[Congressional Record (Bound Edition), Volume 151 (2005), Part 2]
[Senate]
[Pages 1804-1837]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   CLASS ACTION FAIRNESS ACT OF 2005

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of S. 5, which the clerk will report.
  The assistant legislative clerk read as follows:

       A bill (S. 5) to amend procedures that apply to 
     consideration of interstate class actions to assure fairer 
     outcomes for class members and defendants, and for other 
     purposes.

  Pending:

       Durbin (Modified) Amendment No. 3, to preserve State court 
     procedures for handling class actions.

  The PRESIDING OFFICER. Under the previous order, the pending 
amendment is set aside and the Senator from Arkansas, Mr. Pryor, is 
recognized.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, parliamentary inquiry: We are proceeding 
now to go to the class action bill?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. SPECTER. And the next order of business is the Pryor amendment?
  The PRESIDING OFFICER. That is correct.
  Mr. SPECTER. I see the Senator from Arkansas on the floor, so I will 
yield the floor.


                            Amendment No. 5

  Mr. PRYOR. Mr. President, I send an amendment to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER (Mr. Graham). The clerk will report the 
amendment.
  The assistant legislative clerk read as follows:

       The Senator from Arkansas [Mr. Pryor], for himself, Mr. 
     Salazar, and Mr. Bingaman, proposes an amendment numbered 5.

  Mr. PRYOR. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

   (Purpose: To exempt class action lawsuits brought by the attorney 
  general of any State from the modified civil procedures required by 
                               this Act)

       On page 5, between lines 2 and 3, insert the following:
       ``(1) Attorney general.--The term `attorney general' means 
     the chief legal officer of a State.
       On page 5, line 3, strike ``(1)'' and insert ``(2)''.
       On page 5, line 5, strike ``(2)'' and insert ``(3)''.
       On page 5, line 12, strike the period at the end and insert 
     the following: ``, but does not include any civil action 
     brought by, or on behalf of, any attorney general.''.

[[Page 1805]]

       On page 5, line 13, strike ``(3)'' and insert ``(4)''.
       On page 5, line 17, strike ``(4)'' and insert ``(5)''.
       On page 5, line 21, strike ``(5)'' and insert ``(6)''.
       On page 6, line 1, strike ``(6)'' and insert ``(7)''.
       On page 6, between lines 5 and 6, insert the following:
       ``(8) State.--The term `State' means each of the several 
     States of the United States, the District of Columbia, the 
     Commonwealth of Puerto Rico, the Commonwealth of the Northern 
     Mariana Islands, and any territory or possession of the 
     United States.
       On page 14, strike lines 20 and 21, and insert the 
     following:
       (1) by striking subsection (d) and inserting the following:
       ``(e) As used in this section--
       ``(1) the term `attorney general' means the chief legal 
     officer of a State; and
       ``(2) the term `State' means each of the several States of 
     the United States, the District of Columbia, the Commonwealth 
     of Puerto Rico, the Commonwealth of the Northern Mariana 
     Islands, and any territory or possession of the United 
     States.''; and
       On page 15, line 7, insert ``, but does not include any 
     civil action brought by, or on behalf of, any attorney 
     general'' before the semicolon at the end.

  Mr. PRYOR. Mr. President, I rise to offer an amendment to S. 5, the 
Class Action Fairness Act of 2005, to ensure that State attorneys 
general elected by the people of their States as the chief law 
enforcement officer will still be able to do their business and protect 
the people of their States.
  My amendment simply clarifies that State attorneys general should be 
exempt from S. 5 and be allowed to pursue their individual State's 
interests as determined by themselves and not by the Federal 
Government.
  I know that S. 5 is intended to fix problems around class action law 
in America, and I think most agree that the attorneys general are not 
part of the problem. In the simplest terms, this amendment allows them 
to seek State remedies to State problems. I hope we can all agree 
infringement on State rights should not be a result of this bill.
  I believe class actions remain an important tool for enforcing 
shareholder and employee rights, for cracking down on telemarketing 
fraud in attempts to prey on the elderly, and in forcing companies to 
improve product safety both in the manufacture of unreasonably 
dangerous products and in drugs. We need to make sure class action 
reform does not unnecessarily restrict the ability of citizens to seek 
redress for legitimate claims.
  While we all may not agree with those in Congress that we need to 
improve the class action process, we should all agree that it should 
not be done by shutting State attorneys general out of the system. I 
believe to do so would circumvent the intent of our Founding Fathers in 
recognizing that State sovereignty should not be dismissed by Federal 
action so easily. To that end, I offer this amendment in an attempt to 
quash ambiguity about the authority of State attorneys general that may 
exist in this bill.
  It should be known that this commonsense amendment in no way impairs 
the class action reforms as intended in this bill, nor does it in any 
way expand the authority of State attorneys general. What this 
amendment does is clarify the existing authority of State attorneys 
general.
  I have heard in the hallways, and as I have gone through the 
corridors in the Senate in the last few days, that there are some who 
do not want any amendments to this bill. This amendment, if accepted, I 
believe is very consistent with the intent of the bill. I believe the 
authors of the bill did not intend to shut out State attorneys general. 
So even though some do not want amendments--I think we ought to 
consider all amendments; some of the amendments are very worthy of 
consideration. Although some do not want amendments, I think they can 
vote for this with a clear conscience that this will not change the 
intent of the bill.
  I am a former State attorney general. I understand the important work 
they do for consumers and the most vulnerable in our society. It is not 
just my opinion that this amendment is needed. I offer this amendment 
on behalf of a bipartisan group of 46 State attorneys general who have 
expressed that it is critically important to all their constituents, 
especially the poor, elderly, and disabled, that provisions in this 
legislation be clarified so as not to compromise the traditional law 
enforcement authority.
  I have a letter. Interestingly enough, in the first paragraph of the 
letter, it says--and these are 46 State attorneys general:

       We take no position on the act as a general matter and, 
     indeed, there are differing views among us on the policy 
     judgments reflected in the act.

  This is very clear. The attorneys general are split on the underlying 
act, but they are not split on their authority being called into 
question with this act.
  They say:

       Clarifying the act does not apply to and would have no 
     effect on actions brought by State attorneys general on 
     behalf of their respective States and citizens.

  I want to talk in just a minute about how State attorneys general are 
different from private sector lawyers. I will get to that in a minute.
  I ask unanimous consent to print in the Record this letter signed by 
46 State attorneys general, Democrats and Republicans, collectively 
representing more than 90 percent of the country, who are very 
concerned that this legislation as it is written will stop them from 
doing an important part of their jobs.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                              National Association


                                         of Attorneys General,

                                 Washington, DC, February 7, 2005.
     Hon. Bill Frist,
     Senate Majority Leader, U.S. Senate, Dirksen Building, 
         Washington DC.
     Hon. Harry Reid,
     Senate Minority Leader, U.S. Senate, Hart Building 
         Washington, DC.
     Dear Senate Majority Leader Frist and Senate Minority Leader 
     Reid: We, the undersigned State Attorneys General, write to 
     express our concern regarding one limited aspect of pending 
     Senate Bill 5, the ``Class Action Fairness Act,'' or any 
     similar legislation. We take no position on the Act as a 
     general matter and, indeed, there are differing views among 
     us on the policy judgments reflected in the Act. We join 
     together, however, in a bipartisan request for support of 
     Senator Mark Pryor's potential amendment to S. 5, or any 
     similar legislation, clarifying that the Act does not apply 
     to, and would have no effect on, actions brought by any State 
     Attorney General on behalf of his or her respective state or 
     its citizens.
       As Attorneys General, we frequently investigate and bring 
     actions against defendants who have caused harm to our 
     citizens. These cases are usually brought pursuant to the 
     Attorney General's parens patriae authority under our 
     respective 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. It is our concern that certain 
     provisions of S. 5 might be misinterpreted to hamper the 
     ability of the Attorneys General to bring such actions, 
     thereby impeding one means of protecting our citizens from 
     unlawful activity and its resulting harm.
       The Attorneys General have been very successful in 
     litigation initiated to protect the rights of our consumers. 
     For example, in the pharmaceutical industry, the States have 
     recently brought enforcement actions on behalf of consumers 
     against large, often foreign-owned, drug companies for 
     overcharges and market manipulations that illegally raised 
     the costs of certain prescription drugs. Such cases have 
     resulted in recoveries of approximately 235 million dollars, 
     the majority of which is earmarked for consumer restitution. 
     In several instances, the States' recoveries provided one 
     hundred percent reimbursement directly to individual 
     consumers of the overcharges they suffered as a result of the 
     illegal activities of the defendants. This often meant 
     several hundred dollars going back into the pockets of those 
     consumers who can least afford to be victimized by illegal 
     trade practices, senior citizens living on fixed incomes and 
     the working poor who cannot afford insurance.
       We encourage you to support the aforementioned amendment 
     exempting all actions brought by State Attorneys General from 
     the provisions of S. 5, or any similar legislation. It is 
     important to all of our constituents, but especially to the 
     poor, elderly and disabled, that the provisions of the Act 
     not be misconstrued and that we maintain the enforcement 
     authority needed to protect them from illegal practices. We 
     respectfully submit that the overall purposes of the 
     legislation would not be impaired by such an amendment that 
     merely clarifies the existing authority of our respective 
     States.
       Thank you for your consideration of this very important 
     matter. Please contact any of us if you have questions or 
     comments.
           Sincerely,
         Mike Beebee, Attorney General, Arkansas; Mark Shurtleff, 
           Attorney General,

[[Page 1806]]

           Utah; Gregg Renkes, Attorney General, Alaska; Fiti 
           Sunia, Attorney General, American Samoa; Terry Goddard, 
           Attorney General, Arizona; Bill Lockyer, Attorney 
           General, California; John Suthers, Attorney General, 
           Colorado; Richard Blumenthal, Attorney General, 
           Connecticut; Jane Brady, Attorney General, Delaware; 
           Robert Spagnoletti, Attorney General, District of 
           Columbia; Charlie Crist, Attorney General, Florida; 
           Thurbert Baker, Attorney General, Georgia; Mark 
           Bennett, Attorney General, Hawaii; Lawrence Wasden, 
           Attorney General, Idaho; Stephen Carter, Attorney 
           General, Indiana.
         Tom Miller, Attorney General, Iowa; Greg Stumbo, Attorney 
           General, Kentucky; Charles Foti, Attorney General, 
           Louisiana; Steven Rowe, Attorney General, Maine; Joseph 
           Curran, Attorney General, Maryland; Tom Reilly, 
           Attorney General, Massachusetts; Mike Cox, Attorney 
           General, Michigan; Mike Hatch, Attorney General, 
           Minnesota; Jim Hood, Attorney General, Mississippi; Jay 
           Nixon, Attorney General, Missouri; Mike McGrath, 
           Attorney General, Montana; Jon Bruning, Attorney 
           General, Nebraska; Brian Sandoval, Attorney General, 
           Nevada; Kelly Ayotte, Attorney General, New Hampshire; 
           Peter Harvey, Attorney General, New Jersey.
         Eliot Spitzer, Attorney General, New York; Roy Cooper, 
           Attorney General, North Carolina; Wayne Stenehjem, 
           Attorney General, North Dakota; Pamela Brown, Attorney 
           General, N. Mariana Islands; Jim Petro, Attorney 
           General, Ohio; W.A. Drew Edmondson, Attorney General, 
           Oklahoma; Hardy Myers, Attorney General, Oregon; Tom 
           Corbett, Attorney General, Pennsylvania; Roberto 
           Sanchez Ramos, Attorney General, Puerto Rico; Patrick 
           Lynch, Attorney General, Rhode Island.
         Henry McMaster, Attorney General, South Carolina; 
           Lawrence Long, Attorney General, South Dakota; Paul 
           Summers, Attorney General, Tennessee; Rob McKenna, 
           Attorney General, Washington; Darrell McGraw, Attorney 
           General, West Virginia; Peg Lautenschlager, Attorney 
           General, Wisconsin; Patrick Crank, Attorney General, 
           Wyoming.

  Mr. PRYOR. Mr. President, I have served with some of these attorneys 
general, and I can say they come from different ideological points of 
view and different ways of practicing law. As a whole, they are not 
taking a position on the bill, but as you can see by this letter, the 
vast majority of State AGs agree on one point: As the chief legal 
officers for their respective States, there must be clarification in 
the bill to make sure they can continue to represent the citizens of 
their States and carry out their duties as elected officials.
  As we all know, attorneys general frequently investigate and bring 
actions against defendants who have caused harm to their citizens. 
These cases are usually brought pursuant to the attorneys general 
parens patriae authority under their respective consumer protection and 
antitrust statutes. This is an important point. Not all States have 
parens patriae authority. In fact, the State of Arkansas, when I was 
attorney general, had very limited parens patriae. In fact, one could 
argue none at all. We always had to pursue our actions under the 
Deceptive Trade Practices Act, which is a State statute, and we had 
specific authority in that statute.
  I heard some people say, again, in the hallways here, that all States 
have parens patriae and therefore we do not need this amendment. But 
that is not the case. In some instances, such actions have been brought 
with the attorney general acting as the class representative for 
consumers in the State. It is my concern, as well as those of 46 
attorneys general, that certain provisions in S. 5 might be interpreted 
to hamper their ability to bring such actions, thereby impeding one 
means of protecting their citizens from unlawful activity and resulting 
harm.
  It is important to all consumers, but especially to the poor, 
elderly, and disabled, that the provisions of the act not be 
misconstrued and that attorneys general maintain the enforcement 
authority needed to protect them from illegal practices.
  I know there are many people who want this body to pass class action 
reform this year and do not want to ruin its chances by adding too many 
amendments to the underlying bill. But, as I said a few moments ago, in 
this case, with this particular amendment, we are not changing the 
intent of the bill.
  I would like to address a falsehood about the amendment that I have 
heard, and that is that some people have said this amendment would 
create a major loophole because suits could be brought on behalf of 
State attorneys general, that some attorneys general may allow their 
friends to use their names to avoid moving the case to Federal court.
  The notion is incorrect and, quite frankly, it is offensive. Let me 
be clear.
  No one can add a State attorney general without his or her express 
consent or permission. Moreover, attorneys general are statewide 
elected officials accountable to the same citizens who vote for us. 
They work hard and take their responsibility as chief legal officers 
very seriously. State attorneys general would not expend the resources 
or their reputations to take up a class action they did not believe was 
worthy of protecting their citizens.
  In addition, it should be noted that in many cases, attorneys general 
are not after the check or the payment in litigation. They are not 
eyeing the big settlement, although in some cases there are large 
settlements at the end of the horizon. The primary objective of State 
attorneys general is not chasing the money but bringing about reform.
  Let me be clear on this point. I alluded to this a few moments ago. 
State attorneys general are fundamentally different from private 
attorneys. Private attorneys have clients, and they are out there doing 
what their clients want: trying to get a recovery and trying to make 
their clients whole. I understand that. That is a good thing. I do not 
have any problem with that.
  State attorneys general are different. Generally speaking--maybe not 
in every single case but generally speaking, when the State attorney 
general becomes involved, there is a matter of public policy in the 
litigation. In fact, I said a few moments ago that the State attorneys 
general are elected officials. That is not true in every single case. I 
think there are about 35 elected attorneys general. There are a couple 
selected by the supreme court or by the State legislature, and some are 
appointed by the Governor.
  Nonetheless, attorneys general have a level of accountability that 
you do not find in private practice because they are accountable to the 
people, either the people who elected them or appointed them or 
selected them for the office. And attorneys general, more than private 
lawyers, are sensitive to criticism.
  I can assure you, the last thing an attorney general wants to read is 
an opinion by a judge who is criticizing the attorney general for 
bringing a frivolous lawsuit, criticizing the attorney general for 
going too far. That is the last thing the attorney general wants to 
read in the paper.
  Also, there is the court of public opinion. The attorney general does 
not like bad editorials to be written about him or her. They do not 
like to be out on the street and people questioning their integrity or 
their sense. So attorneys general have a level of accountability that 
just does not exist in other areas of practice.
  That is an important distinction. As I mentioned a few moments ago, 
normally cases brought by States involve a matter of public policy, and 
we can go through a long list of cases and show where the public policy 
is in the cases and also show how a lot of these cases would not be 
profitable for the private sector to bring.
  Oftentimes there is a matter of fairness and not a matter of money 
involved in these cases. There are several major examples where State 
attorneys general have filed a cause of action in State court to 
protect their citizens or bring reform. However, if we do not act to 
clarify S. 5, I am concerned this legislation would make it much harder 
for the attorneys general to do their jobs.
  Back in the 1990s, the attorneys general around the country pooled 
together and sued the tobacco industry for reimbursement of State 
moneys as a result of disease brought about by smoking. I know in some 
quarters that

[[Page 1807]]

is still a very controversial decision. Let me very respectfully remind 
the Congress that the Congress a year, two or three before this 
settlement occurred had the chance to enter into a federally mandated 
global settlement of all claims. That did not happen. The States 
pursued their case after the Congress failed to act.
  This tobacco case resulted in a historic global settlement that 
drastically altered the way our Nation views and approaches smoking. 
Money from these settlements was used by the States for youth smoking 
prevention, to improve health care, educate citizens on the dangers of 
smoking, and an increased level of treatment for smoking-related 
illnesses. My State of Arkansas has spent every penny of the tobacco 
money it has received on health-related issues--every single penny.
  Back to the point about the difference in the private sector attorney 
representing the individual or representing a class versus the attorney 
general representing the State's interest and the citizens of the 
State, when you look at the settlement agreement between the tobacco 
companies and the State, if I recall right, it was about 147 pages 
long. It was very detailed, very negotiated, a very hard-to-reach 
settlement.
  I believe it was 147 pages long without the attachments, and 91 of 
those pages, that is two-thirds of the pages approximately, were about 
the public policy and changing the tobacco industry's practices. Here 
again, in private litigation it is about getting recovery for one's 
client, and we understand that, but when the attorney general is 
involved it is a materially different type of litigation.
  I have never seen a private settlement in which two-thirds of the 
settlement document requires the industry or the company to change its 
practices, but that is the type of litigation the attorneys general 
enter into.
  Each State in the tobacco case filed individual suits in their 
respective State's court alleging fraud. In our particular State, we 
alleged the Deceptive Trade Practices Act violations and also a number 
of common law claims. Due to the nature of the claims, if this 
legislation as it is written would have existed at the time of this 
case, it may have presented hurdles to the attorneys general that could 
have prevented a resolution.
  In 2001, several State attorneys general took on Ford and Firestone 
for failure to disclose defects in Firestone tires used on Ford SUVs, 
of which they should have been aware. These cases were brought again in 
Arkansas, and other States have similar laws, under our State's 
Deceptive Trade Practices Act, fraud and consumer protection laws.
  Let us make this point in another case. In private causes of action, 
and there were many relating to the Ford and the Firestone litigation, 
the parties' and the lawyers' primary concern was trying to make the 
plaintiffs whole. That is the nature of that type of litigation.
  In the attorney general actions, we established a restitution fund 
and a long series of injunctions against the companies in the way they 
marketed their products. In fact, some people may have noticed they 
have seen some new Ford Explorer ads on television in recent weeks. 
These Ford Explorer ads are due to the attorney general lawsuit, and 
they deal with the safety of Ford Explorers. All this goes back to the 
way Ford Explorers were marketed originally. The buyers bought them 
thinking they were safe under pretty much all conditions, but practice 
has taught us differently. So I make that point one more time to show 
how different State litigation is versus private litigation.
  Ultimately, the Ford case was settled. However, had these States been 
required to file separate State cases under their own consumer 
protection laws, as could be required under this class action bill, 
those States would have been removed to Federal court. The Federal 
court would then have been required to become an expert in each State's 
diverse consumer laws and remedies.
  State litigation is different from private litigation, and I think to 
some degree this amendment is a matter of States rights. In 2000, 26 
attorneys general from 26 States brought suit against Publishers 
Clearinghouse claiming that the company was intentionally preying on 
the elderly by misrepresenting their sweepstakes award. My colleagues 
may remember that for years people used to get mail with pictures of 
celebrities, and in big bold letters it would have your name and say: 
You have won X number of millions of dollars. Or it would say: 
Congratulations, millionaire.
  Think about it. We do not get those letters anymore. Why? Because the 
States intervened. The States came in under consumer protection laws 
and looked at how deceptive those ads were. In fact, in Arkansas when I 
was in the attorney general's office I would talk to an adult child of 
a deceased person or an adult child who had put their parents in a 
nursing home and they would clean out the closets and the living room 
or whatever and they would find stacks and stacks of magazines that had 
been ordered through these sweepstakes companies.
  Even if one reads everything in great detail, they would find in the 
fine print that ordering does not increase their chances of winning. 
Most people do not read all the fine print. Most people thought that 
ordering did increase their chance of winning, and what happened was 
people would order the same magazine. People would tell me they would 
find 10 copies of the same Sports Illustrated or 10 copies of the same 
Newsweek or Good Housekeeping because these senior citizens ordered to 
try to win the sweepstakes.
  It is sad and unfortunate, but they saw this as a chance they were 
willing to take to leave a lot of money to their children and 
grandchildren. So we came in as States and put a stop to that. I think 
it was 26 States that banded together and put a stop to that.
  It was alleged that Publishers Clearinghouse was profiting from this 
fraud at the expense of the vulnerable elderly. I can recall that these 
individuals had spent their life savings on these fraudulent 
sweepstakes. When we got inside of the cases, we found many seniors in 
Arkansas who had spent hundreds, maybe thousands of dollars trying to 
win sweepstakes.
  Is there someone here who thinks the actions of the attorneys general 
are out of step with common sense and fairness? In this bill we should 
make sure we do not take away any existing authority of the attorneys 
general.
  These are just a few examples of the very hard and worthy work by the 
State attorneys general where they are trying to protect the citizens 
of their States. I challenge my colleagues to deem the work they do as 
frivolous or as junk lawsuits because attorneys general around the 
country have a layer of accountability that does not exist elsewhere. 
They are accountable to the people. They are accountable to the 
legislature that makes their budgets. They are accountable to the 
Governor. They are accountable in the court of public opinion.
  I ask my colleagues to support this amendment to this bill for 
several reasons. One is that the overwhelming majority of State 
attorneys general, our States' chief legal officers, are concerned 
about the language of this bill, and we should be concerned about it. 
Remember, these attorneys general represent the citizens in all of our 
States. They try to get out there and do the right thing for their 
citizens.
  Secondly, by making this change, we are not obstructing the intent of 
the bill, but I believe very strongly we are clarifying the authority 
that already exists.
  Third, we should allow our attorneys general to seek State remedies 
to State problems. I think this is an important piece of this. It goes 
back to States rights. It goes back to local control and people trying 
to do things the way they want to handle them in their own States.
  So I implore all of my colleagues who are champions of States rights 
or who want to protect the integrity of the bill and want to leave the 
tools that currently exist with the State attorneys general, to vote 
for this amendment.
  I yield the floor.

[[Page 1808]]

  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, a time agreement has been worked out. I 
ask unanimous consent that the vote in relation to the Pryor amendment 
occur at 12:15 today, with the time equally divided in the usual form 
prior to the vote, with no amendment in order to the amendment prior to 
the vote. Further, the time to be divided begins from when the 
amendment was sent to the desk. So to amplify that, the time for the 
Democrats would begin when Senator Pryor started to speak.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. SPECTER. I know the Senator from Delaware, Mr. Carper, has 
another engagement, so I will speak very briefly as the lead opponent 
of this amendment.
  I do oppose the amendment. I appreciate the experience of Senator 
Pryor having been attorney general of the State of Arkansas. I did not 
hold such a lofty position. I was just a district attorney, but I 
appreciate the reasons he has put forward for the amendment.
  It is my suggestion that it is not necessary. When the Senator from 
Arkansas has enumerated a number of situations where attorneys general 
protect the interests of the citizens of their State, that can be 
accomplished even if this bill is adopted. In the first place, the bill 
provides that if two-thirds of the parties involved are citizens of the 
State, it stays in the State; if one-third, it goes to the Federal 
court; and between one-third and two-thirds, it is up to the discretion 
of the judge.
  So even within the confines of the language of the bill, the 
interests that the Senator from Arkansas has articulated will be 
protected.
  Next, the attorneys general have authority under parens patriae 
statutes enacted by the many state legislatures to represent the 
citizens of their State. They are the lawyer for everybody in the 
State. The Latin phrase of parens patriae has been adopted and that 
gives them sufficient standing to undertake whatever is necessary.
  There is a provision in the Pryor amendment which broadens it 
substantially by providing that any civil action brought by or on 
behalf of the attorney general in a State would be excluded so that 
there would be latitude for the attorney general to deputize private 
attorneys to bring their class actions and to find an exclusion, which 
is a pretty broad exclusion, not to use pejorative terms, but a pretty 
broad loophole.
  Those are the essential arguments. I could expand on them, but we 
have limited time. The Senator from Texas has been in the Chamber since 
we started the debate, but as I understand it, he has agreed to yield 
to the Senator from Delaware.
  Mr. CORNYN. It is my understanding Senator Carper would like to speak 
for about 5 minutes. I ask unanimous consent that I be recognized 
immediately after Senator Carper, and then Senator Salazar be 
recognized in that sequence.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SPECTER. I thank the Senator from Texas, and I yield the floor.
  The PRESIDING OFFICER. The Senator from Delaware is recognized for 5 
minutes.
  Mr. CARPER. Mr. President, I thank Senator Specter for yielding to 
me. I say to my friend and colleague from Arkansas, he knows how fond I 
am of him and how highly I regard him, both in his previous role as 
attorney general and as a colleague in the Senate.
  When I heard of the amendment he was preparing to offer, I stopped 
and I said to my staff, let's find out if this is something I can 
support. As many of my colleagues know, we have endeavored to improve 
this bill over time, and the legislation before us today is a far 
different bill than was first proposed 7 years ago or even was debated 
2 years ago and reported out of committee.
  Senator Specter has spoken of the option that is available to most 
attorneys general, an approach called parens patriae, which I 
understand means ``government stands in the place of the citizen.'' For 
most attorneys general who wish to file a case on behalf of their 
citizens against some defendant, they have the opportunity to use 
parens patriae. For those who do not, in my judgment, they still have 
the opportunity to use the class action lawsuit.
  What we have sought to do over the last couple of years in modifying 
this bill is to make sure that the class action lawsuits brought by an 
individual in a State, if they are of a national scope, they would be 
in a Federal court. If they are not, if they are more of a local issue 
involving residents of that State, a defendant in that State, or even 
where there are multiple defendants, but a defendant in that State who 
has a principal role as a defendant, not just somebody who was sort of 
pulled out of the air, to make sure there is a real defendant with a 
real stake in it that has a real financial ability to pay damages, then 
the legislation that is before us actually permits an attorney general 
or, frankly, any attorney, plaintiff's attorney, to bring that kind of 
class action.
  The legislation that is before us says if two-thirds of the 
plaintiffs in a class action lawsuit are from the same State as the 
defendant, it will stay in the State court, no question. The 
legislation before us says that if anywhere from one-third to two-
thirds of the plaintiffs on whose behalf the class action is brought 
meet certain standards that are set out in the bill, that can stay in 
State court as well.
  The legislation that is before us today provides exemptions as well 
for incidents involving a sudden single accident. The legislation 
before us today also provides exemptions under the Dodd-Schumer-
Landrieu language that provide even further opportunities to proceed 
with a class action lawsuit if the matter that is being discussed is 
truly a local matter, if most of the people involved both as plaintiffs 
and defendants are within that State.
  The last thing I would say is there are plenty of people on both 
sides of the aisle who would like to offer amendments. My fear is if 
any of those amendments were adopted, we invite the House of 
Representatives to come back and to offer quite a different bill than 
the compromise that is before us today. To those of us who seek 
reasonable, modest reforms--and this is a court reform bill, not a tort 
reform bill--but to those who seek moderate reforms incorporated in 
this legislation, I did not support this amendment because I think it 
would simply invite the adoption of other amendments and, frankly, put 
us in the situation which will end in a conference with the House of 
Representatives with a bill that is frankly far different than this one 
and will provide an end product not to my liking and I suspect even 
less to the liking of those who are opposed to this compromise.
  I reluctantly oppose this amendment with that in mind, but it is not 
something I do easily or lightly.
  I thank my friend Senator Cornyn for making it possible for me to 
have this time.
  The ACTING PRESIDENT pro tempore. The Senator from Texas is 
recognized.
  Mr. CORNYN. Mr. President, I first want to say how much I respect and 
admire the author of this amendment, Senator Pryor. He and I served 
together as State attorneys general, he in Arkansas and I in Texas, for 
4 years. Our careers overlapped. I agree with him about the important 
role that attorneys general play when it comes to protecting a State's 
citizens and a State's consumers. But I think where I part company with 
my friend Senator Pryor is, No. 1, this amendment is not necessary to 
preserve the authority of the State attorney general to protect the 
State's consumers, and, second, this amendment as worded--and I know 
this is not his intention--would create a potential loophole big enough 
to drive a truck through, that could cause substantial mischief that is 
intended to be prevented by this very bill.
  Finally, as Senator Carper has said, this is a negotiated bill. There 
are amendments I would like to offer that I think would make it a 
better bill. But I think we all realize that after many Senators have 
labored long and hard to try to get us to the point today where we 
literally have bipartisan support for

[[Page 1809]]

this compromise, to offer any amendments, and particularly one like 
this and others that have been filed but not yet called up, would 
threaten our chance of success. I think that would be a shame because 
we all agree that the class action abuses we see are very real and are 
something that do not benefit the American people or consumers in 
general.
  We have seen that some of these egregious abuses of the class action 
procedure have been used to make certain entrepreneurial lawyers very 
wealthy when the consumers literally get a coupon worth pennies on the 
dollar.
  I am not opposed to lawyers. Let me say up front I happen to be a 
lawyer. But I do think that all lawyers, all people, anybody with 
common sense--some may say that excludes lawyers--but I like to think 
anybody with common sense recognizes the very real abuses that have 
occurred in the class action system. We have heard a lot about that. I 
will not repeat all of that now. I think we all take that as a given.
  First, let me allude to the letter signed by--the Senator from 
Arkansas said 46 State attorneys general from the National Association 
of Attorneys General, an organization of which I used to be a member 
and for which I have a lot of respect, both for the people who help run 
that organization as well as the attorneys general who make up its 
membership.
  I point my colleagues to paragraph 2 in this letter, which I believe 
makes my initial point which is that this amendment is not necessary to 
preserve the authority of State attorneys general. Indeed, in the last 
sentence in the second paragraph these 46 attorneys general say:

       It is our concern that certain provisions of S. 5 might be 
     misinterpreted to hamper the ability of attorneys general to 
     bring such actions, thereby impeding one means of protecting 
     our citizens from unlawful activity and its resulting harm.

