[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.
____________________