[Congressional Record (Bound Edition), Volume 149 (2003), Part 18]
[Senate]
[Pages 25512-25513]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       CLASS ACTION FAIRNESS ACT

  Mr. DORGAN. Mr. President, I wanted to echo some comments made by my 
colleague from Connecticut, Senator Dodd, on the issue of class action 
reform.
  I believe that we need to do a class action reform bill. Some of us 
who voted against cloture this afternoon believe that there have been 
abuses in the area of class action litigation, and that reform is 
needed.
  But class action reform has to be sensible and thoughtful, and it 
needs to be resolved through negotiation. I am hopeful that this will 
be accomplished. The minority leader indicated he is willing to 
negotiate. The majority leader indicated he is willing to negotiate on 
these issues. It is my hope that these negotiations will be fruitful.
  There is no question that there have been instances of abusive forum 
shopping. There are cases being filed in state court in places like 
Madison County, Illinois, where there are thousands of plaintiffs, but 
only a handful are from that area. It's pretty clear to me that cases 
like that, when brought on behalf of nationwide classes, should be 
heard in federal court.
  I have a long list of such cases here, which on their face involve 
abuses of the class action mechanism. I think I shall not go through 
them all today. Suffice it to say that forum shopping is a problem, and 
we need reforms in this area.
  I also believe that there is a problem with coupon settlements. It 
makes no sense to have settlements where plaintiffs get meaningless 
coupons that are never redeemed. That, too, in my judgment, can and 
should be changed.
  I have decided to cosponsor the class action reform proposal 
described by Senator John Breaux, because I think it takes care of the 
problems of forum shopping and also coupon settlements. I think it is 
superior to the bill that was the subject of today's cloture vote, 
because it will more effectively address the issues of coupon 
settlements and forum shopping.
  With respect to coupon settlements, the Breaux bill is much tougher 
than the Grassley-Hatch bill, which was the subject of today's cloture 
vote. The Grassley-Hatch bill simply says that the courts should review 
coupon settlements for fairness. By contrast, the proposal that is 
offered by Senator Breaux, that I am cosponsoring, actually ties legal 
fees to the rates at which coupons are actually redeemed. So in a case 
where plaintiffs get meaningless coupons, the lawyers get paid 
accordingly. That is a much preferable provision, in my judgment, in 
reforming the class action area.
  With respect to forum shopping, let me again point out that the 
proposal offered by my colleague, Senator Breaux, is preferable. It 
says if fewer than one-third of the plaintiffs are in a State, then it 
goes to Federal court. If more than two-thirds are in a State, it goes 
to State court. If it is in between the two, the Federal court shall 
make a judgment of where it is most appropriate.
  The bill that was proposed to be brought to the floor today would 
have a very different mechanism. It would say that you could not bring 
a case in state court unless the defendant was a citizen of that state. 
So, for example, if 1,000 citizens of my State of North Dakota were 
cheated by a company in Houston, TX, they could not form a class and 
file an action in North Dakota under North Dakota law. They

[[Page 25513]]

simply could not do that under the bill brought to the floor of the 
Senate.
  That is not fair. That doesn't make any sense.
  Now, I understand that forum shopping is a problem and we ought to 
deal with it. But there is a right way and a wrong way to deal with it. 
I think the Breaux approach is the right way. It is a thoughtful, 
balanced approach. It allows us to stop class action abuses, while at 
the same time preserving the rights of people to be able to access 
their own State courts in legitimate cases.
  Again, I think it makes no sense to say to North Dakotans, it does 
not matter if there are two thousand of you who have been injured by an 
out-of-state company, you cannot access North Dakota State Courts and 
you cannot have the protection of North Dakota state law. Yet that is 
precisely what the bill that was the subject of today's vote would have 
said.
  The proposal offered by my colleague, Senator Breaux, strikes the 
right balance. It is the right approach. Cases that involve a lot of 
plaintiffs from around the country would go to federal court. But 
citizens of a particular state would still be able to band together if 
they were injured by an out-of-state defendant, and bring a lawsuit in 
their own state court.
  I say to the majority leader, if you are interested in class action 
reform, then let's work out a solution to the very real problem of 
class action abuses--but let's do it without depriving the people of 
any one state of the right to access their state's court, in legitimate 
cases. I think we can strike that proper balance, and I hope we can do 
it soon. That is the reason I voted against the motion to proceed.
  What we should avoid is a process in which the majority simply says: 
Here's where the wagon is heading. If you like it, jump on. If you 
don't like it, tough luck. Don't give us any advice along the way.
  I am a conferee on the Energy bill, but I have not been invited to a 
conference. No Democrat in the Senate has been included in a conference 
on the Energy bill. In fact, we have been specifically excluded and 
prevented from being a part of the conference. If that is the way 
legislation will be handled in the Congress, it will pervert the 
legislative process. In the case of the Energy Conference, nearly one-
half of the Senate, 49 Members of a body of 100 persons, are being 
given no voice at the conference. We are told that the majority will 
make all the decisions.
  We are told by the majority: Just let us bring the Energy bill to the 
floor and we will be fair. Just take our word for it.
  Well, I hope and trust that we will follow a different path on the 
issue of class action reform. The Breaux proposal is a good one. I 
suggest we begin now seriously negotiating a balanced, responsible 
solution, that takes care of the problem of class action abuses.
  Let me also say parenthetically that there is another issue, in 
addition to class action reform, that requires meaningful negotiations. 
That is the issue of asbestos litigation. That, too, is a real problem 
and we ought to deal with it. It, too, in my judgment, will require 
negotiation. All sides are going to have to want to do this and be 
willing to negotiate aggressively. You have a series of stakeholders 
involved and those stakeholders, in my judgment, need to get together, 
because the system is broken. We have people who are sick and dying who 
are not getting help. And we have a huge cloud of uncertainty hanging 
over the business community.
  A solution is going to require, in my judgment, that all the 
stakeholders be part of the negotiation. Yes, labor is a very 
significant part of that. So, too, is the business community and 
others.
  I know this is a complex issue, but I hope in the concluding days of 
this first session of the Congress we will see a breakthrough in 
negotiations, and solve this asbestos issue in a way that works for 
everyone.
  I think they have been close on a number of occasions. My hope is it 
finally is completed.

                          ____________________