  In other words, these 46 lawyers, the chief law enforcement officers 
of these States, make no claim that in fact this bill would impede 
their authority but, rather, that it might be misinterpreted.
  I think it is fair to say that any law that has ever been written is 
capable of being misinterpreted. That is why we have the court system. 
But we certainly do not need an amendment like this to protect the 
States or the attorneys general against a potential misinterpretation 
of S. 5, the Class Action Reform bill. That is the function, that is 
the role of the courts. I think it is very plain that no power of the 
State attorney general is impeded by virtue of S. 5, or will be once it 
is signed into law.
  Indeed, the Senator from Arkansas alluded to statutes that are 
typical of every State--deceptive trade practice acts and consumer 
protection statutes--which in my State and I believe in virtually every 
other State specifically authorize the attorney general to seek 
remedies on behalf of aggrieved consumers. This bill certainly would 
not encroach on that authority. Indeed, he also alluded to common law 
claims that are asserted by the attorneys general in pursuit of justice 
for their State's citizens.
  We heard the Senator from Delaware talk about the parens patriae 
doctrine, which is generally recognized as providing the authority to 
the attorney general to sue on behalf of his State's citizens. I 
acknowledge, as he said, there are some variations in terms of the 
court's interpretation in each State about the scope of that doctrine 
and how much or what kinds of actions might be authorized. But clearly, 
when State law and the State Constitution specifically provide for the 
right of an attorney general, a State attorney general, to sue on 
behalf of his State's citizens, then this bill, when made a law, will 
not in any way impede that endeavor.
  Finally, in terms of the lack of necessity of this bill, the Senator 
from Delaware pointed out that where a substantial number of a State's 
citizens are party to a class action and are located in one State, they 
are carved out by the very terms of this bill so that the case will 
remain in State court if that is where it was originally filed.
  But the real danger in this amendment--and here again I am not 
suggesting that anyone intended this, but I think it does show the 
potential for mischief with amendments that have not been the subject 
of long debate and negotiation--is the language that says:

     . . . does not include any civil action brought by or on 
     behalf of the Attorney General of any State.

  I am very sensitive to that particular phrase in the amendment 
because of a, frankly, very tragic experience I had as attorney general 
of my State. It is a fact that my predecessor as attorney general in 
the State of Texas is currently in the Federal penitentiary. He is in 
the Federal penitentiary because he was convicted, based on his own 
confession, of mail fraud and other violations of law primarily related 
to his attempt, almost successful, to backdate outside counsel 
contracts with an old buddy of his, that would potentially entitle his 
friend to $520 million out of the taxpayers' recovery in the Texas 
tobacco litigation.
  I take no pleasure in bringing this up but merely make mention of it 
to point out the potential for mischief--not when cases are brought by 
an attorney general, somebody who is elected by the people, whose 
future, frankly, is dependent on their dutiful discharge of their 
obligations and faithful discharge of their duties--but when you carve 
out suits brought on behalf of the attorney general, which could 
include any lawyer who any attorney general might choose to hire as 
outside counsel and, of course, who is unelected and unaccountable to 
the people. Here, we see the potential for grave abuses.
  As I have pointed out, this example was part of the Texas tobacco 
litigation that was part of a nationwide set of litigation, one which 
ultimately involved settlements on behalf of several individual States. 
I want to say, if my memory serves me, that Florida, Mississippi, and 
Texas filed their individual lawsuits and had individual judgments 
rendered. But the remainder of the States, including, I believe, the 
States of the Senator from Arkansas and the Senator from Colorado--they 
will correct me if I am wrong--they had a collective judgment rendered 
against the tobacco industry of almost $250 billion, a sum we would 
recognize, even here in Washington, as being significant.
  The problems presented by outside counsel performing the duties of an 
attorney general under an exception like this just go on and on. My own 
experience is, again, where outside counsel of the State of Texas 
claimed the right to $3.3 billion out of the Texas tobacco lawsuit 
recovery, which by any reasonable measure was an extraordinary fee, one 
that, when calculated by the hours of work actually put into the 
lawsuit, has been described as scandalous and unconscionable. The 
ultimate concern must be the public interest. By accepting an amendment 
that would place outside the scope of this bill someone bringing a 
lawsuit on behalf of the attorney general, somebody unelected by the 
people, not accountable at the polls, we would be creating an 
environment ripe for fraud.
  Let me tell you this: I recall that many of the States' attorneys 
general believed in good faith that the tobacco industry was 
responsible for contributing to the death and the illness of hundreds 
of thousands of Americans each year. Indeed, that is a fact. We lose 
400,000 people each year in this country as a result of consuming 
tobacco products. But the lawsuits brought, which were ultimately 
settled by the tobacco industry, were brought under the guise of 
protecting children and protecting the American consumer. We now see 
that almost $300 billion was paid out but not a single tobacco company 
is out of business today. Indeed, they continue to make their product, 
not only in this country but worldwide. There has been no decrease in 
the number of people who get sick or die as a result of consuming 
tobacco products in this country each year.
  I just have to ask whether it is wise--I suggest it is not--to create 
an exception, to place outside the protections of the bill not the 
attorneys general per

[[Page 1810]]

se but those who seek to bring suits on the attorney general's behalf. 
I suggest to you the evidence in my State--and perhaps nationwide--
indicates that the lack of accountability to the voters, the lack of 
concern for ultimate welfare of the consumer, and the potential 
presence of an immediate personal self-serving motive to maximize a 
huge attorney fee, creates enough opportunity for mischief under this 
well-intended amendment that it should be voted down on that basis, if 
no other.
  Finally, let me say in conclusion that I know the Senator from 
Arkansas has filed this amendment in good faith and certainly does not 
intend any of the results I have suggested here today. But I reiterate 
what the Senator from Delaware has said, and what I have been told both 
privately and publicly. If I were to offer amendments which I believe 
would make this bill better, it would be a poison pill for this 
litigation. Indeed, I believe that no matter how well intended the 
amendment offered by the Senator from Arkansas is, it would have that 
same effect. I don't believe that is in anyone's interest.
  I thank the Chair. I thank my colleagues.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. SALAZAR. Mr. President, I rise in support of the amendment which 
has been offered by the Senator from Arkansas. I have a great deal of 
respect for the National Association of Attorneys General. I also 
served in that position in the past, as well as the Senator from Texas 
and the Senator from Arkansas.
  Let me very quickly make three points.
  First, as has already been alluded to by both the Senator from Texas 
and the Senator from Delaware, the intent of this bill is to have no 
effect whatsoever on the powers and duties of the attorneys general to 
enforce their consumer protection responsibilities. I believe that 
point should be very much a part of the legislative history of this 
legislation as it moves forward.
  Second, the powers and duties of the attorneys general in our States 
are very important powers and duties. Those are in those cases powers 
and duties that result from elections of the people of their States who 
elected individuals to serve in the capacity of attorney general.
  In the context where we are limiting the ability for class actions to 
be brought under S. 5, that ability of the attorneys general to protect 
vulnerable consumers is all the more important. It is important for us 
to make sure as this legislation is being considered that we all 
understand it is going to have no impact on the powers and duties of 
the attorneys general.
  The letter that came in from our 46 of our former colleagues, 
interestingly, is an accumulation of almost all of the attorneys 
general from around the country. It includes Democrats and Republicans 
alike. It includes Republicans such as my successor, John Suthers, from 
the State of Colorado, and Democrats such as Tom Miller from the State 
of Iowa. I think their letter and Senator Pryor's amendment with 
respect to some of those are indeed just an effort to make sure the 
legislative intent that has been talked about here would impact the 
legislation; that is, that this legislation, S. 5, is not going to have 
any diminishing effect whatsoever on the powers and duties of the 
attorneys general to proceed forward under the laws of their States, 
both constitutionally and also consumer protection laws.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I have been working on this legislation 
for five Congresses, and I would like to get this legislation to the 
President without any amendments. We have heard from the highest levels 
of the House of Representatives that if we can pass this bill without 
amendments, we will be able to get it to the President without going to 
conference; in other words, the House will adopt it the way we do.
  I don't know how many times I would like to have heard that in the 
House of Representatives. I don't know when I have ever heard that in 
my entire career. I hope everybody in the Senate has a strong heart. If 
I didn't have a strong heart, I wouldn't say that. And if I heard it, I 
wouldn't believe it. I would pass out if the House was going to take 
something the Senate did without question. We ought to grab the ball 
and run with it.
  Regardless of the merits of the amendment by the Senator from 
Arkansas, I hope we can defeat that amendment. This amendment would 
exclude this language from the bill: ``Any action brought by or on 
behalf of the Attorney General of any State.''
  I ask my colleagues not to be fooled. Although this amendment sounds 
good, and there was a good presentation made by the authors of the 
amendment, it is potentially harmful and could lead to gaming by class 
action lawyers. I will explain what I mean by gaming.
  First, before I do that, in my judgment, the amendment is not 
necessary. I will explain. State attorneys general have authority under 
the laws of every State to bring enforcement action to protect their 
citizens. Sometimes these laws are parens patriae cases, similar to 
class actions in the sense that the State attorney general represents 
the people of that State. In other instances, their actions are brought 
directly on behalf of that particular State. But they are not class 
actions; rather, they are very unique attorney general lawsuits 
authorized under State constitutions or under statutes.
  One reason this amendment is not necessary is because our bill will 
not affect those lawsuits. Our bill provides class actions under that 
term ``class action'' as defined to mean any civil action filed in a 
district court of the United States under rule 23 of the Federal Rules 
of Civil Procedure or any civil action removed to a district court that 
was originally filed under State statute or rule authorizing an action 
to be brought by one or more representatives as a class action.
  The key phrase there is ``class action.'' Hence, because almost all 
civil suits brought by State attorneys general are parens patriae 
suits, similar representative suits or direct enforcement actions, it 
is clear they do not fall within this definition. That means that cases 
brought by State attorneys general will not be affected by this bill.
  The supporters of this amendment say it is necessary because State 
attorneys general can bring class actions and those cases might become 
removable to Federal court. That possibility does not make this 
amendment necessary. That is because State attorneys general are not 
required to use class actions to enforce their State laws. If State 
attorneys general want to recover on behalf of their citizens, they can 
always bring actions as parens patriae suits under statutes that 
authorize representative actions or even as direct enforcement actions. 
Again, such lawsuits will not be subject to this bill.
  In addition, our bill has been drafted so as to distinguish between 
solely truly local class action lawsuits and those that involve 
national issues. That compromise, which was not part of my original 
bill, was reached with Senator Feinstein on the home State exception 
provision as well as further compromises made with Senators Dodd, 
Schumer, and Landrieu, dealing with the local controversy exception. As 
a result of these compromises, they will keep then truly local cases 
where they ought to be--in State court.
  Another concern with this amendment is that it is worded in such a 
way to exclude class actions, not just by State attorneys general but 
also, in their words, on behalf of State attorneys general. The way 
this provision is drafted would allow plaintiffs' lawyers to bring 
class actions and simply include in their complaint a State attorney 
general's name as a purported class member, arguably to make their 
class action completely immune to the provisions of this bill. 
Plaintiffs' lawyers could simply ask State attorneys general to lend 
their name to a class action lawsuit so as to keep them in the State 
court.
  That creates a very serious loophole in this bill. We should not risk 
creating

[[Page 1811]]

a situation where State attorneys general can be used as pawns so that 
crafty class action lawyers can avoid the jurisdictional provisions of 
this bill. Our bill would put an end to class action abuses without 
diminishing the ability of State attorneys general to protect their 
citizens in State court. This is another way for lawyers to keep cases 
in State courts.
  This is what this bill is all about, to make sure that cases that 
have national significance are not determined by some county judge in 
one of our 50 States that end up having national implications. Those 
cases should be in Federal court and, for the most part, under our 
legislation will be.
  This amendment would seriously create a loophole in the reforms we 
are trying to accomplish with this bill. I urge my colleagues to join 
me in opposing this amendment.
  Mr. HATCH. Mr. President, I rise in opposition to the amendment 
offered by my colleague from Arkansas. At best, this amendment is 
unnecessary. At worst, it will create a loophole that some enterprising 
plaintiffs' lawyers will surely manipulate in order to keep their 
lucrative class action lawsuits in State court.
  Before I go into more details about the problems with the amendment, 
I would like to point out that the National Association of Attorneys 
General does not endorse this measure, nor has it pushed for its 
inclusion in the class action bill. One would expect that if the 
current bill somehow impairs the ability of State attorneys general to 
bring lawsuits on behalf of their citizens, we would have a position 
from them by now. But we do not, and the association's silence speaks 
volumes about the merits of this amendment.
  Let me first note that this amendment, which excludes from the scope 
of this legislation any ``civil action brought by or on behalf of, the 
Attorney General of any State,'' is unnecessary. Let me explain why.
  State attorneys general have authority under the laws of every State 
in this country to bring enforcement actions to protect their citizens. 
These suits, known commonly as parens patriae cases, are similar to 
class actions to the extent that the attorney general represents a 
large group of people.
  But let me be perfectly clear that they are not class actions.
  There is no certification process, there are no representative class 
members named in the complaint, and plaintiffs' attorneys who stand to 
gain millions of dollars in fees. Rather, they are unique lawsuits 
authorized under State constitutions or State statutes that are brought 
on behalf of the citizenry of a particular State. These actions are 
brought typically in consumer protection matters under State law and 
usually involve local disputes. As such, S. 5 in no way affects these 
lawsuits.
  To underscore, I direct my colleagues to section 1711(2) of the bill 
which explicitly defines a ``class action'' to mean any civil action 
filed in a district court of the United States under rule 23 of the 
Federal Rules of Civil Procedure, or any civil action that is removed 
to a district court of the United States that was originally filed 
under a State or rule of judicial procedure authorizing an action to be 
brought by one or more representatives as a class action.
  This statutory definition makes it perfectly clear that the bill 
applies only to class actions, and not parens patriae actions. Class 
actions being those lawsuits filed in Federal district court under rule 
23 of the Federal rules of civil procedure or lawsuits brought in State 
court as a class action. Neither of these conditions are met when 
compared to the nature of a parens patriae action, and consequently, 
are excluded from the reach of this bill.
  What I think the proponents of this amendment are really concerned 
about is the impact of this bill on State attorneys general if they 
choose to pursue an action other than a parens patriae action. But this 
possibility does not make this amendment necessary.
  First, attorneys general are not required to use class actions to 
enforce their State laws and protect their citizens. To the contrary, 
their main weapon has been, and continues to be, the parens patriae 
action authorized under State statute.
  Second, this legislation has been carefully crafted to distinguish 
between truly local suits and those that involve national issues. Thus, 
if an attorney general brings a class action, and that class action 
involves matters of truly local concern, it will certainly fall under 
one of the bill's exceptions. On the other hand, if the lawsuit is 
aimed at an out-of-State corporation for conduct that affects citizens 
in multiple States, or if the lawsuit is interstate in nature, then 
that suit should be removed to Federal court. Removal of such a case is 
particularly appropriate because there would likely be similar suits 
brought in a number of courts, and one of the central purposes of this 
legislation is to promote judicial efficiency and fairness by allowing 
copy-cat class actions to be coordinated in one Federal proceeding.
  As I noted earlier, this amendment is not only unnecessary, it 
actually creates opportunities for gaming. If this legislation enables 
State attorneys general to keep all class actions in State court, it 
will not take long for plaintiffs' lawyers to figure out that all they 
need to do to avoid the impact of S. 5 is to persuade a State attorney 
general to simply lend the name of his or her office to a private class 
action. In other words, plaintiffs' lawyers will try to keep interstate 
class actions in State court by simply naming that State's attorney 
general at the end of complaint as a cocounsel or of-counsel. 
Undoubtedly, we will see arguments that if an attorney general merely 
sends in a letter saying that he/she is sympathetic 10 the action, the 
lawsuit will be exempt from the bill's provisions. I think this is the 
very type of forum shopping that S. 5 is supposed to eliminate and we 
should not be encouraging it now.
  Indeed, to give the potential gaming some real life perspective, I 
direct your attention, Mr. President, to an article from the Boston 
Globe which reports that the Massachusetts attorney general had made 
arrangements with private plaintiffs' attorneys to prosecute a 
consumer-oriented class action against the drug store chain Wal-
greens. Under the arrangement, the plaintiffs lawyers pocketed hefty 
fees while the state AG's office received a portion of the settlement 
money.
  But the article reports that this privatization arrangement has drawn 
criticism because the settlement did very little to benefit consumers. 
The article reports that too little of the settlement money actually 
went to consumers, but rather to groups such as Public Citizen, the 
American Lung Association, and Massachusetts Bar Association. Perhaps 
more troubling about the article is the alleged campaign contribution 
ties between the private attorneys who prosecuted these cases and the 
State attorney general office.
  Given the close ties between this State AG and private attorneys, I 
find that this amendment will only encourage these types of 
arrangements in the future that do not benefit consumers.
  We do not want to risk creating a situation in which State attorneys 
general can be used as pawns so that class action lawyers can remain in 
one of their magic jurisdictions and avoid the import of this bill. S. 
5 would put an end to class action reform without diminishing in any 
way the ability of State attorneys general to discharge their duty to 
protect their citizens--and to do so in State court. I urge my 
colleagues to vote against this amendment.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mr. PRYOR. I thank my colleagues for their attention to this 
amendment. I am encouraged in one way because I know they have spent 
time with the amendment and studied it, analyzed it. What encourages me 
is all four who spoke against this--in fact, every Senator who spoke 
against the amendment--have said that this bill as currently drafted 
will not alter or limit the existing rights of any State attorney 
general. That is very good news.
  I don't agree with that interpretation. In fact, there are 46 
attorneys

[[Page 1812]]

general, Democrats and Republicans from all over the country, who have 
written a letter saying they do not agree, or at least they have 
concern with that interpretation.
  I hope when this law, if it passes, S. 5, is challenged, and it will 
be at some point or be litigated at some point, and a State attorney 
general tries to pursue some sort of action and there is a challenge 
saying the State cannot do it, I hope the courts will recognize the 
legislative history we developed today. The intention of this Senate 
and the conference is not to limit any existing rights or any existing 
abilities of the State attorneys general in pursuing cases they may 
deem appropriate to pursue.
  In addition, a number of the opponents, maybe all, have focused on 
some language in the bill. We need to clarify that language so when we 
vote on this we will be able to vote from an informed position. The 
language is ``but does not include any civil action brought by or on 
behalf of any Attorney General.''
  Chairman Grassley and others have pointed to that language and 
indicated they have some concern with that. I respect that concern.
  Let me flesh that out, if I may. In virtually every State, and 
probably every State, the work of the attorney general's office is too 
large for one person to do. In other words, the AG himself or herself 
cannot sign every pleading, cannot attend every hearing, cannot 
participate in everything. They cannot do it. There are not enough 
hours in the day and the workload is too heavy. Again, I think every 
State law does this routinely. I don't know of any exception. What that 
means is every attorney general in America has an assistant attorney 
general or deputy attorney general or some other titled person in their 
office who every single day routinely does things on behalf of the 
attorney general. It has to be that way.
  Under the laws of the States, the attorney general is the one who is 
ultimately responsible. When a pleading is signed, that signatory--
whichever deputy or assistant or attorney general it may be--that 
person is binding the State's attorney general to certain things in the 
pleadings.
  The attorney general is the officer of the court. The attorney 
general has ethical responsibilities and ethical duties. I would argue 
that these ethical duties are above and beyond what is in the private 
practice of law because that lawyer, as the attorney general, is 
representing the State he or she was elected or selected to represent. 
Also, some are concerned that the phrase ``or on behalf of'' may mean 
that a private sector law firm could be retained by the State to pursue 
a matter. That is true. That is existing law today. And everybody has 
said the intention of S. 5 is not to limit or alter or change any 
authority of the States' attorneys general.
  So all that is true. However, in every State I am aware of--I cannot 
promise this is true in every State, but in every State I am familiar 
with, there is a process which States' attorneys general have to go 
through in order to hire outside counsel. I think if we spent 30 
minutes looking at various States and the needs of various States, 
probably 100 percent of the people in the Senate would understand that 
there may be cases where it might be appropriate to hire outside 
counsel under certain circumstances.
  But there is a process. For example, in Arkansas, we had to go to the 
State legislature. We had to go to the State legislative committee and 
get approval to hire outside counsel. We also had to have the Governor 
sign off on the approval. So we had both the legislative and the 
executive branch signing off on that decision. Again, I cannot promise 
every State has that same process, but every one I am familiar with has 
some sort of process they go through and do that.
  The United States is a union of States. We should not think of these 
attorneys general as attorneys. I tried to make this point several 
times. They are different than private practice attorneys. These 
attorneys represent the State. They are the mouthpiece for the State. 
They do the will of the legislature of the State in all of its various 
capacities.
  Mr. President, may I ask how much time I have?
  The PRESIDING OFFICER (Mr. Thune). Fifteen seconds.
  Mr. PRYOR. Mr. President, after the 15 seconds, what will happen? Can 
I ask unanimous consent to extend it for another, say, 10 minutes?
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. PRYOR. Thank you, Mr. President.
  But the only point I was going to make on that is, we are a union of 
States. We should always see the States' attorneys general as being a 
little different than private sector lawyers. There is nothing wrong 
with private sector lawyers. Like I said many times during the course 
of this debate on this amendment, they are doing their job. They are 
representing their clients, and that is great and fantastic. That is 
the way the system works. But the State's attorney general does more. 
The State's attorney general has more responsibility. When they speak, 
they speak on behalf of the State. It is kind of like us being here in 
Washington. Certainly we are everyday citizens like everybody else, but 
we are elected to come here and represent our States in this great 
body.
  So I will ask my colleagues to try to see States' attorneys general 
in a different light, in a materially different light, not a slightly 
different light but in a materially, substantially different light than 
you see your ordinary attorneys in private practice.
  Like I said, some say this amendment is unnecessary because it honors 
the integrity of the bill. I like that in terms of legislative history. 
But I also say the counterargument there is: If it is unnecessary and 
if it does not change the impact of the bill, why not vote on it and 
allow the amendment to make sure we are all protecting the ability of 
our States to pursue litigation in the way they have always been able 
to do that.
  Mr. President, I ask for the yeas and nays on my amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  Mr. PRYOR. Mr. President, I yield the floor.
  Mr. GRASSLEY. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. SPECTER. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SPECTER. Mr. President, the time of 12:15 having arrived, we are 
set for the vote. I move to table the Pryor amendment No. 5, and I ask 
for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is on agreeing to the motion. The clerk will call the 
roll.
  The assistant legislative clerk called the roll.
  Mr. McCONNELL. The following Senator was necessarily absent: the 
Senator from New Hampshire (Mr. Sununu).

                       [Rollcall Vote No. 5 Leg.]

                                YEAS--60

     Alexander
     Allard
     Allen
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Burr
     Carper
     Chafee
     Chambliss
     Coburn
     Cochran
     Coleman
     Collins
     Cornyn
     Craig
     Crapo
     DeMint
     DeWine
     Dodd
     Dole
     Domenici
     Ensign
     Enzi
     Frist
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Isakson
     Kohl
     Kyl
     Lincoln
     Lott
     Lugar
     Martinez
     McCain
     McConnell
     Murkowski
     Nelson (NE)
     Roberts
     Santorum
     Schumer
     Sessions
     Shelby
     Smith (OR)
     Snowe
     Specter
     Stevens
     Talent
     Thomas
     Thune
     Vitter
     Voinovich
     Warner

[[Page 1813]]



                                NAYS--39

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Byrd
     Cantwell
     Clinton
     Conrad
     Corzine
     Dayton
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Mikulski
     Murray
     Nelson (FL)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sarbanes
     Stabenow
     Wyden

                             NOT VOTING--1

       
     Sununu
       
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 60, nays 39, as follows:
  The motion was agreed to.
  Mr. SPECTER. Mr. President, I move to reconsider the vote.
  Mr. BOND. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. SPECTER. Mr. President, the Senator from Missouri has requested 
some time in morning business, which is acceptable to the managers. 
Senator Bond will take 10 minutes in morning business. Then we will 
proceed to amendments.
  I see our colleagues on the other side of the aisle who have risen, 
who are ready for amendments, so after Senator Bond's 10 minutes we 
will proceed with the laying down of an amendment.
  Mr. KENNEDY. Reserving the right to object, my intention was just to 
call it up. If I could have the attention of the leader? It was just to 
call it up, have it before the Senate. We have other Senators who want 
to speak. Then I will speak on it later, after my colleagues speak.
  Could I have the opportunity to call up my amendment and just have it 
before the Senate?
  Mr. SPECTER. Do I understand the Senator from Massachusetts wants 2 
minutes?
  Mr. KENNEDY. That will be plenty.
  Mr. SPECTER. Does the Senator from Missouri agree?
  Mr. BOND. I am agreeable.


