or personal property 
     damage within the state, as in the case of a serious 
     environmental disaster.'' The Judicial Conference's letter 
     explains that this ``environmental harm'' exception should 
     apply ``to all individuals who suffered personal injuries or 
     losses to physical property, whether or not they were 
     citizens of the state in question.''
       We agree with the Judicial Conference that cases involving 
     environmental harm are not even close to the type of cases 
     that proponents of S. 5 cite when they call for reforms to 
     the class action system. Including such cases in the bill 
     penalizes injured parties in those cases for no reason other 
     than to benefit the polluters. No rationale has been offered 
     by the bill's supporters for including environmental cases in 
     S. 5's provisions. We are unaware of any examples offered by 
     bill supporters of environmental harm cases that represent 
     alleged abuses of the state class actions.
       More proof of the overreaching of this bill is that the so-
     called ``Class Action Fairness Act'' is not even limited to 
     class action cases. The bill contains a provision that would 
     allow defendants to remove to federal court all environmental 
     ``mass action'' cases involving more than 100 people--even 
     though these cases are not even filed as class actions. For 
     example, the bill would apply to cases similar to the 
     recently concluded state-court trial in Anniston, Alabama, 
     where a jury awarded damages to be paid by Monsanto and 
     Solutia for injuring more than 3,500 people that the jury 
     found had been exposed over many years--with the companies' 
     knowledge--to cancer-causing PCBs.
       There is little doubt in the Anniston case that, had S. 5 
     been law, the defendants would have tried to remove the case 
     from the state court that serves the community that suffered 
     this devastating harm. Even in the best-case scenario, S. 5 
     would put plaintiffs like those in Anniston in the position 
     of having to fight costly and time-consuming court battles in 
     order to preserve their chosen forum for litigating their 
     claims. In any case, it would reward the kind of reckless 
     corporate misbehavior demonstrated by Monsanto and Solutia by 
     giving defendants in such cases the right to remove state-law 
     cases to federal court over the objections of those they have 
     injured.
       The so-called ``Class Action Fairness Act'' would allow 
     corporate polluters who harm the public's health and welfare 
     to exploit the availability of a federal forum whenever they 
     perceive an advantage to doing so. It is nothing more than an 
     attempt to take legitimate state-court claims by injured 
     parties out of state court at the whim of those who have 
     committed the injury.
       Cases involving environmental harm and injury to the public 
     from toxic exposure should not be subject to the bill's 
     provisions; if these environmental harm cases are not 
     excluded, we strongly urge you to vote against S. 5.
           Sincerely,
       S. Elizabeth Birnbaum, Vice President for Government 
     Affairs, American Rivers.
       Doug Kendall, Executive Director, Community Rights Counsel.
       Mary Beth Beetham, Director of Legislative Affairs, 
     Defenders of Wildlife.
       Sara Zdeb, Legislative Director, Friends of the Earth.
       Anne Georges, Acting Director of Public Policy, National 
     Audubon Society.
       Karen Wayland, Legislative Director, Natural Resources 
     Defense Council.
       Tom Z. Collina, Executive Director, 20/20 Vision.
       Linda Lance, Vice President for Public Policy, The 
     Wilderness Society.
       Paul Schwartz, National Campaigns Director, Clean Water 
     Action.
       James Cox, Legislative Counsel, Earthjustice.
       Ken Cook, Executive Director, Environmental Working Group.
       Rick Hind, Legislative Director, Toxics Campaign, 
     Greenpeace U.S.
       Kevin S. Curtis, Vice President, National Environmental 
     Trust.
       Ed Hopkins, Director, Environmental Quality Programs, 
     Sierra Club.
       Julia Hathaway, Legislative Director, The Ocean 
     Conservancy.
       Anna Aurilio, Legislative Director, U.S. Public Interest 
     Research Group.

  Mr. McGOVERN. Mr. Speaker, I yield back the balance of my time.
  Mr. GINGREY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, this is a fair rule for legislation that will help 
restore fairness and common sense to the current class action system.
  Like H.R. 1115, which overwhelmingly passed the House last Congress, 
S. 5 expands Federal diversity jurisdiction over interstate class 
actions in a manner consistent with the framers' constitutional intent 
that Federal court preside over controversies between citizens of 
different States. S. 5 also protects consumers from these bogus coupon 
settlements that reward trial lawyers with millions in windfall fees 
while clients who never hired them get coupons in the mail.
  Mr. Speaker, I want to call attention to this slide before me. This 
is from the Washington Post, November of 2002. The Washington Post is 
not exactly the most conservative newspaper in the country: ``The 
clients get token payments while the lawyers get enormous fees. This is 
not justice. It is an extortion racket that only Congress can fix.''

                              {time}  1215

  The Senate's overwhelming passage of S. 5 by a vote of 72 to 26 just 
last week reflects a strong bipartisan consensus in favor of reforming 
a class-action system that is prone to systematic abuse. Of those 26, 
18 were Democrats, and each one of those provisions in that amendment 
in the nature of a substitute were offered in the Senate, and each one 
of them were voted down in a bipartisan fashion.
  I think we all, in both the Senate and the House, and both 
Republicans and Democrats, we want to do the right thing here, and we 
want to make sure that, as the Washington Post says, that we eliminate 
this extortion racket and bring some fairness to this class-action 
system. After all, it is the injured person, it is the plaintiff that 
deserves a fair and just settlement, and it should not be just a 
lottery windfall for lawyers who venue shop, looking for places like, 
and we have heard it during this hour's discussion, Madison County, 
Illinois, the epicenter of this class-action lawsuit abuse. What 
happens in Madison County, Illinois, affects the whole country.
  So I encourage my colleagues to vote for the rule, vote for S. 5 
tomorrow.
  Mr. Speaker, I yield back the remaining portion of my time.
  The SPEAKER pro tempore (Mr. LaTourette). Without objection, the 
previous question is ordered.
  There was no objection.
  The SPEAKER pro tempore. The question is the resolution.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.

                          ____________________