                            Amendment No. 2

  Mr. KENNEDY. I ask unanimous consent the pending amendment be set 
aside and call up my amendment, No. 2, which is at the desk.
  The PRESIDING OFFICER. Without objection it is so ordered. The clerk 
will report.
  The assistant legislative clerk read as follows:

       The Senator from Massachusetts [Mr. Kennedy], for himself, 
     Ms. Cantwell, Mr. Biden, Mr. Leahy, and Mr. Corzine, proposes 
     an amendment numbered 2.
       On page 15, strike lines 3 through 7, and insert the 
     following:
       ``(B) the term `class action'--
       ``(i) means any civil action filed under rule 23 of the 
     Federal Rules of Civil Procedure or similar State statute or 
     rule of judicial procedure authorizing an action to be 
     brought by 1 or more representative persons as a class 
     action; and
       ``(ii) does not include--
       ``(I) any class action brought under a State or local civil 
     rights law prohibiting discrimination on the basis of race, 
     color, religion, sex, national origin, age, disability, or 
     other classification specified in that law; or
       ``(II) any class action or collective action brought to 
     obtain relief under State or local law for failure to pay the 
     minimum wage, overtime pay, or wages for all time worked, 
     failure to provide rest or meal breaks, or unlawful use of 
     child labor'';

  Mr. KENNEDY. Mr. President, because of other Members' schedules, they 
want to address this and other issues at this time. I intend to come 
back and have a more complete statement.
  This is about discrimination. It is also about a worker's rights. 
Those were issues that were never intended to be included in this class 
action legislation.
  I will have more to say about it, but it is an extremely important 
amendment. I will address the Senate on this issue in a very short 
period of time.
  I thank the floor managers for their courtesies in letting us get 
this matter up. Hopefully, we will have a chance midafternoon to have a 
vote on it.
  Mr. BOND. Mr. President, I ask unanimous consent I may be permitted 
to speak as in morning business for up to 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Mr. Bond are printed in today's Record under 
``Morning Business.'')
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, the senior Senator from California is on 
the floor to offer an amendment, titled the Feinstein-Bingaman 
amendment, which has been the subject of considerable discussion.
  As I have said in the earlier portions of the discussion on this 
bill, I believe class action reform is necessary to move cases into the 
Federal courts, but I think it is important that there not be any 
substantive law changes, as I indicated previously on the floor. I had 
been in support of the Bingaman amendment. The management in opposition 
will be handled by Senator Hatch.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. FEINSTEIN. Mr. President, I thank the Senator from Pennsylvania.
  I ask unanimous consent that the pending amendment be set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                            Amendment No. 4

  Mrs. FEINSTEIN. Mr. President, I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from California [Mrs. Feinstein], for herself 
     and Mr. Bingaman, proposes an amendment numbered 4.

  Mrs. FEINSTEIN. Mr. President, I ask unanimous consent that reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To clarify the application of State law in certain class 
                    actions, and for other purposes)

       On page 24, before line 22, insert the following:
       (c) Choice of State Law in Interstate Class Actions.--
     Notwithstanding any other choice of law rule, in any class 
     action, over which the district courts have jurisdiction, 
     asserting claims arising under State law concerning products 
     or services marketed, sold, or provided in more than 1 State 
     on behalf of a proposed class, which includes citizens of 
     more than 1 such State, as to each such claim and any defense 
     to such claim--
       (1) the district court shall not deny class certification, 
     in whole or in part, on the ground that the law of more than 
     1 State will be applied;
       (2) the district court shall require each party to submit 
     their recommendations for subclassifications among the 
     plaintiff class based on substantially similar State law; and
       (3) the district court shall--
       (A) issue subclassifications, as determined necessary, to 
     permit the action to proceed; or
       (B) if the district court determines such 
     subclassifications are an impracticable method of managing 
     the action, the district court shall attempt to ensure that 
     plaintiffs' State laws are applied to the extent practical.

  Mrs. FEINSTEIN. Mr. President, what I would like to do is say a few 
words on behalf of this amendment which is submitted on behalf of both 
Senator Bingaman, who will be on the floor shortly to speak on it, and 
myself.
  As the legislation has been debated, Senator Bingaman has raised, I 
think, a reasonable, valid, and a real concern about whether certain 
national class action cases may be caught in a catch-22 when they were 
prohibited from having their cases heard either in State or Federal 
court, leaving the case to reside in oblivion.
  This problem was best described by the Bruce Bromley Harvard Law 
Professor Arthur Miller in a letter he sent to Senator Bingaman. It is 
a lengthy letter, but I will read one part:

       Under current doctrines, federal courts hearing state law-
     based claims, must use the ``choice-of-law'' rule of the 
     State in which the federal district court sits. These 
     procedural rules vary among states, but many provide that the 
     federal court should apply the substantive law of a home 
     state of a plaintiff, or the law of the state where the harm 
     occurred. In a nationwide consumer class action, such a rule 
     would lead the court to apply to each class member's claim 
     the law of the state in which the class member lives or lived 
     at the time the harm occurred. As noted, most federal courts 
     will not grant

[[Page 1814]]

     class certification in these situations because they find the 
     cases would be ``unmanageable.''

  That is the catch-22. You send a consumer class action to Federal 
court, the judge says it is unmanageable, will not certify it, the case 
cannot go back to State court and it sits in oblivion. Senator Bingaman 
and I have worked to address this problem. I believe we have.
  The original solution proposed by Senator Bingaman was a bit too 
broad because it could impact consumers in States with strong consumer 
protection laws such as my State of California. What we tried to do, 
and did, was develop a compromise amendment that provides Federal 
judges with guidance on how to proceed in these cases, while leaving 
the judges with the discretion they need to manage their court dockets.
  This ensures that national class actions will be heard. They will be 
certified and claimants in those cases will be more likely to receive 
the benefit of his or her own State's law.
  Let me quickly go over the amendment. The amendment basically 
provides that:

       Notwithstanding any other so-called choice of law rule 
     [which is what is involved here] in any class action over 
     which the district courts have jurisdiction, asserting claims 
     arising under State law concerning products or services 
     marketed, sold, or provided in more than 1 State on behalf of 
     a proposed class, which includes citizens of more than 1 such 
     State, as to each such claim and any defense to such claim--

  Here is the amendment:

       (1) the district court shall not deny class certification, 
     in whole or in part, on the ground that the law of more than 
     one State will be applied.

  That solves the problem of the kind of unanswered question in this 
bill, Can a class action remain uncertified? The answer is, clearly, 
no.

       (2) the district court shall require each party to submit 
     their recommendations for subclassifications among the 
     plaintiff class based on substantially similar State law; and
       (3) the district court shall--
       (A) issue subclassifications, as determined necessary, to 
     permit the action to proceed; or
       (B) if the district court determines such 
     subclassifications are an impracticable method of managing 
     the action, the district court shall attempt to ensure that 
     plaintiffs' State laws are applied to the extent practical.

  This provides guidance to the judge. Secondly, it requires these 
cases receive certification in the district court.
  We believe this is a good solution. It is a significant solution. I 
hope this Senate will accept that.
  Let me say something about this bill as a supporter of a class action 
bill. This bill is not perfect. It represents the best that can be done 
to solve what is a real problem in our legal system. I have tried to 
spend a good deal of time on this issue through Judiciary Committee 
hearings, personal hearings with both sides, and research and analysis.
  As I said in the Judiciary Committee when we marked up the bill, I 
had a kind of epiphany in one of the hearings a few years ago when a 
woman named Hilda Bankston testified before our committee. She was the 
owner of a small pharmacy, with her late husband, in Mississippi. The 
Bankstons were sued more than 100 times for doing nothing other than 
filling legal prescriptions. The pharmacy had done nothing wrong, but 
they were the only drugstore in the county, a county that was so 
plaintiff friendly that there are actually more plaintiffs than 
residents. So she, in effect, became a person to sue in that county to 
enable the forum shopping process to take place.
  I will read a letter from her because it is indicative. Let me say 
this: This bill is not anti-class action as some would have Members 
believe. This bill tries to fix a broken part of class action which is 
the ability to venue or forum shop and to make that much more 
difficult. The Bankston case is a reason for doing that. So many people 
such as Hilda Bankston, innocent people who have done nothing wrong, 
get caught up in how these class actions are put together.
  Let me quickly read what she told us in committee:

       For 30 years, my husband, Navy Seaman Fourth Class Mitchell 
     Bankston, and I lived our dream, owning and operating 
     Bankston Drugstore in Fayette, MS. We worked hard and my 
     husband built a solid reputation as a caring, honest 
     pharmacist . . .
       Three weeks after being named in the [first] lawsuit, 
     Mitch, who was 58 years old and in good health, died suddenly 
     of a massive heart attack . . .
       I sold the pharmacy in 2000, but have spent many years 
     since retrieving records for plaintiffs and getting dragged 
     into court again and again to testify in hundreds of national 
     lawsuits brought in Jefferson County against the pharmacy and 
     out-of-state manufacturers of other drugs . . . I had to hire 
     personnel to watch the store while I was dragged into court 
     on numerous occasions to testify.
       I endured the whispers and questions of my customers and 
     neighbors wondering what we did to end up in court so often. 
     And, I spent many sleepless nights wondering if my business 
     would survive the tidal wave of lawsuits cresting over it . . 
     .
       This lawsuit frenzy has hurt my family and my community. 
     Businesses will no longer locate in Jefferson County because 
     of fear of litigation. The county's reputation has driven 
     liability insurance rates through the roof.
       No small business should have to endure the nightmares I 
     have experienced.

  This amended Class Action Fairness Act goes a long way toward 
stopping forum shopping by allowing Federal courts to hear truly 
national class action lawsuits. The Constitution itself states that the 
Federal judicial power ``shall extend . . . to controversies between 
citizens of different States.''
  Yet an anomaly in our current law has resulted in a disparity wherein 
class actions are treated differently than regular cases and often stay 
in State court. The current rules of procedure have not kept up with 
the times. The result is a broken system that has strayed far from the 
Framers' intent.
  I believe this bill is a well-thought-out, reasoned and an easily 
read bill. I have actually read it three times--as solution to this 
problem it does a number of things.
  First, the bill contains a consumer class action bill of rights to 
provide greater information and greater oversight of settlements that 
might unfairly benefit attorneys at the expense of truly injured 
parties.
  For instance, the bill ensures that judges review the fairness of 
proposed settlements if those settlements provide only coupons to the 
plaintiffs. It bans settlements that actually impose net costs on class 
members. It requires that all settlements be written in plain English 
so all class members can understand their rights. And it provides that 
State attorneys general can review settlements involving plaintiffs.
  All these things are important guarantees for the plaintiff, for the 
individual, for the aggrieved party. I believe it makes the class 
action procedure much sounder for the consumer.
  Secondly, the legislation creates a new set of rules for when a class 
action may be so-called removed to Federal court. These diversity 
requirements were modified in committee and again since then to make it 
clear that cases that are truly national in scope should be removed to 
Federal court. But equally important, the rules preserve truly State 
actions so that those confined to one State remain in State courts.
  Now, the original bill that came to the Judiciary Committee said all 
class actions where a substantial majority of the members of the class 
and the defendants are citizens of the State would be moved to Federal 
court. We changed this. I actually offered an amendment in committee 
that changed this definition to split the jurisdiction into thirds. Now 
there is less ambiguity about where a case will end up, and more cases 
will actually remain in State court.
  I think that is important to stress: more cases will actually remain 
in State court. This is an important compromise.
  If more than two-thirds of the plaintiffs are from the same State as 
the primary defendant, the case automatically stays in State court.
  If fewer than one-third of the plaintiffs are from the same State as 
the primary defendant, the case may automatically be removed to Federal 
court. Remember, this happens only if one of the parties asks for 
removal. Otherwise, these cases, too, remain in State court.
  In the middle third of the cases, where between one-third and two-

[[Page 1815]]

thirds of the plaintiffs are from the same State as the primary 
defendant, the amendment would give the Federal judge discretion to 
accept removal or remand the case back to the State based on a number 
of factors which are defined in the bill.
  I would hope Members would take the time to read the bill. I think it 
is an important bill. I think to a great extent it has been maligned in 
that people have chosen to interpret it as anti-class action. I think 
if those of us--and it is interesting that some of us on this bill are 
not attorneys; Senator Grassley, Senator Kohl, certainly myself from 
the Judiciary Committee--I think if you are not an attorney, you can 
look at the forest and not really get caught up in some of the process 
trees of that forest, and you can make an assessment whether the forest 
well serves class action cases.
  I think these changes, and particularly the diversity requirement 
changes, make this a much sounder way to make a decision as to whether 
a class action should remain in State court or is truly national in 
scope and, therefore, should be heard by the Federal court.
  I commend to this body the consumer bill of rights. It is very clear 
in reading the bill that protections are given for coupons. There is 
review for settlements. The consumer is taken very seriously. I think 
the system is improved.
  Now, let me speak just for a moment to this business: Well, you have 
to take the bill as is or forget it, there is not going to be a bill. 
There is an arrangement with the House to take the bill if it is 
exactly as is.
  Well, in many complicated issues, there are dilemmas or problems or 
issues or corrections that need to be made which appear as the 
legislative process takes place. And that is what has happened with 
this bill. In certain areas of concern, where the law may be silent, 
and case law may be conflicting, I think it is important to clarify the 
law. That is what the Feinstein-Bingaman amendment does. There is a 
hole there. The issue is governed by old case law. What we do is, in 
essence, codify that so we make clear the discretion that the judge 
has.
  Most importantly, we make clear that a bona fide class action going 
to Federal court is not going to fall into oblivion because a judge is 
going to say, Oh, my goodness, there are so many State laws at issue 
here I can't possibly manage the case, and, therefore, that judge does 
nothing and the case goes nowhere.
  So I think we have worked out a good solution. I know Senator 
Bingaman was here on the Senate floor. I would say to the Senator from 
Pennsylvania, I know he is desirous of saying a few words. So perhaps 
if his staff is listening, they will urge him to come to the floor. 
Otherwise, Mr. President, I thank the Chair, and I thank the chairman.
  I yield the floor.
  Mr. GRASSLEY. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BINGAMAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BINGAMAN. Mr. President, I rise to express my strong support for 
Senator Feinstein's amendment. The amendment will provide courts with 
guidance as to how to manage large multistate class actions in Federal 
court. This amendment addresses a flaw in the underlying legislation 
that, if left uncorrected, could leave many properly filed multistate 
consumer class actions without a forum in which those cases could be 
heard.
  I had prepared an amendment that would have reaffirmed the 
discretionary authority of a judge to select the law of one State, as 
is currently permissible under the Constitution, and reaffirm the right 
of the judge to do that instead of denying certification for large 
multistate consumer class actions. There were some concerns raised by 
my colleagues, and I have agreed to withhold that amendment and lend my 
support to the Feinstein compromise approach. I believe the Feinstein 
compromise will accomplish what I intended to address in my amendment; 
that is, to make sure injured consumers have their day in court.
  By amending the diversity jurisdiction rules, the Class Action 
Fairness Act of 2005 will give almost exclusive jurisdiction to the 
Federal courts to hear class action cases. The proponents of the 
legislation argue that such changes are necessary due to abuses that 
are occurring in a handful of State courts. Although the bill makes 
changes to other aspects of class action litigation, such as coupon 
settlements, this procedural removal of cases from State court to 
Federal court should be the focus of our scrutiny. This goes to the 
core of the 10th amendment of the Constitution that preserves the right 
of a State to protect its citizens. While this shift may be necessary 
in certain cases, it should not be taken lightly, as we will be taking 
away the ability of States to hear cases involving injuries to their 
citizens that are in violation of the State law. This is clearly a 
fundamental change in jurisprudence.
  Class action suits have long provided a means for individuals to band 
together to seek a remedy when they have collectively been damaged in a 
manner that is significant but would not be economical to advance on 
their own. These actions empower those citizens who would be left 
without redress, absent the collective effort of others. This system 
has provided a necessary balance to a system weighted toward those with 
the means to defend their actions in court. The suits also take much of 
the pressure off of a State attorney general. The State attorneys 
general are not able to investigate and seek remedies for all the 
citizens who have been damaged or hurt by business in and outside of a 
State. Class actions reduce the need for overly burdensome regulations 
and laws that would be necessary if it were to be forced to limit the 
discretion given to businesses to operate in a responsible manner.
  Finally, class action litigation protects our citizens from future 
injuries by putting an end to certain acts of corporate malfeasance and 
negligence. Although there have been abuses on occasion, the benefits 
of class action litigation should be evident. Under current law, an 
individual has the right to participate in a class when a number of 
people have been injured in a similar fashion by the same defendant. 
Once the class has been created, if the injury is based on a violation 
of State law--and many are, as there are really no general consumer 
protection laws--the class representative generally has the option of 
filing either in State court or Federal court. In this respect, a class 
action is similar to any action that is filed in court; that is, the 
plaintiff is the master of his or her claims.
  The proponents of this legislation have argued that the basic goal of 
the legislation is to move these large class actions to Federal court. 
For instance, Stanton D. Anderson, executive vice president and chief 
legal counsel for the U.S. Chamber of Commerce, wrote in the 
Philadelphia Inquirer, dated February 27, 2004, that:

       [t]he Class Action Fairness Act would simply allow federal 
     courts to more easily hear large, national class action 
     lawsuits affecting consumers all over the country.

  Similarly, in testimony before the Judiciary Committee on July 31, 
2002, Walter Dellinger stated:

       [t]he principal purpose and effect of the [class action] 
     bill is undeniably modest: it merely adjusts the rules of 
     diversity jurisdiction so that certain large multi-party 
     cases--those with true nationwide compass, affecting many or 
     even all states at once--will be litigated in the federal 
     courts rather than in the courts of just one state (or 
     county) or another.

  Suffice it to say, the new Federal diversity statute for purposes of 
class action will accomplish this as very few, if any, cases will meet 
the standards necessary to remain in State court. The operative 
question is, then, What will happen to these cases once they are in the 
Federal court system? If we look at the past decade or so, we note an 
interesting pattern. Although some State courts have certified these 
large multistate class actions, the Federal

[[Page 1816]]

courts have not. In fact, six U.S. circuit courts of appeal--the Third 
Circuit, the Fifth Circuit, the Sixth Circuit, the Seventh Circuit, the 
Ninth Circuit, and the Eleventh Circuit--and at least 26 Federal 
district courts have denied class certification in multistate consumer 
class actions. Except for a 1986 Third Circuit decision which has since 
been narrowed to only its facts, no U.S. circuit court of appeals has 
granted class certification in such a case. At the same time, at least 
seven different States have certified large multistate consumer class 
actions.
  Under rule 23(b)(3) of the Federal Rules of Civil Procedure, an 
action ``may be maintained as a class action if the court finds that 
the questions of law or fact common to the members of the class 
predominate over any questions affecting only individual members.''
  Because class action lawsuits involving fraud and deceptive sales 
practices or sales of defective products allege violations of State 
consumer protection statutes or common law, there is always a 
possibility that the laws to be applied will be different. If a court 
determines that they must apply the laws of different States to 
different members of a class action, they often find that questions of 
law common to the members of a class do not predominate. That renders 
the adjudication of the case as a class action unmanageable, and they 
deny class certification. This denial is effectively the end of the 
action. It is not hard to understand why State courts are the forum of 
choice for these large class actions.
  The proponents of this legislation are aware that Federal courts do 
not certify these large class actions. In fact, in most cases, they 
argue this very point in court.
  For example, in re Simon, the second litigation, which was before the 
U.S. Court of Appeals for the Second Circuit, the Chamber of Commerce 
opined:

       . . . it is nearly a truism that nationwide class actions 
     in which the claims are subject to varying State laws cannot 
     be certified because they are simply unmanageable.

  Obviously, these arguments have been persuasive before the Federal 
courts. In re the Ford Motor Company ignition switch products liability 
litigation that was in the U.S. District Court for New Jersey, that 
court stated:

       [P]laintiffs' first cause of action contends that Ford 
     breached an implied warranty of merchantability under each of 
     the many States' laws that govern this action. Variations 
     among these States' laws, however, preclude classwide 
     adjudication of plaintiffs' claims.

  This case involved a defective ignition switch that caused it to 
fail. It has been claimed that this failure may have resulted in as 
many as 11 deaths and 31 injuries, not to mention almost a billion 
dollars spent by consumers to replace the defective product. The case 
was ultimately settled, but it was only settled after a State court in 
California agreed to certify a class.
  Senator Feinstein's amendment makes sure that by moving these cases 
to Federal court, we are not pushing them into a forum that will fail 
to hear those cases because too many State laws apply.
  The amendment requires the parties to submit plans as to how the case 
could be managed by dividing it into subclasses based on the similarity 
of the State laws that would need to be applied. The judge would then 
have the discretion to divide the class into subclasses or use some 
other manner that ensures that the plaintiffs' State laws are applied.
  Under the Feinstein amendment, the Federal court is not required to 
divide the class into subclasses; it is simply discretionary. It can 
still follow the State's choice of law rules, or use any other means 
permissible to ensure that the plaintiffs' State laws are applied to 
the extent practicable.
  If we are going to take away the right of State judges to hear a 
class action, it is incumbent upon us to make sure the Federal judge is 
not able to not certify the class because too many State laws would 
apply. That would be an unfair result.
  I have heard many Members argue that a deal is a deal; therefore, 
Members who support the bill, including those who were able to get 
changes made to the bill before it was brought to the floor, should be 
precluded from supporting any amendment, including this amendment. I 
remind my colleagues that although this legislation has been around for 
years, there has not been a single amendment to improve this 
legislation that has been voted on on the floor of the Senate prior to 
this week.
  The stated intention of the proponents of this bill is to avoid 
conference with the House and to have that Chamber pass the bill 
exactly the way it passes the Senate. While they argue this is a reason 
to not support amendments, I would argue the opposite. Because we know 
this is the only opportunity for any Member of Congress to amend this 
legislation, it is imperative that we remain openminded to the few 
amendments that are going to be offered and debated on the bill.
  In the 22 years I have been in the Senate, I do not recall a single 
piece of legislation that could not have benefited from input from all 
interested Members of the Senate. The Founding Fathers of our country 
created a legislative branch that is intentionally deliberative and 
subject to the repetitive processes of debate and amendment.
  I remind my colleagues of the language included in last year's 
nonamendable Omnibus appropriations bill that would have allowed staff 
from the appropriations committees to review taxpayers' tax return 
information. That one provision almost derailed the entire spending 
bill for our country. Clearly, if Members had been presented with an 
opportunity to review the bill on the floor, to amend that bill, we 
could have avoided that problem.
  As elected officials, we have a responsibility to the public to do 
our best to improve legislation before it becomes law, which I believe 
argues for Members to consider each amendment with an open mind. If my 
colleagues disagree with this amendment, then I encourage them to vote 
against it. However, if they agree with me that this catch-22, which is 
in the current bill, should be corrected, then I hope they will vote 
for this Feinstein amendment, regardless of whether you previously 
stated support for the overall bill.
  I would like to acknowledge and thank the chairman of the Judiciary 
Committee, Senator Specter, for his support of my amendment and what I 
understand to be his support of the Feinstein amendment. No one could 
debate the chairman's dedication to getting this bill passed. Yet he 
agrees that the legislation would be improved by correcting the problem 
we have identified.
  Substantively, one of the arguments that was raised by proponents of 
the bill is that courts have been certifying classes in these large 
multistate class actions, even though all of the circuits I mentioned 
before in numerous district courts have denied certification on the 
ground that the case is unmanageable. The cases enlisted by proponents 
of the bill in defense of their claim that cases have been certified 
are cases involving a Federal question or certifications of a class for 
purposes of settlement. These types of certifications are entirely 
different than the cases we are referring to; that is, cases involving 
violations of State law for purposes of a trial. The only way these 
cases are going to get to the settlement phase is if there is the 
possibility that a case could be taken to trial, if necessary. It is an 
important distinction.
  Again, I point to this in re Simon II litigation where the Chamber of 
Commerce argued against certification, stating that it is nearly a 
truism that nationwide class actions in which the claims are subject to 
varying State laws cannot be certified because they are simply 
unmanageable.
  As I mentioned before, this is not just an abstract situation. There 
are over 300,000 homeowners in Mississippi, Louisiana, Florida, and 
Texas who have been compensated for defective siding they had purchased 
for their houses. When this case was brought before the Federal court, 
it was not certified, in part because the court could not ``imagine 
managing a trial under

[[Page 1817]]

the law of 51 jurisdictions on the defectiveness of masonite siding.'' 
Because an Alabama State court agreed to certify the case for trial, 
the case was settled, and these homeowners were compensated for their 
damages.
  Proponents of the legislation also argue that a class denied 
certification would be free to refile its cases in either State or 
Federal court. Based on the underlying legislation, the State court 
cases, almost without exception, would be removed again to the Federal 
court, and once in Federal court, the case would be sent to the same 
Federal court that failed to certify the class in the first place due 
to the procedure for consolidation and the operation of the 
multidistrict litigation panel.
  This MDL, multidistrict litigation panel, streamlines large, unwieldy 
multidistrict litigation involving the same parties and the same facts 
when those cases are filed in Federal courts. This panel of seven 
judges appointed by the Chief Justice of the Supreme Court determines 
which cases pending in Federal court should be transferred to a single 
district court for purposes of hearing and ruling on pretrial matters, 
including the matter of class certification.
  The proceedings can be initiated by the MDL panel or by any party 
involved in one of the actions pending in a district court. All cases 
of a similar nature in Federal court, including those filed after the 
consolidation, are affected and subject to being transferred. Once a 
transferee court has been selected, it rules on all pretrial motions, 
including class certification, but will send the cases back to the 
transferor courts for trial, assuming that the case has not settled or 
been dismissed. All future cases involving similar claims and similar 
parties are automatically sent back to the same transferee court for 
any future actions.
  Class actions by their very nature are large cases and they are 
affected by the ability of the MDL panel to consolidate, as there are 
generally different cases pending in district courts throughout the 
country. Under current law, a class based on claims of State law 
violations can avoid this consolidation by remaining in State court, 
but this will no longer be the case after this bill becomes law. 
Instead, plaintiffs who go through the consolidation process and are 
not certified will not refile these cases since they would ultimately 
be back before the same judge who failed to certify the class in the 
first place.
  Finally, the proponents of the bill have argued that taking away the 
right of a judge to deny certification based on too many States' laws 
is a violation of due process and is anticonsumer. It seems implausible 
to me that an amendment that would ameliorate the impact of denying 
States the right to hear certain cases could be considered either a 
violation of due process or anticonsumer. I believe the amendment of 
the Senator from California is fair. It is a reasonable approach to 
dealing with a serious problem created in the underlying legislation.
  As Chairman Specter stated earlier in the week, this legislation is 
intended to change the procedure for class actions and not the 
substantive law. Without Senator Feinstein's amendment this bill could 
effectively limit the substantive rights of citizens to obtain a remedy 
for modest damages when a defendant has injured many in a similar 
fashion. I hope my colleagues will join me in supporting the Feinstein 
amendment.
  I have a letter I received from Professor Arthur Miller at the 
Harvard Law School. He has been very helpful to me and to other 
Senators in trying to help us understand the seriousness of the issue 
and the importance of remedying this through proposals such as the 
Feinstein amendment. I ask unanimous consent that the letter be printed 
in the Record at the end of my remarks.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


                                           Harvard Law School,

                                     Cambridge, MA, June 17, 2005.
     Hon. Jeff BIngaman,
     U.S. Senate,
     Washington, DC.
       Dear Senator Bingaman: I am happy to respond to your letter 
     of June 14 asking for my views of your proposed ``choice of 
     law'' amendment to the proposed ``Class Action Fairness Act'' 
     (S. 2062). After decades of teaching, practicing, writing, 
     and serving the Judiciary in various public service 
     capacities in the fields of civil procedure, complex 
     litigation, and class actions, I very interested in any 
     federal legislation affecting class action lawsuits, and 
     particularly, in the possibility of making this particular 
     legislation fairer and more balanced.
       In general, S. 2062 would place in federal court most class 
     actions that involve more than $5 million in losses and more 
     than 100 class members, and in which any defendant is a 
     citizen of a state that is different from that of any member 
     of the plaintiff class. In effect, the proposed legislation 
     would federalize all class actions of any significance. I 
     be1ieve that this radical departure from one of the most 
     basic, longstanding principles of federalism is a particular 
     affront to state judges when we consider the unquestioned 
     vitality and competence of state courts to which we have 
     historically and frequently entrusted the enforcement of 
     state-created rights and remedies. I recognize, however, that 
     apparently a majority of the Senate supports the idea of 
     moving most class action lawsuits from state to federal 
     court. If that is the case, your proposed amendment is 
     essential to ensure that, once class actions were moved into 
     the federal courts, these cases not be consigned to oblivion. 
     That real possibility goes beyond the just mentioned 
     intrusion on federalism principles and raises legitimate 
     concerns about the fairness and balance of S. 2062.
       Proponents of S. 2062 argue that federal courts are the 
     more appropriate forum for lawsuits involving plaintiffs from 
     multiple states. They assert that the goal of the bill is to 
     ensure that nationwide cases will ``be litigated in the 
     federal courts rather than in the courts of just one state 
     (or county) or another.'' Of course, that statement ignores 
     the fact that state courts have been trusted to adjudicate 
     multi-state controversies since the foundation of the Nation. 
     Moreover, the truth is that these cases are not litigated in 
     federal court; most commonly they are denied class 
     certification. The proposed legislation would magnify that 
     reality.
       Federal courts have consistently denied class certification 
     in multi-state lawsuits based on consumer laws as well as 
     other state laws. This fact is acknowledged by most class 
     action practitioners and experts, regardless of their 
     position on class action policy issues. Just last year, the 
     U.S. Chamber of Commerce--the leading proponent of S. 2062--
     filed an amicus curiae brief in the U.S. Court of Appeals for 
     the Second Circuit urging the court to overrule a 
     distinguished district court's class certification decision 
     because ``. . . federal courts have consistently refused to 
     certify nationwide class actions in product defect cases 
     because the need to apply the laws of many different states 
     would make such a sprawling class action unmanageable.'' The 
     Chamber went on to conclude, ``. . . it is nearly a truism 
     that nationwide class actions in which the claims are subject 
     to varying state laws cannot be certified because they are 
     simply unmanageable.'' On this point, the Chamber is 
     correct--not a single Federal Circuit Court has granted class 
     certification for such a lawsuit, and six Circuit Courts have 
     expressly denied certification.
       It is not surprising that federal courts are reluctant to 
     grant certification to multi-state class actions based on 
     state consumer protection laws. After all, these are laws 
     with which the federal courts generally are not familiar or 
     comfortable. Imagine the discomfort of a federal judge, then, 
     when confronted with a case involving tens of thousands of 
     individuals from all fifty states and state laws that at 
     least superficia11y appear to be different. Moreover, our 
     federal courts have limited resources and are responsible for 
     adjudicating a tremendous array of substantive matters. State 
     courts, on the other hand, are far more comfortable handling 
     cases involving state contract or tort law and are, 
     therefore, more inclined to try to find a way to hear and 
     resolve those cases.
       Your proposed amendment will provide guidance to federal 
     judges that will enable more multi-state consumer class 
     actions to be certified in federal court and, hopefully, 
     resolved on their actual merits. If S. 2062 is enacted 
     without the amendment, class action lawsuits brought on 
     behalf of consumers who have been defrauded or injured 
     because of corporate misconduct that affected people in 
     multiple states will continue to be non-viable.
       The following is a brief description of how federal courts 
     currently treat class actions based on different state laws. 
     It will elucidate the need for an amendment like yours in the 
     event that Congress does indeed give federal courts exclusive 
     jurisdiction over class actions that involve solely state law 
     claims.
       The rationale that many federal courts use for refusing to 
     certify consumer class actions that involve solely state law 
     claims on beha1f of citizens from different states rests on 
     the requirement of Federal Rule of Civil Procedure 23(b)(3), 
     which governs most consumer class actions brought in federal 
     court. Rule 23(b)(3) says, in pertinent part: ``An action may 
     be maintained as a class action if

[[Page 1818]]

     . . . the court finds that the questions of law or fact 
     common to the members of the class predominate over any 
     questions affecting only individual members.'' When courts 
     feel compelled to apply the laws of different states to 
     different members of a class action, they often find that 
     questions of law common to the members of the class do not 
     predominate, leading them to conclude that proceeding on a 
     class action basis would prove to be unmanageable, and they 
     deny class certification.
       Federal courts often conclude they must apply the laws of 
     different states to different members of a class action after 
     they engage in a complex ``choice of law'' analysis to 
     determine which state's law to apply to the claims of the 
     class members. Under current doctrines, federal courts 
     hearing state law based claims must use the ``choice-of-law'' 
     rule of the state in which the federal district court sits. 
     These procedural rules vary among states, but many provide 
     that the federal court should apply the substantive law of 
     the home state of the plaintiff, or the law of the state 
     where the harm occurred. In a nationwide consumer class 
     action, such a rule would lead the court to apply to each 
     class member's claim the law of the state in which the class 
     member lives, or lived at the time the harm occurred. As 
     noted, most federal courts will not grant class certification 
     in these situations because they find that the classes would 
     be ``unmanageable.''
       Your amendment would allow a federal court to choose not to 
     follow the choice-of-law rule of the state in which the court 
     is located. The federal judge could instead make the case 
     more manageable by choosing the law of one state with 
     sufficient ties to the underlying claims to meet the choice 
     of law requirements that the Constitution demands be met. 
     That state often will be the state in which the defendant's 
     headquarters is located, or where the product was designed or 
     manufactured, or where the marketing materials were 
     conceived, or where the particular business practice being 
     challenged was developed or executed.
       If the federal district judge chooses to reject the option 
     of applying one state's law to the case, your amendment 
     ensures that the judge does not deny class certification on 
     the sole ground that the laws of more than one state would 
     apply to the action. This protects consumers from being 
     caught in the ultimate Catch-22 situation--their lawsuit is 
     in federal court because the class includes people from many 
     states and Congress has said that is the only place the class 
     can go, but then, the federal court will not grant class 
     certification precisely because the class involves citizens 
     from multiple states. That simply violates the most basic 
     principles of citizen access to the courts. I believe that 
     your amendment strikes the appropriate balance among the 
     interests of the class members, defendants, and the courts. 
     Most important, it will ensure that S. 2062 does not lead to 
     the unintended consequence of robbing from consumers their 
     only avenue to seek redress from corporations that violate 
     the law.
       If S. 2062 passes without your amendment, the only outlet 
     for injured consumers will be single-state class actions. But 
     that would fly in the face of what the proponents of the bill 
     are apparently trying to achieve, which is to consolidate 
     nationwide class actions in one forum, federal court, so that 
     businesses do not have to face multiple lawsuits throughout 
     the country. What is worse, the only plaintiffs who will he 
     represented and compensated through single state actions are 
     those from highly-populated states, where the damages 
     suffered by the class members will be large enough to finance 
     a costly and typically risky class action lawsuit. This may 
     be a practical and viable solution for those who live in a 
     state like California or Texas. But it will leave millions of 
     consumers who have been harmed in less-populated states, such 
     as your home state of New Mexico, without relief.
       Your amendment effectively and efficiently allows multi-
     state class actions in consumer cases to be certified in 
     federal court. It actually accomplishes what the bill 
     purports to achieve--giving harmed consumers from multiple 
     states one federal forum in which to seek relief. Under your 
     amendment, the federal judge will have the discretion to 
     apply one state's law, as long as that is constitutionally 
     permissible. Or the judge may choose to manage the case in a 
     different way, perhaps by grouping states together that have 
     similar laws into subclasses or by using exemplar or test 
     cases or by resorting to the increasingly sophisticated tool 
     chest of management procedures our courts have developed. In 
     any event, the judge may not dismiss a case on the ground 
     that the litigation is unmanageable simply because multiple 
     state laws apply. The judge does, of course, maintain the 
     discretion to refuse to certify the class on other grounds. 
     The amendment is quite modest, but it does restore some 
     balance and fairness to the bill by increasing the likelihood 
     that citizens will have access to the courts to present their 
     grievances.
       Your letter to me notes that proponents of the bill are 
     portraying this amendment as anti-consumer. Such a 
     characterization could not be further from the truth and is 
     little more than rhetoric. Indeed, in my judgment, it is S. 
     2062 that is anti-consumer.
       As noted above, under current practice, federal courts 
     rarely certify nationwide consumer class actions. In almost 
     every instance in which allegations of wrongdoing injuring 
     large numbers of consumers have been brought, the decision to 
     deny class certification will eviscerate any opportunity for 
     the victims to seek redress. The individual members of the 
     class simply will not suffer losses large enough to justify 
     bringing suit solely on one person's behalf. It is hardly 
     anti-consumer to provide a mechanism to enable federal courts 
     to certify cases and afford consumers an opportunity to have 
     their grievances heard.
       Thus I believe your amendment provides a balanced solution. 
     It allows injured consumers a better chance of getting their 
     day in court. And it provides federal judges with a 
     reasonable way to manage multi-state class actions based on 
     consumer laws.
       You also note that proponents of the legislation have 
     suggested that this amendment is unconstitutional. There is 
     no basis for such an assertion.
       Your amendment expressly honors the Constitution by 
     stating, ``the district court may apply the rule of decision 
     of one state having a sufficient interest in the claim that 
     the application of that state's law is permissible under the 
     Constitution.'' Although the amendment allows a federal judge 
     to apply one state's law, it does so only when that is 
     constitutionally acceptable.
       The constitutional limitation on applying a single state's 
     law to a multi-state action is derived from Phillips 
     Petroleum Co. v. Shutts et al., 472 U.S. 797 (185), a case 
     that I argued on behalf of Phillips Petroleum Co. before the 
     Supreme Court. The Court held that ``for a State's 
     substantive law to be selected in a constitutionally 
     permissible manner, that State must have a significant 
     contact or significant aggregation of contacts, creating 
     state interests, such that choice of its law is neither 
     arbitrary nor fundamentally unfair.'' Id. at 818 (internal 
     cite and quotations omitted). Thus, as long as there are 
     ``significant contacts'' and the choice of law is not 
     ``arbitrary'' or ``fundamentally unfair,'' then a single 
     state's laws may apply to a multi-state class action. Neither 
     party can object to that.
       Because your amendment effectively codifies Shutts, it is 
     constitutional. If there is a multi-state class action in 
     which no single state's law meets the constitutional standard 
     set forth in Shutts or if the judge does not choose to apply 
     a single state law that does meet the constitutional 
     criteria, then the judge may follow the choice of law rules 
     of the state in which the district court sits. Part (b) of 
     the amendment does not implicate the Constitution in any way. 
     It merely provides that if the judge does not apply a single 
     state law, then he or she may not deny certification under 
     Rule 23 on the narrow ground that multiple states' laws apply 
     to the case and make it unmanageable. It encourages federal 
     judges to try to go forward and reach the merits of the 
     dispute.
       Thus, your amendment gives federal judges appropriate 
     guidance about how to address multi-state consumer class 
     action lawsuits. It does not mandate a result or tie their 
     hands. This ability to make a case more manageable will allow 
     at least some multi-state consumer class actions to be heard, 
     rather than to be denied certification. As the California 
     State Supreme Court aptly recognized, defendants should not 
     be able to keep ill-gotten gains ``simply because their 
     conduct harmed large numbers of people in small amounts 
     instead of smal1 numbers of people in large amounts.'' State 
     v. Levi Strauss & Co., 41 Cal.3d 460 (1986). Yet that is 
     where this bill as written will lead us, and that is 
     extremely bad policy.
       Unless the Senate wants to enact legislation that, as a 
     practical matter, eliminates multi-state class actions, it 
     should not pass S. 2062 as it is written. Under S. 2062, 
     multi-state class actions in consumer law cases, a vital 
     mechanism for promoting social justice, giving people access 
     to the courts and dealing fairly with our citizenry, will 
     become an artifact, a thing of the past. At a minimum, the 
     Senate would be wise to adopt your amendment, which would 
     allow plaintiffs to have their day in federal court; after 
     all, the proponents of the legislation argue that is the goal 
     of the bill.
       Thank you again for your willingness to address this 
     important issue. If you have any additional questions about 
     S. 2062 or the benefits of your amendment, I would be happy 
     to assist you further.
           Sincerely yours,
                                                 Arthur R. Miller,
                                   Bruce Bromley Professor of Law.

  Mr. BINGAMAN. I yield the floor, and I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Chambliss). Without objection, it is so 
ordered.
  The Senator from Iowa is recognized.
  Mr. GRASSLEY. Mr. President, when I spoke prior to Senator Pryor's

[[Page 1819]]

amendment, I made a pitch that I want to repeat about the opportunity 
we have now, after four Congresses--this is the fifth Congress--to get 
this bill to the President. It has passed the House so many times, and 
we have never been able to get it to finality in the Senate. We have 
the House in position now, even after all of these compromises we have 
made which have diluted the bill more than I would have liked to have 
done, of passing a bill the leadership in the House of Representatives 
tells us they will take the way we pass it and send it to the President 
as long as there are no changes, and this assurance about no changes 
comes from two standpoints.
  One, in the previous Congress we made compromises to get Democratic 
votes with the idea that once those changes were made and we got this 
bill through the Senate, they would not be changed in the House. We 
also got the assurance from the House that they would not change it, 
even though the House has passed much stronger legislation a couple of 
times. So there is an assurance in this body for people who would 
rather not pass strong legislation but they know there needs to be some 
changes in class action regime, to make some modest changes, and make 
sure that what they agree to will be what gets to the President, and 
then the House saying now for a new Congress they will pass this 
legislation without amendment.
  So every Democrat who has made a compromise with us so we can get 
this bill behind us can be satisfied that they will not be nickeled and 
dimed to death.
  Obviously, not all Democrats are satisfied with this sort of 
agreement and that is their right as individual Senators to try to 
change it more. But as I said before, any changes in this bill negate 
both promises that have been made. It means the promise to go through 
the House will not be kept because the bill has been changed in the 
Senate, and then for those Senators who got the assurance from me that 
this bill would not be changed in the House so that they were not 
nickeled and dimed away with their compromises are going to lose the 
opportunity of getting what they want without the assurance that 
somewhere else in the legislative process, probably conference, there 
might be a much stronger bill than they want.
  This bill was originally introduced in the 105th Congress, then the 
106th Congress, then the 107th Congress. We moved it in the 108th 
Congress. Now we are here in the 109th Congress. Almost everybody seems 
to believe there is some reform that needs to be done in the class 
action tort regime. This bill is it.
  Now we have amendments. We defeated the amendment of Senator Pryor. 
We had an amendment by Senator Bingaman that we were going to deal 
with, that would have destroyed this compromise. There must have been a 
belief on the part of the people behind the Bingaman amendment that it 
would not go, so instead of the Bingaman amendment we have in front of 
us a Feinstein modification of the Bingaman amendment.
  I am in the same position I was with the amendment of Senator Pryor, 
asking people to defeat the Feinstein-Bingaman amendment. I will be 
very precise why that needs to be done. But the substance of the 
amendment and my arguing against the substance of the amendment should 
not carry as much weight with my colleagues as my pleading with them 
that we defeat all amendments because this bill has been compromised to 
satisfy a supermajority of Senators--not a bare majority, a 
supermajority.
  So I take this opportunity to speak out against the Feinstein-
Bingaman ``choice of law'' amendment, and I urge my colleagues to 
oppose it. Pure and simple, this amendment blows a hole in the bill and 
guts the modest reforms we are finally going to be able to get to the 
President.
  This amendment would require the Federal courts to certify a class 
that does not meet basic class action requirements. In addition, what 
the amendment does is a contravention of the requirements of rule 23 of 
the Federal Rules of Civil Procedure, which rule says you have to have 
similar law in fact in order to certify a class. The net result of this 
amendment is that it would require Federal judges to hear dissimilar 
claims that do not belong together as a class action, and would not be 
allowed to proceed as a class action under current law. Requiring 
courts to subclass does not make this amendment any better.
  This amendment would require Federal judges to not follow the 
requirements for certifying class under rule 23. Why do the proponents 
of this amendment want to do that? They have given reasons for their 
amendment and I think, whether this is their intention or not--and I 
should not question the motives of people--but the end result is 
perpetuating the abuses that were already seen in the magnet courts, 
these infamous judicial hellholes which have been referred to. I 
remember only one out of dozens throughout the country, but one was in 
Madison County, IL.
  The purpose of class actions is obvious: to enable courts to decide 
large numbers of similar claims and to do it fairly and to do it in an 
efficient manner. Different claims cannot be pulled together as a class 
action because that would be unfair and it would violate the due 
process rights of both plaintiffs and defendants. But the Feinstein-
Bingaman amendment would require judges to do just that. As you know, 
that is exactly what the problem is all about, what our bill was trying 
to correct: judges certifying classes that should never have been 
certified in the first place. Rules are in place as to what should or 
should not be certified, and the Feinstein-Bingaman amendment blows 
those rules off. The efficiency and the rationale of that rule should 
not be followed.
  The Federal courts should undertake a review to determine whether 
multistate class actions involving State law claims should be 
certified. They need to determine that the legal claims are 
sufficiently similar to warrant class certification. Most State courts 
make the same kind of determinations as well. The magnet State courts, 
on the other hand, do not make this determination and that is why they 
certify huge classes that involve claims that are completely 
dissimilar, to the detriment of both plaintiff and defendant. That ends 
up being a due process problem.
  In addition, this amendment before us ignores how diversity 
jurisdiction works, and it eviscerates the reforms that are contained 
in our bill.
  Another argument for this amendment by Senator Feinstein and Senator 
Bingaman is allegedly that Federal courts refuse to certify nationwide 
class actions. That sort of presumption is plain wrong. That is not the 
case. There are numerous examples of where Federal courts have 
certified multistate class actions based on State law claims. There is 
not a rule against nationwide class actions. Federal courts do certify 
nationwide class actions where the laws that govern the claims are 
similar.
  Class actions are also certified when the plaintiffs' lawyers 
organize the claims in a manner so that they may be litigated fairly, 
even under differing State laws, where they appropriately organize the 
claims into subclasses. But this amendment does not give the courts any 
choice to determine whether it is appropriate to subclass.
  So for a third time during this period that I am standing, I remind 
my colleagues again about the extensive efforts on the part of Senator 
Kohl of Wisconsin, Senator Hatch of Utah, and this Senator from Iowa, 
getting to this version of the Class Action Fairness Act. No one can 
question that we negotiated in good faith with our colleague Senator 
Feinstein, as well as our colleagues Senators Dodd, Schumer, and 
Landrieu, to make changes to address concerns they had about the 
original bill introduced.
  The bill we have now will keep many class actions in State court 
under the Feinstein home State exception. That was accepted in 
committee, way back there in early 2003, in the 108th Congress. Also 
under the local controversy exception we crafted with Senators Dodd, 
Schumer, and Landrieu, that will stay in State court.

[[Page 1820]]

  So I hope I get us back in an understandable way, and what people 
think is rational after all these compromises, so that there is no 
further need to change this bottom-line compromise. Again, the purpose 
of this amendment is to gut the modest, commonsense reforms contained 
in this bill. This is an attempt to legitimize the class action abuse 
we have been seeing in the magnet State courts. It is an attempt to 
legalize the problem by putting it into the rule.
  All I can say is, that is not all right. It is not OK. If we are 
serious about putting a stop to class action abuse, I urge my 
colleagues to oppose this amendment.
  Mr. President, I ask unanimous consent to have printed in the Record 
the letter by Walter Dellinger.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                        O'Melveny & Myers LLP,

                                 Washington, DC, February 4, 2005.
     Re Proposed Choice-of-Law Amendment to Class Action Fairness 
         Act (S. 5).
     Hon. Arlen Specter,
     Chairman, Committee on the Judiciary,
     U.S. Senate, Washington, DC.
       Dear Mr. Chairman: I write concerning the ``choice-of-law'' 
     amendment that Public Citizen has been suggesting should be 
     offered to the Class Action Fairness Act. As I understand it, 
     this amendment would encourage or require federal court 
     judges, faced with multi-state or nationwide class actions, 
     to either: (1) apply the laws of one state to all the claims 
     in the case; or (2) certify the class action despite the 
     manageability problems created by conflicting state laws.
       I strongly recommend rejection of this seriously flawed 
     proposal for several reasons.
       The Public Citizen amendment violates basic principles of 
     federalism and would extend ``magnet'' state court abuses to 
     federal court. Many consumer protection cases now proceed on 
     a nationwide basis in federal court in those instances in 
     which Congress has determined that a single national law 
     ought to govern. This has been the case with laws such as the 
     Truth in Lending Act (TILA) and the Real Estate Settlement 
     Practices Act (RESPA). Frequently, nationwide class actions 
     are brought and tried to successful conclusions under laws 
     such as these.
       Where Congress has chosen not to enact uniform national 
     legislation under which citizens can bring suit, however, it 
     has left the legal issues to be resolved by each state 
     adopting its own law. Allowing each state to decide for 
     itself and for its citizens is the essence of federalism. 
     Instructing a federal judge to pick out one state's law and 
     impose it on other states is a profound violation of 
     federalism principles. Congress is elected by all the people 
     of the United States. When it is acting within its 
     constitutional power under Article I, Congress can decide to 
     impose a uniform rule on the states. It is a far more serious 
     intrusion into the autonomy of the States when a single 
     judge, not Congress, acts to set aside the laws of all of the 
     states (but one) by choosing whichever particular state law 
     the judge likes best and imposing that law on all of the 
     other states.
       For example, in Avery v. State Farm Mut. Auto Ins. Co., 746 
     N.E.2d 1242 (Ill. App. 2001), the sate court decided that 
     Illinois law could be applied to a nationwide class of 
     policyholders, and held that State Farm's use of ``non-
     original equipment manufactured'' automobile service parts 
     violated Illinois law. Yet many other states' insurance laws 
     either expressly or implicitly permitted or even required 
     insurance companies to use non-OEM parts as a way to reduce 
     insurance costs. Avery has been uniformly recognized as an 
     example of judicial excess--the Illinois court exceeded its 
     authority by purporting to dictate the insurance laws of 49 
     other states. Nonetheless, the proposed amendment would tell 
     federal courts to do precisely the same thing. It would, in 
     effect, recreate in federal court the very state-court 
     problem that precipitated the introduction of this 
     legislation.
       The amendment would reverse the decisions of numerous state 
     supreme courts that have rejected application of their laws 
     extraterritorially. Opponents of S. 5 have argued that this 
     amendment is necessary because ``state courts . . . are far 
     more comfortable handling cases involving state contract or 
     tort law.'' Aside from certain magnet courts, however, many 
     state courts have strongly rejected what Public Citizen 
     proposes: i.e., nationwide application of individual states' 
     laws. In fact, the proposed amendment would eviscerate a 
     number of decisions by state supreme courts, refusing to 
     apply one state's consumer protection laws in nationwide 
     class actions. Among the state court decisions that could be 
     reversed by the proposed amendment are the following:
       Goshen v. Mutual Life Insurance Company of New York, 774 
     N.E.2d 1190 (N.Y. 2002), (explaining that to ``apply the [New 
     York consumer] statute to out-of-state transactions in the 
     case before us would . . . tread on the ability of other 
     states to regulate their own markets and enforce their own 
     consumer protection laws.'').
       Compaq Computer Corp. v. Lapray, 2004 Tex. LEXIS 435 (Tex. 
     May 7, 2004) (``The putative class members are domiciled in 
     fifty states and the District of Columbia. All these fifty-
     one relevant jurisdictions are likely to be interested in 
     ensuring that their consumers are adequately compensated for 
     a breach of warranty. Texas law may not provide sufficient 
     consumer protections in the view of the other states . . . 
     The differences in state law outlined above cannot be 
     concealed in a throng.'').
       Zarella v. Minnesota Mutual Life Ins. Co., 1999 R.I. Super. 
     LEXIS 161 (R.I. Super. Ct. 1999) (the court found that there 
     were substantial variations on issues such as statutes of 
     limitations and burdens of proof, which ``plaintiffs have not 
     adequately addressed'').
       Ex parte Green Tree Financial Corp., 723 So. 2d 6, 11 (Ala. 
     1998) (the Alabama Supreme Court expressed ``grave concerns 
     as to whether any national class of plaintiffs in an action 
     involving the application of the differing laws of numerous 
     states can satisfy the requirements'' for certifying a class 
     action).
       Dragon v. Vanguard Indus., 277 Kan. 776, 789 (Kan. 2004) 
     (reversing certification of a nationwide class of property 
     owners alleging defective plumbing due to, inter alia, ``wide 
     variance in the laws of various states'' on relevant issues).
       State ex rel. Am. Family Mut. Ins. Co. v. Clark, 106 S.W.3d 
     483, 487 (Mo. 2003) (``The trial court abused its discretion 
     in certification of the class with respect to insureds whose 
     contracts are subject to the laws of states other than 
     Missouri'').
       Henry Schein v. Stromboe, 102 S.W.3d 675 (Tex. 2002) 
     (decertifying a class of some 20,000 purchasers of software 
     products on theories of fraud, breach of express warranty, 
     negligent misrepresentation, promissory estoppel, and 
     deceptive trade practices because class could not demonstrate 
     that Texas law should apply to individual issues of reliance 
     and trial court was required to look to the laws of all fifty 
     states to adjudicate the claims).
       Philip Morris, Inc. v. Angeletti, 358 Md. 689, 747 (Md. 
     2000) (denying certification of a proposed tobacco class 
     because, inter alia, Maryland ``conflict of law principles 
     necessitate that the [lower court] engage in individualized 
     assessments for each class member'').
       Washington Mutual Bank v. Superior Court, 24 Cal. 4th 906, 
     926 (Cal. 2001) (reversing the certification of a nationwide 
     class and holding that ``a class action proponent must 
     credibly demonstrate, through a thorough analysis of the 
     applicable state laws, that state law variations will not 
     swamp common issues and defeat predominance'').
       Stetser v. TAP Pharm. Prods. Inc., 598 S.E.2d 570, 586 
     (N.C. Ct. App. 2004) (reversing trial court's certification 
     of a nationwide class of persons alleging the defendant 
     companies had inflated prices and defrauded patients and 
     insurance companies) (``Because this case is composed of 
     plaintiffs nationwide, the remaining forty-nine states' laws, 
     as well as the law of the District of Columbia, must be 
     analyzed to determine whether it conflicts with the law of 
     North Carolina.'').
       Linn v. Roto-Rooter, Inc., 2004 Ohio 2559, P57 (Ohio Ct. 
     App. 2004) (reversing trial court's decision to certify a 
     nationwide class ``because of the widespread reluctance to 
     certify nationwide class actions involving consumer 
     protection, fraud, and unjust enrichment claims, and due to 
     the variances in these laws which would render a nationwide 
     class unmanageable . . . the trial court abused its 
     discretion in certifying the class which entails litigants 
     from 35 states'').
       Liggett Group Inc. v. Engle, 853 So. 2d 434, 448, 449 (Fla. 
     Dist. Ct. App. 2003) (decertifying a statewide class of 
     smokers because, inter alia, the ``highly transient 
     population'' of Florida would ``require examination of 
     numerous significantly different state laws governing the 
     different plaintiffs' claims'') (matters under review by the 
     Florida Supreme Court, see 873 So. 2d 1222 (Fla. 2004)).
       Although proponents of the amendment say that its purpose 
     is to protect state law, its real effect would be to overrule 
     an established body of state law.
       I would also note that these state supreme court decisions 
     are no less binding on federal courts than on lower state 
     courts. The reason is because, in ``diversity'' cases, 
     federal courts look to the choice-of-law rules of the state 
     in which they sit to decide what substantive state law should 
     apply. Thus, a federal court confronting a nationwide class 
     action would currently defer to the decision of the highest 
     appellate court of that state declining to allow that state's 
     law (or any other single state's law) to govern the claims of 
     consumers residing throughout the nation. But the ``choice-
     of-law''' amendment would change that. As its proponents 
     concede, the ``amendment would allow a federal court to 
     choose not to follow the choice-of-law rule of the state in 
     which the court is located.'' That is another serious 
     distortion of federalism principles.
       The amendment could hurt consumers from states with strong 
     consumer protection laws. Another problem with the proposal 
     is that, in their effort to make sure that a single state's 
     law may be applied even in a nationwide class action, critics 
     of S. 5 have not

[[Page 1821]]

     thought through the consequences of what would happen if 
     federal courts actually did apply a single state's law. To 
     pose the question bluntly: which single state's law? If the 
     choice-of-law amendment were adopted, that question--the 
     ``which state'' question--likely would be the source of 
     considerable mischief, often to the detriment of consumers.
       For example, assume that someone brings a nationwide class 
     action alleging that the defendant company participated in 
     fraudulent sales behavior. State consumer protection statutes 
     vary widely, but the court may decide to apply Alabama law to 
     all claims. That would be bad news for the class members 
     living in California and other states with strong consumer 
     protection statutes, because the Alabama statute prohibits 
     the assertions of consumer protection claims on a class 
     basis. Thus, the claims of all class members presumably would 
     be subject to dismissal. In short, consumers with valid 
     claims under their home state laws, adopted by their own 
     state legislatures and courts to protect their interests, may 
     have their claims obliterated (or, at least, rendered much 
     less beneficial).
       Even its proponents appear to acknowledge this problem. 
     Professor Arthur Miller, for example, has suggested that one 
     state whose law would ``often'' be applied in a nationwide 
     class action would be ``the state in which the defendant's 
     headquarters is located.'' See Letter of Prof. Arthur Miller 
     to Sen. Bingaman, June 17, 2004, at 3.
       The amendment, in short, is a radical attempt to avoid the 
     fact that in some areas Congress has chosen to leave the 
     decision of what substantive law should govern conduct to the 
     legislative process of each state. By having judges dismiss 
     the laws of all states but one, the Public Citizen amendment 
     violates fundamental principles of federalism.
       The amendment is based on the false premise that federal 
     courts never certify multi-state classes based on state law. 
     It is worth noting that neither federal nor state courts have 
     any hard-and-fast rule against the certification of 
     nationwide or multi-state classes asserting state law claims. 
     To the contrary, federal ``[c]ourts have expressed a 
     willingness to certify nationwide classes on the ground that 
     relatively minor differences in state law could be overcome 
     at trial by grouping similar state laws together and applying 
     them as a unit.'' In re Prudential Ins. Co. of America Sales 
     Practices Litig., 148 F.3d 283, 315 (3d Cir. 1998). Indeed, 
     the two leading proponents of the Public Citizen amendment--
     Prof. Arthur Miller and Prof. Samuel Isaacharoff--have 
     themselves succeeded in persuading federal courts to certify 
     such nationwide class actions.
       The main reason why courts, state and federal, often refuse 
     to certify nationwide classes is because attorneys too often 
     propose classes that overreach--classes that encompass too 
     many people with too many disparate facts asserted under too 
     many different laws. See, e.g., Chin v. Chrysler Corp., 182 
     F.R.D. 448 (D.N.J. 1998) (``Plaintiffs could have reduced or 
     simplified the case . . . by the creation of a smaller and 
     more clearly defined proposed class. Instead, Plaintiffs have 
     asked this Court to certify the largest class possible . . . 
     on the basis of mere promises that a manageable litigation 
     plan can be designed . . . for five causes of action under 
     the laws of 52 jurisdictions''). That, I submit, is a 
     necessary consequence of respect for federalism. There is no 
     reason to exalt the need for nationwide class actions in 
     every case above the basic principles of federalism.
       The amendment, which would ignore the manageability 
     problems engendered by varying state laws, would violate due 
     process rights. If a federal court decided that a single 
     state's law cannot be applied over all claims in a nationwide 
     class action without violating the Constitution, the choice-
     of-law amendment would allow a federal court to apply several 
     states' laws to the claims at issue. But in that 
     circumstance, the proposed amendment would then forbid the 
     court from denying class certification (even ``in part'') on 
     the grounds that applying those several states' laws would 
     render the case one devoid of common legal issues that could 
     not be tried fairly on a class basis.
       The amendment would distort traditional and prevailing 
     class action practice in a way that raises serious due 
     process concerns. The basic reason is that it would instruct 
     federal judges that, even if they truly believe that the fact 
     that several (or even all 50) states' laws must be applied in 
     a particular case means that the case cannot possibly be 
     fairly adjudicated as a class action, they must simply ignore 
     that true belief and grant class certification anyway.
       In deciding whether to certify a class, for example, a 
     federal court must inquire into (a) whether ``common 
     questions of law'' will ``predominate'' and (b) whether the 
     class action is ``superior'' to other methods, both of which 
     require consideration of any ``difficulties likely to be 
     encountered in the management of the class action.'' Fed. R. 
     Civ. P. 23(b)(3). What that means is that a party objecting 
     to the proposed class action can argue that various state's 
     laws must be applied in the case; that those state laws 
     differ in important ways (indeed, they may even conflict); 
     and that those variations (or conflicts) will make it 
     impossible to adjudicate the class action fairly on a class 
     basis--and will make it impossible for one jury to decide 
     those different or conflicting laws in one trial. In the 
     parlance of Rule 23, the party objecting to the proposed 
     class may argue that the differing state laws are reasons why 
     common questions of law do not ``predominate'' and that the 
     multi-state or nationwide class action is not ``superior'' to 
     other methods of resolving the case (including a statewide 
     class action).
       Again, the Avery case makes for a good example. If the 
     court had (correctly, in my view) concluded that many states' 
     laws would need to be applied to resolve that nationwide 
     class action, that determination would in all likelihood have 
     also led the court to conclude that it would not have been 
     fair to try before one jury the legality of the use of non-
     OEM parts nationwide. After all, how could a single jury 
     hearing that the practice is illegal in Illinois, legally 
     required in other states, permitted in other states, and not 
     addressed at all by still other states, render a fair and 
     coherent verdict? Especially when one keeps in mind that some 
     class actions involve dozens of claims, nationwide class 
     actions would in some cases require literally hundreds of 
     different decisions for a single jury to make.
       These Rule 23 requirements have due process underpinnings. 
     Class actions serve an important public function: they allow 
     numerous, similarly situated individuals whose relatively 
     small claims might otherwise be shut out of the legal system 
     to aggregate their claims and obtain collective relief. At 
     the same time, the purpose of the class action device is to 
     allow the aggregation of only some--not all--lawsuits. 
     Indeed, as the U.S. Supreme Court has noted, there is a 
     strong presumption in our legal system that claims will be 
     litigated individually; class actions are an exception to 
     that general rule. Thus, lawsuits seeking damages in which 
     common questions of questions do not ``predominate,'' and in 
     which the class action is not ``superior'' method of 
     resolving the dispute, are denied class treatment for the 
     very reason that the court concludes that it would not be 
     fair to resolve the whole case in one trial. In other words, 
     a class cannot be certified at the expense of ``procedural 
     fairness.'' Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613 
     (1997); see also Malcolm v. Nat'l Gypsum Co., 995 F.2d 346, 
     350 (2d Cir. 1993) (holding that the benefits of aggregated 
     litigation ``can never be purchased at the cost of 
     fairness''). This principle is as important for protecting 
     the plaintiffs (that is, the unnamed class members) as it is 
     for protecting defendants. See id.; see also Hansberry v. 
     Lee, 311 U.S. 32, 40-42 (1940).
       The proposed amendment violates this principle by elevating 
     the class certification decision over ``procedural 
     fairness.'' Whereas the fact that different state laws would 
     need to be applied to a multi-state or nationwide class 
     action is unquestionably a valid factor to consider in 
     deciding whether a class should be certified, the proposed 
     amendment would dictate to federal judges that they cannot 
     consider that factor at all. For example, under the facts of 
     the Avery case, the choice-of-law amendments would require 
     the federal court to ignore the central fact that the 50 
     states have made fundamentally conflicting policy choices 
     over the legality of the conduct at issue. The court would be 
     required not to consider the obvious fact that it might be 
     procedurally unfair for the same jury to decide whether the 
     use of non-OEM parts is legal in all of the different states.
       I am not suggesting that, in every multi-state class 
     action, the laws of every state must be applied as a matter 
     of due process. That depends upon the particular case, and 
     upon the connection that any one state might have to a 
     proposed class action. Rather, what I am suggesting is that 
     in cases in which federal courts themselves decide that due 
     process requires the application of numerous states' laws, it 
     is a serious due process problem to tell those same federal 
     courts that they may not deny class certification on same 
     basis--to tell those federal courts that they must certify a 
     class despite their firmly held relief that the differing 
     state laws will make use of the class action device 
     fundamentally unfair.
       For all of the foregoing reasons, I find the proposed 
     choice-of-law amendment to be constitutionally suspect (both 
     from a federalism and due process standpoint) and wrongheaded 
     as a public policy matter. It should be rejected.
           Sincerely,
                                              Walter E. Dellinger.

  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. FRIST. Mr. President, for the information of our colleagues, we 
are making good progress on the class action bill. I appreciate 
everyone's participation in coming to the floor and offering and 
talking about their amendments. I want to keep the pace going.
  The Democratic leader and I have been in discussions over the day. We 
want to complete this bill at the earliest possible time this week.
  I will shortly be asking unanimous consent that the vote on the 
Kennedy amendment be this afternoon at a time which I will state. After 
that we will be

[[Page 1822]]

proceeding to the Feinstein amendment. We will at that time divide the 
time accordingly.
  At this point, I ask unanimous consent that the vote occur in 
relation to the Kennedy amendment No. 2 at 4 p.m. today; provided 
further that following that vote the Senate proceed immediately to a 
vote in relation to the Feinstein amendment No. 4; provided further 
that the debate until 4 be equally divided in the usual way, and that 
no amendments be in order to either amendment prior to the votes.
  Finally, I ask unanimous consent that there be 2 minutes for debate 
equally divided following the first vote. I further ask unanimous 
consent that 15 minutes of minority time be reserved for Senator 
Kennedy.
  Mr. REID. Mr. President, I have no objection to the unanimous consent 
request.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. FRIST. Mr. President, while the Democratic leader is here, I 
mentioned as he was returning to the floor that we are all working very 
hard to complete the bill on class action. I understand there are 
several other amendments to be considered. But I reflected our 
commitment to stay on the bill and complete it at the soonest time 
possible.
  Mr. REID. It is my understanding that the distinguished Republican 
leader has indicated we will finish this bill this week. Is that right?
  Mr. FRIST. Mr. President, that is right.
  Mr. President, again I encourage our colleagues to focus on the bill 
before us today and tonight and tomorrow, and we will be staying on the 
bill until we complete the bill. I appreciate everybody's 
consideration.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. SESSIONS. Mr. President, I ask unanimous consent that the order 
for the quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The PRESIDING OFFICER. The Senator from Alabama is recognized.
  Mr. SESSIONS. Mr. President, Senator Feinstein has offered an 
amendment to S. 5, the Class Action Fairness Act of 2005, to address 
the opponents' claim that Federal courts routinely deny certification 
of multistate or nationwide classes that involve different State laws. 
Under this amendment, that would change the underlying bill we are 
considering here. Federal courts would be required to certify class 
actions, even if the claims were brought under State law.
  The amendment further provides that courts faced with nationwide 
classes involving different State laws should either create subclasses 
to account for variations in State law or, if such subclasses are 
impractical, to attempt to apply the proper State law to the class 
members claims only to the extent doing so is practical.
  The proposal would toss State laws and procedural fairness out of the 
window for the sake of allowing a nationwide class action. It would 
reverse nearly 70 years of established Supreme Court case law that 
requires Federal courts to apply the proper State law when they hear 
claims between citizens of different States.
  It would reverse numerous decisions about State supreme courts 
rejecting the application of one State's law to class action claims 
that arise in 50 States, and it would seriously undermine the ability 
of plaintiffs and defendants alike to have a fair trial.
  Most importantly, it would have the perverse effect of perpetuating 
the very magnet court abuses that the legislation seeks to end.
  Here is why the latest choice-of-law amendment should be rejected. 
First, the premise of the amendment is false. Federal courts do not 
have a hard and fast rule against certifying multistate class actions. 
Rather, both Federal and State courts--except for certain magnet 
jurisdictions--conduct a careful inquiry before certifying a class to 
ensure that common legal issues predominate, as required by the Federal 
rules governing class actions.
  The reason for this requirement is self-evident. The whole point of a 
class action is to resolve a large number of similar claims at the same 
time. If the differences among the class members' legal claims are too 
great, a class trial will not be fair or practical.
  In some circumstances, Federal courts have found that the law of 
different States was sufficiently similar that a class action could go 
forward. In other cases, they have found the differences were too great 
to have a fair class action trial.
  If the laws under which the liability is founded are significantly 
different, you can't try them in the same trial. If they are not that 
much different, you can make it work.
  The proposed amendment would take away the discretion of Federal 
judges to make these important decisions as they always have.
  Proponents of the amendment conveniently ignore the fact that Federal 
law on this issue is quite consistent with the approach taken by 
numerous State supreme courts, which have refused to certify cases 
where the differences in State law would make it impossible to have a 
fair or manageable trial. In fact, the proposed amendment would reverse 
decisions by the Supreme Court of California, Texas, New York, and 
numerous other States that have rejected nationwide classes in such 
circumstances as these.
  Second, Federal courts already use subclassing where appropriate. 
Subclassing basically means dividing a class into a couple of smaller 
classes where claims may be more similar to one another. In rule 23 of 
the Federal Rules of Civil Procedure, the nearly 40-year rule governing 
class actions explicitly gives courts the option of using subclasses to 
account for variations in the class as long as the trial would still be 
manageable and fair.
  For example, if a case involved State laws that can be easily divided 
into three or four groups, subclassing would be appropriate if the 
trial would otherwise be manageable. At the same time, if subclassing 
were used in every situation that involved different State laws, in 
some cases there would be so many subclasses it would be impossible to 
have a manageable or fair trial.
  Under the current law, Federal judges have the discretion to decide 
when subclassing makes sense. That approach is working. Why change it? 
If it ``ain't'' broke, don't fix it. We have not had serious problems, 
and it is better to allow the discretion with the judge than for us to 
try to anticipate and put in hard law requirements involving 
complexities in the future we cannot anticipate fully today.
  Third, the amendment would hurt consumers by subverting State laws. 
The proposed amendment suggests that if subclassing will not work, the 
court should simply respect State laws ``to the extent practicable.'' 
What does that mean? How does the court partially carry out State law? 
Judges are responsible for carrying out the law, not for carrying out 
the law to the extent practicable. It would be a dangerous empowerment 
and an erosion of our classical commitment to following law.
  By suggesting that Federal courts should ignore variations in State 
laws when respecting State law is impractical, this provision would 
perpetuate the very problem the class action bill is trying to fix. For 
example, in the notorious Avery v. State Farm case, a county judge in 
Illinois applied Illinois law to claims that arose throughout the 
country, ruling that insurers could not use aftermarket parts in making 
auto accident repairs even though several States had passed laws 
encouraging, even requiring the use of these more economic parts to 
keep down the cost of insurance premiums. The approach taken by the 
Avery judge and condoned by the proposed amendment actually hurts 
consumers by denying them the protection of their State's laws.
  Some State legislatures have adopted particularly strong laws in 
certain areas because their citizens have expressed strong feelings 
about these issues; for example, privacy or consumer fraud. Under this 
amendment, the citizens of such States would not

[[Page 1823]]

be entitled to the protection of their State's laws in nationwide class 
actions. Instead, their claims would be subject to some compromise law 
created by the judge in order to carry out a class action.
  These are some thoughts I share about this legislation. We do have a 
need for class action reform. The legislation before the Senate is 
sound. We know if we stay firm, if we do not willy-nilly amend this 
bill, if we keep it clean and send it forward to the House, they will 
approve it, we will make this law, and for once pass a serious tort 
reform legislation that will improve justice in America and reduce 
costs.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. CARPER. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CARPER. Mr. President, I would like to take a couple of minutes 
today to speak to the amendment being offered by Senators Feinstein and 
Bingaman. I don't think we will find on either side of the aisle a 
Democrat or Republican more thoughtful than either of them, or more 
fair-minded. Senator Feinstein, in particular, has been heroic in her 
efforts to try to bring about consensus on class action so we end up 
with legislation to make sure little people who are harmed by big 
companies are able to bind together and be made whole; to ensure that 
the companies that are accused know if they step out of line there is a 
price to pay for that; legislation that will also make sure that the 
defendant companies, large or small, have the opportunity to have a 
fair trial for whatever they are accused of in the litigation; and our 
last goal is to make sure the Federal judiciary is not overwhelmed with 
litigation that could be in State courts, ought to be in State courts, 
and is needlessly moved to Federal courts.
  Those are the objectives we all share, Democrats and Republicans, 
whether we like or do not like the bill. I am in support of the 
legislation.
  Most consumer laws that end up in courts are laws that are adopted by 
our States. There are some areas where the Federal Government has laws 
in place to protect the consumers, but the lion's share of the consumer 
protection laws are written by the various States.
  The effort by Senators Feinstein and Bingaman is laudable; that is, 
to make sure that when State laws have been violated, particularly when 
State laws have been violated in a number of States, that whoever has 
violated those laws is going to be held accountable. The question is, 
If you have a class action case that is brought forward based on the 
laws of 10, 20, or 30 States or more, under whose State law do we argue 
in court the class action litigation? Is it in a State that has fairly 
weak consumer protection laws or a State that has very strong consumer 
protection laws?
  I am not a lawyer by training, and I come at this as a lay person 
simply trying to figure out what is the right and fair thing to do. As 
I understand class action litigation, I will use the example of where 
we have maybe 21 States that have been bound together in a class action 
filed in a particular State court, one of those 21 States, and in 
particular, a State where the litigation is brought, the effort might 
be to apply that State's laws to all the other States that are part of 
this. Senator Sessions talked about a situation in a case involving 
class action with State Farm, where the suit alleged that consumers 
were being harmed because in the car repair business, when replacement 
parts were used, some of the States allowed the use of non-original 
equipment replacement crash parts, sometimes referred to as generic 
parts. In this case, Avery v. State Farm, an Illinois judge applied the 
Illinois Consumer Fraud Act to a 48-State class, even though there were 
significant differences in the States' consumer protection laws and 
vast differences in the laws of the different states on the use of 
these types of parts. Most States explicitly authorize their use and a 
few States even require their use to reduce costs for consumers.
  As I have looked into this matter, I have learned when there is an 
effort to move a class action litigation on consumer issues from a 
State court to a Federal court, the Federal judge has a number of 
decisions to make as to whether they want to receive it and hear it at 
the Federal level.
  One, they can say, yes, on the basis of the law that is in question 
here, and the facts, this is one that makes sense to be heard at the 
Federal level and to go forward.
  The Federal judge can say--again, using the example of 21 States 
because the math works easily--let's divide those 21 States into three 
subgroups, and each of those 7 States have laws that are fairly similar 
but distinct and apart from the other two subgroups. So a Federal judge 
could say, we are going to go forward with this class action 
litigation. We will do it as one case, but we will have three 
subcategories of subgroups.
  A third alternative that is available to a Federal judge would be to 
say, we are not going to have one case; we will have maybe three cases. 
In those instances where the laws of the States are pretty similar, we 
will group those seven, and the same would be true for this seven and 
that seven. And we will hear three separate cases, not one.
  If none of that works, the Federal judge is always free to say this 
is a State matter. The laws and the facts are in such disarray that it 
is difficult to try them as one case.
  Some States have very strong consumer laws, some not. There is a 
whole big range in between where the laws and the facts are just too 
disparate and different, and the judge can simply remand it back to the 
States.
  If the Federal judge declines to hear that consumer class action, 
then it can be tried in State court. Whoever the plaintiffs are, in 
those instances, will have their day in court. If you happen to be from 
California, the latter course is not a big deal because you have so 
many people, 30 million people, and it is not as difficult to put 
together a meaningful class and to be able to attract an attorney to 
represent your case. If you happen to be from a smaller State, with 
fewer people, then it can be more of a challenge to put together a 
large enough plaintiff class in that State to pay for an attorney to 
represent the interests of consumers in that State. I acknowledge that.
  Having said that, my overriding concern with this legislation is 
this. I mentioned the four principles earlier, but my overriding 
concern with this legislation is that we not begin to pick apart this 
carefully balanced compromise on which we have worked. I have been here 
4 years. We have worked on it for almost those 4 years I have been in 
this Senate. I know people worked on this 3 years before that. We have 
come so far from where this legislation began in 1997.
  This is not tort reform, as a lot of people like to think of it. This 
is, as others have said today, court reform. Our goal is to, again, 
make sure if people get harmed, they have an opportunity to be made 
whole, to band together into similar groups to make sure the accused 
and the defendants in the case have a chance to be fairly defended in a 
courtroom. It is a fair shot.
  My fear is, to the extent this amendment would be adopted, it invites 
amendments of others who may not like this bipartisan compromise 
because it does not go far enough.
  Earlier this month, in the House of Representatives, their bill, 
which passed by a fairly wide margin in the last Congress, was 
reintroduced. There are some people in the other Chamber, as well as 
some in this body, who would like nothing better than to be able to 
change this bipartisan compromise and move it, frankly, a lot closer to 
where the House bill is.
  Eventually, my friends, we are going to pass a class action bill this 
year. My own view is it is not going to get any better or more balanced 
or fairer to plaintiffs and defendants than the compromise we have 
worked out here this year. As a result, I will oppose, albeit with some 
reluctance, the amendment

[[Page 1824]]

offered by Senators Feinstein and Bingaman. I know they have put a lot 
of time and energy into this amendment. Frankly, my staff and I have as 
well, trying to find a way to accommodate the concerns they have 
raised. In the end, I do not believe we can, and I must reluctantly 
oppose the amendment.
  I yield back my time.
  The PRESIDING OFFICER (Mr. Martinez). The Senator from Vermont.


                    Attacking The Democratic Leader

  Mr. LEAHY. Mr. President, I am going to speak in favor of the 
commonsense amendment brought to us by Senators Bingaman and Feinstein. 
Before I do, though, if I could make a couple personal comments.
  I have been in the Senate for 31 years. I came at a time when there 
was a real effort for Republicans and Democrats to work together, and 
for White Houses to do so. I have been here during the administrations 
of President Ford, President Carter, both terms of President Reagan, 
President George H.W. Bush, both terms of President Clinton, and now 
into the second term of President George W. Bush.
  I have seen terrific majority leaders in both parties, leaders in 
both parties. Senator Mansfield, Senator Scott, Senator Byrd, Senator 
Baker, Senator Dole, Senator Mitchell, obviously Senator Daschle. I 
think of all the times they would work so closely to bring people 
together. The President, whoever the President was, would do the same.
  I can remember times Senator Dole, a partisan, tough-minded 
Republican, would reach a point as majority leader when he would call 
Senators from both parties into his office and say: OK, boys, let's see 
where we go from here. How do we get this legislation done?
  Senator Baker would do that. Senator Mansfield was famous for coming 
out on the floor during evening sessions and picking a few Senators 
from both sides of the aisle and saying: Come up to the office. We have 
to chat and work things out. Senator Baker had the ability to do that. 
He would go down and speak to President Reagan and suggest to him which 
Democrats, which Republicans, he might call to make things work out.
  You also had, during that time, the practice where the two great 
parties, the Democratic Party and Republican Party, would keep from 
attacking the leaders of the other party's caucus in either body. They 
did it because they knew that, while they might oppose each other on 
one issue today, they were going to have to work together for the 
betterment of the country the next day.
  Now it has broken down. For some reason, something I never thought I 
would see, nor, I suspect, did any of those leaders I mentioned from 
either party ever think they would see, it stopped last session when 
the leader of one party went to the home of the leader of the other 
party and attacked him in a political campaign, and attacks were then 
mounted by the national party. I think it was a mistake.
  In the years I have talked about, the 31 years of both Republicans 
and Democrats running the Senate--we have seen it go back and forth a 
half a dozen times since I have been here--it has worked very well, 
where you fight for your party, you fight for your majority or 
minority, but you do not go after the leaders.
  I was hoping the last election might be an aberration. Now I see a 
difference when the Republican National Committee has come out with the 
most scurrilous, outrageous attack on the Democratic leader, Senator 
Reid.
  It makes no sense whatsoever. Senator Reid spent his years as the 
deputy Democratic leader helping to get legislation through this place. 
He worked very closely with two different Republican deputy leaders, 
both when he was in the majority and in the minority, to move 
legislation through.
  I can think of dozens of times, hundreds of times on this floor when 
legislation looked like it might not get through, and both Republicans 
and Democrats were going to Harry Reid as the deputy leader to say: How 
can we work this out?
  He would say: Why don't you leave off these amendments, and I will 
talk to the Republicans and they will leave off these amendments. We 
will get it through.
  It always worked. The legislation we have before us is not one that 
Senator Reid favors, but he worked in good faith with the Republican 
leadership to bring it up. Almost a day after he does that, he gets 
attacked by the Republican National Committee, a day or so after the 
President of the United States in his State of the Union message said 
how we must all work together, and on the day when the President 
invites Senator Reid down for a cordial family dinner, which is, of 
course, showing how bipartisan we can be, the Republican National 
Committee--controlled, of course, by the White House--sends out this 
scurrilous attack on Senator Reid.
  It is a mistake. I would say the same thing if the Democratic Party 
was doing it to the Republican leadership. It is a mistake because 
ultimately the Senate consists of only 100 men and women who have the 
privilege to represent 290 million Americans at any given time. There 
are so many things we need to get done. We should be working together.
  An example: During President Reagan's term, we were facing a real 
crisis--not a manufactured crisis but a real crisis in Social Security, 
not the manufactured one we see today, a real one--and we were stuck 
here on the floor. Neither side seemed to budge, and efforts to do 
something that might save Social Security seemed lost when two giants 
of the Senate--I know this for a fact because I was standing right here 
on the floor--Senator Daniel Patrick Moynihan of New York and Senator 
Robert Dole, the leaders on the Finance Committee where Social Security 
reform now seemed founded, were talking, and Pat Moynihan walks over to 
Bob Dole and says: We have to give this another try. It is far too 
important to let this fall apart in partisan bickering. Let us make 
this work. You know the two of us can do it.
  I and a couple others who were standing there said: We are all with 
you.
  When I say ``I and a couple others,'' Republicans and Democrats said: 
We are all for you. You can do it.
  They went down and saw President Reagan, talked with him and said: 
Look, we are going to take another try at it, if you will work with us.
  He said: Fine.
  And they did. As a result of that, in the 1980s, Social Security was 
put in solvent standing for 70 years. If we do nothing with Social 
Security now, it will still be solvent in the year 2045, 2050.
  Wouldn't it be nice if we went back to the days of giants in the 
Senate and Presidents of both parties who wanted to work with the 
Members of the House and Senate who actually want to get something 
done, not for partisan gain but for American gain, not for one 
political party but for all Americans?
  Those who came up with the bright idea of attacking Harry Reid, a man 
who will get reelected his next term, I suspect by even a greater 
margin than the last landslide he had, ought to step back. They might 
raise money this way. They might stir up some of the true believers 
this way. They do nothing for the country. They do nothing for the 
Nation. All they do is deepen the divides instead of healing them. It 
would be nice if we could have leaders who would try to be uniters, not 
dividers. We haven't had that for a few years. I wish we could.
  I digress somewhat. I see the distinguished Chair, a man I knew 
before he came here, admired in his work as a member of the Cabinet. We 
are benefited by having him here. I hope that he might be one of those 
who will come in not with preconceptions but his enormous talent of 
bringing people together and work with us. I say this somewhat unfairly 
because under the rules he cannot respond, of course. I hope I have not 
damaged him irreparably with the Republican Party in Florida, but he 
has known me long enough to know I mean what I am saying.
  This Bingaman-Feinstein amendment is a commonsense amendment. It 
seeks to rectify one of most significant problems of the class action 
legislation

[[Page 1825]]

under consideration by the Senate. As we all know, this class action 
bill is going to sweep most class actions into Federal court. But then 
many of the Federal courts refuse to certify multistate 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 quite similar.
  Without this balanced amendment, members of important class actions 
that involve multiple-State laws may have no place to receive justice. 
In other words, they get removed from the State court to Federal court, 
but then the Federal court says: Well, because the State laws may be 
different, we can't do anything. But you can't go back to State court 
because you are removed here. It is probably as classical a legal 
Catch-22 as one could see.
  According to 14 of our State attorneys general:

       [I]n 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 sources. 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 that similar lawsuits would be brought on 
     behalf of residents of many smaller states.

  The Feinstein-Bingaman amendment would help citizens of States such 
as my own of Vermont. We have smaller populations. We are only the size 
of one congressional district, 610,000 people. But it would allow us to 
join with other injured plaintiffs from other States to have their day 
in court. Federal courts should be allowed to certify nationwide class 
actions by applying one State's law with sufficient ties to the 
underlying claims in the case. This amendment would give Federal judges 
that power and make it clear that they should not deny certification on 
the sole ground that the laws of more than one State would apply to the 
action.
  If the Senate is truly interested in passing class action legislation 
that gives injured citizens from every State a place to seek relief, 
then all Senators should embrace this commonsense amendment. I hope my 
colleagues will support this important amendment.
  I thank Senators Bingaman and Feinstein for their hard work on the 
amendment.


                          Sad News for Vermont

  On another issue, I spoke of my small State. I was born in Vermont, a 
precious State. We have had Leahys there since the 1850s. It is in my 
heart and soul. I read with pride but with sadness an article on the 
front page of the Washington Post today about Vermont and the number of 
our brave men and women who have been called up in the Guard and 
Reserves. Two States have the highest per capita callup in the Nation--
Hawaii and Vermont, two of the smaller States. We also have the very 
sad distinction of having the most fatalities, the most soldiers killed 
per capita of any State in the Union.
  I mention this because in our State, everybody knows everybody else. 
If one person dies, everybody in the State feels it. I have been to 
those funerals where I have seen people with whom I was in 
kindergarten, people I grew up with, neighbors of mine or my sister's, 
people my parents knew. You go to the funeral, you walk into a church, 
not as a member of the congressional delegation from Vermont--we have 
all done that--but you go as a friend and neighbor, and that is what 
you see, friends and neighbors. I will later today put the full article 
in the Record.
  It struck me as to what this means. We have one small town that is 
about the size of a small town in which my wife and I live in Vermont. 
They have one country store. It is a small store, but it is important 
to the town. Everybody goes there. A mother and a son run the store. 
The son gets called up. He goes bravely, of course. The mother cannot 
handle the store by herself, and the store closes. The community in 
many ways has lost its center.
  These are the realities of what is happening. Several of us met 
earlier today from both bodies, both parties, to introduce legislation 
to increase health benefits for those in the Guard and Reserves who are 
called up, to improve their retirement situation, make sure they stay 
healthy, make sure if they have a solely owned business and they get 
called up, they can at least have health care for their family.
  I mention this again not because it is apropos to the legislation--I 
do not see anybody else seeking recognition; I am not taking away from 
others' time--but I hope those who are watching or listening to this 
will read this article about what happens in rural America with these 
callups.
  In my State, the largest community is only 38,000 people. The town I 
live in has about 1,500 people. They know everybody. I live on a dirt 
road on the side of a mountain with magnificent views. Again, everybody 
is on a first-name basis. When somebody gets called up, you know it, 
you feel it.
  This is not a question about whether somebody is for or against the 
war. In my State, everybody has supported those who have gone. Even 
though I would suspect the majority of the people in Vermont are 
opposed to the war, they are all supportive of our troops. But it 
hurts. It is real. I hope we can bring them home soon.
  I was heartened by the elections in Iraq. I was heartened by the 
efforts of those who would brave in some cases death to go out and 
vote. I hope those of us in our country who say it is going to be a 
hard time to vote today because it is raining or it is snowing or it is 
cold or it is hot or it is inconvenient to go those extra five blocks, 
or whatever the reason, look at what they did.
  I hope that country will soon be able to take care of itself. We are 
going to spend huge amounts of money in this budget to build schools, 
improve police forces, build communications, roads, and hospitals all 
in Iraq. We have those same needs at home. I hope soon they can be on 
their own. I hope soon our men and women can come home, as many safely 
as possible.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Burr). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. HATCH. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HATCH. Mr. President, I would like to take a moment to 
demonstrate just how out of balance the class action has become and to 
underscore why we need to get this bill passed.
  Before I do, I want to make it clear that I do not object to class 
lawsuits. Legitimate class action lawsuits are helpful, when they are 
legitimate, when there is a good cause of action, when people really 
have been abused.
  Legitimate cause of actions do not have to seek out these favorable 
jurisdictions where the law is stacked against the defendants, which is 
what this bill helps to cure. When they are legitimate and brought in 
the best interest of the class members, class action lawsuits are a 
vital part of our judicial system. They can serve as a means to ensure 
that injured parties who might otherwise go unrepresented have the 
opportunity to have their injuries redressed.
  However, in recent years we have witnessed a disturbing trend where 
some lawyers are bringing and settling class action lawsuits in which 
the chief interests actually being served appear to be those of the 
lawyers and not the people for whom they are bringing the actions. Too 
often the plaintiffs' attorneys recover millions of dollars in 
attorney's fees while the class action members get little more than a 
coupon, if that.
  While we must acknowledge that there have been a few isolated 
instances of abusive settlements in the Federal courts, these are the 
rare exception. By contrast, numerous examples of abusive class action 
settlements originate from the State courts. As we have noted in the 
Judiciary Committee report in the 108th Congress, the Class Action 
Fairness Act is a ``modest, balanced bill to address some of the most 
egregious problems in class action practice.'' It is not, however 
``intended to be a panacea that will correct all class action abuses.''
  This bill is the result of intense bipartisan negotiations and is our 
best effort to address a problem that is pervading our State court 
system. Abuse

[[Page 1826]]

of the class action system has reached a critical point, and it is time 
that we as a legislative body address the problem. The public is 
increasingly aware of the system's unfairness. News programs, such as 
ABC's ``20/20,'' have covered the rise in class action jurisdictions in 
certain magnet jurisdictions, magnet meaning jurisdictions where these 
extortionate suits are brought because they can get a tremendous 
advantage regardless of whether they are right or wrong.
  Scores of editorials have called for actions in newspapers all across 
this country. Abuse of the class action system has even become the 
inspiration for popular literature. In 2003, the author, John Grisham, 
released a book entitled ``The King of Torts.'' Grisham's novel takes 
its reader into the world of the mass tort/class action lawyer where 
clients are treated like chattel and bargaining chips. The value of a 
potential action is not measured by the merit of the claim but on the 
number of class members that can be rounded up. The end game is not the 
pursuit of justice for the class members and clients, but in the 
pursuit of a hefty attorney's fee.
  Although Grisham's book is intended as fiction, it is hard to 
distinguish it from the facts of our broken class action system.
  Let me read a few passages:

       Nobody earns ten million dollars in six months. . . . You 
     might win it, steal it, or have it drop out of the sky, but 
     nobody earns money like that. It's ridiculous and obscene.

  Now this quote may come from a fictional story, but it is too often 
too close to the truth. This short novel written by Grisham 
demonstrates the problems with our class action system all too well. As 
his book shows, with drug manufacturers the sad but inevitable fact is 
that people are injured every day in this country by products they buy, 
and justice does require that they receive just compensation for their 
injuries.
  Frequently, class actions are the best way to compensate large groups 
of injured consumers. Yet, Grisham's novel, ``The King of Torts,'' also 
shows that the financial reward of a settlement is so great that the 
class action system has attracted a small group of unscrupulous lawyers 
who will do anything, say anything, and sue anything or anybody--not to 
help their clients but to line their own pockets.
  We keep hearing this is not a crisis, that not everyone is gaming the 
system. Everyone in this body knows, however, that a few bad apples can 
spoil the bunch. In this case, these few lawyers are hurting our civil 
justice system. This reform is one small step toward restoring some 
balance to that system. What I have read in this work of fiction is too 
often fact today. Everybody knows it. Without question, many of today's 
class actions are nothing more than business opportunities for some 
lawyers to strike it rich and too often they have little, if anything, 
to do with fairly compensating the injured class members.
  Some law firms make no secret of this. One law firm actually states 
on its Web site that it has brought over 24 nationwide class actions in 
Madison County, IL, a court notorious for approving settlements that 
benefit the lawyers, and that it specializes in class actions that seek 
less than $500 in damages for class members. Plaintiffs beware.
  I am told, for example, of a law firm that explicitly acknowledges 
that the more potential class members there are to a claim, the more 
the case is worth their while. Specifically, the ``frequently asked 
questions'' section of their firm's Web site states:

       More claimants means greater potential liability for 
     defendants. Because there is greater potential liability, 
     these lawsuits become worthwhile for lawyers to prosecute on 
     a contingent-fee basis.

  Worthwhile, indeed. Worthwhile for the lawyers.
  A small handful of wealthy lawyers is profiting from the class action 
system. According to an article appearing in the 2001-2002 edition of 
the Harvard Journal of Law and Public Policy five firms accounted for 
nearly half of the class action lawsuits filed in Madison County, IL, 
and Jefferson County, TX.
  Of the lawsuits filed in these districts, many allege the same causes 
of action, represent the same class of plaintiffs that are brought 
against many of the same parties within an industry.
  While these lawyers might have something to gain, the same cannot 
clearly be said with respect to plaintiffs, consumers, and those 
employed by defendant companies, who lose their jobs as a result of 
these types of lawsuits.
  It is evident that a few key courts have been singled out by a small 
group of legal players in the class action world. This point is 
reinforced by a 2003 study conducted by the Institute for Civil 
Justice/RAND and funded jointly by the plaintiffs and defense bar to 
determine who gets the money in class action settlements. The study 
found that in State court consumer class settlements, it is the class 
counsel and not their clients who often walk away with a 
disproportionate share of the settlement.
  What do their clients get? Well, quite simply, not enough. I believe 
that the many hard-working and honest class action lawyers should be 
compensated for their hard work and efforts. The overwhelming number of 
lawyers are honorable people. They are honest. They are hard working. 
Only a few are causing the lion's share of trouble. The majority of the 
honest ones are not searching for jackpot jurisdictions where the 
judges and the lawyers are in cahoots and somehow always find against 
the defendants.
  I also believe such compensation should be reconcilable with a fair 
recovery for the client. I have supported large recovery for trial 
lawyers when I thought it was justified. Quite honestly, it is simply 
not right when our judicial system allows lawyers to walk away with 
millions of dollars while in some cases their clients walk away with 
nothing more than a coupon good toward a future purchase of the very 
product that was the subject matter of the class action to begin with.
  I do not know about my colleagues, but when I have a problem with a 
product, sometimes the last thing I want to do is buy that product or 
have anything to do with the company or firm that makes that particular 
product. Frankly, keep your coupon and show me the money. If the 
coupons were so good, one would expect the lawyers would request that 
they be paid in coupons, not money.
  In real life, we are too often reminded of the legendary fictional 
case Jarndyce v. Jarndyce of Charles Dickens' ``Bleak House'' in which 
legal fees ate up the whole estate so that the intended beneficiaries 
could not benefit.
  Consider the case of Degradi v. KB Holdings, Inc., in Cook County, 
IL. The suit alleged that KB Toys, one of the Nation's largest toy 
retailers, engaged in deceptive pricing practices in some of their 
products. Specifically, the suit alleged that the prices of certain 
products were marked to appear reduced when in fact the apparently 
reduced price was the market price.
  In the settlement with KB Toys over these allegedly deceptive pricing 
practices, the toy store paid attorney's fees and costs of $1 million 
and not one dime of cash to class members. As part of the settlement, 
the store held an unadvertised 30-percent-off sale on selected 
products. That is laughable. Under the terms of the settlement 
agreement, the toy retailer agreed to offer a 30-percent discount on 
selected products between October 8 and October 14, 2003. In other 
words, they held a week-long sale that was not even publicly 
advertised. By the time most of the class members learned about the 
sale, their opportunity to recover under the terms of the settlement 
had passed.
  In fact, an independent analyst stated that KB Toys would likely 
benefit from the settlement because they were driving traffic. What did 
the class counsel get? They got $1 million. Good work if one can get 
it, but not necessarily a good outcome for their clients.
  Then there was the 1998 class action filed in Fulton County, GA, 
alleging that Coca-Cola improperly added sweeteners to apple juice. In 
this Coca-Cola case, in the settlement of a class

[[Page 1827]]

action lawsuit alleging that Coca-Cola improperly added sweeteners to 
apple juice, it was the lawyers who got a sweet deal--$1.5 million in 
fees and costs. Unfortunately, class members came up empty again, 
receiving 50-cent coupons but no cash. So each of them got 50-cent 
coupons while the lawyers walked away with $1.5 million in attorney's 
fees.
  As my colleagues know, I am a lawyer. In my practice, I represented 
both plaintiffs and defendants. I have watched some of the greatest 
lawyers appear in court when I started to practice law in Pittsburgh, 
PA, such as James McArdle. When Jimmy McArdle tried a case, the 
courtroom was always filled with young and old lawyers who wanted to 
watch a master at work. He brought one of the first cases against the 
tobacco industry.
  He lost that one, but it was the case that paved the way to clean up 
the tobacco industry in this country.
  I supported many of the tobacco class action lawyers because I 
thought what they did was in the best interests of their clients and 
the American public. But this current class action system is out of 
whack and needs to be fixed. I understand many of these classes are 
comprised of hundreds if not thousands of members, and I do not 
begrudge class action attorneys a reasonable fee award. But when the 
class member gets a 50-cent coupon and the lawyers get $1.5 million 
because the company has to settle rather than take a chance of going on 
and getting killed in a forum-shopped court, then you can see why I am 
upset about this.
  There is also the case of Scott v. Blockbuster, Inc. Blockbuster 
Video was named as a defendant in 23 class action lawsuits brought by 
consumers, alleging that they were charged excessive late movie return 
fees. In 2001, Blockbuster agreed to enter into a settlement agreement. 
Under the terms of the settlement, which was approved by a Jefferson 
County, TX, State court, the class attorneys received approximately 
$9.25 million in attorney's fees while the class members received--you 
guessed it--coupons. Each class member got a $1-off, or buy one get one 
free coupon. Experts have predicted only 20 percent of the class 
members will even redeem these coupons.
  I am pleased the bill before us at least ties legal fees to the 
actual amount of redeemed coupons. If only 1,000 people redeem those $1 
coupons, the attorneys would be entitled to a percentage of that $1,000 
but not $9.25 million.
  I have described a few of the many class action settlements streaming 
out of our State court system. Many State courts appear at times to be 
nothing more than rubberstamps for the lawyers' proposed settlement 
agreements. This is not civil justice.
  In that Jefferson County case, the company, Blockbuster, had to 
settle. They could not risk going to trial in that particular 
jurisdiction because of the outrageous verdicts that are granted by 
jurors who appear to be compromised.
  This is akin to legalized extortion. Too often it appears that the 
chief interests served by these settlements are those of the class 
counsel and not the class members. This bill does not prevent class 
action suits, but it does stop some of these excesses.
  The Class Action Fairness Act would alleviate many of the problems 
present in the current class action system by allowing truly national 
class actions to be filed in or removed to Federal court. Some of our 
colleagues have indicated the consumer will be lost here because they 
will not be able to bring these cases. Give me a break. Of course they 
will be able to bring these cases. But they have to be brought in a 
legitimate way, in Federal court where it is much less likely that they 
will be hammered by political judges who are in cahoots with the 
plaintiffs' lawyers in that jurisdiction. Federal courts as a general 
rule will adequately dispense justice in these matters. So the suits 
can be brought. This will level the playing field that has become 
tilted in many jurisdictions in the last few years.
  It also reforms the way Federal courts would approve proposed 
settlements with basic requirements such as a hearing and a finding by 
the court that the settlement is fair, reasonable, and adequate.
  This is the second time the Class Action Fairness Act has come to the 
Senate floor, but we have been working on it for 6 years. When we 
failed to achieve cloture by one vote in the preceding Congress--by one 
vote we failed to achieve cloture--we sat down with several Democratic 
Senators to reach bipartisan agreement on a bill. We know it is 
difficult for them to work on this bill because the largest hard money 
contributor to Democrats in the Senate happens to be the American Trial 
Lawyers Association. Some people believe Democrats are owned by them. I 
do not believe that. I know there are many wonderful lawyers in the 
American Trial Lawyers Association. Most are decent, honorable people, 
and I know many of them. But there are some who are unscrupulous, and 
they are the ones who have been fighting this reform. And they have the 
means to do so since they have become billionaires as a result of these 
coupon cases won in jackpot jurisdictions.
  The bill we are considering today is the result of all of these 
negotiations. S. 5, the Class Action Fairness Act of 2005, presents 
this Congress with an opportunity to correct some of the dubious 
practices currently found in the class action system, and to protect 
the average consumer.
  The first response I have is that this amendment is based on a faulty 
premise. Federal courts do not have a hard and fast rule against 
certifying multistate class actions. Rather, both Federal and State 
courts conduct a fair, full inquiry before certifying a class, to 
ensure that common legal issues predominate, as required by the Federal 
rule governing class actions. Put simply, this Bingaman-Feinstein 
amendment, as amended by Senator Feinstein, would toss State laws and 
procedural fairness out the window for the sake of allowing nationwide 
class actions. It would reverse nearly 70 years of established Supreme 
Court case law that requires Federal courts to apply the proper State 
laws when they hear claims between citizens of different States.
  It would reverse numerous decisions by State supreme courts rejecting 
the application of one State's laws to class action claims that arise 
in 50 States, and it would seriously undermine the ability of 
plaintiffs and defendants alike to have a fair trial.
  Most importantly, it would have the perverse effect of perpetuating 
the very magnet court abuses that this legislation seeks to end. The 
reason for this requirement is self-evident. The whole point of a class 
action is to resolve a large number of similar claims at the same time. 
If the differences among class members' legal claims are too great, a 
class trial will not be fair or practical. In some circumstances, 
Federal courts have found that the law of different States was 
sufficiently similar that a class could go forward. In other cases, 
they have found that the differences were too great to have a fair 
class trial.
  The proposed amendment would take away the discretion of Federal 
judges to make these important decisions. It is as though we do not 
trust our Federal judges. In this case, we can trust them.
  Proponents of the amendment conveniently ignore the fact that Federal 
law in this issue is quite consistent with the approach taken by 
numerous State supreme courts which have refused to certify cases where 
the differences in State law would make it impossible to have a fair 
and manageable trial.
  In fact, the proposed amendment would reverse decisions by the 
Supreme Courts of California, Texas, New York, and numerous other 
States that have rejected nationwide class actions under such 
circumstances.
  Second of all, Federal courts already use subclassing where 
appropriate. Subclassing basically means dividing a class into a couple 
of smaller classes whose claims are similar. Rule 23 of the Federal 
Rules of Civil Procedure, the nearly 40-year-old rule governing class 
actions, explicitly gives courts the option to use subclasses to 
account for variations in a class as long as the class would still be 
manageable and

[[Page 1828]]

fair--for example, if a case involves State law that can easily be 
divided into three or four groups, subclassing would be appropriate if 
the trial would otherwise be manageable. At the same time, if 
subclassing were used in every situation that involves different State 
laws, in some cases there would be so many subclasses that it would be 
impossible to have a manageable or even a fair trial.
  Under current law, Federal judges have discretion to decide when 
subclassing makes sense.
  This approach is working. Why would we change it?
  The amendment not only changes it but makes it even worse.
  Finally, the amendment would hurt consumers by subverting State law. 
The proposed amendment suggests that if subclassing will not work, the 
courts should simply respect State laws to the extent practical. What 
does that mean? How does a court partially carry out a State law? 
Judges are responsible for carrying out the law, period--not for 
carrying out the law to the extent practical.
  By suggesting the Federal courts should ignore variations in State 
laws when respected State law is impractical, this provision would 
perpetuate the very problem that the class action bill is trying to 
fix. For example, in the notorious Avery vs. State Farm case, a county 
judge applied Illinois law to claims that arose throughout the country, 
ruling that insurers could not use aftermarket parts in making auto 
accident repairs even though several States had passed laws encouraging 
and even requiring the use of these more economical parts to keep down 
the costs of insurance premiums. The approach taken by the Avery 
judge--condoned by the proposed amendment--hurts consumers by denying 
them the protection of their State laws.
  Some State legislatures have adopted particularly strong laws in 
certain areas because their citizens have expressed strong feelings 
about those issues--for example, privacy or consumer fraud. Under this 
amendment, citizens of such States will not be entitled to the 
protection of their States laws in nationwide class actions. Instead, 
their claims will be subject to some compromise law created by a judge 
who allowed for a class action trial. That is not justice. That is not 
good law. That is not a good way to approach things. That is not good 
procedure.
  For all of these reasons I urge our colleagues to vote against the 
Bingaman-Feinstein amendment and keep this bill intact. We also know 
that should that amendment pass, this bill is dead. One more time, it 
will be dead. I hope we have enough Senators who realize the importance 
of getting this bill through and getting these egregious harms 
straightened out to pass this bill without amendment.
  Let me refer one more time to Dickie Scruggs' comments which he made 
at a luncheon--``Asbestos for Lunch''--which was a panel discussion at 
the Prudential Securities Financial Research and Regulatory Conference 
on June 11, 2002, in New York.
  I happen to admire Dickie Scruggs. He is very sharp. He is smart. He 
has made a billion dollars from practicing law, and I think he has made 
it legitimately--mainly in the tobacco cases. I have worked very 
closely with the attorneys in those cases. I have a lot of respect for 
him. He is an honest man.
  When this honest man, a top trial lawyer, one of the best in the 
country, who is a plaintiffs' lawyer, who has brought class actions, 
who understands the whole system better than those lawyers, says this, 
I think we ought to pay attention to it. Here is what he said at that 
luncheon, and he is one of the leading plaintiffs' lawyers in the 
country. He said:

     [w]hat I call the ``magic jurisdictions'' . . . [is] where 
     the judiciary is elected with verdict money.

  What does he mean by that? He means the attorneys make so much money 
that they in turn can give a small percentage of that money to these 
judges so they can get elected and reelected. So there is an interest 
in the courts in making sure the attorneys make a lot of money so they 
can get their share to be reelected.
  Let me start at the beginning again. It is best heard in full. Here 
is what Dickie Scruggs said:

     [W]hat I call the ``magic jurisdictions, . . . [is] where the 
     judiciary is elected with verdict money. The trial lawyers 
     have established relationships with the judges that are 
     elected; they're State Court judges; they're popul[ists]. 
     They've got large populations of voters who are in on the 
     deal, they're getting their [piece] in many cases. And so, 
     it's a political force in their jurisdiction, and it's almost 
     impossible to get a fair trial if you're a defendant in some 
     of these places. The plaintiff lawyer walks in there and 
     writes the number on the blackboard, and the first juror 
     meets the last one coming out the door with that amount of 
     money . . . The cases are not won in the courtroom. They're 
     won on the back roads long before the case goes to trial. Any 
     lawyer fresh out of law school can walk in there and win the 
     case, so it doesn't matter what the evidence or the law is.

  He said it better than anybody on this floor has said it. And he is a 
trial lawyer. He said it is almost impossible to get a fair trial if 
you are a defendant in some of these places. He is talking about 
Madison County, IL, Jefferson County, TX, jurisdictions in Mississippi, 
and other jurisdictions throughout the country. I do not want to name 
them all. The fact is that is what he is talking about. It is 
impossible to get a fair trial.
  I wonder. I have heard my colleagues come on the Senate floor and say 
there were only two cases a year in Madison County. Come on. That 
ignores all the threatened cases, demand letters, and settled cases for 
what are basically defense costs--whatever it costs the company to hire 
their law firm to defend them because they cannot afford to go to a 
verdict in that particular jurisdiction because that verdict money is 
what supports the judges to begin with. They are as interested as 
anybody in making sure that those verdicts are big, even if they are 
unjust.
  That is what this is all about--and the Bingaman amendment, as 
amended by my dear friend, Senator Feinstein from California, continues 
to perpetuate this system.
  This is not an overwhelming antilawyer bill. This is not an 
overwhelming bill that takes away consumers' rights. In fact, it is not 
a bill that takes away consumers' rights at all. This is not a bill 
that is unfair. This is a bill that will straighten out these 
egregious, wrongful actions by some of these jurisdictions by putting 
these important cases in courts where it is much more likely that 
justice will prevail. That is what this bill does. It will not prevent 
anybody from suing. It will not prevent anybody from recovering. It is 
just that these cases will be tried in Federal jurisdictions in these 
very prestigious Federal courts, as they should be because of the 
diversity problems that are presented by these cases, and it is much 
more likely that we will have less fraud, less unfairness, less jackpot 
justice in the Federal courts than lawyers are allowed to forum shop 
them in remote counties with little attachment to the parties.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. KENNEDY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                            amendment no. 2

  Mr. KENNEDY. Mr. President, I urge all of my colleagues to support 
this amendment to exclude civil rights and wage and hour cases from the 
bill's provisions on removal of cases to Federal court. Working 
Americans and victims of discrimination seeking justice under State 
laws don't deserve to have the doors of justice slammed on such claims, 
but that is exactly what this bill will do.
  All of us know that families across the country are struggling to 
make ends meet. We cannot ignore that they are too often hurt by the 
denial of a fair wage, or by unfair discrimination. We cannot tell the 
victims of these practices that Congress does not care about this 
enormous problem.
  This amendment is needed, because the harm suffered by plaintiffs in 
State civil rights and labor cases is real, devastating, and personal--
not the sort of

[[Page 1829]]

harm that results in a few dollars of damages or a coupon settlement.
  We have been told that this bill was designed to correct the problem 
of class actions in which plaintiffs get only a few dollars for minor 
claims, while elite attorneys earn million-dollar fees. We have yet to 
hear one example of that happening in a civil rights case or a labor 
case. We certainly haven't heard anything to suggest there is a major 
problem in those areas.
  Some have said it is too late to raise these concerns about civil 
rights and workers' rights. We have been told that too much work has 
gone into this legislation to consider these issues now. But it is 
always the right time to stand up for principle.
  In its current form, this bill is just another example of the 
administration's misguided priorities--putting the interests of big 
companies ahead of America's working families. Why should Congress 
protect companies that violate State laws by engaging in discrimination 
or exploiting low wage workers, while making it harder for victims of 
those practices to get relief in court? Those are the wrong priorities, 
and we cannot ignore that problem.
  We can't turn our backs on victims of discrimination such as Kathleen 
Rudolph. She and other working women in Florida brought a class action 
alleging sexual harassment. These women provided health care and other 
services to inmates in State prisons. They told the court they had 
suffered almost daily sexual harassment from male inmates, and prison 
officials failed to stop it. What sense does it make to force a case 
like that to go to a Federal district court?
  The same principle applies to wage and hour laws. A fair day's work 
deserves a fair day's wage. State wage-and-hour laws provide basic 
protections to workers, particularly now, as companies continue to 
improve their bottom lines by pressuring workers to work off the clock. 
A recent New York Times article described the growing phenomenon of 
low-wage workers in many fields, including hairstylists, supermarket 
cashiers, and call center workers, being forced to work without 
recording their full hours.
  These workers are denied overtime pay, and in many cases, working 
extra hours means they don't even earn the minimum wage. Many of these 
workers refuse to underreport their hours, and they are punished for 
not doing so. One manager interviewed by the New York Times admitted:

       Working off the clock was a condition of a call service 
     representative's employment. Hourly workers who complained 
     were weeded out and terminated.

  Professor Eileen Applebaum of Rutgers University emphasized that 
workers have little choice but to go along. She said, ``One big reason 
for off-the-clock work is that people are really worried about their 
jobs.''
  Congress should not take away the right of these workers to recover 
the wages they are owed. Locking the courthouse door against them will 
hurt people such as Nancy Braun and Debbie Simonson, who worked at a 
national discount chain in Minnesota. They were constantly forced to 
work through their meal breaks and work off the clock. They and workers 
like them would not be able to recover their wages without a class 
action. We should not put more barriers in the way of their pursuit of 
justice.
  The new Federal overtime rule that takes away overtime from so many 
workers means that State-law overtime protections are more important 
than ever. This is particularly true in States such as Illinois, which 
have wage-and-hour laws similar to the Federal law, and have explicitly 
rejected the new Federal regulations.
  With 8 million Americans out of work, and so many other families 
struggling to make ends meet, cutbacks in overtime are an unfair burden 
that America's workers should not have to bear. Overtime pay accounts 
for about 25 percent of the income for those who work overtime, and 
workers denied that protection routinely end up working longer hours 
for less pay.
  Employers are all too ready to classify workers as not eligible for 
overtime. Warren Dubrow and Sam O'Lear discovered that problem when 
they worked in Orange County, CA, as service mangers at an automotive 
chain.
  They often had to work more than 50 hours a week. Yet they were 
denied overtime pay because their employer called them ``managers.'' 
Never mind that they spent most of their time on nonsupervisory tasks 
like greeting customers, filling out order forms, and even changing 
tires. In State court, they and thousands of their fellow service 
managers won the right to overtime pay under State laws providing that 
workers who spend more than half their time on non-managerial tasks are 
entitled to overtime. Why should a Federal court be required to hear a 
case like that?
  This isn't just a matter of moving civil rights cases and labor cases 
to a different forum. The real effect is much more harmful. Too often, 
moving these cases to Federal courts will mean they are never heard at 
all because strict Federal rules for class certification will prevent 
the plaintiffs from being approved as a class. If a Federal court 
decides not to certify the class, that is probably the end of the case, 
because many members of class action lawsuits can't afford to pursue 
their cases individually. Extended litigation in Federal court is too 
expensive for low wage workers and victims of discrimination, many of 
whom live paycheck to paycheck. Defendant companies are eager to throw 
sand in the gears of the law, and Congress shouldn't be encouraging 
them.
  There has been some confusion during this debate about whether the 
class action bill would really move cases involving local events into 
Federal courts. Yesterday, the distinguished Senator from Utah 
questioned whether cases based on truly local events would really be 
affected by the class action bill. Let there be no doubt, it will 
happen if the current bill isn't modified.
  If 100 Alabama workers bring a class action case under Alabama law 
for job discrimination that took place in Alabama, the employer can 
still use this bill to drag the case into Federal court if the employer 
company is incorporated outside the State. The same is true if low-wage 
workers are denied fair pay in their home State. As long as an employer 
is incorporated out of State, that employer can move the case into 
Federal court.
  Section 4 of the bill allows a case to stay in State court only if a 
primary defendant is a ``citizen'' of the same State as the plaintiffs 
who brought the case. Companies are citizens of the State where they 
are incorporated, regardless of where they do business. As a result, 
plaintiffs who file a case in State court against a company with 
offices in their home State could quickly find their case in Federal 
court if the company is incorporated somewhere else.
  That will affect a huge number of State law cases. To show the scale 
of this problem, let's look at the figures. More than 308,000 companies 
are incorporated in Delaware, including 60 percent of the Fortune 500 
firms and 50 percent of the corporations listed on the New York Stock 
Exchange. Most of these companies also do business in many other 
States. But plaintiffs in those other States will not be able to file 
cases against these companies without being dragged into Federal court. 
That result violates basic fairness and common sense.
  The Senator from Utah also suggested that this amendment isn't 
necessary to protect victims of discrimination because Federal courts 
have traditionally been defenders of civil rights.
  Federal courts do perform the important job of protecting civil 
rights under Federal law and the U.S. Constitution. No one is 
questioning that. This amendment wouldn't change the fact that Federal 
civil rights claims can be decided by Federal courts. Nor would it 
exempt Federal civil rights or Federal wage and hour cases from the 
other requirements of this bill, such as the requirement that 
appropriate Government officials be notified of class action 
settlements.
  This amendment does only one thing. It leaves in place the current 
rules governing removal of civil rights and labor

[[Page 1830]]

cases filed under State or local laws. When States are ahead of the 
Federal Government in giving their citizens greater protection than 
Federal law--as several States have done in the area of genetic 
discrimination and discrimination based on marital status--State 
courts, not Federal courts, should interpret those laws.
  The Senator from Utah suggested that this amendment isn't necessary 
because civil rights cases are filed under Federal laws. That is not 
accurate. There are many Federal class actions, but there are also many 
emerging areas in which victims of discrimination are seeking relief 
through State law class actions.
  Sexual harassment cases are often brought in State courts under State 
law, like Kathleen Rudolph's case which I mentioned earlier.
  Many civil rights class actions can only be brought under State law 
because there is no Federal law on the particular issue involved. That 
is true for genetic discrimination. It is true for discrimination based 
on marital status, parental status, and citizenship status. Those types 
of discrimination are prohibited under many State laws, but not yet 
under Federal law.
  If we don't let State courts develop these emerging protections under 
State laws, we are stacking the deck against workers and victims of 
discrimination. That is because Federal courts have said, time and time 
and time again, that they will interpret State laws narrowly.
  The Court of Appeals for the Seventh Circuit, faced with opposing 
interpretations of State law, has ruled that it will ``choose the 
narrower interpretation that restricts liability.'' The First and Third 
Circuits have made similar rulings. There is no question that Federal 
courts are more likely than State courts to rule against plaintiffs in 
interpreting State law. Federal judges have said so themselves. Moving 
these cases into Federal courts will put a Federal thumb on the scale 
in favor of companies that violate the law.
  We can't let that happen. I urge all of my colleagues on both sides 
of the aisle, and on both sides of the class action debate, to support 
this amendment. This legislation is supposed to reduce class action 
abuses, not add new abuses.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. SESSIONS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SESSIONS. Mr. President, I rise in opposition to the Kennedy 
amendment that would exclude labor class actions from the scope of S. 
5. At the outset, I have serious problems with any of the carve-out 
amendments to S. 5. These amendments are part of an effort by opponents 
of the bill to mischaracterize S. 5 as anticonsumer and to make it 
appear that some of these carve-outs and exceptions are necessary to 
prevent injustice. But, Mr. President, S. 5 is a good deal across the 
board. It is going to improve class actions for consumers, for workers, 
for our economy, and for businesses. Why should American workers be 
denied its benefits? Why would people who have a labor dispute not want 
to have that dispute settled in a Federal court under these superior 
procedures?
  S. 5 will keep most labor cases in State court, anyway. The act 
includes two exceptions--the home State exception, and the local 
controversy exception--that are intended to keep most local class 
actions in State court. That means if local residents sue a local 
employer, the case will probably stay in State court, anyway.
  Second, any labor class actions that will be removable to Federal 
court under the bill would still be governed by State law. This is not 
unusual. It is done all the time in Federal court. Nothing in the act 
changes substantive law in any way. It does not strip any worker of any 
right to seek redress for a labor violation. It creates no new defense 
for corporate defendants in time-shaving cases or otherwise. In short, 
workers who bring State labor claims after the Act passes--and I expect 
that it will--will have the exact same rights they have now.
  Third, Federal courts have frequently certified overtime class 
actions. Some critics have said they are worried about Federal courts 
refusing to certify employee claims, but that is not true.
  A recent study by the Federal Judicial Center found that class 
actions generally ``are almost equally likely to be certified'' in 
State and Federal court.
  Certification, of course, is when a Federal court agrees that a class 
action should be tried as a class action. A lawyer can't go in and 
declare, I am representing a whole class of people, without some 
finding that there is a class that has been similarly wronged, or there 
is a similar litigation issue at stake.
  A review of these decisions in Federal court found numerous examples 
of Federal judges certifying wage-labor class actions. For example, a 
Federal court in New York recently certified a State labor law class 
action on behalf of employees of a chain of natural food stores, many 
of whom were immigrants, who claimed they were not properly compensated 
for their overtime claims. The Federal judge accepted that case.
  A Federal court in New York also certified a class of delivery 
persons and dispatchers at a drugstore chain who alleged they were not 
paid the minimum wage or overtime in violation of New York law. That 
was already accepted under current law, and it certainly would not 
change under this.
  We made some efforts to improve the overtime laws in the Federal 
rules with regard to it. I have personally, as a private practitioner, 
represented two clients in wage cases involving overtime. The reason 
those cases were litigated is because the laws are not clear about what 
overtime is and what it is not. Nor is the law clear as to who is 
entitled to overtime and who is not. That needs to be clarified, and I 
salute the President for his attempt to do so. That is a parenthetical 
comment.
  In a multidistrict litigation proceeding in the Federal court in 
Oregon, a Federal court certified seven State law classes brought by 
claims representatives against an insurance company, alleging they were 
improperly classified as exempt. In a case in Federal court in 
Illinois, the judge certified a class of employees who said their 
employer violated State law by failing to pay them for time spent 
loading trucks and driving to sites.
  So the judge certified a class of employees who were making a claim 
in Federal court for violation of State labor laws. Judges will try 
that case based on whether it violated State law.
  In a case in Washington State, the district court certified a class 
of meat processing plant employees who accused their employer of 
failing to pay them for work at the beginning and end of each day when 
they were on meal breaks. This is a constant source of litigation in 
these types of cases.
  I would suggest that the argument that Federal courts will not 
certify class actions in wage and hour cases is not correct.
  Finally, Mr. President, contrary to what has been suggested today, 
Federal courts have a long record of protecting workers in employment 
class actions. Congress has passed strong laws, such as title VII, that 
were specifically crafted to give workers access to Federal courts so 
they could bring employment discrimination cases in a fair forum.
  We have always believed Federal court is a fair, objective forum for 
people who have been discriminated against, whether they claim 
employment rights or civil rights.
  As a result, Federal courts already have jurisdiction over most 
employment discrimination and pension claims, and their record is in 
sharp contrast to courts such as in Madison County, IL, and Jefferson 
County, TX.
  Which courts system oversaw the Home Depot gender discrimination case 
settlement that paid class members about $65 million? Which courts 
oversaw the $192 million Coca-Cola race discrimination settlement in

[[Page 1831]]

which each class member was guaranteed a recovery of at least $38,000?
  The answer to both is these were Federal court cases, not magnet 
State courts that to often look out for lawyers instead of consumers.
  In sum, the only class of workers that will be negatively affected by 
S. 5 is the trial lawyers who will no longer be able to bring major 
nationwide class actions in their favorite county court. For everyone 
else, S. 5 is a win-win proposition that will put an end to class 
action abuse while protecting consumers who seek to bring legitimate 
class actions.
  I urge my colleagues to reject this amendment and those other carve-
out amendments that are being introduced.
  Senator Kennedy has also added to his amendment, the employer-worker 
rights cases, the civil rights carve-out. I would like to make a few 
points about the civil rights cases.
  The amendment, as I understand it, would exclude from the reach of 
this bill all class actions involving civil rights--all of them. It 
should be defeated for several reasons.
  First, an amendment that would affirmatively exclude civil rights 
cases from Federal jurisdiction would be contrary to a long tradition 
of encouraging the availability of our Federal courts to address civil 
rights claims.
  Indeed, we have on the books several statutes that are intended to 
ensure that Federal civil rights cases can be heard in Federal courts. 
It has long been recognized that Federal courts, by virtue of their 
independence from political pressure, provide a more objective, 
hospitable forum for civil rights cases than State courts.
  One statute that permits removal to Federal court for a broad range 
of civil rights actions is 28 U.S.C. 1443. A second statute, 28 U.S.C. 
1343, provides broad Federal jurisdiction over a whole host of civil 
rights claims. For example, any action ``for injury to person or 
property or because of the deprivation of any right or privilege of a 
citizen of the United States,'' any action ``to recover damages or to 
secure equitable or other relief under any Act of Congress providing 
for the protection of civil rights.''
  Indeed, that section provides original Federal jurisdiction over any 
action ``to redress the deprivation, under color of any State law, 
statute, ordinance, regulation, custom or usage, of any right, 
privilege, or immunity secured by the Constitution of the United States 
or by any Act of Congress providing for equal rights of citizens.''
  Would this amendment take those from State court? I do not think that 
is healthy, and I do not think that is what we should do.
  Second, contrary to the sponsor's assertion, the bill will not 
discourage people from bringing class actions by prohibiting 
settlements that provide named plaintiffs full relief for their claims. 
The answer to this contention is simple: There is no such provision in 
the bill. Indeed, the bill does not contain any provisions that will 
change claimants' substantive rights to recovery in any respect. The 
``consumer bill of rights'' provisions of the bill used to include a 
section that prohibited the payment of excessive ``bounties'' to class 
representatives. The rationale for that provision was to protect the 
class members. However, because of concern from the civil rights 
community about that provision being potentially misused, we have 
deleted that provision from the bill.
  Finally, contrary to the position of the amendment's proponents, the 
bill will not impose new, burdensome and unnecessary requirements on 
civil rights litigants and the federal courts.
  The provision of the bill requiring that certain public officials be 
notified about proposed settlements will not delay the approval of 
settlements. The period allowed for commentary from public officials is 
consistent with the time that it normally takes to get settlement 
notices to class members and conduct the ``fairness hearing'' process 
to obtain judicial approval of a proposed settlement.
  The whole purpose of this additional requirement is to ensure that 
proposed settlements are fully scrutinized to protect the interests of 
the unnamed class members.
  This bill protects the rights of civil rights plaintiffs.
  It should not be amended.
  The PRESIDING OFFICER. The Senator's time has expired en bloc.
  Mr. SESSIONS. I thank the Chair. I urge the amendment be defeated. I 
yield the floor.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, how much time remains?
  The PRESIDING OFFICER. Three minutes remain.
  Mr. KENNEDY. I yield myself such time.
  Mr. President, a point has been raised by those who are opposed to 
this amendment that there have been examples where issues affecting 
working conditions have been considered in the Federal courts and, 
therefore, we should not be so concerned. That misses the point.
  The fact is, we know of a number of cases that have been referred to 
Federal courts and the Federal courts have been uncertain as to which 
way to rule. Therefore, they have made a judgment consistently to have 
the narrowest possible interpretation. Narrowest possible 
interpretation means workers are going to get shortchanged on wages and 
working conditions. That is what it means.
  Why take it away from the local jurisdiction? We know the same 
argument with regard to civil rights. We all understand and respect the 
fact that when it comes to constitutional rights or interpreting the 
laws that have been passed here with Federal guarantees there is going 
to be Federal jurisdiction. But that ignores the basic fact that in a 
number of the States there have been enhancements of civil rights. The 
States have made those judgments. Judges understand that. They 
understand what has been considered by the legislature. They know what 
the temperament of the legislation is all about.
  Why take away those protections? This legislation does so. Quite 
frankly, those areas of workers' rights and civil rights were never 
really thought about as being the major reason for this legislation. 
They represent about 10 percent of the total class action, but they do 
involve protecting workers and workers' rights and they do involve 
protecting the basic civil rights which the States have enhanced over 
the Federal laws.
  Why are we going to take away from the States the opportunity, the 
power, the authority, to go ahead and interpret that? That is going to 
be unfair to those individuals who ought to have the protection. This 
is going to provide less protection for workers, less protection for 
their wages and their working conditions, and it is going to put at 
risk the kinds of protections that States have decided should be there 
to protect their citizens in the area of civil rights. It makes no 
sense, and I would certainly hope that our amendment would be accepted.
  I yield back the remainder of my time.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, the hour of 4 has arrived. Pursuant to 
the previous order, we will now vote on the Kennedy amendment with a 
stacked vote on the Feinstein-Bingaman amendment to follow immediately.
  The PRESIDING OFFICER (Mr. Coburn). Under the previous order, the 
question is on agreeing to amendment No. 2 offered by the Senator from 
Massachusetts.
  Mr. SPECTER. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. McCONNELL. The following Senator was necessarily absent: the 
Senator from New Hampshire (Mr. Sununu).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 40, nays 59, as follows:

[[Page 1832]]



                       [Rollcall Vote No. 6 Leg.]

                                YEAS--40

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Byrd
     Cantwell
     Clinton
     Conrad
     Corzine
     Dayton
     Dorgan
     Durbin
     Feingold
     Harkin
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Murray
     Nelson (FL)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sarbanes
     Schumer
     Stabenow
     Wyden

                                NAYS--59

     Alexander
     Allard
     Allen
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Burr
     Carper
     Chafee
     Chambliss
     Coburn
     Cochran
     Coleman
     Collins
     Cornyn
     Craig
     Crapo
     DeMint
     DeWine
     Dodd
     Dole
     Domenici
     Ensign
     Enzi
     Feinstein
     Frist
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Isakson
     Kohl
     Kyl
     Lott
     Lugar
     Martinez
     McCain
     McConnell
     Murkowski
     Nelson (NE)
     Roberts
     Santorum
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stevens
     Talent
     Thomas
     Thune
     Vitter
     Voinovich
     Warner

                             NOT VOTING--1

       
     Sununu
       
  The amendment (No. 2) was rejected.


                            Amendment No. 4

  The PRESIDING OFFICER. Under the previous order, there are now 2 
minutes of debate equally divided prior to a vote in relation to the 
Feinstein amendment No. 4.
  The Senator from California.
  Mrs. FEINSTEIN. Mr. President, I understand I have 1 minute to 
discuss the amendment before the Senate. This amendment is on behalf of 
Senator Bingaman and myself. It essentially deals with an issue that 
emerged in the consideration of the class action bill.
  I am a supporter of the class action bill. However, there is a 
loophole. That loophole is with class action consumer-related cases. 
They could go to a Federal judge, and the Federal judge could say the 
various laws of the 50 States are so complex he cannot decide on a 
given law. Then the class action remains in limbo. It cannot go back to 
State court.
  This is a compromise between Senator Bingaman and myself. It 
essentially says the judge can either issue subclassifications as 
determined necessary to permit the action to proceed or, if that is 
impractical, look at other courses, including the plaintiff's State 
laws.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, there is no loophole in this bill. This 
amendment would force the Federal courts to certify dissimilar and 
unmanageable claims, which is the problem occurring in certain magnet 
State courts right now. This is a fairness and a due process problem. 
This is not really a compromise at all. It defeats the purpose of the 
bill.
  The amendment tells courts to ignore State law and forget about 
fairness just so a class can be certified. It would require courts to 
subclass even where it would be unwieldy and impractical.
  If you want to stop the abuses and pass class action reform, you will 
oppose this amendment. This underlying bill is the compromise.
  Mr. CARPER. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the amendment.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. McCONNELL. The following Senator was necessarily absent: the 
Senator from New Hampshire (Mr. Sununu).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 38, nays 61, as follows:

                       [Rollcall Vote No. 7 Leg.]

                                YEAS--38

     Akaka
     Baucus
     Biden
     Bingaman
     Boxer
     Byrd
     Cantwell
     Clinton
     Conrad
     Corzine
     Dayton
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Johnson
     Kennedy
     Kerry
     Landrieu
     Lautenberg
     Leahy
     Levin
     Mikulski
     Murray
     Nelson (FL)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sarbanes
     Schumer
     Specter
     Stabenow
     Wyden

                                NAYS--61

     Alexander
     Allard
     Allen
     Bayh
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Burr
     Carper
     Chafee
     Chambliss
     Coburn
     Cochran
     Coleman
     Collins
     Cornyn
     Craig
     Crapo
     DeMint
     DeWine
     Dodd
     Dole
     Domenici
     Ensign
     Enzi
     Frist
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Isakson
     Jeffords
     Kohl
     Kyl
     Lieberman
     Lincoln
     Lott
     Lugar
     Martinez
     McCain
     McConnell
     Murkowski
     Nelson (NE)
     Roberts
     Santorum
     Sessions
     Shelby
     Smith
     Snowe
     Stevens
     Talent
     Thomas
     Thune
     Vitter
     Voinovich
     Warner

                             NOT VOTING--1

       
     Sununu
       
  The amendment (No. 4) was rejected.
  The PRESIDING OFFICER. The majority leader.
  Mr. FRIST. Mr. President, very briefly, a number of Members have 
inquired about the schedule. It is my understanding that shortly 
Senator Feingold will be offering his amendment, and then we will 
debate that amendment tonight. We will have the vote on that amendment 
tomorrow at some time. We will have discussions with the Democratic 
leadership and Senator Feingold in terms of time. Thus, we will have no 
more rollcall votes tonight. The next rollcall vote I expect will be on 
the Feingold amendment sometime tomorrow.
  With that, the prospects of finishing this bill tomorrow at a very 
reasonable time--hopefully, midafternoon or early afternoon--are very 
good, very positive. There are lots of other discussions and issues 
that have to be dealt with, and I encourage they be dealt with later 
this afternoon and into the evening, tonight, and tomorrow morning so 
we can bring this bill to closure.
  We were just remarking, it has been a real pleasure, in terms of the 
approach of this bill--a bipartisan bill, amendments being debated in a 
timely way, people being able to express themselves--but bringing the 
bill to closure at an appropriate point, to me, is very constructive 
and very positive. I thank my colleagues for that.
  Thus, the next rollcall vote will be tomorrow at some point. No more 
rollcall votes tonight.
  The PRESIDING OFFICER. The Senator from Wisconsin.
  Mr. FEINGOLD. Mr. President, I ask unanimous consent that the pending 
business be set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                            Amendment No. 12

  Mr. FEINGOLD. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Wisconsin [Mr. Feingold] proposes an 
     amendment numbered 12.

  Mr. FEINGOLD. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

   (Purpose: To establish time limits for action by Federal district 
  courts on motions to remand cases that have been removed to Federal 
                                 court)

       On page 22, strike line 22 and all that follows through 
     page 23, line 4, and insert the following:
       ``(1) In general.--Section 1447 shall apply to any removal 
     of a case under this section, except that--
       ``(A) not later than 60 days after the date on which a 
     motion to remand is made, the district court shall--
       ``(i) complete all action on the motion; or
       ``(ii) issue an order explaining the court's reasons for 
     not ruling on the motion within the 60 day period;
       ``(B) not later than 180 days after the date on which a 
     motion to remand is made, the district court shall complete 
     all action on the motion unless all parties to the proceeding 
     agree to an extension; and
       ``(C) notwithstanding section 1447(d), a court of appeals 
     may accept an appeal from

[[Page 1833]]

     an order of a district court granting or denying a motion to 
     remand a class action to the State court from which it was 
     removed if application is made to the court of appeals not 
     less than 7 days after entry of the order.''

  Mr. FEINGOLD. Mr. President, if we are going to pass this bill, I 
think we should do all we can to ensure citizens get their day in court 
promptly, whether it is in a Federal court or a State court. We are all 
familiar with the adage that justice delayed is justice denied. So we 
cannot let this bill become a vehicle for delay.
  The bill includes complicated requirements for determining which 
cases can be removed to Federal court. We need to make sure the cases 
that belong in State court under this bill do not get caught up in some 
kind of procedural wrangling that would effectively deny justice to the 
plaintiffs through delay.
  Current Federal court practice allows a case filed in a State court 
to be automatically removed to Federal court by the filing of a notice 
of removal. If a party believes the case does not belong in Federal 
court, it can then remove in Federal court to remand or return the case 
to the State court.
  Under current law, when a Federal district court decides to grant a 
motion to remand the case back to State court, right now that order is 
not appealable. S. 5, the bill before us, makes such orders appealable 
for the first time in over a century. Due to the efforts of Senator 
Schumer, Senator Dodd, and Senator Landrieu, the bill requires the 
court of appeals to decide appeals of remand orders within 60 days 
unless the parties agree otherwise. This 60-day time limit recognizes 
that there is a potential for delay that these newly permitted appeals 
could cause and that there is a need for courts to resolve quickly at 
the appellate level the issue of where a case will be heard.
  I strongly support this idea of a time limit for decisions on 
appeals. But it also highlights another great potential for delay that 
is caused by this bill. Before that 60-day clock begins to run on an 
appeal, the district court must first rule on the motion to remand the 
case to State court. Unfortunately, some courts take a great deal of 
time to decide motions to remand. The result is simply putting a case 
in limbo.
  Take, for example, the case of Lizana v. DuPont. In this case, cancer 
victims in Mississippi allege they became sick because they lived next 
door to a DuPont manufacturing plant. DuPont then removed the case to 
Federal court on January 21, 2003, and the victims then moved to remand 
the case to State court. The Federal district court finally granted the 
victims' motion, a year after the motion to remand was filed.
  In an Oklahoma case called Gibbons v. Sprint, a group of consumers 
filed a case against Sprint for installing cable lines across their 
land without giving proper notice or paying compensation to the 
landowners. Sprint then removed the case to Federal court. A remand 
motion was filed on October 4, 1999, and was granted, but only after a 
delay of nearly a year.
  These are real-life examples of how an improper removal can end up 
delaying a case for a significant period of time. By rewriting 
diversity jurisdiction rules in this bill, we are handing defendants a 
tool for delay, even if they do not actually qualify to have their 
cases removed. So we need to make sure that in cases that are removed 
from State courts as a result of this bill, remand motions are decided 
promptly. At the very least, we should require that the courts review 
these motions and decide them quickly, if they can.
  The amendment that I offered in the Judiciary Committee would have 
placed a 60-day time limit on district court consideration of motions 
to remand. This is the same limit that the new bill places on courts of 
appeals when decisions on motions to remand are appealed.
  My committee also adopted the other components of the bill's 
provision on appeals. It allowed all parties to agree to an extension 
of any length and allows the court to take an additional 10 days for 
good cause shown. If courts of appeals are going to be required to rule 
on appeals of decisions on motions to remand in short order, I thought 
we should require district courts to make those decisions just as 
quickly. That way, we could be sure that removals will not be used as a 
tool for delay.
  On Monday, the Judicial Conference sent a letter to the chairman of 
the Judiciary Committee concerning my amendment. Not surprisingly, it 
opposes the amendment. The Judicial Conference historically has 
opposed, as it says in its letter, ``statutory imposition of litigation 
priority, expediting requirements, or time limitation rules in 
specified types of civil cases.''
  In other words, judges do not like being told by Congress how to 
prioritize their cases or how quickly they should do their work. And I 
do not blame them. But we do it when we think it is important. And here 
we are sending a potentially large new number of cases to Federal 
court. We are increasing the workload of the Federal courts, making it 
more likely cases will be delayed because of crowded dockets.
  What the committee amendment did was to require the courts to quickly 
assess whether a case belongs in Federal court, whether this bill 
applies to it. I do not think that amendment of mine was unreasonable 
at all.
  On the other hand, I am sympathetic to the concern expressed by the 
Judicial Conference that in some cases 60 days may not be enough time 
to decide the motion. Its letter points out that, in some cases, an 
evidentiary hearing might be required and the time to fully brief the 
motion may exhaust a portion of this 60-day period. My committee 
amendment allowed for an automatic 10-day extension and an extension of 
any amount if both sides agree.
  I have read the letter from the Judicial Conference and I am trying 
to come to a reasonable solution. I accept the possibility that the 
changes I have made to date perhaps are not enough. So I am not wedded 
to the 60-day period itself. What I am wedded to is the idea that these 
motions should not be permitted to languish unexamined for months and 
months. I have made further modifications to the amendment that I 
offered in committee in the hope that the sponsors of the bill would be 
willing to work with me to reach an accommodation on this issue.
  The amendment I have proposed on the floor requires the district 
court to do one of two things within 60 days of a motion to remand 
being filed. First, the court can decide the motion. I hope many, if 
not most, motions to remand could be decided that quickly. But under my 
amendment before the body, the court has another option under this 
amendment. It can issue an order within a 60-day time period indicating 
why a decision within that time cannot be made. Perhaps the reason is 
that the factual record cannot be completed within that time, or that 
other pressing matters must receive priority in light of the court's 
full docket. The amendment does not presume to specify what reasons are 
good or adequate reasons. The justification is entirely within the 
court's discretion, but it must give some explanation, some reason in 
an order that would be issued within this 60-day period.
  If such an order is issued, the court is then allowed, under the 
amendment before the body, to issue a decision up to 180 days after the 
filing of the motion. That gives the court a full 6 months to make a 
decision. I argue that should be enough time for even the most complex 
of remand motions. Once again, an extension of any length is permitted 
if all the parties to the case agree.
  I believe these changes more than address the concerns raised by the 
Judicial Conference, but they also make sure that a remand motion will 
not languish for more than 6 months because the court simply has not 
gotten around to it.
  My hope is that the requirement that an order be issued within the 60 
days will make it more likely that the court will devote enough time to 
the motion to realize that it is possible for a final decision to be 
reached within that time. If more time is needed, 180 days should be 
more than sufficient.
  A 6-month time limit will not cause undue hardship to our Federal 
courts.

[[Page 1834]]

For those who doubt that removal will become a tool for delay, let me 
call their attention to testimony before the House Judiciary Committee 
by legal scholar Theodore Eisenberg of Cornell Law School. Professor 
Eisenberg testified that his research has found that even though the 
number of class action lawsuits is declining, efforts to remove cases 
are not. More importantly, he found that remand rates are increasing 
over time.
  In recent years, more than 20 percent of diversity tort cases removed 
to Federal court have been remanded to State court. Now, that means 
that one out of five removals are improper. We have no way of knowing 
what will happen under this bill. Perhaps some of the 20 percent will 
now be properly removed to Federal court. But given the complexity of 
the bill's new requirements, I think it is safe to assume that a 
significant number of removals will still turn out to be improper.
  Once a district court decides to remand a case, that remand order 
will almost certainly be appealed. Plaintiffs with legitimate class 
actions in State court therefore need the additional protection 
provided by my amendment in order to avoid being unfairly harmed by 
this bill. Some time limit on district court consideration of remand 
motions in class action cases is critical to minimize the denial of 
justice to citizens who legitimately turn to the State courts, even 
under this bill, to have their grievances heard.
  I know there is tremendous opposition to any attempt to perfect this 
bill on the floor because of concerns about the other body, but I 
implore my colleagues who support the bill to not let their no-
amendment strategy prevent them from taking a hard look at this 
problem. Do we want to leave unaddressed the possibility that a case 
could sit in Federal court with a motion to remand pending for a year 
or more, only to have the case properly returned to State court once 
the court finally takes a look at the motion? Is that a just result?
  I am convinced that we can work at something if my colleagues will 
simply take a quick look at this issue with an open mind. This 
amendment does not even come close to blowing this bill up. It is 
certainly not a poison pill. It is just an effort to make the bill work 
better, and surely the supporters of this bill should have the 
flexibility to do that.
  This bill is called the Class Action Fairness Act. To be fair to 
people seeking justice from courts, we should ask the courts to act 
quickly on remand motions at both the court of appeals and district 
court levels. So I urge my colleagues to support this amendment.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DODD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DODD. Mr. President, I begin by thanking the leadership. I thank 
Senator Reid of Nevada particularly because, as my colleagues know, the 
minority in this institution, even a minority of 1, can make life 
difficult for a majority even of 99.
  The Framers of the Constitution created an institution that would 
make sure that the rights of minorities would be protected in this 
body. Contrary to his own substantive feelings about the matter before 
us, the distinguished Democratic leader has made it possible, because 
of the unanimous consent agreement entered into with the distinguished 
majority leader, for this matter to proceed. I also thank Senator 
Frist, the majority leader, for working out that arrangement so that we 
can deal with the matter before us.
  As someone who a year and a half ago negotiated an agreement that was 
satisfactory to many, not to all, I am pleased that we are within a day 
or so of adopting this very important legislation. We would not be able 
to do that were it not for the leadership shown by the minority and the 
majority in allowing this amendment process to go forward. So I begin 
there.
  I commend my colleagues who have offered amendments. They have 
offered germane and relevant amendments to this bill that have at the 
very least some kernels of sound judgment and good ideas to them. I 
regretfully disagree with my colleagues substantively and have 
expressed that in the Record. I know my colleague from Delaware, 
Senator Carper, who has spent a lot of time on this legislation, has 
been more deeply involved in this question than almost anyone in this 
body and has listened very carefully to all of those who have argued 
their amendments and considered them thoroughly. So I thank them for 
offering these ideas. I do not suggest that I would necessarily be 
opposed to all of these amendments under different circumstances, 
although I think there are substantive arguments against them.
  I say to one of my dearest friends in this body--and I know we call 
each other good friends, but Russ Feingold is one of my best friends in 
the Senate, and it is a rarity when he and I are on different sides of 
an issue. I am not comfortable disagreeing with my friend from 
Wisconsin because I admire him so much, but there is a substantive 
disagreement over having mandatory time requirements.
  The Judicial Conference of the United States, in a letter dated 
February 7, addresses specifically this amendment and urges our 
colleagues not to impose a time certain. The Senator from Wisconsin 
makes a strong argument on having some predictability, and I agree with 
him about predictability for all involved, for defendants and 
plaintiffs, but there is a danger in making the predictability so 
certain that it makes it difficult for the judicial process to 
necessarily work in a fair and balanced way. Because there are so many 
extenuating circumstances which can complicate a given mandatory time 
requirement, it can actually work adversely to plaintiffs or defendants 
in the case, and I know my colleagues are aware of that.
  A sound case can be made for Senator Feingold's amendment. There was 
a sound argument on the other side as well as to why this can be 
dangerous. The Judicial Conference has come down rather strongly in a 
letter in opposition to a mandatory time requirement. Rather than go 
through and read this whole letter, I ask unanimous consent that the 
letter from the Judicial Conference dated February 7 be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                            Judicial Conference of


                                            the United States,

                                 Washington, DC, February 7, 2005.
     Hon. Arlen Specter,
     Committee on the Judiciary, U.S. Senate, 224 Dirksen Senate 
         Office Building, Washington, DC.
       Dear Mr. Chairman: I write on behalf of the Judicial 
     Conference of the United States, the policy-making body for 
     the federal courts, to express the judiciary's opposition to 
     the amendment offered, and later withdrawn, by Senator Russ 
     Feingold to the Class Action Fairness Act of 2005 (S. 5) 
     during the Senate Judiciary Committee's business meeting on 
     February 3, 2005. That amendment would require the district 
     court to complete all action on a motion to remand a class 
     action case not later than 60 days after the date on which 
     such motion was made, unless ail parties agree to an 
     extension or the court grants an extension up to 10 days for 
     good cause shown and in the interests of justice. As further 
     explained below, the Judicial Conference opposes the 
     imposition of mandatory time frames for judicial actions. 
     Because the amendment may be considered further as S. 5 moves 
     to the floor of the United States Senate, I wanted to provide 
     you with these views as soon as possible.
       The Judicial Conference strongly opposes the statutory 
     imposition of litigation priority, expediting requirements, 
     or time limitation rules in specified types of civil cases 
     brought in federal court beyond those civil actions already 
     identified in 28 U.S.C. 1657 as warranting expedited review. 
     The Conference also strongly opposes any attempt to impose 
     statutory time limits for the disposition of specified cases 
     in the district courts, the courts of appeals, or the Supreme 
     Court. (Report of the Proceedings of the Judicial Conference 
     of the United States, September 1990, p. 80.) Section 1657 
     currently provides that United States courts shall determine 
     the order in which civil actions are heard, except for the 
     following types of actions that must be given expedited 
     consideration: cases

[[Page 1835]]

     brought under chapter 153 (habeas corpus petitions) of title 
     28 or under 28 U.S.C. Sec. 1826 (recalcitrant witnesses); 
     actions for temporary or injunctive relief; and actions for 
     which ``good cause'' is shown.
       The expansion of statutorily mandated expedited review is 
     unwise for several reasons. Individual actions within a 
     category of cases inevitably have different priority 
     requirements, which are best determined on a case-by-case 
     basis. Also, mandatory priorities and expediting requirements 
     run counter to principles of effective civil case management. 
     In addition, as the number of categories of cases receiving 
     priority treatment increases, the ability of a court to 
     expedite review of any of these cases is necessarily 
     restricted. At the same time, district courts must meet 
     stringent deadlines for the consideration of criminal cases, 
     as required by the Speedy Trial Act.
       From a practical standpoint, it may be difficult in many 
     situations to meet the 60-day deadline under Senator 
     Feingold's amendment. The filing of a remand motion following 
     a notice of removal pursuant to 28 U.S.C. Sec. 1447 would 
     trigger the 60-day period. Under current local rules of 
     practice in the district courts, a motion to remand may not 
     be fully briefed and ready for court consideration until a 
     substantial portion of the 60-day deadline has expired. In 
     addition, the district court must consider the criteria 
     listed as a threshold for federal court jurisdiction under S. 
     5 before deciding the motion to remand, which may require the 
     court to hold an evidentiary hearing with witnesses.
       The judiciary shares Senator Feingold's desire to 
     facilitate the consideration of cases. However, for the 
     reasons stated above, the judiciary believes the amendment is 
     unwise. Nevertheless, if Congress determines that a specific 
     reference beyond 28 U.S.C. Sec. 1657 is appropriate, then the 
     following alternative language is suggested for the 
     Committee's consideration as a replacement for subsection (A) 
     on pages 1 and 2 of Senator Feingold's amendment:
       ``(A) the district court shall complete all action on a 
     motion to remand as soon as practicable after the date on 
     which such motion was made; and''
       OR
       ``(A) the district court shall expedite all action on a 
     motion to remand to the greatest extent practicable; and''.
       Similar language has been used by Congress in other 
     legislation and is now found within the draft asbestos bill 
     being discussed in your Committee. It has reminded federal 
     judges of the importance Congress has given to the resolution 
     of the particular matter without precluding a fair hearing of 
     the issues underlying the motion or action.
       Thank you for your consideration of the above comments. If 
     you have any questions, please contact Mike Blommer, 
     Assistant Director, Office of Legislative Affairs, at 202-
     502-1700.
           Sincerely,
                                            Leonidas Ralph Mecham,
                                                        Secretary.

  Mr. DODD. I am not going to go through each and every amendment, but 
the amendments offered by my friends, Senators Kennedy, Bingaman, and 
Feinstein, also make good points, but as the Senator from Delaware and 
others have pointed out there are substantial and substantive reasons 
why those amendments are even incorporated already under the 
legislation and thereby covered or that would undo what we have 
attempted to achieve in this legislation.
  I pointed out the other day that back in the fall of 2003--I believe 
in October--a group of us who objected to the cloture motion and 
provided the margin of difference that day from invoking cloture 
provided the necessary votes to secure passage of the then as written 
class action reform bill. I think we were right in doing so. That bill, 
I believe, was excessive. There was a real danger it would have undone 
a lot of good law in this country which made courts accessible to 
legitimate class action plaintiffs.
  We were asked, a small group of us who were willing to work on this 
issue, to try to come up with some compromises, and we did. We 
submitted a letter to the majority leader saying there were four items 
that we thought needed to be addressed in that bill. We then sat down 
and negotiated not only the 4 items but 8 items additional to the 4, so 
we came back with 12 improvements to that bill, far more than we were 
asked to do by those concerned with legislation. I am not suggesting 
that covered the universe. Obviously, other ideas occurred in the last 
year and several months since that was struck. I was disappointed we 
didn't bring up the reform bill in January of last year, as the leader 
announced we would do. We lost an entire year on this matter, where we 
could have had the same arrangement we agreed to over a year ago. 
Nonetheless, we are back here with that same agreement.
  Across the country, those who have had a chance to look at this 
legislation have spoken very extensively in favor of it. In fact, some 
109 editorials across the Nation, from publications, daily publications 
literally across the Nation in virtually every jurisdiction of the 
country, have come out and strongly endorsed this compromise package. I 
have a list of the 109 editorial comments made in support of this 
legislation, from publications that have reputations of being center, 
right, and left. It transcends the traditional ideological differences 
one might find in our daily newspapers. It is instructive to those of 
us anxious to know what those editorials have to say about this bill.
  I ask unanimous consent that list be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             109 Editorials Supporting Class Action Reform

     The Washington Post
     Get Tort Reform Right--January 10, 2005
     Reforming Class Actions--June 14, 2003
     Making Justice Work--November 25, 2002
     Restoring Class to Class Actions--March 9, 2002
     Actions Without Class--August 27, 2001
     The Wall Street Journal
     Tort Reform Roadmap--January 27, 2005
     Class-Action Showdown--July 8, 2004
     Class-Action Showdown--June 12, 2003
     Mayhem in Madison County--December 6, 2002
     Miracle in Mississippi--December 3, 2002
     Class War--March 25, 2002
     Chicago Tribune
     Mr. Bush goes to Collinsville--January 5, 2005
     American as apple pie--July 7, 2004
     Madison (just another) County--June 18, 2004
     The Judicial Hellhole--March 11, 2004
     The class-action money chase--June 18, 2003
     The judges of Madison County--September 6, 2002
     Financial Times
     Class Action Repair--September 18, 2003
     Out of Action--March 18, 2002
     USA Today
     Class-action plaintiffs deserve more than coupons--October 9, 
         2002
     Akron Beacon Journal
     Classier act--May 2, 2003
     Baltimore Sun
     No-Class Action--October 26, 2003
     Bangor Daily News
     Class-action reform--June 3, 2004
     Action on Lawsuits--September 17, 2003
     Bloomington Pantagraph (Bloomington, IL)
     Congress should approve class-action suit reforms--June 30, 
         2004
     The Buffalo News
     Class Action Compromise--December 6, 2003
     Class-Action Lawsuits--October 14, 2003
     Protection for plaintiffs--July 31, 2002
     Business Insurance
     Tort Reform Takes Time--July 19, 2004
     Tort Reform Deserved More--January 26, 2004
     Redouble Effort in Tort Reform Battle--October 27, 2003
     Stick With Original Class Action Bill--September 29, 2003
     Maintain Class-Action Reform Push--September 8, 2003
     The Christian Science Monitor
     Reforming class-action suits--April 17, 2003
     Contra Costa Times (Walnut Creek, CA)
     Class-Action Reform--July 9, 2004
     Crain's New York Business
     A Class Action for Schumer--September 1, 2003
     Daily Jefferson County Union
     Take Bite Out of Frivolous Suits--October 20, 2003
     The Des Moines Register
     Pass the class-action reform--July 14, 2004
     Reform class actions--February 14, 2003
     The Florida Times-Union (Jacksonville, FL)
     Congress: Minority Rules--July 11, 2004
     Progress Is Seen--December 16, 2003
     Class Warfare--September 8, 2003
     Always Alert--June 17, 2003
     The Gazette (Cedar Rapids, Iowa)
     Clamp down on class-action suits--May 19, 2004
     More class-action suits should be federal cases--July 10, 
         2002
     The Gazette (Colorado Springs, CO)
     Our View: A lawyer's paradise--July 5, 2003
     Greensboro News & Record
     Class-Action Lawsuit Abuse Less Under Senate Rewrite--January 
         12, 2004
     The Hartford Courant
     Abuse of the Courts--June 16, 2004

[[Page 1836]]

     Compromise on Class Action--December 31, 2003
     Sen. Dodd's Crucial Vote--October 26, 2003
     Stop Class-Action Abuses--August 22, 2003
     The class-action racket--July 15, 2002
     The Herald (Everett, WA)
     Class-action reform needed to curb abuse--June 25, 2003
     The Indianapolis Star
     Lawyers Get Rich, Plaintiffs Get Coupons--September 2, 2003
     Class-action suits shop the system--May 15, 2002
     Investor's Business Daily
     A Shorter Leash for Trial Lawyers--January 6, 2005
     Any Tort In A Storm--December 18, 2003
     King County Journal (Bellevue/Kent, WA)
     Our View: Class-action reform needs Senate action--July 8, 
         2003
     Knoxville News Sentinel
     Class action act was reasonable legislation--October 27, 2003
     Las Vegas Review-Journal
     Tort Reform--June 2, 2004
     Coupon Clippers--January 12, 2004
     A real class act--June 13, 2003
     Lincoln Journal Star (Lincoln, Neb.)
     Take small step toward legal reform--June 30, 2003
     Mobile Register
     Senate Has a Chance To Limit Lawsuit Abuse--August 16, 2003
     Montgomery Advertiser
     Negotiate Fair Bill on Lawsuits--October 27, 2003
     Newsday (Long Island, NY)
     Lawsuit reform is within reach; Stop stalling class-action 
         remedy--July 9, 2004
     A Little Compromising Helps Bill on Mass Lawsuits--December 
         4, 2003
     Senate Should Change the Rules for Mass Lawsuits--November 5, 
         2003
     Congress should stem abuses of class-action lawsuits--March 
         3, 2003
     New York Daily News
     End Lawyers' Shopping Spree--September 28, 2003
     New York Sun
     Breaking With the Bar--November 20, 2003
     Senators With Class?--October 22, 2003
     Northwest Arkansas Business Journal
     Class-action reform a must--May 27, 2002
     The Oklahoman
     So Long to Reform--October 29, 2003
     Odessa American (Odessa, Texas)
     Lawsuit reform seems necessary--July 8, 2003
     Omaha World-Herald
     A Final Judgement--May 20, 2004
     Ready for (Class) Action--February 12, 2004
     Class-action bill sinks--October 27, 2003
     Reshaping Class Action Suits--October 13, 2003
     Balance the Scales--July 25, 2003
     Shopping days may be over--June 16, 2003
     Fix class-action abuse--July 29, 2002
     The Oregonian
     Approve class-action reform--July 29, 2002
     Orlando Sentinel
     A Needed Crackdown: It's Important for Congress to Revive the 
         Effort to Control Class-Action Abuse--January 28, 2005
     Congress Should Approve a Plan To Reform the Class-Action-
         Lawsuit System--June 1, 2004
     Cut Down On Judge-Shopping--February 1, 2004
     Stop abuse of class actions--June 23, 2003
     Pittsburgh Tribune-Review
     No-class action--July 12, 2004
     The Providence Journal
     Crimes against consumers--May 19, 2003
     Stop these corrupt suits--April 6, 2002
     Rocky Mountain News (Denver, Colorado)
     Pay the Lawyers in Coupons, Too: Class-Action Excesses--July 
         25, 2004
     Sun Journal (Lewiston, Maine)
     Reform Class Actions--September 7, 2003
     St. Louis Post-Dispatch
     Madison County: Bush in the ``hellhole''--January 5, 2005
     Feathering the Legal Nest--April 6, 2004
     Tilted Scales--January 23, 2004
     The Lawyers Win Again--October 24, 2003
     Derail Madco's gravy train--October 2, 2003
     Lawsuit heaven--January 13, 2003
     The Santa Fe New Mexican
     Time for a tad of tort reform--July 16, 2003
     Spokane Spokesman-Review
     Class Action Bill Needs Action Now--July 20, 2004
     Unclassy Action in Need of Reform--September 3, 2003
     Times Union (Albany, NY)
     Class Action Victory--December 3, 2003
     Class Action Showdown--November 10, 2003
     Fix class-action law--July 28, 2002
     Tyler Morning Telegraph
     Small firms new target in lawsuit abuse crisis--June 23, 2003
     Vero Beach Press-Journal
     Class-action reform delayed by Democrats' stalling tactics--
         July 14, 2004
     No Class--October 24, 2003
     Washington Times
     Ushering thru tort reform--July 7, 2004
     Wisconsin State Journal
     Put Fair Limits on Group Lawsuits: Class-Action Abuses Enrich 
         Lawyers While Yielding Pennies for Plaintiffs--June 7, 
         2004

  Mr. DODD. As a source of some parochial pride, I ask unanimous 
consent the entire editorial in the Hartford Courant of Hartford, CT, 
be printed in the Record supporting this legislation. It is entitled 
``Reining In Class-Action Abuses.''
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Hartford Courant, Feb. 8, 2005]

                     Reining In Class-Action Abuses

       Congress finally appears ready to curtail the worst abuses 
     in class-action lawsuits.
       The House and Senate have debated the issue for a decade. 
     Now the Senate is prepared to vote, possibly this week, on a 
     bipartisan compromise engineered by Democratic Sen. 
     Christopher Dodd of Connecticut and others. President Bush 
     has indicated he will sign the measure.
       Lawyers long have had a field day with class-action 
     lawsuits. They sometimes solicit clients and then shop for 
     friendly state courts with reputations for handing down huge 
     monetary awards. Too often, though, plaintiffs end up with 
     pennies, while the lawyers take home millions of dollars.
       Under a bill that cleared the Senate Judiciary Committee 
     last week, most interstate class-action lawsuits in which 
     claims total more than $5 million would appropriately be 
     moved to federal courts.
       Truly local lawsuits involving plaintiffs and defendants 
     within a state would properly remain in local courts.
       The bill, known as the Class Action Fairness Act, has other 
     useful provisions, such as tighter controls on so-called 
     coupon settlements, in which consumers receive discount 
     coupons instead of cash. Also, there would be better scrutiny 
     of settlements in which class members actually lose money.
       Critics say the bill would unfairly penalize consumers 
     because federal consumer-protection laws are weak. There 
     still is time to address this shortcoming. But lawmakers must 
     resist the temptation to add extraneous amendments--such as 
     one to increase the salaries of federal judges--that would 
     doom the bill.
       The measure enjoys broad support in the House, which gave 
     it overwhelming approval last year but which must vote again.
       Once Congress acts on class-action lawsuits, it can turn 
     its attention to two other urgent lawsuit abuses--medical 
     malpractice and asbestos.

  Mr. DODD. Let me say again to my colleagues here, many of whom I know 
have offered amendments that have not succeeded in the past, I know it 
can be disappointing to work on the amendment and not get the necessary 
votes. But let me remind my colleagues, those who believe--and that is 
most of us here--that clearly the class action situation in this 
country cries out for reform, that this bill is a court reform bill 
rather than a tort reform bill. No courts are closing their doors to 
class action plaintiffs at all. But the situation had gotten out of 
hand. I think most of us here agree with that.
  We have written an improved bill--from both a plaintiff's perspective 
as well as a defendant's perspective. We can have access to courts, get 
good judgments, and see to it that victimized plaintiffs will receive 
the compensation they deserve as a result of a class action decision in 
their favor.
  I suggest to those who would have liked to have us add additional 
amendments here that there was a very real danger indeed that had we 
not stuck with the agreement reached almost a year and a half ago, the 
original bill would have come back or a bill adopted in the other body 
would have been the vehicle chosen as the vehicle for class action 
reform. I believe that would have been a mistake.
  I know there are colleagues who are disappointed that some of us did 
not support them in their efforts. I state there are substantive 
reasons that we did not, but also there is the reason that had we done 
so, this matter would have been opened and the results would have been 
a bill that would have been dangerous. I would have opposed it, but I 
think the votes are here to carry it. It is always a tough call, and I 
am not going to suggest otherwise. Those are the kinds of decisions you 
have to make in a legislative body with 99 other colleagues, 435 in the 
other body,

[[Page 1837]]

and a President. We are dealing with a legislative form of government. 
Unfortunately, as much as we would like to write our own bills and have 
everybody go along and agree with our ideas, that is not the way the 
process works.
  We think we have a substantially improved piece of legislation, one 
that I heartily endorse. We will discover in time if there are any 
shortcomings, but by and large I believe we have written a good bill.
  I mentioned in his absence my friendship with the Senator from 
Wisconsin, talking about his amendment. As I said earlier, there is 
more than just a kernel of truth in what he suggests. There is an 
argument on the other side that I know my colleague, as a very 
distinguished member of the bar, will appreciate. I will not be able to 
support his amendment, but nonetheless I appreciate the point he is 
making about certainty and predictability, which is not an irrelevant 
issue when it comes to our courts.
  For those reasons, I appreciate the fact that a majority of us here 
in a bipartisan way--not overwhelmingly bipartisan but a bipartisan 
fashion--have rejected the amendments offered by our colleagues today. 
My hope is that a similar result will occur with remaining amendments, 
that we can have final passage of this bill, that the leadership of the 
House will do what they said they were going to do, and that is to 
embrace this compromise package, and that we will be able to send this 
bill to the President for his signature and make a major step forward 
in reforming our courts so that class actions can proceed in the way 
the Framers intended in the Constitution, which is fair to plaintiffs 
and defendants alike.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Wisconsin.
  Mr. FEINGOLD. Mr. President, let me say I appreciate the comments of 
my friend from Connecticut, as I always do. I just want to point out 
that the amendment I have offered, as opposed to the one I offered in 
committee, has increased the time for deciding these motions from 60 
days to 180 days. Surely 6 months is plenty of time, even in a 
complicated motion. So I believe the concerns of the Judicial 
Conference have been addressed, unless we in the Congress are going to 
go along with the idea there should be no time limit at all.
  At this point I simply leave it at that, hoping that prior to the 
time of actually voting on the amendment tomorrow I would have a few 
minutes to repeat and reiterate my position on this amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. CARPER. Mr. President, while Senator Dodd is still on the floor, 
and Senator Feingold as well, let me first of all say to Senator Dodd 
that we would not be here today with this compromise, which is good 
public policy but also something Democrats and Republicans, not all, 
can support--and I know we will get the support of the House and the 
President. I want to say a special thank you for your leadership. I 
have learned a lot in the last 4 years watching you and listening to 
you. Certainly in this instance it is no exception, but thank you.
  I want to say to Senator Feingold, we had a number of amendments that 
have been presented to us today, all thoughtful amendments by some of 
our very finest Members. I was not able to support any of them.
  The one amendment that I have literally worked, as he knows, behind 
the scenes to try to get included in a managers' amendment is this 
amendment or some variation of this amendment. I think the underlying 
point you make--if a class action is filed in a State court and that is 
turned down and there is an effort to move it to Federal court, that is 
turned down, and then there is another effort to move that class action 
from State court to Federal court, we limit the second time through. 
There has to be a response in 60 days to the appeal by the Federal 
judge on the appeal. That would sort of beg the question, Should not 
there maybe be some kind of time limit as well on the first time there 
is an attempt to remove the case to the Federal court? That strikes me 
as something that makes common sense and seems fair and reasonable. As 
he knows, I have reached out as recently as last night with some of the 
people involved in the Judicial Conference and the Rules Committee to 
see if there is a way to strike the balance, and I believe you have 
moved toward that balance.
  My hope is that we could take this amendment or something similar to 
this amendment and include it in a managers' package. You have heard 
Senator Dodd and me and others say there is a very delicate compromise 
here, and there is a concern if we change one piece of the bill we 
invite friends on the other side, who have a different view about the 
balance and would like to take the bill in a different direction--we 
unleash them to feel free to come forth with their amendments and set 
the bill back.
  Having said that, I still think this amendment as you have redrawn it 
would actually be a good addition to a managers' amendment. I learned 
today there is not going to be a managers' amendment. As a result, I am 
not going to be able to support this amendment.
  I discussed this this morning with Senator Specter; he finds favor 
with your amendment. I think he mentioned that at the Senate Judiciary 
Committee hearing. He said to me--and he has no reason to say this, but 
I think it is just in his heart--he thinks you are onto something here 
and would like to take the Senator's approach on this provision and 
include it in another bill that he is working on and presumably will 
have hearings on.
  I think this idea, if it does not pass tomorrow and does not get 
included in the underlying bill, is going to live for another day and 
we will be back to where we can hopefully all support it.
  I thank the Senator for a real thoughtful approach and for his 
willingness to compromise and try to find some middle ground. I think 
he has found it. I think his efforts will ultimately be rewarded.
  Mr. FEINGOLD. Mr. President, I thank the Senator from Delaware for 
his kind remarks and for his genuine efforts to try to reach an accord. 
It is a shame when we have the chairman of the committee admitting that 
this ought to be dealt with, and one of the great advocates of this 
legislation admitting that this is just a question of fixing something, 
we can't get it done. There is something wrong with the way we are 
proceeding when we can't fix something that basically nobody is really 
against if we do it right.
  I recognize what is likely to happen in the vote. But I take the 
Senator at his word that he is hoping we can resolve it. Perhaps this 
is something that can still happen on this bill. If not, we have to 
resolve it another way. But I thank him for his sincere efforts to 
solve this problem.
  I yield the floor. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. FRIST. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________